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Friday 29 April 2011
Italian Executive of California Valve Company<br /> Pleads Guilty to Foreign Bribery OffensesRead the Press Release
WASHINGTON – Flavio Ricotti, a former executive of Rancho Santa Margarita, Calif.-based valve company Control Components Inc. (CCI), has pleaded guilty for his participation in a conspiracy to secure contracts by paying bribes to officials of foreign state-owned companies as well as officers and employees of foreign and domestic private companies.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney André Birotte Jr. of the Central District of California. Ricotti, 49, of Bientina, Italy, was previously arrested on Feb. 14, 2010, in Frankfurt, Germany, and subsequently extradited to the United States.
Ricotti pleaded guilty yesterday before U.S. District Judge James V. Selna in Santa Ana, Calif., to a one-count superseding information charging him with conspiring to make corrupt payments to foreign government officials, and officers and employees of private companies in several countries, including Saudi Arabia and Qatar, in violation of the Foreign Corrupt Practices Act (FCPA) and the Travel Act. According to court documents, CCI designed and manufactured service control valves for use in the nuclear, oil and gas, and power generation industries worldwide. From 2001 through 2007, Ricotti was CCI’s director and then vice-president of sales for Europe, Africa and the Middle East (EAME). In these positions, Ricotti was responsible for overseeing the marketing and sales of CCI’s products to customers in the EAME region.
In connection with his guilty plea, Ricotti admitted that he conspired with other CCI employees to offer a payment to an official of Saudi Aramco, a Saudi Arabian state-owned oil company, in connection with attempting to obtain a valve contract for CCI in 2003. Ricotti also admitted to conspiring with other CCI employees to make a payment to an employee of a private company so that the employee would assist in awarding to CCI a valve contract in Qatar. Ricotti admitted that during the bidding process, one of his subordinates informed him that an employee of the private company was willing to provide CCI with confidential information about the bids of CCI’s competitors and to exercise influence in CCI’s favor in the awarding of the contract in exchange for a commission. Ricotti admitted that the benefit conferred on CCI as a result of the corrupt payments with which he was directly involved was more than $400,000 but less than $1 million.
On Apr. 8, 2009, Ricotti and five other former executives of CCI were charged in a 16-count indictment for their roles in the foreign bribery scheme. The other five former CCI executives also charged are Stuart Carson, CCI’s former president; Hong (Rose) Carson, CCI’s former director of sales for China and Taiwan; Paul Cosgrove, CCI’s former director of worldwide sales; David Edmonds, CCI’s former vice president of worldwide customer service; and Han Yong Kim, the former president of CCI’s Korean office. Trial is scheduled to begin on Oct. 4, 2011. An indictment is merely an accusation and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
In related cases, two defendants previously pleaded guilty to conspiring to bribe officers and employees of foreign state-owned companies on behalf of CCI. On Jan. 8, 2009, Mario Covino, the former director of worldwide factory sales for the valve company, pleaded guilty to one count of conspiracy to violate the FCPA and admitted to causing the payment of approximately $1 million in bribes to officers and employees of several foreign state-owned companies. On Feb. 3, 2009, Richard Morlok, the former finance director for the valve company, pleaded guilty to one count of conspiracy to violate the FCPA and admitted to causing the payment of approximately $628,000 in bribes to officers and employees of several foreign state-owned companies. Covino and Morlok are scheduled to be sentenced in February 2012.
On July 31, 2009, CCI pleaded guilty to a three-count criminal information charging the company with conspiracy to violate the FCPA and the Travel Act, and two substantive violations of the FCPA. CCI was ordered to pay an $18.2 million criminal fine, placed on organizational probation for three years, and ordered to create and implement a compliance program and retain an independent compliance monitor for three years. CCI admitted that from 2003 through 2007 it made corrupt payments in more than 30 countries, which resulted in net profits to the company of approximately $46.5 million from sales related to those corrupt payments.
As part of his plea agreement, Ricotti has agreed to cooperate with the department. At sentencing, Ricotti faces a maximum of five years in prison.
The case is being prosecuted by Deputy Chief Charles G. La Bella and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Douglas McCormick of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI’s Washington Field Office, and its team of special agents dedicated to the investigation of foreign bribery cases. Significant assistance was provided by the Criminal Division’s Office of International Affairs.
Four Pittsburgh Crips Gang Members Plead Guilty to Racketeering ChargesRead the Press Release
WASHINGTON – Four members of a Pittsburgh Crips street gang pleaded guilty this week in federal court to charges of conspiring to conduct a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Vance Pearson, 25, aka “Vinny P;” Rayshawn Malachi, 25, aka “Melly Mel;” Arthur Davis, 24, aka “Seven;” and Phillip Turner, 22, aka “Philly C” each pleaded guilty to one count of conspiracy to engage in a racketeering conspiracy before Senior U.S. District Judge Gustave Diamond. Davis also pleaded guilty to three counts of attempted murder under the violent crimes in aid of racketeering activity statute. In addition, Turner pleaded guilty to charges stemming from a carjacking he and an indicted co-conspirator committed at gunpoint on Sept. 4, 2007, and a charge of possession of a firearm on Dec. 15, 2009.
According to the guilty pleas, Pearson, Malachi, Davis, Turner and others participated in a pattern of racketeering activity that included multiple acts involving gun point robberies; attempted murders; distribution of controlled substances, including cocaine, heroin and crack cocaine; and acts of obstruction of justice and intimidation.
According to information presented in court, Pearson, Turner, Davis and Malachi were members of the Northview Heights/ Fineview Crips, a criminal street gang operating out of the Northview Heights public housing facility in the Northside neighborhood, and in the Fineview neighborhood of Pittsburgh. The gang had been operating in Northside since 2002, when in 2003 it formed an alliance with the Brighton Place Crips to expand the gang’s drug trafficking territory and increase the gang’s capability for 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 identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc,” and “G.K.”
According to information presented in court, Pearson, Malachi and Turner acted as “hustlers” or distributors of controlled substances including heroin, cocaine and crack cocaine for the gang. Davis was a “soldier” or enforcer for the gang, providing protection for the enterprise through the commission of violent crimes. Malachi was involved in the distribution of heroin on multiple occasions from approximately 2003 to August 2006 including arrests for heroin, marijuana and crack cocaine. On June 22, 2009, while on probation and still wearing an ankle monitoring bracelet, Malachi was arrested selling heroin in the Crips-controlled neighborhood of Northview Heights.
According to information presented in court, on Aug. 27, 2007, Turner and a Crips co-conspirator robbed another man at gunpoint in Crips controlled territory. Less than two weeks later on Sept. 4, 2007, in Crips-controlled territory, Turner and the same Crips co-conspirator robbed a different victim of his automobile at gunpoint. According to the information presented in court, Turner approached the victim as he was walking toward his brother’s automobile and pointed a firearm at the victim while his co-conspirator knocked the victim to the ground. While pointing the firearm at the victim, the two Crips members took the victim’s Nike Jordan shoes, went through the victim’s pockets and stole his brother’s automobile.
In addition, according to information presented in court, Pearson and another Crips member robbed two individuals at gunpoint on May 23, 2005, in the Crips-controlled neighborhood of Northview Heights. While waiting in an automobile for a friend, two victims were approached at gunpoint by Pearson and Michael Wade, a Crips member who previously pleaded guilty in the case. The victims were pulled out of the car at gunpoint and the Crips members robbed the victims of a gold chain, $300, a Playstation video game and a CD player. On May 19, 2005, Davis and other Crips members entered a barbershop in Pittsburgh when a Manchester OG gang member entered and called them “Crabs,” a derogatory term for Crips. Davis followed the rival gang member outside of the shop and shot him four times.
On Sept. 7, 2006, while in a store on the Northside of Pittsburgh, Davis and another Crips member got into an argument with two individuals associated with the Wilson Avenue Gangsters, a rival street gang. They continued their argument into the parking lot where the victims both suffered gunshot wounds Officers pursued Davis and his accomplice to a nearby residence and inside the home they arrested the two Crips members, and found two firearms and approximately 80 grams of crack cocaine hidden in a vacuum cleaner.
Pearson, Malachi, Davis and Turner are four 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 2005. 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.
Pearson and Malachi face maximum penalties of 20 years in prison and a fine of $250,000. Davis faces a maximum penalty of 50 years in prison and a fine of $1 million. Turner faces a maximum penalty of life in prison and a fine of $500,000. Pearson is scheduled to be sentenced on Aug. 24, 2011. Davis, Malachi and Turner are scheduled to be sentenced on Aug. 25, 2011.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s 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.
Former Leader of the Arellano-Felix Organization<br /> Extradited from Mexico to United States to Face ChargesRead the Press Release
WASHINGTON – Alberto Benjamin Arellano-Felix, an alleged leader of the Arellano-Felix Organization (AFO), was extradited today by the government of Mexico to the United States to face racketeering, money laundering and narcotics trafficking charges in the Southern District of California.
The extradition was announced by U.S. Attorney Laura E. Duffy of the Southern District of California, Assistant Attorney General Lanny A. Breuer of the Criminal Division, Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA) and Assistant Director Kevin Perkins of the FBI’s Criminal Investigative Division.
Arellano-Felix was taken into custody by Mexican authorities in 2002. A final order of extradition to the United States was granted in 2007. After years of unsuccessful appeals, Arellano-Felix arrived in the United States this afternoon. He is scheduled to be arraigned on May 2, 2011, in U.S. District Court in San Diego before Judge Larry Alan Burns.
U.S. Attorney Laura Duffy, whose office secured the indictment against Arellano-Felix, said that she was “extremely proud of the dedication and commitment that teams of people have demonstrated in bringing Arellano-Felix to answer, in an American court of law, to the very serious charges with which he is charged.” Duffy stated, “We are grateful to the Government of Mexico for its assistance in the extradition and have personally relayed our thanks to Mexican Attorney General Marisela Morales.” Over the last several years, Duffy and Morales have worked together on a number of transborder crime matters.
“The extradition of Benjamin Arellano-Felix reflects our close collaboration with our Mexican law enforcement partners to dismantle violent criminal organizations in Mexico and the United States,” said Assistant Attorney General Breuer. “The Arellano-Felix Organization has spread fear and violence on both sides of the border, and today’s extradition is an important step forward in our effort to hold the alleged leaders of this criminal enterprise to account.”
“Using violence, intimidation, kidnapping and murder, the Arellano-Felix Organization, also known as the Tijuana Cartel, has been one of the world’s most brutal drug trafficking networks,” said DEA Administrator Leonhart. “The extradition of Benjamin Arellano-Felix is one of many great victories against this criminal enterprise, which has seen five of the seven Arellano-Felix brothers either arrested or killed. Together with our Mexican partners, we will continue sustained attacks on cartels that threaten our way of life.”
“The FBI is pleased with Mexico’s efforts to bring to justice a leader from one of the most violent criminal enterprises in our history,” said Assistant Director Perkins of the FBI’s Criminal Investigative Division. “The cooperation between our two countries is a powerful force in disrupting the Arellano-Felix Organization’s criminal activities that instill fear and threaten the safety of our citizens.”
Long-reputed to be one of the most notorious multi-national drug trafficking organizations, the AFO controlled the flow of cocaine, marijuana and other drugs through the Mexican border cities of Tijuana and Mexicali into the United States. Its operations also extended into southern Mexico as well as Colombia.
The seventh superseding indictment charges Arellano-Felix with conducting the affairs of an illegal enterprise through a pattern of racketeering activity (RICO), conspiracy to import and distribute cocaine and marijuana, and money laundering. The indictment alleges that the leadership of the AFO negotiated directly with Colombian cocaine trafficking organizations for the purchase of multi-ton shipments of cocaine, received those shipments in Mexico by sea and by air, and then arranged for the smuggling of the cocaine into the United States and its further distribution throughout the U.S. The indictment also alleges that the proceeds of the AFO’s drug trafficking, estimated by law enforcement to be in the hundreds of millions of dollars, were then smuggled back into Mexico.
The indictment also alleges that the AFO recruited, trained and armed groups of bodyguards and assassins who were responsible for protecting the leaders of the organization, and also for conducting assassinations of rival drug traffickers, suspected cooperators, uncooperative Mexican law enforcement and military personnel, and members of the Mexican news media who printed stories unfavorable towards the AFO.
This case is being investigated by agents from the DEA, the FBI, and the Internal Revenue Service Criminal Investigations, and prosecuted in the Southern District of California by Assistant U.S. Attorneys Joseph Green and James Melendres. The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The investigation of Alberto Benjamin Arellano-Felix was coordinated by an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was created to consolidate and coordinate all law enforcement resources in this country’s battle against major drug trafficking rings, drug kingpins and money launderers.
An indictment is not evidence that the defendant committed the crimes charged. The defendant is presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
API Healthcare Corp. Abandons Merger Plans with Kronos Inc. After Justice Department Expresses Antitrust ConcernsRead the Press Release
WASHINGTON — API Healthcare Corporation has abandoned its merger plans with Kronos Inc. after the Department of Justice expressed concerns that the acquisition would have reduced competition and increased prices in healthcare-specific workforce management technology. As a result of the contract termination, both Kronos, which is owned by investment firm Hellman & Friedman Capital Partners VI L.P., and API, which is owned by investment firm Francisco Partners II L.P., will continue to sell health-care specific workforce management solutions.
By purchasing API, Kronos would have acquired its most significant competitor for healthcare time and attendance solutions, and led to the loss of a vigorous competitor that offered innovative staff scheduling capabilities in combination with its time and attendance products. The department said that according to industry sources, the transaction would have resulted in a single firm controlling approximately 70 percent of the time and attendance healthcare market.
“We welcome the decision to abandon this deal, which will preserve competition in the market for time and attendance technology in the healthcare industry,” said Christine Varney, Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “The abandonment of this transaction means that consumers will continue to receive the same benefits of competition, including greater innovation and lower prices, they’re now receiving.”
API, headquartered in Hartford, Wis., has installations in more than 1,000 client sites in the healthcare industry and had 2010 revenues of $52 million. Kronos, headquartered in Chelmsford, Mass., provides workforce management software to tens of thousands of organizations in approximately 60 countries, both within the healthcare industry as well as many other industries.
Thursday 28 April 2011
Two Indicted in Alabama for Filing False Income Tax Returns Using Stolen IdentitiesRead the Press Release
WASHINGTON – Alchico Grant and Melinda Clayton were indicted by a federal grand jury in the Middle District of Alabama on a variety of charges stemming from an identity theft and tax fraud scheme, the Department of Justice, U.S. Attorney Leura G. Canary and the Internal Revenue Service (IRS) announced today. The 21-count indictment charges the two with filing false claims against the United States, wire fraud and aggravated identity theft.
Clayton had previously been arrested on a criminal complaint on April 8, 2011, following the execution of a search warrant at her house that same day. Grant had been indicted, along with several co-conspirators, in December 2010, for his involvement in an earlier conspiracy to obtain tax refunds using stolen identities. Grant was on pretrial release when indicted on the new charges. At a hearing on April 28, 2011, Grant’s pretrial release was revoked and he was ordered detained.
According to the new indictment, Clayton and Grant fraudulently obtained tax refunds using stolen identities. The two would illegally obtain identity information, file false tax returns claiming fraudulent refunds using the stolen identities and have the proceeds deposited into bank accounts and stored value card accounts they controlled. Grant would purchase stored value cards that were used to receive proceeds from some of the false returns.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Clayton and Grant both face a maximum of 189 years in prison and a mandatory minimum sentence of 2 years. If convicted, they will also face forfeiture of the proceeds of their crimes and mandatory restitution.
The case was investigated by Special Agents of the IRS - Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Jared Morris are prosecuting the case.
Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Three Sentenced for Involvement in Civil Rights Conspiracy and Cover-Up in Connection with Cross-Burning in Athens, LouisianaRead the Press Release
WASHINGTON –Jeremy Matthew Moro, 33, and Joshua James Moro, 23, have been sentenced by U.S. District Judge Donald E. Walter following their January 2011, guilty pleas to conspiring to violate the civil rights of an interracial couple by burning a cross near their home in Athens, La., in October 2008. Sonya Marie Hart, 31, was sentenced today following her January 2011, guilty plea to withholding information from the FBI regarding the defendants’ attempt to cover-up the cross-burning. The Moros’ cousin, Daniel Danforth, was previously convicted by a federal jury for organizing, carrying out, and attempting to cover up the same cross-burning.
Jeremy Moro was sentenced to 12 months and one day in prison followed by three years of supervised release; Joshua Moro was sentenced to 12 months and one day in prison followed by three years of supervised release; Sonya Hart was sentenced to three years of supervised probation. The defendants’ co-conspirator, Daniel Danforth, was previously sentenced to 48 months in prison for his role in the cross-burning and attempted cover-up.
During their guilty pleas in January 2011, Joshua and Jeremy Moro admitted that in October 2008, they and Danforth agreed to build, erect and burn a cross near the home of another cousin, her African American boyfriend (now husband), her 11-year-old son, and their grandmother who was believed to approve of the cousin’s interracial relationship. Joshua Moro admitted that he offered Danforth diesel fuel to use to burn the cross and that, later that evening, he sent a text message to see if Danforth and Jeremy Moro still needed the diesel to burn the cross. Jeremy Moro admitted that he helped Danforth find an accelerant, transport the cross to an area near the victims’ homes, and that he watched Danforth light the cross on fire because Danforth was upset about the presence of the African American man living with their cousin. Hart admitted that she affirmatively withheld information from the FBI in connection with the investigation into the cross-burning and attempted cover-up.
Evidence during Danforth’s trial in January 2010 showed that in the days following the cross-burning, Danforth, Jeremy Moro, and Sonya Hart agreed to remove the burned cross when they learned that the FBI was going to investigate the matter. With Jeremy Moro’s and Hart’s assistance, Danforth removed the cross, disassembled it and hid it in the woods. The evidence also showed that Joshua Moro, Jeremy Moro and Sonya Hart lied to the FBI and a federal grand jury during the investigation into the cross-burning.
“The defendants used an unmistakable symbol of hate to threaten a member of their own family simply because of her boyfriend’s race,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Incidents of this kind have no place in this country, and they are a reminder of the civil rights challenges we still face in 2011.”
“Cross burnings have historically been symbols of intense hatred of others based on their race. There is no place in our communities for this kind of activity,” said Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana. “ Everyone should feel comfortable to live in their communities without fear of violence because they are different or because of their race. Every citizen has this right. We hope that these sentences send a message that these kinds of acts are serious and have serious consequences.”
This case was investigated by the FBI. The case was prosecuted by Assistant U.S. Attorney Mary J. Mudrick for the Western District of Louisiana and Trial Attorney Erin Aslan from the Justice Department’s Civil Rights Division.
Louisiana Man Pleads Guilty to Federal Civil Rights ViolationsRead the Press Release
WASHINGTON - The Justice Department announced today that Johnny Mathis, 47, of Lecompte, La., pleaded guilty to two federal crimes for shooting at the home of three Hispanic men living across the street from him because of the victims’ race and national origin.
Mathis pleaded guilty to criminal interference with the right to fair housing and using a firearm during a crime of violence. Mathis admitted that, on June 15, 2008, he shot at the victims’ home because the victims were Mexican. When the defendant began shooting at their home, the victims fled into the woods behind their residence. Mathis then entered the home with his firearm. All three victims survived the shooting unharmed.
“The defendant targeted his neighbors with violence because of their race and national origin,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Acts of violence like this one have no place in our country, and the department will vigorously prosecute those who engage in such conduct.”
“Everyone, regardless of race, national origin or religion, etc., has the right to feel secure in their homes and free from violence,” said U.S. Attorney for the Western District of Louisiana Stephanie A. Finley. “That’s pretty basic. Our office will protect that right for all people residing in this district and will continue to prosecute these types of crimes.”
Sentencing is scheduled for July 28, 2011. Mathis faces a maximum of 10 years in prison, a fine of $ 250,000, or both, on the fair housing charge. He also faces a mandatory minimum term of 10 years in prison for the firearm charge, which must run consecutively to any term imposed on the fair housing charge.
The case was investigated by the FBI. It is being prosecuted by Assistant U.S. Attorney Mary Mudrick of the Western District of Louisiana and by Nicole Lee Ndumele, a Trial Attorney in the Department of Justice’s Civil Rights Division.
Justice Department Signs Agreement with the City of Independence, Kansas, toEnsure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON - The Justice Department today announced an agreement with the city of Independence, Kan., to improve access to all aspects of civic life for people with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“ Individuals with disabilities must have the opportunity to participate in local government programs, services and activities on an equal basis with their neighbors,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We applaud Independence officials for their commitment to improving access for all residents and visitors with disabilities to the full range of city programs and facilities, including the zoo, library, aquatic center and city hall.”
“I hope Kansans will take note of this settlement,” said Barry Grissom, U.S. Attorney for the District of Kansas. “It is time to recognize the right of Americans with disabilities to the care and services they need.”
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. This agreement is the 189th under the PCA initiative. According to census data, the city population is 9,846, and 23 percent of Independence residents have a disability.
Under the agreement announced today, the city of Independence will take several important steps to improve access for individuals with disabilities, such as:
· Making physical modifications to facilities surveyed by the department so that parking, routes into the buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
· Surveying other facilities and programs and making modifications wherever necessary to achieve full compliance with ADA requirements;
· Ensuring that buildings and outdoor facilities that will be built or altered by or on behalf of the city comply with the ADA’s architectural requirements;
· Posting, publishing and distributing a notice to inform members of the public of the provisions of Title II and their applicability to the city’s programs, services and activities;
· Officially recognizing the Kansas telephone relay service as a key means of communicating with individuals who are deaf, are hard-of-hearing, or have speech impairments, and training staff in using the relay service for telephone communications;
· Undertaking the required planning and modifications to ensure equal, integrated access to emergency management for individuals with disabilities, including emergency preparedness, notification, evacuation, sheltering, response, clean up and recovery;
· Developing a method for providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs;
· Installing signs at any inaccessible entrance to a facility directing individuals with disabilities to an accessible entrance or to information about accessing programs and services at other accessible facilities;
· Implementing a plan to improve the accessibility of city sidewalks and provide for the installation of accessible curb ramps throughout the city; and
· Adopting a grievance procedure to deal with complaints of disability discrimination relating to city programs and services.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement requires most actions to be completed within three years. For the required accessibility modifications to sidewalks, pedestrian crossings, transportation stops and curb ramps, the city will work with the disability community to prioritize and complete these modifications within five years. The department will actively monitor compliance with the agreement until it has confirmed that all required actions have been completed.
People interested in finding out more about the ADA, today’s agreement with the city of Independence, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA website at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
For the full agreement, please visit www.ada.gov/independence_ks/independenceks_sa.htm.
Former U.S. Probation Officer Pleads Guilty to Civil Rights and Sex Abuse ChargesRead the Press Release
WASHINGTON– Mark John Walker, 52, of Eugene, Ore., pleaded guilty today to charges related to his engaging in sexual contact or aggravated sexual abuse with female offenders who were under his direct supervision as a federal probation officer from 2006 to 2009. Sentencing is scheduled for July 18, 2011 before Chief U.S. District Judge Ralph R. Beistline, who is a visiting judge from Alaska.
As a U.S. Probation Officer, Walker supervised offenders who were serving probation or supervised release terms imposed by a federal judge, including offenders with vulnerable backgrounds involving sexual abuse, mental illness and drug addiction. Walker had the power to recommend that offenders who violated their conditions of probation or supervised release be incarcerated or otherwise sanctioned. Under the U.S. Constitution and federal law, law enforcement officials cannot use their authority to willfully sexually assault individuals under their control.
While exercising his authority as a probation officer, Walker willfully violated the victims’ civil rights by kissing them, touching their breasts, buttocks and inner thighs, and forcing one victim to have sexual intercourse with him when he visited her home as part of his official duties. At the time, he was wearing his badge and carrying his government-issued firearm, and the victim was not able to escape. The victims feared reporting the violations to authorities because they were afraid that no one would believe them and that Walker, as their probation officer, had the power to have them incarcerated or otherwise punished.
Under the terms of the plea agreement, the parties have agreed to recommend that Walker be sentenced to 10 years in prison, followed by five years of supervised release. The defendant will also have to register as a sex offender under the federal Sex Offender Registration and Notification Act, and keep the registration current in any state in which he resides, is employed or is a student. Chief Judge Beistline has the authority to accept or reject the joint sentencing recommendation.
“ Law enforcement officials violate the public trust when they abuse the rights of individuals under their supervision,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those who abuse their power in this way.
“ Federal Probation Officers are entrusted and empowered by law to serve others,” said U.S. Attorney Dwight Holton. “Our criminal justice system is enhanced every day by their dedicated and loyal service. Walker betrayed his fellow officers and abused his power by sexually abusing the vulnerable people he had sworn to help. These victims have been heard.”
“We have a very high standard when it comes to the actions of federal officers,” said Arthur Balizan, Special Agent in Charge of the FBI in Oregon. “This defendant’s criminal actions did great harm to women who were already very vulnerable. That is intolerable.”
The case has been investigated by the FBI in Eugene, Ore. Assistant U.S. Attorneys Pamala Holsinger, Hannah Horsley and Craig Gabriel are prosecuting the case with assistance from the U.S. Department of Justice, Civil Rights Division, Criminal Section.
Federal Court Bars Colorado Man from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has permanently barred George Thomas Gaines of Aurora, Colo., from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Gaines consented, was signed by Judge Robert E. Blackburn of the U.S. District Court for the District of Colorado.
The government complaint in the case alleged that Gaines and his companies, G&G Tax Service and American Benefits, prepared federal income tax returns for customers that used fictitious businesses to claim false tax deductions and improper earned income tax credits. According to the complaint, more than 96 percent of the audited tax returns prepared by Gaines between 2004 and 2007 understated his customers’ tax liabilities.
Return preparer fraud is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past ten years, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website.
Deputy Attorney General James Cole and Assistant Attorney General Ignacia Moreno Commend Efforts by Employees of the Environment and Natural Resources Division at Earth Day Service EventRead the Press Release
WASHINGTON – Marking the eighth annual Earth Day Service Celebration today, Deputy Attorney General James Cole and Assistant Attorney General Ignacia S. Moreno commended volunteers from the Justice Department’s Environment and Natural Resources Division (ENRD) as they began work on a future Community Greening Center near Marvin Gaye Park in Northeast Washington, D.C.
The Community Greening Center will be a neighborhood-based nursery for plants and trees as well as an environmental education resource center to be located near the intersection of 51st Street and Nannie Helen Burroughs Ave., N.E. The Justice Department volunteers are breaking ground on this project together with Washington Parks & People and the DC Green Corps.
2011 will mark the eighth consecutive Earth Day service celebration at Marvin Gaye Park. In those seven years, ENRD has devoted over 5,000 hours of employee time to planting trees, removing trash, laying sod and gardening. The event Thursday featured brief remarks by Deputy Attorney General Cole; Assistant Attorney General Moreno; Steve Coleman, Director and President of Washington Parks and People; and Lisa A. Hayes, Director of Development and Senior Counsel at the American Constitution Society of Law and Policy. Ms. Hayes is also the daughter of Earth Day Network founder Denis Hayes, who coordinated the first Earth Day in 1970.
“Earth Day is a reminder to all of us at the Department that we serve not only to protect the people of our country, but also its natural resources such as our lands, waters, air and wildlife, and the tremendous work of the Environment Division is essential to that mission,” said Deputy Attorney General Cole. “The Division has contributed its expertise and hard work in a number of key areas, including the government’s response to the Deepwater Horizon oil rig explosion and oil spill, important tribal matters and our overall efforts in advancing environmental justice, and I am grateful for their continued dedication.”
Assistant Attorney General Ignacia S. Moreno also announced the publication of ENRD’s Fiscal Year 2010 Accomplishments Report. The full report, which details the division’s work across the nation during FY2010, is posted at www.justice.gov/enrd/Current_topics.html . Among other things, the report details the civil and criminal enforcement of the nation’s environmental laws, resulting in immeasurable benefits for human health and the environment derived from significant reductions in emissions and discharges of harmful pollutants. Other results detailed in the report show:
$1.3 billion in civil and stipulated penalties, cost recoveries, natural resource damages, and other civil monetary reliefm, including $922 million recovered for the Superfund to support the cleanup of toxic waste;
$7.5 billion in corrective measures through court orders and settlements; and
50 criminal cases against 79 defendants, resulting in $104 million in fines.
A core mission of the division is the strong enforcement of civil and criminal environmental laws to protect our nation’s air, land, water and natural resources. The division’s mission also includes vigorous defense of environmental, wildlife and natural resources laws and agency actions; effective stewardship of our public lands and natural resources; and careful and respectful management of the United States’ obligations to American Indian tribes and their members, including litigation to protect tribal sovereignty, rights and resources. Also in 2010, with colleagues in the Civil Division, ENRD played an instrumental role in supporting the federal response to, and investigation of, the catastrophic oil spill in the Gulf of Mexico, and the filing of a civil enforcement action on Dec. 15, 2010 in Louisiana.
In her remarks, Assistant Attorney General Moreno underscored the achievements of the past year and the Division’s commitment to environmental justice:
“I am proud of the meaningful results that we have achieved for the benefit of the American people over the past year. In our work, we have not forgotten vulnerable communities and have taken concrete steps to make environmental justice a reality.”
The D.C. Green Corps, based at the Marvin Gaye Community Greening Center in the Watts Branch sub-watershed of the Anacostia River, will provide a city-wide gateway to 50 different green career tracks in urban and community forestry and forest-based ecosystem and watershed restoration. Helping under-served sub-watershed communities across the city, the Green Corps job program will focus on environmental justice, sustainable native reforestation, riparian buffer planting, invasive removal and green controls of urban systems, such as storm and sewer flows. The Green Corps and Center will develop a referral system to help participants connect to jobs through a wide range of agencies, professional and trade associations, trades, professions and industries.
The Green Corps is a pilot job training program funded by the American Recovery and Reinvestment Act, in partnership with the U.S. Forest Service, the D.C. Urban Forest Administration and the D.C. Department of Parks and Recreation.
Wednesday 27 April 2011
North Carolina Bank Agrees to Pay $400,000 in Restitution to Victims of Investment Fraud Scheme It Failed to Detect and ReportRead the Press Release
WASHINGTON – CommunityONE Bank N.A., based in Asheboro, N.C., with 45 offices throughout the state, has entered into a deferred prosecution agreement with the Department of Justice related to its failure to file a suspicious activity report (SAR) and maintain an effective anti-money laundering program, announced Assistant Attorney General Lanny Breuer of the Criminal Division and U.S. Attorney Anne Tompkins of the Western District of North Carolina. The bank has agreed to pay $400,000 toward restitution to victims of a third-party ponzi scheme that operated through accounts maintained at the bank.
The criminal information filed today in U.S. District Court for the Western District of North Carolina charges CommunityONE Bank with failing to maintain an effective anti-money laundering program. CommunityONE Bank waived indictment and accepted and acknowledged responsibility for its conduct. The deferred prosecution agreement, also filed today, recognizes that the bank has committed to, and already taken significant steps toward, overhauling its anti-money laundering program. This resolution allows the bank, which had been critically undercapitalized according to information contained in court documents, to undergo a merger and recapitalization to survive, and to avoid losses from a bank failure to innocent account holders and to the FDIC fund estimated at $500 million. The agreement recognizes that the bank’s total value under the recapitalization and merger is $2.5 million, and requires the bank to pay 16 percent of its value, or $400,000, to the victims of the ponzi scheme that the bank failed to detect and report. Provided that the bank fully implements the significant anti-money laundering measures required by the agreement, the government will recommend dismissal of the criminal charge in two years.
“Banks asleep at the switch need to wake up,” said U.S. Attorney Tompkins. “Federal law requires banks to implement a robust and proactive anti-money laundering program to detect fraud and protect the public from harm. This bank’s failure to detect and report a ponzi scheme cost it 16 percent of its value. Other financial institutions should heed this warning: the Bank Secrecy Act applies to more than just drug and terrorist financing.”
“CommunityONE Bank turned a blind eye to criminal conduct occurring under its nose,” said Assistant Attorney General Breuer. “By agreeing to pay restitution to the victims of a customer’s investment fraud scheme, and to overhaul its anti-money laundering program, the bank has begun the process of righting its wrongs. We will take every necessary step to hold banks committing similar offenses to account.”
“The Bank Secrecy Act was enacted to protect the public from harm by identifying and detecting money laundering from criminal enterprises, terrorism, tax evasion or other unlawful activities. IRS-Criminal Investigation and our fellow law enforcement agencies stand ready to make sure the laws are followed,” said Jeannine A. Hammett, Special Agent in Charge, Internal Revenue Service (IRS)-Criminal Investigation.
“CommunityOne should serve as an example to other banks – you won’t be allowed to ignore inconvenient or unpopular laws against fraud, especially when it has such a negative impact on people’s lives. When customers deposit their hard-earned income into a bank, they trust those banks to take care of their livelihood,” said Chris Briese, Special Agent in Charge of the FBI’s Charlotte, N.C., Division.
According to information contained in court documents, the actions taken today were the result of an investigation related to a $40 million ponzi scheme operated by bank customer Keith Franklin Simmons for two and a half years almost entirely through an account at the bank. Simmons was convicted of securities fraud, wire fraud and money laundering following a jury trial in Charlotte in December 2010 and is being detained pending sentencing. At sentencing, he faces a maximum prison sentence of 80 years.
From April 2007 until September 2009, Simmons deposited more than $35 million in investor funds into one account with the bank and withdrew over the same time span more than $35 million from the same account. According to court documents, the bank failed to detect and report the suspicious transactions, as required by the Bank Secrecy Act, due to deficiencies in its anti-money laundering program. The bank did not file any SAR on Simmons during this time period, despite the hundreds of suspicious transactions that took place over those two and a half years.
In addition, according to the court documents, the bank’s records also showed that Simmons diverted more than $2 million to other accounts with the bank that he controlled to operate his other businesses; diverted nearly $800,000 in cash withdrawals, gift cards and transfers to his personal account with the bank; and diverted numerous payments to support his luxurious lifestyle including payments for private jets, vehicles and gifts.
Under the Bank Secrecy Act, banks are required to establish, implement and maintain programs designed to detect and report suspicious activity indicative of money laundering and other financial crimes, such as investment fraud schemes. A bank is required to file a SAR when it detects known or suspected money laundering activity or a federal crime.
The case was prosecuted by Assistant U.S. Attorneys Kurt Meyers and Mark Odulio of the U.S. Attorney’s Office for the Western District of North Carolina and Trial Attorney Michael Mosier with the Asset Forfeiture and Money Laundering Section in the Justice Department’s Criminal Division. This case was jointly investigated by the FBI’s Charlotte Division and IRS-Criminal Investigation.
These actions are part of efforts underway by President Barack 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. For more information about the task force visit: www.stopfraud.gov.
Greenwich, Connecticut, to Pay Penalty and Fix Wastewater InfrastructureRead the Press Release
WASHINGTON – Under a settlement between the United States, state of Connecticut, and the town of Greenwich, Conn., the town will pay a $200,000 penalty and rehabilitate a critical wastewater collection system that serves three of the town’s major wastewater pump stations. The agreement settles allegations of Clean Water Act violations by the town stemming from two major ruptures of the town’s sewage system.
On Oct. 14, 2005, the town’s Old Greenwich Common Force Main ruptured and released 14.5 million gallons of raw sewage into the Cos Cob Harbor, a tributary to the Long Island Sound. The same force main ruptured again on Dec. 16, 2008, releasing 28 million gallons of raw sewage into Cos Cob Harbor.
Under the settlement lodged in federal district court in Hartford today, in addition to paying a $200,000 penalty to be split equally between the federal and state governments, the town will replace the section of the force main which previously failed. The town will also evaluate the need to replace other sections of the force main that have not been replaced in the past. In the event another rupture to the force main occurs, the agreement requires the town to pay additional penalties and replace some or all of the older sections of the force main – depending on the circumstances of the rupture.
The settlement further requires the town to develop a strategy for communicating with other entities, such as utilities, to facilitate emergency repairs of the force main that may be required in the future.
More information: Enforcing Clean Water requirements in New England: www.epa.gov/region1/enforcement/water/index.html.
Federal Jury Finds That Massachusetts Cranberry Growers’ Filling Wetlands Was Subject to Clean Water ActRead the Press Release
WASHINGTON – A federal jury this week found that the Clean Water Act applied to the filling of wetlands and other waters at two properties in Carver, Mass., owned by Charles Johnson, Genelda Johnson, Francis Vaner (“Van”) Johnson, and Johnson Cranberries Limited Partnership (the Johnsons), announced Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division, U.S. Attorney Carmen M. Ortiz and EPA Regional Administer H. Curtis Spaulding.
The Johnsons filled and altered approximately 46.1 acres of wetlands and other waters in order to construct cranberry bogs and associated structures.
The suit was originally brought by the United States in 1999 at the request of the U.S. Environmental Protection Agency (EPA) to enforce a provision of the Clean Water Act which prohibits the discharge of dredged and fill material into waters of the United States, which include certain wetlands, without first obtaining a permit from the U.S. Army Corps of Engineers.
In 2004, the U.S. District Court ruled that the Johnsons had filled the wetlands and other waters without obtaining a permit. After two appeals and a change in law resulting from a 2006 Supreme Court ruling, the case was given to a jury to decide whether the Clean Water Act applied to the wetlands and other waters at the Johnson properties under new standards set out by the Supreme Court’s 2006 ruling in Rapanos v. United States. On Monday, April 25, 2011, the jury upheld the government’s assertion of jurisdiction.
The prosecution of the case was handled by Assistant U.S. Attorney George B. Henderson of the U.S. Attorney’s Office in the District of Massachusetts, Department of Justice Environment and Natural Resources Division Attorney Jered J. Lindsay, with assistance from EPA Enforcement Counsel Margery Adams and Christine Foot.
Tuesday 26 April 2011
Statement of the Department of Justice Antitrust Division on Its Decision to Close Its Investigation of Southwest's Acquisition of AirtranRead 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 of AirTran Airways by Southwest Airlines Company:
After a thorough investigation, the division determined that the merger is not likely to substantially lessen competition. The merged firm will be able to offer new service on routes that neither serves today, including new connecting service through Atlanta’s Hartfield Jackson International Airport from cities currently served by Southwest to cities currently served by AirTran. The division said that the presence of low cost carriers like Southwest and AirTran has been shown to lower fares on routes previously served only by incumbent legacy carriers.
Although there are overlaps on certain nonstop routes, the division did not challenge the acquisition after considering the consumer benefits from the new service. Also, the airports affected by the overlaps are not subject to restrictions on slots or gate availability. Where such restrictions exist, entry by other airlines may be particularly difficult.
Southwest Airlines is based in Dallas. In 2010, it had revenues of $12.1 billion carrying approximately 88 million passengers. Southwest serves 72 cities in the United States. AirTran is based in Orlando. In 2010, it had revenues of $2.6 billion carrying approximately 25 million passengers. AirTran serves 69 cities in the United States, Mexico and the Caribbean.
Oakland, California, Patient Recruiter Sentenced to 57 Months in Prison for Causing the Submission of $1.2 Million in False Power Wheelchair Claims to MedicareRead the Press Release
WASHINGTON – An Oakland, Calif., woman was sentenced today to 57 months in prison for her role in a scam to bill Medicare for more than $1.2 million in claims for expensive, high-end power wheelchairs and other durable medical equipment (DME) that were not medically necessary, announced the Departments of Justice and Health and Human Services (HHS).
Donna K. Wells, 52, was convicted in November 2010 of health care fraud after a one-week jury trial in the Central District of California. In addition to her prison term, U.S. District Court Judge Dale S. Fischer sentenced Wells to three years of supervised release and ordered her to pay $240,380 in restitution.
The evidence introduced at Wells’ trial showed that Wells worked the streets and low-income, senior living communities of Oakland to recruit Medicare beneficiaries to bill Medicare for expensive power wheelchairs and DME that the beneficiaries did not want, need, or use. Medicare beneficiaries who testified at trial said that Wells approached them on the street, at the store, or in the lobbies of their apartment buildings and offered them free power wheelchairs in exchange for the beneficiaries allowing Wells to copy their Medicare and California identification cards. Witnesses who lived in or worked at the San Pablo Hotel, a low-income, senior living community in Oakland, testified that Wells often sat in the lobby of the hotel to recruit beneficiaries. These and other witnesses testified that many of the residents of the San Pablo Hotel did not use the power wheelchairs that Wells provided to them.
Witness testimony at Wells’ trial established that Wells sold to other individuals the information she solicited from beneficiaries for between $400 and $500 per beneficiary. The individuals who purchased the information from Wells, including the operators of a fraudulent medical clinic in Los Angeles, used the beneficiary information from Wells to fabricate fraudulent prescriptions and medical documents which were then sold to and used by numerous fraudulent Los Angeles-area DME supply companies to submit false claims to Medicare. The claims were for power wheelchairs that cost Medicare approximately $4,000 per wheelchair but cost the DME supply companies only approximately $900 per wheelchair, the wholesale price. One of the DME supply companies that used the Medicare beneficiary information from Wells to defraud Medicare was Maydads Medical Supply of Arleta, Calif, which was owned by Wells’ co-defendant, Sylvester Ijewere, who was sentenced in October 2010 to 46 months in prison for Medicare fraud.
In imposing Wells’ sentence, Judge Fischer found that Wells was responsible for more than $1.2 million in false claims that were submitted to Medicare for approximately 200 Medicare beneficiaries. Judge Fischer also found that Wells purposely misled beneficiaries into believing that she worked for Medicare or another government agency when Wells solicited them to receive power wheelchairs and DME.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General for HHS (HHS-OIG); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
The case was prosecuted by Trial Attorney Jonathan Baum and Senior Trial Attorney John Michelich of the Criminal Division’s Fraud Section. The case was investigated by the California Department of Justice. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Maryland Man Pleads Guilty to Corruptly Endeavoring to Impede the Internal Revenue ServiceRead the Press Release
WASHINGTON - Thomas Robert Turner, a resident of Prince George’s County, Md., pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, the Justice Department and Internal Revenue Service (IRS) announced today. Sentencing is scheduled for Aug. 12, 2011.
According to the plea agreement and statement of facts, Turner worked as a bus driver for D & B Tours Inc., a tour bus company. He, along with at least two other people, devised a plan to file false corporate income tax returns for 2001, 2002 and 2003 for D & B Tours with the IRS in order to get money from the government to which they were not entitled. These corporate returns claimed false refunds of more than $177,000 based upon fraudulently inflated federal fuel tax credits. Turner received $70,000 as his share of the fraudulent refunds.
According to the court documents, Turner also admitted that he was aware that false individual tax returns for 2002 through 2005 were filed in his name. Although he never saw the tax returns, he was aware that, just as he had been in the case with the false D & B Tours corporate tax returns, his personal tax returns would report false information relating to fuel expenses to support false claims for tax refunds. Turner received two refund checks from the IRS -- one for more than $20,000 and a second for more than $19,000. He retained a portion of these refund checks. Turner also admitted that in January 2009 he made false statements to a criminal investigator of the IRS who had questions about the tax refunds related to the false D & B Tours corporate tax returns.
John DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division, and Rod Rosenstein, U.S. Attorney for the District of Maryland, commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division Trial Attorneys Caryn Finley and Jack Hinton, who are prosecuting the case on behalf of the United States.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/ .
Lufkin, Texas, Woman Sentenced to 180 Months in Prison for Involvement in Gang MurdersRead the Press Release
WASHINGTON – A Lufkin, Texas, woman was sentenced today by U.S. District Judge Marcia Crone to 180 months in prison for her role in a double homicide that took place in Nacogdoches, Texas, in August 2007, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John M. Bales for the Eastern District of Texas.
April Flanagan, 31, pleaded guilty on Nov. 29, 2010, to committing a violent crime in aid of racketeering activity, the object of which was a conspiracy to murder David Clyde Mitchamore Jr., and to acting as an accessory after the fact in the murder of Christy Rochelle Brown.
According to information presented in court, Flanagan had close ties to the Aryan Brotherhood of Texas (ABT), a race-based state-wide organization that operates inside and outside of state and federal prisons located throughout the state of Texas and the United States. The ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, as well as ABT associates and prospects, are required to follow, without question, the orders of higher-ranking members. These so-called “direct orders” typically task the ABT member or associate to “discipline” the offending individual with physical force.
According to court documents, David Mitchamore, aka “Super Dave,” an ABT member, and his girlfriend, Christie Rochelle Brown, were murdered as a result of a “direct order” by ABT members because of Mitchamore’s failure to repay an outstanding debt he allegedly owed to an ABT member. The bodies of Mitchamore and Brown were discovered in Nacogdoches County on Aug. 10, 2007.
Flanagan admitted that she knew and approved of the plan to murder Mitchamore, and provided ABT members with the shotgun used to murder Mitchamore and Brown. She also admitted that she loaned her vehicle to them for use during the commission of the murders.
This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the National Gang Targeting, Enforcement and Coordination Center (Gang-TECC); the Nacogdoches Sheriff's Department; the Nacogdoches Police Department; the Angelina County, Texas, Sheriff's Department; the Texas Department of Public Safety; and the Texas Rangers. The case is being prosecuted by the Office of the U.S. Attorney in Lufkin, Texas, and the Criminal Division’s Gang Unit, in full cooperation with the Nacogdoches County District Attorney’s Office.
Justice Department Settles Allegations of <br /> Immigration-Related Employment Discrimination Against <br /> Wendy’s Franchise Owners in MaineRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a settlement agreement with Restwend LLC, the corporate owner of several Wendy’s restaurants in Maine, to resolve allegations that at least one of its restaurants engaged in employment discrimination by refusing to hire individuals believed to be non-U.S. citizens.
According to the department’s findings, since at least 2009 this Restwend-owned Wendy’s instituted a policy of refusing to hire work authorized individuals whom it believed to be non-U.S. citizens. The Immigration and Nationality Act (INA) generally prohibits discrimination in hiring against authorized workers on the basis of citizenship status.
Under the terms of the settlement, Restwend has agreed to pay $14,500 in back pay, plus interest, to a victim of its citizens-only policy, plus $3,200 in civil penalties. Restwend will also train its human resources personnel about employers’ nondiscrimination responsibilities under the INA, and the company agreed to monitoring provisions.
“No one who is authorized to work in the United States should face discrimination because of their perceived immigration status,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are pleased to have reached the settlement with Restwend and look forward to continuing to work with all employers, both public and private, to educate them about their responsibilities under federal law.”
The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.
For more information about protections against employment discrimination under the immigration laws, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired), 1-800-255-8155 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email [email protected]; or visit OSC’s website at www.justice.gov/crt/osc.
Justice Department Reaches ADA Settlement to Make Law School Application Processes Accessible to Blind ApplicantsRead the Press Release
WASHINGTON – The Justice Department announced today its participation in two related settlement agreements involving the accessibility of the Law School Admission Council’s (LSAC) online application service, which is used by law schools nationwide for their application processes. As a result of these agreements, LSAC’s online application service, and the online application process of the nation's law schools, will be accessible to individuals who are blind.
Under the first agreement, which resolves a lawsuit filed against LSAC by the National Federation of the Blind, LSAC will take critical steps to ensure that its online application website, www.lsac.org , will be fully accessible to individuals who use screen readers by the beginning of the fall 2012 application cycle. Application through the LSAC website offers several convenient features to applicants—including LSAC’s “Common Information Form;” bundling of applications into the required LSAC Credential Assembly Service, which eliminates the need to obtain multiple transcripts, letters of recommendations and evaluations for applicants to more than one school; and online payment of the application fee. The department is a signatory to this agreement, which signifies that the steps the LSAC will undertake for its website will satisfy, in part, the law schools’ obligations under the Americans with Disabilities Act (ADA) to make their application processes equally accessible to individuals who are blind.
The second agreement is between the department and Atlanta’s John Marshall Law School. It requires the law school to modify its own website to notify potential applicants of a process they may use to apply to the law school until the LSAC electronic application process has been made fully accessible. Specifically, the notice will state that LSAC currently provides telephone assistance free of charge to individuals completing applications. The law school will also post current policies of non-discrimination on the basis of disability on its application website. Finally, the law school will cease using the LSAC electronic application process for the fall 2012 application cycle if the LSAC website is not fully accessible under the terms reached in the agreement involving the National Federation of the Blind (NFB), LSAC and the department. The agreement is the result of an investigation following a complaint from the NFB about the school’s use of the LSAC website. The department is working with other law schools to reach similar agreements.
“Increased use of the Internet or other electronic technologies may enhance convenience for law schools and applicants alike, but the rights of individuals with disabilities may not be violated in the process,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “In this case, blind students were denied an equal opportunity to apply to law school. The ADA requires equal access to educational opportunities, and the Civil Rights Division is committed to vigorous enforcement of the ADA.”
In passing the ADA and the recent ADA Amendments Act, Congress found that individuals with disabilities were uniquely disadvantaged in critical areas, including education. The ADA prohibits discrimination on the basis of disability by public accommodations and covers discrimination by private educational facilities, including law schools and other post-graduate institutions. Those interested in seeking information about ADA rights and responsibilities may access the department’s ADA website at www.ada.gov or call the Justice Department’s toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD). For the full agreements, visit www.ada.gov/LSAC.htm and www.ada.gov/john-marshall-lawsch.htm .
Justice Department Announces $6.9 Million in Grants to Engage Men in Preventing Crimes Against WomenRead the Press Release
WASHINGTON – The U.S. Department of Justice Office on Violence Against Women (OVW) announced $6.9 million in awards to 23 projects in the Engaging Men in Preventing Sexual Assault, Domestic Violence, Dating Violence and Stalking Grant Program (Engaging Men Grant Program). This is the first time in the history of OVW that a grant program directly encourages men to be part of successful crime prevention efforts addressing sexual assault, domestic violence, dating violence and stalking, and to become partners in creating respectful and positive relationships.
The Engaging Men Grant Program creates a unique opportunity for OVW to support public education campaigns and community organizations to encourage men and boys to work as allies with women and girls for preventing violence.
“All men play a critical role in preventing crimes against women and are important partners in our effort to address the full spectrum of these crimes,” said Susan B. Carbon, Director of the Office on Violence Against Women. “These grants and the work of the grantees will provide the framework for extending and developing these partnerships across the country.”
The funded projects include non-profit non-governmental victim services agencies; non-profit community based agencies; state domestic violence or sexual assault coalitions; an institution of higher education; a unit of local government; a tribal coalition; and a tribal non-profit victim services agency. These awards are part of OVW’s ongoing commitment to support gender and culturally specific education on healthy relationships and strengthen existing community outreach efforts to men and boys.
The following 23 organizations received $300,000 :
Alaska Network on Domestic Violence & Sexual Assault (Juneau, Alaska)
Korean American Family Service Center Inc. (Los Angeles)
Peace Over Violence (Los Angeles)
Howard University (Washington, D.C.)
Tapestri Inc. (Tucker, Ga.)
Idaho Coalition Against Sexual & Domestic Violence ( Boise, Idaho)
Maine Boys to Men (Portland, Maine)
Maine Coalition to End Domestic Violence ( Augusta, Maine)
Boston Public Health Commission (Boston)
Michigan Coalition Against Domestic Violence and Sexual Assault ( Okemos, Mich.)
Family & Children’s Service ( Minneapolis)
Minnesota Indian Women’s Sexual Assault Coalition (St. Paul, Minn.)
North Carolina Coalition Against Sexual Assault ( Raleigh, N.C.)
North Dakota Council on Abused Women’s Services ( Bismarck, N.D.)
Enlace Comunitario ( Albuquerque, N.M.)
Family Services Inc. ( Poughkeepsie, N.Y.)
Retreat Inc. ( East Hampton, N.Y.)
Vera House Inc., ( Syracuse, N.Y.)
Klamath Crisis Center ( Klamath Falls, Ore.)
White Buffalo Calf Woman Society Inc. ( Mission, S.D.)
Migrant Clinicians Network Inc. ( Austin, Texas)
Migrant Health Promotion Inc. (Weslaco, Texas)
Refugee Women’s Alliance (Seattle)
The Office on Violence Against Women (OVW), a component of the U.S. Department of Justice, provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act (VAWA) 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. In addition to overseeing 21 federal grant programs, OVW often undertakes initiatives in response to special needs identified by communities facing acute challenges.
More information is available at www.ovw.usdoj.gov .
Former Humanitarian Workers Each Sentenced to 142 Months <br /> in Prison for Defrauding Usaid of $1.9 MillionRead the Press Release
WASHINGTON – Two former humanitarian aid workers were each sentenced today to 142 months in prison for defrauding the U.S. Agency for International Development (USAID) of approximately $1.9 million that was intended to assist impoverished people and towns in Liberia.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Ronald C. Machen Jr. of the District of Columbia and Donald A. Gambatesa, Inspector General of USAID.
Joe O. Bondo, 39, and Morris B. Fahnbulleh, 41, both of Monrovia, Liberia, were each convicted by a jury in November 2010 of one count of conspiracy to defraud the United States, four counts of mail fraud, two counts of wire fraud and four false claims counts. Bondo was also convicted of two counts of witness tampering. Fahnbulleh was also convicted of one count of conspiracy to commit mail and wire fraud.
U.S. District Court Judge Reggie B. Walton of the District of Columbia also ordered Bondo and Fahnbulleh to pay jointly and severally $1.2 million in restitution. Bondo and Fahnbulleh were also sentenced to three years of supervised release following their prison term.
“Today’s sentences reflect the reprehensible nature of the defendants’ conduct,” said Assistant Attorney General Breuer. “Bondo and Fahnbulleh defrauded USAID of nearly $2 million intended to provide food for the needy and build infrastructure in war-torn Liberia. Serious crimes deserve serious punishment. These defendants have learned first hand that we are committed to pursuing aggressively those who steal from our government programs.”
“Through their tax dollars, the American people battle hunger and disease and poverty throughout the world,” said U.S. Attorney Machen. “Today’s sentence makes clear that we will punish opportunists who try to undermine the good work of USAID by diverting development assistance for personal profit.”’
“Our office will continue to pursue anyone who defrauds USAID,” said Inspector General Gambatesa. “As in this instance, we will use the necessary resources to investigate allegations of wrongdoing worldwide in order to serve the U.S. taxpayer.”
According to court documents and information presented at trial, after Liberia’s 14-year civil war, USAID awarded a grant in 2005, through Catholic Relief Services, to World Vision, an international non-profit Christian humanitarian foundation. The grant was a two-year humanitarian project in Liberia for community reconstruction projects.
Under the agreement, Bondo and Fahnbulleh were assigned to supervise World Vision employees as they assisted Liberian communities with infrastructure projects, including road, latrine and water well construction. In return for their labor, USAID, through World Vision, was supposed to then distribute food to the residents of these communities.
However, in 2008, an internal audit conducted by World Vision revealed that up to 91 percent of the food never reached its intended beneficiaries. According to the trial evidence, the defendants sold the food and pocketed the proceeds and then instructed World Vision employees to falsify the documents used to track food distributions.
Bondo and Fahnbulleh also directed USAID-salaried employees to perform construction work on their personal compounds, instead of building clinics, schools, roads and other vital infrastructure projects which the federal government had funded. They further concealed these activities from World Vision headquarters, Catholic Relief Services and USAID by intimidating the World Vision employees with threats of job loss and by paying some subordinates “hush money” to cement their silence and cooperation.
As a result of the defendants’ conduct, thousands of families never got the food or reconstruction assistance they were intended to receive. More than 250 towns in Liberia submitted statements to the court that detailed the consequences of the fraud. In addition, World Vision has repaid about $1.9 million to USAID through Catholic Relief Services. World Vision also expended extensive resources in investigating the fraud and working with authorities.
The case was prosecuted by Assistant U.S. Attorney John Borchert of the District of Columbia and Trial Attorney Liam Brennan of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs assisted in the case. The investigation was conducted by USAID Office of the Inspector General.
Former Air France Cargo Executives Indicted in Conspiracy to Fix Rates and Surcharges on Air Cargo ShipmentsRead the Press Release
WASHINGTON — A Chicago grand jury returned an indictment today against two former executives of Paris-based Société Air France (Air France), for participating in a conspiracy to fix and coordinate surcharges on air cargo shipments to and from the United States and elsewhere and air cargo service rates to certain locations in the United States and elsewhere, the Department of Justice announced today. The indictment further alleges that the former executives along with co-conspirators also agreed to refuse to pay their customers commissions on surcharges for air cargo shipments to and from the United States and elsewhere.
The indictment, returned today in U.S. District Court in Chicago, charges Marc Boudier, former executive vice president of the cargo division of Air France, and Jean Charles Foucault, former vice president of the cargo division of sales and marketing of Air France, with conspiring with other air cargo carriers and their officials to suppress and restrain competition for international air cargo services. The department said that Boudier and Foucault carried out a conspiracy by fixing and coordinating rates on air cargo shipments to certain U.S. locations and elsewhere and surcharges on air cargo shipments to and from the United States and elsewhere, and refusing to pay their customers commissions on surcharges for air cargo shipments to and from the United States and elsewhere . According to the indictment, Boudier and Foucault participated in the conspiracy from at least as early as August 2004 until at least February 2006.
Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights.
According to the indictment, Boudier, Foucault and co-conspirators carried out the conspiracy by participating in or directing the participation of subordinate employees in meetings, conversations and communications to discuss rates for air cargo shipments to certain U.S. locations and elsewhere and surcharges for air cargo shipments to and from the United States and elsewhere. The department said, in accordance with the agreement and understanding reached by Boudier, Foucault and co-conspirators, they issued announcements of increases on surcharges and rates.
Boudier and Foucault are charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
A total of 21 airlines and 21 executives, including Boudier and Foucault, have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.8 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against the remaining 17 executives, including Boudier and Foucault.
Today’s charge is the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section and Cleveland Field Office, the FBI’s Atlanta and Washington Field Offices, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm or call the FBI’s Atlanta Field Office at 404-679-9000 or Washington Field Office at 202-278-2000.
Federal Court Bars Chicago Woman from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has permanently barred Rita Augustus from preparing federal tax returns for others, the Justice Department announced today. Augustus prepared tax returns in Chicago under the business names Windy City Tax Service and Windy City Insurance Agency Inc. The civil injunction order, to which Augustus consented, was signed by Judge Rebecca Pallmeyer of the U.S. District Court for the Northern District of Illinois.
According to the government complaint , Augustus has included fabricated charitable donations, employee business expenses and other deductions on tax returns that she has prepared since 2006. For tax years 2005 through 2009, Augustus allegedly prepared more than 4,000 federal income tax returns for customers with an unusually high refund rate. According to the complaint, the Internal Revenue Service (IRS) estimates that her return preparation activity for those years could have resulted in as much as $20 million or more in lost tax revenue.
The court order requires Augustus to provide the government with a list identifying all persons for whom she prepared federal tax returns for tax years 2005 through 2009. The court also required her to post a copy of the order at her business address in a place visible to potential customers.
Return preparer fraud is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past 10 years, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website .
Baton Rouge, La., Tax Preparer Sentenced to Prison for Aiding in Preparation of False Tax ReturnsRead the Press Release
WASHINGTON – Cynthia Peters was sentenced to 27 months in prison based on her plea of guilty to one count of willfully aiding and assisting in the preparation and filing of a false income tax return, the Justice Department and Internal Revenue Service (IRS) announced today. The court also ordered Peters to serve a one-year term of supervised release following her prison term and to pay restitution to the IRS in the amount of $76,908. The case arises out of a March 31, 2010, indictment filed in the Middle District of Louisiana.
According to her plea agreement, Peters, who worked at Jasmine and Melissa’s Tax Service in Baton Rouge, prepared fraudulent tax returns for 23 clients that reported falsely inflated telephone excise tax refund (TETR) credits in the total amount of $92,932. The TETR credit was a one-time credit available to taxpayers for the 2006 year. The sentencing court found that the tax loss, including all relevant conduct, was approximately $501,376
John A. DiCicco, Principal Deputy Assistant Attorney General for the Department of Justice Tax Division, commended the IRS Special Agents who investigated this case and Tax Division Trial Attorneys Kevin C. Lombardi and Matthew J. Mueller and Assistant U.S. Attorney Rene Salomon of the Middle District of Louisiana, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/
Monday 25 April 2011
Three Miami-Area Medical Professionals Each Sentenced to Prison for Roles in $23 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two Miami-area medical assistants and a physician assistant were sentenced to prison today for their roles in a $23 million Medicare fraud scheme involving HIV infusion therapy, announced the Departments of Justice and Health and Human Services.
Jose Diaz, a 62-year old physician assistant, Lisandra Aguilera, a 40-year old medical assistant, and Estrella Rodriguez, a 43-year old medical assistant, were sentenced by U.S. District Judge Joan A. Lenard to 54 months, 70 months and 57 months in prison, respectively. The defendants each previously pleaded guilty to one count of conspiracy to commit health care fraud for their roles in an HIV infusion fraud scheme.
According to court documents, Diaz, Aguilera and Rodriguez each worked at Metro Med of Hialeah Corp. (Metro Med). In 2003, Metro Med began operating as an HIV infusion clinic that purportedly provided injection and infusion therapies to HIV positive Medicare beneficiaries. In fact, the injection and infusion therapies were medically unnecessary and not provided. Metro Med paid cash kickback payments to Medicare beneficiaries in exchange for those beneficiaries allowing Metro Med to use their Medicare numbers to bill Medicare.
According to court documents, Diaz worked at Metro Med as a physician assistant and instructed Damaris Oliva, the owner of Metro Med, which medications and in what amounts to bill Medicare. Diaz provided these instructions to Oliva to ensure that Metro Med received the maximum reimbursement from Medicare, even though the injection and infusion drugs Metro Med billed to Medicare were not actually provided to the patients. Aguilera was hired by Oliva and worked at Metro Med as an infusionist. Rodriguez also worked at Metro Med as a medical assistant.
While at Metro Med, Diaz, Aguilera and Rodriguez falsified patient files to indicate that injection and infusion treatments were medically necessary, when, in fact, they were not. According to court documents, Aguilera and Rodriguez signed medical records indicating that injection and infusion treatments were provided to Metro Med patients, when, in fact, they were not. Aguilera and Rodriguez also fabricated medical records to show that Metro Med patients had received specific dosages of medications, when the patients had not actually received the treatments or medications reflected on those documents. Aguilera manipulated patient blood samples to make it appear that unnecessary injection and infusion treatments were medically necessary. Diaz, Aguilera and Rodriguez also were aware that beneficiaries who attended the clinic were being paid kickbacks in exchange for allowing Metro Med to bill Medicare under their Medicare numbers for injection and infusion treatments.
From approximately April 2003 through October 2005, Metro Med submitted approximately $23 million in claims to the Medicare program for injection and infusion treatments for Medicare beneficiaries that were not medically necessary, and not provided. The Medicare program paid approximately $11.7 million in claims.
Diaz, Aguilera and Rodriguez were charged in a July 2010 indictment, along with Oliva and Dr. Rene De Los Rios. All five defendants now have pleaded guilty or been convicted at trial. Oliva was sentenced in December 2010 to 82 months in prison.
Today’s prison sentences 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.
This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Miami.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants and organizations that collectively have billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Last of 10 Las Vegas Defendants Pleads Guilty to Falsifying Emissions Test RecordsRead the Press Release
WASHINGTON – Wajdi Waked, 25, of Las Vegas, pleaded guilty today before Judge Philip M. Pro of the U.S. District Court in Nevada, to one count of violating the Clean Air Act by falsifying emissions test results.
A grand jury in Las Vegas indicted Waked in January of 2010. Waked was one of nine other defendants, all at different testing locations, accused of similarly submitting false tests to the Nevada Department of Motor Vehicles (NDMV). The cases came to the attention of Nevada authorities in 2008 when the NDMV hired a contractor to build a vehicle identification database to find possible emissions testing fraud. NDMV discovered that in 2008 alone, there were over 4,000 false vehicle emissions certificates issued in Las Vegas. The database allows investigators to check the vehicle identification number that the emissions tester enters against the vehicle actually tested. Las Vegas and surrounding Clark County is required by the EPA to have emissions testing because the area is in non-attainment for carbon monoxide and ozone.
All of the other nine defendants pleaded guilty. Two in addition to Waked remain scheduled for sentencing. Judge Pro set Waked’s sentencing for Aug. 1, 2011.
The case was investigated by the U.S. Environmental Protection Agency and the Nevada Division of Motor Vehicles. The case was prosecuted by Assistant U.S. Attorney Roger Yang ofthe District of Nevada and Senior Trial Attorney J. Ronald Sutcliffe of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
Lake Worth, Fla., Owner of Construction Business Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
WASHINGTON - Richard Rosaire Routhier of Lake Worth, Fla., pleaded guilty to a one-count information charging him with conspiring to defraud the Internal Revenue Service (IRS), the Justice Department and the IRS announced today. According to the information, Routhier and others conspired to defraud the United States and unlawfully enrich themselves by paying employees in cash and not withholding and paying over employment taxes to the U.S. Treasury.
According to court documents, Routhier owned and operated Drymension Inc., a custom drywall installation and framing contracting company in Lake Worth. From 2002 through 2008, the defendant caused Drymension checks to be issued to several shell corporations. These entities, while purporting to be legitimate subcontractors, existed only on paper and did not do any work for Drymension. The checks written to shell corporations totaled approximately $9,132,516. The checks were cashed at local check cashing stores that were aware of the scheme and Routhier used the cash to pay Drymension employees. Routhier neither withheld from the cash wages nor paid over to the IRS the employment and income taxes as required by law.
The court scheduled sentencing for June 2, 1011. The defendant faces a maximum of five years in prison and a fine of $250,000.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and John A. DiCicco, Principal Deputy Assistant Attorney General for the Department of Justice, Tax Division, thanked the IRS Special Agents who investigated this case and Tax Division Trial Attorneys Matthew J. Mueller, Jason H. Poole and Assistant Chief Gregory E. Tortella who are prosecuting the case.
Friday 22 April 2011
New York Broker Pleads Guilty in International Stock Fraud SchemeRead the Press Release
WASHINGTON - A New York stock broker has pleaded guilty in federal court in Detroit to conspiracy to commit securities fraud and wire fraud in connection with the Alan Ralsky spamming organization’s stock pump-and-dump scheme, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney Barbara McQuade for the Eastern District of Michigan.
Gregg M. S. Berger, 47, of New York City, pleaded guilty yesterday before U.S. District Judge Marianne O. Battani. A federal grand jury in the Eastern District of Michigan indicted Berger in December 2010, charging him in a wide-ranging fraud scheme to illegally pump-and-dump thinly traded Chinese and Israeli stocks.
“Like so many other financial fraudsters we have prosecuted, Gregg Berger knew better,” said Assistant Attorney General Breuer. “He traded on his position as a stockbroker to defraud hundreds of investors out of their hard-earned savings. Now that he has pleaded guilty for his crimes, he faces serious and deserved punishment.”
Under the terms of the plea agreement, Berger faces up to 51 months in prison, a possible fine of up to $75,000, as well as restitution and a five-year term of supervised release. Sentencing is scheduled for Aug. 23, 2011.
According to the indictment, Berger conspired with Ralsky, Francis Tribble, How Wai John Hui, Scott Bradley and others to carry out a sophisticated stock fraud scheme from January 2005 through December 2007. Ralsky, Tribble, Hui and Bradley have all been convicted and sentenced for their roles in the case.
The charges arose after a multi-year investigation, led by agents from the FBI, with assistance from the U.S. Postal Inspection Service and the Internal Revenue Service, revealed a sophisticated and extensive operation that largely focused on running a pump-and-dump scheme, whereby the defendants sent spam touting thinly traded Chinese penny stocks, drove up their stock price, and reaped profits by selling the stock at artificially inflated prices.
In pleading guilty, Berger acknowledged that he established brokerage accounts at the direction of Hui and Tribble, and communicated with Ralsky and Bradley during the conspiracy. Berger’s roles in the scheme included trading the stocks that were illegally promoted by spam email campaigns; arranging for shares of the stocks to be transferred into the brokerage accounts he established; executing stock trades at the direction of Tribble rather than the direction of the named account holders; causing funds that resulted from the stock trades to be transferred to bank accounts beneficially controlled by Hui and other co-conspirators; and providing confidential account information, including trade amounts, prices, cash balances and wire transfer details to Tribble, Bradley and others involved in the scheme who were not entitled to such information, without authorization from the actual named account holders.
The stocks pumped-and-dumped by conspirators included China World Trade Corporation (CWTD), Pingchuan Pharmaceutical Inc. (PGCN), China Digital Media Corporation (CDGT), World Wide Biotech and Pharmaceutical Co. (WWBP), China Mobility Solutions (CHMS) and m-Wise (MWIS).
The indictment alleged that during the course of the scheme Berger caused the sale of approximately 30 million shares of stock, generating approximately $30 million for the co-conspirators and more than $600,000 in commissions for himself. The plea agreement stipulates that Berger may litigate at sentencing the amount he actually earned as a result of his participation in the conspiracy.
The case is being prosecuted by Assistant U.S. Attorney Terrence Berg for the Eastern District of Michigan and Senior Counsel Thomas Dukes of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.
Federal Charges Filed Against Las Vegas Man for Defrauding Distressed HomeownersRead the Press Release
WASHINGTON – A Las Vegas man was arrested yesterday on charges that he defrauded distressed homeowners in Las Vegas who were attempting to refinance or adjust their home mortgages, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Daniel G. Bogden for the District of Nevada.
Alex P. Soria, 64, is charged in an indictment in U.S. District Court in Nevada with six counts of wire fraud, three counts of mail fraud, one count of concealment of information from the Social Security Administration and one count of theft of government funds. Soria was arrested yesterday in Las Vegas, and made an initial appearance before a federal magistrate judge.
According to the indictment, Soria worked in the mortgage lending industry since approximately 1970. From approximately May 2008 to January 2010, Soria allegedly devised a scheme to defraud distressed homeowners who were trying to refinance or adjust their home mortgages. The indictment alleges that Soria solicited the homeowners through advertisements and word of mouth to hire him as a mortgage agent to assist them with their mortgages. Soria allegedly falsely told the homeowners he was a loan officer with Amwest Capital and that he could help them obtain relief with their mortgages through two federal programs, Hope for Homeowners and the Troubled Asset Relief Program (TARP). Soria also falsely told the homeowners that he had helped other homeowners obtain financing. According to the indictment, Soria’s Nevada mortgage agent license had expired in April 2008 and he lacked licensing or status to help the homeowners obtain financing through the federal programs.
The indictment also alleges that in order to make the homeowners think they were going to receive assistance with their home mortgages, Soria provided false information to the homeowners, such as letters and emails, stating that they had prequalified for refinancing and were on track to receive help or that the government was to blame for loans not closing. In fact, Soria did not obtain government assistance for any of the victims identified in the indictment, even though he fraudulently collected approximately $17,000 from 15 homeowners through the alleged scheme.
Soria is also charged with unlawfully collecting Social Security disability benefits for approximately 20 years, from January 1990 to December 2010, when he was actually working in and profiting from the mortgage industry.
If convicted, Soria faces up to 20 years in prison for each fraud count, up to five years in prison on the concealment count, up to 10 years in prison on the theft count, and a fine of up to $250,000 on each count.
The case was investigated by the Office of the Inspector General for U.S. Housing and Urban Development and the Office of the Inspector General for the Social Security Administration. It is being prosecuted by Brian R. Young, Trial Attorney with the Fraud Section in the Justice Department’s Criminal Division.
An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
This law enforcement action is part efforts underway by the interagency 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 .
Dyncorp International LLC and the Sandi Group Pay U.S. More Than $8.7 Million to Resolve False Claims AllegationsRead the Press Release
WASHINGTON - The United States has settled a whistleblower lawsuit against DynCorp International LLC and The Sandi Group (TSG), the Justice Department announced today. The lawsuit, filed in the U.S. District Court for the District of Columbia, alleges that DynCorp and its subcontractor TSG submitted or caused to be submitted false claims for payment under DynCorp’s contract with the Department of State to provide civilian police training in Iraq.
DynCorp has agreed to pay the United States $7.7 million to resolve allegations that it submitted inflated claims for the construction of container camps at various locations in Iraq. TSG agreed to pay $1.01 million to resolve allegations that it sought reimbursement for danger pay that it falsely claimed to have paid its U.S. expatriate employees working in Iraq.
The lawsuit was initially filed by two former TSG employees under the qui tam or whistleblower provisions of the federal False Claims Act, which permit private individuals, called “relators” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. As a result of the settlement, the two, Drew Halldorson and Brian Evancho, will receive up to $481,710 as their share of the government’s recovery.
“The hard work of stabilizing Iraq is challenging enough without contractors and subcontractors inflating the cost of rebuilding by making false claims at taxpayers’ expense,” said Tony West, Assistant Attorney General for the Civil Division. “This case demonstrates that the Department of Justice will pursue these cases that undermine the integrity of our public contracting process.”
"This settlement demonstrates our commitment to aggressively investigating wartime profiteering that corrupts the integrity of our government contracting process,” said U.S. Attorney Ronald C. Machen Jr. “This office worked hand-in-hand with the relators and federal investigators to uncover these fraudulent claims and recover inflated costs that were illegitimately billed to the American taxpayers.”
“We’re pleased with the successful resolution of this case, and I commend the dedication of our Office of Inspector General (OIG) criminal investigators,” said Harold Geisel, Deputy Inspector General for the Department of State. “Our efforts should reinforce to American taxpayers that oversight of their tax dollars is taken seriously.”
“False claims filed by contractors have been a problem in Iraq,” said Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction (SIGIR). “While SIGIR continues to pursue a number of allegations in this regard, I am pleased to see that today one of those cases has come to just resolution. I commend the Department of Justice prosecutors, the Department of State investigators and my SIGIR team for working together to achieve this important victory on behalf of the U.S. taxpayers.”
Assistant Attorney General West and U.S. Attorney Machen thanked the joint investigation team, which includes special agents with the Department of State-OIG and the SIGIR, for their efforts in the investigation of this matter.
Alabama Man Pleads Guilty to Role in Tax Fraud ConspiracyRead the Press Release
WASHINGTON – Eric Bernard Caldwell, a resident of Montgomery County, Ala., pleaded guilty to conspiring to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today. The guilty plea took place before U.S. Magistrate Judge Charles S. Coody in the U.S. District Court in Montgomery, Ala.
According to the indictment and other court documents, Caldwell was part of a conspiracy to file false federal tax returns using stolen identities. Caldwell would provide identity information to co-conspirator Ora Mae Adamson, who would file the returns, in exchange for a portion of the illicit refunds generated by the false tax returns. In all, the conspiracy defrauded the United States of $621,738.
Adamson pleaded guilty to conspiracy and identity theft charges and was sentenced to 46 months in prison on March 10, 2011. Another co-conspirator, Jeffrey Leon Ceaser, also pleaded guilty to conspiracy and identity theft charges and was sentenced to 36 months in prison on March 2, 2011.
The case was investigated by Special Agents of the IRS – Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division are prosecuting the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Alabama Businessman Pleads Guilty in Wide-Ranging Conspiracy to Influence and Corrupt Votes Related to Electronic Bingo LegislationRead the Press Release
WASHINGTON – An Alabama businessman pleaded guilty today before U.S. Magistrate Judge Wallace Capel Jr. to his role in conspiring to bribe legislators in exchange for their favorable votes on pro-gambling legislation, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Special Agent in Charge Lewis M. Chapman of the FBI’s Mobile Field Office.
Ronald E. Gilley, 46, of Enterprise, Ala., pleaded guilty in U.S. District Court for the Middle District of Alabama to one count of conspiracy to commit federal program bribery, six counts of federal program bribery and four counts of money laundering. Gilley and 10 co-defendants were charged in a 39-count indictment returned by a federal grand jury on Oct. 1, 2010, with a variety of criminal offenses for their alleged roles in the bribery scheme. Jarrod Massey, 39, of Montgomery, Ala., a lobbyist for Gilley, pleaded guilty on Dec. 20, 2010, for his role in the conspiracy. His sentencing is scheduled for Nov. 15, 2011. The remaining nine defendants include two current Alabama state legislators, two former Alabama state legislators, two lobbyists, one business owner, an employee of Gilley and an employee of the Alabama legislature.
“Ronald Gilley thought votes could be bought and sold in Alabama,” said Assistant Attorney General Breuer. “He participated in an audacious scheme to bribe state legislators into supporting a law that would fatten his wallet. But he, like his co-conspirators, was stopped in his tracks. Now, Mr. Gilley must face the consequences of his corruption.”
“Mr. Gilley’s plea demonstrates the FBI’s commitment to investigate violations of the public’s trust,” said FBI Special Agent in Charge Chapman. “His plea should further serve as a way to repair the public’s trust in local officials and demonstrates how people can and will be held accountable for their actions.” Chapman also stated, “The public is encouraged to continue to disclose information regarding corrupt activities by persons in positions of trust to the FBI. Investigations involving violations of the public’s trust represents one of the highest priorities of the FBI. ”
According to information contained in court documents and presented during the plea hearing, Gilley owned a controlling interest in Country Crossing, an entertainment and gambling development in Houston County, Ala., which also sought to offer electronic bingo gambling machines to the public. Milton E. McGregor owned a controlling interest in Macon County Greyhound Park Inc., also known as Victoryland, in Macon County, Ala., and Jefferson County Racing Association in Jefferson County, Ala. He also had an ownership interest in other entertainment and gambling facilities in Alabama, including Country Crossing, which offered or sought to offer electronic bingo gambling machines to the public.
According to court documents, during the 2009 and 2010 Alabama state legislative sessions, Gilley and McGregor, along with others, allegedly promoted the passage of pro-gambling legislation that would have been favorable to the business interests of individuals operating electronic bingo facilities in Alabama, including themselves.
Gilley admitted, among other things, his involvement in offering things of value worth millions of dollars to members of the Alabama legislature, in exchange for legislators’ votes. Gilley also admitted directing lobbyists who worked for him, including Massey and Jennifer D. Pouncy, to offer legislators bribes for their votes. Pouncy, 34, of Montgomery, Ala., pleaded guilty on Sept. 28, 2010, for her role in the bribery conspiracy, and is scheduled to be sentenced on Aug. 11, 2011.
According to court documents, Gilley and others attempted to conceal the true nature, source and control of the payments made to members of the Alabama legislature in return for their favorable votes by, among other ways, engaging in financial transactions and disguising illicit payments through political action committees and using conduit contributors.
Gilley faces a maximum penalty of five years in prison and a $250,000 fine on the conspiracy charge. Each count of federal program bribery carries a maximum penalty of 10 years in prison and a $250,000 fine. Each count of money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine. In connection with the money laundering charges, Gilley agreed to forfeit $200,000. A sentencing date has not been set.
Trial for the remaining nine defendants is scheduled to begin on June 6, 2011, before U.S. District Judge Myron H. Thompson. The defendants are presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Deputy Chief Justin V. Shur, Trial Attorneys Edward T. Kang, Eric G. Olshan, Barak Cohen and E. Rae Woods of the Criminal Division’s Public Integrity Section; Senior Litigation Counsel Brenda K. Morris of the Criminal Division; and Assistant U.S. Attorneys Louis V. Franklin and Steve P. Feaga of the Middle District of Alabama. The case is being supervised by the Criminal Division’s Public Integrity Section and is being investigated by the FBI.
Thursday 21 April 2011
Three Individuals and Two Companies Indicted for Conspiring to Export Millions of Dollars Worth of Computer-Related Equipment to IranRead the Press Release
WASHINGTON – One individual and his company in New York and two others and their company in California were indicted today in the District of Columbia on charges of illegally exporting millions of dollars worth of computer-related equipment from the United States to Iran via the United Arab Emirates (UAE).
The two indictments were announced by Todd Hinnen, Acting Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); and David W. Mills, Assistant Secretary of Export Enforcement, U.S. Department of Commerce.
Jeng “Jay” Shih, 53, a U.S. citizen, and his Queens, N.Y. company, Sunrise Technologies and Trading Company, were indicted in the District of Columbia on 27 counts relating to the illegal export of computer-related equipment to Iran without first having obtained the required license from the Department of Treasury. The indictment charges Shih and his company with one count of conspiracy; 13 counts of violating the International Emergency Economic Powers Act (IEEPA); 13 counts of making or causing to be made false statements to the United States; and one allegation for criminal forfeiture of property and proceeds derived from these offenses. Shih was arrested on a criminal complaint in New York on April 6, 2011, and had his initial appearance in court in New York on April 7, 2011. If convicted, he faces a maximum sentence of 20 years in prison and a $1 million fine for each of the IEEPA counts and five years for each false statement count.
Massoud Habibion, 48, aka “Matt Habibion” and “Matt Habi,” and Mohsen Motamedian, 43, aka “Max Motamedian” and “Max Ehsan,” both U.S. citizens, and their Costa Mesa, Calif., company, Online Micro LLC, were indicted in the District of Columbia on 32 counts relating to the illegal export of computer-related equipment to Iran without the required license from the Department of Treasury. Habibion was charged with one count of conspiracy, 14 counts of violating IEEPA, 14 counts of making or causing false statements to the United States and four counts of obstruction of justice. Motamedian was charged with one count of conspiracy, 14 counts of violating IEEPA, 14 counts of making or causing false statements to the United States and one count of obstruction of justice. Habibion and Motamedian were arrested on a criminal complaint in California on April 7, 2011, and had their initial appearance in court in the Central District of California on April 7, 2011. If convicted, both defendants face a maximum sentence of 20 years in prison and $1 million fine for each of the IEEPA counts, and five years for each false statement and 20 years for each obstruction of justice count.
According to the affidavit filed in support of the Shih criminal complaint, in 2006, Commerce Department agents conducted an outreach visit to Shih’s business in New York where they met Shih and informed him about U.S. laws governing the export of goods from the United States to other countries, particularly embargoed countries like Iran. In April 2010, ICE-Homeland Security Investigations (HSI) agents seized hundreds of laptop computers that originated from Sunrise and were destined for Dubai, UAE. Communications related to these shipments indicated that the purchasers were located in Iran, according to the affidavit.
The affidavit alleges that agents subsequently identified a company in Dubai that was purchasing millions of dollars of computers from U.S. companies for export to Iran, through Dubai. ICE-HSI agents arrested one of the company’s agents, who pleaded guilty in December 2010 and began cooperating with the government. In interviews with agents, this individual indicated that he and his company in Dubai had purchased millions worth of laptops from Shih in recent years for shipment to Iran, averaging $700,000 worth of computers each month. The affidavit alleges that agents also obtained documents indicating that more than 1,000 computers had been shipped by Shih’s company to Dubai and later to Iran, between April 9, 2010, and May 28, 2010, alone.
In February 2011, the cooperating individual met with Shih in New York. In recorded conversations, Shih allegedly told the individual he was aware of the U.S. embargo against Iran and U.S. export control laws. According to the affidavit, Shih also told the cooperating individual how to avoid detection when shipping goods to Iran by using fake invoices and indicated that he treated the seizure of some of his shipments as a “loss” when reporting business income and loses on his U.S. taxes.
The affidavit filed in support of the complaint against Habibion and Motamedian alleges that a company in Dubai, referenced above, purchased millions of dollars worth of laptop computers from Online Micro and that these computers were subsequently shipped to Iran. According to the affidavit, the agent for the Dubai company, who was arrested, pleaded guilty and began cooperating with the government, told federal agents that Habibion and Motamedian sold roughly $300,000 worth of computers to the Dubai company each month and that Habibion and Motamedian fully understood that the computers were destined for Iran.
In December 2010, the cooperating individual met with Habibion and Motamedian, wherein these defendants allegedly instructed the cooperating individual to make fake invoices to conceal that Iran was the destination of the shipments and to indicate that the end-users were in Dubai. In addition, the affidavit alleges that in a Jan. 5, 2011, meeting, Habibion told the cooperating individual to lie to federal agents about conducting business in Iran, stating, “If they ask you, for instance, ‘Do you do business in Tehran?’ ‘No, I don't have any business in Tehran. I go there to visit my family, but I have no business there.’ They will ask such questions, it is part of their routine.”
This investigation is being conducted by the ICE-HSI field offices in San Diego and New York and the Department of Commerce Office of Export Enforcement field offices in New York and Los Angeles, with assistance from ICE-HSI offices in Chicago, Newark, N.J., Los Angeles and Orange County, Calif. The Department of Homeland Security's U.S. Customs and Border Protection also assisted in the investigation.
The prosecution is being handled by Assistant U.S. Attorneys Anthony Asuncion and T. Patrick Martin, from the U.S. Attorney's Office for the District of Columbia, and Trial Attorney Jonathan C. Poling from the Counterespionage Section of the Justice Department’s National Security Division. The U.S. Attorney’s Offices for the Central District of California and Eastern District of New York also provided assistance.
The public is reminded that an indictment and criminal complaint contain mere allegations and that defendants are presumed innocent unless and until proven guilty.
Ohio-Based Cardinal Health Inc. to Pay U.S. $8 Million to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – Cardinal Health Inc. has agreed to pay the United States $8 million to resolve claims that it violated the False Claims Act by making payments to induce referral orders for its prescription drugs in violation of the Anti-Kickback Statute, the Justice Department announced today.
Today’s settlement with the Dublin, Ohio-based pharmaceutical distributor resolves a lawsuit filed by former pharmacy owner R. Daniel Saleaumua and pharmacy consultant Kevin Rinne under the qui tam, or whistleblower provisions, of the False Claims Act. Mr. Saleaumua alleged that Cardinal paid him $440,000 in exchange for an agreement that he purchase from Cardinal prescription drugs for his pharmacies. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. Together, Saleaumua and Rinne will receive $760,000 as their share of the government’s recovery.
“Kickback schemes subvert the health care marketplace and undermine the integrity of the choices made by consumers and providers of health care,” said Assistant Attorney General for the Civil Division Tony West. “We will continue to hold accountable those who we allege are misusing our public health care programs at the expense of taxpayers.”
“American taxpayers are the victims of illegal kickback schemes that result in Medicare and Medicaid paying millions of dollars more than they should for prescription drugs,” said Beth Phillips, U.S. Attorney for the Western District of Missouri. “Today’s $8 million settlement underscores our commitment to combating health care fraud and protecting taxpayers.”
“Financial kickbacks -- as the government alleges were paid by Cardinal Health -- weaken Medicare and Medicaid by steering taxpayer dollars into provider pockets, rather than into sound patient care,” said Les W. Hollie, Special Agent in Charge of the Kansas City Regional Office, U.S. Department of Health & Human Services, Office of Inspector General (OIG). “Working in close coordination with our law enforcement partners -- such as the U.S. Attorney for the Western District of Missouri -- OIG will carefully scrutinize financial arrangements and bring offenders to justice.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.5 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 has exceeded $7.1 billion.
Natural Resource Trustees for the Deepwater Horizon Oil Spill Announce $1 Billion Agreement to Fund Early Gulf Coast Restoration ProjectsRead the Press Release
WASHINGTON – Under an unprecedented agreement announced today by the Natural Resource Trustees for the Deepwater Horizon oil spill, BP has agreed to provide $1 billion toward early restoration projects in the Gulf of Mexico to address injuries to natural re sources caused by the spill. The Trustees involved are Alabama; Florida; Louisiana; Mississippi; Texas; the Department of the Interior (DOI); and the National Oceanic and Atmospheric Administration (NOAA). The Department of Justice provided assistance in reaching the agreement.
This early restoration agreement, the largest of its kind ever reached, represents a first step toward fulfilling BP’s obligation to fund the complete restoration of injured public resources, including the loss of use of those resources by the people living, working and visiting the area. The Trustees will use the money to fund projects such as the rebuilding of coastal marshes, replenishment of damaged beaches, conservation of sensitive areas for ocean habitat for injured wildlife, and restoration of barrier islands and wetlands that provide natural protection from storms.
The agreement in no way affects the ultimate liability of BP or any other entity for natural resource damages or other liabilities, but provides an opportunity to help restoration get started sooner. The selection of early restoration projects will follow a public process, and will be overseen by the Trustees.
The full natural resource damage assessment process will continue until the Trustees have determined the full extent of damages caused by the Deepwater Horizon oil spill. At the end of the damage assessment process, the Trustees will take into account any benefits that were realized from these early restoration projects. In addition to funding early restoration projects, BP will continue to fund the damage assessment and, together with the other responsible parties, will ultimately be obligated to compensate the public for the entire injury. BP is providing the early restoration funds voluntarily, and is not required to do so at this stage of the damage assessment process. The agreement will speed needed resources to the Gulf Coast in advance of the completion of the assessment process.
To read the agreement, click here.
“This milestone agreement will allow us to jump-start restoration projects that will bring Gulf Coast marshes, wetlands, and wildlife habitat back to health after the damage they suffered as a result of the Deepwater Horizon spill,” said Secretary of the Interior Ken Salazar. “This agreement accelerates our work on Gulf Coast restoration and in no way limits the ability of all the Natural Resource Trustees from seeking full damages from those who are responsible as the NRDA process moves forward.”
“One year after the largest oil spill in our history, we take a major step forward in the recovery of the Gulf of Mexico, for the environment and the people who depend on it for their livelihood and enjoyment. Today's agreement is a down payment on our promise to protect and restore the Gulf,” s aid Jane Lubchenco, Ph.D., Under Secretary of Commerce for Oceans and Atmosphere and NOAA administrator.
“This agreement is a great first step toward restoring our natural resources destroyed by the BP oil spill,” said Louisiana Governor Bobby Jindal. “We are eager to continue working with public, state and federal co-trustees and BP to quickly convert this downpayment into projects to restore our damaged coast and replace our lost wildlife. We encourage BP to continue to address the damages from this spill through early restoration efforts.”
“Alabama’s natural resources are environmentally diverse and an economic engine for our state and nation. Ecosystem restoration is vital to the economic vitality of the Alabama Gulf Coast,” said Alabama Governor Robert Bentley. “Obtaining funding for these restoration projects is a major step forward in addressing the oil spill’s damage to our precious natural resources. I have the utmost confidence that the Alabama trustees will consider and identify projects and use these funds toward restoring our natural resources.”
“Since the day of the oil spill, our goals have been to make Mississippi whole and to assure that our coastal areas completely recover. Today’s unprecedented agreement is an important first step but it is only the first step. Mississippi will continue this work and will count on our many interested citizens to contribute their ideas and input as we all work to define the scope of these early projects and develop other restoration projects. Our goals have not changed. We will remain actively engaged in these and other projects until the Gulf is restored and our state is made whole,” said Trudy D. Fisher, Mississippi Trustee, Executive Director, Mississippi Department of Environmental Quality.
“I’m pleased that after a year of uncertainty and concerns about environmental damages which occurred as a result of the Deepwater Horizon explosion, Florida will be able to use this early restoration money to initiate greatly needed environmental restoration projects,” said Florida Department of Environmental Protection Secretary Herschel Vinyard. “Because we have worked diligently to assess the environmental damage resulting from the spill, we are well positioned to be able to quickly begin performing important restoration projects and use Florida's share of the early restoration funds to assist our coastal communities with their continued recovery from the spill.”
“While the Texas coast was not as visibly impacted by this spill, our wetlands, bays, beaches and coastal waters were affected, and it makes sense to invest in places that can help jumpstart and maximize recovery of the entire Gulf,” said Carter Smith, Texas Parks and Wildlife Department executive director. “There will be a public process in Texas and throughout the Gulf to consider and identify projects that make the best use of these funds for our coastal habitats and the fish, wildlife and people who depend upon them.”
The $1 billion in early restoration projects will be selected and implemented as follows:
Each state – Florida, Alabama, Mississippi, Louisiana and Texas - will select and implement $100 million in projects;
The Federal Resource Trustees, NOAA and DOI, will each select and implement $100 million in projects;
The remaining $300 million will be used for projects selected by NOAA and DOI from proposals submitted by the State Trustees.
All projects must meet the other requirements of the Framework Agreement and be approved by the Trustee Council comprised of all the natural resource trustees.
Hacker Pleads Guilty to Identity Theft and Credit Card Fraud Resulting in Losses of More Than $36 MillionRead the Press Release
WASHINGTON – Rogelio Hackett Jr., 26, of Lithonia, Ga., pleaded guilty today before U.S. District Judge Anthony J. Trenga in Alexandria, Va., to trafficking in counterfeit credit cards and aggravated identity theft, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
According to court documents, U.S. Secret Service special agents executing a search warrant in 2009 at Hackett’s home found more than 675,000 stolen credit card numbers and related information in his computers and email accounts. Hackett admitted in a court filing that since at least 2002, he has been trafficking in credit card information he obtained either by hacking into business computer networks and downloading credit card databases, or purchasing the information from others using the Internet through various “carding forums.” These forums are online discussion groups used by “carders” to traffic in credit card and other personal identifying information.
Hackett also admitted that he sold credit card information, manufactured and sold counterfeit plastic cards, and used the credit card information to acquire gift cards and merchandise. According to court documents, credit card companies have identified tens of thousands of fraudulent transactions using the card numbers found in Hackett’s possession, totaling more than $36 million.
At sentencing, scheduled for July 22, 2011, Hackett will face maximum penalties of 10 years in prison and a $250,000 fine, or twice the gross gain or loss, on the access device fraud charge, and an additional mandatory two years in prison and a $250,000 fine on the identity theft charge.
The case was investigated by the U.S. Secret Service and prosecuted by Michael J. Stawasz, a Senior Counsel for the Criminal Division’s Computer Crime and Intellectual Property Section and a Special Assistant U.S. Attorney for the Eastern District of Virginia.
Georgia Man Sentenced to 25 Years in Prison for Production of Child PornographyRead the Press Release
WASHINGTON - Andrew Lastinger, 43, of Moultrie, Ga., was sentenced today to 25 years in prison followed by 50 years of supervised release for production of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.
On May 6, 2010, Lastinger pleaded guilty before U.S. District Court Judge W. Louis Sands to a one-count information charging him with producing child pornography. This investigation was initiated as a result of complaints received by the National Center for Missing and Exploited Children regarding a significant number of child pornography images uploaded to a social networking Internet site from an email address registered to Lastinger. FBI special agents executed a search warrant at Lastinger’s residence and seized numerous items of electronic evidence. During the execution of the warrant, Lastinger admitted to uploading the child pornography images as well as to molesting and producing child pornography images of a minor boy, and attempting to produce child pornography of another minor boy. Subsequent forensic examinations of computers and other electronic media seized from Lastinger’s residence confirmed the existence of over 100,000 images of child pornography, child pornography images of the minor boy produced by Lastinger, and of Lastinger attempting to take a sexually explicit video of the other minor boy.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov .
The case was prosecuted by Assistant U.S. Attorney Jim Crane of the Middle District of Georgia and Trial Attorney Mi Yung Park of the Criminal Division’s CEOS. The case was investigated by the FBI; the Colquitt County, Ga., Sheriff’s Office Criminal Investigations Divisions; and CEOS’s High Technology Investigative Unit.
Former Texas Correctional Officer Sentenced on Conviction Arising from Inmate Beating and Subsequent Cover-UpRead the Press Release
WASHINGTON – A former Bexar County Sherriff’s Office Deputy was sentenced today by U.S. District Judge Orlando Garcia to 27 months in prison for depriving a man of his constitutional right to be free from excessive force and for obstructing justice, the Department of Justice announced today. Daniel Melgoza was also sentenced to two years supervised release and a $200 special assessment.
Melgoza, 54, of San Antonio, Texas, was convicted by a jury in San Antonio on Dec. 16, 2010. Evidence at trial showed that on Dec. 8, 2004, Melgoza kicked a compliant inmate in the head several times with pointed cowboy boots. The evidence also showed that Melgoza wrote false reports to conceal his misconduct.
“Correctional officers are entrusted with a great deal of power in order to carry out their critical public safety duties. But they must not be permitted to abuse that power by violating the rights of inmates under their supervision,” said Assistant Attorney General Thomas E. Perez. “ We will not hesitate to prosecute officers who cross the line and injure those they are sworn to protect."
The investigation was conducted by FBI Special Agent Mirella Rodriguez. Civil Rights Division Trial Attorneys Roy Conn and Christopher Lomax prosecuted this case for the United States.
District of Columbia Attorney and Investigators Indicted for Alleged Roles in Scheme to Obstruct Justice in Criminal CaseRead the Press Release
WASHINGTON – A seven-count federal indictment was unsealed today in U.S. District Court for the District of Columbia charging a Washington, D.C., criminal defense attorney and two criminal investigators for their alleged roles in a scheme to obstruct an ongoing criminal case, including, among other things, manufacturing evidence and tampering with a witness, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Attorney Charles F. Daum, 64, of Arnold, Md., and investigators Daaiyah Pasha, 60, of Washington, D.C., and Iman Pasha, 31, of Springfield, Va., each were charged with one count of conspiring to corruptly influence a juror. Daum was also charged with three counts of influencing a juror, one count of tampering with a witness and two counts of inducing perjury.
According to the indictment, the charges resulted from Daum’s representation of Delante White, who was indicted in March 2008 by the U.S. Attorney’s Office for the District of Columbia on federal drug trafficking charges following the execution of a search warrant on Feb. 23, 2008, at the home of White’s grandmother. The indictment alleges that after entering his notice of appearance in the case, Daum allegedly devised a plan to obtain and produce false evidence designed to convince the jury that the drugs seized by the police on Feb. 23, 2008, did not belong to White.
According to the indictment, Daum enlisted the help of Daaiyah and Iman Pasha, whom Daum had hired as investigators, and others to help carry out his scheme. Following Daum’s directions, the co-conspirators allegedly obtained duplicates of several items that were seized as evidence during the execution of the search warrant, including a digital scale, a razor blade, plates, an Adidas shoe box and a pair of Gucci boots. Once those items were obtained, Daaiyah and Iman Pasha allegedly made arrangements to take staged photographs of White’s brother depicted with the items, while apparently “cutting” “rock cocaine” in order to make it appear as though the seized drugs actually belonged to the brother. The indictment alleges that Daum later submitted the staged photographs, as well as other fabricated items, as evidence during White’s criminal trial.
The indictment also alleges that Daum attempted to prevent a government witness from appearing at the trial, as well as solicited and presented the perjured testimony of two witnesses, in order to further obstruct and impede the administration of justice.
An indictment is merely an allegation, and defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The defendants face a maximum penalty of five years in prison and a $250,000 fine on the conspiracy charge. Daum faces an additional maximum penalty of 20 years in prison and a $250,000 fine for each count of influencing a juror and tampering with a witness. Daum face a maximum penalty of five years in prison and a $250,000 fine for each charge of subornation of perjury.
The case is being prosecuted by Trial Attorneys Robert A. Spelke and Donnell Turner of the Criminal Division’s Narcotic and Dangerous Drug Section. The case was investigated by the Washington, D.C., Metropolitan Police Department.
Colville, Wash., Man Indicted for Federal Hate Crime in Attempted Bombing of the MLK Unity MarchRead the Press Release
WASHINGTON - A federal grand jury in the Eastern District of Washington has returned a superseding indictment charging Kevin Harpham, 36, of Colville, Wash., with federal hate crime and weapons violations arising out of the attempted bombing of the Martin Luther King Jr. Unity March in Spokane, Wash., on Jan. 17, 2011, the Justice Department announced today.
The superseding indictment alleges that Kevin Harpham planted and attempted to use an improvised explosive device on the corner of Main and Washington Streets in Spokane during the march, because of the actual or perceived race, color or national origin of participants. On March 9, 2011, Harpham was arrested and charged with attempting to use a weapon of mass destruction and possessing an unregistered destructive device.
If convicted, Harpham faces a sentence up to life in prison. The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the FBI and prosecuted by the U.S. Attorney’s Office for the Eastern District of Washington, the Justice Department’s Civil Rights Division and the National Security Division.
Attorney General Holder Announces Formation of Oil and Gas Price Fraud Working Group to Focus on Energy MarketsRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced the formation of a Financial Fraud Enforcement Task Force Working Group to focus specifically on fraud in the energy markets. The Oil and Gas Price Fraud Working Group will monitor oil and gas markets for potential violations of criminal or civil laws to safeguard against unlawful consumer harm.
The working group will include representatives from the Department of Justice, the National Association of Attorneys General, the Commodity Futures Trading Commission, the Federal Trade Commission, the Department of the Treasury, the Federal Reserve Board, the Securities and Exchange Commission, as well as the Departments of Agriculture and Energy.
“Rapidly rising gasoline prices are pinching the pockets of consumers across the country,” said Attorney General Holder. “We will be vigilant in monitoring the oil and gas markets for any wrongdoing so that consumers can be confident they are not paying higher prices as a result of illegal activity. If illegal conduct is responsible for increasing gas prices, state and federal authorities should take swift action.”
In March 2011, President Obama asked the Attorney General to work with federal and state agencies to monitor oil and gas markets for potential wrongdoing. In response to the President’s call for action, Department of Justice leadership consulted with federal agencies and state attorneys general and discussed pending inquiries in some states, the most effective legal tools and areas that require additional exploration. As a result of this examination and to further the central mission of the Financial Fraud Enforcement Task Force, the Attorney General formed the Oil and Gas Price Fraud Working Group.
The Oil and Gas Price Fraud Working Group will explore whether there is any evidence of manipulation of oil and gas prices, collusion, fraud, or misrepresentations at the retail or wholesale levels that violates state or federal laws and harms consumers or the federal government as a purchaser of oil and gas. The Working Group will also evaluate developments in commodities markets and examine investor practices, supply and demand factors and the role of speculators and index traders in oil futures markets.
The Financial Fraud Enforcement Task Force was established by President Obama to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes and other laws prohibiting financial fraud. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement agencies 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.
Related Documents:
Attorney General’s Memo to the Financial Fraud Enforcement Task Force on Gas Prices
Wednesday 20 April 2011
Michigan Woman Pleads Guilty to Selling More Than $400,000 in Counterfeit Business SoftwareRead the Press Release
WASHINGTON – A Michigan woman pleaded guilty today to selling more than $400,000 worth of counterfeit computer software, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan,
Jacinda Jones, 31, of Ypsilanti, Mich., pleaded guilty to one count of willful copyright infringement before U.S. District Judge David M. Lawson in Detroit. According to court documents, between July 2008 and January 2010, Jones earned more than $400,000 by selling over 7,000 copies of pirated business software at discounted prices through the website www.cheapdl.com . The software had a retail value of more than $2 million and was owned by several companies, including Microsoft, Adobe, Intuit and Symantec. According to court documents, Jones’ activities came to the attention of U.S. Immigration and Customs Enforcement (ICE) agents, who made several undercover purchases of the pirated business and utility software.
At sentencing, Jones faces maximum penalties of five years in prison, a $250,000 fine and three years of supervised release. During her guilty plea hearing, Jones also agreed to forfeit any illegal proceeds from her criminal activity and pay restitution to the victims. Sentencing has been scheduled for Aug. 15, 2011, at 9 a.m.
The case is being prosecuted by Assistant U.S. Attorney Terrence Berg of the U.S. Attorney’s Office for the Eastern District of Michigan and Trial Attorney Thomas Dougherty of the Criminal Division’s Computer Crime and Intellectual Property Section. The investigation was conducted by the Field Support Unit of the National Intellectual Property Rights Coordination Center (IPR Center) and by ICE’s Office of Homeland Security Investigations in Detroit.
The enforcement action 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/ .
Los Angeles-Area Man Pleads Guilty to Establishing Fraudulent Medical Clinics and Using Stolen Doctor Identities to Defraud Medicare of up to $13.6 MillionRead the Press Release
WASHINGTON— A Los Angeles-area man pleaded guilty today to establishing fraudulent medical clinics and using stolen identities of physicians to defraud Medicare of up to $13.6 million, the Departments of Justice and Health and Human Services (HHS) announced.
Eduard Aslanyan, 37, of Sherman Oaks, Calif., pleaded guilty before U.S. District Judge Consuelo B. Marshall in the Central District of California. Aslanyan admitted that between March 2007 and September 2008, he established a series of fraudulent medical clinics in and around Los Angeles to defraud Medicare. Carolyn Vasquez, who pleaded guilty previously to conspiring with Aslanyan to defraud Medicare, recruited physicians to serve as the medical directors of Aslanyan’s fraudulent medical clinics, and helped them negotiate management agreements with Multiple Trading Inc., a shell company Aslanyan owned, which permitted Multiple Trading to manage the day-to-day operations of the clinics. In return for Multiple Trading’s management services, the physicians agreed to pay Multiple Trading 75 percent of all the revenue the physicians received from Medicare for the services that the clinics billed to Medicare. These services were not performed by the physicians, who were rarely at Aslanyan’s fraudulent medical clinics, but by physician assistants who were hired by Aslanyan and Vasquez and were complicit in the fraud scheme at the clinics.
According to court documents, Aslanyan hired patient recruiters to find Medicare beneficiaries who were willing to provide their Medicare billing information in exchange for expensive, high-end power wheelchairs and other medical equipment that the patient recruiters told the beneficiaries they could receive for free. Often, the Medicare beneficiaries who were solicited by the patient recruiters did not have a legitimate medical need for the power wheelchairs and equipment. The patient recruiters then provided the beneficiaries’ Medicare billing information to Aslanyan or brought the beneficiaries to Aslanyan’s fraudulent medical clinics. In exchange for recruiting the Medicare beneficiaries, Aslanyan paid the patient recruiters cash kickbacks.
In court documents, Aslanyan admitted that he and Vasquez instructed and paid the physician assistants who worked at his fraudulent medical clinics to prescribe medically-unnecessary power wheelchairs and medical equipment, and order medically-unnecessary diagnostic tests for the Medicare beneficiaries. Aslanyan also admitted that physician assistants who prescribed the wheelchairs, equipment and diagnostic tests did so using the stolen identities of physicians who either did not supervise the physician assistants or work at Aslanyan’s fraudulent medical clinics. In one instance, Aslanyan admitted that he and his co-conspirators went so far as to print prescription pads and medical documents with the name of a physician who applied for, but did not accept, a job at one of Aslanyan’s fraudulent medical clinics. Two physician assistants at Aslanyan’s clinics then used the prescription pads and medical documents to prescribe medically-unnecessary power wheelchairs and medical equipment, and to order medically-unnecessary diagnostic tests without the physician’s knowledge or consent.
Aslanyan admitted that one way he profited from the fraud scheme at his clinics was by allowing fraudulent diagnostic testing facilities to use the Medicare billing information he purchased from the patient recruiters to submit false claims to Medicare for the fraudulent diagnostic tests which physician assistants ordered at the clinics. In exchange, the fraudulent diagnostic testing facilities paid Aslanyan cash kickbacks which they disguised as rent payments to Aslanyan.
In addition, Aslanyan profited from the fraud scheme by selling the fraudulent power wheelchair and medical equipment prescriptions and documents generated at his clinics to the owners and operators of fraudulent durable medical equipment (DME) supply companies, which used the prescriptions and documents to submit false claims to Medicare. Aslanyan also used the fraudulent prescriptions and documents to submit false claims to Medicare through his own fraudulent DME supply companies, Vila Medical Supply Inc. and Blanc Medical Supplies. The straw owner of Blanc Medical Supplies, Gabriel Djanunts, pleaded guilty previously to Medicare fraud. Aslanyan admitted that as a result of his conduct, he and his co-conspirators defrauded Medicare of up to $13.6 million.
At sentencing, scheduled for Oct. 17, 2011, Aslanyan faces a maximum penalty of 10 years in prison and a $250,000 fine. Currently, Aslanyan is serving a three-year state sentence for assault. Vasquez’s sentencing is scheduled for July 11, 2011.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the HHS Office of Inspector General (HHS-OIG); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section. Former Special Trial Attorney Joseph Hudzik participated in the prosecution. The case is being investigated by the FBI.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since their inception in March 2007, strike force operations in nine districts have charged 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about HEAT, go to: www.stopmedicarefraud.gov .
Justice Department Reaches Agreement with Jefferson County, Texas, Drainage District Number Seven on Bailout from the Voting Rights ActRead the Press Release
WASHINGTON – The Justice Department announced that it has reached an agreement with Jefferson County, Texas, Drainage District Number Seven on the terms of a consent decree filed today in the U.S. District Court for the District of Columbia. If approved by the court, the decree will allow for the district’s bailout from its status as a “covered jurisdiction” under the Voting Rights Act, and thereby exempt the district from the preclearance requirements of Section 5 of the act.
Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the Act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court in Washington, D.C., or from the U.S. Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bailout,” or remove itself from such coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in U.S. District Court in Washington, D.C. Such a bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the attorney general can consent to entry of a judgment of bailout if, based upon investigation, the attorney general is satisfied that the jurisdiction meets the eligibility requirements.
Jefferson County Drainage District Number Seven filed its bailout action in U.S. District Court in Washington, D.C. on March 2, 2011. District officials had contacted the attorney general prior to filing its action, indicating that the district was interested in seeking bailout. The district provided the Justice Department with substantial information, and the department conducted an investigation to determine the district’s eligibility. Based on that investigation, the department is satisfied that the district meets the Voting Rights Act’s requirements for bailout.
“In this case, the department worked closely with Jefferson County Drainage District Number Seven, carefully evaluated the information the district provided to us, and conducted our own investigation, which has satisfied us that the district is eligible for a bailout,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I appreciate the cooperation of district officials in providing the department with information that we have requested, and in moving toward a resolution of this matter in the way envisioned by the Voting Rights Act.”
The consent decree, filed in court today, details the legal and factual basis for a bailout determination and, if approved, will grant the district’s request. The court will retain jurisdiction of the action for 10 years and can reopen the action upon the motion of the attorney general or any aggrieved person alleging conduct by the district that would have originally precluded the district from bailing out if it had occurred during the 10 year period preceding entry of the consent decree.
Information about bailout, the Voting Rights Act, and other federal voting laws is available on the Department of Justice web site at www.usdoj.gov/crt/voting/. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Idaho Mining Company Agrees to Pay $1.4 Million Penalty to Settle Alleged Clean Water Act ViolationsRead the Press Release
WASHINGTON – The Department of Justice and the Environmental Protection Agency (EPA) announced today that P4 Production LLC, a mining and phosphorus processing company wholly-owned by Monsanto and operating near Soda Springs in southeast Idaho, has agreed to pay a $1.4 million civil penalty for alleged Clean Water Act violations at its South Rasmussen Mine. In addition to the penalty, P4 will spend an estimated $875,000 on monitoring and to prevent pollutants from entering local waters.
“The Justice Department and the EPA are committed to enforcing the Clean Water Act to reduce pollution from mining and mineral processing operations,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Clean water is essential for human health, as well as for healthy livestock, fish and wildlife. Today’s settlement agreement will make Idaho’s waters cleaner by preventing selenium and other hazardous pollutants generated by P4’s mining operations from entering local creeks and wetlands.”
“Today’s settlement resolves a long-standing hazard to fish, wildlife and the environment in southeast Idaho,” said Edward Kowalski, director for EPA's Seattle Office of Enforcement and Compliance. “Selenium pollution is a serious problem in this part Idaho, and this enforcement action by EPA is one part of the long-term effort to clean up the phosphate patch.”
According to the complaint, P4 allegedly discharged wastewater containing high concentrations of selenium and heavy metals from a waste rock dump at the mine without a required permit. Further, P4’s unpermitted discharges - which contained selenium levels far above Idaho’s state water quality standards – allegedly polluted a nearby wetland and an unnamed tributary of Sheep Creek, as well as downstream waters that drain to the Snake River.
Phosphate mines in the area, including the South Rasmussen Mine, are known to contain high levels of selenium in their waste rock. Rainwater and weathering allow the selenium to leach from the waste rock piles and enter nearby surface water. Sheep, horse and cattle deaths in southeast Idaho have been linked to selenium contamination of plants. Selenium in high concentrations can be toxic to a variety of fish and wildlife and is also known to bio-accumulate, and affect organisms in the aquatic food chain. Monsanto uses phosphate from the South Rasmussen Mine to manufacture Roundup.
Under the terms of the consent decree, P4 will pay the U.S. $1.4 million and it agrees to:
Continue collecting selenium-contaminated leachate from the waste rock pile and prevent leachate from entering nearby creeks and wetlands until such time as the company either obtains an National Pollution Discharge Elimination System permit, or it undertakes a restoration of the waste rock dump under another state or federal order.
Perform downstream monitoring for a period of five years to ensure that selenium-contaminated water is no longer leaving the site.
The settlement is part of EPA’s enforcement initiative to reduce pollution from mining and mineral processing operations. Mining and mineral processing facilities generate more toxic and hazardous waste than any other industrial sector, waste that when not properly managed, can impact surrounding communities and pose a serious risk to public health and the environment. To reduce these risks, EPA is working to ensure mining and mineral processing industry compliance with environmental laws.
The settlement was lodged today in the U.S. District Court of Idaho. There will be a 30-day public comment period during which the United States will accept comments on the settlements before it is presented to the court for entry.
Federal Court Permanently Bars San Antonio Manfrom Preparing Tax ReturnsRead the Press Release
WASHINGTON – A federal court has barred Eddie Madrigal of San Antonio and his business, Madrigal Tax Express Inc., from preparing federal tax returns for others, the Justice Department announced today. The permanent injunction order, to which Madrigal consented, was entered by Chief Judge Fred Biery of the U.S. District Court for the Western District of Texas.
The government complaint alleged that Madrigal and his firm prepared tax returns for their customers that claimed false and exaggerated business deductions, false earned income tax credits and improper miscellaneous itemized deductions. According to the complaint, Madrigal and his business, which has three locations in San Antonio, prepared approximately 28,000 returns from 2005 to 2007. The government further alleged that Madrigal Tax Express prepared approximately 9,000 returns in 2007 and that, of the returns that were audited by the Internal Revenue Service for that year, more than 93 percent understated the customers’ tax liabilities.
In the last decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax-fraud promoters and unscrupulous tax-return preparers. Information about these cases is available on the Justice Department website.
CPTN Holdings LLC and Novell Inc. Change Deal in Order to Address Department of Justice's Open Source ConcernsRead the Press Release
WASHINGTON – The Department of Justice announced today that in order to proceed with the first phase of their acquisition of certain patents and patent applications from Novell Inc., CPTN Holdings LLC and its owners have altered their original agreements to address the department’s antitrust concerns. The department said that, as originally proposed, the deal would jeopardize the ability of open source software, such as Linux, to continue to innovate and compete in the development and distribution of server, desktop, and mobile operating systems, middleware, and virtualization products. Although the department will allow the transaction to proceed, it will continue investigating the distribution of the Novell patents to the CPTN owners.
The department said that CPTN, a holding company owned in equal measure by Microsoft Inc., Oracle Corp., Apple Inc. and EMC Corp., and its owners sought to acquire the patents in a two-stage transaction in conjunction with Novell’s planned merger with Attachmate Corporation. In the first phase, CPTN would acquire the patents and applications. In the second phase, the patents would be allocated and distributed to each of the four owners. In light of the department’s competition concerns, CPTN and its owners made revisions to their formation agreements to acquire approximately 882 patents and patent applications from Novell. The department said that these changes were necessary to protect competition and innovation in the open source software community.
“The parties’ actions address the immediate competitive concerns resulting from the transfer of Novell’s patents. To promote innovation and competition, it is critical to balance antitrust enforcement with allowing appropriate patent transfers and exercise of patent rights,” said Sharis A. Pozen, Deputy Assistant Attorney General of the Justice Department’s Antitrust Division. “Although we recognize that the various changes to the agreement recently made by the parties are helpful, the department will continue to investigate the distribution of patents to ensure continued competition.”
In order to address competition concerns of the department, CPTN and its owners have revised their agreements to provide that:
· Microsoft will sell back to Attachmate all of the Novell patents that Microsoft would have otherwise acquired, but will continue to receive a license for the use of those patents, the patents acquired by the other three participants and any patents retained by Novell;
· EMC will not acquire 33 Novell patents and patent applications that have been identified as related to virtualization software;
· All of the Novell patents will be acquired subject to the GNU General Public License, Version 2, a widely adopted open-source license, and the Open Invention Network (OIN) License, a significant license for the Linux System;
· CPTN does not have the right to limit which of the patents, if any, are available under the OIN license; and
· Neither CPTN nor its owners will make any statement or take any action with the purpose of influencing or encouraging either Novell or Attachmate to modify which of the patents are available under the OIN license.
During the course of their investigations, the Department of Justice and Germany’s Federal Cartel Office (Das Bundeskartellamt) cooperated closely with each other, aided by waivers from the parties. This permitted the agencies to share information and assessments of likely competitive effects and coordinate on potential revisions to the parties’ agreements.
“The Department of Justice and the Federal Cartel Office worked together very closely throughout this investigation,” said Deputy Assistant Attorney General Pozen. “This was an excellent example of international cooperation between our two agencies.”
Novell Inc. is a Delaware corporation with its principal place of business in Waltham, Mass. Its 2010 revenues were approximately $812 million. Attachmate Corp. is a privately held corporation based in Seattle. Its revenues are not public. CPTN Holdings LLC is a recently created consortium created by Microsoft, Oracle, Apple and EMC for the purpose of acquiring the Novell patents. It has no sales or revenues. Microsoft Inc. is a Washington corporation with its principal place of business in Redmond, Wash. Its 2010 revenues were approximately $62.5 billion. Oracle Corp. is a Delaware corporation with its principal place of business in Redwood City, Calif. In fiscal year 2010, it had revenues of nearly $27 billion. Apple Inc., a California corporation with its principal place of business in Cupertino, Calif., had 2010 revenues of more than $65 billion. EMC Corp., a Massachusetts corporation with its principal place of business in Hopkinton, Mass., had 2010 revenues of approximately $17 billion.
Attorney General Hosts 2nd Annual Meeting with Commissioners of the African UnionRead the Press Release
WASHINGTON - Attorney General Eric Holder met today with commissioners of the African Union (AU) in an effort to underscore the U.S. government’s commitment to Africa, particularly efforts to promote rule of law and to combat transnational crime. This meeting is part of the second high-level dialogue between commissioners of the AU and senior U.S. officials in Washington, D.C., the first of which took place in April 2010.
“We are continuing to solidify law enforcement cooperation between the United States and the African Union, especially in the areas of counternarcotics, and the combating of terrorism, piracy, and organized crime,” said Attorney General Holder. “I look forward to maintaining these regularized dialogues, drawing on our strengths to realize our mutual law enforcement objectives.”
The AU is an intergovernmental organization comprised of 53 African countries with the stated objective of political and economic integration throughout Africa. The AU Commission, based in Addis Ababa, Ethiopia, is responsible for the day-to-day administration and coordination of the AU’s activities and meetings. The commission is composed of the chairperson, the deputy chairperson, and eight commissioners who oversee distinct portfolios: peace and security, political affairs, infrastructure and energy, social affairs, human resources, science and technology, trade and industry, rural economy and agriculture, and economic affairs.
Attorney General Holder met with Commission Chairperson Jean Ping and the Commissioner for Peace and Security Ramtane Lamamra. Also present was AU Ambassador to the United States Amina Salum Ali, AU Ambassador to the United Nations Tete Antonio and U.S. Ambassador to the African Union Mission Michael Battle Jr.
Previously, Attorney General Holder also addressed the AU Summit Meeting in Kampala, Uganda, in July 2010, which focused on anti-corruption, rule of law, and training opportunities as tools to combat terrorism and to promote freedom and development.
Alleged Member of the Almighty Latin Kings and Queen Nation Charged in Hammond, Ind., with Racketeering Conspiracy Involving Multiple MurdersRead the Press Release
WASHINGTON – An additional alleged member of the Almighty Latin Kings and Queen Nation (Latin Kings) has been indicted for his alleged role in a racketeering conspiracy in Hammond, Ind., and elsewhere, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney David Capp of the Northern District of Indiana.
The second superseding indictment, returned yesterday by the federal grand jury in Hammond charges Ivan Quiroz, aka “Captain Kirk,” 29, of Posen, Ill., with conspiracy to engage in racketeering activity. Previously charged in the conspiracy are: Alexander Vargas, aka “Pacman,” 33, of Highland, Ind.; Sisto Bernal, aka “Cisco,” aka “Shug,” 44, of Chicago; Jason Ortiz, aka “Creeper,” 27, of Chicago; Brandon Clay, aka “Cheddar,” aka “Swiss,” aka “Slick,” 23, of Chicago; and Martin Anaya, aka “Lefty,” 40, of Chicago. In addition, the second superseding indictment also charges all of the defendants with conspiracy to possess with the intent to distribute five kilograms or more of cocaine and 1,000 kilograms or more of marijuana.
Quiroz is charged also in the second superseding indictment with two counts of murder and two counts of using and carrying a firearm to commit murder during and in relation to a crime of violence.
As previously charged in the superseding indictment, the southeast region of the Latin Kings is allegedly responsible for at least 15 murders. The second superseding indictment specifically alleges that Quiroz participated with Vargas, Ortiz, Clay and other Latin King members in the murder of rival gang members James Walsh and Gonzalo Diaz outside of a bar in Griffith, Ind., in the early morning of Feb. 25, 2007. As previously charged in the superseding indictment, in addition to the violent crimes, the Latin Kings also distributed more than 150 kilograms of cocaine and 1,000 kilograms of marijuana.
According to the second superseding indictment, the Latin Kings is a nationwide gang that originated in Chicago and has branches throughout the United States. The Latin Kings is a well organized street gang comprised of regions that include multiple chapters. The Latin Kings enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, and threats against those who violate the rules or pose a threat to the Latin Kings. Members are required to follow the orders of higher-ranking members, including taking on assignments often referred to as “missions.”
The racketeering and drug conspiracy charges each carry a maximum penalty of life in prison. The murder-related charges carry maximum penalties of life in prison or the death penalty.
This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; Immigration, Customs and Enforcement-Homeland Security Investigations; the National Gang Targeting, Enforcement & Coordination Center; the National Gang Intelligence Center; the Chicago Police Department, the Griffith Police Department; the Highland, Ind., Police Department; the Hammond Police Department; and the Houston Police Department.
The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Gang Unit and Assistant U.S. Attorney David Nozick of the U.S. Attorney’s Office for the Northern District of Indiana.
The indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.