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Tuesday 24 May 2011
Federal Court Bars Arizona Family from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has barred a family of tax preparers in Overgaard, Ariz., from preparing federal tax returns for others, the Justice Department announced today. The court’s preliminary injunction order against Shelia Young, Deane Young and Kennith Defoor will remain in effect while a related criminal case against the defendants proceeds in court.
The government complaint in the civil injunction case alleged that the Youngs and Defoor promoted fraudulent tax schemes through their companies, Accurate Consulting LLC, and D4 Accounting, Consulting, Tax Services Inc. According to the complaint, these schemes included manipulating the amount of income and federal tax withholdings claimed on their customers’ tax returns, resulting in bogus claims for tax refunds. The complaint further states that, since 2001, the Youngs and Defoor prepared at least 337 federal tax returns requesting fraudulent tax refunds, often in amounts exceeding $100,000.
The three family members allegedly prepared frivolous tax returns that cumulatively claimed more than $24 million in fraudulent refunds and resulted in the Internal Revenue Service (IRS) issuing approximately $2.3 million in erroneous refunds. The complaint alleged that the Youngs and Defoor asserted fraudulent “zero income” and “commercial redemption” tax schemes and regularly submitted false IRS forms on behalf of their customers that reported both fictitious interest income and tax withholdings.
The IRS described the zero income and commercial redemption schemes as frivolous in its publication The Truth About Frivolous Tax Arguments . Return preparer fraud, bogus refund claims based on frivolous arguments, and claims of zero wages are also three of the “Dirty Dozen” tax scams identified by the IRS for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department’s website .
Attorney General Calls for Action to Protect Children<br /> from Violence in New TV Public Service AnnouncementRead the Press Release
WASHINGTON – A public service announcement (PSA) featuring Attorney General Eric Holder began airing this week on the Investigation Discovery network. This 30-second PSA is part of the Attorney General’s Defending Childhood initiative to address the issue of children’s exposure to violence.
“This PSA calls on all of us to take action to protect our children from violence in communities across the country,” said Attorney General Holder. “We can protect and heal the most vulnerable among us and transform the country for the better—one child at a time.”
The goals of the initiative are to prevent children’s exposure to violence as victims and witnesses, to mitigate the negative effects that children exposed to violence experience, and to develop knowledge about and increase public awareness of this issue.
A key component of the Defending Childhood initiative is a multi-year demonstration program to develop comprehensive, community-based strategies to prevent and reduce the impact of children’s exposure to violence in their homes, schools and communities. In 2010, eight planning grants were awarded to begin this process to the City of Boston; the City of Portland, Maine; the Chippewa Cree Tribe of Montana; the City of Grand Forks, N.D.; the Cuyahoga County, Ohio, Board of Commissioners; the Multnomah County, Oreg., Department of Human Services; the Rosebud Sioux Tribe, S.D.; and Shelby County, Tenn.
Defending Childhood involves collaborative efforts across the Department of Justice and other federal agencies including the Departments of Health and Human Services and Education. Critical partners outside the federal government include state, local and tribal law enforcement agencies, national experts, practitioners and advocates.
The PSA was distributed nationally through the Department of Justice YouTube channel. Detailed information on Defending Childhood is located at: www.justice.gov/ag/defendingchildhood
The PSA can be viewed at: www.justice.gov/video.php?id=15
The script follows:
Our children are exposed to violence every day—in their neighborhoods, in their schools, even in their own homes.
Exposure to violence can have a devastating and lifelong impact.
Through community action and leadership at the national level…
We’re identifying the children who need our help.
I’m Attorney General Eric Holder.
And I’m asking those of you who have a role in a child’s life—to take action.
Through your attention and early intervention, we can help children in need to heal, to thrive.
Together, we can change their lives and their futures.
Join the Justice Department in Defending Childhood.
Alabama Tax Preparer Sentenced for Identity Theft and Filing False Tax ReturnsRead the Press Release
WASHINGTON – A resident of Elmore, Ala., was sentenced to 60 months in prison for stealing identities and using them to file false tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.
On Feb. 22, 2011, after a four-day trial, a jury in Montgomery, Ala., convicted Sharon Thurman of 14 counts of making false claims, two counts of theft of government money and two counts of aggravated identity theft. According to the indictment and evidence introduced during trial, Thurman owned and operated Sharon’s Tax Service in Elmore. Between January and April 2008, Thurman filed 14 fraudulent tax returns in which she unlawfully attempted to obtain tax refunds intended for individuals whose identities she stole.
At trial, 14 victims of identity theft testified that they did not file, and did not request Thurman to file the tax returns she filed in their names and Social Security numbers. Two victims in whose name she received payment from the IRS testified that they never received any money from Thurman. All 14 victims testified that, to the best of their knowledge, they had never met Thurman and had never been to Sharon’s Tax Service.
U.S. District Judge W. Harold Albritton III also ordered Thurman to serve three years of supervised release.
Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division and U.S. Attorney for the Middle District of Alabama Leura G. Canary commended the IRS Criminal Investigation special agents who investigated the case as well as Tax Division Trial Attorneys Justin Gelfand and Michael Boteler, and Assistant U.S. Attorney Jared Morris, who are prosecuting the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts can be found at www.usdoj.gov/tax.
Monday 23 May 2011
New Jersey UBS Client Sentenced for Failing to Report More Than $750,000 in Swiss Bank AccountRead the Press Release
NEWARK, N.J. – A Hillsdale, N.J., woman was sentenced today to probation after admitting she filed a false tax return and concealed more than $750,000 in a Swiss bank account, New Jersey U.S. Attorney Paul J. Fishman and Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division announced.
Lucille Abrahamsen Jackson pleaded guilty on Nov. 18, 2010, to an information charging her with willfully subscribing to a false tax return. Jackson entered her guilty plea before U.S. District Judge Dennis M. Cavanaugh, who also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court, Jackson admitted that she signed and filed a false tax return for 2005 that failed to disclose her UBS account and income generated from the account’s assets. Jackson also failed to file a Report of Foreign Bank or Financial Accounts (FBAR) with respect to the UBS account. The account, originally opened in 1992, was transferred in 2000 into the name of Primrose Properties S.A., a nominee Panamanian corporation. Jackson’s father, Harry Abrahamsen, established Primrose in 2000 with the assistance of a foreign lawyer and a Swiss banker, in order to hide the account from the Internal Revenue Service (IRS). On April 12, 2010, Abrahamsen pleaded guilty to a federal charge of failing to file an FBAR, admitting he concealed more than $1 million in Swiss bank accounts. He is scheduled to be sentenced on May 24, 2011, by Judge Cavanaugh.
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax returns. Additionally, U.S. citizens must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Jackson admitted that her failure to file the FBAR and her failure to disclose the existence of the UBS account on her personal income tax returns allowed her to underreport personal income for the years 2000 through 2007. In 2003, the account reached a high balance of more than $759,376.
UBS entered into a deferred prosecution agreement in February 2009, in which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of its agreement, UBS provided the U.S. government with the identities of, and account information for, certain U.S. customers of UBS’ cross-border business.
As a condition of her guilty plea, Jackson has agreed to pay an FBAR penalty of $379,688.
U.S. Attorney Fishman and Principal Deputy Assistant Attorney General DiCicco commended special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Stacey A. Levine of the U.S. Attorney’s Office Criminal Division and Trial Attorney Michael C. Vasiliadis of the Department of Justice’s Tax Division.
Lender to Pay $300,000 to Settle Allegations Involving Small Business Administration LoanRead the Press Release
WASHINGTON – Garsh Lending LLC, a lender located in Miami, has agreed to pay the United States $300,000 to settle allegations involving a Small Business Administration (SBA) loan, the Justice Department announced today.
The allegations relate to the SBA’s 504 loan program, which offers small businesses long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization. A portion of the financing for 504 projects comes from independent third party lenders. Garsh, acting as the third party lender in this instance, loaned the borrower money and agreed to provide the SBA written notice of default on the loan. The United States alleges that the borrower missed payments on its loan with Garsh before the 504 loan had closed, yet Garsh failed to provide the required notice of default. The borrower never made any payments on the 504 loan, which was backed by an SBA guarantee.
“The SBA offers valuable assistance to small businesses and contributes to our nation’s economic development,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “The Justice Department will continue to protect the integrity of these important programs and safeguard the taxpayer dollars spent to make them effective."
“The SBA is an important program aimed at helping small businesses to expand and modernize,” said U.S. Attorney for the Southern District of Florida Wifredo Ferrer. “Compliance with loan repayment requirements is crucial to the success of the program. The U.S. Attorney’s Office will continue to help monitor and enforce compliance to protect the soundness of the SBA program.”
SBA General Counsel Sara Lipscomb said, “Increased lender oversight is a priority of the Office of General Counsel, and this recovery is part of that commitment.”
The settlement resulted from a collaborative effort by several federal agencies, including the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Florida and the SBA.
Leadership, Members and Associates of the Philadelphia La Cosa Nostra Family Charged with Racketeering Conspiracy and Related CrimesRead the Press Release
WASHINGTON – A superseding indictment was unsealed today against 13 members and associates of the Philadelphia organized crime family of La Cosa Nostra (LCN), including its current boss and underboss. The indictment charges various crimes involving racketeering conspiracy, extortion, loan sharking, illegal gambling and witness tampering.
The charges were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania; William H. Ryan Jr., Acting Attorney General for the Commonwealth of Pennsylvania; George C. Venizelos, Special Agent in Charge of the FBI’s Philadelphia Field Division; Special Agent in Charge Eric Hylton of the Philadelphia office of Internal Revenue Service (IRS)-Criminal Investigations; Philadelphia Police Commissioner Charles H. Ramsey; Pennsylvania State Police Commissioner Frank Noonan; and Superintendent of the New Jersey State Police Colonel Rick Fuentes
The defendants charged in the 50-count superseding indictment are Philadelphia LCN family boss Joseph Ligambi, Philadelphia LCN family underboss Joseph Massimino, George Borgesi, Martin Angelina, Anthony Staino Jr., Gaeton Lucibello, Damion Canalichio, Louis Monacello, Louis Barretta, Gary Battaglini, Robert Verrecchia, Eric Esposito and Robert Ranieri.
All but two of the defendants were arrested today and will make initial court appearances in U.S. District Court in Philadelphia at 1:30 pm. EST. Borgesi and Canalichio are already serving federal prison sentences for previous convictions.
“Today’s arrests and charges are the largest enforcement action in a decade against La Cosa Nostra in Philadelphia,” said Assistant Attorney General Breuer. “We have pried loose La Cosa Nostra’s grip on power and influence in the United States. But there is still work to be done. We will continue use all the tools at our disposal – including wiretaps, undercover operations and consensual recordings - to build cases against these individuals, and to bring them to justice.”
“It goes without saying that Philadelphia has a rich and vibrant history steeped in government, law and order,” said U.S. Attorney Memeger. “Indeed, the documents which form the basis of our government and the rule of law in this country were signed here. Unfortunately, there continues to exist within Philadelphia a criminal element which refuses to abide by our laws and continues to use force and violence to instill fear and exert power in order to make money. Today, we make clear that such activity will not be tolerated by my office and that La Cosa Nostra remains a priority for the Department of Justice.”
“The significance of the extensive and long-term investigative effort that has resulted in the unsealing of this indictment and the arrests today is that it represents our continuing commitment to the dismantling of the Philadelphia LCN crime syndicate family,” said FBI Special Agent-in-Charge Venizelos. “The FBI in Philadelphia and all of its law enforcement partners will remain focused on identifying and destroying the elements of organized crime that have long victimized Philadelphia and its surrounding communities.”
According to the superseding indictment, the Philadelphia LCN family is one of a number of LCN families based in various cities throughout the United States. The Philadelphia LCN family is led by a boss, who has authority over the activities of the members and associates of organization. If a boss is sent to prison, he appoints an “acting boss” to direct the organization’s affairs. In addition to the boss, the administration of the Philadelphia LCN includes an underboss and consigliere who together oversee crews of criminals led by captains, who in turn supervise organized crime soldiers and associates.
The superseding indictment alleges that for more than a decade, 10 of the defendants, including Ligambi as the boss and Masimino as the underboss, as well as other members and associates of the Philadelphia LCN family, conspired to conduct and participate in the affairs of the Philadelphia LCN family through a pattern of racketeering activity and through the collection of unlawful debts. The alleged racketeering activity includes numerous acts involving extortion, extortionate extensions of credit through usurious loans, extortionate collections, illegal gambling and witness tampering. The organization’s collection of unlawful debts allegedly relates to its loan sharking operations and debts that arose from their illegal gambling businesses.
For example, according to the superseding indictment, Ligambi, Massimino, Staino and other conspirators allegedly ran illegal electronic gambling device businesses, providing video poker machines and other gambling devices for bars, restaurants, convenience stores, coffee shops and other locations in Philadelphia and its suburbs, and then collected the illegal gambling proceeds. After federal law enforcement agents seized 34 of their illegal electronic gambling devices, Ligambi, Massimino and Staino allegedly forced the owners of another illegal electronic gambling device business to sell their illegal businesses to them, including 34 machines.
In another example, the superseding indictment charges that from 2002 to 2006 Massimino extorted yearly tribute payments from a bookmaker to the Philadelphia LCN family so that the bookmaker could avoid personal harm and disruption of the illegal bookmaking business.
According to the superseding indictment, the defendants promoted and furthered their illegal money-making activities through violence, actual and implied threats of violence, and the cultivation and exploitation of the Philadelphia LCN family’s long-standing reputation for violence. The defendants also used this reputation for violence to intimidate and prevent victims and witnesses from cooperating with law enforcement. The indictment alleges various instances where defendants used phrases such as “chop him up” and “put a bullet in your head” when threatening victims. In one instance, Canalicho allegedly used a bat to beat a victim for not paying a loan debt.
The superseding indictment alleges that some of the defendants continued their racketeering activities even after being sent to prison. For example, Borgesi and Massimino, while in prison, allegedly generated criminal proceeds for themselves and the Philadelphia LCN family by using intermediaries to operate criminal businesses and to make extortionate demands at their direction.
Each charge of racketeering conspiracy, collection of unlawful debt, collection of extensions of credit through extortionate means, making extortionate extensions of credit, financing extortionate extensions of credit and witness tampering carries a maximum penalty of 20 years in prison and a $250,000 fine. The illegal gambling charges each carry a maximum penalty of five years in prison and a $250,000 fine.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section, Assistant U.S. Attorneys David E. Troyer and Frank A. Labor III for the Eastern District of Pennsylvania, and Senior Deputy Attorney General Heather A. Castellino of the Pennsylvania Office of Attorney General.
The case is being investigated by the FBI, the IRS-Criminal Investigations, the U.S. Department of Labor Office of Labor Racketeering and Fraud Investigations, Office of Inspector General, the Pennsylvania State Police, the New Jersey State Police and the Philadelphia Police Department. Additional assistance was provided by the New Jersey Department of Corrections.
An indictment is merely an accusation and each defendant is presumed innocent until and unless they are proven guilty.
Justice Department Seeks to Shut Down South Florida Tax PreparersRead the Press Release
WASHINGTON – The United States has asked a federal court to permanently bar two Broward County, Fla., tax preparers and their business from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Ronald Jerome Scriven, Danesa L. Webb and their business, Tamijah International LLC, prepare returns for customers that report false income and expenses and falsely claim several tax credits, including the first-time-homebuyer credit.
Congress enacted the first-time-homebuyer credit in 2008 to strengthen the real estate market and help the economy. It allowed persons who have not owned a home in the previous three years to claim a credit of up to $8,000 against their federal income taxes if they bought a home after April 8, 2008. Congress later expanded the program to allow current homeowners to claim the credit for a purchase of a new home, under certain conditions. The credit has since expired.
The government complaint, filed in the Southern District of Florida, alleges that the defendants claimed the credit on their customers’ tax returns even though they knew the customers had not bought new homes. The complaint also alleges that the defendants claimed fabricated business deductions and education credits on some customers’ returns, and that they failed to report the proper amount of customers’ income on other returns. At times, according to the complaint, the defendants prepared returns for persons without those persons’ knowledge and charged exorbitant fees for their services.
Return preparer fraud is identified by the IRS as one of the “Dirty Dozen” tax scams taxpayers are urged to avoid. In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website .
Justice Department Files Antitrust Lawsuit to Stop H&R Block Inc. from Buying TaxACTRead the Press Release
WASHINGTON — The Department of Justice filed a civil antitrust lawsuit today to block the proposed acquisition by H&R Block Inc. of TaxACT, a digital do-it-yourself tax preparation software provider. The department said that the proposed deal would substantially lessen competition in the growing U.S. digital do-it-yourself tax preparation software market, resulting in higher prices and reduced innovation and quality for products that are used annually by millions of American taxpayers.
The Department of Justice’s Antitrust Division filed its lawsuit in U.S. District Court in Washington, D.C., to prevent H&R Block from acquiring 2SS Holdings Inc., an entity within TA IX L.P. and the maker of TaxACT.
Between 35 and 40 million taxpayers use digital software products, either on the provider’s website or uploaded onto the taxpayers’ computers, to prepare and file their federal and state income taxes. Currently, three companies account for 90 percent of all sales of digital do-it-yourself tax preparation products, and the acquisition would combine H&R Block and TaxACT, respectively the second- and third-largest providers of digital do-it-yourself tax preparation products, the department said.
“The combination of H&R Block and TaxACT would likely lead to millions of American taxpayers paying higher prices for digital do-it-yourself tax preparation products,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “In addition, TaxACT has aggressively competed in the digital do-it-yourself tax preparation market with innovations such as free federal filing. If this merger is allowed to proceed, that type of innovation will be lost.”
On Oct. 13, 2010, H&R Block agreed to purchase 2SS Holdings in a transaction valued at $287.5 million.
According to the department’s complaint, H&R Block’s acquisition of 2SS Holdings would eliminate a company that has aggressively competed with H&R Block and disrupted the U.S. digital do-it-yourself tax preparation market through low pricing and product innovation. By ending the head-to-head competition between TaxACT and H&R Block, American taxpayers would be left with only two major digital do-it-yourself tax preparation providers. This would lead to higher prices, lower quality, and reduced innovation. In addition, by taking control of the TaxACT business, which has been a maverick in the market, it would be easier for H&R Block to coordinate on prices, quality, and other business decisions with the other remaining industry leader – Mountain View, Calif.-based Intuit, which makes personal finance programs such as Quicken and TurboTax – the department said.
The complaint includes statements from H&R Block presentations and emails, such as:
· A primary benefit for H&R Block in acquiring TaxACT is: “Elimination of competitor.”
· In discussing the potential acquisition of TaxAct, one of the “[s]trategic [o]pportunities” of the acquisition is: “Acquire TaxACT and eliminate the brand to regain control of industry pricing and further price erosion.”
· The rationale for launching the H&R Block’s free online product was “[t]o match competitor offerings and stem online share loss to Intuit and TaxACT.”
· “Retail volume at Staples [is] at risk due to introduction of TaxACT [r]etail software on combined display.”
The department also alleges that by eliminating TaxACT, a significant, disruptive and aggressive competitor, the acquisition would likely substantially lessen competition between H&R Block and Intuit by facilitating coordination between them. H&R Block would likely degrade TaxACT’s free product and H&R Block and Intuit would increase the prices for their paid products. An internal H&R Block email said, “The other possible strategic consideration is that Intuit and HRB together would have 84% of the digital market and we both obviously have great incentive to keep this channel profitable.”
H&R Block is a Missouri corporation headquartered in Kansas City, Mo. H&R Block is one of the world’s largest tax service providers, utilizing more than 100,000 trained tax professionals. The company, with its H&R Block At Home products, is the second largest provider of digital do-it-yourself tax preparation products. In its fiscal year 2010, ending April 30, 2010, H&R Block prepared more than 23 million tax returns worldwide and earned revenues of more than $3.8 billion. Its digital do-it-yourself tax preparation product was used in 2010 by more than 5.9 million customers to prepare and file their federal and state income tax returns.
2SS Holdings, the maker of the TaxACT digital do-it-yourself tax preparation products, is a Delaware corporation headquartered in Cedar Rapids, Iowa. 2SS Holdings is the third-largest digital do-it-yourself tax preparation product provider in the United States, and the second-largest provider of such products online through the Internet. TaxACT products were used in 2010 by more than 5 million customers to prepare and file their federal and state income tax returns.
TA IX L.P. is a limited partnership organized and existing under the laws of Delaware and headquartered in Boston. TA IX L.P. is the majority shareholder of 2SS Holdings.
Friday 20 May 2011
VeriFone, Hypercom and Ingenico Abandon Plans to Divest Point of Sale Business to Ingenico Following Justice Department LawsuitRead the Press Release
WASHINGTON —VeriFone Systems Inc., Hypercom Corp. and Ingenico S.A. have abandoned plans for Hypercom to divest its U.S. point-of-sale (POS) business to Ingenico, the Department of Justice announced today. Their decision to abandon the divestiture came just one week after the department’s Antitrust Division filed a lawsuit to block the proposed acquisition by VeriFone of Hypercom and to block the proposed divestiture of Hypercom’s U.S. business to Ingenico. The department’s lawsuit to block the overall deal between VeriFone and Hypercom is still pending, and as the companies have publicly reported, the department is in discussions with them to identify an alternative buyer that is acceptable to the department.
“We are gratified that the parties recognized the anticompetitive nature of the agreement and abandoned its divestiture plan promptly,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Our discussions with the companies will continue as they seek to find an alternative buyer that will resolve the department’s antitrust concerns.”
POS terminals are used by retailers and other firms to accept electronic payments such as credit cards and debit cards. The three companies manufacture more than 90 percent of all POS terminals in the United States.
The department’s complaint alleged that the merger of VeriFone and Hypercom would result in a dominant POS terminal manufacturer that would likely raise prices and reduce innovation, quality, product variety and service. The complaint also alleged that the proposed divestiture to Ingenico did not adequately resolve the competitive concerns raised by the VeriFone/Hypercom transaction.
VeriFone is a Delaware corporation headquartered in San Jose, Calif. VeriFone earned more than $1 billion in worldwide revenues in its last fiscal year, ending in October 2010.
Hypercom is a Delaware corporation headquartered in Scottsdale, Ariz. Hypercom earned more than $450 million in worldwide revenues in 2010.
Ingenico is a French corporation with worldwide revenues in 2010 of more than $1.3 billion.
United States Announces Bankruptcy Settlement with Oil Company in Wake of October 2009 Explosions and FireRead the Press Release
WASHINGTON – Under a settlement agreement lodged today in federal bankruptcy court in Delaware, Caribbean Petroleum Corp., Caribbean Petroleum Refining L.P., and Gulf Petroleum Refining Corp. – Puerto Rico (collectively, CAPECO) will pay more than $8.2 million to address environmental liabilities relating to CAPECO’s former petroleum distribution facility in Bayamón, Puerto Rico, and more than 170 service stations owned or leased by CAPECO throughout Puerto Rico.
The $8.2 million payment will reimburse the Environmental Protection Agency (EPA) and the U.S. Coast Guard for cleanup costs incurred at the Bayamón facility during the bankruptcy, and cover penalties for violations of the Clean Water Act (CWA) and Resource Conservation and Recovery Act (RCRA) during the bankruptcy. The settlement also provides the United States with allowed general unsecured claims in excess of $18 million. These claims are for cleanup costs and penalties for violations of the CWA and RCRA before the bankruptcy, and will be paid based on the availability of funds in the bankruptcy estate.
CAPECO filed Chapter 11 petitions in the bankruptcy court in August 2010 following a series of catastrophic explosions and fires at the Bayamón facility on Oct. 23, 2009. The explosions, measuring 2.8 on the earthquake Richter scale, destroyed 15 above-ground storage tanks and damaged another 17 above-ground storage tanks, releasing approximately 30 million gallons of petroleum. EPA, serving as lead federal agency, conducted emergency cleanup actions with funds from the Oil Spill Liability Trust Fund administered by the U.S. Coast Guard’s National Pollution Funds Center. In February 2011, the United States filed proofs of claim against CAPECO in the bankruptcy proceeding, seeking to recover cleanup costs as well as penalties for violations of the CWA and RCRA.
The bankruptcy settlement is part of a broader settlement that includes three non-bankruptcy agreements announced on May 2, 2011 between EPA and Puma Energy Caribe LLC, under which Puma will perform cleanup work at the Bayamón facility. A fourth non-bankruptcy agreement, among Puma, the EPA and the Commonwealth of Puerto Rico, requires that Puma undertake comprehensive compliance measures at 147 of the service stations and make environmentally beneficial improvements at the service stations that are not required by regulations. Puma acquired the Bayamón facility and 147 service stations on May 11, 2011, through a court-ordered bankruptcy sale. CAPECO has also agreed to pay $850,000 to address the costs of investigation and remediation that is determined to be needed at service stations not acquired by Puma
“This bankruptcy settlement and the earlier agreements with Puma Energy are the result of a commitment by the United States to clean up the contaminated CAPECO site after the catastrophic explosions and fires in October 2009,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “Today’s settlement will send a message to the regulated community that they cannot declare bankruptcy and avoid environmental liabilities.”
“Today’s bankruptcy settlement and the earlier agreements with the new owner, Puma, will advance the ongoing work to clean up the former CAPECO facility,” said EPA Regional Administrator Judith Enck. “EPA is encouraged that Puma has agreed to perform necessary environmental work. EPA will continue to ensure that the cleanup of this facility, and compliance efforts at the service stations, are done properly and that the health of people in the surrounding communities is protected.”
The bankruptcy settlement is subject to approval by the bankruptcy court. Before approval, the settlement agreement will be lodged with the court for a period of seven days to afford members of the public an opportunity to comment on the settlement.
Two Aryan Brotherhood of Texas Gang Members <br /> Plead Guilty to Racketeering ChargesRead the Press Release
WASHINGTON – Two members of the Aryan Brotherhood of Texas (ABT) prison-based gang pleaded guilty today in federal court to racketeering aggravated assault in the 2008 beating of a gang prospect in Tomball, Texas, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney José Angel Moreno for the Southern District of Texas.
Shane Everett Dallmeyer, 30, aka “Lock Jaw,” and Michael Raymond Burkett, 33, aka “Redneck,” each pleaded guilty today to one count of committing violent crimes in aid of racketeering activity in Houston before Senior U.S. District Judge Ewing Werlein Jr.
According to the guilty pleas, Dallmeyer and Burkett were members of ABT , a powerful race-based, state-wide organization that operates inside and outside of state and federal prisons throughout Texas and the United States. The ABT was established in the early 1980s within the Texas prison system. The ABT modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to court filings, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, however, the ABT has expanded its criminal enterprise to include illegal activities for profit.
According to information presented in court, the ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, are required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to the guilty pleas, Dallmeyer and Burkett participated in the beating of an ABT prospect member at the home of another ABT gang member in Tomball, Texas, on Sept. 22, 2008. The ABT prospect, who sustained serious bodily injury, was beaten by ABT gang members because he allegedly violated certain ABT rules of conduct.
On April 29, 2011, ABT gang member Stephen Kyle Knebel, 33, aka “Lil Evil,” pleaded guilty to racketeering aggravated assault. Fellow gang member, Bobby Dan Teets, 45, aka “Bull,” pleaded guilty to the same charge in December 2010.
Dallmeyer, Burkett, Knebel and Teets all face a maximum sentence of 20 years in prison. Sentencing for Dallmeyer and Burkett is scheduled for Aug. 12, 2011. Sentencing for Teets is scheduled for July 25, 2011, and sentencing for Knebel is scheduled for July 29, 2011.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the FBI; the U.S. Marshals Service; the Texas Rangers; the Texas Department of Public Safety; the Montgomery County, Texas, Precinct 4 Constable’s Office; the Montgomery County, Texas, Sheriff’s Department; the Houston Police Department-Gang Division; and the Harris County, Texas Sheriff’s Office.
The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Jay Hileman of the U.S. Attorney’s Office for the Southern District of Texas.
Samuel K. Crocker Is Appointed United States Trustee for Tennessee, KentuckyRead the Press Release
WASHINGTON - Samuel K. Crocker has been appointed by Attorney General Eric Holder as U.S. Trustee for Tennessee and Kentucky (Region 8), and will assume his duties in June, the Executive Office for U.S. Trustees announced today. Mr. Crocker replaces Daniel M. McDermott, the U.S. Trustee for Region 9 (Ohio and Michigan), who has also served as U.S. Trustee for Region 8 since January 2011.
Mr. Crocker has engaged in the private practice of law in Nashville, Tenn., for more than 25 years, primarily representing bankruptcy debtors, creditors and trustees. In addition, since 1984 he has been a member of the panel of chapter 7 trustees in the Middle District of Tennessee. He has also served as a trustee in numerous chapter 11 cases.
Mr. Crocker has argued cases before the Fifth, Sixth and Eleventh Circuit Courts of Appeal. He is a former board member of the Mid-South Commercial Law Institute, which presents an annual seminar in Nashville on commercial law and bankruptcy issues, and a former board member and past president of the National Association of Bankruptcy Trustees. An authority on bankruptcy and trustee-related matters, Mr. Crocker speaks at bankruptcy seminars and training programs around the country and writes articles for scholarly journals and other bankruptcy publications. Mr. Crocker received his law degree from the University of Mississippi School of Law in Oxford, Miss., and his Bachelor of Arts degree from Vanderbilt University in Nashville.
The U.S. Trustee Program (USTP) is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 8 is headquartered in Memphis, with offices in Nashville and Chattanooga, Tenn., and Louisville and Lexington, Ky.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411President Barack Obama Grants PardonsRead the Press Release
WASHINGTON – Today President Barack Obama granted pardons to the following eight individuals:
Randy Eugene Dyer – Burien, Wash.
Offense: Conspiracy to import marijuana (hashish), 21 U.S.C. § 963; conspiracy to remove baggage from the custody and control of the U.S. Customs Service and convey false information concerning an attempt to damage a civil aircraft, 18 U.S.C. § 371.
Sentence: June 19, 1975; Western District of Washington; five years in prison and two years of special parole (special parole term subsequently vacated.)
Danny Alonzo Levitz - Angola, Ind.
Offense: Conspiracy, 18 U.S.C. § 371.
Sentence: Aug. 18, 1980; Northern District of Indiana; two years of probation, $400 fine.
Michael Ray Neal - Palm Coast, Fla.
Offense: Manufacture, assembly, modification and distribution of equipment for unauthorized decryption of satellite cable programming, 47 U.S.C. § 605(e)(4).
Sentence: May 31, 1991, as amended June 2, 1992; Eastern District of Virginia; six months in prison, three years of supervised release conditioned on six months of home confinement, $2,500 fine.
Edwin Alan North - Wolcottville, Ind.
Offense: Transfer of a firearm without payment of transfer tax, 26 U.S.C. § 5861(e).
Sentence: Aug. 18, 1980; Northern District of Indiana; six months of unsupervised probation.
Allen Edward Peratt Sr. - Sioux Falls, S.D.
Offense: Conspiracy to distribute methamphetamine, 21 U.S.C. §§ 841(a)(1) and 846.
Sentence: July 23, 1990, as amended May 29, 1991; District of South Dakota; 30 months in prison, five years of supervised release.
Christine Marie Rossiter - Lincoln, Neb.
Offense: Conspiracy to distribute less than 50 kilograms of marijuana, 21 U.S.C. §§ 841(a)(1) and 846.
Sentence: Oct. 7, 1992; District of Nebraska; three years of probation conditioned on performance of 500 hours of community service.
Patricia Ann Weinzatl - Prentice, Wis.
Offense: Structuring transactions to evade reporting requirements, 31 U.S.C. § 5324(a)(3).
Sentence: Aug. 15, 2001; Western District of Wisconsin; three years of probation, $5,000 fine.
Bobby Gerald Wilson - S ummerton, S.C.
Offense: Aiding and abetting the possession and sale of illegal American alligator hides (Lacey
Act), 16 U.S.C. § 3373(d)(1)(B) and 18 U.S.C. § 2.
Sentence: Dec. 19, 1985, as amended May 13, 1986; Southern District of Georgia; three and one-half months in prison, five years of probation conditioned on performance of 300 hours of community service.
Massachusetts Man Sentenced to Five Years in Prison for Child Pornography ChargesRead the Press Release
WASHINGTON – Timothy S. Kelly, 40, of North Attleboro, Mass., was sentenced today to five years in prison and five years of supervised release following his prison term for receipt and possession of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the District of Massachusetts Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Boston.
Kelly was sentenced by U.S. District Court Judge Richard G. Stearns in Boston. On Feb. 23, 2011, Kelly pleaded guilty to four counts of receipt of child pornography and one count of possession of child pornography. In pleading guilty, Kelly admitted to using an online chat program to communicate with and transmit pictures to others in real time. In these chats, Kelly received images of child pornography and discussed his sexual interest in girls between the ages of 8 and 13 years old. During the execution of a federal search warrant at his residence, Kelly admitted to collecting and trading child pornography since 2003. The images he received and possessed included depictions of prepubescent children engaging in sexually explicit conduct. Kelly previously was employed as a swim coach for the Attleboro YMCA and North Attleboro High School.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Michael I. Yoon of the District of Massachusetts and CEOS Trial Attorney Bonnie L. Kane of the Criminal Division, in coordination with the Bristol County District Attorney’s Office. The case against Kelly was investigated by ICE HSI with the North Attleboro Police Department providing significant assistance.
Iowa Ready-Mix Concrete Company Pleads Guilty to Participating in Price-Fixing and Bid-Rigging ConspiraciesRead the Press Release
WASHINGTON - An Iowa ready-mix concrete company pleaded guilty to participating in three separate conspiracies to fix prices and/or rig bids for the sales of ready-mix concrete, the Department of Justice announced today.
According to a three-count felony charge filed on May 18, 2011, in U.S. District Court in Sioux City, Iowa, GCC Alliance Concrete Inc., a producer of ready-mix concrete headquartered in Orange City, Iowa, participated in separate conspiracies with three different companies involving agreements to fix prices and/or to rig bids for ready-mix concrete sold to various companies in the northern district of Iowa and elsewhere. The department said that the conspiracies took place during various time periods starting as early as January 2006 to as late as August 2009. Under the terms of the plea agreement, GCC Alliance Concrete has agreed to pay a criminal fine, as determined by the court.
Ready-mix concrete is a product comprised of cement, aggregate (sand and gravel), water and other additives. The concrete generally is produced in a concrete plant and is transported by concrete-mixer trucks to work sites, where it is used in various types of construction projects, including buildings and roads.
According to court documents, GCC Alliance Concrete participated in conspiracies through its former sales manager, Steven VandeBrake, in which he engaged in discussions concerning project bids for sales of ready-mix concrete, submitted rigged bids at collusive and noncompetitive prices to customers in Iowa and elsewhere and accepted payment for sales of ready-mix concrete at predetermined prices. VandeBrake also engaged in discussions and reached agreements regarding the prices on the conspirators’ annual price lists for ready-mix concrete sold in Iowa on behalf of GCC Alliance Concrete, the department said.
GCC Alliance Concrete is charged with violating the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge arose from an ongoing federal antitrust investigation of the ready-mix concrete industry in Iowa and surrounding states. As a result of the investigation, on May 26, 2010, VandeBrake pleaded guilty to participating in the conspiracies and, on Feb. 8, 2011, was sentenced to serve 48 months in prison and to pay a criminal fine of $829,715. On the same day, Kent Robert Stewart, the president of another Iowa ready-mix concrete company, was sentenced to serve a year and a day in prison and to pay a $83,427 criminal fine for conspiring with VandeBrake to fix prices and rig bids. Stewart pleaded guilty on May 24, 2010. Chad Van Zee, the president of another Iowa ready-mix concrete company, pleaded guilty on Dec. 6, 2010, to conspiring with VandeBrake to fix prices of ready-mix concrete. Van Zee is scheduled to be sentenced on June 21, 2011.
The investigation is being conducted by the Antitrust Division’s Chicago Field Office, the FBI’s Sioux City Resident Agency and the Department of Transportation’s Office of Inspector General, with the assistance of the U.S. Attorney’s Office in Sioux City. Anyone with information concerning bid rigging, price fixing or territorial allocation related to the ready-mix concrete industry in Iowa and its surrounding states should contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
International Competition Network Presents Vision for Its Second DecadeRead the Press Release
WASHINGTON – At its 10th annual conference in The Hague, the Netherlands, the International Competition Network (ICN) adopted new materials on how to assess market dominance, resolve cartel cases and manage competition projects effectively, the Department of Justice announced today. The organization also presented a comprehensive evaluation of how competition agencies use the ICN’s merger-related materials, and unveiled the first four teaching modules of a “virtual university” of competition law and practice.
The ICN conference, hosted by the Netherlands Competition Authority, was held on May 18-20, 2011. Almost 500 delegates participated, representing over 90jurisdictions from around the world, and included competition experts from international organizations and the legal, business, consumer and academic communities. Officials from the Department of Justice Antitrust Division and the Federal Trade Commission (FTC) led the U.S. delegates at the conference. The conference showcased the accomplishments of ICN working groups on mergers, unilateral conduct, cartels, competition advocacy and competition agency effectiveness.
“As we celebrate the 10th anniversary of the ICN this year, it is important to recognize how much our international cooperation and coordination efforts have enhanced antitrust enforcement worldwide,” said Assistant Attorney General Christine Varney of the Department of Justice’s Antitrust Division. “By working cooperatively on cases when possible and by sharing best practices we can continue to promote effective antitrust enforcement and competition globally.”
The ICN’s Merger Working Group aims to promote best practices in the design and operation of merger review regimes. Co-chaired by the Department of Justice and the Irish Competition Authority, the working group presented a comprehensive assessment of the use and impact of 10 years of ICN work on mergers and an evaluation of new work areas to help make merger review more effective. Rachel Brandenburger, Special Advisor, International to Assistant Attorney General Varney, led the conference discussion of current trends and developments in merger enforcement.
The Cartel Working Group produced a paper on cartel case resolution methods and compiled submissions from more than 60 member agencies to add to the world’s largest collection of cartel awareness and outreach materials. Belinda Barnett, Criminal Deputy General Counsel of the Department of Justice’s Antitrust Division, participated in a panel discussion on cartel enforcement awareness and outreach.
The conference highlighted the work of the Agency Effectiveness Working Group, which is developing a competition agency manual as a resource to enhance agencies’ effectiveness and efficiency. FTC Chairman Leibowitz presented opening remarks and participated in a panel discussion on the effective management of competition agencies. New materials were presented on such topics as project delivery and knowledge management.
“Sharing views and techniques with our foreign counterparts allows us all to identify best practices to apply in our home jurisdictions,” Chairman Leibowitz said. “As it enters its second decade, the ICN continues to build on the momentum and successes of its first 10 years. This year’s conference again demonstrated how the ICN serves as a critical platform for enhancing the effectiveness of competition agencies and maximizing our ability to act as effective consumer champions.”
The conference also showcased the ICN Curriculum Project, a project led by FTC Commissioner and ICN Vice Chairman Kovacic to create a “virtual university” of training materials on competition law and practice. The materials include video lectures and other resources gathered into an online interactive educational center.
Other developments included the work of the Unilateral Conduct Working Group, which promotes convergence and sound enforcement of laws governing conduct by firms with market power. Co-chaired by the FTC and Germany’s competition authority, the Bundeskartellamt, the working group drafted the initial section of a “workbook” for agency investigators on determining market dominance and substantial market power. Randolph W. Tritell, Director of the FTC’s Office of International Affairs, presented opening remarks for a session on the competitive analysis of loyalty discounts and rebate programs.
The Advocacy Working Group prepared a competition advocacy toolkit with an overview of the advocacy process and guidance tools for agencies, and presented the results of evaluating its existing work on conducting market studies. In addition, the Netherlands Competition Authority, the conference’s host agency, conducted a panel and presented a report on the role of consumer welfare in competition enforcement.
The ICN was created in October 2001, when the DOJ and FTC joined antitrust agencies from 13 other jurisdictions to increase understanding of competition policy and promote convergence toward best practices around the world. The ICN now includes 117 member agencies from 103 jurisdictions.
ICN documents are available at www.internationalcompetitionnetwork.org.
Thursday 19 May 2011
Justice Department Files Lawsuit Alleging Disability-Based Housing Discrimination at Nine Apartment Complexes in Three StatesRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against the owners, developers and design professionals involved in the design and construction of nine multi-family housing complexes in Mississippi, Louisiana and Tennessee. The nine complexes comprise more than 2,000 apartments with more than 800 ground-floor units that are required by the Fair Housing Act to contain accessible features. Eight of the complexes contain leasing offices that are required by the Americans with Disabilities Act (ADA) to contain accessible features.
The complaint names the Bryan Company; Bryan Construction Company Inc.; Steve Bryan; Mid-South Houston Partners; Mid-South Development LLC (aka MSD LLC); the Vineyards Apartments LLC; Equity Properties LLC (formerly known as Windsor Lake Apartment LP); Cypress Lake Development LLC; Stephen G. Hill; Pickering Firm Inc. (aka Pickering Inc.); Larry Singleton (dba Singleton Hollomon Architects); H D Lang and Associates Inc.; Richard A. Barron, Architect; Shows Dearman & Waits Inc.; Timothy R. Burge, PA (dba Professional Associates Inc.); Canizaro Cawthon Davis (formerly known as Canizaro Trigiani Architects); Smith Engineering & Surveying Inc. (aka Smith Engineering Firm Inc., aka S.E.C.O. Inc., dba Smith Engineering Co. Inc.); Evans-Graves Engineers; and J.V. Burkes & Associates Inc. as the parties responsible for violating these laws. The complaint also names eleven current owners as necessary parties in whose absence complete relief cannot be afforded.
The suit, filed in the U.S. District Court for the Southern District of Mississippi, alleges that the nine properties are inaccessible to persons with disabilities because they, for example, lack accessible pedestrian routes; lack accessible parking; have steep cross and running slopes; have doors that are not sufficiently wide enough to allow passage by persons in wheelchairs; have insufficient accessible routes into and through the units; have light switches, electrical outlets, thermostats and other environmental controls in inaccessible locations; and/or have kitchens and bathrooms that are inaccessible to persons in wheelchairs. Further, the complaint alleges that the leasing offices are inaccessible to persons with disabilities because, for example, they lack accessible pedestrian approach routes, lack compliant parking spaces, have inaccessible counters, and/or have inaccessible door hardware.
“The Fair Housing Act and the Americans with Disabilities Act include provisions to ensure that persons with disabilities have opportunities to find and live comfortably in multifamily housing across the nation,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “The department will continue its vigorous pursuit of equal housing opportunities for all people, including those with disabilities.”
“The design and construction of multi-family apartment complexes must comply with the Fair Housing laws and the Americans with Disabilities Act,” said John M. Dowdy, U.S. Attorney for the Southern District of Mississippi. “My office remains vigilant in its efforts to eradicate discrimination and to ensure that persons with disabilities have legally accessible accommodations in which to live. We will remain steadfast in making sure that developers, owners, architects and civil engineers design and develop apartments and other buildings which comply with these laws.”
The suit seeks a court order declaring that the defendants’ actions violate the Fair Housing Act and the ADA, prohibiting the defendants from engaging in future discrimination in the design and construction of multi-family housing; requiring the defendants to bring the covered multi-family dwellings, and public and common use areas into compliance with fair housing laws; and awarding monetary damages to persons harmed by the defendants’ discriminatory housing practices.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Title III of the ADA requires, among other things, that public accommodations comply with specific requirements related to architectural standards to ensure accessible public and common use areas. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Former Department of Defense Employee Pleads Guilty to Stealing Financial Assistance Funds Intended for Service MembersRead the Press Release
WASHINGTON – A former civilian employee of the Department of Defense pleaded guilty today in Columbus, Ga., to conversion of Army Emergency Relief (AER) funds while he was employed at Camp Humphreys in the Republic of Korea, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Tyrone L. Ellis, 56, of Columbus, pleaded guilty today in U.S. District Court for the Middle District of Georgia to one count of conversion. Ellis was charged in an indictment returned on Oct. 27, 2010, and unsealed following his arrest on Nov. 3, 2010.
The AER is a private, non-profit organization that serves as the emergency financial assistance organization for the U.S. Army. AER’s operations are financed by voluntary contributions from active and retired soldiers during an annual fund raising campaign, as well as by unsolicited contributions, repayment of outstanding loans and income from reserve funds.
As part of his guilty plea, Ellis admitted that he worked as an Assistant Army Emergency Relief Officer at Camp Humphreys in 2005 and 2006. During that time period, Ellis was tasked with providing AER loans and grants to service members and their families in financial need. Ellis admitted that he approved grants for a dozen soldiers that were greater than the amounts they needed, and that he requested and received approximately $9,250 back from the grant recipients, which he converted to his own use. Ellis also admitted making false statements to investigators in 2006 when questioned about the allegations.
At sentencing, scheduled for Aug. 25, 2011, Ellis faces up to 10 years in prison and a $250,000 fine.
This case is being prosecuted by Trial Attorneys John P. Pearson and Richard B. Evans of the Criminal Division’s Public Integrity Section, and is being investigated by the Army Criminal Investigation Division, with assistance from the Defense Criminal Investigative Service and U.S. Army Audit Agency.
Former CEO of U.S. Telecommunications <br /> Company Pleads Guilty to Foreign Bribery ConspiracyRead the Press Release
WASHINGTON – Jorge Granados, the former chief executive officer of Miami-based telecommunications company Latin Node Inc. (LatiNode), pleaded guilty today to conspiring to pay bribes to government officials in Honduras, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. To date, four former senior executives of LatiNode have pleaded guilty to conspiring to pay bribes to the Honduran officials.
Granados, 54, pleaded guilty before U.S. District Judge Joan A. Lenard in U.S. District Court in Miami to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA).
“Jorge Granados today admitted to authorizing illegal bribe payments to Honduran officials, and now he must pay for his crime,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “Foreign bribery undermines competition in the marketplace, and weakens democratic institutions. CEOs and other corporate executives should know that now, more than ever, violating the Foreign Corrupt Practices Act will lead to criminal prosecution.”
“Today’s plea reflects the FBI’s commitment to aggressively pursue individuals and businesses that engage in corruption around the globe,” said Special Agent in Charge John V. Gillies of the FBI’s Miami Field Office. “Those who elect to pay illegal bribes to further their business interests in the United States or abroad should know that they are not beyond the reach of the FBI. We will work with our law enforcement partners and prosecutors to bring these corrupt individuals to justice.”
“Business executives should beware that paying bribes in foreign countries leads to prosecution in the United States,” said U.S. Immigration and Customs Enforcement (ICE) Director John Morton. “Our Foreign Corruption Investigative group will continue to provide resources and support to our international partners in an effort to fight corrupt business practices.
According to court documents, LatiNode provided wholesale telecommunications services using Internet protocol technology to countries throughout the world, including Honduras. In December 2005, LatiNode learned that it was the sole winner of an “interconnection agreement” with Empresa Hondureña de Telecomunicaciones (Hondutel), the wholly state-owned telecommunications authority in Honduras. The agreement permitted LatiNode to use Hondutel’s telecommunications lines in order to establish a network between Honduras and the United States, and to provide long distance services between the two countries.
According to court documents, Granados and other LatiNode executives, including Manuel Salvoch, the chief financial officer; Manuel Caceres, the vice president for business development; and Juan Pablo Vasquez, the chief commercial officer agreed to a secret deal to pay bribes to Hondutel officials, including the general manager, a senior attorney for Hondutel and a minister of the Honduran government who became a representative on the Hondutel Board of Directors. According to court documents, between September 2006 and June 2007, LatiNode executives paid more than $500,000 in bribes to the Honduran officials, concealing many of the payments by laundering the money through LatiNode subsidiaries in Guatemala and to accounts in Honduras controlled by the Honduran government officials. Granados admitted that he authorized bribe payments.
At sentencing, scheduled for Aug. 22, 2011, Granados faces up to five years in prison and a fine of the greater of $250,000, or twice the value gained or lost.
On April 7, 2009, LatiNode pleaded guilty to a one-count information charging the company with a criminal violation of the FCPA. As part of the plea agreement, LatiNode agreed to pay a $2 million fine. The resolution of the criminal investigation of LatiNode reflected, in large part, the actions of eLandia International Inc. in disclosing potential FCPA violations to the department after eLandia’s acquisition of LatiNode in 2007 and discovery of the improper payments. Granados and Caceres were charged in a Dec. 14, 2010, indictment with violations of the FCPA and international money laundering. On Dec. 17, 2010, criminal informations were filed against Salvoch and Vasquez, charging them with conspiracy to violate the FCPA. Salvoch, Vasquez and Caceres pleaded guilty to conspiracy to violate the FCPA on Jan. 12, 2011, Jan. 21, 2011, and May 18, 2011, respectively. The three defendants face prison sentences of up to five years.
The case is being prosecuted by Acting Senior Deputy for Litigation Jeffrey H. Knox and Trial Attorney Amanda Aikman of the Criminal Division’s Fraud Section. Significant assistance was provided by Trial Attorney James M. Koukios. The case was investigated by the FBI’s Miami Field Office and ICE Homeland Security Investigation’s Foreign Corruption Investigations Group in Miami.
Federal Court Bars Ohio Accountant and Former Business Partner from Promoting Oil-and-Gas Tax Fraud SchemeRead the Press Release
WASHINGTON – A federal court has permanently barred two men from promoting an alleged tax fraud scheme involving interests in purported oil and gas wells, the Justice Department announced today. Judge James L. Graham of the U.S. District Court for the Southern District of Ohio entered the permanent injunction orders against Daniel D. Weddington of Newark, Ohio, and James R. Earl of Heath, Ohio. Both men were preliminarily enjoined in 2008. A third defendant, Jeffrey L. Gaumer of Newark, N.J., was permanently enjoined in 2008. All three men agreed to the permanent injunctions without admitting to the government’s allegations against them in the amended complaint.
Weddington recently pleaded guilty in federal court to two counts of aiding and assisting the filing of false income tax returns and one count of obstructing the administration of the internal revenue laws in connection with his role in the oil-and-gas well scheme.
The amended complaint in the civil injunction case alleged that Weddington, Earl and Gaumer marketed a scheme to claim tax deductions for fictitious well-drilling costs to more than 200 customers across the country. Customers allegedly paid for their purported investments using sham notes that were supposedly paid off by fictitious gas royalty payments from fictitious wells. The amended complaint also alleged that the defendants used a shell corporation, Aurora Capital Group Inc., to issue sham letters of credit to customers in an attempt to make the customers’ sham notes appear legitimate, so as to deceive the Internal Revenue Service (IRS).
The amended complaint also asserted that Weddington is a public accountant, that Gaumer is a certified public accountant in the same accounting firm, and that they prepared tax returns for the majority of the scheme’s participants. According to the amended complaint, the IRS estimated that the scam caused tax revenue losses of $5.7 million to $6.9 million from 2001 to 2004.
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 .
Bank Director Charged with Hiding Foreign AssetsRead the Press Release
WASHINGTON - A Boston venture capitalist and director at Boston Private Bank and Trust Company was charged with failing to report his foreign bank account and income to the Department of the Treasury. Principal Deputy Assistant Attorney General of the Department of Justice’s Tax Division John A. DiCicco, U.S. Attorney for the District of Massachusetts Carmen M. Ortiz and William P. Offord, Special Agent in Charge of the Internal Revenue Service (IRS) Criminal Investigation, Boston Division made the announcement today.
According to the criminal information and plea agreement filed today, from 2003 to 2008, Michael Schiavo, 53, of Westford, Mass., held an account in his name at HSBC Bank Bermuda (formerly the Bank of Bermuda). In 2006, with the assistance of his business partner Peter Schober, Schiavo arranged to have income from a venture capital investment directed to Schober’s secret account at UBS AG in Switzerland. From there, Schiavo’s share of the investment, $99,273, was wired to his HSBC Bank Bermuda account. Schiavo knew that this payment was taxable income in the United States, but deliberately chose not to report it, or the interest income that accrued in the HSBC Bank Bermuda account, to the IRS. In so doing, Schiavo deprived the IRS out of $40,624 in taxes.
U.S. citizens and resident aliens have an obligation to report to the IRS on the Schedule B of a U.S. Individual Income Tax Return, Form 1040, whether that individual has a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. U.S. citizens and resident aliens have an obligation to report all income earned from foreign bank accounts on the tax return and to pay the taxes due on that income. These same taxpayers who have a financial interest in, or signature authority over, one or more financial accounts in a foreign country with an aggregate value of more than $10,000 at any time during a particular year are required to file with the Department of the Treasury a Report of Foreign Bank and Financial Accounts, Form TD F 90-22.1 (the FBAR). The FBAR for the applicable year is due by June 30 of the following year.
According to the criminal information and plea agreement, on Oct. 6, 2009, following widespread media coverage of UBS’s disclosure to the IRS of account records for undeclared accounts held by U.S. taxpayers and the IRS’s Voluntary Disclosure Program, Schiavo made a “silent disclosure” by preparing and filing FBARs and amended Forms 1040 for tax years 2003 to 2008, in which he reported the existence of his previously undeclared account at HSBC Bank Bermuda. He made such filings notwithstanding the availability of the IRS’s Offshore Voluntary Disclosure Program. The Offshore Voluntary Disclosure Program was a program administered by the IRS that was intended to serve as a vehicle for U.S. taxpayers to attempt to avoid criminal prosecution by disclosing their previously undeclared offshore accounts and paying tax on the income earned in those accounts. On its website, the IRS strongly encourages taxpayers to come forward under the Offshore Voluntary Disclosure Program and warns them that taxpayers who instead make silent disclosures risk being criminally prosecuted for all applicable years.
According to the criminal information and plea agreement, Schiavo also admitted that for tax years 2003 through 2008, he willfully failed to file FBARs with the Department of the Treasury and failed to disclose that he had an interest in a financial account in HSBC Bank Bermuda. He further admitted that for tax years 2003 through 2008, he prepared, signed under penalties of perjury, and filed false individual income tax returns with the IRS that falsely represented that he did not have an interest in any foreign financial accounts. According to the plea agreement, Schiavo agreed to pay a civil money penalty of $76,283, half the value of high balance of the HSBC Bank of Bermuda account, for failing to file the FBAR.
Schiavo faces up to five years in prison, followed by three years of supervised release and a $250,000 fine. Schober was charged separately with failing to disclose his secret UBS AG bank account and is awaiting sentencing.
The case was investigated by the IRS-Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney Andrew E. Lelling of the U.S. Attorney’s Office Economic Crimes Unit and Trial Attorney Mark Daly of the Tax Division of the Department of Justice.
Attorney General Eric Holder Honors Prosecutors, Law Enforcement Partners and Victim Advocates for Work Combating Child ExploitationRead the Press Release
WASHINGTON – Attorney General Eric Holder today honored 52 prosecutors, law enforcement partners and victim advocates in 13 communities for their leadership protecting children from sexual abuse and exploitation. The awards were presented at the 2011 National Strategy Conference on Combating Child Exploitation in San Jose, Calif.
Attorney General Eric Holder has made one of the department’s four key priorities the protection of those most vulnerable – children, the elderly, and victims of hate crimes, human trafficking and exploitation.
“Through their work in urban, rural and tribal communities – and through cutting-edge online efforts – these individuals are advancing bold, innovative and collaborative solutions to keep our children safe from all forms of exploitation and abuse,” said Attorney General Holder. “By focusing on prevention and intervention, as well as proven enforcement and prosecution strategies, these award recipients are strengthening our ability to protect children in need and at risk, and to bring offenders to justice.”
Focused on protecting children from sexual abuse and exploitation, the conference held this week in San Jose is bringing together more than 1,000 investigators, agents and prosecutors from all levels of government to receive state-of-the-art instruction in investigative techniques, court room advocacy, digital forensics, behavioral profiling, victim advocacy and community outreach.
The conference is sponsored by the department’s Project Safe Childhood Initiative and Office of Juvenile Justice and Delinquency Prevention’s Internet Crimes Against Children Task Force Program.
Attorney General Holder presented the award for Outstanding Overall Partnership Coalition to the San Diego Internet Crimes Against Children (ICAC) Task Force The group of 20 members and affiliates are honored for their efforts in combating child exploitation crimes and promoting safer and more secure communities throughout the Southern District of California.
The San Diego (ICAC) Task Force employs a number of successful strategies to combat child exploitation, which include: training across jurisdictions on topics of mutual interest; cross-designated state law enforcement offices as Special Deputy U.S. Marshals; regular meetings with full and part-time members; and an emphasis on coordination between the district attorney’s office and U.S. Attorney’s office.
Attorney General Holder presented the award for Outstanding Community Outreach Efforts to three prosecutors and a community relations officer in the Southern District of Texas U.S. Attorney’s Office for the launch of their effort, “Internet Safety—It’s Not Just the Computer Anymore.” Since its launch in January 2010, the program has held discussions on Project Safe Childhood and Internet safety with more than 2,500 educators, parents and students. The program’s continued growth and development includes a total of 12 Assistant U.S. Attorneys making presentations, in both English and Spanish, to teachers, school administrators, parents and youth.
The four award winners from the Southern District of Texas U.S. Attorney’s Office are Robert Stabe, Deputy Chief of the Criminal Division; Sherri Zack, Assistant U.S. Attorney; Megan Paulson, Assistant U.S. Attorney; and Rob Barnes, Community Relations Coordinator. They are being honored for their launch of, “Internet Safety—It’s Not Just the Computer Anymore.”
Attorney General Holder presented the award for Outstanding Multi-Agency Operation to four Washington, D.C., law enforcement officials. The four award winners are Timothy Palchak, Detective for the D.C. Metropolitan Police Department; Chadwick M. Elgersma, Associate Division Counsel of the FBI; Scott Schelble, Relief Supervisor for the National Capital Response Squad of the FBI; and Keith Becker, Trial Attorney for the Child Exploitation/Obscenity Section of the Justice Department.
The awardees are honored for their work in a series of child pornography, enticing and traveler cases, which led to the rescues of four child victims from three separate homes. The prosecutions began as a single distribution of child pornography case which, on account of the extraordinary efforts by these four individuals, resulted in the successful prosecution of six sexual offenders. Four of the offenders were “hands-on” child sexual abusers who produced child pornography in four jurisdictions. The offenders were sentenced to lengthy prison terms ranging from 15 to more than 27 years in prison.
Attorney General Holder presented the award for Outstanding Multi-Agency Operation to three North Carolina and Massachusetts law enforcement officials. The three award winners are E. Michael Smith Jr., Special Agent for the North Carolina State Bureau of Investigation; Gregory D. Squire, Special Agent for U.S. Immigration and Customs Enforcement in Boston; and Joe Exum Jr., Assistant U.S. Attorney for the Eastern District of North Carolina.
The awardees are honored for their work which led to the rescue of a six-year-old child exploitation victim and successful prosecution of the sex offender. In collaboration with state, local and federal authorities, the U.S. Attorney’s Office for the Eastern District of North Carolina prosecuted and convicted a sex offender for exploitation of a six-year-old child, obtaining the maximum sentence of 50 years in prison. While the sentence is significant, the most compelling aspect of the case is the apparent seamlessness with which a federal agent in Boston, coordinated with a state law enforcement agent in North Carolina, who in turn worked with state, federal and local law enforcement and prosecutors to follow through on the lead. This group exhibited exceptional cooperation and a swift response so that a child in rural North Carolina could be rescued quickly.
Attorney General Holder presented the award for Superior Performance in Victim Services to Felice Weiler, the Victim and Witness Specialist for the U.S. Attorney’s office of the Northern District of Illinois, for her outstanding work on behalf of victims in the prosecution of a sex offender.
Attorney General Holder presented the award for Outstanding Prevention Strategy to Tommy Loftis, Law Enforcement Coordinator for the U.S. Attorney’s Office for the Southern District of Alabama for his presentation, “The Hidden Dangers of the Digital Age,” promoting child Internet safety. During the past three years, Loftis has presented an informative and captivating program to more than 15,000 students and 5,000 parents throughout the Southern District of Alabama.
Attorney General Holder presented the award for Outstanding Overall Partnership Coalition to seven Florida and Hawaii law enforcement offices. The seven office awardees are the Broward, Fla., Sheriff’s Office; Miami-Dade Police Department; Miami Beach Police Department; the Honolulu Division of the FBI; the Miami Division of the FBI; the U.S. Secret Service Miami office; and the U.S. Attorney’s Office for the Southern District of Florida.
The offices are honored for their work in combating domestic sex trafficking of minors in South Florida. Through close partnerships, shared resources and tireless work, the group’s efforts have resulted in the indictment of more than 16 cases, charging more than 25 defendants for the domestic sex trafficking of minors. In 2010, the U.S. Attorney’s Office in Southern Florida had approximately five cases proceed to trial involving the sex trafficking of minors. Despite the many significant challenges faced by the prosecution teams, all defendants were found guilty.
Attorney General Holder presented the award for Outstanding Prevention Strategy to nine Ohio law enforcement officials affiliated with the Franklin County, Ohio, Internet Crimes Against Children (ICAC) Task Force. The nine award winners are Deputy Chief Steve Martin of the Franklin, Ohio, County Sheriff’s Office; Corporal Dan Johnson of the Franklin County Sheriff’s Office; Detective Marcus Penwell of the Franklin County Sheriff’s Office; Detective Jane Junk of the Columbus, Ohio, Police Department; Officer John Priest of the Upper Arlington, Ohio, Police Department; Detective Brett Peachey of the Westerville, Ohio, Police Department; Officer Steve Grubbs of the Westerville Police Department; Agent Justin Myers of Homeland Security Investigations; and Assistant U.S. Attorney Michael J. Hunter.
The awardees are honored for their work in combating child exploitation crimes throughout the Southern District of Ohio. Established in May of 2009, the Franklin County ICAC Task Force has demonstrated innovation and a consistent ability to adapt its techniques and practices to aggressively target child exploitation offenders in Central Ohio for arrest and prosecution. The ICAC employs several innovative strategies to combat child exploitation, including the training of multiple officers in computer forensics, partnering with federal agencies, cross-deputizing task force officers as federal agents and coordinating a prosecution strategy with the U.S. Attorney’s Office. Its successes include arresting more than 180 child exploitation defendants – including nine repeat offenders – executing more than 150 search warrants, identifying 10 child victims and referring 27 cases for federal prosecution.
Attorney General Holder presented the award for Outstanding Interdiction Strategy to two U.S. postal inspectors. The award winners are William E.S. Beaty, Postal Inspector for the Seattle Division of the U.S. Postal Inspection Service, and Gary Nork, Postal Inspector for the Phoenix Division of the U.S. Postal Inspection Service.
The two awardees are honored for their work to ensure that a sex offender would not exploit children through the Internet and U.S. Mail. Working together, these two postal inspectors from two different states not only devised a strategy to identify the suspect and interdict the communications, but also secured the prosecution of the sex offender. Within 48 hours of receiving a complaint from the National Center for Missing and Exploited Children, these postal inspectors acted to rescue a 12-year-old boy from a dangerous predator.
Attorney General Holder presented the award for Outstanding Local Prosecutor’s Office to Utah Attorney General Mark Shurtleff for his efforts in combating child exploitation crimes and promoting safer and more secure communities throughout the state of Utah.
Led by Utah Attorney General Mark L. Shurtleff, the Utah Internet Crimes Against Children (ICAC) Task Force has conducted more than 700 investigations of child exploitation; engaged in community outreach with parents and children to discuss online safety; set up Utah’s Amber Alert program; and established the first statewide Child Abduction Response Team in Utah. The Utah Attorney General’s Office and the ICAC have also collaborated with other agencies, resulting in several significant child exploitation prosecutions by the U.S. Attorney’s Office for the District of Utah.
Arkansas Jury Finds Man Guilty of Federal Hate Crime Related to the Assault of Five Hispanic MenRead the Press Release
WASHINGTON –Frankie Maybee, 20, of Green Forest, Ark., was convicted today by a federal jury today of five counts of committing a federal hate crime and one count of conspiring to commit a federal hate crime, announced the Justice Department. This is the first conviction at trial for a violation of the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, which was enacted in October 2009. Maybee faces a maximum of 55 years in prison, and a fine of up to $250,000 per violation.
On May 16, 2011, co-defendant Sean Popejoy, 19, of Green Forest, pleaded guilty in federal court to one count of committing a federal hate crime and one count of conspiring to commit a federal hate crime in connection with this matter.
Evidence presented at trial established that in the early morning hours of June 20, 2010, Maybee and Popejoy conspired to and did threaten and injure five Hispanic men who had pulled into a gas station parking lot. The co-conspirators pursued the victims in a truck. When the co-conspirators caught up to the victims, Popejoy leaned outside of the front passenger window and waived a tire wrench at the victims, and continued to threaten and hurl racial epithets at the victims. Maybee, driving his truck, rammed into the victims’ car repeatedly, which caused the victims’ car to cross the opposite lane of traffic, go off the road, crash into a tree and ignite. As a result of Maybee and his co-conspirators’ actions, the victims suffered bodily injury, including one victim who sustained life-threatening injuries.
“The defendants targeted five men because they were Hispanic, and today’s verdict shows that the Justice Department is committed to vigorously prosecuting individuals who perform acts of hate because of someone’s race or national origin,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will continue to use the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, and every other tool in our law enforcement arsenal, to identify and prosecute hate crimes whenever they occur.”
“ We thank the jury for their careful consideration, and for their verdict. It is horrific that acts of violence are committed against complete strangers because of their race,” Conner Eldridge, U.S. Attorney for the Western District of Arkansas. “In this case, five Hispanic men stopped to fill up their car with gas and were violently run off the road, causing severe injuries and nearly causing death to one of them. In the Western District of Arkansas, we will continue to prosecute acts of violence that are motivated by hatred of another’s race. ”
This case was investigated by the FBI’s Fayetteville, Ark., Division in cooperation with the Arkansas State Police Department and the Carroll County Sheriff’s Office. The case was prosecuted by Trial Attorney Edward Chung of the Department of Justice’s Civil Rights Division and Assistant U.S. Attorney Kyra E. Jenner for the Western District of Arkansas.
Wednesday 18 May 2011
Texas Egg Producer Will Pay $1.9 Million Penalty to Resolve Clean Water Act ViolationsRead the Press Release
WASHINGTON – Mahard Egg Farm Inc., a Texas corporation operating in both Texas and Oklahoma, has agreed to pay a $1.9 million penalty to resolve claims that the company failed to comply with the Clean Water Act at its egg production facilities, announced the Department of Justice and the Environmental Protection Agency (EPA). The civil penalty is the largest ever to be paid in a federal enforcement action involving a concentrated animal feeding operation (CAFO), and is in addition to approximately $3.5 million that Mahard will spend on remedial measures to bring the company into compliance with the law and protect the environment and people’s health.
The Clean Water Act complaint, filed jointly with the settlement by the United States and the states of Texas and Oklahoma, alleges that Mahard operated one facility without a permit and discharged pollutants into area waterways. Mahard also allegedly discharged pollutants or otherwise failed to comply with the terms of its permits at six other facilities, including its newest facility near Vernon, Texas, where it also failed to comply with the Texas Construction Storm Water General Permit and to ensure safe drinking water for its employees. The states of Texas and Oklahoma also alleged similar violations of state laws.
“This agreement is the result of extensive cooperation between the states of Texas and Oklahoma and the federal government to address multiple violations of the Clean Water Act at Mahard facilities,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “Ensuring the lawful handling of CAFO wastes will mean cleaner steams and waterways in Texas and Oklahoma, which is important for aquatic habitats, safe drinking water and public recreation.”
“By working with the Department of Justice and our state partners in Texas and Oklahoma, we have reached a significant settlement that reflects the seriousness of Mahard’s violations,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Large animal feeding operations that fail to comply with our nation’s environmental laws threaten public health and the environment and put smaller farming operations at a disadvantage.”
Most egg production facilities generate various wastes, including wet or dry manure from chicken houses, wastewater from the egg-washing process and compost from chicken carcasses. If done properly, these wastes may be sold or contained on-site in manure storage lagoons prior to being applied to nearby fields. However, the joint complaint alleges that, as a result of Mahard’s historic practice of over-applying waste to its fields, the soils at its facilities are extremely high in nutrients (nitrogen and phosphorus). During and after rainfall, these nutrients are discharged into area streams and waterways. In addition, at several facilities, Mahard abandoned inactive and improperly designed manure lagoons rather than closing them as required by law.
As part of this settlement, Mahard has committed to comprehensive, system-wide changes in order to bring each of its seven CAFO facilities into compliance with applicable state and federal laws, permits and regulations and to restore the lands so as to prevent future discharges to area waterways. The settlement mandates the performance of specific requirements, such as proper lagoon closures, groundwater monitoring, and the construction and maintenance of buffer strips along area waterways within the facility boundaries. It also requires on-going land restoration and management measures, such as restrictions on the land application of manure and on livestock grazing.
Preventing animal waste from contaminating surface and ground waters of the United States is one of EPA’s National Enforcement Initiatives for 2011-2013. The initiative continues EPA’s focus on large and medium sized CAFOs that are discharging pollution without or in violation of a permit.
The settlement, lodged today in the U.S. District Court for the Northern District of Texas, 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 website at: www.justice.gov/enrd/Consent_Decrees.html .
Justice Department Reaches Agreement with Berkshire Hills Bancorp and Legacy Bancorp on DivestituresRead the Press Release
WASHINGTON – The Department of Justice announced today that Berkshire Hills Bancorp Inc. and Legacy Bancorp Inc. have agreed to sell four branch offices in Berkshire County, Mass., with approximately $158 million in deposits, to resolve antitrust concerns about the companies’ pending merger. The department said that, with the divestitures, the merger would not have an adverse effect on competition in local markets for retail banking or small business banking services. The combined entity will be worth almost $4 billion in assets and have a total of 69 branches in three states.
Under the agreement with the Justice Department’s Antitrust Division, the companies will divest four Legacy branches located in North Adams, Pittsfield, Lee and Great Barrington, Mass. The divestitures will include the commercial loans associated with the divested branches.
“With the divestiture, consumers and small businesses in Berkshire County will continue to enjoy the benefits of competition in banking services,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
The proposed merger is subject to the final approval of the Office of Thrift Supervision (OTS). The department said that it will advise the OTS that it will not challenge the merger provided that the parties divest the branch offices specified in the agreement and associated loans and deposits; and provided that the parties commit to the OTS that they will comply with the agreement with the department.
Berkshire Hills Bancorp is a Delaware corporation, the main subsidiary of which is Berkshire Bank, a Massachusetts savings bank headquartered in Pittsfield. Berkshire has about $2.9 billion in assets and about $2.1 billion in deposits. It offers banking and financial products and services at 50 branches in Massachusetts, eastern New York and southern Vermont. Twelve of those branches are located in Berkshire County.
Legacy Bancorp is a savings and loan holding company also headquartered in Pittsfield. It has approximately $917 million in total assets and $676 million in deposits. Legacy has a total of 19 branches in western Massachusetts and eastern New York, 11 of which are in Berkshire County.
The branches to be divested are:
Bank
State
County
Address
City
Zip
Deposits as of June 30, 2010 (000s)
Legacy
Mass.
Berkshire
331 State Road
North Adams
01247
$18,365
Legacy
Mass.
Berkshire
609 Merrill Road
Pittsfield
01201
$45,760
Legacy
Mass.
Berkshire
76 Park Street
Lee
01238
$48,179
Legacy
Mass.
Berkshire
700 Main Street
Great Barrington
01230
$45,822
Houston Medical Equipment Company Owner Sentenced to 84 Months in Prison for Health Care Fraud Scheme Involving More Than $2 Million in False BillingsRead the Press Release
WASHINGTON – The owner of a Houston-area durable medical equipment (DME) company was sentenced to 84 months in prison for her role in a Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Doris Vinitski, a Houston-area resident, was sentenced yesterday by U.S. District Court Judge Nancy F. Atlas in the Southern District of Texas. Vinitski pleaded guilty in April 2010 to one count of conspiracy to commit health care fraud.
According to court documents, Vinitski, 46, was the owner of Onward Medical Supply, a Houston-area DME company. Onward began billing Medicare for fraudulent DME in 2003. In pleading guilty, Vinitski admitted she paid kickbacks, sometimes $1,000 per patient, to recruiters who brought patients to Onward. Vinitski and her co-conspirator and estranged husband, John Lachman, then billed Medicare for DME that these patients either did not need or never received, including power wheelchairs and orthotic devices. Lachman also pleaded guilty in April 2010 to one count of conspiracy to commit health care fraud and was sentenced to 26 months in prison. According to court documents, the fraud scheme at Onward resulted in more than $2 million in fraudulent billing to Medicare.
Nine additional defendants involved in the Onward fraud scheme are currently serving prison sentences. One remaining defendant is awaiting sentencing in the Eastern District of Texas.
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Russell D. Robinson, Acting Special Agent-in-Charge of the FBI’s Houston Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of the HHS Office of Inspector General (OIG), Office of Investigations; and Texas Attorney General Greg Abbott on behalf of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The cases were prosecuted by Trial Attorney Jennifer L. Saulino and Acting Assistant Chief O. Benton Curtis III of the Criminal Division’s Fraud Section. The cases were investigated by the FBI, HHS-OIG and MFCU.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section. Since March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Co-owner of North Carolina Company Arrested for Defrauding Commodities Trading Investors of More Than $3.2 MillionRead the Press Release
WASHINGTON – The principal and co-owner of Integra Capital Management LLC, a North Carolina company, was arrested in Denton, N.C., today for defrauding commodities trading investors of more than $3.2 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Anne M. Tompkins of the Western District of North Carolina.
Nicholas Cox, 34, a North Carolina resident, is charged in an indictment returned on May 17, 2011, by a federal grand jury in the Western District of North Carolina, with one count of conspiracy to commit mail fraud, seven counts of mail fraud and one count of conspiracy to commit money laundering. Following his arrest, Cox made his initial appearance today before U.S. Magistrate Judge David Cayer in Charlotte, N.C.
The indictment alleges that between September 2006 and January 2009, Cox and his co-conspirator, Rodney Whitney, who was also a principal and co-owner of Integra, engaged in a scheme to defraud investors in commodity trading pools operated by Cox and Whitney through Integra. According to the indictment, Integra was established for the purpose of pooling investors’ funds in commodity pools, and investing in commodity futures and foreign currency exchange (forex) trading. Cox and Whitney allegedly provided false and fraudulent information, including prospectuses, contracts, tax forms, account statements and other documents, to current and prospective investors to obtain and misappropriate more than $3.29 million in investor funds.
According to the indictment, Cox and Whitney falsely represented, among other things, that Integra’s managers had more than 30 years of combined market experience; that Integra paid dividends of 2 to 5 percent of the investor’s initial investment, which was derived from Integra’s trading profits; and investors could remove their principal investments within five days upon giving notice to Integra. The indictment alleges that Cox and Whitney used the monies invested by later investors to pay promised monthly investment returns to earlier investors, to purchase real estate, to fund other business ventures, and to purchase automobiles and other personal goods and services.
Whitney was charged on March 2, 2011, in a criminal information for his role in the scheme. On March 21, 2011, Whitney pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering.
The maximum sentence for each count of mail fraud and conspiracy to commit mail fraud is 20 years in prison. The maximum sentence for each count of conspiracy to commit money laundering is 10 years in prison.
The case is being prosecuted by Trial Attorneys Nicole H. Sprinzen and Luke B. Marsh of the Criminal Division=s Fraud Section and Benjamin Bain-Creed of the U.S. Attorney’s Office for the Western District of North Carolina. The case is being investigated by the U.S. Postal Inspection Service.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Attorney General Holder Names Sheila L. Birnbaum as Special Master of September 11th Victim Compensation FundRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced that he has chosen Sheila L. Birnbaum to head the September 11th Victim Compensation Fund program. Birnbaum, a life-long New Yorker, has decades of experience resolving complicated litigation. Birnbaum gained recognition and regard from the victims community for her work mediating a settlement of $500 million for 92 families of victims of the September 11th terrorist attack on the World Trade Center.
Birnbaum will administer the fund created under the James Zadroga 9/11 Health & Compensation Act, signed into law by President Obama on Jan. 2, 2011. The bill reactivates the September 11th Victim Compensation Fund that operated from 2001-2003, expanding the pool of applicants to include first responders and other individuals who experienced latent physical injuries associated with the attacks or with debris removal.
“Sheila Birnbaum brings extensive experience, credibility and unique insight to this important role,” said Attorney General Holder. “She has worked closely with, and won the trust of, the families of 9/11 victims with whom she worked. I know that under her direction, the fund will be administered in a manner that is sensitive and fair to those who have suffered so much from the September 11th attacks.”
“As a life-long New Yorker, the opportunity to serve the country and the 9/11 community in this way is a tremendous honor,” Birnbaum said. “My first priority will be to sit down with the people who will be most affected by the program, and see how we can design a program that is fair, transparent and easy to navigate. The fund needs to get up and running quickly. At the same time, I want to make sure we do it right.
“Ken Feinberg laid a great foundation during the fund’s first iteration, and I plan to build upon it,” continued Birnbaum.
The fund is expected to become fully operational after funding appropriated for its administration becomes available on Oct. 1, 2011. Birnbaum indicated that she will publish proposed regulations to govern the program as soon as possible, and take public comment on those proposed regulations over the summer before finalizing them.
In 2006, 9/11 victims and corporate defendants jointly asked Judge Alvin K. Hellerstein to appoint Birnbaum to mediate 95 wrongful death and personal injury cases. Birnbaum successfully mediated 92 of them. Judge Hellerstein called her work “extraordinary” and noted that she had gained credibility with the 9/11 community. In a March 5, 2009, order Hellerstein wrote, “She allowed each of the plaintiffs’ families to express their loss and the quality of the lives lost on September 11. She absorbed their losses and their pain with empathy. . . . She gained plaintiffs’ confidence.”
Birnbaum, the daughter of a grocery store owner in Harlem, N.Y., attended James Monroe High School, and graduated from Hunter College as the first person in her family to attend college. She taught the fourth grade at P.S. 62 in the Bronx, N.Y., before attending New York University School of Law. Since law school, she has taught at both Fordham University School of Law and NYU School of Law, where she became Associate Dean. She is now a partner at Skadden, Arps, Slate, Meagher & Flom, and the chair of the firm’s Mass Torts Litigation Group.
Birnbaum has an extensive career in public service. Among other positions, she has served as the first president and founding member of Judges and Lawyers Breast Cancer Alert; as a member on the New York State Judicial Commission on Minorities; as Executive Director for the U.S. Court of Appeals for the Second Circuit’s Task Force for Racial, Ethnic and Gender Fairness; as Chair for the Commission on Fiduciary Appointments; and as President of the New York Women’s Bar Association.
For additional information on the Victim Compensation Fund or to sign up for email updates, please visit: www.justice.gov/vcf/ .
Tuesday 17 May 2011
Tenaris S.A. Agrees to Pay $3.5 Million Criminal Penalty<br /> to Resolve Violations of the Foreign Corrupt Practices ActRead the Press Release
WASHINGTON – Tenaris S.A., a publicly traded corporation headquartered in Luxembourg, has agreed to pay a $3.5 million penalty for violations of the Foreign Corrupt Practices Act (FCPA), and has entered into a non-prosecution agreement with the Department of Justice, announced Assistant Attorney General Lanny A. Breuer for the Justice Department’s Criminal Division.
Tenaris, a global manufacturer and supplier of steel pipe products and related services to the oil and gas industry throughout the world, admitted that its employees and agents offered and made improper payments to officials of OJSC O’ztashqineftgaz (OAO), an Uzbekistan state-controlled oil and gas production company, and failed to record such payments accurately in Tenaris’s books and records. In connection with four public bids to provide oilfield pipe and related services for energy extraction and transportation projects, Tenaris retained an agent to obtain competitors’ bid information, which Tenaris then used to secretly submit revised bids to its advantage. Tenaris agreed to pay the agent 3.5 percent of the value of four separate contracts, while being aware or substantially certain that the agent would pay all or a portion of the money to one or more OAO employees.
According to the agreement, Tenaris voluntarily disclosed this conduct to the department in a timely and complete manner, conducted an internal investigation, provided thorough, real-time cooperation to the department and the U.S. Securities and Exchange Commission (SEC), and undertook extensive remediation, including voluntary enhancements to its compliance program. The criminal penalty in this case constitutes a substantially reduced monetary penalty and reflects the department’s commitment to providing meaningful credit to Tenaris for its extraordinary cooperation with the department. As outlined in the agreement, Tenaris has agreed to fully cooperate with investigations by law enforcement authorities of the company’s corrupt payments and to adhere to a set of enhanced corporate compliance and reporting obligations.
FCPA enforcement action documents can be found at www.justice.gov/criminal/fraud/fcpa . Information about the Principles of Federal Prosecution of Business Organizations can be found at www.justice.gov/usao/eousa/foia_reading_room/usam/title9/28mcrm.htm
In a related matter, Tenaris reached a settlement today with the SEC in which Tenaris entered into a deferred prosecution agreement and agreed to pay $5,428,338 in disgorgement and prejudgment interest. Tenaris also agreed to comply with certain undertakings regarding its FCPA compliance program.
The case is being prosecuted by Assistant U.S. Attorney Jerrob Duffy, formerly a Trial Attorney in the Criminal Division’s Fraud Section. The department acknowledges and expresses its appreciation for the significant assistance provided by the staff of the SEC and the FBI’s Houston Field Office during the course of this investigation .
Justice Department Settles ADA Complaint Involving Children with Autism and Other Disabilities at Preschool Program in Baldwin Park, Calif.Read the Press Release
WASHINGTON – The Justice Department today announced a settlement agreement under the Americans with Disabilities Act (ADA) with a state-funded private preschool program, Beginning Montessori Academy, located in Baldwin Park, Calif. The Justice Department initiated its investigation of the Montessori Academy after a student’s parent filed a complaint alleging violations of Title III of the ADA. The parent filed the complaint after the school alerted her that the student was not accepted to the school for the following year, despite having been a student there for some time.
Under the terms of the settlement agreement, the Montessori Academy will ensure that it will not discriminate against any individual on the basis of disability, including autism. The Montessori Academy agrees to provide children with disabilities an equal opportunity to attend the Montessori Academy and to participate in all programs, services or activities. The school has also agreed to make reasonable modifications in policies, practices or procedures when such modifications are necessary to afford its child care services and facilities to children with disabilities, except when doing so would cause a fundamental alteration of its services or when the child’s participation in programs, services or activities causes a direct threat to others. The Montessori Academy will also pay $5,000 to the party affected by the school’s previous policies.
“All children deserve access to educational services, and making sure that schools are fully accessibile to children with disabilities is a necessary part of integrating individuals with disabilities into all aspects of American life,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department is committed to vigorously enforcing Title III of the ADA.”
Title III of the ADA prohibits private entities that offer public accommodations, like the Montessori Academy, from excluding people with disabilities, including people with autism, from full and equal enjoyment of the services provided. Anyone interested in learning more about federal disability rights statutes can call the Justice Department’s toll-free ADA information line at 800-514-0301, 800-514-0383 (TTY), or visit the ADA website at www.ada.gov . For more information about the Civil Rights Division, visit its website at www.justice.gov/crt or follow @civilrights on Twitter.
Justice Department Resolves Citizenship Status Discrimination Charge Against New Jersey Employer Iflowsoft LLCRead the Press Release
WASHINGTON – The Justice Department announced today that it has reached a settlement agreement with Iflowsoft LLC, a computer programming services provider in Iselin, N.J., to settle allegations that Iflowsoft engaged in a pattern or practice of citizenship status discrimination by preferring to hire temporary visa holders over U.S. citizens.
According to the department’s findings, Iflowsoft posted several job advertisements for IT professionals expressing a preference for temporary visa holders (specifically H-1B transfers and/or OPT candidates). The facially discriminatory advertisements deterred the charging party, a U.S. citizen, from applying to Iflowsoft. In addition, the department found Iflowsoft hired an H1-B visa holder without considering a qualified U.S. citizen applicant. The Immigration and Nationality Act (INA) generally prohibits employers from discriminating based on citizenship status during the hiring process.
Under the terms of the settlement, Iflowsoft has agreed to pay $6,400 in civil penalties and $7,158.49 in back pay to two U.S. citizens who were qualified for the positions advertised and applied, or would have applied for the positions. Iflowsoft has also agreed to provide its employees training on the INA anti-discrimination requirements, adopt nondiscrimination policies with respect to recruitment and hiring, and maintain and submit records to the United States for the three-year term of the agreement.
“ All workers who are authorized to work in the United States, whether they are citizens or not, have the right to look for a job without facing discrimination,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are pleased to have reached a settlement with Iflowsoft and look forward to continuing to work with public and private employers to educate them about anti-discrimination protections and employer obligations under the law.”
The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the INA anti-discrimination provision, which prohibits employers from discriminating against work-authorized individuals on the basis of citizenship status or national origin in hiring, firing, recruitment or referral for a fee.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email [email protected] ; or visit the website at www.justice/gov/crt/osc .
Justice Department Antitrust Officials to Participate in 10th Annual International Competition Network Conference in the Hague, the NetherlandsRead the Press Release
WASHINGTON – Department of Justice Antitrust Division officials will participate in the 10th annual International Competition Network (ICN) conference in The Hague, The Netherlands, from May 18-20, 2011. At the conference, senior government antitrust officials, private sector antitrust experts and representatives of intergovernmental organizations will meet to discuss competition issues and recent accomplishments of ICN working groups on areas of antitrust enforcement policy, including unilateral conduct, mergers, cartels, advocacy and agency effectiveness.
Conference panels will discuss promoting the use of competition principles in government actions, anti-cartel enforcement awareness and outreach, effective operation of competition agencies, trends in merger enforcement, analysis of loyalty discounts and rebates, and competition enforcement and consumer welfare. Member agencies also will finalize work programs for the upcoming year and engage in long-term planning.
In October 2001, the Department of Justice and the Federal Trade Commission (FTC) joined with antitrust agencies from 13 other jurisdictions around the world (Australia, Canada, the European Union, France, Germany, Israel, Italy, Japan, Korea, Mexico, South Africa, the United Kingdom and Zambia) to create the ICN. The ICN now includes 117 member agencies from 103 jurisdictions. The goal of the ICN is to provide a forum for antitrust agencies to address competition enforcement and policy issues of common interest.
The following portions of this year’s conference will be open to the press:
WEDNESDAY, MAY 18 (Day 1)
9:00 a.m. (The Hague), 3:00 a.m. (EDT) – Opening Remarks
The conference opening will include remarks by Henk Don, Acting Chairman of the Board, Netherlands Competition Authority, and Joaquín Almunia, Vice President of the European Commission and European Commissioner of Competition.
10:15 a.m. (The Hague), 4:15 a.m. (EDT) – ICN Curriculum Project
FTC Commissioner William Kovacic will present the ICN Curriculum Project, including its first video training materials that will become part of the ICN’s “virtual university” on competition law and practice for competition agency officials.
11:00 a.m. (The Hague), 5:00 a.m. (EDT) – Advocacy Session
John Fingleton, Chief Executive, UK Office of Fair Trading, will join a panel to discuss the use of competition principles in government actions.
2:30 p.m. (The Hague), 8:30 a.m. (EDT) – Cartel Session
Belinda Barnett, Criminal Deputy General Counsel of the Department of Justice’s Antitrust Division, will join a discussion on public awareness and outreach in the context of cartel enforcement, moderated by Alexander Italianer, Director General, Directorate for Competition in the European Commission.
THURSDAY, MAY 19 (Day 2)
10:45 a.m. (The Hague), 4:45 a.m. (EDT) – Agency Effectiveness Session
FTC Chairman Jon Leibowitz will present remarks and participate in a panel discussion on effectively managing competition agencies.
2:30 p.m. (The Hague), 8:30 a.m. (EDT) – Special Project Session
Jarig van Sinderen, Chief Economist, Netherlands Competition Authority, will focus on a special project undertaken by the Netherlands Competition Authority on competition enforcement and consumer welfare.
3:15 p.m. (The Hague), 9:15 a.m. (EDT) – Merger Session
Rachel Brandenburger, Special Advisor, International to Assistant Attorney General Christine Varney of the Department of Justice’s Antitrust Division, will moderate a panel on current trends and developments in merger enforcement.
FRIDAY, MAY 20 (Day 3)
10:35 a.m. (The Hague), 4:35 a.m. (EDT) – Unilateral Conduct Session
Randolph W. Tritell, Director of the FTC’s Office of International Affairs, will present opening remarks preceding a panel debate on “Arguing the Case: Scrutinizing a Loyalty Discount and Rebate Case from All Sides.”
11:20 a.m. (The Hague), 5:20 a.m. (EDT) – Closing
The conference will be held at the World Forum in The Hague, The Netherlands. More information about the conference can be found at www.icn-thehague.org/page.php. ICN documents are available at www.internationalcompetitionnetwork.org.
Former Puerto Rico Senator Jorge De Castro Font Sentenced to 60 Months in Prison for Honest Services Wire Fraud and Conspiracy to Commit ExtortionRead the Press Release
WASHINGTON — Jorge De Castro Font, 47, a former senate majority leader in the Commonwealth of Puerto Rico, was sentenced today to 60 months in prison after pleading guilty to 20 counts of honest services wire fraud and one count of conspiracy to commit extortion, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez. De Castro Font also was sentenced in Puerto Rico by U.S. District Judge Francisco A. Besosa to serve three years of supervised release following his prison term.
De Castro Font pleaded guilty on Jan. 21, 2009, to engaging in a scheme to deprive the people of Puerto Rico of his honest services as a legislator. De Castro Font also pleaded guilty to one count of conspiracy to commit extortion through fear of economic harm and under color of official right. De Castro Font was charged with these and other related offenses on Oct. 2, 2008.
“Former senator de Castro Font abused his elected position for his own financial benefit. By trading dollars for official acts, he undermined the trust that the people of Puerto Rico placed in him,” said Assistant Attorney General Breuer. “Today’s prison sentence shows that ultimately corruption doesn’t pay. The Public Integrity Section and its law enforcement partners will continue to pursue elected officials aggressively, and seek stiff sentences for those convicted.”
“The sentence imposed by the court today sends a strong message to public officials who engage in self-dealing and use their public office for financial gain. Public corruption crimes are serious offenses that will be stiffly punished by the courts,” said U.S. Attorney Rodríguez-Vélez. “These crimes involve betrayal of the public trust constituents placed in the elected official. But the consequences transcend the boundaries of a particular case. Public corruption crimes corrode our representative form of government, undermine the public’s confidence in its public officials, and subvert the very essence of democracy. The District of Puerto Rico remains committed to continuing to investigate and prosecute public corruption crimes as one of our top priorities.”
“Let this conviction and sentencing send a stark message to all public servants that the sale of influence and public corruption will not be tolerated by the FBI or the law-abiding citizens of Puerto Rico,” said Luis Fraticelli, Special Agent in Charge of the FBI-San Juan Field Office. “The FBI will continue to be vigilant so as to root out all public corruption. As I have said before, corruption affects every facet of society, particularly the hard working and honest people.”
In his guilty plea, de Castro Font admitted that from Jan. 2, 2005, through August 2008, he directly and indirectly solicited between approximately $500,000 and $525,000 in cash payments and other benefits, such as campaign contributions in excess of the legal limits, lodging, private flights, meals and other things of value, from individuals. De Castro Font admitted that he engaged in official acts on behalf of some of these individuals who had provided him with these undisclosed benefits, including proposing legislation, preventing legislative projects to be voted or acted upon, and persuading other legislators to vote for or against legislation.
De Castro Font also admitted to participating in a conspiracy to obtain cash and other benefits from five individuals he acknowledged that he knew felt if they did not provide him with the financial benefits requested, de Castro Font could use his official position to harm their financial interests.
On Dec. 4, 2008, Alberto Goachet, a political consultant and aide to de Castro Font, pleaded guilty to participating in the conspiracy to launder illegal campaign contributions and other payments. Goachet admitted that he and others laundered the money through the use of fake invoices purporting to reflect legitimate payments to a political consulting firm owned by Goachet. Goachet admitted that the false invoices were meant to conceal a businessman’s illegal payments to de Castro Font. Goachet also admitted that in August 2008 he falsely claimed in an interview with the FBI that the invoices were legitimately written for services rendered to the businessman and denied that the money was intended for de Castro Font. Goachet was sentenced in March 2009 to three months in prison, three months of home detention and three years of supervised release.
The case was prosecuted by Assistant U.S. Attorneys Jacqueline Novas, Timothy R. Henwood and Ernesto López-Soltero of the U.S. Attorney’s Office for the District of Puerto Rico, and Trial Attorney Peter Koski of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI’s San Juan Field Office.
Attorney General Holder Announces Appointment of Juan Osuna as Director for the Executive Office for Immigration ReviewRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced the appointment of Juan Osuna as the permanent Director for the Executive Office for Immigration Review (EOIR) at the Department of Justice.
“Having served with the department for over a decade, Juan has developed an extensive knowledge of immigration litigation and issues, and demonstrated himself to be a diligent and thoughtful advocate and manager,” said Attorney General Holder. “I am confident he will lead this office with the highest standards of professionalism, integrity and dedication.”
EOIR was created on Jan. 9, 1983, through an internal department reorganization which combined the Board of Immigration Appeals (BIA) with the Immigration Judge function previously performed by the former Immigration and Naturalization Service (INS) (now part of the Department of Homeland Security). The Office of the Chief Administrative Hearing Officer was added in 1987.
EOIR is headed by a director who is responsible for the supervision of the Chairman of BIA, the Chief Immigration Judge, the Chief Administrative Hearing Officer and all agency personnel. EOIR has more than 1,300 employees in its 59 immigration courts nationwide, at the BIA and at EOIR headquarters in Falls Church, Va.
“I am honored by the Attorney General’s appointment and look forward to continuing to serve the department and the American people on these important issues,” Osuna said.
Osuna has served as Acting Director of EOIR since December 2010. Prior to that, he worked as an Associate Deputy Attorney General focusing on immigration policy, Indian country matters, pardons and commutations and other issues. Before joining the Deputy Attorney General’s office, he worked as a Deputy Assistant Attorney General in the department’s Civil Division, where, in addition to handling immigration policy, he also oversaw civil immigration-related litigation in the federal courts. Previously he served as chairman of the BIA. He was first appointed to the BIA in 2000 and became chairman in 2008.
While at the BIA, Osuna put in place a number of reforms and oversaw the attorney general’s 2006 reform plan, which increased the quality and transparency of the board’s decisions, and he adjudicated hundreds of appeals from decisions of immigration judges made in removal proceedings.
Osuna also teaches immigration policy at George Mason University School of Law in Arlington, Va.
Osuna received a B.A. from George Washington University, a law degree from American University’s Washington College of Law and a master’s degree in law and international affairs from American University’s School of International Service.
Monday 16 May 2011
NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. Abandon Their Proposed Acquisition of NYSE Euronext After Justice Department Threatens LawsuitRead the Press Release
WASHINGTON – The NASDAQ OMX Group Inc. and IntercontinentalExchange Inc. abandoned their joint bid to acquire NYSE Euronext after the Department of Justice informed the companies that it would file an antitrust lawsuit to block the deal. The department said that the acquisition would have substantially eliminated competition for corporate stock listing services, opening and closing stock auction services, off-exchange stock trade reporting services and real-time proprietary equity data products.
On April 1, 2011, NASDAQ joined with the IntercontinentalExchange to submit an unsolicited bid to acquire NYSE. At the time of its announcement, the proposed bid was worth approximately $11.3 billion. If consummated, the deal would have given NASDAQ control over NYSE’s stock listings business, stock trading venues and market data licensing operations. NYSE’s futures businesses, located primarily in Europe, would have been sold to the IntercontinentalExchange.
“The companies’ decision to abandon their bid for NYSE Euronext eliminates the competitive concerns developed during our investigation,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The acquisition would have removed incentives for competitive pricing, high quality of service, and innovation in the listing, trading and data services these exchange operators provide to the investing public and to new and established companies that need access to U.S. stock markets.”
NYSE and NASDAQ operate the major stock exchanges in the United States. NYSE owns the New York Stock Exchange, the oldest exchange in the United States and referred to by many simply as the “Big Board”; NYSE Arca, an all-electronic exchange; and NYSE Amex, which caters to small and mid-size companies. NASDAQ operates The NASDAQ Stock Market, NASDAQ OMX BX (formerly the Boston Stock Exchange) and NASDAQ OMX PSX (formerly the Philadelphia Stock Exchange). The market value of the companies and funds listed on NASDAQ and NYSE U.S. exchanges is approximately $18 trillion, with more than $14 trillion listed on NYSE exchanges and $4 trillion on NASDAQ.
The department’s investigation revealed that NYSE and NASDAQ are the only competitors in several businesses vital to the success of U.S. equity markets. NYSE and NASDAQ compete aggressively for listing customers as they are effectively the only companies providing corporate stock listing services in the United States. In order for a company to sell its stock to investors on a public exchange in the United States, the company must first “list” or register its shares with an exchange. Once listed, the company’s stock can be bought or sold on any stock exchange in the United States, off-exchange at certain broker-dealers and on licensed alternative trading systems. Listing stock exchanges act as “gatekeepers” to public equity markets, allowing only certain companies that meet rigorous standards to list and attract investment capital from the public.
NYSE and NASDAQ are also the only two providers of stock auction services that are used every day at the open and close of trading, as well as at certain other times of market imbalance, the department said. At most times, the process of determining a price for a stock occurs in a robust market, with numerous buyers and sellers actively negotiating prices. However, at certain times the market cannot determine a price in this way. For example, a long line of orders builds up every night waiting to execute at the moment the market opens. These orders are based on information revealed overnight, which is not reflected in the market price at the close of the previous day. Similarly, at the end of each trading day, major market participants place large orders to balance their portfolios, potentially creating large imbalances in order flows and distorting prices, the department said. Both NYSE and NASDAQ have developed special auctions to handle these unique order flows at the open and close of each trading day.
NYSE and NASDAQ provide trade reporting facilities for the reporting of stock trades occurring outside of a stock exchange and are currently the only two entities that compete to collect this data. This reporting business is vital for the proper dissemination of information about off-exchange trading, which today accounts for roughly 30 percent of all stock trading in the United States, the department said.
NASDAQ and NYSE are the largest two competitors providing certain real-time proprietary equity data products. These products reflect, for example, the prices and quotes on the several NASDAQ and NYSE stock exchanges as well as information and data collected by the NASDAQ and NYSE trade reporting facilities for trades occurring off the stock exchanges.
NYSE is a publicly traded Delaware corporation with its principal place of business located in New York, N.Y. NYSE was created by the merger between NYSE Group Inc. (NYSE Group) and Euronext N.V. in 2007. In 2010, NYSE earned more than $3 billion in revenues from sales within the United States.
NASDAQ is a publicly traded Delaware corporation with its principal place of business also located in New York, N.Y. In 2010, NASDAQ earned more than $2.5 billion in revenues from sales to customers located in the United States.
IntercontinentalExchange is a publicly traded Delaware corporation with its principal place of business located in Atlanta. IntercontinentalExchange operates exchanges, over-the-counter markets and clearing houses to support derivates trading and settlement. In 2010, IntercontinentalExchange earned $609 million in revenues within the United States.
Justice Department Settles Allegations of Immigration-Related Employment Discrimination Against Maricopa Community College DistrictRead the Press Release
WASHINGTON – The Justice Department today reached a settlement agreement with the Maricopa County Community College District in Arizona, resolving allegations that the district engaged in a pattern or practice of discrimination against non-citizens in the hiring and employment-eligibility verification process. The district, which consists of 10 community colleges and two skill centers, has agreed to pay $45,760 in civil penalties and $22,123 in back pay to settle a lawsuit filed by the Justice Department on Aug. 30, 2010.
According to the department’s findings, the district had a policy of requiring newly hired workers who are not U.S. citizens but are authorized to work to present specific documentation that is not required by federal law. In accordance with that policy, at least two individuals were denied the opportunity to begin their employment despite having produced documentation sufficient to establish their employment eligibility. Specifically, a lawful permanent resident who accepted an adjunct mathematics faculty appointment and an honor student who was to begin a federal work-study position were not permitted to work when they did not comply with the district’s excessive and discriminatory documentary requirements. Both individuals will receive full back pay.
Under the terms of the settlement agreement, the district will alter its practices to ensure that citizens and non-citizens are treated equally in the employment eligibility verification process. The district has also agreed to train its human resources personnel about employers’ non-discrimination responsibilities in the employment eligibility verification process, to produce Forms I-9 for inspection, and to provide periodic reports to the department for three years.
“Employers have a responsibility to conduct the employment-eligibility verification process in a non-discriminatory manner,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are pleased to have reached this agreement with the district, and we look forward to continuing to work with all employers, both public and private, to educate them about their obligations under federal law.”
The Immigration and Nationality Act (INA) includes a provision designed to protect lawful workers who may look or sound foreign by prohibiting employers from treating non-citizens differently than U.S. citizens in the I-9 process. When Congress enacted this provision as part of the Immigration Reform and Control Act of 1986, it sought to strike a balance between immigration worksite enforcement and the civil rights of workers. While employers are banned from hiring unauthorized workers, they must also treat all work-authorized individuals the same regardless of citizenship status or national origin.
The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired); email [email protected] ; or visit OSC’s website atwww.justice.gov/crt/about/osc .
Justice Department Announces ADA Settlement with Intercity Bus Company, MegabusRead the Press Release
WASHINGTON – The Justice Department today announced a comprehensive settlement agreement under the Americans with Disabilities Act (ADA) with intercity bus service providers Megabus USA L.L.C., and Megabus Northeast L.L.C., which are located in Chicago and Elizabeth, N.J., respectively. The Justice Department initiated its investigation of Megabus as part of its ongoing review of the private transportation industry. In particular, the department has been investigating accessibility of private transportation operations for individuals with disabilities.
Under the terms of the settlement agreement, Megabus will ensure that all of the vehicles in its intercity service are fully accessible to individuals with disabilities, including individuals who use wheelchairs or other mobility aids. Megabus will also alter its online reservation services so that passengers with disabilities are able to access schedule information and make reservations in the same manner and using the same reservation system as other passengers. Megabus will pay a $55,000 civil penalty to the United States, and $12,500 in damages to a complainant who was not permitted to use the ramp on a passenger bus, and who was forced to transfer out of his wheelchair rather than be secured in the wheelchair, as required by federal regulations, during his trip from New York, to Baltimore. The United States credits Megabus for their cooperation throughout the investigation and their willingness to address the deficiencies identified.
“Commercial passenger buses are an affordable and growing sector of the transportation industry, and making sure that they are fully accessible to individuals with disabilities is a necessary part of integrating individuals with disabilities into all aspects of American life,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department is committed to vigorously enforcing the transportation requirements of the ADA.”
Title III of the ADA prohibits specified private transportation providers like Megabus from excluding persons with disabilities, including persons with mobility impairments, from full and equal enjoyment of the services provided. Anyone interested in learning more about federal disability rights statutes can call the Justice Department’s toll-free ADA information line at 800-514-0301, 800-514-0383 (TTY), or access the ADA website at www.ada.gov .
Former Kershaw County, South Carolina, Sheriff’s Department Officer Sentenced for Assaulting a Handcuffed ArresteeRead the Press Release
WASHINGTON – The Justice Department announced today that Oddie Tribble, 51, a former deputy sheriff with the Kershaw County, S.C., Sherriff’s Office, was sentenced to 63 month in prison and three years of supervised release by U.S. District Judge Cameron McGowan Currie for using excessive force on a man in his custody on Aug. 5, 2010. Tribble was also ordered to pay restitution of $5,109.25 to the victim.
According to evidence presented at trial, Tribble struck Charles Shelley, 38, a handcuffed arrestee, more than 25 times with a metal baton, lacerating his skin and fracturing his leg. The assault was captured by video cameras at the Kershaw County Detention Center. Eyewitnesses to the beating, including law enforcement officers, testified that they were shocked to see the unjustified attack by a police officer. A jury found Tribble guilty of violating Shelley’s rights on Feb. 3, 2011.
“ The defendant was granted considerable power to enforce the law, but instead abused his authority when he beat a handcuffed man entrusted to his care,” stated Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This prosecution reflects the department’s commitment to rooting out official misconduct, and today’s sentence sends a message that such violent abuse will not be tolerated.”
“Oddie Tribble’s conviction and sentence demonstrate that we are a nation of laws, and that no man is above the law, most especially those of us that are responsible for enforcing the same.” said U.S Attorney Bill Nettles.
This case was investigated by the Columbia, S.C., Division of the FBI with assistance from the South Carolina Law Enforcement Division, and was prosecuted by First Assistant U.S. Attorney Beth Drake, Assistant U.S. Attorney Tara McGregor, and Civil Rights Division Trial Attorney Christopher Lomax.
Arkansas Man Pleads Guilty to Federal Hate Crime Related to the Assault of Five Hispanic MenRead the Press Release
WASHINGTON – The Justice Department announced today that Sean Popejoy, 19, of Green Forest, Ark., pleaded guilty in federal court to one count of committing a federal hate crime and one count of conspiring to commit a federal hate crime. This is the first conviction for a violation of the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, which was enacted in October 2009.
Information presented during the plea hearing established that in the early morning hours of June 20, 2010, Popejoy admitted that he was part of a conspiracy to threaten and injure five Hispanic men who had pulled into a gas station parking lot. The co-conspirators pursued the victims in a truck. When the co-conspirators caught up to the victims, Popejoy leaned outside of the front passenger window and waived a tire wrench at the victims and continued to threaten and hurl racial epithets at the victims. The co-conspirator rammed into the victims' car, which caused the victims’ car to cross the opposite lane of traffic, go off the road, crash into a tree and ignite. As a result of the co-conspirators’ actions, the victims suffered bodily injury, including one victim who sustained life-threatening injuries.
“James Byrd, Jr. and Matthew Shepard were brutally murdered more than a decade ago, and today the first defendant is convicted for a hate crime under the critical new law enacted in their names,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “It is unacceptable that violent acts of hate committed because of someone’s race continue to occur in 2011, and the department will continue to use every available tool to identify and prosecute hate crimes whenever and wherever they occur.
“It is terrible and disturbing that violence motivated by hatred of another’s race continues to occur,” said Conner Eldridge, U.S. Attorney for the Western District of Arkansas. “We are committed to prosecuting such crimes in the Western District of Arkansas.”
If convicted, the defendant faces a maximum punishment of 15 years in prison.
This case is being investigated by the FBI’s Fayetteville Division in cooperation with the Arkansas State Police Department and the Carroll County Sheriff’s Office. The case is being prosecuted by Trial Attorney Edward Chung of the Department of Justice’s Civil Rights Division and Assistant U.S. Attorney Kyra Jenner for the Western District of Arkansas.
Saturday 14 May 2011
Six Individuals Charged for Providing Material Support <br /> to the Pakistani TalibanRead the Press Release
MIAMI – Six individuals located in South Florida and Pakistan have been indicted in the Southern District of Florida on charges of providing financing and other material support to the Pakistani Taliban, a designated foreign terrorist organization. The charges were announced today by Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, FBI Miami Field Office, and the members of the South Florida Joint Terrorism Task Force (JTTF).
The four-count indictment charges Hafiz Muhammed Sher Ali Khan (hereafter “Khan”), 76, a U.S. citizen and resident of Miami; his son Irfan Khan, 37, a U.S. citizen and resident of Miami; and one of his other sons, Izhar Khan, 24, a U.S. citizen and resident of North Lauderdale, Fla. Three other individuals residing in Pakistan, Ali Rehman, aka “Faisal Ali Rehman;” Alam Zeb; and Amina Khan, aka “Amina Bibi,” are also charged in the indictment. Amina Khan is the daughter of Khan and her son, Alam Zeb, is Khan’s grandson.
All six defendants are charged with conspiring to provide, and providing, material support to a conspiracy to murder, maim and kidnap persons overseas, as well as conspiring to provide material support to a foreign terrorist organization, specifically, the Pakistani Taliban. Defendants Khan, Rehman and Zeb are also charged with providing material support to the Pakistani Taliban.
FBI agents arrested Hafiz Khan and his son Izhar Khan today in South Florida. They are scheduled to make their initial appearance in federal court in Miami at 1:30 p.m. on Monday, May 16, 2011. In addition, Irfan Khan was arrested in Los Angeles and is expected to make his initial appearance there. If convicted, each faces a potential 15 years in prison for each count of the indictment. The remaining defendants are at large in Pakistan.
The defendants are originally from Pakistan. Hafiz Khan is the Imam at the Miami Mosque, also known as the Flagler Mosque, in Miami. His son, Izhar Khan, is an Imam at the Jamaat Al-Mu’mineen Mosque in Margate, Fla. The indictment does not charge the mosques themselves with any wrongdoing, and the individual defendants are charged based on their provision of material support to terrorism, not on their religious beliefs or teachings.
U.S. Attorney Wifredo A. Ferrer stated, “Despite being an Imam, or spiritual leader, Hafiz Khan was by no means a man of peace. Instead, as today’s charges show, he acted with others to support terrorists to further acts of murder, kidnapping and maiming. But for law enforcement intervention, these defendants would have continued to transfer funds to Pakistan to finance the Pakistani Taliban, including its purchase of guns. Dismantling terrorist networks is a top priority for this office and the Department of Justice.”
“Today terrorists have lost another funding source to use against innocent people and U.S. interests. We will not allow this country to be used as a base for funding and recruiting terrorists,” said John V. Gillies, Special Agent in Charge of the FBI’s Miami Office. “I remind everyone that the Muslim and Arab-American members of our community should never be judged by the illegal activities of a few.”
This investigation was initiated by the FBI in conjunction with the JTTF based upon a review of suspicious financial transactions and other evidence; it was not an undercover sting. According to the allegations in the indictment, from around 2008 through in or around November 2010, the defendants provided money, financial services, and other forms of support to the Pakistani Taliban. The Pakistani Taliban, also known as Tehrik-e Taliban Pakistan, Tehrik-I-Taliban, Tehrik-e-Taliban, and Tehreek-e-Taliban, is a Pakistan-based terrorist organization formed in December 2007 by an alliance of radical Islamist militants. On Aug. 12, 2010, the U.S. State Department formally designated the Pakistani Taliban as a Foreign Terrorist Organization, under Section 219 of the Immigration and Nationality Act.
According to the indictment, the Pakistani Taliban’s objectives include resistance against the lawful Pakistani government, enforcement of strict Islamic law known as Sharia, and opposition to the U.S. and coalition armed forces fighting in Afghanistan. The Pakistani Taliban has committed numerous acts of violence in Pakistan and elsewhere, including suicide bombings that resulted in the death of civilians and Pakistani police, army, and government personnel, and other acts of murder, kidnapping and maiming. The Pakistani Taliban has also been involved in, or claimed responsibility for, numerous attacks against U.S. interests, including a December 2009 suicide attack on a U.S. military base in Khost, Afghanistan, along the border with Pakistan, which killed seven U.S. citizens; an April 2010 suicide bombing against the U.S. Consulate in Peshawar, Pakistan, which killed six Pakistani citizens; and the attempt by Faisal Shahzad to detonate an explosive device in New York City’s Times Square on May 1, 2010. Most recently, on May 13, 2011, the Pakistani Taliban claimed responsibility for the suicide attacks that killed at least 80 people at a military training facility in northwestern Pakistan. The Pakistani Taliban has links to both al-Qaeda and the Taliban in Afghanistan.
As set forth in the indictment, the defendants sought to aid the Pakistani Taliban’s fight against the Pakistani government and its perceived allies, including the United States, by supporting acts of murder, kidnapping and maiming in Pakistan and elsewhere, in order to displace the lawful government of Pakistan and to establish strict Islamic law known as Sharia.
To this end, the defendants, assisted by others in the United States and Pakistan, conspired to provide and provided material support to the Pakistani Taliban by soliciting, collecting and transferring money from the United States to supporters of the Pakistani Taliban, primarily using bank accounts and wire transfer services in the United States and Pakistan. According to the indictment, these funds were intended to purchase guns for the Pakistani Taliban, to sustain militants and their families, and generally to promote the Pakistani Taliban’s cause. In addition, the indictment alleges that defendant Khan supported the Pakistani Taliban through a madrassa, or Islamic school, that he founded and controlled in the Swat region of Pakistan. Khan has allegedly used the madrassa to provide shelter and other support for the Pakistani Taliban and has sent children from his madrassa to learn to kill Americans in Afghanistan.
According to the allegations in the indictment, the defendants endorsed the violence perpetrated by the Pakistani Taliban. On one occasion in July 2009, defendants Khan and Irfan Khan participated in a recorded conversation in which Khan called for an attack on the Pakistani Assembly that would resemble the September 2008 suicide bombing of the Marriott Hotel in Islamabad, Pakistan. On another occasion in September 2010, Hafiz Khan participated in a conversation in which he stated that he would provide that individual with contact information for Pakistani Taliban militants in Karachi, and upon hearing that mujahideen in Afghanistan had killed seven American soldiers, declared his wish that God kill 50,000 more.
In closing, Mr. Ferrer noted, “Let me be clear that this is not an indictment against a particular community or religion. Instead, today’s indictment charges six individuals for promoting terror and violence through their financial and other support of the Pakistani Taliban. Radical extremists know no boundaries; they come in all shapes and sizes and are not limited by religion, age or geography.”
Mr. Ferrer commended the investigative efforts of the FBI, U.S. Customs and Border Protection, U.S. Department of State, Broward Sheriff’s Office, Miami-Dade Police, City of Miami Police, City of Miramar Police, City of Margate Police, and the Florida Department of Environmental Protection, and the members of the South Florida Joint Terrorism Task Force. The case is being prosecuted by Assistant U.S. Attorneys John Shipley and Sivashree Sundaram, from the U.S. Attorney’s Office for the Southern District of Florida, and Trial Attorney Stephen Ponticiello from the Counterterrorism Section of the Justice Department’s National Security Division.
An indictment is only an accusation and a defendant is presumed innocent until and unless proven guilty.
Friday 13 May 2011
Justice Department to Monitor Elections in TexasRead the Press Release
WASHINGTON – The Justice Department announced today that it will monitor municipal elections on May 14, 2011, in Galveston, Jefferson, Liberty, Medina and San Patricio Counties in Texas to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. In addition, the act requires certain covered jurisdictions to provide language assistance during the election process. The monitored jurisdictions are required to provide language assistance in Spanish.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Galveston, Jefferson and Medina Counties based on the attorney general’s certification. The observers will watch and record activities during voting hours at polling locations in these counties, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Liberty and San Patricio Counties. Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Former CFO of National Auto Parts Retailer Pleads Guilty to Scheme to Manipulate Corporate EarningsRead the Press Release
WASHINGTON – Don W. Watson, former chief financial officer (CFO) of CSK Auto Corp. (CSK), pleaded guilty today in U.S. District Court for the District of Arizona to conspiracy to commit securities and mail fraud in connection with a scheme to misstate the company’s reported earnings from 2001 through 2006, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; Kevin Perkins, Assistant Director of the FBI’s Criminal Investigative Division; Inspector in Charge Pete Zegarac of the U.S. Postal Inspection Service (USPIS) Phoenix Division; and Victor S.O. Song, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Watson, 55, of Gilbert, Ariz., pleaded guilty before U.S. District Judge Susan R. Bolton. Watson admitted that, from 2001 to 2006, he and others conspired to misstate CSK’s income by concealing that the company had tens of millions of dollars in vendor rebates that CSK had claimed as income but were never collected. The rebates were in fact not owed to the company or could not be collected and therefore should have been written off CSK’s books. As a result of the fraud scheme, CSK reported tens of millions of dollars more in pre-tax income than it in fact earned.
“Don Watson made the crucial mistake of thinking he was above the law,” said Assistant Attorney General Breuer. “He used his position as CFO to manipulate CSK’s books and lie about the company’s true worth. In doing so, he misled shareholders and the investing public. We are determined to continue investigating and prosecuting corporate executives who, like Watson, should know better.”
“Fraud and dishonest dealings have no place in the American marketplace. The FBI and our law enforcement partners will use our resources to identify and investigate companies like CSK that do not follow the rules,” said Assistant Director Perkins of the FBI’s Criminal Investigative Division.
“The U.S. Postal Inspection Service will continue to partner with fellow law enforcement agencies to bring those conducting mail fraud to justice,” said Phoenix Division Postal Inspector in Charge Zegarac. “Postal Inspectors will continue to aggressively investigate those who use the US Mail to perpetuate schemes manipulating corporate earnings.”
“High-ranking corporate officials hold positions of trust not only in their companies but also in the eyes of the public. In this investigation, Mr. Watson broke that trust by misstating CSK’s receivables and pre-tax income in its annual reports by millions of dollars,” said IRS-CI Chief Song. “The license to run a business is not a license to conduct criminal activity.”
According to court documents, CSK operated under the brand names Checker Auto Parts, Schucks Auto Supply and Kragen Auto Parts. During the time of the conspiracy, CSK was the largest specialty retailer of auto parts and accessories in the western United States and one of the largest such retailers in the entire United States.
According to court documents, CSK purchased hundreds of millions of dollars worth of auto parts every year. Its vendors gave CSK allowances, or rebates, for products CSK purchased in exchange for CSK using the allowances for marketing of the vendors’ products for sale in its stores. By reducing the cost to CSK of the products it purchased from vendors, the rebates increased CSK’s income. Watson admitted that, instead of writing off rebates that CSK had claimed but could not collect, he and others concealed the uncollectible amounts by causing vendor rebates from later years to be moved to cover the shortfalls in prior years and by causing vendors to be billed for rebates CSK was not owed.
As a result of the scheme, CSK misstated its receivables and pre-tax income in its annual reports (Forms 10-K) in fiscal years 2002, 2003 and 2004 by approximately $10 million, $23 million and $19 million, respectively.
Watson and the former president and chief operating officer of CSK were originally indicted on April 7, 2009. The conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing for Watson has been scheduled for Sept. 19, 2011.
In related actions, Edward W. O’Brien III, the former controller of CSK, and Gary M. Opper, the former director of credits and receivables at CSK, pleaded guilty to obstruction of justice in April 2009. O’Brien and Opper admitted to making material false statements during an internal investigation of CSK’s accounting practices knowing the information would be passed on to the Securities and Exchange Commission (SEC), which was conducting an investigation into misstatements of CSK’s expenses and income from 2001 through 2004 with regard to vendor allowances. Sentencings for O’Brien and Opper are scheduled for July 25, 2011, before Judge Bolton.
The case was prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Jennifer R. Taylor of the Criminal Division’s Fraud Section, with assistance from the U.S. Attorney’s Office for the District of Arizona. The case was investigated by the FBI, IRS-CI and USPIS. The Department would also like to acknowledge the substantial assistance of the SEC in the investigation.
Federal Court Bars Houston-Area Tax Preparers from Preparing Federal Tax Returns for OthersRead the Press Release
WASHINGTON – A federal court has permanently barred Houston-area tax preparers Christopher Helton and Marcia Johnson from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order against Johnson was signed by Judge David Hittner of the U.S. District Court for the Southern District of Texas. Helton previously consented to a similar injunction.
According to the government complaint, Helton and Johnson, doing business as M.C. Tax Service, M.C. Tax Interprise and M.J. Tax Service, repeatedly claimed false tax credits and deductions on their customers’ federal tax returns. The most common alleged misconduct was blatantly fraudulent claims for a credit for gasoline or other fuel that the customers purportedly bought and used in their businesses. Under federal tax law, the fuel tax credit is limited to off-highway use of fuels, such as in the agricultural industry. But Helton and Johnson allegedly claimed the credit for customers – in one instance, a day care provider – whose occupations clearly did not involve off-highway fuel use. According to the complaint, Helton and Johnson also repeatedly made false claims for the earned income tax credit.
Return preparer fraud is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past ten years, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website .
Brooklyn Physical Therapist Pleads Guilty to Fraud Scheme Involving False Billings to MedicareRead the Press Release
WASHINGTON – A Brooklyn physical therapist pleaded guilty today for his role in submitting false and fraudulent claims to Medicare for physical therapy services that were medically unnecessary and never provided, announced the Departments of Justice and Health and Human Services (HHS).
Aleksandr Kharkover, 49, pleaded guilty before U.S . Magistrate Judge Marilyn Go in the Eastern District of New York to an indictment charging him with five counts of health care fraud. Kharkover faces a maximum of 10 years in prison for each count of health care fraud. His sentencing has not yet been scheduled.
According to the indictment, between January 2005 and July 2010, Kharkover caused the submission of approximately $11.9 million in false and fraudulent claims to Medicare for physical therapy services that were not performed and were not medically necessary. According to the indictment, Kharkover hired individuals who were not certified as physical therapy assistants to purportedly provide physical therapy to Medicare beneficiaries.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director-in-Charge Janice K. Fedarcyk of the FBI’s New York field office and Special Agent-in-Charge Thomas O’Donnell of the HHS Office of Inspector General (HHS-OIG).
The case is being prosecuted by Trial Attorney Katherine Houston of the Criminal Division’s Fraud Section, and was investigated by HHS-OIG and the New York State Office of the Medicaid Inspector General.
This case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.
Since their inception in March 2007, 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 $3.2 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 .
Thursday 12 May 2011
Statement of the Attorney General on Proposed Extension of FBI Director Mueller's TermRead the Press Release
WASHINGTON – The Attorney General made the following statement today:
“In the wake of the September 11, 2001 attacks, Bob Mueller led the transformation of the FBI into what today is the world’s pre-eminent counterterrorism agency. One of the most respected prosecutors of his generation before joining the FBI as its Director, he has earned the confidence of two Presidents for his ability to lead and his calmness under fire.
“A short-term legislative change will allow Bob to remain at the FBI for an additional two years so the President’s counterterrorism team can continue to work together seamlessly. The United States faces ongoing threats from terrorists intent on attacking us both at home and abroad, and it is crucial that the FBI have sustained, strong leadership to confront that threat. There is no better person for that job than Bob Mueller. I hope he will be allowed to continue providing the able leadership and unquestioned integrity for which he is known for the remainder of the President’s term.”
Massachusetts Man Sentenced to Five Years in Prison for Child Pornography ChargesRead the Press Release
WASHINGTON – Douglas L. Wright, 41, of North Chelmsford, Mass., was sentenced to five years in prison to be followed by 10 years of supervised release for transportation and possession of child pornography, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the District of Massachusetts Carmen M. Ortiz, and Richard DesLauriers, Special Agent in Charge of the FBI Boston Field Office.
Wright was sentenced yesterday by U.S. District Court Judge Joseph L. Tauro in Boston. On Feb. 17, 2011, Wright pleaded guilty to one count of transportation of child pornography and one count of possession of child pornography. In pleading guilty, Wright admitted to using an online, peer-to-peer file sharing program to transmit computer files containing visual depictions of prepubescent minors engaging in sexually explicit conduct. Wright, a former middle school teacher, also admitted to being interested in child pornography for several years.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Michael I. Yoon of the District of Massachusetts and CEOS Trial Attorney Bonnie L. Kane of the Criminal Division. The case against Wright was investigated by the FBI with the Chelmsford Police Department providing significant assistance.
Justice Department Sues to Halt “Sham Cemetery” Tax ScamsRead the Press Release
WASHINGTON – The United States is seeking to bar three men from promoting alleged tax shelter schemes involving sham cemetery investments, the Justice Department announced today. The government has filed a civil injunction lawsuit in federal court in Washington, D.C., against Michael A. Strauss of Herndon, Va.; his son, Patrick B. Strauss, of Washington, D.C.; and Joseph C. Barreiro of Poughkeepsie, N.Y.
According to the government complaint, the Strausses and Barreiro promoted illegal tax schemes to customers located in Northern Virginia, Maryland and Washington, D.C. Through these scams, they allegedly received millions of dollars from their customers and concocted approximately $35 million in fake partnership losses and phony charitable contribution deductions, which they falsely told their customers could be used to offset their federal income taxes. The complaint alleges that the three men falsely promised their customers $5 of tax benefits for every $1 that they “invested.” The defendants allegedly sold the schemes through shell entities, which they controlled, called Burial Specialists LLC, Memorial Specialists LLC and Dignified Charitable Burials.
The complaint states that the men falsely told their customers that Burial Specialists had bought a “license” worth more than $90 million from a company called Southern Dorchester LLC using a $90 million “promissory note.” The license purportedly gave Burial Specialists the right to future profits from performing funeral services at a purported cemetery in Spotsylvania County, Va. According to the complaint, the defendants also falsely claimed that Burial Specialists could annually deduct a portion of the license’s supposed value and then pass on millions of dollars in losses to the customers. The government contends that there was no arm’s-length sale by Southern Dorchester and that Michael Strauss and Barreiro fabricated the $90 million “license” value, along with the accompanying $90 million “promissory note,” to generate fake tax benefits. The defendants also allegedly used the fictitious promissory note to siphon off, for their personal benefit, funds that they told their customers were being “invested.”
According to the complaint, the defendants undertook a virtually identical scheme using Memorial Specialists and a supposed cemetery in Lloyd, N.Y., as well as a third scheme using Dignified Charitable Burials that generated bogus charitable contribution deductions.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of abusive or fraudulent tax schemes and the preparation of fraudulent tax returns. Information about these cases is available on the Justice Department website .
Justice Department Files Antitrust Lawsuit to Stop VeriFone <br /> from Buying Hypercom and Entering into Anticompetitive Divestiture Agreement with IngenicoRead the Press Release
WASHINGTON — The Department of Justice filed a civil antitrust lawsuit today to block the proposed acquisition by VeriFone Systems Inc. of Hypercom Corp. The department said that the proposed deal would substantially lessen competition in the sale of point-of-sale (POS) terminals in the United States, resulting in higher prices and reduced innovation, quality, product variety, and service.
The department said that although VeriFone and Hypercom proposed a fix to resolve the antitrust concerns with the merger, it did not adequately resolve the competitive concerns. The department filed its lawsuit in U.S. District Court in Washington, D.C.
POS terminals are used by retailers and other firms to accept electronic payments such as credit cards and debit cards. VeriFone and Hypercom together control more than 60 percent of the U.S. market for the POS terminals used by the largest retailers. They are two of only three substantial sellers of other types of POS terminals.
“The combination of VeriFone and Hypercom would likely lead to retailers paying higher prices for POS terminals,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The proposed divestiture does not resolve the significant competitive concerns posed by the merger, and in some ways exacerbates them.”
On Nov. 17, 2010, VeriFone agreed to purchase Hypercom in a transaction valued at $485 million. In an effort to resolve antitrust issues with the merger, Hypercom announced on April 4, 2011, that it had entered into an agreement to sell its U.S. business to Ingenico S.A., the largest provider of POS terminals worldwide and the only other significant competitor to VeriFone and Hypercom in the United States.
According to the department’s complaint, the planned sale of Hypercom’s U.S. POS terminal business to Ingenico does not resolve the antitrust concerns raised by the VeriFone/Hypercom transaction because the assets are to be sold to another significant competitor in the market in a manner that does not create a new, independent, long-term competitor. In addition, the structure of the agreements between Ingenico and VeriFone, the only two significant POS sellers in the United States post-merger, enhances VeriFone and Ingenico’s ability to coordinate pricing for all POS terminals.
VeriFone is a Delaware corporation headquartered in San Jose, Calif. VeriFone earned more than $1 billion in worldwide revenues in its last fiscal year, ending in October 2010.
Hypercom is a Delaware corporation headquartered in Alpharetta, Ga. Hypercom earned more than $450 million in worldwide revenues in 2010.
Ingenico is a French corporation with worldwide revenues in 2010 of more than $1.3 billion.
Former Massachusetts Direct Mail Printing Executive Sentenced to Serve 30 Months in Prison for His Role in Fraud Conspiracies and Tax EvasionRead the Press Release
WASHINGTON — A former employee of two Massachusetts-based customer relationship management agencies that purchase direct mail advertising services was sentenced today for participating in fraud conspiracies and committing tax evasion relating to his receipt of more than $1.8 million in kickbacks, the Department of Justice announced.
Reed A. Richard of Carlisle, Mass., was sentenced in U.S. District Court in Boston by Judge Douglas P. Woodlock to serve 30 months in prison, to pay a $250,000 criminal fine and to pay $35,500 in restitution. On Dec. 14, 2010, Richard pleaded guilty to conspiring with others to defraud his employers, Mullen Advertising Inc. and PreVision Marketing LLC, by accepting kickbacks from two direct mail advertising printing brokers in exchange for awarding printing work to the companies that the brokers represented. Richard also pleaded guilty to one count of tax evasion for tax years 2004 and 2005 for falsely claiming substantial personal expenses as business expenses. The department said that the conspiracies took place from approximately January 2000 through approximately February 2006.
Direct mail advertising allows companies to specifically target potential customers and contact them with tailored offers, promotional materials or advertisements using the U.S. mail.
According to the court documents, as a vice president of direct marketing production services of Mullen Advertising, and later as a senior production manager of PreVision Marketing, Richard was responsible for procuring direct mail printing services by obtaining competitive bids from printing companies, awarding contracts, reviewing invoices and authorizing payment. As part of the conspiracies, Richard approved invoices, issued by or through the printing brokers, while knowing that they were fraudulently inflated to include the kickbacks he was to receive. The department said that a portion of these overcharges were passed from the brokers to Richard as kickback payments. According to the court documents, in order to conceal his role in the scheme, Richard used a shell company which purportedly provided consulting services to the printing brokers but was in fact a vehicle for Richard to receive the kickbacks. In addition to the conspiracies, Richard claimed substantial illegitimate business deductions on his company’s federal income tax returns. The department said that, as a result, he under-reported his corporate and personal taxable income, resulting in a total tax loss of approximately $170,000.
Today’s sentencing is a result of an ongoing investigation into the direct mail printing industry being conducted by the Antitrust Division’s New York Field Office, with the assistance of the Internal Revenue Service (IRS)-Criminal Investigation, in Springfield, Mass.
Anyone with information concerning fraud, antitrust or tax offenses relating to the direct mail printing industry should contact the Antitrust Division’s New York Field Office at 212-264-9308, visit www.justice.gov/atr/contact/newcase.htm or contact the IRS-Criminal Investigation’s Springfield Office at 413-785-0090.
California Man Sentenced to Four Years in Prison for Attempting<br /> to Extort Child Pornography from MinorRead the Press Release
WASHINGTON – A Fremont, Calif., man was sentenced yesterday to four years in prison and to pay a $20,000 fine for possessing child pornography and attempting to extort additional child pornography images of an underage girl whom he harassed via the social networking website Facebook, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Melinda Haag of the Northern District of California.
James Dale Brown, 28, pleaded guilty on Feb. 2, 2011, before U.S. District Court Judge Phyllis J. Hamilton in the Northern District of California. In pleading guilty, Mr. Brown admitted that from December 2008 through April 2009, under the username “Bob Lewis,” he repeatedly contacted a girl he knew to be 14 years old via her Facebook webpage. Prior to contacting the victim, Brown had obtained a revealing photograph of the victim. Brown informed the victim that he had this photograph, and others, and suggested that he would delete all the pictures of her “from the Internet” only if she sent him a video of herself engaging in sexually explicit conduct. To force her to send such a video, Brown threatened to expose explicit images of the victim then in his possession to the victim’s friends, who were also minors. Despite Brown’s consistent harassment, the victim resisted his efforts for several months. To carry out his threats, on April 18, 2009, Brown sent two Internet links to the victim’s friend, also a minor, which directed the victim’s friend to an explicit image of the victim. On April 23, 2009, FBI agents executed a search warrant on Brown’s Fremont residence. Brown was arrested on Aug. 26, 2010.
This is the first case involving the attempted extortion of a minor for child pornography via a social networking website, such as Facebook, to be prosecuted in the Northern District of California.
The case was prosecuted by Trial Attorney Mi Yung Park of Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division and Assistant U.S. Attorney Joshua Hill of the Northern District of California. The case was investigated by the FBI.
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 .