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Thursday 12 May 2011
Arizona Man Sentenced to 180 Months in Prison for Engaging in a Child Exploitation EnterpriseRead the Press Release
WASHINGTON – David Dean, 43, of Peoria, Ariz., was sentenced today to 180 monthsin prison and a lifetime of supervised release for engaging in a child exploitation enterprise, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney David J. Hickton for the Western District of Pennsylvania and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
“The members of this criminal enterprise committed the most unthinkable of crimes – they trafficked in chilling images of children and infants being brutally, sexually abused. And, they used a social networking website to distribute these images so that they could reach as many other like-minded individuals as they could,” said Assistant Attorney General Breuer. “Our children, who are the most vulnerable and innocent in our society, deserve every measure of protection we can give them. As this prosecution shows, we will use every tool we have to attack and dismantle these illegal child exploitation networks.”
“ This prosecution also illustrates the ripe environment for child predators that exists though the internet. The defendants in this case found kinship online, validating their shared desire to engage in sex with children, and to seek sexual gratification through sharing horrific and degrading images of children,” said U.S. Attorney Hickton. “We must respond to this threat with the full force of federal law enforcement and its many partners across agencies, jurisdictions, state lines, and national borders. I am committed to this effort, and we will not stop until we eradicate this evil.”
“Possession of child pornography is not a victimless crime,” said ICE Director Morton. “Those who engage in this criminal behavior should be forewarned that ICE, along with our law enforcement partners, will use every tool at our disposal to end the sexual exploitation of our children and keep them safe wherever they live.”
On June 17, 2010, Dean pleaded guilty before U.S. District Court Judge Arthur A. Schwab in Pittsburgh to one count of engaging in a child exploitation enterprise. According to court documents and proceedings, Dean and others distributed images and videos of children being sexually abused to other members of an international group that had restricted membership and was formed on a social networking website. Members of the group distributed to one another thousands of sexually explicit images and videos of children, many of which graphically depicted prepubescent, male children, including some infants, being sexually abused and sometimes sodomized or subjected to bondage.
Seven co-defendants have previously pleaded guilty and been sentenced to prison as a result of this investigation.
This case was investigated by ICE’s Homeland Security Investigations and the High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Assistant U.S. Attorney Craig W. Haller and CEOS Trial Attorney Andrew McCormack prosecuted the case.
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 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 .
Wednesday 11 May 2011
Pennsylvania Man Pleads Guilty for Cross BurningRead the Press Release
WASHINGTON – Michael Duane Bracken, of Bolivar, Penn., pleaded guilty today to a charge related to the burning of a cross in the yard of an African-American juvenile in November 2009, the Justice Department announced today. Bracken is the last of three adult defendants to enter a guilty plea in the case, following Michael Francis Bealonis and Kenneth Paul Stiffey Jr.
Bracken, 23, pleaded guilty to conspiracy to interfere with the housing rights of another in federal court in Pittsburgh before Senior U.S. District Judge Alan N. Bloch. Information presented during the plea hearing established that Bracken and his co-conspirators agreed to burn a cross at a home of a family with three minor children, one of whom is African-American. Bracken was principal in constructing the cross on Nov. 14, 2009, and burning a smaller “practice cross” to assess how it would burn. After the 6-foot wooden cross was constructed and doused in accelerant, Bracken and others applied gasoline to the cross. One of the co-conspirators then took the cross, jumped the fence onto the backyard of the victim’s property, stuck it into the ground and ignited it.
“The burning cross is an unmistakable symbol of bigotry and hate, and to use it to threaten a family with violence because the race of a child is intolerable in this nation. That such incidents occur in 2011 is a reminder of the civil rights challenges we still face,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will continue to aggressively prosecute hate crimes of this kind.”
“This case underscores our commitment to vigorously pursue those who commit crimes driven by hatred or intolerance,” stated U.S. Attorney for the Western District of Pennsylvania, David J. Hickton.
Judge Bloch remanded Bracken to the custody of the U.S. Marshals pending sentencing, which has been set for Sept. 1, 2011. The law provides for a maximum punishment of 10 years in prison and a $250,000 fine.
The case was investigated by the FBI, together with the Pennsylvania State Police. The case is being prosecuted by Assistant U.S. Attorney Soo C. Song from the U.S. Attornery's Office for the Western District of Pennsylvania and Trial Attorney Patricia A. Sumner from the Civil Rights Division of the Department of Justice.
Microsoft Antitrust Final Judgment Expires May 12Read the Press Release
The Department of Justice issued the following statement today marking the May 12, 2011, expiration of the final judgment the department obtained as part of its historic Microsoft antitrust case
WASHINGTON – As a result of the Department of Justice Antitrust Division’s efforts in the Microsoft case and final judgment, the competitive landscape changed allowing the marketplace to operate in a fair and open manner bringing about increased innovation and more choices for consumers. The final judgment also prevented Microsoft from continuing to engage in exclusionary behavior that was harmful to American businesses and consumers.
The Microsoft final judgment, which has been in effect since 2002, was designed to eliminate Microsoft’s illegal practices, to prevent recurrence of the same or similar practices and to restore the potential for competition from software products known as “middleware.” To that end, the judgment protected the development and distribution of middleware – including web browsers, media players and instant messaging software – thereby increasing choices available to consumers.
The final judgment proved effective in protecting the development and distribution of middleware products and prevented Microsoft from continuing the type of exclusionary behavior that led to the original lawsuit. Microsoft no longer dominates the computer industry as it did when the complaint was filed in 1998. Nearly every desktop middleware market, from web browsers to media players to instant messaging software, is more competitive today than it was when the final judgment was entered. In addition, the final judgment helped create competitive conditions that enabled new kinds of products, such as cloud computing services and mobile devices, to develop as potential platform threats to the Windows desktop operating system.
Since the entry of the final judgment, there have been a number of developments in the competitive landscape relating to middleware and to personal computer (PC) operating systems generally that suggest that the final judgment accomplished its goal of fostering competitive conditions among middleware products, unimpeded by anticompetitive exclusionary obstacles erected by Microsoft.
The Microsoft final judgment was unique in creating a technical committee empowered to assist the department, the U.S. District Court for the District of Columbia and a group of states involved in the case. Given the technical nature of Microsoft’s obligations under the final judgment, the technical committee members and their staff proved invaluable to the enforcement of the final judgment.
Background
In 1998, the department and attorneys general for 19 states plus the District of Columbia, filed suit against Microsoft alleging violation of the antitrust laws. The core allegation in the original lawsuit, upheld by the U.S. Court of Appeals in June 2001, was that Microsoft had unlawfully maintained its monopoly in PC operating systems by excluding competing middleware that posed a nascent threat to the Windows operating system. Specifically, the court of appeals upheld the district court’s conclusion that Microsoft engaged in unlawful exclusionary conduct by using contractual provisions to prohibit computer manufacturers from supporting competing middleware products on Microsoft’s operating system, prohibiting consumers and computer manufacturers from removing access to Microsoft’s middleware products in the operating system, and reaching agreements with software developers and third parties to exclude or impede competing middleware products.
The Department of Justice worked extensively with two groups of plaintiff states (the New York Group and the California Group) with similar final judgments in this matter. The level and depth of cooperation between the department and the states is a model for federal-state civil law enforcement.
Certain provisions in the Microsoft final judgment expired in November 2007. Other provisions relating to Microsoft’s obligation to make certain interoperability information available to third parties have twice been extended with Microsoft’s consent. As these issues have now been resolved, it is appropriate for the final judgment to expire.
Former U.S. Army Major Pleads Guilty to Money Laundering Charge Related to Contracts Supporting Iraq WarRead the Press Release
WASHINGTON - A retired major in the U.S. Army pleaded guilty today in San Antonio to accepting $400,000 from a contractor following his deployment to Kuwait, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Charles Joseph Bowie Jr., 45, of Georgetown, Texas, pleaded guilty today before U.S. Magistrate Judge Nancy Stein Nowak in the Western District of Texas to a criminal information charging him with one count of engaging in monetary transactions in property derived from specified unlawful activity. According to the court document, Bowie served in Kuwait from April 2004 to April 2005 in support of Operation Iraqi Freedom. While serving in Kuwait, Bowie became friends with former U.S. Army Major John Cockerham, who directed a government contractor to pay Bowie money in exchange for the award of a bottled water contract. Bowie admitted that he received four wire transfers of approximately $100,000 each from the contractor between July 2005 and February 2006. Bowie also admitted that he entered into a sham consulting agreement with the contractor to conceal the payments.
Cockerham pleaded guilty in February 2008 to participating in a complex bribery and money laundering scheme while working as an Army contracting officer in Kuwait. According to court documents, he was responsible for awarding contracts for services to be delivered to troops in Iraq, including bottled water. In return for awarding these contracts, Cockerham admitted receiving more than $9 million in bribe proceeds. Cockerham admitted that once he agreed to take money in exchange for awarding contracts, he directed contractors to pay Bowie and others in order to conceal the receipt of bribe payments. In December 2009, Cockerham was sentenced to 210 months in prison.
In addition to John Cockerham, his wife, Melissa Cockerham, pleaded guilty in February 2008 to money laundering for accepting $1.4 million on her husband’s behalf, and admitted that she stored the money in safe deposit boxes at banks in Kuwait and Dubai. Carolyn Blake, John Cockerham’s sister, pleaded guilty in March 2009 to money laundering for accepting more than $3 million on John Cockerham’s behalf, and admitted that she stored the money in safe deposit boxes at banks in Kuwait. Additionally, Nyree Pettaway, John Cockerham’s niece, pleaded guilty in July 2009, to conspiring with him, Blake and others to obstruct the investigation of money laundering related to his receipt of bribes. In December 2009, Melissa Cockerham was sentenced to 41 months in prison, Carolyn Blake was sentenced to 71 months in prison and Nyree Pettaway was sentenced to 12 months in prison.
Bowie faces up to 10 years in prison and a fine of $250,000 or twice the amount of the criminally derived property he received. In addition, Bowie has agreed to pay $400,000 in restitution to the United States. A sentencing date has not yet been scheduled by the court.
This case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, and Trial Attorneys Mark W. Pletcher and Emily W. Allen of the Criminal Division’s Fraud Section. The case is being investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service, the FBI, the Internal Revenue Service, the Special Inspector General for Iraq Reconstruction and U.S. Immigration and Customs Enforcement at the Department of Homeland Security.
Former Member of Virginia House of Delegates Convicted of Bribery and ExtortionRead the Press Release
WASHINGTON – Phillip A. Hamilton, a former member of the Virginia House of Delegates, today was convicted by a jury in Richmond, Va., of soliciting employees of Old Dominion University (ODU) for a paid position at the same time he was introducing legislation to fund the position, announced U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
“Phil Hamilton sold his services as a legislator to get a job at ODU. He promised to use his influence as a powerful, 20-year delegate to get ODU funding, but it came with a price – they had to pay him $40,000 a year,” said U.S. Attorney MacBride. “Bribery and extortion are never just the cost of doing business in government. Today’s guilty verdict should serve as a reminder to every legislator of the trust the public has in our elected officials. Never betray that trust. Never sell your office. And never forget that if you do, we will hold you accountable.”
“Mr. Hamilton abused his political office for personal gain,” said Assistant Attorney General Breuer. “His sweetheart deal ensured that only he would be considered for a position he created and shepherded through the Virginia General Assembly. Americans deserve more from their representatives, and today a Virginia jury showed that citizens will not tolerate these abuses.”
Hamilton, 59, was convicted today of one count of federal program bribery and one count of extortion under color of official right. He faces a maximum of 10 years in prison on the bribery charge and up to 20 years in prison on the extortion charge when he is sentenced on Aug. 12, 2011.
Hamilton was elected in 1988 to represent the 93rd District in the Virginia House of Delegates, which includes Newport News and James City County, Va. As part of his duties, Hamilton sat on the Elementary & Secondary Education Subcommittee of the Virginia House Appropriations Committee.
According to the Jan. 5, 2011, indictment and evidence presented at trial, from August 2006 through February 2007, Hamilton solicited employees of ODU for a position as director for the ODU Center for Teacher Quality and Educational Leadership. The center’s objective was to train teachers for success in urban school environments. During this period, Hamilton simultaneously introduced legislation that would establish and fund the center, including his salary as the director.
According to an email that Hamilton sent to an ODU official on Dec. 21, 2006, which was admitted as evidence at trial, Hamilton stated that the current budget did not include any funding for the center, his retirement payments from another source were being reduced in May 2007, and he would need to supplement his current income. Evidence at trial showed that an ODU official assured Hamilton in December 2006 and January 2007 that if ODU obtained funding from the Virginia General Assembly for the creation of the center, then Hamilton would have a job at the center. During this same period, in January 2007, Hamilton introduced a budget amendment in the House of Delegates to appropriate $1 million in fiscal year 2007-2008 (July 1, 2007 – June 30, 2008) for a “Center for Teacher Quality and Educational Leadership.” The amendment passed the full committee unanimously.
On Feb. 24, 2007, after a conference between the Virginia house and senate that resulted in an amendment to appropriate $500,000 to ODU for the center – for which Hamilton voted in favor - the budget bill was passed. The next day, according to evidence at trial, Hamilton and ODU officials exchanged emails about Hamilton receiving the director job. Approximately three people applied in response to a job posting for the position; however, none of them were interviewed. Hamilton, who was awarded the job, never submitted an application.
In June 2007, Hamilton and an ODU official signed an employee contract indicating, among other things, that Hamilton would direct the center and seek continual funding for the center. The contract also stated that Hamilton would be paid $40,000 per year. From approximately July 2007 through July 2009, Hamilton collected approximately $80,000 from ODU.
Evidence at trial showed that Hamilton took numerous steps to conceal this arrangement, including telling ODU officials not to mention his name in connection with the center to members of the Virginia Senate Finance Committee; advising an ODU official to tell a Virginia senate staffer that the official, and not Hamilton, was the director of the center; and unsuccessfully attempting to persuade ODU leadership not to release incriminating emails in response to a Freedom of Information Act request that ODU had received.
The case is being prosecuted by Trial Attorney David V. Harbach II of the Criminal Division’s Public Integrity Section and Supervisory Assistant U.S. Attorney Robert J. Seidel Jr. of the Eastern District of Virginia. The case was investigated by the FBI.
Federal Court Bars North Georgia Man from Promoting Form 1099-OID Tax SchemeRead the Press Release
WASHINGTON – A federal court has permanently barred Atlanta-area financial planner T. Michael Haney from promoting the use of Internal Revenue Service (IRS) Forms 1099-OID to support false tax withholdings, the Justice Department announced today. The civil injunction order, to which Haney consented, was signed by Judge Clarence Cooper of the U.S. District Court for the Northern District of Georgia.
The government complaint alleged that Haney advised his customers to prepare false IRS forms, such as Form 1099-OID, to request fraudulent refunds based on phony claims of large income tax withholding. According to the complaint, Haney’s customers have submitted fraudulent refund claims of more than $3.5 million. The court order requires Haney to provide the government with a list of all persons to whom he sold his “OID” program since Jan. 1, 2007, and to provide them with a copy of the injunction order.
Claiming bogus tax refunds based on false Forms1099-OID is identified by the IRS as one of the “Dirty Dozen” tax scams that taxpayers are urged to avoid. Since 2001, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent tax returns. Information about these cases is available on the Justice Department website .
Another Individual Sentenced in Miami in Connection with Costa Rica-Based Business Opportunity Fraud VenturesRead the Press Release
WASHINGTON – Gregory Britt Fleming was sentenced today in connection with a series of Costa Rica-based business opportunity fraud ventures, the Justice Department and the U.S. Postal Inspection Service announced. Fleming was sentenced by Judge Marcia G. Cooke to a term of 60 months in prison and five years of supervised release. Additionally, he was ordered to pay more than $2.5 million in restitution.
Two other defendants in this case previously pleaded guilty and have been sentenced. On Oct. 27, 2010, Donald Williams was sentenced to 78 months in prison. On April 20, 2011, Silvio Carrano was sentenced to 97 months in prison, three years supervised release and ordered to pay more than $9 million in restitution.
Beginning in June 2004, Carrano, Donald Williams, Fleming and their co-conspirators fraudulently induced purchasers in the United States to buy business opportunities in Apex Management Group Inc., USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., Cards-R-Us Inc., Premier Cards Inc., The Coffee Man Inc. and Nation West Distribution Company. The business opportunities the defendants sold cost thousands of dollars each, and most purchasers paid at least $10,000. Each company operated for several months, and after one company closed, the next opened. The various companies used bank accounts, office space and other services in the Southern District of Florida and elsewhere.
The defendants, using aliases, participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Carrano, Donald Williams and Fleming operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
The companies made numerous false statements to potential purchasers of the business opportunities. Potential purchasers were falsely told they would likely earn substantial profits; that prior purchasers of the business opportunities were earning meaningful profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.
The companies employed various types of sales representatives, including fronters, closers and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to close deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. As part of his plea, Fleming acknowledged that he conspired to commit fraud while working at USA Beverages and Nation West.
“The court’s sentences provide fair warning to business opportunity fraudsters who try to impose financial hardship on innocent, hardworking victims,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice will continue to seek stiff sentences for those who exploit consumers to make a quick buck for themselves.”
“Fraudulent business opportunity sellers must realize that all finanical fraud will be prosecuted vigorously. This is true even if the schemers operate from outside of the United States,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “International law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas.”
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. Apex was registered as a Florida corporation and rented office space in Ft. Lauderdale, Fla., while USA Beverages was registered as a Florida and New Mexico corporation and rented office space in Las Cruces, N.M. Twin Peaks was registered as a Florida and Colorado corporation and rented office space in Fort Collins, Colo. Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia. Coffee Man and Nation West were both registered as Colorado corporations and rented office space in Denver. These locations made it appear to potential purchasers that the businesses were located entirely in the United States when in fact they were not.
“Telemarketing fraud that exploits American consumers and abuses the U.S. Mails will be investigated thoroughly, whereever it arises. This international and domestic investigation illustrates the Postal Inspection Service’s resolve to protect the American public from financial fraud in all its forms,” said Henry Gutierrez, U. S. Postal Inspector in Charge in Miami.
Assistant Attorney General West and U.S. Attorney Ferrer commended the investigative efforts of the Postal Inspection Service. The case is being prosecuted by trial attorneys Jeffrey Steger and Alan Phelps with the U.S. Department of Justice Office of Consumer Protection Litigation.
Tuesday 10 May 2011
Two Arkansas Men Plead Guilty to Firebombing an Interracial Couple’s HomeRead the Press Release
WASHINGTON – Two Arkansas men pleaded guilty today in U.S. District Court in Little Rock, Ark., to charges related to their involvement in the firebombing of the house of an interracial couple, the Justice Department announced.
During the plea proceedings, Dustin Hammond of Sharp County, Ark., and Jake Murphy of Scott County, Ark., admitted that on the night of Jan.14, 2011, while at a party in Evening Shade, Ark., they and two other men devised a plan to firebomb an interracial couple’s home. Thereafter, all four co-defendants drove from Evening Shade to the victims’ house in Hardy, Ark. Upon arrival, the co-defendants constructed three Molotov cocktails and threw them at the house. The couple was also barraged with racial slurs and threatened with future violence if they did not leave Arkansas. The victims’ house sustained some damage during the incident. The victims were not injured.
Hammond and Murphy pleaded guilty to one count of conspiracy against rights and one count of criminal violation of housing rights.
“Firebombing a family’s home because of their race is a deplorable act of hate that will not be tolerated in our country,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “The Justice Department will vigorously prosecute those who resort to violent acts motivated by hate.”
Hammond and Murphy face a maximum penalty of 20 years in prison. Sentencing has been set for Aug. 12, 2011. The remaining co-defendants are scheduled to go to trial on May 31, 2011.
This case was investigated by the Little Rock, Ark., Division of the FBI and is being prosecuted by Assistant U.S. Attorney John Ray White of the Eastern District of Arkansas and Trial Attorney Henry Leventis of the Civil Rights Division.
Shell Oil Companies to Pay $2.2 Million to Resolve Allegations of Royalty Underpayments from Federal LandsRead the Press Release
WASHINGTON – Shell Oil Company and other Shell affiliates have agreed to pay the United States $2.2 million to resolve claims that the companies violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal leases, the Justice Department announced today. Shell Oil Company is the U.S.-based subsidiary of Royal Dutch Shell, a multinational oil company, and is a leading producer of oil and natural gas.
Congress has authorized federal and Indian lands to be leased for the production of natural gas in exchange for the payment of royalties on the value of the gas that is produced. Each month companies are required to report to the U.S. Department of the Interior (DOI) the amount of royalty that is due. This settlement resolves claims by the United States that the Shell defendants improperly deducted from royalty values the cost of boosting gas up to pipeline pressures, and improperly reported processed gas as unprocessed gas to reduce royalty payments.
In June 2003, Shell paid $56 million to settle claims that it knowingly underpaid royalties related to natural gas and natural gas liquids produced from federal lands located in the Gulf of Mexico. Today’s settlement resolves claims related to Shell’s on-shore federal leases.
“Natural gas is a non-renewable resource. When the United States allows companies to remove gas from public lands that belong to all of us, we must require those companies to pay all of the royalties they owe, because those funds support important federal programs from which we all benefit,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Through cases like this, we are keeping our commitment to protect public lands and the valuable resources they contain."
“We are required to ensure that energy companies accurately report production and pay the required royalties,” said Chris Henderson, Acting Assistant Secretary for the DOI’s Office of Policy, Management and Budget. “We will continue to pursue any case where companies do not follow the rules.”
Today’s settlement arises from a lawsuit filed by Harrold Wright under the False Claims Act. Under the qui tam, or whistleblower, provisions of the act, private citizens may file actions on behalf of the United States and share in any recovery. Because Mr. Wright is deceased, his heirs will receive $572,000 as their share of the settlements. The United States intervened against Shell for the purpose of completing this settlement, and had previously intervened as to the claims settled in 2003, but had otherwise declined to intervene in the allegations against Shell. The Justice Department previously intervened against several other defendants in the Wright lawsuit. Total settlements in the case to date exceed $233 million.
The investigation and settlement of this matter was jointly handled by the Justice Department’s Civil Division and the U.S. Attorney for the Eastern District of Texas, with assistance from the Department of the Interior’s Office of Natural Resources Revenue, Office of the Solicitor and Office of the Inspector General.
The case is U.S. ex rel. Wright v. Chevron USA, Inc. et al., 5:03-CV-264 (E.D. Tex.) .
National Disaster Fraud Hotline Available to Report Tornado and Flood-Related FraudRead the Press Release
WASHINGTON - In response to recent natural disasters in several states, and subsequent relief efforts, the National Center for Disaster Fraud (NCDF) is reminding the public to be aware of and report any instances of alleged fraudulent activity related to relief operations and funding for victims.
Members of the public can report fraud, waste, abuse or allegations of mismanagement involving disaster relief operations through the National Disaster Fraud Hotline toll free at (866) 720-5721 or the Disaster Fraud email at [email protected] . The telephone line is staffed by a live operator 24 hours a day, seven days a week.
Members of the public are reminded to apply a critical eye and do their due diligence before giving contributions to anyone soliciting donations on behalf of flood or tornado victims. Solicitations can originate from emails, websites, door-to-door collections, mailings and telephone calls, and similar methods.
In response to a significant amount of fraud associated with federal disaster relief programs that went into effect following Hurricanes Katrina, Rita and Wilma, a Joint Command Center was established in Baton Rouge, La., in 2005. The command center, now known as the National Center for Disaster Fraud, has received and screened more than 39,000 complaints of disaster fraud and referred more than 25,000 of those to law enforcement for investigation. The NCDF – based on its extensive expertise and established infrastructure – has helped victims of fraud related to Hurricanes Katrina, Rita, Wilma, Ike and Gustav, as well as those affected by severe storms in more than 20 different states, earthquakes, tsunamis, wildfires and Deepwater Horizon oil spill.
More than 20 federal agencies participate in the center, allowing it to act as a centralized clearinghouse of information. To date, the Department of Justice has charged more than 1,300 defendants in 47 judicial districts throughout the country for disaster fraud related to Hurricanes Katrina, Rita and Wilma, the Gulf Coast oil spill and other disasters.
Man Indicted for Tax Evasion in TennesseeRead the Press Release
WASHINGTON – Jimmie Duane Ross was indicted by a federal grand jury in Knoxville, Tenn., for five counts of tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. The April 5, 2011, indictment was unsealed today, May 10, 2011, following Ross’s arrest.
According to the indictment, in 1999, Ross, who at all times relevant to the indictment resided in Sevierville, Tenn, received a monetary award of $840,000 as a result of an employment dispute with a former employer. Ross failed to pay taxes on this amount and evaded the payment of such taxes by, among other things, filing a false mortgage upon his residence and a false lien upon his vehicle, dealing extensively in cash, and directing funds to an offshore bank account. Additionally, during tax years 2004 through 2007, Ross earned commissions for referring clients to Guardian Trust Company Ltd., a purported offshore investment company. However, he evaded his taxes for those years by funneling his commissions through a nominee offshore entity that he controlled.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Ross faces a sentence of up to five years in prison and a $250,000 fine for each count of conviction.
The case was investigated by IRS-Criminal Investigation and is being prosecuted by Department of Justice – Tax Division Trial Attorneys Tracy Gostyla and Kevin Lombardi.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
Man Convicted in Miami in Connection with Costa Rica-Based Business Opportunity Fraud VenturesRead the Press Release
WASHINGTON – Following a two-week trial, a federal jury in Miami today convicted Sirtaj “Tosh” Mathauda on 12 felony counts related to a fraudulent business opportunity scheme, the Justice Department announced. The jury convicted Mathauda of conspiracy, nine counts of mail fraud and two counts of wire fraud.
A federal grand jury returned a second superseding indictment again Mathauda on March 30, 2010, charging that he and his co-conspirators operated a string of bogus companies known as Apex Management Group, USA Beverages Inc., Omega Business Systems and Nation West Distribution. The companies operated largely out of phone rooms in Costa Rica and marketed to residents in the United States. The companies sold opportunities to own and operate vending machine routes, beverage distributorships and greeting card distributorships. The so-called “business opportunities” were promoted as including retail display racks or vending machines, high-traffic locations in which they would be placed, and assistance in maintaining and operating such businesses. The promises of good locations and business assistance were fabricated.
As the evidence presented at trial showed, Mathauda owned, managed or worked at the fraudulent companies in Costa Rica, one after another, from 2004 through early 2009. Salesmen in the phone rooms told potential customers that the companies were located in the United States and would provide profitable distribution routes for vending machines or retail display racks. Salesmen said that the companies had a track record of success, claims that were backed up by phony references pretending to be satisfied customers of the companies in calls to customers. Many of the references were in reality the salesmen for the companies.
Several of Mathauda’s co-conspirators, including his brother, Dilraj “Rosh” Mathauda, as well as Stephen Schultz, Silvio Carrano, Donald Williams, Patrick Williams and Gregory Fleming, previously pleaded guilty in Miami in connection with their roles in the fraudulent business opportunity scam. All of these defendants were charged as part of the government’s continued nationwide crackdown on business opportunity fraud.
“Business opportunity fraud imposes major financial hardship on innocent, hardworking victims,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice will continue to prosecute aggressively those who are exploiting consumers to make a quick buck for themselves.”
Mathauda faces a maximum sentence of 25 years in prison on each count of conviction, a possible fine and mandatory restitution.
“This verdict demonstrates that individuals living outside of the United States will not be allowed to use technology to commit fraud on the American public. This investigation illustrates our resolve to protect American consumers from business scams, wherever they occur,” said U.S. Postal Inspector in Charge, Henry Gutierrez, based in Miami.
Assistant Attorney General West commended the investigative efforts of the Postal Inspection Service, as well as the Federal Trade Commission, which previously brought a related civil suit and made a criminal referral. This matter was prosecuted by trial attorneys in the Justice Department’s Office of Consumer Protection Litigation.
Justice Department Files Antitrust Lawsuit Challenging George’s Inc.’s Acquisition of Tyson Foods Inc.’s Harrisonburg, Va., Poultry Processing ComplexRead the Press Release
WASHINGTON – The Department of Justice filed a civil antitrust lawsuit today challenging George’s Inc.’s acquisition of Tyson Foods’ Harrisonburg, Va., chicken processing complex. The department said that based on the information gathered thus far, the acquisition eliminates substantial competition between the two companies for the procurement of services of chicken growers in the Shenandoah Valley area.
The department’s lawsuit, filed in U.S. District Court in Harrisonburg requests that the court declare the acquisition to be unlawful under the antitrust laws and order appropriate equitable relief, such as divestiture of the Harrisonburg complex.
“The department’s lawsuit alleges that George’s acquisition of Tyson’s Harrisonburg chicken processing facility would reduce growers’ ability to receive competitive prices for their services,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “America’s farmers deserve competitive prices and terms for the sale of their services, and the Antitrust Division will vigorously pursue anticompetitive acquisitions that stand in the way of achieving that goal.”
Chicken processors, such as Tyson and George’s, are also referred to in the industry as “integrators.” Integrators typically contract with farmers to grow chickens that are then transported to plants for processing. The processors provide the chicks and the feed, and the growers provide the housing and labor. Feed is delivered on a regular basis and since it is costly to transport grown chickens long distances, processors typically contract with growers that are located close to the processors’ plants and feed mills.
Prior to the acquisition, three chicken processors – Tyson, George’s and JBS/Pilgrim’s Pride – competed in Virginia’s Shenandoah Valley region for the services of local chicken growers. By combining the Tyson plant with George’s Edinburg, Va., operations, the sale decreased the number of processors in the area to two, reducing competition for grower services.
Tyson and George’s publicly announced the acquisition on March 18, 2011. Upon learning of the proposed acquisition, the department’s Antitrust Division opened an investigation into the proposed deal. The department sought information on the potential competitive effects of the transaction, and George’s proposed business justifications for purchasing the Harrisonburg plant. On Saturday, May 7, despite the parties’ awareness of the department’s serious antitrust concerns about the transaction, and without providing a response to the information requested by the department, George’s and Tyson entered into an asset purchase agreement and simultaneously closed the transaction.
The acquisition was not required to be reported under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which requires companies to notify and provide information to the department and the Federal Trade Commission before consummating certain size acquisitions. The purchase price of the transaction was less than the minimum reporting threshold.
George’s, headquartered in Springdale, Ark., is the 15th largest chicken processor in the United States, with output of more than 20 million pounds of chicken per week. In addition to its Shenandoah Valley operations, George’s processes chicken in Springdale, Ark., and Cassville, Mo.
Tyson Foods, headquartered in Springdale is the largest chicken processor in the United States, with output of more than 205 million pounds of chicken per week.
JBS/Pilgrim’s Pride, headquartered in Greely, Colo., is the second largest chicken processor in the United States, with output of more than 160 million pounds of chicken per week.
Former Executive of Illinois Refuse Container Repair Company Sentenced to Serve 16 Months in Prison for Conspiring to Defraud the City of ChicagoRead the Press Release
WASHINGTON — A former president of an Illinois refuse disposal container repair company was sentenced today for his role in a conspiracy to commit mail and wire fraud in connection with bids on a contract for the repair of refuse carts for the city of Chicago, the Department of Justice announced today.
Douglas E. Ritter, an Illinois resident, was sentenced by U.S. District Court Judge Ruben Castillo to serve 16 months in prison and to pay $35,303 in restitution for his participation in a conspiracy to defraud the city of Chicago on a contract for the repair of refuse carts from as early as November 2004 to as late as September 2008. Ritter, along with his business partner Steven Fenzl, was charged in an indictment filed on April 21, 2009, in U.S. District Court in Chicago. Ritter pleaded guilty to the conspiracy on June 3, 2010. Fenzl, a California resident, was found guilty by a jury on Sept. 28, 2010, of one count of conspiracy to commit mail and wire fraud, two counts of mail fraud and one count of wire fraud. Fenzl is scheduled to be sentenced on June 15, 2011.
According to the indictment, Ritter, Fenzl and their co-conspirator conspired to deceive city of Chicago officials about the number of legitimate, competitive bids submitted for the contract. Specifically, Ritter and his co-conspirators fraudulently induced other companies to submit bids for the contract at prices determined by Ritter and his co-conspirators and greater than the price for which Ritter’s company had submitted a bid. The department said that included in these bids were fraudulent documents indicating that, if awarded the contract, the bidder would enter into subcontracts to purchase goods or services for a specified percentage of the contract from a minority-owned business and a women-owned business, as required by the city of Chicago. According to the indictment, Ritter and his co-conspirators also fraudulently certified to the city on Ritter’s company’s bid that it had not entered an agreement with any other bidder relating to the price named in any other bid submitted to the city for the contract.
Today’s sentencing resulted from an ongoing investigation of the refuse cart repair industry being conducted by the Antitrust Division’s Chicago Field Office and the city of Chicago’s Office of Inspector General.
Anyone with information concerning bid rigging or other anticompetitive conduct involving government or private contracts with the city of Chicago is urged to call the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm .
California Company, Its Two Executives and Intermediary Convicted by Federal Jury in Los Angeles on All Counts for Their Involvement in Scheme to Bribe Officials at State-Owned Electrical Utility in MexicoRead the Press Release
WASHINGTON – Lindsey Manufacturing Company, an Azusa, Calif., company, two of its executives and a Mexican intermediary today were convicted by a federal jury on all counts for their alleged roles in a scheme to pay bribes to Mexican government officials at the Comisión Federal de Electricidad (CFE), a state-owned utility company. The jury reached its verdict after one day of deliberations, following a five-week trial.
The convictions were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Steven M. Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Victor S.O. Song, Chief of Internal Revenue Service-Criminal Investigation (IRS-CI).
“Today’s guilty verdicts are an important milestone in our Foreign Corrupt Practices Act (FCPA) enforcement efforts,” said Assistant Attorney General Breuer. “Lindsey Manufacturing is the first company to be tried and convicted on FCPA violations, but it will not be the last. Foreign corruption undermines the rule of law, stifling competition and the health of international markets and American businesses. As this prosecution shows, we are fiercely committed to bringing to justice all the players in these bribery schemes – the executives who conceive of the criminal plans, the people they use to pay the bribes, and the companies that knowingly allow these schemes to flourish. Bribery has real consequences.”
“Bribery is not a victimless crime,” said U.S. Attorney Birotte. “Not only does it damage citizens’ confidence in their own government, it also damages the integrity of the global marketplace. The Department of Justice remains committed to prosecuting violations of the FCPA to ensure that the payment of bribes can no longer be viewed simply as the cost of doing business in a foreign nation. Bribery, wherever it occurs, will carry the potential cost of criminal prosecution, hefty fines and prison terms.”
“The FBI investigates corruption and allegations of bribery to ensure that U.S.-based companies do business on an even playing field,” said FBI Assistant Director in Charge Martinez of the FBI’s Los Angeles Field Office . “The guilty verdicts announced today should send a strong message to large public corporations and small businesses alike, that bribing foreign officials to obtain a competitive advantage is a crime and will be prosecuted.”
“IRS Criminal Investigation provides financial investigative expertise in our work with our law enforcement partners,” said Chief Song of IRS-CI. “Pooling the skills of each agency makes a formidable team as we investigate allegations of wrong-doing.”
Keith E. Lindsey, 66, of La Canada, Calif., and Steve K. Lee, 60, of Diamond Bar, Calif., were convicted of one count of conspiracy to violate the FCPA and five counts of FCPA violations. Angela Maria Gomez Aguilar, 56, of Cuernavaca , Mexico, was convicted of one count of money laundering conspiracy. The court entered a judgment of acquittal prior to the jury’s verdict on one substantive count of money laundering against Angela Aquilar.
Angela Aguilar’s husband, Enrique Aguilar, 56, also of Cuernavaca, Mexico, is charged with conspiracy to violate the FCPA, violations of the FCPA and money laundering violations. He remains a fugitive, and is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The defendants were charged in a superseding indictment returned by a federal grand jury in Los Angeles on Oct. 21, 2010.
According to the evidence presented at trial, CFE is responsible for supplying electricity in Mexico, and contracts with Mexican and foreign companies for goods and services to help supply electricity services to its customers. Enrique and Angela Aguilar were directors of Grupo Internacional de Asesores S.A. (Grupo), which purported to provide sales representation services for companies doing business with CFE.
According to evidence presented at trial, Lindsey Manufacturing hired Grupo to serve as its sales representative in Mexico and to obtain contracts for it from CFE. Lindsey Manufacturing makes emergency restoration systems and other equipment used by electrical utility companies. Many of Lindsey Manufacturing’s clients were foreign, state-owned utilities, including CFE, which was one of the company’s most significant customers. Grupo received a percentage of the revenue Lindsey Manufacturing realized from its contracts with CFE.
From approximately February 2002 until March 2009, according to evidence presented at trial, Lindsey Manufacturing, Lindsey, Lee and others orchestrated a scheme in which Enrique Aguilar was paid a 30 percent commission on all the goods and services Lindsey Manufacturing sold to CFE, even though this was a significantly higher commission than previous sales representatives for the company had received. According to evidence presented at trial, Lindsey and Lee understood that all or part of the 30 percent commission would be used to pay bribes to Mexican officials in exchange for CFE awarding contracts to Lindsey Manufacturing. The costs of goods and services sold to CFE allegedly were increased by 30 percent to ensure that the added cost of paying the bribes was absorbed by CFE and not by Lindsey Manufacturing.
According to evidence presented at trial, fraudulent invoices were submitted from Grupo to Lindsey Manufacturing for 30 percent of the CFE contract price. Lindsey and Lee then caused the money requested in the fraudulent invoices to be wired into Grupo’s brokerage account, knowing that the invoices were fraudulent and that at least part of the funds were being used as bribes.
The evidence at trial established that in the months leading up to the hiring of Enrique Aguilar, Lindsey and Lee learned that Enrique Aguilar had a corrupt relationship with a top CFE official. In fact, according to evidence presented at trial, Lindsey and Lee complained to CFE about the way in which contracts were being awarded. The month after their complaint was rebuffed, Lindsey and Lee hired Enrique Aguilar. An employee of Lindsey Manufacturing testified at trial that in 2000, prior to hiring Enrique Aguilar, the employee and Lee discussed Aguilar’s possible representation of the company. The employee said he told Lee, “if we cannot defeat the enemy, might as well join the enemy.” The evidence at trial established that within months of hiring Enrique Aguilar, Lindsey Manufacturing began receiving contracts from CFE and over the course of the next seven years received more than $19 million in CFE business. The evidence also showed that Keith Lindsey and Lee wired approximately $5.9 million of that money directly to Grupo.
Evidence established that Angela Aguilar authorized money in the Grupo account to be used to buy a CFE official a $297,500 Ferrari Spyder and a $1.8 million yacht, as well as to pay more than $170,000 towards the official’s credit card bills. She also authorized the transfer of $500,000 to the brother and mother of another CFE official.
Angela Aguilar was arrested on Aug. 10, 2010, on a criminal complaint when she travelled to Houston from Mexico. She was ordered detained and removed to the Central District of California, where she remains in custody pending sentencing.
Sentencing for Lindsey Manufacturing, Lindsey and Lee is scheduled for Sept. 16, 2011. Angela Aguilar’s sentencing is scheduled for Aug. 12, 2011. The defendants face a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost on the FCPA conspiracy charge. Each of the five FCPA counts carries a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The money laundering conspiracy count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The government is seeking forfeiture against all defendants.
The case is being prosecuted by Senior Trial Attorneys Nicola J. Mrazek and Jeffrey A. Goldberg of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Douglas M. Miller in the Central District of California. The case was investigated by the FBI’s Los Angeles Field Office and the IRS-CI Los Angeles Field Office, with the assistance of the Department of Homeland Security Office of Inspector General. Significant assistance was provided by the Criminal Division’s Office of International Affairs. The Department of Justice also thanks Mexican authorities for their ongoing assistance in this matter.
Monday 9 May 2011
Uzbek Man Sentenced for Role in Multi-National Racketeering and Forced Labor EnterpriseRead the Press Release
WASHINGTON – An Uzbek national was sentenced today for his role as the leader of a illicit enterprise that engaged in numerous criminal activities including forced labor, fraud in foreign labor contracting, visa fraud, mail fraud, identity theft, tax evasion and money laundering, the Department of Justice announced. Abrorkhodja Askarkhodjaev was sentenced to 12 years in prison and three years of supervised release, and was ordered to pay $172,000 in restitution to the foreign worker fraud and forced labor victims in addition to restitution for harm caused by other aspects of the criminal enterprise. Askarkhodjaev pleaded guilty in October 2010, to racketeering conspiracy, fraud in foreign labor contracting, evasion of corporate employment tax and identity theft.
As leader of this multi-national criminal enterprise, whose members included nationals of Uzbekistan, Moldova and the United States, Askarkhodjaev arranged for the recruitment and exploitation of dozens of workers from Jamaica, the Dominican Republic, the Philippines and elsewhere, many of whom were recruited with false promises concerning the terms, conditions and nature of their employment. Once in the United States, the workers were held in overcrowded apartments and compelled into service and hospitality jobs in as many as 14 states. Members of the criminal enterprise withheld much of the victims’ earnings and threatened them with deportation and financial penalties if they refused to comply with the defendants’ demands.
“The defendant directed a criminal organization that, out of pure greed, exploited the hopes and dreams of scores of foreign workers, degrading them through threats and deceit,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Department of Justice will continue to vigorously prosecute these cases and dismantle criminal networks that prey on vulnerable victims.”
“This case was the first in the country in which forced labor trafficking was charged as part of a Racketeer Influenced and Corrupt Organizations Act, or RICO, conspiracy,” said U.S. Attorney for the Western District of Missouri Beth Phillips. “Hundreds of illegal aliens working in 14 states were victims of modern-day slavery, including employees at hotels in the Kansas City, Mo., area and in Branson, Mo.”
Co-defendants Kristin Dougherty, Ilkham Fazilov, Viorel Simon, Nodirbek Abdollayev, Jakhongir Kakhkarov, Alexandru Frumusache and Abdukakhar Azizkhodjaev were previously sentenced for their respective roles in this criminal enterprise. Dougherty was convicted of racketeering, racketeering conspiracy and wire fraud, and was sentenced to 60 months in prison. Fazilov was convicted of racketeering conspiracy and was sentenced to 41 months in prison. Simon was convicted of racketeering conspiracy and fraud in foreign labor contracting, and was sentenced to 25 months in prison. Abdoollayev was convicted of racketeering and was sentenced to 21 months in prison. Kakhkharov and Azizkhodjaev were convicted of racketeering conspiracy and misprision of a felony respectively, and both were sentenced to time served. Andrew Cole, who was convicted of racketeering conspiracy and fraud in foreign labor contracting, is scheduled to be sentenced on May 10, 2011.
This case is being prosecuted by Assistant U.S. Attorney William L. Meiners, Special Assistant U.S. Attorney Trey Alford and Deputy Chief Jim Felte of the Civil Rights Division. It was investigated by the U.S. Immigration and Customs Enforcement Office of Homeland Security Investigations, the FBI, the U.S. Department of Labor- Office of the Inspector General, the Internal Revenue Service- Criminal Investigations, the Kansas Department of Revenue- Criminal Investigations, U.S. Citizenship and Immigration Services and the Independence, Mo., Police Department in conjunction with the Human Trafficking Rescue Project.
Latin Kings Leader in Maryland Sentenced to 23 Years in Prison for Racketeering Conspiracy Including Attempted MurdersRead the Press Release
WASHINGTON - Brandon Smith, aka “Little One” and “King Little One,” 26, of Hyattsville, Md., was sentenced today to 23 years in prison by U.S. District Judge Alexander Williams Jr. for conspiracy to participate in a racketeering enterprise, in connection with his gang activities as a member and leader of the Almighty Latin King and Queen Nation (Latin Kings). Smith also was ordered to serve five years of supervised release following his prison term.
The sentence was announced by Assistant Attorney General Lanny A Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Theresa R. Stoop of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief J. Thomas Manger of the Montgomery County, Md., Police Department; Montgomery County State’s Attorney John McCarthy; Interim Chief Mark Magaw of the Prince George’s County, Md., Police Department; and Prince George’s County State’s Attorney Angela Alsobrooks.
According to Smith’s plea agreement, the Latin Kings is a violent street gang with thousands of members across the country and overseas. The Latin Kings have a detailed and uniform organizational structure, which is outlined – along with various “prayers,” codes of behavior and rituals – in a written “manifesto” widely distributed to members throughout the country. Members of the Latin Kings are also traditionally given “King Names” or “Queen Names,” which are names other than their legal names by which they are known to members of the gang and to others on the street. At the local level, groups of Latin Kings are organized into “tribes,” including the Royal Lion Tribe, MOG, Sun Tribe and UTL.
Smith was a member of the MOG and UTL Tribes in Maryland, joining the MOG Tribe in January 2009. On Jan. 16, 2009, Smith and other Latin Kings members and associates from Maryland, traveled to New York City to attend a Latin Kings meeting at the Amazura Night Club in Queens, New York. After the meeting, as Smith and other Latin Kings members were standing in front of the Amazura, a car pulled up in front of the club and a man opened fire yelling “Mara, Mara!” (referring to rival gang MS-13). Smith admitted that he returned fire, emptying his 9mm semi-automatic Taurus. During the shooting, four Latin Kings were shot, as well as a limousine driver, who was driving by and was struck in the leg by the cross-fire.
According to the plea agreement, late in the evening on Jan. 31, 2009, Smith and several Latin Kings members and associates went to a residence in Wheaton, Md. Smith, the enforcer for the MOG tribe at the time, ordered an individual into the basement laundry room and demanded that he make the Latin Kings crown sign with his hands, while two other Latin Kings held the individual at gunpoint. From late in the evening on Jan. 31, 2009, and continuing into the early morning hours of Feb, 1, 2009, Smith threatened the individual, pacing in front of him with a knife, and telling the individual not to “drop” the crown (move his hands from the crown position). Smith admitted that at one point, he slashed the individual across the face, stating that he wanted to see the individual “leaking” on the floor and that the victim was going to leave the house in a body bag. Smith instructed another Latin Kings member to shoot the individual in the heart if he dropped his crown, at which point the other Latin Kings member cocked the gun. Smith called the leader of the MOG Tribe on speaker phone and told him that he had sliced the victim and planned to murder him. According to court documents, Montgomery County police officers arrived on the scene at about this time and directed everyone to leave the residence. After being threatened by Smith and others not to “snitch,” the victim wore a mask to cover his face as he left the residence. However, law enforcement had the victim remove his mask and discovered his wound.
According to court documents, during the evening of July 8, 2009, Smith and other members and associates of the UTL tribe attempted to murder another individual in Germantown, Md. The individual was walking on a residential street with two friends when a car approached and several people got out and began chasing the individual, who was able to hide for several minutes. When the individual left his hiding place, he was chased again. The individual was hit in the back of the head and fell to the ground. Smith admitted that he and the other UTL members and associates beat the individual with a bat-like object, and kicked, punched and stabbed the individual multiple times. In fact, the victim was stabbed with such force that the blade of the knife broke off during the attack and was recovered at the scene. The victim was taken to the hospital and treated for the multiple stab wounds he sustained.
Seven co-defendants previously pleaded guilty to the racketeering conspiracy and an eighth was convicted after trial.
The ATF-led Regional Anti-Gang Enforcement (RAGE) Task Force, which includes the Gaithersburg, Md., Police Department; the Montgomery County Department of Police; the Montgomery County State’s Attorney’s Office; the Prince George’s County Police Department; the Prince George’s County State’s Attorney’s Office; the Montgomery County Sheriff’s Office; the Maryland National Capital Park Police - Prince George’s County Division; and the Maryland State Police; as well as the New York City Police Department , the U.S. Secret Service and the Internal Revenue Service - Criminal Investigation provided assistance in the investigation and prosecution.
The case was prosecuted by Assistant U.S. Attorneys Emily Glatfelter and David Salem, and Trial Attorney Lara M. Peirce with the Criminal Division’s Gang Unit.
Justice Department Opens Investigation into the Newark, N.J., Police DepartmentRead the Press Release
NEWARK, N.J. – The Justice Department announced today that it has opened a civil pattern or practice investigation into the Newark, N.J., Police Department (NPD) involving allegations of use of excessive force, discriminatory policing, whether detainees confined to holding cells are subjected to unreasonable risk of harm and whether officers retaliate against citizens who legally attempt to observe or record police activity. The investigation is in accordance with the pattern or practice provision of the Violent Crime Control and Law Enforcement Act of 1994, the anti-discrimination provisions of the Omnibus Crime Control and Safe Streets Act of 1968 and Title VI of the Civil Rights Act of 1964.
The Justice Department will determine whether there are systemic violations of the constitution or federal law by officers of the NPD. During the course of the investigation, the Justice Department will consider all relevant information, including all efforts that Newark has undertaken to ensure compliance with federal law. The Justice Department has engaged in similar reviews of a variety of state and local law enforcement agencies, both large and small, in jurisdictions such as New York, Ohio, Washington, Pennsylvania, the District of Columbia, Louisiana and California.
This matter is being investigated jointly by attorneys from the Special Litigation Section of the Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey. The department welcomes any information from the community. If you have any comments or concerns, please feel free to contact the department at 855-281-3339, via email at [email protected] or submit a complaint using our web site at www.justice.gov/usao/nj/files/CivilRightsComplaint.pdf .
Illinois Man Admits Plotting to Bomb Federal Courthouse <br /> and Is Sentenced to 28 Years in PrisonRead the Press Release
WASHINGTON – Michael C. Finton, aka “Talib Islam,” pleaded guilty today to attempting to bomb the federal courthouse in Springfield, Ill., in September 2009 and was immediately sentenced to serve 28 years in prison, announced Todd Hinnen, Acting Assistant Attorney General for National Security, U.S. Attorney James A. Lewis of the Central District of Illinois, and Armando Fernandez, Acting Special Agent in Charge of the FBI Springfield Division.
At a hearing today in East St. Louis, Ill., Finton, 31, a U.S. citizen and resident of Decatur, Ill., appeared before U.S. District Judge David R. Herndon and entered a plea of guilty to one count of attempted use of a weapon of mass destruction (an explosive bomb) against property owned by the United States. Judge Herndon sentenced Finton to 336 months in prison in accordance with the terms of his plea agreement with the government.
“Michael Finton is one of a number of young Americans over the past two years who, under the influence of a radical and violent ideology, have sought to carry out acts of terrorism in the United States,” said Acting Assistant Attorney General Hinnen. “Although a coordinated undercover law enforcement investigation thwarted Mr. Finton's plot to destroy the federal courthouse in Springfield, this case underscores the need to remain vigilant against the threat posed by homegrown extremism.”
“Michael Finton tried to bomb our federal courthouse with the intent to kill innocent civilians, committed public servants and dedicated first responders,” said U.S. Attorney Lewis. “This terrible attempt was prevented through the excellent investigative work of the Springfield FBI Joint Terrorism Task Force and assisting law enforcement agencies.”
“The investigation of Michael Finton is a significant accomplishment in the FBI’s mission to protect the United States from terrorist attack. The dedication and professionalism of the Springfield Joint Terrorism Task Force and the U.S. Attorney’s Office in this case have made America safer,” said FBI Acting Special Agent in Charge Fernandez.
According to the plea agreement and other documents filed in court, Finton admitted that on Sept. 23, 2009, he traveled from Decatur to Springfield, where he knowingly took possession of a truck that he believed contained a bomb with approximately one ton of explosives. The explosive device was actually inert. Finton drove the truck to the Paul Findley Federal Building and Courthouse at 600 East Monroe Street, where he parked immediately outside the federal building and across the street from an office used by a U.S. Congressman.
At the time he parked the truck, Finton activated a timer connected to the explosive device, which he believed was large enough to destroy the federal building and the congressman’s office. After Finton parked the van and armed the device, he locked the truck and got into a vehicle with an undercover law enforcement agent whom he believed was associated with the al-Qaeda terrorist organization. Finton then used a cell phone to attempt to remotely detonate the purported bomb after he and the undercover agent had driven a safe distance away.
Prior to Sept. 23, 2009, according to filed court documents, Finton met on several occasions with an undercover law enforcement officer whom Finton believed was acting on behalf of al-Qaeda. During a meeting on July 29, 2009, Finton proposed the federal building in Springfield as a target and proposed that two vehicle-borne bombs be used, the first to do the initial damage, and the second to attack the responders. Finton also suggested that if the bomb was big enough it might also “take out” the office of the congressman across the street from the federal building.
Finton has remained detained in the custody of the U.S. Marshals Service since his arrest on Sept. 23, 2009.
The case was investigated by the Springfield FBI Joint Terrorism Task Force and assisting law enforcement agencies. Assistant U.S. Attorney Eric I. Long of the Central District of Illinois, and Trial Attorney Alamdar Hamdani of the Counterterrorism Section at the Justice Department’s National Security Division, prosecuted the case.
Former U.S. Marshals Service Employee Sentenced to 21 Months <br /> in Prison for Theft of $104,000 in U.S. Government FundsRead the Press Release
WASHINGTON – A former U.S. Marshals Service (USMS) employee was sentenced today to 21 months in prison for theft of $104,000 in U.S. government funds, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Sno H. Rush, 40, of Upper Marlboro, Md., was also ordered by U.S. District Judge Colleen Kollar-Kotelly to pay restitution of $104,000, and to serve three years of supervised release following her prison term. Rush pleaded guilty on Oct. 12, 2010, to one count of theft of government property.
According to court documents, Rush worked as an administrative officer for the USMS in the District of Columbia Superior Court from October 1998 to November 2008. Rush’s responsibilities included, among other things, handling payroll-related matters for the USMS, authorizing payment to USMS employees and outside entities, drafting and signing U.S. Treasury checks for USMS expenditures, and directing and supervising other USMS employees to draft and sign such checks.
During her guilty plea, Rush admitted that between April 2006 and February 2009, she unlawfully used a USMS credit card for personal expenses totaling approximately $15,000. In addition, Rush admitted creating a fictitious employee in the USMS payroll system and submitting falsified time-and-attendance records for the employee, resulting in fraudulent payments totaling $31,000 between November 2007 and October 2008, which Rush converted to her personal use. Rush also admitted that between June 2007 and November 2008, she caused to be issued $51,000 in U.S. Treasury checks to pay down the balance on a personal credit card, disguising the theft with fraudulent business invoices she created to make the payments appear legitimate. According to the plea agreement, Rush converted an additional $7,000 in U.S. Treasury checks used to pay the balance on another personal credit card. In total, Rush admitted stealing approximately $104,000 in USMS funds.
This case was prosecuted by Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section. This case was investigated by the Department of Justice Office of the Inspector General.
Former Tax Planning Firm Executive Sentenced in Salt Lake City for Tax OffenseRead the Press Release
WASHINGTON - Patrick Merrill Brody was sentenced on May 6, 2011, to 10 months of prison, 12 months of supervised release and ordered to pay the costs of prosecution for willfully failing to file a federal income tax return for 2001, the Justice Department and Internal Revenue Service (IRS) announced today.
Brody’s sentencing by U.S. District Court Judge Clark Waddoups followed a week-long trial in October 2010. According to the evidence at trial, Brody’s obligation to file a tax return for 2001 arose from the income he received for work in connection with his tax planning firm, Merrill Scott & Associates. The business was shut down and placed into receivership by the Securities and Exchange Commission (SEC) in early 2002 for alleged securities fraud. The civil suit resulted in a judgment against Brody for more than $16 million. Brody earned more than $500,000 in income from Merrill Scott & Associates during 2001, but deliberately failed to report the income and its tax liability on a federal income tax return.
This case was investigated by IRS-Criminal Investigation and was prosecuted by Tax Division Trial Attorneys Brian Bailey and Elizabeth Hadden.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
California Company and Its CEO Sentenced for Conspiring<br /> to Illegally Export Industrial Valves to IranRead the Press Release
WASHINGTON – GWC Valve International Inc., a company headquartered in Bakersfield, Calif., and its chief executive officer, David Meador, 52, were sentenced today in the Eastern District of California for conspiracy to export services related to industrial valves to Iran.
The sentences were announced by Todd Hinnen, Acting Assistant Attorney General for National Security; Benjamin B. Wagner, U.S. Attorney for the Eastern District of California, and John Morton, Director of U.S. Immigration and Customs Enforcement (ICE).
At a hearing in federal court in Fresno, Calif., U.S. District Court Judge Anthony W. Ishii sentenced GWC Valve International to a criminal fine of $300,000 and five years of corporate probation and ordered the company to forfeit $410,833.82. The judge also sentenced Meador to 13 months in prison, followed by three years of supervised release. The government has already received $110,000 in payments from the defendants.
On June 24, 2010, both GWC Valve International and Meador pleaded guilty to conspiring to violate the International Emergency Economic Powers Act and the Iranian Transactions Regulations. According to court documents filed in the case, between July 2005 and May 2008, Meador and others conspired to cause the export of financial and technical services related to the sale of the industrial valves to Iran without having first obtained the required licenses and authorization from the U.S. Treasury Department’s Office of Foreign Assets Control. U.S. persons are prohibited from engaging in commercial transactions involving Iran.
As part of the conspiracy, GWC and Meador received orders from customers in Iran for industrial valves, totaling more than $2.16 million, then entered into contracts with these customers and caused the valves to be manufactured on behalf of Iranian customers. The defendants also concealed that Iranian customers were the true recipients of the valves by once falsely asserting that the GWC office in the United Arab Emirates was the end user of the goods and on several occasions altering or omitting references to the Iranian banks and end-users in correspondence about the sales.
This case was the product of an extensive investigation by the Department of Homeland Security’s U.S. Immigration and Customs Enforcement. The case was prosecuted by Trial Attorney Ryan Fayhee of the Counterespionage Section in the Justice Department’s National Security Division, and Assistant U.S. Attorney Duce Rice of the U.S. Attorney’s Office for the Eastern District of California.
Friday 6 May 2011
Two Clinic Owners and a Money Launderer Convicted in <br /> $9.1 Million Medicare Fraud Scheme in DetroitRead the Press Release
WASHINGTON—Two owners of a fraudulent Detroit-area medical clinic, Martin and Joaquin Tasis, and a man who helped them launder the proceeds of the fraud, Leoncio Alayon, were convicted today by a federal jury in Detroit for their roles in a $9.1 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Martin Tasis and Joaquin Tasis were each convicted of one count of conspiracy to commit health care fraud, one count of conspiracy to pay health care kickbacks and three counts of health care fraud. Martin Tasis was also convicted of one count of conspiracy to commit money laundering and one count of money laundering, and found not guilty on one money laundering count. Alayon was convicted of one count of conspiracy to commit money laundering and two counts of money laundering.
According to evidence presented during the one-week trial, Martin and Joaquin Tasis were owners of Dearborn Rehabilitation and Medical Center (DMRC), a fraudulent HIV-infusion therapy clinic located in Dearborn, Mich. The Tasis brothers oversaw the payment of kickbacks to patients whose Medicare information was then used by DMRC to fraudulently bill Medicare for treatments they never received. Evidence showed that DMRC, an outpatient clinic that purported to specialize in infusion and injection therapy, was established for the sole purpose of defrauding Medicare.
Between November 2005 and March 2007, DMRC billed approximately $9.1 million in claims to Medicare for injection therapy services that were never provided and were not medically necessary. Medicare paid approximately $6 million of those claims. The Tasis brothers used Alayon and a bogus “research” company to launder hundreds of thousands of dollars in proceeds of the fraud.
Evidence presented at trial showed that the Tasis brothers and their co-conspirators helped relocate the highly lucrative infusion therapy fraud scheme from South Florida to Michigan after increased law enforcement scrutiny in South Florida. Evidence at trial showed that Medicare beneficiaries were not referred to DMRC by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of cash kickbacks. DMRC then billed Medicare for expensive medications, purportedly given to treat HIV and Hepatitis-C, which were never administered. For example, evidence at trial showed that DMRC billed $9.1 million to Medicare, but purchased only $36,000 in medication and medical supplies.
Once Medicare started paying the co-conspirators, Martin Tasis enlisted a family friend, Leoncio Alayon, to help him launder the proceeds of the fraud through a shell corporation in Florida called Infinity Research Corp. Evidence at trial showed that Infinity Research Corp. had no employees, did no research and was based at Alayon’s residence. Alayon, after taking a commission, distributed the laundered proceeds to Martin Tasis, Joaquin Tasis and their co-conspirators.
Including today’s guilty verdicts, 12 individuals involved with DMRC have been convicted for their roles in the DMRC scheme. Defendants Clara Guilarte and Caridad Guilarte are currently awaiting trial on charges related to their alleged roles at DMRC. An indictment is merely a charge and defendants are presumed innocent until proven guilty.
A sentencing date for the Tasis brothers and Alayon has not yet been scheduled by the court. Each count of conspiracy to commit health care fraud, health care fraud and money laundering carries a maximum penalty of 10 years in prison and a $250,000 fine. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a $500,000 fine, and the conspiracy to pay health care kickbacks carries a maximum penalty of five years in prison and a $250,000 fine.
Today’s verdicts were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
The case was prosecuted by Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorney for the Eastern District of Michigan Philip Ross, with assistance from Fraud Section Trial Attorney Catherine Dick. The FBI and HHS-OIG conducted the investigation.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 individuals who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the HEAT team, go to: www.stopmedicarefraud.gov .
Justice Department Requires Divestitures in Unilever's Acquisition of Alberto-Culver CompanyRead the Press Release
WASHINGTON – The Department of Justice announced today that it has reached a settlement with Unilever and Alberto-Culver Co. that requires them to divest two hair care brands in order to proceed with Unilever’s $3.7 billion acquisition of Alberto-Culver. The department said that the transaction, as originally proposed, would substantially lessen competition in three product markets – value shampoo, value conditioner and hairspray sold in retail stores. Value shampoos and conditioners are the lowest priced shampoos and conditioners sold in retail stores, typically selling for less than two dollars a bottle.
The department’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction between three Unilever entities – Unilever N.V., Unilever PLC and Conopco Inc. – and Alberto-Culver. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“Without the divestitures required by the department, consumers would have paid higher prices for value shampoo and conditioner and for hairspray sold in retail stores,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
Under the proposed settlement, the companies must divest Alberto-Culver’s Alberto VO5 brand and Unilever’s Rave brand, as well as associated assets. The Alberto VO5 brand consists of value shampoo and conditioner, hairspray, mousse and other hair styling products. The Rave brand consists of hairspray and mousse products.
According to the complaint, the acquisition would eliminate significant head-to-head competition between the merging parties for value shampoo, value conditioner and hairspray sold in retail stores. In the case of value shampoo and conditioner, it would reduce the number of significant competitors in the value shampoo and conditioner markets from three to two, leaving Unilever with approximately 90 percent of those markets. In the case of hairspray, Unilever’s post-merger share of the market would be approximately 46 percent, with the combination resulting in a highly concentrated market. This loss of competition likely would have resulted in higher prices for value shampoo and conditioner, and hairspray products.
During the investigation of the transaction, the department’s Antitrust Division cooperated with the Office of Fair Trading in the United Kingdom, the Federal Competition Commission in Mexico and South Africa’s Competition Commission. Both Unilever and Alberto-Culver provided waivers, in a timely way, to facilitate the effective international cooperation in this case, the department said.
“Maintaining close working relationships with competition agencies around the world and having open dialogues with our counterparts are important ways of enhancing competition and protecting consumers in the United States and internationally,” said Assistant Attorney General Varney.
Unilever N.V. and Unilever PLC are corporations with headquarters in Rotterdam of the Netherlands and London, respectively. They wholly own Conopco Inc., a New York corporation. Unilever sells consumer products in more than 100 countries under brands such as Hellmann’s, Lipton, Surf, Dove, Suave and Vaseline. Unilever had sales of $62 billion in 2010.
Alberto-Culver Co., a Delaware corporation headquartered in Melrose Park, Ill., sells consumer products in more than 100 countries under brands such as TRESemmé, Alberto VO5, Noxzema, Nexxus, St. Ives, Static Guard and Mrs. Dash. Alberto Culver had sales of $1.6 billion for the fiscal year ending Sept. 30, 2010.
The proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Joshua H. Soven, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St., N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the settlement upon a finding that it is in the public interest.
Thursday 5 May 2011
Seafood Wholesaler Owners Sentenced in Alabama for Selling Falsely Labeled Fish, Smuggling and Misbranding of Seafood ProductsRead the Press Release
WASHINGTON– Karen L. Blyth and David H. M. Phelps were sentenced yesterday in federal court in Mobile, Ala., to 33 months and 24 months in prison, respectively. The pair was also fined $5,000 each, and barred for three years from working in the seafood industry or owning any seafood related business.
Blyth and Phelps had been convicted in January 2011 of 13 felony offenses for their roles in purchasing and selling farm-raised Asian catfish and Lake Victoria perch falsely labeled as grouper, selling foreign farm-raised shrimp falsely labeled as U.S. wild caught shrimp, selling shrimp they falsely claimed to be larger, more expensive shrimp than they actually were, and for buying fish they knew had been illegally imported into the United States. Blyth and Phelps, on the eve of trial on January 24, 2011, pleaded guilty to the offenses, which included one conspiracy count, nine violations of the Lacey Act, two counts of receiving smuggled goods and one count of misbranding. A third defendant charged in the case, John J. Popa, of Lisbon, Conn. had previously pleaded guilty to similar offenses, and is scheduled to be sentenced on May 26, 2011.
“These significant sentences are appropriate penalties for Blyth and Phelps, who committed multiple felonies in conspiring to scam consumers with falsely labeled, cheaper fish substitutes from Asia and Africa,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Their fraudulent scheme artificially deflated the cost of wild-caught fish, and gave them an unacceptable economic advantage over law abiding fisherman.”
“These prosecutions and the sentences that were imposed today should send a clear message that instances of consumer fraud will not be tolerated and that this U.S. Attorney’s Office will continue to aggressively protect local seafood consumers and all components of the local seafood market and industry,” said Kenyen R. Brown, U.S. Attorney for the Southern District of Alabama.
Blyth, of Paradise Valley, Ariz., was the co-owner and president of two companies, Consolidated Seafood Enterprises Inc., located in Phoenix, and Reel Fish and Seafood, Inc., located in Pensacola, Fla., which traded in a variety of seafood products. Phelps, of Scottsdale, Ariz., co-owned Consolidated Seafood and Reel Fish and served as a vice president in both companies. John J. Popa of Pensacola, managed and co-owned Reel Fish with Blyth and Phelps and served as the company’s vice president.
The defendants used Consolidated Seafood to buy frozen fillets of a type of farm raised catfish from Vietnam within the genus Pangasius, called sutchi, that they knew had been imported into the U.S. and falsely declared as wild caught sole, in order to avoid anti-dumping duties that were owed on this product. Anti-dumping duties went into effect on frozen fillets of sutchi, basa and swai in Jan. 2003, after an investigation by the Department of Commerce established that this product was being sold in the United States at less than fair value and were therefore injuring domestic catfish producers. In all, the defendants conspired to falsely label and buy approximately 283,500 pounds of farm raised sutchi, which was imported without $145,625 of anti-dumping duties having been paid.
Some of the fish seized during the investigation tested positive for malachite green and Enrofloxin, both of which are prohibited from use in U.S. food. Malachite green is a chemical compound often used in overseas fish farming, and Enrofloxin is an antibiotic used in some foreign fish farming but for which there is zero tolerance by the FDA in food sold in the U.S. The defendants ultimately received 81,000 pounds of this illegally imported sutchi, and sold 34,100 pounds of it to Reel Fish, which in turn sold it to customers in Alabama, Florida and elsewhere.
The defendants changed the marking on this sutchi and other imported basa to grouper, and sold it to customers in Alabama, Florida and Mississippi as more desirable grouper, at a higher cost. The defendants sold over 100,000 pounds of this falsely labeled basa and sutchi to these customers.
Blyth and Phelps also were sentenced for buying over 25,000 pounds of Lake Victoria perch from Africa, mislabeling and selling this fish as grouper and snapper to customers in Alabama and Florida at a higher cost, and in greater quantities than if it had been accurately labeled.
The defendants also conspired to mislabel and create false labels for shrimp they sold to customers in these areas. The defendants, through Reel Fish, would repackage farm raised foreign shrimp as U.S. wild caught shrimp. The defendants would also falsely label the shrimp as being larger than they were. By falsely labeling the shrimp in these manners, the defendants were able to sell more and charge more for the shrimp that they sold.
The case was investigated by the National Oceanic and Atmospheric Administration, Office of Law Enforcement; the Department of Homeland Security, Immigration and Customs Enforcement; the U.S. Air Force Office of Special Investigations; the Department of Defense, Defense Criminal Investigative Service. The case was prosecuted by Wayne D. Hettenbach and Susan L. Park of the Environmental Crimes Section of the Department of Justice Environment and Natural Resources Division, and Deborah A. Griffin of the U.S. Attorney’s Office for the Southern District of Alabama.
Maryland Man Sentenced to 84 Months in Prison for Defrauding Cisco Systems Inc.Read the Press Release
WASHINGTON – Iheanyi Frank Chinasa, 39, of Gaithersburg, Md., was sentenced today to 84 months in prison for his participation in a scheme to defraud Cisco Systems Inc., announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and Michael Morehart, Special Agent in Charge of the FBI Richmond, Va., Field Office.
Chinasa also was ordered by Chief U.S. District Judge James R. Spencer to pay restitution of $18,761,825, jointly and severally with co-defendant Robert Kendrick Chambliss, and to serve three years of supervised release following his prison term. Chinasa was convicted on Feb. 7, 2011, by a federal jury in Richmond of one count of conspiracy to commit mail and wire fraud, eight counts of mail fraud, one count of wire fraud and one count of obstruction of an official proceeding.
Chinasa and Chambliss, 31, of Henrico, Va., were indicted on Aug. 18, 2010. Chambliss pleaded guilty on Jan. 12, 2011, to conspiring to commit mail fraud and wire fraud. Chambliss was sentenced on April 13, 2011, to 12 months and one day in prison and ordered to pay $18,761,825 in restitution.
According to court records and evidence at trial, Chinasa and Chambliss engaged ina scheme to defraud Cisco. As part of the scheme, Chinasa manufactured counterfeit computer networking and telecommunications equipment. He or Chambliss would then contact Cisco, falsely claiming that they were having trouble with a Cisco product covered by a warranty. Cisco would issue replacement parts, but its warranty required return of the allegedly defective product. To satisfy that return policy, Chinasa and Chambliss would send their counterfeit product to Cisco.
The case was prosecuted by Assistant U.S. Attorney Michael C. Moore of the Eastern District of Virginia and Trial Attorney Kevin B. Muhlendorf of the Criminal Division’s Fraud Section. The case was investigated by the FBI.
Justice Department Reaches Settlement with Citizens Republic Bancorp Inc. and Citizens Bank Regarding Alleged Lending Discrimination in DetroitRead the Press Release
WASHINGTON – Citizens Republic Bancorp Inc. (CRBC) and Citizens Bank of Flint, Mich., will open a loan production office in an African-American neighborhood in Detroit, invest approximately $3.6 million in Wayne County, Mich., and take other steps as part of a settlement to resolve allegations that they engaged in a pattern or practice of discrimination on the basis of race and color, the Justice Department announced today.
The settlement, which remains subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Eastern District of Michigan. The complaint alleges that CRBC, as the successor to Republic Bank, and Citizens Bank violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The lawsuit alleges that Citizens Bank, and Republic Bank before it, have served the credit needs of the residents of predominantly white neighborhoods in the Detroit metropolitan area to a significantly greater extent than they have served the credit needs of majority African-American neighborhoods. Those neighborhoods are easily recognized because t he Detroit metropolitan area has long had highly-segregated residential housing patterns, especially for African-Americans.
“Discrimination in the provision of lending services based on race deprives communities of access to credit and leaves the residents of minority neighborhoods vulnerable to predatory lenders. This type of discrimination is part of the web of intolerable practices that stripped vast amounts of wealth from communities of color in the last decade,” said Thomas E. Perez, Assistant Attorney General in charge of the Justice Department’s Civil Rights Division. “We are pleased that Citizens Bank will partner with the Detroit community to invest in an area that was long neglected, particularly by the former Republic Bank.”
U.S. Attorney for the Eastern District of Michigan Barbara McQuade added: “Today’s settlement will bring badly needed resources to Detroit and surrounding areas in Wayne County to assist in neighborhood stabilization. It will also broaden opportunities for home ownership for families who have been unlawfully denied credit. We applaud the bank’s cooperation and commitment to community development.”
“Racial or other illegal discrimination has no place in our credit markets,” said Federal Reserve Governor Sarah Bloom Raskin. “We are pleased that this settlement is designed to increase fair access to credit.”
Under the settlement, CRBC and Citizens Bank will invest $1.625 million in a partnership with the city of Detroit to aid in neighborhood stabilization by providing existing homeowners with matching grants of up to $5,000 to fund exterior improvements, $1.5 million in a special financing program to increase the amount of credit the banks extend to majority African-American areas in Wayne County, and spend $500,000 for outreach to potential customers, promotion of their products and services, and consumer financial education. Citizens Bank also will open a loan production office in a majority African-American area in Detroit and conduct fair lending training for its employees. The agreement also prohibits CRBC and Citizens Bank from discriminating on the basis of race or color in any aspect of a residential real estate-related or credit transaction.
The lawsuit originated from a 2010 referral by the Board of Governors of the Federal Reserve System to the Justice Department’s Civil Rights Division. Citizens Bank is a member of the Federal Reserve System.
The Civil Rights Division, the U.S. Attorney’s Office for the Eastern District of Michigan and the Board of Governors of the Federal Reserve System are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov .
A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at www.justice.gov/fairhousing .
Federal Court Bars North Carolina Man from Promoting Alleged Tax Fraud SchemeRead the Press Release
WASHINGTON – A federal court has permanently barred a North Carolina man from selling an alleged tax fraud scheme, the Justice Department announced today. According to the government complaint , Andrew DeDominicis (formerly known as Andrew Brown) of Dallas, N.C., promoted the formation and use of a “corporation sole” to help his customers improperly avoid paying federal income taxes. The civil injunction order, to which DeDominicis consented, was entered by Judge Martin Reidinger of the U.S. District Court for the Western District of North Carolina.
According to the complaint, some states authorize an entity known as a corporation sole to enable religious leaders to hold property and conduct business for the benefit of a legitimate religious entity. The complaint states that DeDominicis falsely informed his customers that their corporations sole would be treated as churches and will not need to file federal income tax returns.
The court also required DeDominicis to give a copy of the injunction order to each customer who bought a corporation sole from him and to remove from his websites any material promoting the use of corporations sole.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes like corporations sole. Details of these cases are available on the Justice Department website .
Wednesday 4 May 2011
Washington Man Agrees to Order Barring Him from Reproductive Clinic and SurroundingsRead the Press Release
WASHINGTON – The U.S. District Court for the Western District of Washington ordered that John C. Kroack must adhere to a 25-foot buffer zone around a Planned Parenthood Reproductive Health Services Clinic in Lynnwood, Wash. The court order is the result of a consent decree entered into by Kroack to resolve a civil complaint filed against him by the United States for violation of the Freedom of Access to Clinic Entrances Act (FACE Act). Kroack, a 53-year-old resident of Mountlake Terrace, Wash., will also pay $5,000, with $4,000 suspended assuming that no other violations occur.
The complaint filed by the United States alleged that, on Jan. 7, 2010, Kroack entered the Planned Parenthood clinic’s front door and physically and verbally intimidated the clinic staff, while kicking and throwing his shoulder against a locked door that separated the clinic waiting room from the exam rooms. Kroack refused to leave the clinic until local law enforcement arrived and placed him under arrest. Police subsequently searched Kroack’s vehicle in the clinic parking lot and discovered a machete and several “army-style” bags containing netting, rip cord, tools and camouflage clothing. The FACE Act prohibits the physical obstruction of any person providing or obtaining reproductive health services with the intent to intimidate or interfere with that person.
“Protecting the right to provide or obtain reproductive health services free from the threat of harm, intimidation or physical obstruction is vital to safeguarding the constitutional rights of all Americans,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Department of Justice will continue to aggressively enforce the FACE Act against those who seek to violate the rights of their fellow Americans to safely provide or obtain such services.”
“This resolution protects patients’ right to obtain healthcare services free from threats or intimidation, and it protects healthcare providers’ right to a safe workplace,” said U.S. Attorney Jenny A. Durkan.
This civil action was filed by the Civil Rights Division Special Litigation Section Deputy Chief Julie Abbate and Trial Attorney William Nolan and Assistant U.S. Attorney Michael Diaz of the Western District of Washington.
United States Sues to Shut Down Eastern Pennsylvania Tax PreparerRead the Press Release
WASHINGTON – The United States has sued Dorthea Alexander of Leola, Pa., seeking to bar her from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Alexander claimed false tax deductions, credits and exemptions on customer tax returns during her employment as tax supervisor at Pawn Plus Inc. in Lancaster, Pa.
According to the government complaint in the case, Alexander allegedly fabricated deductions for charitable donations, business expenses, medical expenses and other miscellaneous expenses to reduce her customers’ reported tax liabilities. The complaint states that she also used the names and social security numbers of unrelated individuals to claim improper dependent exemptions for her customers, sometimes charging customers extra for doing so.
In one instance cited in the complaint, Alexander allegedly told a customer that he “could use some dependents,” which would give him a larger tax refund. She allegedly then listed as dependents on his tax return the names and social security numbers of people whom the customer did not know, and charged the customer a fee for claiming those dependents equal to half of the resulting inflated tax refund.
According to the complaint, the total harm to the government from Alexander’s misconduct for the 2004 through 2007 tax years could be as high as $10.8 million.
Return preparer fraud is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-fraud promoters and unscrupulous tax-return preparers. Information about these cases is available on the Justice Department website .
UBS AG Admits to Anticompetitive Conduct by Former Employees in the Municipal Bond Investments Market and Agrees to Pay $160 Million to Federal and State AgenciesRead the Press Release
UBS AG has entered into an agreement with the Department of Justice to resolve anticompetitive activity in the municipal bond investments market and has agreed to pay a total of $160 million in restitution, penalties and disgorgement to federal and state agencies, the Department of Justice announced today.
As part of its agreement with the department, UBS admits, acknowledges and accepts responsibility for illegal, anticompetitive conduct by its former employees. According to the non-prosecution agreement, from 2001 through 2006, certain former UBS employees at its municipal reinvestment and derivatives desk and related desks, entered into unlawful agreements to manipulate the bidding process and rig bids on municipal investment contracts. These contracts were used to invest the proceeds of, or manage the risks associated with, bond issuances by municipalities and other non-profit entities.
“UBS and its former executives engaged in illegal conduct that corrupted the competitive process and harmed municipalities, and ultimately taxpayers, nationwide,” said Assistant Attorney General Christine Varney. “Today’s agreements with UBS ensure that restitution is paid to the victims of the anticompetitive conduct, that UBS pays penalties and disgorges its ill-gotten gains. The Antitrust Division will continue to use every tool at our disposal to root out illegal activity in financial markets that disrupts the competitive process.”
Under the terms of the agreement, UBS agrees to pay restitution to victims of the anticompetitive conduct and to cooperate fully with the Justice Department’s Antitrust Division in its ongoing investigation into anticompetitive conduct in the municipal bond derivatives industry. To date, the ongoing investigation has resulted in criminal charges against 18 former executives of various financial services companies and one corporation. Four of these charged executives are former UBS employees: Mark Zaino, Peter Ghavami, Gary Heinz and Michael Welty. Nine of the 18 executives charged have pleaded guilty, including Mark Zaino.
The Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS) and 25 state attorneys general also entered into agreements with UBS requiring the payment of penalties, disgorgement of profits from the illegal conduct and payment of full restitution to the victims harmed by the manipulation and bid rigging by UBS employees.
As a result of UBS’s admission of conduct; its cooperation with the Department of Justice and the SEC, the IRS and the state attorneys general; its monetary and non-monetary commitments to the SEC, IRS and state attorneys general; and its remedial efforts to address the anticompetitive conduct, the department agreed not to prosecute UBS for the manipulation and bid rigging of municipal investment contracts, provided that UBS satisfies its ongoing obligations under the agreement.
In December 2010, Bank of America agreed to pay a total of $137.3 million in restitution to federal and state agencies for its participation in anticompetitive conduct in the municipal bond derivatives market.
The department’s ongoing investigation into the municipal bonds industry is being conducted by the Antitrust Division, the FBI and the IRS Criminal Investigation. The department is coordinating its investigation with the SEC, the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Bank of New York.
The Antitrust Division, SEC, IRS, FBI, state attorneys general, OCC and Federal Reserve Bank are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.stopfraud.gov.
Pharmaceutical Giant, Serono, Agrees to Pay $44.3 Million to Settle False Claims Act CaseRead the Press Release
WASHINGTON - P harmaceutical manufacturers Serono Laboratories Inc., EMD Serono Inc., Merck Serono S.A, and Ares Trading S.A. have agreed to pay $44.3 million to resolve False Claims Act allegations in connection with the marketing of the drug Rebif, the Justice Department announced.
The settlement resolves allegations that Serono paid health care providers from the launch of Rebif in about January 2002 through December 2009, to induce them to promote or prescribe Rebif, a recombinant interferon injectable that is used to treat relapsing forms of multiple sclerosis. Serono is alleged to have made payments to providers for hundreds of speaker training meetings and programs, as well as payments for attending consultant, marketing and advisory board meetings, all at upscale resorts and other locations. Serono’s actions allegedly resulted in the submission of false claims to federal health care programs including Medicare and Medicaid for the payment of Rebif, i.e., claims that were tainted by kickbacks.
“It’s imperative that medical determinations are guided by a patient's needs, not tainted by illegal incentives or fraud,” said Tony West, Assistant Attorney General of the Civil Division. “We are committed to ensuring that the chronically ill and other vulnerable members in our communities who rely on Medicare and Medicaid programs receive the best possible care.”
“Health care decisions must be based solely upon what is best for the individual patient and not on which pharmaceutical company is paying the doctor the biggest kickback,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland. “All consumers have the right to know that their health care provider’s judgment about medications they should take has not been undermined by kickbacks from pharmaceutical manufacturers.”
“In settling this second case with Serono, the Office of the Inspector General extended Serono’s existing corporate integrity agreement by three years, and required enhanced provisions such as specifically requiring that company directors and senior executives take responsibility for ensuring and monitoring compliance with federal law,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services (HHS-OIG). “If we can alter the cost-benefit calculus of some directors and executives, OIG can influence corporate behavior without putting access to government health care benefits at risk.”
Under the agreement announced today, the proceeds from the settlement will be split between the federal government and various states, with the United States receiving $34.6 million to resolve the federal claims and the states receiving $9.7 million to settle their respective claims under Medicaid.
The settlement is part of the government's emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT), which was announced by Attorney General Eric Holder and HHS Secretary Kathleen Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $5.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 have topped $7.3 billion.
The settlement was the result of an investigation by the U.S. Attorney’s Office for the District of Maryland with assistance from HHS-OIG; the Department of Defense Criminal Investigative Service; and the Civil Division of the U.S. Department of Justice.
Petroleum Distributors to Pay $2.5 Million to Settle Clean Air Act Allegations of Illegal Mixing and Distribution of Gasoline in Colorado and NebraskaRead the Press Release
WASHINGTON – Three gasoline distributors have agreed to pay $2.5 million to resolve claims that they illegally mixed and distributed more than one million gallons of gasoline that did not meet Clean Air Act emissions and fuel quality requirements. The settlement with Rocky Mountain Pipeline System LLC, Western Convenience Stores Inc. and Offen Petroleum Inc., was filed in federal court in Denver today, announced the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA).
Use of gasoline that does not meet the Clean Air Act’s standards for fuel can result in increased emissions from car tailpipes, affect vehicle performance, and in some cases can damage engines and emissions controls. The settling companies will pay a $2.5 million civil penalty and conduct an environmental project designed to offset the harm EPA alleges was caused by their failure to meet federal gasoline quality requirements.
“Providing and distributing gasoline that fails to meet the Clean Air Act standards for fuel can have serious consequences for human health and the environment,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement appropriately requires that the distributors undertake a project that will result in major annual reductions in emissions of volatile organic compounds in order to offset any harm they may have caused.”
“Complying with the Clean Air Act’s fuel regulations is critical to ensuring that our nation’s important emissions standards are met,” said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "Today’s settlement shows that EPA is committed to protecting the air we breathe by reducing illegal air pollution.”
According to the government’s complaint, at two terminals in Dupont and Fountain, Colo., between 2006 and 2009, the companies produced millions of gallons of illegal gasoline by mixing natural gasoline, a byproduct of natural gas production, and ethanol with gasoline previously certified to meet Clean Air Act requirements. The blended gas was distributed and sold by Western Convenience Stores, Inc. (Western), and Offen Petroleum, Inc. (Offen), at retail gasoline stations in Colorado and Nebraska.
The Clean Air Act allows refiners to produce gasoline by adding other fuel sources to previously certified gasoline, but anyone using this method must ensure that the blended gasoline still meets applicable emissions and fuel standards. They must also comply with sampling, testing, and quality assurance requirements to ensure that the gasoline meets these standards.
The companies’ gasoline blending operations may have resulted in the introduction into the environment of a total of more than 10 tons of excess emissions of volatile organic compounds (VOCs), which can lead to higher levels of ozone. Human exposure to ozone can cause lung damage, aggravate asthma, and cause difficulty breathing. EPA sets gasoline standards to reduce air pollutants from motor vehicles, such as volatile organic compounds, particulate matter, and toxic air pollutants, because they contribute to serious public health and environmental problems. To offset any excess emissions, the companies will install a geodesic dome cover on a gasoline storage tank at one of the terminals where the fuel blending took place. The cover is expected to reduce VOC emissions by more than 8.6 tons annually.
Learn more about this settlement: www.epa.gov/compliance/resources/cases/civil/caa/rockymountainpipeline.html
The consent decree, which is subject to a 30-day public comment period and final court approval, is available at: www.justice.gov/enrd/
Pennsylvania Tax Defier Home Builder and Landlord Convicted of Tax FraudRead the Press Release
HARRISBURG, Pa. – Troy A. Beam was convicted today in the Middle District of Pennsylvania before U.S. District Judge Christopher C. Conner. Beam, a resident of Shippensburg, Pa., was convicted of tax evasion, obstructing and impeding the due administration of the Internal Revenue laws and willful failure to file federal income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the indictment and evidence at trial, Beam, a former certified public accountant and state auditor in the Pennsylvania Auditor General’s Office, earned substantial sums of income from 1992 to the date of the indictment while operating a home construction business known as “Sunbeam Builders,” as well as owning and operating two real estate businesses known as “Latrobe Leasing” and “Goldstar Property Management” that purchased, rented and sold real estate. Despite earning substantial income from these businesses, as well as other activities, Beam failed to file any federal income tax returns since April 1996, when he filed his 1995 tax return reporting a loss. In April 1996, Beam also filed false amended federal income tax returns for 1992, 1993 and 1994, seeking tax refunds for taxes he previously had paid for those years.
The indictment alleged and the evidence at trial proved that Beam obstructed the IRS in its attempt to calculate and collect his taxes by using numerous sham trusts and other entities, including North Star Investment Holdings Ltd. to hide his income and assets. Beam used North Star to set up a bank account in the Cayman Islands into which he deposited nearly $3 million of income derived from his construction business.
Beam faces up to 12 years in prison, $900,000 in fines and full restitution to the IRS for all back taxes due and owing. Sentencing is scheduled for Aug. 12, 2011.
Principal Deputy Assistant Attorney General John A. DiCicco of the Department of Justice’s Tax Division and Peter J. Smith, U.S. Attorney for the Middle District of Pennsylvania, commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Jorge Almonte and Mark S. McDonald who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.justice.gov/tax.
Michigan Business Owner Pleads Guilty to Tax EvasionRead the Press Release
WASHINGTON – John Walter Kaber, a resident of Bloomfield, Mich., pleaded guilty to tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. The Honorable U.S. District Court Judge Victoria A. Roberts set sentencing for Sept. 20, 2011.
According to the plea agreement, Kaber was the owner of Merchant Processing, a business that installed credit card processing systems. Despite earning substantial income from Merchant Processing and incurring a tax liability on that income, Kaber failed to file timely U.S. Individual Income Tax Returns (IRS Forms 1040) for the 1991 and 2005 tax years. Kaber filed Forms 1040 for the 1992-1996 and 2000-2004 tax years that reflected a tax due and owing, but failed to pay the taxes due. Kaber also failed to pay a portion of the employment taxes for Merchant Processing that were due to the IRS during the 2000-2003 tax years. The defendant’s total tax due and owing to the United States for the 1991-1996 and 2000-2005 tax years, including both income taxes and employment taxes, is more than $868,000.
According to the plea agreement, in order to carry out his tax evasion scheme and to conceal his assets from the IRS, the defendant, among other things, used his wife’s name to purchase and refinance two parcels of real property and to purchase a boat, boat slip and vehicle. Kaber also sought to prevent the IRS from collecting unpaid taxes from his bank accounts by, among other things, cashing checks rather than depositing them in the bank, depositing business receipts into his wife’s checking account, and removing his name from a joint bank account after it became subject to an IRS levy.
On Nov. 6, 2007, the U.S. District Court for the Eastern District of Michigan entered a judgment against the defendant for his unpaid 1991-1996 taxes.
This case is being prosecuted by Tax Division trial attorney Melissa Siskind and was investigated by the IRS-Criminal Investigation Division. Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax/index.html .
Houston Federal Jury Convicts Four Defendants in Connection <br /> with $5.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A federal jury in Houston convicted four defendants today in connection with a $5.2 million Medicare fraud scheme that operated from April 2006 to August 2009, announced the Departments of Justice and Health and Human Services (HHS), the FBI and the Texas Attorney General.
Ezinne Ubani, 46, of Houston, and Mary Ellis, 55, of Missouri City, Texas, were each convicted of one count of conspiring to commit health care fraud, and two counts of making false statements for use in determining rights for benefit and payment by Medicare. Ellis was also convicted of one count of conspiring to receive illegal kickbacks for referring Medicare beneficiaries, and three counts of receiving illegal kickbacks for referring Medicare beneficiaries.
Caroline Njoku, 45, of Houston, was convicted of one count of conspiring to commit health care fraud and one count of conspiring to receive kickbacks for referring a Medicare beneficiary. Njoku was found not guilty of one count of receiving illegal kickbacks for referring a Medicare beneficiary. Terrie Porter, 47, of Houston, was convicted of one count of conspiring to receive illegal kickbacks for referring a Medicare beneficiary and one count of illegally receiving a kickback for referring a Medicare beneficiary. Estella Joseph, 62, of Houston, was found not guilty of one count of conspiring to receive kickbacks for referring a Medicare beneficiary, and not guilty of one count of receiving an illegal kickback for referring a Medicare beneficiary
The four defendants were convicted after a 15-day trial before U.S. District Court Judge Nancy Atlas in Houston. According to the evidence presented at trial, Family Healthcare Group, a Houston home health care company, purported to provide skilled nursing to Medicare beneficiaries. Family Healthcare Group hired Njoku, Ellis, Porter and other co-conspirators to recruit Medicare beneficiaries for the purpose of filing claims with Medicare for skilled nursing that was medically unnecessary and/or not provided. After the Medicare beneficiaries were recruited, Ubani, a registered nurse, and other co-conspirators fraudulently signed plans of care stating that the beneficiaries needed home health care when in fact they knew the beneficiaries were not home-bound and not in need of skilled nursing.
Ubani’s husband, Clifford, and Njoku’s husband, Princewill, were co-owners of Family Healthcare Group and they both previously pleaded guilty to conspiring to commit healthcare fraud and conspiring to paying illegal kickbacks for referring Medicare beneficiaries. Additionally, Adelma Casas-Sevilla, a registered nurse employed by Family Healthcare Group, previously pleaded guilty to conspiring to commit healthcare fraud. Sammie Wilson and Cynthia Garza-Williams, both patient recruiters for Family Healthcare Group, also pleaded guilty to conspiring to commit healthcare fraud. Erica Walker and Florida Holiday Island, both patient recruiters for Family Healthcare Group, pleaded guilty to conspiring to receive illegal kickbacks for referring a Medicare beneficiary and illegally receiving a kickback for referring a Medicare beneficiary. Family Healthcare Group is no longer in business.
At sentencing, scheduled for July 20 and 21, 2011, the defendants face maximum penalties of 10 years in prison for the health care fraud conspiracy count; five years in prison for making false statements for use in determining rights for benefit and payment by Medicare; five years in prison for conspiring to receive illegal kickbacks for referring Medicare beneficiaries; and five years in prison for receiving an illegal kickback for referring a Medicare beneficiary.
Today’s guilty verdicts were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Special Agent-in-Charge Richard C. Powers of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations; and Texas Attorney General Greg Abbott.
This case is being prosecuted by Trial Attorneys Charles D. Reed and Sarah Hall, and Assistant Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. 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 their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, HHS’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 .
Federal Officials Close the Investigation Involving Pittsburgh Bureau of Police OfficersRead the Press Release
WASHINGTON - The Justice Department announced today that it will not pursue criminal charges against three Pittsburgh Bureau of Police officers in connection with the events of Jan. 12, 2010, involving former Pittsburgh School for the Creative and Performing Arts (CAPA) student Jordan Miles.
Officials from the U.S. Attorney’s Office for the Western District of Pennsylvania, the Justice Department’s Civil Rights Division and the FBI met today with Jordan Miles and his family to inform them of the decision.
The U.S. Attorney’s Office , the Civil Rights Division and the FBI, working together, conducted an exhaustive review of the incident, which included interviews of more than 40 witnesses, some on multiple occasions, visits to the scene and careful review of all police reports, medical records, photographs, laboratory reports, cell phone records and other documentation related to the incident. After thorough review of all of the evidence, experienced federal officials concluded that there was insufficient evidence to prove beyond a reasonable doubt a violation of the applicable federal criminal civil rights statutes.
Under the applicable federal criminal civil rights laws, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right. Proving “willfulness” is a heavy burden, and means that it must be proven that the officer acted with the deliberate and specific intent to do something the law forbids. To act “willfully,” for purposes of the federal statute, means to act with a bad purpose to disobey or disregard the law. Neither negligence, accident, mistake, fear nor bad judgment is sufficient to establish such a criminal violation. After a lengthy, independent and thorough review consuming hundreds of hours of agent and prosecutor time, federal officials determined that the evidence was insufficient to prove a federal civil rights violation, beyond a reasonable doubt, against any of the Pittsburgh Bureau of Police officers.
The Justice Department is committed to investigating allegations of excessive force by law enforcement officers and will continue to devote the resources necessary to ensure that all allegations of serious civil rights violations are fully and completely investigated.
Chief Engineer Pleads Guilty in Maryland to Obstructing Investigation into the Illegal Overboard Discharge of Oily WasteRead the Press Release
WASHINGTON – Dimitrios Grifakis, 57, of Kallithea, Greece, pleaded guilty today in federal court in Baltimore to obstructing a Coast Guard inspection that took place aboard the M/V Capitola from May 3 to May 11, 2010. Grifakis was then the Chief Engineer of the Capitola.
The guilty plea was announced by U.S. Attorney for the District of Maryland Rod J. Rosenstein; Ignacia S. Moreno, Assistant Attorney General, Environment & Natural Resources Division, U.S. Department of Justice; Rear Adm. Dean Lee, Commander of the U.S. Coast Guard's 5th District; Special Agent in Charge Otis E. Harris, Jr. of the Coast Guard Investigative Service-Chesapeake Region; and Acting Special Agent in Charge Christian Spangenberg of the Environmental Protection Agency’s (EPA) Criminal Investigation Division.
According to Grifakis’ guilty plea and other court documents, the investigation into the M/V Capitola was launched on May 3, 2010, at the Port of Baltimore, after a crew member informed a clergy member, who was on board the Capitola on a pastoral visit, that there had been “monkey business in the engine room,” which involved a “magic pipe.” The “magic pipe” proved to be a bypass hose that allowed the dumping of waste oil overboard, circumventing pollution prevention equipment required by law. The crew member asked the minister to alert the Coast Guard which triggered an inspection of the Capitola.
Grifakis admitted that from about March 2009 through May 3, 2010, he ordered his subordinates to illegally pump oil-contaminated waste directly into the ocean, most commonly through the “magic pipe.” However, during the investigation, Grifakis falsely denied having ordered anyone to pump oily waste overboard and falsified documents to hide these discharges from inspectors in ports visited by the Capitola.
Every ship that enters the U.S. is required to have an accurate Oil Record Book that records the ship’s operation related to oil, including the handling and disposal of oil contaminated waste. Grifakis intentionally presented an Oil Record Book to the U.S. Coast Guard that was intentionally falsified to conceal the illegal overboard discharges of oil contaminated waste.
Grifakis also obstructed the investigation by denying that the Capitola had a Daily Sounding Record, which is a daily measurement of the contents of the ship’s waste tanks. This record would have been useful during the Coast Guard’s inspection of the Capitola in that it could have shown when the levels of the waste tanks changed, which could be compared to entries in the Oil Record Book. Sudden, unexplained drops in the measurements could have indicated specific dates when wastes were discharged overboard. The Daily Sounding Record was not produced to the Coast Guard. Grifakis also directed other members of the engine room crew to lie to investigators and claim that the Capitola did not have a daily record of soundings.
In a related case, Cardiff Marine Inc., a Liberian-registered shipping company pleaded guilty to a felony violation of the Act to Prevent Pollution from Ships and was sentenced to pay a $2.4 million fine, and to serve three years probation, subject to an environmental compliance plan that includes audits by an independent third party auditor.
This prosecution was made possible through the combined efforts of the U.S. Coast Guard Sector-Baltimore, the Coast Guard Investigative Service-Baltimore, Coast Guard Fifth District Legal Office, Coast Guard Office of Maritime and International Law, Coast Guard Office of Investigations and Analysis, EPA Criminal Investigation Division with assistance from U.S. Customs and Border Protection. The cases were prosecuted by Justin S. Herring, Assistant U.S. Attorney in Maryland and Thomas T. Ballantine, Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Tuesday 3 May 2011
United States Sues Deutsche Bank and Subsidiary MortgageIT for Years of Reckless Lending PracticesRead the Press Release
NEW YORK – The United States has filed a civil mortgage fraud lawsuit against Deutsche Bank AG and its wholly owned subsidiary, MortgageIT Inc. The government’s complaint seeks damages and civil penalties under the False Claims Act for repeated false certifications made to the U.S. Department of Housing and Urban Development (HUD) in connection with the residential mortgage origination and sponsorship practices of MortgageIT. To date, the Federal Housing Administration (FHA) has paid insurance claims on more than 3,100 mortgages, totaling $386 million, for mortgages endorsed by MortgageIT.
Today’s announcement was made by Preet Bharara, U.S. Attorney for the Southern District of New York; Tony West, Assistant Attorney General for the Justice Department’s Civil Division; Helen Kanovsky, General Counsel of HUD; and Michael P. Stephens, Acting Inspector General of HUD.
According to the government’s complaint filed today in Manhattan federal court: Between 1999 and 2009, MortgageIT was an approved direct endorsement lender, and endorsed more than 39,000 mortgages for FHA insurance, totaling more than $5 billion in underlying principal obligations. These mortgages were highly marketable for resale to investors because they were insured by the full faith and credit of the United States. MortgageIT and Deutsche Bank, which acquired MortgageIT in January 2007, made substantial profits through the resale of these endorsed FHA-insured mortgages.
According to the complaint, MortgageIT repeatedly made false certifications to HUD to obtain approval of mortgages that MortgageIT underwriters wrongfully endorsed for FHA insurance. These mortgages were not eligible for FHA insurance under HUD rules. Notwithstanding the mortgages' ineligibility, underwriters at MortgageIT endorsed the mortgages by falsely certifying that they had conducted the due diligence required by HUD rules when, in fact, they had not. By endorsing ineligible mortgages and falsely certifying compliance with HUD rules, MortgageIT wrongfully obtained approval of these ineligible mortgages for FHA insurance, thereby putting millions of FHA dollars at risk.
In addition, according to the complaint, MortgageIT and Deutsche Bank never implemented the quality control procedures required of direct endorsement lenders, but falsely certified to HUD that MortgageIT had the required procedures in place. On various occasions when HUD discovered evidence that MortgageIT was violating the quality control requirement, MortgageIT falsely stated the failures had been corrected.
The government’s complaint seeks treble damages and penalties under the False Claims Act for the insurance claims already paid by HUD for mortgages wrongfully endorsed by MortgageIT through the false statements of Deutsche Bank and MortgageIT. In addition, the United States seeks compensatory and punitive damages under the common law theories of breach of fiduciary duty, gross negligence, negligence and indemnification for the insurance claims that HUD expects to pay in the future for mortgages wrongfully endorsed by MortgageIT as a result of Deutsche Bank’s and MortgageIT’s false statements.
“Many working families count on FHA’s mortgage insurance program to help them achieve the dream of home ownership,” said Assistant Attorney General West. “According to our complaint, these lenders put millions of dollars of taxpayer funds at risk and violated the integrity of this important program by making false certifications to HUD.”
“As alleged, MortgageIT and Deutsche Bank ignored every type of red flag and breached every duty of due diligence before underwriting thousands of federally insured mortgages,” said U.S. Attorney Bharara. “While the homes the defendants issued loans for may have been built on solid ground, the defendants’ lending practices were built on quicksand. Ultimately, prudence was trumped by profit, and good faith took a back seat to good fees. This is exactly the kind of misconduct that our Civil Frauds Unit was created to combat.”
Background on FHA Mortgage Insurance
FHA mortgage insurance makes home ownership possible for millions of American families by protecting lenders against defaults on mortgages, thereby encouraging lenders to make loans to borrowers who might not be able to meet conventional underwriting requirements. To assist as many qualified homeowners as possible, FHA operates a direct endorsement lender program, which grants participating lenders the authority to endorse mortgages that are qualified for FHA insurance. Direct endorsement lenders act as fiduciaries of HUD in underwriting mortgages and endorsing them for FHA insurance. The integrity of the program requires these direct endorsement lenders to carefully review mortgages to ensure compliance with HUD rules and underwriting standards. These lenders are entrusted with safeguarding the public from taking on risks that exceed statutory and regulatory limits.
To qualify as a direct endorsement lender, a lender must implement a quality control plan. Every direct endorsement lender must submit a certification to HUD for each mortgage the lender endorses, stating that the lender has conducted due diligence in accordance with all HUD rules.
“We don’t tolerate fraud in FHA’s mortgage insurance business,” said HUD General Counsel Kanovsky. “Each and every lender has a responsibility to properly underwrite mortgages not only to protect FHA's insurance fund but those families who depend on the FHA mortgage insurance program to provide them safe and sustainable mortgage financing.”
“The Department of Housing and Urban Development Office of Inspector General is committed to aggressively pursuing, in cooperation with our law enforcement partners, those who would seek to damage our nation’s important housing programs,” said HUD Acting Inspector General Stephens. “In today's trying economic times, it is all the more important to protect those programs, such as the FHA’s, which are so critical to our fragile recovery and to our country’s citizenry.”
The case is being handled by the U.S. Attorney’s Civil Frauds Unit, with assistance from the Commercial Litigation Branch, Civil Division.
Today’s lawsuit was brought in coordination with President Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Two Miami-Area Corporations Plead Guilty to More Than <br /> $200 Million Medicare FraudRead the Press Release
WASHINGTON - Two Miami-area corporations, American Therapeutic Corporation (ATC) and Medlink Professional Management Group Inc., pleaded guilty today in U.S. District Court in Miami for a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
According to court documents, ATC is a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando, Fla. A PHP is a form of intensive treatment for severe mental illness. Medlink is a Florida corporation headquartered in Miami that purported to act as a “management company” for health care businesses. In reality, ATC and a related company, the American Sleep Institute (ASI), were Medlink’s only clients. ATC and Medlink are each charged with conspiracy to commit health care fraud in a superseding indictment unsealed on Feb. 15, 2011. ATC is also charged in the superseding indictment with health care fraud and conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.
“ATC and Medlink, and their owners, have now pleaded guilty to perpetrating a massive $200 million Medicare fraud scheme in South Florida,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “The fraud scheme was staggering in scope, and those who concocted the scheme exhibited a complete disregard for the elderly, infirm and disabled victims who were used to commit it. Today’s guilty pleas mark an important step forward in our effort to hold accountable everyone -- and every entity -- involved in the scheme, and to recover the maximum amount possible on behalf of American taxpayers.”
“The defendants altered patient files, diagnoses and medication types and levels to make it appear that patients being treated qualified for PHP treatments,” said U.S. Attorney Wifredo Ferrer for the Southern District of Florida. “This was done so that the defendants could fraudulently bill Medicare for more than $200 million in medically unnecessary services. We are pleased to have put these unscrupulous operators out of business.”
“No matter what the scheme or how elaborately it was disguised, personal and corporate greed by these two corporations and their owners defrauded taxpayers of millions of dollars,” said Special Agent in Charge John V. Gillies of the FBI’s Miami Field Office. “Ultimately, health care fraud robs from the elderly and disabled.”
“ATC and Medlink shared a common business model: the systematic defrauding of American taxpayers. Now these companies are out of business and they’ll pay for their crimes.” said Daniel R. Levinson, HHS Inspector General. “Investigators from my office will continue to keep the heat on health care criminals whose victims are the most vulnerable in society.”
Marianella Valera, the president of ATC, and Lawrence S. Duran, the president of Medlink, entered the pleas on behalf of the two corporations before Magistrate Judge Barry L. Garber in Miami. Valera and Duran each pleaded guilty on April 14, 2011, to all counts charged against them individually in the superseding indictment. The superseding indictment charged Duran with 38 felony counts and Valera with 21 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements.
In pleading guilty on behalf of the companies, Duran and Valera admitted that the corporate entities together, and along with individuals, executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Duran and Valera also admitted that they used ASI to submit fraudulent Medicare claims.
Specifically, according to the superseding indictment, Duran, Valera and others caused the alteration of patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by ATC qualified for PHP treatments. According to court documents, Duran and Valera also instructed employees and doctors to alter diagnoses and medication types and levels to make it falsely appear that ATC patients qualified for PHP services. The superseding indictment also charges that Duran, Valera and their co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.
According to court filings, Duran, Valera and others paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. The defendants and their co-conspirators actively recruited ALF and halfway house owners and operators and patient brokers to participate in this kickback scheme. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, attending treatment programs that were not legitimate PHP programs. This was done so that ATC and ASI could bill Medicare for more than $200 million in medically unnecessary services.
According to court documents, Duran, Valera and others used Medlink to conceal the health care fraud and kickbacks from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred millions of dollars to Medlink. The superseding indictment and a related indictment charge individuals, including Duran and Valera, with using Medlink to distribute those millions of dollars to shell corporations and individuals with the purpose of laundering the money into cash to pay kickbacks.
Sentencing for the two corporations is scheduled for July 13, 2011, at 9:30 a.m. The two corporations, which have been out of business since the arrests of their owners in October 2010, face maximum financial penalties of more than $80 million, the amount paid by Medicare as a result of this scheme. The corporations’ assets were frozen in October 2010 through civil forfeiture proceedings.
Co-conspirator Margarita Acevedo, also charged in the February 2011 superseding indictment, pleaded guilty on April 7, 2011, for her role in the fraud scheme. Trial against a fourth individual charged in the superseding indictment, Judith Negron, is scheduled to begin Aug. 1, 2011. An indictment is merely an allegation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Today’s guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The criminal case is being prosecuted by Trial Attorneys Jennifer L. Saulino and Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Justice Department’s Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in 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 .
Pittsburgh Crips Leader Sentenced to 20 Years <br /> in Prison on Racketeering ChargesRead the Press Release
WASHINGTON – Bryant Mathis, who served in a leadership role as a member of a Pittsburgh Crips street gang, was sentenced today in federal court in Pittsburgh to 20 years in prison on charges of conspiring to conduct a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Mathis, 23, aka “Lil B,” pleaded guilty, before Senior U.S. District Judge Gustave Diamond, on Jan. 18, 2011, to one count of conspiracy to engage in a racketeering conspiracy.
According to court documents and information presented in court, Mathis and other members of the conspiracy participated in a pattern of racketeering activity that included multiple acts involving robberies at gun point; attempted murders; distribution of controlled substances, including cocaine, heroin and crack cocaine; and acts of obstruction of justice and intimidation of victims and witnesses.
According to court documents, Mathis was a member of the Brighton Place Crips, a criminal street gang that controlled an area of Brighton Place, Morrison Street, also known as the Mad Cave, and Federal Street in the Northside area of Pittsburgh. The Brighton Place Crips were formed in the early 1990s and in approximately 2003, it formed an alliance with the Northview Heights/Fineview Crips. This alliance expanded the gang’s drug trafficking territory, and increased the number of members and associates of the enterprise available to preserve and protect the power, territory and profits of the enterprise through violence.
The gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees, bond, jail commissary accounts and support of incarcerated members’ families.
In addition, the Brighton Place/Northview Heights Crips gang maintains an ongoing rivalry with other Northside street gangs such as the Manchester Original Gangsters. According to information presented in court, these gangs have been involved in multiple retaliatory shootings. Brighton Place/Northview Heights Crips gang members often identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc” and “G.K.”
According to evidence presented in court at today’s sentencing hearing, Mathis referred to himself in letters he sent from prison as a “Ho-town Killa,” a reference to the Crips rivalry with the Hoodtown Mafia, a Northside gang. In recorded telephone conversations played in court at today’s hearing, Mathis threatened an eyewitness to the April 2008 murder of Mathis’ uncle. The eyewitness, formerly a sheriff’s deputy in North Carolina, was visiting Mathis’ uncle in Pittsburgh at the time of the murder. Mathis threatened the sheriff’s deputy that he had better not cooperate with the police in the investigation of his uncle’s killer, stating that they need to “keep it gangster” and handle the issue on the streets. In a subsequent telephone conversation, Mathis discussed seeking retribution for this uncle’s murder by shooting “anybody in Hoodtown…kids, babies whoever.”
According to court documents Mathis was considered a respected member and leader of the enterprise, due to his reputation for violence, as well as his ability to instruct other members as to how to conduct the affairs of the enterprise.
Mathis is one of the 26 defendants charged in February 2010 with being members of, and conducting racketeering activity through, the Brighton Place/Northview Heights Crips gang. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2007. To date, more than half of the Brighton Place/Northview Heights Crips members who were charged in this indictment have pleaded guilty to racketeering charges.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s Gang Unit. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the city of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
BP Exploration Alaska to Pay $25 Million Penalty for Alaskan North Slope Oil SpillRead the Press Release
WASHINGTON – BP Exploration Alaska, Inc. (BP Alaska) will pay a $25 million civil penalty and carry out a system-wide pipeline integrity management program as part of a settlement for spilling more than 5,000 barrels of crude oil from the company’s pipelines on the North Slope of Alaska in 2006, the U.S. Department of Justice, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) announced today. The penalty is the largest per-barrel penalty to date for an oil spill.
“This penalty should serve as a wake-up call to all pipeline operators that they will be held accountable for the safety of their operations and their compliance with the Clean Water Act, the Clean Air Act and the pipeline safety laws,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Companies like BP Alaska must understand that they can no longer afford to ignore, neglect or postpone the proper monitoring and maintenance of their pipelines. This agreement will help prevent future environmental disasters and protect the fragile ecosystem of Alaska’s North Slope.”
“This penalty is a stern reminder to pipeline operators to follow orders issued by PHMSA or risk a federal civil lawsuit and steep fines,” said PHMSA Administrator Cynthia L. Quarterman. “Also, it is a warning that operators must know, test and maintain their pipelines or risk harming people and the environment and having to spend, as in this instance, hundreds of millions of dollars replacing those pipelines.”
“Today’s settlement with BP Alaska imposes a tough penalty and requires the company to take action to prevent future pipeline oil spills on the Alaska North Slope,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “The Clean Water Act gives the U.S. authority to assess higher penalties when oil spills are the result of gross negligence, and this case sends a message that we intend to use that authority and to insist that BP Alaska and other companies act responsibly to prevent pipeline oil spills.”
“BP Alaska admits that it cut corners and failed to do what was required to adequately maintain its pipelines,” said Karen Loeffler, U.S. Attorney for the District of Alaska. “The penalty reflects the seriousness of the conduct. The consent decree is important to ensure that BP Alaska implements changes that will prevent spills like this in the future. The Department of Justice and the United States Attorney's office for the District of Alaska are committed to strong enforcement of our environmental laws."
In March 2006, BP Alaska spilled approximately 5,054 barrels of crude oil on the North Slope in Alaska. A second spill occurred in August 2006, spilling approximately 24 barrels of crude oil. Investigators from EPA and PHMSA determined that the spills were a result of BP Alaska’s failure to properly inspect and maintain the pipeline to prevent corrosion. PHMSA issued a Corrective Action Order (CAO) to BP Alaska that addressed the pipeline’s risks and ordered pipeline repair or replacement. When BP Alaska did not fully comply with the terms of the corrective action, PHMSA referred the case to the Department of Justice. Today’s settlement also addresses Clean Air Act violations arising out of BP Alaska’s improper asbestos removal along the pipeline in the aftermath of the spill.
Today’s settlement requires BP Alaska to develop a system-wide program to manage pipeline integrity for the company’s 1600 miles of pipeline on the North Slope based on PHMSA’s integrity management program. The program will address corrosion and other threats to these oil pipelines and require regular inspections and adherence to a risk-based assessment system. The program will cost an estimated $60 million over three years and is in addition to the approximately $200 million BP Alaska has already spent replacing the lines that leaked on the North Slope.
Of the $25 million penalty, $20.05 million will be deposited in the Oil Spill Liability Trust Fund established under the Clean Water Act. The remainder, $4.95 million, will be paid to the U.S. Treasury. The funds paid to the Oil Spill Liability Trust Fund will be used to finance federal response activities and provide compensation for damages sustained from future discharges or threatened discharges of oil into water or adjoining shorelines. Oil spills are known to cause both immediate and long-term harm to human health and ecosystems, including the suffocation of wildlife and the contamination of nesting habitats.
In 2007, BP Alaska pleaded guilty to one misdemeanor violation of the Clean Water Act for the March 2006 spill and was sentenced to three years probation, ordered to pay a $20 million criminal penalty, including a $12 million fine, $4 million to the National Fish and Wildlife Foundation to support research and activities on the North Slope and pay $4 million in restitution to the state of Alaska.
The consent decree, which is subject to a 30-day public comment period and final court approval, is available at: www.justice.gov/enrd/ .
More information on the settlement: www.epa.gov/compliance/resources/cases/civil/cwa/bpnorthslope.html.
Monday 2 May 2011
Stock Promoters Indicted for Conspiracy in Stock Manipulation SchemeRead the Press Release
WASHINGTON – Three stock promoters have been indicted for their roles in a stock manipulation scheme that defrauded investors, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Chief Postal Inspector Guy Cottrell of the U.S. Postal Inspection Service (USPIS) and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
Timothy Barham Jr., 43, of Henderson, Tenn.; Nathan Montgomery, 30, of Henderson, Nev.; and Ryan Reynolds, 39, of Dallas, were each charged in a superseding indictment filed on April 28, 2011, in U.S. District Court for the Southern District of Florida. On April 29, 2011, Barham was arrested in Henderson, Tenn., and Montgomery was arrested in Las Vegas. Reynolds, who was in custody on previously filed civil charges, made his initial appearance today in U.S. District Court in Dallas.
The superseding indictment charges Barham, Montgomery and Reynolds each with one count of conspiracy to commit securities fraud, wire fraud and mail fraud. The superseding indictment also charges six individuals who were originally indicted in February 2010 for their roles in the fraud scheme: Jonathan Randall Curshen, 46, of Sarasota, Fla.; Michael Simon Krome, 49, Long Island, N.Y.; Ronald Salazar Morales, aka “Ronny Salazar,” 39, of Costa Rica; Robert Lloyd Weidenbaum, 44, of Miami; and Eric Ariav Weinbaum, 37, and Izhack Zigdon, 47, both of Israel.
According to the superseding indictment, Curshen was the principal behind Red Sea Management and Sentry Global Securities, two companies located in San Jose, Costa Rica, that provided offshore accounts and facilitated trading in penny stocks. The superseding indictment alleges that Weinbaum and Zigdon took control of the outstanding shares of a company called CO2 Tech (ticker CTTD), which traded in the over-the-counter market through listings on Pink Sheets, an inter-dealer electronic quotation and trading system. Weinbaum and Zigdon allegedly obtained the shares by retaining Krome, a securities attorney. Krome allegedly evaded federal securities registration requirements in order to provide co-conspirators with millions of unregistered and “free-trading” shares of CO2 Tech that the co-conspirators could not have otherwise legally obtained.
The superseding indictment alleges that the shares were subsequently sold to the general investing public by Weinbaum, Zigdon, Curshen and Salazar, a Sentry Global stock trader, through Sentry Global’s stock trading floor. According to court documents, the defendants concealed from the investing public the actual financial condition and business operations of CO2 Tech by evading the registration requirements. The superseding indictment also alleges that Weidenbaum, Reynolds, Montgomery and Barham coordinated trades by purchasing shares of CO2 Tech on the open market from Curshen, Weinbaum, and Salazar. Weidenbaum was allegedly paid approximately $1 million by Weinbaum and Zigdon to participate in sham stock trades of CO2 Tech to make it appear that there were genuine investors in the market that were buying the shares.
As alleged in the superseding indictment, coordinated trades were often made between the co-conspirators in conjunction with the issuance of false and misleading press releases that were designed to make CO2 Tech appear that it had significant business prospects. According to these press releases, CO2 Tech purported to have a business relationship with Boeing to reduce polluting gases emitted from airplanes. The superseding indictment alleges that these relationships never existed.
After fraudulently “pumping” the market price and demand for CO2 Tech stock through these press releases and coordinated trades, Weinbaum, Curshen, Salazar, Reynolds, Montgomery and Barham allegedly “dumped” shares by selling them for large profits to the general investing public in the over-the-counter market through listings on Pink Sheets. These shares were allegedly purchased by unsuspecting investors, including in the Southern District of Florida, and were often rendered virtually worthless.
The superseding indictment further alleges that Curshen and Salazar engaged in a conspiracy to commit money laundering. Curshen, through Red Sea and Sentry Global, allegedly established domestic and offshore bank accounts through which the proceeds of stock manipulation schemes flowed. The superseding indictment alleges that Curshen and Salazar used these accounts to conceal the origin and ownership of the ill-gotten gains from these schemes.
The defendants are all charged with one count of conspiracy to commit securities, mail and wire fraud. Additionally, as in the original indictment, the superseding indictment charges Krome with one count of securities registration violation, one count of obstruction of justice and one count of wire fraud. Weinbaum and Zigdon also continue to be charged with three counts of wire fraud. In addition, Curshen and Salazar each are charged with two counts of mail fraud, and Weidenbaum and Weinbaum each are charged with one count of mail fraud. The superseding indictment also charges Curshen and Salazar with one count of conspiracy to commit money laundering. The superseding indictment seeks forfeiture in the amount of $7 million.
The fraud conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine. Each count of wire fraud and mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. The securities registration violation carries a maximum penalty of five years in prison and a $10,000 fine and the obstruction count carries a maximum penalty of 20 years in prison and a $250,000 fine. The money laundering conspiracy charge carries a maximum penalty of 20 years in prison.
Curshen, Krome, Salazar, Weinbaum, Zigdon and Weidenbaum were also charged by the Securities and Exchange Commission in February 2010 in a related civil matter.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
The case was investigated by the FBI’s Washington Field Office and the USPIS. The case is being prosecuted by Trial Attorneys N. Nathan Dimock and Rina Tucker Harris of the Criminal Division’s Fraud Section. The U.S. Attorney’s Office for the Southern District of Florida provided significant assistance in this case. The Department of Justice acknowledges the significant assistance of the Financial Industry Regulatory Authority (FINRA) and the SEC in its investigation. The Criminal Division’s Office of International Affairs and Costa Rican authorities also provided assistance.
Today’s charges are part of efforts underway by the Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Statement of the Department of Justice’s Antitrust Division on Its Decision to Close Its Investigation of Perdue’s Acquisition of Coleman Natural FoodsRead the Press Release
WASHINGTON – The Department of Justice’s Antitrust Division issued the following statement today after announcing the closing of its investigation into the proposed acquisition by Perdue Farms Inc.’s parent company, FPP Family Investments, of Coleman Natural Foods:
The Antitrust Division obtained extensive information from Perdue, Coleman and a wide range of market participants, including interviews of customers, chicken processors and more than 100 chicken growers. After a thorough review of the evidence, the division concluded that the facts did not support challenging the proposed transaction.
Although the Antitrust Division concluded that it could not prove that this particular transaction would likely cause harm, the division will continue to be vigilant in the enforcement of the antitrust laws to protect competition in agricultural markets.
The division’s investigation focused on the potential effect of the transaction on competition among chicken processors, also known as integrators, for the purchase of services from chicken growers.
The department said that mergers of competing buyers can enhance market power on the buying side of a market, raising significant antitrust concerns. For example, a merger may anticompetitively reduce the number of processors that purchase grower services in a particular region, allowing the merged firm to depress prices paid to growers. Such a concern was not an issue in this case as Perdue’s and Coleman’s facilities do not overlap in any local region. Coleman’s processing plants are located in Fredericksburg, Pa.; Petaluma, Calif.; and Mount Vernon, Wash. Perdue has a number of processing plants on the East Coast, but its closest plant is 150 miles from Coleman’s plant in Fredericksburg. It has no plants on the West Coast.
Under certain circumstances, mergers can make coordination more likely, the department said. In light of the Antitrust Division’s experience with this industry, the division looked closely at this transaction and considered whether it might increase the possibility of coordination under several theories, including a “multi-market contact” theory which provides that firms may find it more feasible to coordinate on terms, such as payment for grower services, as they interact in more numerous regions.
The transaction would add an additional region – the area around Coleman’s Fredericksburg plant – in which Perdue will compete with another major chicken processor for chicken grower services. The division, however, concluded that this additional point of contact was not likely to increase the risk of coordination due to a number of conditions particular to this specific investigation.
Coordinated effects will continue to be an area of division focus in merger review where the facts suggest it and especially for markets where participants have raised concerns about whether markets are working competitively. While the multi-market contact theory did not apply given the specific facts of this matter, the division will continue to consider its application in future transactions, especially those involving agricultural markets where processors interact in numerous local markets for the purchase of goods or services from producers.
In 2010, the Department of Justice and the U.S. Department of Agriculture (USDA) held joint workshops to hear from market participants about competition-related issues in various agriculture industries, including concerns raised by chicken growers about the impact of concentration in poultry processing. The department continues to work with USDA on these important issues.
FPP Family Investments and Perdue are both headquartered in Salisbury, Md. Perdue is the third largest processor of conventional chicken in the United States, with annual revenues of more than $4 billion. Coleman, headquartered in Golden, Colo., processes natural, antibiotic free and organic chicken, with annual revenues of more than $400 million. It does not process conventional chicken.
The division provides this statement under its policy of issuing statements concerning the closing of investigations in appropriate cases. This statement is limited by the division’s obligation to protect the confidentiality of certain information obtained in its investigations. As in most of its investigations, the division’s evaluation has been highly fact-specific, and many of the relevant underlying facts are not public. Consequently, readers should not draw overly broad conclusions regarding how the division is likely in the future to analyze other collaborations or activities, or transactions involving particular firms. Enforcement decisions are made on a case-by-case basis, and the analysis and conclusions discussed in this statement do not bind the division in any future enforcement actions. Guidance on the division’s policy regarding closing statements is available at www.usdoj.gov/atr/public/guidelines/201888.htm.
Justice Department Reaches Agreement with Arizona Medical Center to Ensure Effective Communication with Individuals Who Are Deaf or Hard of HearingRead the Press Release
WASHINGTON – The Justice Department reached a settlement agreement with the Yavapai Regional Medical Center in Prescott and Prescott Valley, Ariz., to resolve an investigation into the policies and procedures for effective communication with individuals who are deaf or hard of hearing at the medical center.
The complaint alleged that the medical center discriminated against individuals on the basis of disability by requiring them to sign a waiver of liability as a condition for the use of sign language interpreters. Title III of the Americans with Disabilities Act (ADA) prohibits discrimination on the basis of disability, including hearing disabilities, in hospitals.
With full cooperation from the center, the Department of Justice conducted an extensive investigation of the center’s policies and procedures with regard to the provision of auxiliary aids and services to ensure effective communication with patients and companions with disabilities. The department gathered evidence indicating that the center’s policies, procedures and trainings were not adequately addressing effective communication with patients and companions, including the appropriate use of video remote interpreting service. The center quickly took corrective steps to ensure effective communication, and voluntarily entered into the settlement agreement.
“All individuals have a right to go to the hospital and communicate with medical staff without having to sign a waiver of liability, and hospitals have a responsibility to ensure that individuals get effective communication,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I applaud the medical center for working with us to address this matter, and we hope this agreement is a reminder for other hospital and health care providers about the requirements of the ADA.”
“Proper medical care depends on effective communication – and hospital officials are the key to making that happen. That’s why the Obama Administration is committed to ensuring all individuals in this country can go to the hospital and communicate effectively with staff in order to receive proper medical care,” said Dennis K. Burke, U.S. Attorney for the District of Arizona. “To hospitals: Take the appropriate steps to ensure effective communication.”
According to the agreement, the center will ensure that individuals who are deaf or hard of hearing receive a benefit equal to that provided to others, and to ensure that appropriate auxiliary aids and services, including qualified interpreters, will be provided where necessary to afford effective communication between the center and individuals. To that end, the center has agreed, among other things, to improve its policies and procedures concerning effective communication, conduct training of all center staff on discrimination and effective communication, and provide annual compliance reports to the department for the next three years.
The enforcement of the ADA is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt .
Justice Department Files Motion to Ensure That Mississippi School District Complies with Desegregation OrdersRead the Press Release
WASHINGTON – The Department of Justice announced that it has asked the federal court overseeing a longstanding desegregation case against the school district in Cleveland, Miss., to enforce the previously-entered desegregation orders governing the district and compel the district’s compliance with federal law.
In a motion filed with the court today, the United States alleges that the school district has failed to dismantle the vestiges of segregation in its schools, and that schools that were racially segregated by law in 1969, when the district was originally ordered to desegregate, remain so today. Prior to 1969, schools on the west side of the railroad tracks that run through Cleveland were white schools segregated by law. More than forty years later, these schools maintain their character and reputation as white schools with a student body and faculty that are disproportionately white. Similarly, schools on the east side of the railroad tracks – originally black schools segregated by law – have never been integrated; and remain all-black or virtually-all-black schools today. In most cases, the schools on the east side and west side of the railroad tracks are less than three miles apart.
After unsuccessful attempts to work with the school district on this matter, the United States has asked the court to rule that the school district has violated the existing desegregation orders and federal law, and order the district to devise and implement a desegregation plan that will eliminate the vestiges of the district’s former dual school system in an expeditious manner.
“It is intolerable for school districts to continue operating schools that retain their racial identity from the Jim Crow era,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “If school districts are not willing to work collaboratively to eradicate the vestiges of de jure segregated schools, we will ask the courts to take the steps necessary to ensure that students of all racial backgrounds have the opportunity to attend diverse, inclusive schools.”
Enforcement of the court orders mandating the desegregation of school districts formerly segregated by law is a top priority of the Justice Department’s Civil Rights Division. For example, on March 23, 2011, the U.S. District Court for the Southern District of Mississippi entered an order modifying the 1969 desegregation order governing the operations of the school district in Leake County, Miss. After a comprehensive review, the department determined that the school district continued to operate four essentially single-race schools. After taking account of a district wide capacity study and the input of more than 800 students, parents and concerned citizens who attended a community meeting, the Department of Justice and the school district jointly requested the closure of two schools as well as the reassignment of students and faculty, and improvements to the quality of education and extracurricular activities at the remaining schools. The court’s order granted all of the modifications sought by the parties.
Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt .
California Man Pleads Guilty for Role in Distributing Pirated Music During Five-Year PeriodRead the Press Release
WASHINGTON – Richard Franco Montejano, 29, of Harbor City, Calif., pleaded guilty today to conspiring to commit criminal copyright infringement, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney André Birotte Jr. for the Central District of California and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Montejano pleaded guilty before U.S. District Judge George H. King in Los Angeles to one count of conspiracy to commit willful copyright infringement by the distribution of a work being prepared for commercial distribution.
In his plea agreement, Montejano admitted that from 2002 to September 2007, he was a member and leader of an Internet music release group known as “Old School Classics” or “OSC.” OSC was a “warez” group that specialized in the unauthorized reproduction and distribution of copyrighted music using the Internet.
According to court documents, warez groups such as OSC are music piracy groups that act as first-providers of copyrighted works to the “warez scene.” These groups obtain copyrighted works, sometimes from industry insiders before the work’s commercial release, and then prepare the works for distribution. Once a warez release group prepares a stolen work for distribution, the material is distributed to servers of affiliated warez groups. This sharing with other groups is generally based on getting access to the pirated works of those groups. From there, many of the works copied and distributed by warez groups ultimately are distributed to an even wider audience through peer-to-peer networks.
Montajano admitted that he maintained a computer server at his Harbor City residence to which other OSC members uploaded pirated music. He admitted that a member of OSC uploaded the Kanye West album “Graduation,” to Montejano’s server in August 2007, more than one week before the album was commercially released. Montejano also admitted using his server to upload pirated music to other warez group servers.
In addition, Montejano admitted that after the break-up in January 2007 of another warez group known as “Rabid Neurosis” or “RNS,” OSC began obtaining pre-release music from two former RNS members known to Montejano as “adeg” and “StJames.” Both adeg and StJames, whose true identities were Bennie Glover and James Anthony Dockery, respectively, were employed at a North Carolina factory that manufactured compact discs for Universal Music Group and its subsidiary labels. Glover and Dockery pleaded guilty on Oct. 15, 2009, to conspiracy to commit willful copyright infringement. Both defendants were sentenced on Jan. 15, 2010, in U.S. District Court in Alexandria, Va., to three months in prison and two years of supervised release.
At sentencing, scheduled for July 25, 2011, Montejano faces a maximum penalty of five years in prison and a $250,000 fine.
The case is part of a multi-year federal investigation of organized piracy groups responsible for the illegal distribution of significant amounts of copyrighted movies, software, games and music through the Internet. The investigation of music piracy groups was led by agents from the FBI’s Washington Field Office-Northern Virginia Resident Agency.
The case is being prosecuted by Assistant U.S. Attorney Jay Prabhu of the U.S. Attorney’s Office for the Eastern District of Virginia, Trial Attorney Kendra Ervin of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Lisa Feldman of the U.S. Attorney’s Office for the Central District of California.
The guilty plea announced today is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/ .
Saturday 30 April 2011
Attorney General Eric Holder and Department of Agriculture Secretary Tom Vilsack Announce Settlement of Lawsuit Against USDA by Native American FarmersRead the Press Release
WASHINGTON –Attorney General Eric Holder and Department of Agriculture (USDA) Secretary Tom Vilsack announced the approval by the U.S. District Court of the settlement of a class action lawsuit filed against USDA by Native American farmers alleging discrimination by USDA. The court’s approval of the settlement ends litigation concerning discrimination complaints from Native Americans generally covering the period 1981-1999.
“The settlement approved by the court Thursday will allow USDA and the Native American farmers involved in the lawsuit to move forward and focus on the future,” said Attorney General Holder. “Under the process established in this agreement, Native American farmers who believe they suffered discrimination will have their claims heard. The Department of Justice is proud to partner with USDA in the agency’s effort to ensure fair and equitable treatment of its clients."
“The Keepseagle settlement approved by the court marks just one more step toward our goal of ensuring that American Indian and Alaskan Native Tribe farmers and ranchers not only have a place at the table, but are welcome as full participants in USDA programs,” said Secretary Vilsack. President Obama, Attorney General Holder and I are delighted this day has come and recognize that today is a good day for Indian Country.
This lawsuit, Marilyn Keepseagle et al., v. Vilsack (Civil Action No. 99-3119 (D.D.C.)), was filed on Nov. 24, 1999. The settlement will not become final until it is formally approved by the U.S. District Court for the District of Columbia.
Friday 29 April 2011
Three Men Sentenced on Federal Hate Crime Charges Related to Desecration of Synagogue and Churches in Modesto, CaliforniaRead the Press Release
WASHINGTON – The Justice Department announced today that Brian Lewis, Abel Mark Gonzalez and Andrew Kerber were sentenced for their roles in violating the civil rights of congregants of several houses of worship in Modesto, Calif.
Lewis and Gonzalez each received sentences of nine months incarceration and 36 months supervised release on the felony charge of conspiracy to violate civil rights. Lewis was also ordered to perform 200 hours of community service. Kerber was sentenced to 36 months probation, with a condition that he serves six months home detention with electronic monitoring at his expense, on the misdemeanor charge of damaging religious property. The defendants were also ordered to pay $3,700 in restitution.
Lewis, 23, of Modesto, Calif.; Gonzalez, 23, of Morgan Hill, Calif.; and Kerber, 23, of Chico, Calif., pleaded guilty in January to defacing and damaging the Congregation Beth Shalom synagogue on Feb. 2, 2006, by spray-painting anti-Semitic and neo-Nazi graffiti on its exterior walls. The men further admitted to spray-painting anti-Christian graffiti on the exterior walls of, and causing other damage to, Our Lady of Fatima Church and School and the Greek Orthodox Church of the Annunciation.
“Today’s sentences demonstrate that those who employ hate and intimidation to jeopardize the First Amendment rights of their fellow Americans to worship freely will be held accountable for their criminal conduct,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
“Americans have the right to worship as they choose, free from intimidation and harassment. Today’s sentences make clear that we will enforce that right,” said U.S. Attorney Benjamin B. Wagner.
In announcing the sentence, Assistant Attorney General Perez and U.S. Attorney Wagner commended the FBI and the Modesto Police Department for their work in this investigation and prosecution. Assistant U.S. Attorney David Gappa and Civil Rights Division Trial Attorney Karen Ruckert Lopez prosecuted this case for the government.
Justice and Education Departments Commemorate Sexual Assault Awareness Month with Students at Banneker High SchoolRead the Press Release
WASHINGTON – Wrapping up a month’s worth of events in recognition of Sexual Assault Awareness Month, the Departments of Justice and Education participated in a town hall-style event today at Benjamin Banneker Academic High School in Washington, D.C. Associate Attorney General Tom Perrelli; Susan B. Carbon, Director for the Office on Violence Against Women (OVW); Vincent Cohen Jr., Principal Assistant U.S. Attorney; Sunil H. Mansukhani, Deputy Secretary for Policy at the Department of Education’s Office of Civil Rights; and local resource providers took part in a discussion with the school’s student body focused on healthy relationships, sexual assault prevention, early intervention and resources available to assault victims.
President Obama first proclaimed April as Sexual Assault Awareness Month in 2009, urging Americans to support victims and to work together to prevent these crimes in our communities.
“We at the Justice Department share a vision of a world where women, men, girls, boys and communities live without fear of sexual violence,” said Associate Attorney General Perrelli. “I am honored to be here today with a thoughtful and engaged set of students, because it’s never too early to begin a dialogue about these issues and work to find solutions.”
“Sexual Assault Awareness Month provides an important focus for recognizing that we can all be agents of social change and end sexual violence,” said Director Carbon. “In the 16 years since the Violence Against Women Act was signed into law, we have been able to equip communities with the resources to save lives and protect survivors. This month’s theme encourages everyone to get involved, take action, and support the ongoing work done in the field of sexual assault—and we hope to impress that same message upon the students here at Banneker High School.”
More than 400 students engaged in a lively question and answer session with department officials, Neil Irvin of Men Can Stop Rape, Tonya Turner of Break The Cycle and Melinda Coles of the DC Rape Crisis Center.
Throughout April, Director Carbon and members of the department’s OVW team have visited nine different states to discuss sexual assault prevention and awareness. During these visits OVW spoke with members of the military, student groups, advocates, elected officials and community members about the importance of getting involved in stopping these crimes and supporting the work of those in the field who are working to transform the lives of survivors.
The Justice Department’s 2006 National Violence Against Women Survey found that nearly 18 million women and 3 million men had experienced a sexual assault. In 2008, according to the department’s Bureau of Justice Statistics, 57 percent of the sexual assaults against females were committed by an offender whom they knew, and one in five sexual assaults against females was committed by an intimate partner. Less than half (47 percent) of the sexual assaults against females in 2008 were reported to police. Young women ages 16 to 24 are at greatest risk, and an alarming number of young women are sexually assaulted while in college. One National Institute of Justice study found that 1 in 4 women will be raped over the course of their college career.
OVW provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. For more information, please visit www.ovw.usdoj.gov.