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Tuesday 19 April 2011
Terra Industries Inc. to Pay $625,000 Clean Air Act Penalty and Spend $17 Million to Install Pollution Controls at Acid Plants in Iowa, Mississippi and OklahomaRead the Press Release
WASHINGTON – Terra Industries Inc., one of the nation’s largest producers of nitric acid and nitrogen fertilizers, has agreed to pay $625,000 in civil penalties to settle alleged violations of the federal Clean Air Act at nine of its plants in Iowa, Mississippi and Oklahoma, the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.
As part of the settlement, Terra will also spend an estimated $17 million to install and implement new controls and technologies that are expected to reduce harmful nitrogen oxide emissions at its facilities by at least 1,200 tons per year.
“This agreement will require Terra Industries to make important improvements in pollution control technology at nine acid-producing facilities that will result in cleaner and healthier air for the benefit of communities in Iowa, Mississippi and Oklahoma,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “This is a notable achievement in our efforts, alongside the Environmental Protection Agency, to address the largest sources of harmful air pollution and bring about company-wide compliance with the Clean Air Act.”
“Illegal air pollution from the production of nitric acid can leave the public vulnerable to long-term health problems such as respiratory illness and asthma,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Bringing Terra into compliance with the Clean Air Act will protect the public health of communities across Iowa, Mississippi and Oklahoma.”
Terra is a major U.S. producer of nitrogen fertilizers, including anhydrous ammonia, urea, ammonia nitrate,and urea-ammonium nitrate (UAN). The company also produces nitric acid, a key intermediate in the manufacture of ammonium nitrate and UAN.
The production of nitric acid results in the emission of nitrogen oxides, which can cause lung damage, worsen respiratory diseases, contribute to acid rain and lead to the formation of smog.
Terra, headquartered in Sioux City, Iowa, will pay $325,000 to the United States and $100,000 each to Iowa, Mississippi and the Oklahoma Department of Environmental Quality – co-plaintiffs in the action filed today in U.S. District Court in Sioux City.
Terra’s nine plants covered by the settlement include four nitric acid plants at Yazoo City, Miss.; two each at Sergeant Bluff, Iowa, and Verdigris, Okla.; and one at Woodward, Okla.
According to the consent decree, Terra allegedly constructed, modified and operated its facilities without obtaining appropriate pre-construction and operating permits, and without installing best available control technology for controlling air pollution. Terra also allegedly violated the Clean Air Act by failing to comply with applicable air emission limits and ongoing requirements for emissions monitoring, recordkeeping and reporting at some of its facilities.
Reducing air pollution from the largest sources of emissions, including acid facilities, is one of EPA’s National Enforcement Initiatives for 2011-2013. The initiative continues EPA’s focus on improving compliance with the new source review provisions of the Clean Air Act among industries that have the potential to cause significant amounts of air pollution. In fiscal year 2010, EPA’s enforcement actions in the cement manufacturing, coal-fired power plant, glass and acid sectors led to approximately 370 million pounds of pollution reduced or treated, $1.4 billion in estimated pollution controls and $14 million in civil penalties.
The consent decree, which is subject to a 30-day public comment period and final court approval, is available at: www.justice.gov/enrd/
Learn more about EPA’s civil enforcement of the Clean Air Act: www.epa.gov/compliance/civil/caa/index.html
Justice Department Seeks to Shut Down Southern California Tax Return PreparerRead the Press Release
WASHINGTON – The United States has asked a federal court to bar Dennis Giroud of Victorville, Calif., from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Giroud and his business, Refunds R Us, prepare fraudulent tax returns for their customers that claim large tax refunds based on a frivolous theory called “redemption” or “commercial redemption,” which has been rejected by numerous courts.
According to the government complaint, Giroud prepares tax returns that claim fraudulent refunds based on fabricated income tax withholding reported on false forms submitted with the returns. The complaint alleges that the Internal Revenue Service (IRS) catches most of the frivolous refund requests before refunds are issued, but that Giroud’s scheme has caused the IRS to issue at least $1.2 million in erroneous refunds to his customers. Giroud has allegedly sought more than $19 million in fraudulent refunds for more than 100 customers using returns based on the frivolous “redemption” theory and has also allegedly requested more than $1.3 million in bogus refunds for himself.
Filing false tax forms, including false withholding claims, is one of the IRS’s“Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department website .
Former Chairman of Taylor, Bean & Whitaker Convicted for $2.9 Billion Fraud Scheme That Contributed to the Failure of Colonial BankRead the Press Release
WASHINGTON – Lee Bentley Farkas, the former chairman of a private mortgage lending company, Taylor, Bean & Whitaker (TBW), was convicted today for his role in a more than $2.9 billion fraud scheme that contributed to the failures of Colonial Bank, one of the 25 largest banks in the United States in 2009, and TBW, one of the largest privately held mortgage lending companies in the United States in 2009.
The conviction was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Acting Inspector General of the Department of Housing and Urban Development (HUD-OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG) ; Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA-OIG); and Victor F. O. Song, Chief of the Internal Revenue Service Criminal Investigation (IRS-CI).
After a 10-day trial, a federal jury in the Eastern District of Virginia found Farkas guilty of one count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud; four counts of wire fraud; and three counts of securities fraud. At sentencing, scheduled for July 1, 2011, Farkas faces a maximum prison term of 30 years for the conspiracy charge and for each count of bank fraud, 20 years for each count of wire fraud related to TARP, 30 years for each count of wire fraud affecting a financial institution and 25 years for each securities fraud count. Farkas was remanded into custody.
According to court documents and evidence presented at trial, Farkas and his co-conspirators engaged in a scheme that misappropriated more than $1.4 billion from Colonial Bank’s Mortgage Warehouse Lending Division in Orlando, Fla., and approximately $1.5 billion from Ocala Funding, a mortgage lending facility controlled by TBW. Farkas and his co-conspirators misappropriated this money to, among other things, cover TBW’s operating expenses. The fraud scheme contributed to the failures of Colonial Bank and TBW.
Six individuals have pleaded guilty for their roles in the fraud scheme, including: Paul Allen, former chief executive officer of TBW; Raymond Bowman, former president of TBW; Desiree Brown, former treasurer of TBW; Catherine Kissick, former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division (MWLD); Teresa Kelly, former operations supervisor for Colonial Bank’s MWLD; and Sean Ragland, a former senior financial analyst at TBW.
“Lee Farkas, the former chairman of TBW, masterminded one of the largest bank fraud schemes in history,” said Assistant Attorney General Breuer. “His shockingly brazen scheme poured fuel on the fire of the financial crisis. It not only led to the downfall of TBW, one of the largest private mortgage lending companies in the United States, but also contributed to the failure of one of the country’s largest commercial banks. Mr. Farkas may have thought he could steal nearly $3 billion from investors and taxpayers and sail into the sunset. But now a jury has told him otherwise, and he must face the severe consequences.”
“Today a jury convicted Lee Farkas of orchestrating one of the longest and largest bank fraud schemes in the country,” said U.S. Attorney Neil H. MacBride. “In 2008, Lee Farkas boasted that he ‘could rob a bank with a pencil.’ And he did just that. His staggering greed led him to steal nearly $3 billion from Colonial Bank and other investors. Farkas’s mammoth fraud contributed to the toppling of a financial institution and the ripple effects were felt from Wall Street to Main Street. Now he’s being held responsible for the financial ruin he left in his wake.”
“This investigation required thousands of hours of work by investigators, forensic accountants and analysts to sort through complex mortgage and lending documents,” said Assistant Director in Charge McJunkin. “I’d like to thank the many other agencies who worked with FBI personnel to build a strong investigative team; a team still out there working today to protect federal funds and innocent victims.”
“Today’s verdict ensures that Farkas will pay for his crime – an unprecedented scheme to defraud regulators during the height of the financial crisis and to steal over $550 million from the American taxpayers through TARP,” said Acting Special Inspector General Romero for SIGTARP . “SIGTARP and its partners in the Financial Fraud Enforcement Task Force stopped the scheme dead in its tracks and will continue to bring to justice those criminals who seek to profit by exploiting TARP through fraud.”
According to court documents and evidence presented at trial, the fraud scheme began in 2002, when Farkas and his co-conspirators ran overdrafts in TBW bank accounts at Colonial Bank in order to cover TBW’s cash shortfalls. Farkas and his co-conspirators at TBW and Colonial Bank transferred money between accounts at Colonial Bank to hide the overdrafts. Evidence presented at trial showed that after the overdrafts grew to more than $100 million, Farkas and his co-conspirators covered up the overdrafts and operating losses by causing Colonial Bank to purchase from TBW over time more than $1.5 billion in what amounted to worthless mortgage loan assets, including loans that TBW had already sold to other investors and fake pools of loans supposedly being formed into mortgage-backed securities. Farkas and his co-conspirators caused Colonial Bank to report these assets on its books at face value when in fact the mortgage loan assets were worthless. By August 2009, approximately $500 million in fake pools of loans remained on Colonial Bank’s books.
According to court documents and evidence presented at trial, Farkas and his co-conspirators at TBW also misappropriated more than $1.5 billion from Ocala Funding. Ocala Funding sold asset-backed commercial paper to financial institution investors, including Deutsche Bank and BNP Paribas Bank. Ocala Funding, in turn, was required to maintain collateral in the form of cash and/or mortgage loans at least equal to the value of outstanding commercial paper.
Evidence presented at trial established that Farkas and his co-conspirators diverted cash from Ocala Funding to TBW to cover its operating losses, and as a result, created significant deficits in the amount of collateral Ocala Funding possessed to back the outstanding commercial paper. To cover up the diversions, the conspirators sent false information to Deutsche Bank, BNP Paribas Bank and other financial institution investors and led them to falsely believe that they had sufficient collateral backing the commercial paper they had purchased. When TBW failed in August 2009, the banks were unable to redeem their commercial paper for full value. Farkas and his co-conspirators also caused approximately $900 million in loans to be held on Colonial Bank’s books when in fact the loans had already been sold to Freddie Mac and other investors.
According to court documents and evidence at trial, in the fall of 2008, Colonial Bank’s holding company, Colonial BancGroup Inc., applied for $570 million in taxpayer funding through the Capital Purchase Program (CPP), a sub-program of the U.S. Treasury Department’s Troubled Asset Relief Program (TARP). In connection with the application, Colonial BancGroup submitted financial data and filings that included materially false information related to mortgage loans and securities held by Colonial Bank as a result of the fraudulent scheme perpetrated by Farkas and his co-conspirators. Colonial BancGroup’s TARP application was conditionally approved for $553 million contingent on the bank raising $300 million in private capital.
Evidence at trial established that Farkas and his co-conspirators falsely informed Colonial BancGroup that they had identified sufficient investors to satisfy the TARP capital contingency. Farkas and his TBW co-conspirators diverted $25 million from Ocala Funding into an escrow account and falsely represented that the money was on behalf of capital raise investors. Farkas and his TBW co-conspirators caused Colonial BancGroup to issue a false and misleading financial statement to the Securities and Exchange Commission (SEC) and press release announcing the success of the capital raise. Ultimately, Colonial BancGroup did not receive any TARP funds.
Evidence at trial also established that Farkas and his co-conspirators caused Colonial BancGroup to file materially false financial data with the SEC regarding its assets in annual reports contained in Forms 10-K and quarterly filings contained in Forms 10-Q. Colonial BancGroup’s materially false financial data included overstated assets for mortgage loans that had little to no value that Farkas and his co-conspirators caused Colonial Bank to purchase. Farkas and his co-conspirators also caused TBW to submit materially false financial data to the Government National Mortgage Association (Ginnie Mae) in order to extend TBW’s authority to issue Ginnie Mae mortgage-backed securities.
According to court documents and evidence presented at trial, Farkas also personally misappropriated more than $20 million from TBW and Colonial Bank to finance his lifestyle, including purchasing multiple homes, scores of cars, a jet and sea plane, and restaurants and bars.
In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver. Colonial BancGroup also filed for bankruptcy in August 2009.
“The successful prosecution of Farkas and his associates highlights the commitment and combined efforts of DOJ and federal law enforcement to hold those responsible from all levels of a mortgage company,” said Acting Inspector General Stephens for HUD-OIG. “Efforts to protect FHA and Ginnie Mae are strengthened by this verdict.”
“Today’s verdict confirms that the former chairman of one of the leading mortgage lending firms in the Southeast engaged in criminal conduct during the mid-2000s,” said Inspector General Rymer of FDIC-OIG. “We are proud to work with our partners at the Justice Department’s Criminal Division and in the U.S. Attorney’s Office for the Eastern District of Virginia to bring to justice individuals whose fraud contributed significantly to the financial crisis and the failure of a major financial institution.”
“This conviction represents a victory for Freddie Mac and American taxpayers, who have invested $64.2 billion in Freddie Mac to date,” said Inspector General Linick of the FHFA-OIG. “ The fraud that Farkas perpetrated on Freddie Mac directly affected its bottom line and, in turn, American taxpayers. FHFA-OIG looks forward to future cooperative efforts with law enforcement partners to combat fraud against Freddie Mac, Fannie Mae, and the Federal Home Loan Banks.”
The case was prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by the FBI’s Washington Field Office, SIGTARP, FDIC-OIG, HUD-OIG, FHFA-OIG, and the IRS Criminal Investigation. The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation. The Department of Justice would like to thank the SEC for their assistance.
This conviction is 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
Federal Court Bars Philadelphia Tax Firm and Ownerfrom Claiming First-Time-Homebuyer Tax Credit for CustomersRead the Press Release
WASHINGTON – A federal court has barred a Philadelphia tax preparation firm and its owner from preparing federal tax returns claiming first-time-homebuyer tax credits and tax deductions for certain expenses, the Justice Department announced today. The court’s preliminary injunction order against Friday James of Landsdowne, Pa., who does business as Frika Tax Services, will remain in effect while the government’s lawsuit seeking a permanent injunction proceeds in court.
Following a court hearing at which the government presented evidence against James, including testimony from several of his customers, the court found that James “negligently or willfully understated tax liability on many of the federal income tax returns he prepared for his clients.” The court found that James claimed the first-time-homebuyer credit for customers who did not qualify for the credit and claimed deductions for business and miscellaneous expenses that were “erroneous, unrealistic or unreasonable.”
The court also stated that, absent an injunction, many of James’s customers would be likely to “underpay their tax liabilities and bear financial harm by having to pay overdue taxes, interest, and possible penalties.” The court required James to provide a copy of the injunction order to all persons for whom he has prepared any federal income tax returns.
Return preparer fraud is one of the Internal Revenue Service’s “Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department website.
Monday 18 April 2011
New Jersey Man Sentenced for Threatening Employees of National Latino Civil Rights OrganizationsRead the Press Release
WASHINGTON – The Justice Department announced today that Vincent Johnson of Brick, N.J., was sentenced to 50 months in prison and three years supervised release for sending a series of threatening email communications to employees of five civil rights organizations that work to improve opportunities for, and challenge discrimination against, Latinos in the United States. Johnson was also ordered to pay a fine of $10,000.
Johnson, 61, who went by the internet pseudonym “Devilfish,” pleaded guilty on Oct. 20, 2010, to 10 counts related to threatening conduct towards the victims, who included employees of the LatinoJustice Puerto Rican Legal Defense and Education Fund; the Mexican American Legal Defense and Educational Fund; the National Council of La Raza; the League of United Latin American Citizens; and the National Coalition of Latino Clergy and Christian Leaders.
Johnson admitted that between November 2006 and February 2009, he emailed numerous threats to the victims to prevent them from aiding and encouraging Latinos to participate, without discrimination, in various protected activities, such as accessing the court system, voting, attending public schools, and applying for employment. Johnson admitted that his threats were motivated by race and national origin.
Examples of Johnson’s threatening language include: “Do you have a last will and testament? If not, better get one real soon.”; “If the idiots in the organizations which this e-mail is being copied to can't fathom the serious nature of their actions, then they will be on the hit list just like any illegal alien...actually, they are already on the list”; “I am giving you fair warning that your presence and position is being tracked...you are dead meat...along with anyone else in your organization”; “So be warned or we may find you in the obits”; “Get into the American groove or we will destroy your sorry [expletive]”; “My preference would be to buy more ammunition to deal with the growing chaos created by the pro-illegal alien groups. RIP [names of the victims] who are not the friends of our democracy.”; “After reading the article below can you give me simply one good reason why someone should not put a bullet between your eyes for your actions that are promoting lawlessness in this country?”; and “[Y]ou are putting yourself and your staff at great risk . . . and by virtue of the network that I operate under information about your malevolent ways is broadly disseminated. . . And you could very well find yourself belly up 6 feet under.” Throughout his emails, Johnson also made offensive and disparaging remarks about Latinos, including comments such as, “[t]here can be absolutely no argument against the fact that Mexicans are scum as all they know how to do is [expletive] and kill.”
“The defendant engaged in a hate-fueled campaign of fear to intimidate and terrorize the victims,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Racially-charged threats of violence have no place in a civilized society, and the Department of Justice will vigorously prosecute those who engage in such reprehensible conduct.”
“Johnson admitted that he sent threatening emails to individuals and groups because of who they are and what they believe,” said Paul Fishman, U.S. Attorney for the District of New Jersey . “Violence or threats of violence based on race, religion, national origin, gender or sexual orientation are an intolerable violation of our most basic civil rights. Hiding behind the perceived anonymity of a computer screen to make hateful threats will provide no protection from prosecution.”
“Vincent Johnson’s intent was crystal clear: he wanted to strike fear in the hearts of Latino and Hispanic activists in hopes of dissuading their activity,” said Michael B. Ward, Special Agent in Charge of the FBI’s Newark Field Office. “Such conduct was, and will always, be met with swift response by the FBI. There is zero tolerance for this type of criminal activity impacting people’s civil rights.”
The case was investigated by the Washington, D.C., and Newark, N.J., field offices of the FBI. The case is being prosecuted by Trial Attorney Benjamin J. Hawk of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Thomas Eicher of the U.S. Attorney’s Office for the District of New Jersey.
Friday 15 April 2011
National Security Division Announces FARA eFile for <br /> Foreign Agents Registration Act Electronic FilingRead the Press Release
WASHINGTON – The Justice Department’s National Security Division today announced the launch of a system for the electronic filing of registration statements and supplements with the Justice Department under the Foreign Agents Registration Act (FARA). Called FARA eFile, the system enables FARA registrants to electronically file documents with the FARA Registration Unit, which is part of the Counterespionage Section of the Justice Department’s National Security Division.
Under FARA, which was amended by the Honest Leadership and Open Government Act of 2007, FARA registrants shall file registration statements and supplements in electronic form. FARA eFile is an intuitive online shopping cart process that allows registrants to register and pay the required registration fees online, 24 hours a day, seven days a week, demonstrating another enhancement to the department’s FARA website. FARA eFile will result in more timely public disclosure and transparency while promoting more efficient practices.
Passed by Congress in 1938, FARA is a public disclosure statute that requires all persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts and disbursements in support of those activities.
The purpose of FARA is to protect the national defense, internal security and foreign
relations of the United States by requiring public disclosure by persons engaged in certain activities on behalf of foreign principals to ensure the American public and its lawmakers know the source of the information intended to sway public opinion, policy and laws. The law facilitates evaluation by the government and the American people of the statements and activities of such persons in light of their associations.
FARA eFile can be accessed at www.fara.gov and is linked through the home page of the National Security Division at www.usdoj.gov/nsd/ . Additional information about FARA eFile can also be found at www.fara.gov/efile-faq.html.
CVS Pharmacy Inc. Agrees to Pay $17.5 Million to Resolve False Prescription Billing CaseRead the Press Release
WASHINGTON – CVS Pharmacy Inc., the retail pharmacy division of CVS Caremark Corporation that operates more than 7,000 retail pharmacies in 41 states and the District of Columbia, has agreed to pay the United States and 10 states $17.5 million to resolve False Claims Act allegations, the Justice Department announced today.
The settlement resolves allegations that CVS submitted inflated prescription claims to the government by billing the Medicaid programs in Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island for more than what CVS was owed for prescription drugs dispensed to Medicaid beneficiaries who were also eligible for benefits under a primary third party insurance plan (excluding Medicare as the primary payor). The United States alleged that rather than billing the government for what the insured would have been obligated to pay had the claims been submitted solely to the third party insurer (typically the co-pay), CVS billed and was paid a higher amount by Medicaid.
Under the terms of the agreement with the United States and the 10 states, CVS will pay the United States $7,993,615.55 and the states $9,506,384.45 plus interest. CVS has also executed an amendment to a Corporate Integrity Agreement (CIA) with the Department of Human Services, Office of Inspector General (HHS-OIG), that was executed on March 14, 2008, in connection with a separate investigation and settlement. The amendment to the CIA, which will be in effect for three years, will monitor CVS’s implementation of correct billing procedures and the training and education of employees. In addition, an independent review organization will conduct regular audits and issue reports on CVS’s compliance with the terms of the amendment to the CIA.
The allegations were brought to the government by Stephani LeFlore, a CVS pharmacist in St. Paul, Minn., in a whistleblower action filed under the qui tam, or whistleblower, provisions of the False Claims Act and state False Claims Act statutes. Ms. LeFlore will receive a total of $2,595,460: $1,278,978 of the United States’ recovery and $1,316,482 of the state proceeds from California, Florida, Indiana, Massachusetts, Michigan, New Hampshire, Nevada and Rhode Island. Alabama and Minnesota do not have state False Claims Act statutes.
“This case is an example of the government’s strong commitment to pursue companies that overcharge our federal health programs by submitting false claims,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
“We will not tolerate pharmacies that take advantage of taxpayer funds by billing Medicaid more for drugs than they should have received,” said John William Vaudreuil, U.S. Attorney for the Western District of Wisconsin.
This case was investigated jointly by the U.S. Attorney’s Office for the Western District of Wisconsin, the Commercial Litigation Branch of the Justice Department’s Civil Division, the National Association of Medicaid Fraud Control Units and the HHS-OIG.
“Medicaid covers the poorest, most vulnerable people in American society. Overcharging this needed government program for prescriptions is a disservice to everyone, and won’t be tolerated,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health & Human Services. “OIG will work vigilantly with law enforcement partners at all levels of government to safeguard this vital program.”
This resolution is part of the government's emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of 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 are more than
$7.1 billion.
Thursday 14 April 2011
U.S. Court Bars California Man from Selling or Administering Pension and Employee Welfare-Benefit PlansRead the Press Release
WASHINGTON – A federal court in Los Angeles has permanently barred William Alexander of Pasadena, Calif., and his two companies, Retirement Plan Services Inc. and Lyons Pensions Inc., from selling or administering pension plans or employee welfare-benefit plans, the Justice Department announced today. The court’s order, to which Alexander and his companies consented, also prohibits Alexander from preparing federal tax returns for others for a fee or representing others before the Internal Revenue Service (IRS).
In August 2010, the Justice Department sued Alexander, alleging that he promoted tax fraud schemes involving sham pension plans and welfare-benefit plans. According to the government complaint, Alexander helped small business owners create bogus pension plans so they could re-characterize their salaries as pension-plan contributions. Alexander then allegedly caused the sham contributions to be refunded to his customers through fake loans from the plans. According to the complaint, Alexander advised his customers that they could deduct the purported contributions in order to reduce or eliminate their federal income taxes. The complaint also alleged that Alexander fraudulently misrepresented his customers’ non-deductible personal expenses as deductible pension-plan contributions. The government alleged that Alexander’s promotion of these schemes cost the government at least $30 million.
The civil injunction order also requires Alexander to provide copies of the court’s order to anyone to whom he provided tax advice since Jan. 1, 2005, and for whom he has or can readily obtain a mail or e-mail address.
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 .
Two Owners of Miami-Area Mental Health Care Corporation Plead Guilty to Orchestrating $200 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two Miami-area residents and owners of a mental health care corporation, American Therapeutic Corporation (ATC), pleaded guilty today in U.S. District Court in Miami for orchestrating a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
Lawrence S. Duran, 49, and Marianella Valera, 40, pleaded guilty at an arraignment hearing before Magistrate Judge Barry L. Garber to all counts charged in a superseding indictment, which was unsealed on Feb. 15, 2011. The superseding indictment charges Duran with 38 felony counts and Valera with 21 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements. The court must hold a hearing scheduled for a later date to accept and enter the guilty pleas.
“Lawrence Duran and Marianella Valera masterminded a complex Medicare fraud scheme,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “They reaped millions in illegal profits by operating a sham mental health care company that provided unnecessary and illegitimate treatments to patients, many of whom were recruited through bribes and kickbacks, and then they laundered the proceeds. In carrying out their elaborate scheme, Duran and Valera and their co-conspirators billed Medicare for more than $200 million – a staggering sum. Having now pleaded guilty to their crimes, they must face the consequences.”
“Community mental health centers are an essential part of the Nation’s health care system and serve vulnerable populations,” said Daniel R. Levinson, HHS Inspector General. “Today’s guilty pleas emphasize that OIG, along with our law enforcement partners, will not tolerate kickbacks and other crimes committed against the Medicare program.”
“These defendants billed Medicare for mental health services that were illegitimate or never provided,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “In this way, these defendants engaged in an eight-year scheme that defrauded Medicare out of more than $200 million in payments for purported community mental health services. We will continue to aggressively prosecute all types of Medicare fraud and all levels of fraudsters, up and down the organizational chain, to help preserve our scarce Medicare dollars for those who really need it, the sick and the elderly.”
“Health care fraud robs from the elderly and disabled,” said Special Agent in Charge John V. Gillies of the FBI’s Miami Field Office. “Today’s pleas should be a warning to illegitimate providers who abuse their position of trust within the medical community. No matter what the scheme or how elaborately disguised, the FBI and our law enforcement partners will investigate and prosecute such fraud to the fullest extent of the law.”
In pleading guilty, Duran and Valera admitted that they masterminded and executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Duran and Valera submitted false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. Duran and Valera also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
According to the superseding indictment, Duran, Valera and others paid bribes and kickbacks to recruit Medicare beneficiaries to attend ATC and ASI. The superseding indictment charges that Duran, Valera and others billed Medicare for treatments purportedly provided to these recruited patients. According to court documents, the treatments were medically unnecessary or never provided at all. Duran and Valera supported the kickback scheme through an extensive money laundering scheme that aimed to conceal the illicit conversion of Medicare payments into cash. The defendants and their co-conspirators also engaged in sophisticated measures to conceal their fraudulent activities from Medicare and from law enforcement.
Specifically, according to court filings, Duran, Valera and others paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. The defendants and their co-conspirators actively recruited ALF and halfway house owners and operators and patient brokers to participate in this kickback scheme. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs so that ATC and ASI could bill Medicare for more than $200 million in medically unnecessary services.
The superseding indictment charges that Duran, Valera and others caused the alteration of patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by ATC qualified for PHP treatments. According to court documents, Duran and Valera also instructed employees and doctors to alter diagnoses and medication types and levels to make it falsely appear that ATC patients qualified for PHP services. The superseding indictment also charges that Duran, Valera and co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.
The defendants are also charged with engaging in a money laundering conspiracy to enrich themselves and to provide cash for the millions of dollars in kickbacks paid to recruit Medicare beneficiaries. According to court documents, they used another company they owned and operated, Medlink Professional Management Group Inc., to conceal the health care fraud and kickbacks from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred millions of dollars to Medlink. The superseding indictment charges that they and others opened phony corporations to receive checks and wire transfers from both ATC and Medlink to convert that money into cash for their personal enrichment and for the payment of kickbacks. According to court documents, Duran, Valera and others cashed checks at different bank branches and different locations to conceal the true purpose of their activities and to evade reporting requirements.
Duran and Valera have been in federal custody since their arrests in October 2010, under orders of detention issued by Magistrate Judge Andrea Simonton and U.S. District Court Judge James Lawrence King. Sentencing is scheduled for July 13 at 9:30 a.m. Duran and Valera each face a maximum of 10 years in prison for each count of conspiracy to commit health care fraud and each count of health care fraud; five years in prison for each count of conspiracy to pay and receive health care kickbacks; 20 years in prison for each count of conspiracy to commit money laundering; 10 to 20 years in prison for each count of money laundering; and 10 years in prison for each count of structuring to avoid reporting requirements. The defendants’ assets were frozen at the time of their arrests through civil forfeiture proceedings.
Co-conspirator Margarita Acevedo, also charged in the February 2011 superseding indictment, pleaded guilty on April 7, 2011, for her role in the fraud scheme.
Today’s guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The criminal case is being prosecuted by Trial Attorneys Jennifer L. Saulino and Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants that collectively have billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Two Former Washington, D.C., Tax Return Preparers Charged with Preparing False Income Tax ReturnsRead the Press Release
WASHINGTON – Two former Washington, D.C., tax preparers have been indicted on tax charges, the Justice Department and Internal Revenue Service (IRS) announced today. Onuoha “Iggy” Nwokoro, a former D.C. tax return preparer, made his initial appearance in federal district court on tax charges. On April 12, 2011, a grand jury returned a sealed indictment charging Nwokoro with 18 counts of aiding and assisting in the preparation of false income tax returns. The indictment was unsealed on April 13, 2011, following Nwokoro’s arrest in Washington, D.C. A trial date has not been scheduled.
According to the indictment, from prior to January 2005 through April 2007, Nwokoro operated BBC Tax Services, also known as BBC Tax and Medical Billing Services, a tax preparation business in Washington, D.C. For tax years 2004, 2005 and 2006, Nwokoro prepared and electronically filed tax returns for his clients that included fictitious business income and expenses for what purported to be a computer systems business. The indictment alleges that 15 of the returns collectively report more than $1.2 million in fraudulent business losses.
According to the indictment, Nwokoro’s own 2004, 2005 and 2006, personal tax returns were also false in that they under-reported his income. If convicted, Nwokoro faces a maximum sentence of 54 years in prison and a maximum fine of $250,000.
The case was investigated by IRS-Criminal Investigation and is being prosecuted by Department of Justice Tax Division Trial Attorneys Jorge Almonte and Jeffrey B. Bender. The case is CR-11-104.
In a related matter, the Justice Department and IRS announced that John T. Hoang, a former D.C. tax return preparer, made his initial appearance today in D.C. federal district court on tax charges. On April 12, 2011, a grand jury returned a sealed indictment charging Hoang with six counts of aiding and assisting in the preparation of false income tax returns. The indictment was unsealed on today, following Hoang’s arrest in Maryland. A trial date has not been scheduled.
According to the indictment, from prior to January 2005 through at least April 2005, Hoang operated “John T. Hoang CPA,” a tax preparation business in Washington. For tax year 2004, Hoang prepared and electronically filed for his clients tax returns that included fictitious business income and expenses for what purported to be a technology licensing business. The indictment alleges that six returns collectively report more than $400,000 in fraudulent business losses.
The Hoang case was investigated by IRS-Criminal Investigation and is being prosecuted by Department of Justice Tax Division Trial Attorneys Jorge Almonte and Jeffrey B. Bender. The case is CR-11-103.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
Newspaper Publisher Pleads Guilty to Making False Statement to CongressRead the Press Release
WASHINGTON - Karl B. Rodney, the chief executive officer of the Carib News Foundation and publisher of Carib News, pleaded guilty today in U.S. District Court for the District of Columbia to making a false statement to the U.S. House of Representatives, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
According to court documents, through the Carib News foundation and Carib News, Rodney has organized an annual conference for more than a decade in the Caribbean called the Annual Caribbean Multi-National Business Conference. Many of the conferences have been attended by members of Congress.
In 2007, the House of Representatives modified its travel rules to require, among other things, that all privately-funded travel by members of Congress be pre-approved by the House of Representatives Committee on Standards of Official Conduct (Ethics Committee.) The pre-approval process required the private sponsor to submit a Private Sponsor Travel Certification Form disclosing, among other things, the source of funding for the member’s trip, including transportation, lodging and meals.
In pleading guilty today, Rodney admitted that he made false statements on the Private Sponsor Travel Certification Form submitted to the Ethics Committee in connection with the 12th Annual Caribbean Multi-National Business Conference held in Antigua and Barbuda from November 8-11, 2007.
According to court documents, in connection with the 2007 conference, Rodney provided round-trip airfare, hotels and meals for the members attending the conference using money and in-kind support provided by the foreign host country and a private corporation. Under the House of Representatives’ travel rules, Rodney was required to disclose on the Private Sponsor Travel Certification Form any entity contributing funds or in-kind support towards the members’ trip. Instead of listing the foreign host country and private corporation on the certification form that he submitted, Rodney falsely stated that Carib News Foundation was the only entity that paid for the members’ travel and that the foundation had not accepted funds from any other source earmarked for that purpose.
Rodney faces a maximum of five years in prison and a $250,000 fine on the false statement charge. Sentencing is scheduled for July 22, 2011, at 2:30 p.m. before U.S. District Judge Emmet G. Sullivan.
This case is being prosecuted by Trial Attorneys Kate Albrecht and Justin Shur of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI’s Washington Field Office and the Office of the Special Inspector General for the Troubled Asset Relief Program.
Miami Doctor Convicted in $23 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Miami-area physician Rene De Los Rios was convicted of five felony counts today by a federal jury for his role in a $23 million dollar HIV injection and infusion Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
After a three-week trial, the jury convicted De Los Rios of one count of conspiracy to commit health care fraud and four counts of submission of false claims to the Medicare program. The conspiracy charge carries a maximum penalty of 10 years in prison and a $250,000 fine; each false claims count carries a maximum penalty of five years in prison . Sentencing has been scheduled for June 27, 2011.
Evidence at trial established that Damaris Oliva was the owner and operator of Metro Med of Hialeah Corp. 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 patients at the Metro Med clinic in exchange for those patients allowing Metro Med to use their Medicare numbers to bill the Medicare program.
Evidence at trial established that as part of the scheme, Oliva hired the De Los Rios to order unnecessary tests, sign medical analysis and diagnosis forms, and authorize treatments to make it appear that legitimate medical services, including injection and infusion therapies, were being provided to patients who were Medicare beneficiaries. The defendant also signed patient charts, often without seeing the patient, indicating that injection and infusion treatments were medically necessary, when, in fact, he knew they were not. Evidence at trial also established that the defendant diagnosed almost all of the patients at Metro Med with the same rare blood disorders, which the patients did not in fact have, in order to ensure maximum reimbursement from Medicare. Moreover, the evidence at trial showed that the defendant prescribed expensive medications, including Winrho, Procrit and Neupogen, to patients for the sole purpose of receiving reimbursement from the Medicare program. The evidence showed that Oliva paid the defendant $3,000 per week for his involvement in the HIV infusion scheme.
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 were not provided. The Medicare program paid approximately $11.7 million in claims. Damaris Oliva and three other individuals have each previously pleaded guilty to conspiracy to commit health care fraud in connection with the scheme.
Today’s verdict was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The case was prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section and Robert J. Luck, Assistant U.S. Attorney for the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, 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, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Massachusetts Man Convicted for Burning African-American ChurchRead the Press Release
WASHINGTON –Michael Jacques, 26, of Springfield, Mass., was found guilty by a federal jury of three crimes related to the burning of a predominantly African-American church in Springfield on the morning after Barack Obama was elected as the first African-American President of the United States, the Justice Department announced today.
Evidence at trial established that in the early morning hours of Nov. 5, 2008, within hours of Obama being elected president, Jacques and his co-conspirators agreed to burn and succeeded in burning the newly-constructed Macedonia Church of God in Christ’s building where religious services were to be held. The building was nearly completed at the time of the fire, which destroyed the entire structure, leaving only the metal superstructure and a small portion of the front corner intact. Investigators determined the fire to be incendiary in nature and caused by an unknown quantity of gasoline applied to the exterior and interior of the building.
Prior to the Nov. 4, 2008 presidential election, Jacques and his co-conspirators used racial slurs against African-Americans and expressed anger about the possible election of Obama as the first African-American President. On Nov. 4, 2008, Jacques and his co-conspirators agreed to retaliate against the election by burning the new church because the church members, congregation and bishop were African-American.
Jacques was convicted of damaging religious property and obstructing the free exercise of religion because of the race, color or ethnic characteristics of any individual associated with that religious property. Jacques was also convicted of conspiring to injure, oppress, threaten and intimidate the parishioners of the church in the free exercise or enjoyment of the right to hold and use real property, a right which is secured by the Constitution and laws of the United States, and for using fire in the course of a federal felony.
“Hateful acts of violence of this kind will not be tolerated in our country,” said Thomas E. Perez, Assistant Attorney General in charge of the Justice Department’s Civil Rights Division. “The department will continue to vigorously prosecute hate crimes against all individuals.”
“This was a very serious case that affected the lives of hundreds of parishioners at the Macedonia Church of God in Christ. When I met with Bishop Bryant Robinson it was clear to me how much damage was inflicted on his community by this horrible act. It was not necessarily about the physical structure that was burned, it was about symbolic and personal nature of the crime”, said U.S. Attorney for the District of Massachusetts Carmen M. Ortiz. “We are very pleased with the jury’s verdict and want to reaffirm our commitment to defend our most fundamental rights, stemming the tide of hatred and discrimination.”
Sentencing is scheduled for Sept. 15, 2011.
Two other co-conspirators, Thomas Gleason and Benjamin Haskell, have previously pleaded guilty for their role in the offenses. Haskell was sentenced to nine years in prison and three years of supervised release.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; FBI; Massachusetts State Police; Hampden County District Attorney’s Office and the Springfield Police Department. It was prosecuted by Assistant U.S. Attorneys Paul H. Smyth and Kevin O’Regan and Nicole Lee Ndumele, Trial Attorney in the Department of Justice’s Civil Rights Division.
Louisiana Father and Son Plead Guilty to Guiding Illegal Hunts for Protected AlligatorsRead the Press Release
WASHINGTON—Larry Dees Sr., 66, and Larry Dees Jr., 37, both of Maringuoin, La., each pleaded guilty today in U.S. District Court in Baton Rouge, La., to two violations of the Lacey Act for leading sport hunters to unauthorized areas to hunt American alligators in violation of the federal Endangered Species Act and Louisiana law, the Justice Department announced.
According to statements made in court, on Sep. 10, 2009, and on September 24-25, 2009, Dees Sr. and Dees Jr., licensed alligator helpers, guided out-of-state alligator sport hunters to unapproved areas, that is, areas for which they did not have appropriate state authorization to hunt. On Sep. 10, the sport hunter killed a 9'4" trophy-sized alligator.
In plea agreements filed in court, the United States and Larry Dees Sr. and Larry Dees Jr. recommend, in addition to the sentence imposed by the court, that the Dees serve a three year term of probation during which they will be prohibited from hunting as follows: for one year of the probation they will be prohibited from engaging worldwide in all hunting activities, including guiding, with any kind of weapon; for the remaining two years of probation they will be prohibited from engaging worldwide in all commercial alligator hunting activities, including guiding, with any kind of weapon. The plea agreements are subject to approval by the court. Larry Dees Sr. has been licensed since 1992. Larry Dees Jr. has been licensed since 2002.
In the 1960s alligators were classified as endangered due to over harvesting. In order to save this important natural and economic resource, Louisiana imposed strict regulations on alligator hunting in the wild. As a result, the alligator population rebounded. The law requires that licensed alligator helpers must have hide, or CITES (Convention on International Trade in Endangered Species), tags for the property on which they are hunting and must affix a tag to an alligator after the kill. Each tag is specific to a particular parcel of land. Annually, state biologists review alligator population data and decide where alligators may be hunted in order to preserve the species. Tags are issued for only those properties. Licensed helpers must hunt on tag-specific land. It is illegal to kill an alligator in an area for which the licensed helper does not have appropriate tags.
The American alligator is listed as a threatened species on the U.S. list of Threatened and Endangered Species. It also is listed as a crocodilian species on Appendix II of the CITES. To better regulate trade in crocodilian species, the parties to CITES agreed to a program of requiring a uniquely numbered tag to be inserted into the skin of each alligator immediately after it is killed. The tag is to remain with the skin as it travels in interstate or international commerce until it is manufactured into a final consumer product. The U.S. Secretary of the Interior promulgated special rules for American alligators that implement the CITES tagging program and regulate the harvest of alligators within the United States, including the requirement that American alligators must be taken in compliance with state law.
Larry Dees Sr. and Larry Dees Jr. each face a maximum sentence of one year in prison and a $200,000 fine.
The case is being prosecuted by Claire Whitney of the Environmental Crimes Section of the Department of Justice. The case was investigated by the Law Enforcement Division of the Louisiana Department of Wildlife and Fisheries and the U. S. Fish and Wildlife Service’s Office of Law Enforcement.
Justice Department Files ADA Lawsuit Against Puerto Rico Department of Justice for Discriminatory Employment PracticesRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit in federal court in San Juan, Puerto Rico, charging the Puerto Rico Department of Justice (PRDOJ) with employment discrimination for failing to provide a reasonable accommodation to an employee with a disability, as required by the Americans with Disabilities Act (ADA).
The complaint alleges that the PRDOJ knowingly relocated an employee who uses a wheelchair to an office building that was not accessible to her. As a result, the employee could not park her vehicle and enter the building without the assistance of others, and could not use the restroom during her work day. After the employee filed a complaint with the Equal Employment Opportunity Commission, the PRDOJ eventually relocated the employee to a more accessible office building, but continues to require her to attend long meetings on a regular basis at an inaccessible facility.
“The Americans with Disabilities Act protects an employee’s right to work in an environment that is free of unnecessary barriers to access,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to protecting the employment rights of individuals with disabilities, who should not be relegated to working in locations that result in unequal and, in this case, unsafe and undignified working conditions.”
Title I of the ADA prohibits employers, such as the PRDOJ, from discriminating against a qualified individual on the basis of disability in regard to job application procedures, hiring, advancement, discharge, employee compensation, job training and other terms, conditions and privileges of employment. In addition, an employer is required to make a reasonable accommodation to the known disability of an employee if it would not impose an “undue hardship” on the operation of the employer’s business. Reasonable accommodations are adjustments or modifications provided by an employer to enable people with disabilities to enjoy equal employment opportunities.
Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the department’s ADA website at www.ada.gov .
Former Pharmaceutical Company Lawyer Charged with Obstruction and Making False StatementsRead the Press Release
WASHINGTON – An attorney who formerly worked for a major pharmaceutical company was re-indicted on charges of obstruction and making false statements, the Justice Department announced today. The new indictment identifies GlaxoSmithKline (GSK) as Lauren Stevens’ employer at the time of the alleged obstruction and false statements. GSK has not been charged with a crime.
Stevens, a resident of Durham, N.C., is charged with one count of obstructing an official proceeding, one count of concealing and falsifying documents to influence a federal agency and four counts of making false statements to the Food and Drug Administration.
The indictment returned late Wednesday in the District of Maryland contains essentially the same charges that were brought against Stevens in November 2010. On March 23, 2011, the original indictment was dismissed by the District Court Judge Roger W. Titus. Judge Titus has scheduled a status conference for April 15, 2011, and set a tentative trial date of April 26, 2011.
Charges contained in the indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty it is to determine guilt or innocence.
Former InterMune Ceo Sentenced for False & Misleading Statements Related to Pulmonary Fibrosis Drug’s Clinical TestsRead the Press Release
SAN FRANCISCO – W. Scott Harkonen, M.D., the former chief executive office (CEO) of InterMune Inc., was sentenced Wednesday before U.S. District Court Judge Marilyn Hall Patel for wire fraud relating to the dissemination of false and misleading statements about the results of a clinical trial of InterMune’s drug Actimmune. Judge Patel sentenced Harkonen to three years’ probation, with six months of home confinement. He was ordered to pay a $20,000 fine and to perform 200 hours of community service. In September 2009, after a seven-week trial, a jury convicted Harkonen of wire fraud for the creation and dissemination of false and misleading information about the efficacy of Actimmune (Interferon gamma-1b) as a treatment for idiopathic pulmonary fibrosis (IPF).
Evidence at trial showed that Harkonen was the CEO of InterMune from February 1998 through June 30, 2003 and a member of InterMune’s board of directors. Under Harkonen’s direction, InterMune marketed and sold Actimmune to treat the fatal disease IPF despite the fact that Actimmune was not approved by the Food and Drug Administration (FDA) as a safe and effective treatment. The cost of Actimmune for one IPF patient for one year was approximately $50,000 and the vast majority of the sales of Actimmune were for the unapproved, off-label use of treating IPF.
Evidence at trial further showed that Harkonen caused InterMune to issue a false and misleading press release publicly announcing the results of a clinical trial of Actimmune for the treatment of IPF on Aug. 28, 2002. Although the clinical trial had failed, InterMune’s press release falsely stated that the results of the clinical trial established that Actimmune helped IPF patients live longer. The headline of the press release read, “InterMune Announces Phase III Data Demonstrating Survival Benefit of Actimmune in IPF,” with the subheading “Reduces Mortality by 70% in Patients With Mild to Moderate Disease.”
In October 2006, InterMune agreed to enter into a deferred prosecution agreement and to pay nearly $37 million to resolve criminal charges and civil liability in connection with the illegal promotion and marketing of its drug Actimmune. InterMune also entered into a five-year Corporate Integrity Agreement with the Office of Inspector General for the Department of Health and Human Services.
“The Department of Justice is firmly committed to holding accountable corporate executives who promote drugs using false or fraudulent information,” said Acting Deputy Assistant Attorney General for the Office of Consumer Protection Litigation, Maame Ewusi-Mensah Frimpong. “Executives like Dr. Harkonen, who—without regard for patient health or safety—engage in criminal conduct on behalf of their companies, will not be permitted to carry out this conduct with impunity.”
This case is being prosecuted by Assistant U.S. Attorney Kyle Waldinger of the Northern District of California and Trial Attorney Allan Gordus of the Office of Consumer Protection Litigation with the Department of Justice in Washington, D.C. The prosecution is the result of a multi-year investigation by the FBI; the FDA’s Office of Criminal Investigations; the U.S. Department of Veterans Affairs, Office of Inspector General; and the Office of Personnel Management, Office of the Inspector General.
Federal Employee Pleads Guilty to Failure to File Federal Income Tax ReturnRead the Press Release
WASHINGTON - Janet Jaensch, a federal employee, pleaded guilty in U.S. District Court in Alexandria, Va., to one count of failure to file a 2008 federal income tax return, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents, between 2001 and 2011, Jaensch was employed by the federal government and was married to Richard Jaensch. Between 2001 and 2008, Janet Jaensch did not timely file U.S. Individual Income Tax Returns, Form 1040, with the IRS, despite the fact that she was required to do so. Specifically, in 2008, Jaensch admitted that she received $152,725 in gross income, yet she did not timely file a federal income tax return nor did she timely pay any income tax to the IRS. She further admitted that between 2002 and 2009, she failed to timely pay approximately $226,685 in taxes to the IRS.
In addition, according to the statement of facts, Jaensch admitted that beginning in 2002, and continuing each year through approximately 2009, at the direction of her husband, she presented a letter to her payroll department directing her employer to stop withholding federal income taxes from her salary. Jaensch further admitted that between 2002 and 2009, at her husband’s direction, she willfully committed the following acts: sending a document to the IRS claiming that she was not a person required to file federal income tax returns; recording in Fairfax County, Va., a “Declaration of Independence by Public Notice” claiming that she was “not a party to the Constitution of the united States of America”; sending correspondence to the IRS claiming they could not instruct her employer to withhold taxes from her paycheck; and sending certified letters to the Defense Finance and Accounting Service (DFAS) and IRS advising that she is not a taxpayer.
The defendant faces a maximum potential sentence of one year in prison. Sentencing has been scheduled for Aug. 16, 2011.
Janet Jaensch’s husband, Richard Jaensch, was indicted in March 2011 by an Alexandria federal grand jury with one count of corruptly endeavoring to impede the IRS, one count of filing a false claim for a refund and four counts of failing to file a tax return for 2004 through 2007. His trial is scheduled for July 20, 2011.
This case was investigated by IRS-Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Gene Rossi and the Department of Justice’s Tax Division Trial Attorney Caryn Finley.
More information about the Justice Department’s Tax Division and its enforcement efforts is available atwww.usdoj.gov/tax/.
Federal Court Permanently Bars Texas Man from Operating Businesses Because of Unpaid Payroll TaxesRead the Press Release
DALLAS – A federal court in Dallas has barred Arthur Piner Grider III from operating businesses under any name, the Justice Department announced today. The final judgment and permanent injunction order, to which Grider agreed, finds him liable for more than $100 million in unpaid federal employment taxes, unemployment taxes and related penalties associated with numerous business entities, including Asgard Avionics Corp. of Florida, Talent Force Services LLC and NAG Financial LLC.
The court’s order also makes final a preliminary injunction entered against Grider in November 2010 that prohibited Grider and his employee leasing companies from, among other things, transferring funds to themselves or others before paying their current federal employment tax liabilities. The government’s complaint alleged that Grider and his business entities had a long history of “pyramiding” employment taxes.
According to the court’s orders, Grider and his wife agreed to allow the government to sell their Houston residence as a partial payment of his tax debts. The court also appointed a receiver to locate, preserve and distribute to creditors the assets of Grider’s businesses, including 69 company bank accounts and 14 antique automobiles manufactured between 1929 and 1970. The court also ordered the receiver to sell Grider’s interest in Pacific Aerospace Resources & Technologies LLC of Victorville, Calif., and to apply the sale proceeds to his tax debts.
Wednesday 13 April 2011
Two New Orleans Police Officers Convicted on Civil Rights and Obstruction of Justice Charges in Connection with the Beating Death of a CivilianRead the Press Release
WASHINGTON – Two officers with the New Orleans Police Department (NOPD) have been convicted of civil rights and obstruction of justice crimes in connection with the beating death of civilian Raymond Robair in July 2005, and a subsequent cover-up.
Officer Melvin Williams was convicted of violating Robair’s constitutional rights by beating him on July 30, 2005. Evidence at trial established that Williams approached Robair on the street in Robair’s neighborhood. Several neighbors testified that they saw Williams kick Robair in the side and beat him repeatedly with a baton. After the beating, Williams and Moore placed Robair, who was unconscious, into their police car and drove him to Charity Hospital, where, according to witnesses at trial, they falsely informed the hospital staff that they had found Robair under a bridge in this condition, and that all they knew was that Robair was a drug user. Based upon that information, the hospital treated Robair for a drug overdose rather than for blunt force trauma. Robair, who suffered fractured ribs and a ruptured spleen as a result of the beating, was pronounced dead within a few hours.
Williams was also convicted, along with Officer Matthew Dean Moore, of obstructing justice by writing and submitting a false and inaccurate incident report regarding their interactions with Robair. Moore was also convicted of one additional felony count for making false statements regarding the incident to FBI agents in March 2010.
“Every community relies upon their police officers to protect and serve, but these officers abused their power, violating the law and the public trust,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I am hopeful that today’s verdict brings a measure of justice to the victim’s family and the entire community.”
“As we recognize Victims’ Rights this week, today’s verdict is evidence that we, and our partners in the Department of Justice Civil Rights Division and FBI, are absolutely committed to bring those who have violated the sacred rights of our citizens to justice, in the hope that our pursuit will give the people of New Orleans confidence in the protection of honest and professional law enforcement,” said Jim Letten, U.S. Attorney for the Eastern District of Louisiana.
Williams faces a possible maximum sentence of life in prison. Moore faces a possible maximum sentence of 25 years in prison.
This case was investigated by the New Orleans Field Office of the FBI, and was prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Jared Fishman of the Justice Department’s Civil Rights Division, and Assistant U.S. Attorney Jordan Ginsberg of the Eastern District of Louisiana.
Justice Department Files Lawsuit Against the Berkeley County, S.C., Sheriff’s Office for Violating the First Amendment and Inmate’s Right to Practice His ReligionRead the Press Release
WASHINGTON– The Justice Department has filed a lawsuit against the Berkeley County, S.C., Sheriff’s Office and Sheriff Wayne DeWitt for violating the First Amendment and the Religious Land Use and Institutionalized Persons Act (RLUIPA). The Berkeley County Detention Center, a component of the sheriff’s office, enforces policies that prohibit inmates from receiving virtually all expressive material and substantially burden the rights of inmates to practice their faith.
By filing the complaint, the Justice Department seeks to participate in a recently filed lawsuit challenging the detention center’s restrictive mail policies. These policies prohibit inmates from receiving any books, magazines, newspapers, religious texts or other expressive materials through the mail, in violation of the Speech Clause of the First Amendment. Further, by denying religious texts to inmates, the sheriff’s office substantially burdens religious practice in contravention of RLUIPA. Finally, the prison violates the First Amendment’s Establishment Clause by making copies of the Bible readily available to inmates, while erecting barriers to inmates seeking access to texts used in other religious traditions.
“The freedom to practice one’s faith is among our most cherished rights, and the Justice Department is committed to defending that right. RLUIPA has proven to be a powerful tool in combating religious discrimination and ensuring religious freedom for all individuals,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
“The county’s religious intolerance tramples our freedom of religion which is a cornerstone of the United States Constitution,” said William N. Nettles, U.S. Attorney for the District of South Carolina. “We look forward to the privilege of defending the religious freedom afforded to all people in the United States by the Constitution.”
The Justice Department filed its lawsuit to enforce the sheriff’s office’s compliance with the First Amendment and RLUIPA. The First Amendment protects the right of prisoners to receive a reasonable amount of expressive material, and forbids government institutions from favoring certain religions over others. RLUIPA protects the religious freedom of persons confined to institutions such as prisons, mental health facilities and state-run nursing homes. RLUIPA was enacted by both houses of Congress unanimously and signed into law on September 22, 2000. The law also addresses religious discrimination in land use. In the 10 years since its passage, RLUIPA has helped secure the ability of thousands of individuals and institutions to practice their faiths freely and without discrimination.
More information on the Civil Rights Division’s efforts to combat religious discrimination may be found at www.justice.gov/crt .
Department of Justice Takes Action to Disable International BotnetRead the Press Release
WASHINGTON - Today the Department of Justice and FBI announced the filing of a civil complaint, the execution of criminal seizure warrants, and the issuance of a temporary restraining order as part of the most complete and comprehensive enforcement action ever taken by U.S authorities to disable an international botnet.
The botnet is a network of hundreds of thousands of computers infected with a malicious software program known as Coreflood, which installs itself by exploiting a vulnerability in computers running Windows operating systems. Coreflood allows infected computers to be controlled remotely for the purpose of stealing private personal and financial information from unsuspecting computer users, including users on corporate computer networks, and using that information to steal funds.
The Department of Justice strongly encourages computer users to ensure they are using security software on their computers and that users regularly update their security and routinely scan their computers for viruses. To learn more about what you can do to protect your computer, including how to download and receive updates on security vulnerabilities, the public may go to the following sites operated by U.S. Computer Emergency Readiness Team (CERT) and the Federal Trade Commission, respectively: us-cert.gov/nav/nt01 and onguardonline.gov/topics/malware.aspx .
The U.S. Attorney’s Office for the District of Connecticut has filed a civil complaint against 13 “John Doe” defendants, alleging that the defendants engaged in wire fraud, bank fraud and illegal interception of electronic communications. In addition, search warrants were obtained for computer servers throughout the country , and a seizure warrant was obtained in U.S. District Court for the District of Connecticut for 29 domain names. Finally, the government obtained a temporary restraining order (TRO), authorizing the government to respond to signals sent from infected computers in the United States in order to stop the Coreflood software from running, thereby preventing further harm to hundreds of thousands of unsuspecting users of infected computers in the United States.
“The seizure of the Coreflood servers and Internet domain names is expected to prevent criminals from using Coreflood or computers infected by Coreflood for their nefarious purposes,” said U.S. Attorney David B. Fein for the District of Connecticut. “I want to commend our industry partners for their collaboration with law enforcement to achieve this great result.”
“The actions announced today are part of a comprehensive effort by the department to disable an international botnet, while at the same time giving consumers the ability to take necessary steps to protect themselves from this harmful malware,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “Law enforcement will continue to use innovative and responsible actions in our fight against cyber criminals and at the same time, we urge consumers to ensure they are continually taking prudent measures to guard against harm, including routinely updating anti-virus security protection.”
“Botnets and the cyber criminals who deploy them jeopardize the economic security of the United States and the dependability of the nation's information infrastructure,” said Shawn Henry, Executive Assistant Director of the FBI’s Criminal, Cyber, Response and Services Branch. “These actions to mitigate the threat posed by the Coreflood botnet are the first of their kind in the United States and reflect our commitment to being creative and proactive in making the Internet more secure.”
According to court filings, Coreflood is a particularly harmful type of malicious software that records keystrokes and private communications on a computer. Once a computer is infected with Coreflood, it can be controlled remotely from another computer, known as a command and control (C & C) server. A computer infected by Coreflood and subject to remote control is referred to as a “bot,” short for “robot.” According to information contained in court filings, the group of all computers infected with Coreflood is known as the Coreflood botnet, which is believed to have been operating for nearly a decade and to have infected more than two million computers worldwide.
Coreflood steals usernames, passwords and other private personal and financial information allegedly used by the defendants for a variety of criminal purposes, including stealing funds from the compromised accounts. In one example described in court filings, through the illegal monitoring of Internet communications between the user and the user’s bank, Coreflood was used to take over an online banking session and caused the fraudulent transfer of funds to a foreign account.
In the enforcement actions announced today, five C & C servers that remotely controlled hundreds of thousands of infected computers were seized, as were 29 domain names used by the Coreflood botnet to communicate with the C & C servers. As authorized by the TRO, the government replaced the illegal C & C servers with substitute servers to prevent Coreflood from causing further injury to the owners and users of infected computers and other third parties.
The Coreflood malware on a victim’s computer is programmed to request directions and commands from C & C servers on a routine basis. New versions of the malware are introduced using the C & C servers on a regular basis, in an effort to stay ahead of security software and other virus updates. If the C & C servers do not respond, the existing Coreflood malware continues to run on the victim’s computer, collecting personal and financial information. The TRO authorizes the government to respond to these requests from infected computers in the United States with a command that temporarily stops the malware from running on the infected computer. During that time, the defendants will not be able to introduce different versions of the Coreflood malware onto the infected computers. By limiting the defendants ability to control the botnet, computer security providers will be given time to update their virus signatures and malicious software removal tools so that all victims can have a reliable tool available to them that removes the latest version of the malware from an infected computer.
The Department of Justice and FBI, working with Internet service providers around the country, is committed to identifying and notifying as many innocent victims as possible who have been infected with Coreflood, in order to avoid or minimize future fraud losses and identity theft resulting from Coreflood. Identified owners of infected computers will also be told how to “opt out” from the TRO, if for some reason they want to keep Coreflood running on their computers. At no time will law enforcement authorities access any information that may be stored on an infected computer.
While this enforcement action completely disabled the existing Coreflood botnet by seizing control from the criminals who ran it, this does not mean that Coreflood malware or similar forms of malware have been removed from the Internet entirely. Nor does it mean that criminals will not attempt to build another botnet using a different version of the Coreflood malware or other malware. The best defense against such malware, and botnets in general, is for users to ensure their computers are protected by regularly-updated anti-virus security software.
The law enforcement actions announced today are the result of an ongoing criminal investigation by the FBI’s New Haven Division, in coordination with the U.S. Marshals Service. Additional assistance was provided by Microsoft, the Internet Systems Consortium and other private industry partners. The matter is being prosecuted by the U.S. Attorney’s Office for the District of Connecticut, led by Assistant U.S. Attorney Edward Chang, and attorneys from the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.
Tuesday 12 April 2011
U.S. Army Contractor Pleads Guilty to Assault in Relation to Stabbing at Kandahar Airfield in AfghanistanRead the Press Release
WASHINGTON – A U.S. Army contractor pleaded guilty to assault today in relation to stabbing another individual with a knife at Kandahar Airfield in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
Sean T. Brehm, 44, of Capetown, South Africa, pleaded guilty before U.S. District Judge Anthony J. Trenga to assault resulting in serious bodily injury. At sentencing, scheduled for July 8, 2011, Brehm faces a maximum sentence of 10 years in prison.
According to court documents, the stabbing took place on Nov. 25, 2010. At the time of the stabbing, Brehm was working as a contractor for DynCorp International LLC, a U.S. Army contractor in Afghanistan. According to court documents, the stabbing resulted in serious bodily injury to the victim and the victim underwent emergency surgery immediately following the incident.
The defendant was charged under the Military Extraterritorial Jurisdiction Act (MEJA), a statute that gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, contractors or subcontractors of the Department of Defense.
The case is being prosecuted by Senior Trial Attorney James S. Yoon of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Ronald L. Walutes Jr. for the Eastern District of Virginia. The Criminal Division’s Office of International Affairs provided assistance.
The case was investigated by the FBI’s Washington Field Office. The U.S. Army Criminal Investigation Division and the International Security Assistance Force Military Police conducted the military investigation. The Office of Military Justice for Regional Command - South and 10th Mountain Division, and the Office of the Staff Judge Advocate for Regional Command - South provided invaluable assistance.
Shipping Conglomerate Pleads Guilty to Concealing Deliberate Pollution in “Magic Pipe” CaseRead the Press Release
WASHINGTON – Four corporations involved in owning and operating a fleet of vessels regularly visiting New Orleans pleaded guilty today and agreed to pay a $1 million penalty and be banned from doing business in the United States for the next five years under the terms of a proposed plea agreement.
Stanships Inc. (Marshall Islands), Stanships Inc. (New York), Standard Shipping Inc. and Calmore Maritime Ltd., collectively the owners and operator of the M/V Americana, a Panamanian registered cargo vessel, each pleaded guilty today in New Orleans before U.S. District Judge Carl J. Barbier to a total of 32 felony counts for violations of the Act to Prevent Pollution from Ships, Ports and Waterways Safety Act and obstruction of justice.
According to the plea agreement, subject to approval by the court, the four corporations will be prohibited from further business in the United States during the maximum five year period of probation. The plea terms also require personal banning of the owner of the companies who is also a corporate officer in some of the companies owning or technically managing vessels during the probationary period. Of the $1 million penalty, $250,000 will be devoted to community service payments to help conservation, protection, restoration and management projects to benefit fish and wildlife habitats and resources in the Eastern District of Louisiana.
The government’s investigation of the M/V Americana started when a crew member told the U.S. Coast Guard during an inspection of the ship on Nov. 29, 2010, that the ship was illegally dumping sludge and oily waste overboard using a so-called “magic pipe” to bypass required pollution prevention equipment. The crew member provided the Coast Guard with cell phone photos taken at sea showing the use of the bypass. According to an agreed upon factual statement filed in court, the defendants have admitted the following:
- Sludge and oily waste from the vessel’s engines was transferred to a fuel tank and then deliberately pumped overboard.
- The ship had an unreported leak between a ballast and fuel tank that led to overboard discharges of oil contaminated waste from both tanks.
- A black “comet streak” stain of apparent oil was visible on the outside of the ship in the immediate vicinity of the overboard valve when the ship was in New Orleans in December 2010.
- The metal bypass pipe used to dump oily waste overboard was hidden from view when the ship was in port.
- A false Oil Record Book was created to conceal the illegal discharges. Ships are required to keep an Oil Record Book in which internal transfers and overboard discharges are fully recorded. The log is regularly inspected by the Coast Guard to assure compliance with U.S. and international law and to make sure ships are not a threat to U.S. ports and waters.
The defendants also were charged with violating the Ports and Waterways Safety Act because they failed to report a hazardous situation that threatened U.S. ports and waters, involving the failure of the ship’s generators. After a voyage in which the ship had lost power for several days at sea, the ship arrived at the Southwest Pass, La. The master, who opposed proceeding to port until the problem was corrected, was directed by a shore-side manager to write an email indicating that the ship had two generators. This was communicated to the Coast Guard which then allowed the ship to enter the Mississippi River. However, the agency was not told that neither of the two generators was fully operational or able to power the ship, and that there was no backup since a third generator was completely inoperable. Because of the hazardous situation, the master ordered tug boats to guide the ship into port.
Stanships Inc. (Marshall Islands) is a repeat offender. It committed new crimes after it was sentenced on Sep. 29, 2010, for deliberate discharges in U.S. waters and concealing illegal pollution in falsified ship records from the M/V Doric Glory. In that case, U.S. District Judge Helen G. Berrigan ordered the defendant to implement a comprehensive environmental compliance plan and pay $700,000 in criminal fines and an additional $125,000 as community service payments. In pleading guilty, Stanships Inc. (Marshall Islands) admitted that it violated the terms of its probation. The M/V Doric Glory prosecution was also initiated by crew members. The court issued an award to the two whistleblowers under the Act to Prevent Pollution from Ships which provides that up to one-half of a criminal fine can be awarded to those providing information that leads to conviction.
“Together with our partners at the Coast Guard, Environmental Protection Agency, and United States Attorney’s Office, we are sending the message that we will vigorously prosecute deliberate violations of environmental and safety laws,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “As a consequence of their violations of the law, Stanships’ vessels and related corporations will pay a substantial fine and be barred from doing business in the United States for the next five years.”
“The endangerment of our environment and quality of life resulting from repeat offenders is simply unacceptable and will not be tolerated. We will work aggressively with our partners in the U.S. Department of Justice Environment and Natural Resources Division, U. S. Coast Guard and EPA Criminal Investigative Division to ensure that our water, our rivers and wetlands remain safe for our citizens and for future generations,” said Jim Letten, U.S. Attorney for the Eastern District of Louisiana.
“The outcome of this case clearly demonstrates the Coast Guard's commitment to work with our interagency partners to aggressively enforce all maritime anti-pollution laws. These federal laws are in place to protect the marine environment and America's waterways. It is especially disappointing to see a repeat offender violate these laws. This case is a testament to the dedication of all persons who were involved in resolving this matter including my legal staff, Coast Guard Investigative Service, Coast Guard Sector New Orleans, the U.S Department of Justice Environmental Crimes Section and U.S. Attorney's Office for the Eastern District of Louisiana,” said Rear Adm. Mary E. Landry, Eighth District Coast Guard commander.
“Today’s action demonstrates that neither the government nor the public will tolerate the flagrant and repeated violation of U.S. laws,” said Ivan J. Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Louisiana. “The government contends that the defendant not only failed to carry out the terms of its probation, it knowingly released oil into our oceans after the sentence was passed. The oceans must be protected from shipping companies that look to cut corners by dumping waste improperly.”
“No matter how vast they seem, aquatic resources are still finite and the Coast Guard Investigative Service remains committed to their preservation,” said Damon Rodriguez, Coast Guard Investigative Service Gulf Region special agent in charge.
This case was investigated criminally by the U.S. Coast Guard Criminal Investigative Services and the EPA Criminal Investigation Division, with assistance from Sector New Orleans, Eight Coast Guard District Office of the Judge Advocate. The case was prosecuted by Assistant U.S. Attorneys Emily K. Greenfield and Dorothy Manning Taylor, and Senior Trial Attorney Richard A. Udell of the Environmental Crimes Section of Department of Justice Environment and Natural Resources Division.
Departments of Justice and Education Reach Agreement with Owatonna, Minn., Public Schools to Resolve Harassment AllegationsRead the Press Release
WASHINGTON – Today, the Justice Department’s Civil Rights Division and the Department of Education’s Office for Civil Rights, reached a settlement agreement with Independent School District #761 in Owatonna, Minn., to resolve an investigation into the race and national origin harassment and disproportionate discipline of Somali-American students at Owatonna High School.
The complaint alleged severe and persistent harassment of Somali-American students, culminating in an incident in November 2009, when approximately 11 white and Somali-American students engaged in a fight. Title IV of the Civil Rights Act of 1964, Title VI of the Civil Rights Act of 1964, and the Equal Protection Clause of the Fourteenth Amendment to the Constitution prohibit harassment and discrimination based on race, color, sex, national origin or religion.
In collaboration with the district, community advocacy groups, students and parents, the Departments of Justice and Education conducted an extensive investigation of the school district’s policies and practices with regard to student-on-student harassment and discipline. The departments gathered evidence indicating that the district meted out disproportionate discipline for the students involved in the November 2009 incident and that the district’s policies, procedures and trainings were not adequately addressing harassment against Somali-American students. The district and its superintendent took affirmative steps to address the harassment and disproportionate discipline of Somali-American students, and voluntarily entered into the settlement agreement.
“All students have a right to go to school without fearing harassment from their peers, and schools have a responsibility to ensure students can exercise that right. We will continue to use all of the tools in our law enforcement arsenal to ensure that all students can go to school in a safe learning environment,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I applaud the school district for working with us to address this matter, and we hope this agreement reminds school officials elsewhere of their obligations under federal law.”
“If children aren’t safe, then children can’t learn. That’s why the Obama Administration is committed to ensuring all students in this country can attend school in an environment free from physical threats and discrimination,” said Russlynn Ali, Assistant Secretary for the Office for Civil Rights at the Department of Education. “As a country, we must make clear that harassment in our schools, in any form, will not be tolerated. Local officials are in the best position to stop harassment in its tracks and the Obama Administration will use every resource we have to help them.”
According to the agreement, the district will take all reasonable steps to ensure that all students enrolled in the district are not subject to harassment or discrimination on the basis of race, color or national origin, and to respond promptly and appropriately to all reports of harassment. To that end, the district has agreed to improve its policies and procedures concerning harassment and discipline as necessary to make them effectively protect students from racial or national origin-based harassment to specifically include, among other things: (1) issue an anti-harassment statement to all district students, parents and staff; (2) conduct training of all district faculty, staff and students on discrimination and harassment; (3) meet with high school Somali students to discuss their concerns about harassment; (4) establish a working group of district personnel, students and parents to make recommendations to the district regarding the effectiveness of the district’s anti-harassment program; (5) develop a district-wide monitoring program to assess the effectiveness of the district’s anti-harassment efforts; and (6) provide annual compliance reports to the departments for the next three years.
The enforcement of Title IV and Title VI are top priorities of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website atwww.justice.gov/crt . Enforcement of Title VI is also a top priority of Department of Education’s Office for Civil Rights. Additional information about the Department of Education’s Office for Civil Rights is available on its website at www2.ed.gov/about/offices/list/ocr/index.html .
Monday 11 April 2011
Virginia Man Sentenced to 23 Years in Prison for<br /> Plotting Attacks on D.C.-Area Metro Stations with <br /> People He Believed to Be Al-Qaeda MembersRead the Press Release
WASHINGTON – Farooque Ahmed, 35, of Ashburn, Va., was sentenced today to 23 years in prison, followed by 50 years of supervised release, after pleading guilty to charges stemming from his attempts to assist others whom he believed to be members of al-Qaeda in planning bombings at Metrorail stations in the Washington, D.C., area.
Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; Todd Hinnen, Acting Assistant Attorney General for National Security; and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after Ahmed entered his guilty plea and was sentenced by U.S. District Court Judge Bruce Lee.
Ahmed, a naturalized U.S. citizen born in Pakistan, pleaded guilty to the charges of attempting to provide material support to a designated terrorist organization and collecting information to assist in planning a terrorist attack on a transit facility. In a plea agreement, the defense and government jointly recommended a prison sentence of 23 years in prison. Following the acceptance of the guilty plea, Judge Lee immediately sentenced Ahmed to the agreed-upon term of imprisonment and imposed a 50-year term of supervised release.
In announcing the plea, officials emphasized that at no time was the public in danger during this investigation and that the FBI was aware of Ahmed’s activities from before the alleged attempt began and closely monitored his activities until his arrest.
“Mr. Ahmed today admitted he was determined to kill as many people as possible through multiple bombings at the heart of our nation’s capital,” said U.S. Attorney Neil H. MacBride. “It’s chilling that a man from Ashburn could admit to planning these acts of terrorism, and a 23-year sentence is a just punishment. We are grateful for the outstanding work of the FBI in detecting and disrupting this plot.”
“From his home in Ashburn, Virginia, believing that he was working for Al-Qaeda, Farooque Ahmed plotted to carry out the simultaneous bombing of multiple Metro trains in the D.C. area,” said Todd Hinnen, Acting Assistant Attorney General for National Security. “Today's plea provides a powerful example of how law enforcement and intelligence officials working together continue to use the criminal justice system to protect America from attack, obtain intelligence from terrorists, and secure their lawful, long-term detention.”
“This individual followed a twisted, radical ideology outside that of the mainstream Muslim community which led him to break the law. He now faces the consequences of his actions,” said James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office. “The FBI remains committed to disrupting possible terrorist plots and individuals who seek to assist terrorist organizations.”
Ahmed was arrested by the FBI on Oct. 27, 2010. According to court records, from April 2010 through Oct. 25, 2010, Ahmed attempted to assist others whom he believed to be members of al-Qaeda in planning multiple bombings to cause mass casualties at Metrorail stations. On April 18, 2010, he drove to a hotel in Dulles, Va., and met with a courier he believed to be affiliated with a terrorist organization who provided Ahmed with a document that provided potential locations at which future meetings could be arranged. On or about May 15, 2010, at a hotel in Herndon, Va., Ahmed agreed to watch and photograph another hotel in Washington, D.C., and a Metrorail station in Arlington, Va., to obtain information about their security and busiest periods.
Ahmed participated in surveillance and recorded video images of Metrorail stations in Arlington, Va., on four occasions. On or about July 19, 2010, in a hotel room in Sterling, Va., Ahmed handed a memory stick containing video images of a Metrorail station in Arlington to an individual whom Ahmed believed to be affiliated with al-Qaeda. On that same day, Ahmed allegedly agreed to assess the security of two other Metrorail stations in Arlington as locations of terrorist attacks.
On or about Sept. 28, 2010, in a hotel room in Herndon, Ahmed handed a USB drive containing images of two Metrorail stations in Arlington to an individual whom Ahmed believed to be affiliated with al-Qaeda. On or about Sept. 28, 2010, he also provided to an individual whom he believed to be affiliated with al-Qaeda diagrams that Ahmed drew of three Metrorail stations in Arlington and provided suggestions as to where explosives should be placed on trains in Metrorail stations in Arlington to kill the most people in simultaneous attacks planned for 2011.
This case was investigated by the FBI’s Washington Field Office Joint Terrorism Task Force, which includes 35 agencies in the Northern Virginia and Washington, D.C., metropolitan area. Assistant U.S. Attorney Gordon Kromberg and Trial Attorneys Joseph Moreno and Paul Casey of the Counterterrorism Section in the Justice Department’s National Security Division are prosecuting the case on behalf of the United States.
Richmond, Virginia Businessman Pleads Guilty for Role inInvestment Fraud Scheme Causing Millions in LossesRead the Press Release
WASHINGTON – Julius Everett “Bud” Johnson, of Richmond, Va., pleaded guilty today in U.S. District Court in Richmond for his role in an investment scheme resulting in millions of dollars in losses, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
Johnson, 62, pleaded guilty before U.S. District Court Judge James R. Spencerto one count of conspiracy to commit mail, wire and bank fraud and one count of engaging in unlawful monetary transactions. For these offenses, he faces a maximum of 15 years in prison, a fine of up to $500,000 and mandatory restitution. Sentencing is scheduled for July 19, 2011.
According to court filings, from prior to July 2009 until at least March 2010, Johnson owned and operated several businesses based in Richmond, including Virginia Group Benefits; Mid-Atlantic Insurance; F.I.C. Financial Group, Inc.; Benefit Contractors Administrators Inc.; River City Cleaners LLC; Roberts Awning LLC; Norvell Awning, LLC; MHC Linen Services LLC; The Everett Group; and Living Well. Johnson and a co-conspirator offered investments in the different businesses, generally including a promise of returns of up to 10 percent within one to four years. Johnson and his co-conspirator represented to potential investors that their investment funds would be funneled directly into specific companies, which would generate the returns on investment. Instead, a significant portion of the invested funds were used to repay other investors and to cover operating costs for unrelated businesses.
The statement of facts details two separate transactions where Johnson and his co-conspirator misused investor funds. In the summer of 2009, Johnson experienced shortages in some of his companies. At the same time, he was approached by two investors who demanded a portion of their investments back. With the co-conspirator’s assistance, Johnson obtained additional investor funds that were ultimately used to repay $125,000 to the two investors. In a separate transaction occurring in October 2009, Johnson told his co-conspirator that he needed money to make quarterly interest payments. The co-conspirator successfully solicited an investor for $200,000 in funds that were purportedly intended to be invested in Norvell Awning Company. Although that money was initially deposited in the Norvell Awning bank account, the funds were depleted from that account within four days. In reality, Johnson diverted the money to repay other investors, to cover shortfalls in other companies and to pay a $30,000 commission to Johnson’s co-conspirator.
In connection with his guilty plea, Johnson stipulated that the restitution amount associated with this scheme is approximately $8.92 million. Johnson will be ordered to repay the final restitution amount to his victims at sentencing.
This case is being prosecuted by Assistant U.S. Attorney Mike Gill of the Eastern District of Virginia and Trial Attorney Kevin Muhlendorf of the Criminal Division’s Fraud Section. The case was investigated by the Internal Revenue Service-Criminal Investigative Division, the FBI, and the Virginia State Corporation Commission Bureau of Insurance. The investigation is ongoing.
This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
New Jersey Solid Waste Management Facility Pleads Guilty to Illegal Dumping in Upstate New YorkRead the Press Release
WASHINGTON – Lieze Associates, dba Eagle Recycling of New Jersey, pleaded guilty today in federal court in Utica, N.Y., for conspiring to violate the Clean Water Act and to defraud the United States, the U.S. Attorney’s Office for the Northern District of New York and the U.S. Justice Department Environment and Natural Resources Division announced today.
Eagle Recycling pleaded guilty before U.S. District Judge Hurd for the Northern District of New York to one criminal felony count for conspiring to violate the Clean Water Act’s prohibition on filling wetlands and committing wire fraud to conduct that filling. According to the charges, Eagle Recycling and other co-conspirators, engaged in a multi-year scheme to illegally dump 8,100 tons of pulverized construction and demolition debris that was processed at Eagle Recycling’s North Bergen, N.J., solid waste management facility and then transported to a farmer’s property in Frankfort, N.Y.
According to court documents, Eagle Recycling and other conspirators concealed the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forged the name of a DEC official on the fraudulent permit. Eagle Recycling admitted in the plea agreement that once DEC and the U.S. Environmental Protection Agency (EPA) learned of the illegal dumping, the company began a systematic pattern of document concealment, alteration and destruction including, but not limited to, destroying documents during the execution of a federal search warrant, secreting documents responsive to grand jury subpoenas, falsifying certifications submitted to the Grand Jury, and falsifying and submitting environmental sampling to the EPA.
As part of the plea agreement, Eagle Recycling has agreed to pay a criminal fine of $500,000, to implement an environmental compliance plan at its North Bergen facility, and to pay restitution which potentially includes cleanup costs at the Frankfort, N.Y., site.
U.S. Attorney Richard S. Hartunian said “This case is another example of our continued efforts to aggressively prosecute those who illegally pollute the environment. The joint efforts of the state and federal investigation team that brought this case to a successful conclusion are to be commended.”
“This investigation underscores the extent that environmental polluters will go to avoid New York and federal environmental laws,” said New York State Department of Environmental Conservation Commissioner Joe Martens. This long term investigation, first stated in 2006, highlights the complexity of the crime and propensity of the criminal actors to cross state lines to help cover their actions. It was only through the cooperative investigation by the New York State Environmental Conservation Police, Bureau of Environmental Crimes (BECI), EPA, US Attorney’s office and the New Jersey State Police that this criminal enterprise was uncovered and further environmental damage avoided."
Today’s plea is related to the plea of Jonathan Deck who pleaded guilty to similar conspiracy charges in late-2009. Sentencing has been scheduled for Sept. 9, 2011.
This case was investigated by Criminal Investigators with the BECI; Special Agents from the EPA's Criminal Investigation Division and the Internal Revenue Service; investigators from the New Jersey State Police Office of Business Integrity Unit; the New Jersey Department of Environmental Protection; and the Ohio Department of Environmental Protection. The case is being prosecuted by Assistant U.S. Attorney Craig A. Benedict, of the Northern District of New York, and Todd W. Gleason of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Massachusetts Fish Packer Found Guilty of Falsely and Misleadingly Labeling Frozen Fish FilletsRead the Press Release
WASHINGTON— Stephen C. Delaney, 55, of Quincy, Mass., was found guilty on April 8, 2011, by a federal jury in Boston of falsely labeling frozen fish fillets from China.
Specifically, Delaney was convicted of a felony violation of the Lacey Act, a federal wildlife statute. The jury found that, on or about April 15, 2009, Delaney falsely labeled approximately $8,000 worth of frozen fillets of pollock, product of China, as cod loins, product of Canada. The labeling of pollock as cod is identified by the Food and Drug Administration (FDA) on the list of examples of substituted seafood and economic fraud on its website. Evidence at trial established that the price of cod is approximately $1.00 per pound higher than that for Alaska pollock.
In addition, Delaney was convicted on one misdemeanor violation of the Food, Drug and Cosmetic Act for misbranding seafood. Specifically, the jury found that Delaney sent into interstate commerce approximately $203,000 worth of frozen fish fillets, that were falsely and misleadingly labeled as products of Canada, Holland, Namibia and the United States, when they were actually a product of China.
Delaney was acquitted on several additional charges.
According to evidence presented during the week-long trial, Delaney, the president of South Shore Fisheries, would take frozen fish fillets out of cold storage and rebox and re-label the fish for various seafood dealers. At the direction of the dealers, Delaney would take the frozen fish from one box, place it into a new box and place a new label on the box. This enabled him to, through a change of label, change the species and/or country of origin of the fillets.
Documents admitted at trial showed that Delaney changed approximately $203,000 worth of mostly sole fillets from China into mostly flounder fillets from Canada, the United States and other countries. In one instance the records showed that Delaney took fillets from boxes labeled as product of China and changed it into product of Holland and Canada while leaving some as product of China. Another record showed such product also changing from a 4 oz. label to a 5 oz. label.
This prosecution is one of a number over the past few years targeting fraud in the seafood industry.
Delaney faces a statutory maximum of five years in jail and fines of up to $250,000 for his conviction on the felony false labeling charge. He also faces a statutory maximum of one year in jail and fines of up to $100,000 for his conviction on the misdemeanor misbranding charge. Sentencing is scheduled for June 8, 2011.
The case was investigated by Special Agents of the National Oceanic and Atmospheric Administration Fisheries Office of Law Enforcement, FDA’s Office of Criminal Investigations. Trial Attorney Jessica Alloway and Assistant Chief Elinor Colbourn of the Environmental Crimes Section of the Environment and Natural Resources Division prosecuted the case.
Foreign National Pleads Guilty in Washington, D.C., for Role in International Money Laundering Scheme Involving an Alleged $1.4 Million in Losses to Victims; Romanian National SurrendersRead the Press Release
WASHINGTON – A Bulgarian national pleaded guilty today in U.S. District Court in the District of Columbia for his role in laundering money for a transnational criminal group based in Eastern Europe, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. Additionally, a Romanian national who is charged in the same scheme surrendered and appeared today in federal court in the District of Columbia. According to court documents, in less than one year, the criminal conspiracy netted more than $1.4 million from U.S. victims.
Georgi Vasilev Pletnyov, 50, a resident of Bulgaria, pleaded guilty before U.S. District Court Judge Paul L. Friedman to conspiracy to commit wire fraud and conspiracy to commit money laundering. Pletynov was extradited from Poland to the United States in May 2010. He faces a maximum sentence of 20 years in prison at sentencing, scheduled for Aug. 22, 2011. Roman Teodor appeared before Judge Friedman and was arraigned on the same charges as his co-defendant Pletnyov. Teodor was ordered detained.
According to court documents, Pletnyov and Teodor participated in a scheme that operated from July 2005 through November 2006, and involved the posting of fraudulent advertisements on eBay and other websites offering expensive vehicles and boats for sale that the conspirators did not possess. When the U.S. victims expressed interest in the merchandise, they were contacted directly by an e-mail from a purported seller. According to court documents, the victims were then instructed to wire transfer payments through “eBay Secure Traders” — an entity which has no actual affiliation to eBay but was used as a ruse to persuade the victims that they were sending money into a secure escrow account pending delivery and inspection of their purchases. Instead, the victims’ funds were wired directly into bank accounts in Hungary, Slovakia, the Czech Republic and Poland that were controlled by co-conspirators.
Pletnyov and Teodor were originally charged on Jan. 9, 2008, along with four additional defendants: Ivaylo Vasilev Pletnyov, Nikolay Georgiev Minchev, Georgi Boychev Georgiev and Antoaneta Angelova Getova. On Dec. 2, 2009, Ivaylo Vasilev Pletnyov and Nikolay Georgiev Minchev were sentenced to 48 months and 30 months in prison, respectively, for their roles in the money laundering conspiracy. On Oct. 8, 2010, Georgi Boychev Georgiev was sentenced to 15 months in prison for his role in this scheme. The United States continues to work with foreign counterparts in Bulgaria regarding Antoaneta Angelova Getova. An indictment is merely an accusation and the defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
This investigation was conducted by the FBI – Hungarian National Bureau of Investigation (HNBI) Organized Crime Task Force located in Budapest, Hungary (Budapest Task Force). The Budapest Task Force was established by the FBI in April 2000 to address the increasing threat of Eurasian organized crime groups to the United States.
The case is being prosecuted by Trial Attorney Lisa Page of the Criminal Division’s Organized Crime and Racketeering Section. The Criminal Division’s Office of International Affairs provided significant assistance on this case.
Friday 8 April 2011
Outlaws Motorcycle National President Sentenced to 20 Years in PrisonRead the Press Release
WASHINGTON – The national president of the American Outlaw Association (Outlaws) motorcycle gang was sentenced today to 20 years in prison for leading a violent criminal organization.
U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; and Rich Marianos, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division made the announcement after sentencing by U.S. District Judge Henry E. Hudson.
“Jack Rosga led an outlaw motorcycle gang that was violent at its core,” said U.S. Attorney MacBride. “As the gang’s national president, Mr. Rosga declared war on the rival Hell’s Angels and ordered violent acts on rival gang members. Mr. Rosga admitted to undercover federal agents that he expected to go to jail for leading this violent motorcycle gang, and the jury convicted him of conspiracy to commit racketeering and violent acts. He spent decades dedicated to a criminal way of life, and he’ll now spend decades in prison paying for those crimes.”
“The Outlaws motorcycle gang that Jack Rosga led is responsible for numerous crimes across multiple states,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “Mr. Rosga’s conduct, and the violent activities of his organized criminal enterprise, must have severe consequences. Today’s sentence reflects that. We will not tolerate organized criminal gangs in our communities.”
“This investigation is one of many that reinforces ATF’s commitment to fighting violent crime,” said ATF Acting Special Agent in Charge Rich Marianos. “In partnership with the U.S. Attorney’s Office, we will continue to focus our efforts on putting the worst of the worst violent criminals behind bars so that our neighbors can feel safer in their communities.”
The national president of the Oulaws organization, Jack Rosga, aka “Milwaukee Jack,” 53, was found guilty on Dec. 21, 2010, of conspiring to engage in racketeering activities and conspiring to commit violence in aid of racketeering. To date, 27 individuals have been charged as a result of a long-term investigation into criminal activities of the Outlaws motorcycle gang. Twenty have either pled guilty or were convicted at trial.
According to court documents and evidence at trial, the Outlaws motorcycle gang is a highly organized criminal enterprise with a defined, multi-level chain of command that is ultimately overseen by Rosga, the national president. Leaders and members of the Outlaws in multiple states including Wisconsin, Maine, Montana, North Carolina, Tennessee, South Carolina and Virginia are charged in a June 2010 indictment. Under Rosga’s leadership, the enterprise is alleged to have engaged in violent racketeering activities with the intent to expand its influence and to control various parts of the country against rival motorcycle gangs, particularly the Hell’s Angels.
Court records indicate that the Outlaws planned multiple acts of violence against rival motorcycle gangs, including shows of force at the Cycle Expo in Henrico County, Va., in 2006; Dinwiddie Racetrack in Virginia in 2008; the Cockades Bar in Petersburg, Va., in 2009; Daytona Bike Week in Florida in 2009; and the Easyrider Bike Expo in Charlotte, N.C., in 2010. The indictment alleges that in the Cockades Bar show of force, members of the Pagans Motorcycle Club joined the Outlaws in the assault against rival gangs.
In addition, the evidence showed that in 2008, the Outlaws established a clubhouse in Rock Hill, S.C., in territory traditionally controlled by the Hell’s Angels. The Outlaws understood that this act would create violent friction between the two organizations.
Court records also established that in September 2009, two members of the Outlaws were assaulted in Connecticut by members of the Hell’s Angels. This caused the Outlaws to increase their already violent approach to the Hell’s Angels in retaliation. In October 2009, this led to the alleged attempted murder of a Hell’s Angels member outside the Hell’s Angels’ clubhouse in Canaan, Maine. The victim was seriously injured from gunshot wounds to his neck.
In addition, the evidence showed that on April 17, 2010, Outlaw members of the Milwaukee and other Wisconsin chapters in the Gold Region participated in a charitable event known as the Flood Run, crossing from Wisconsin into Minnesota where they brutally beat members of the Hell’s Angels and stole their club patches, also known as “colors.”
Witnesses at the trial also testified that the Outlaws regularly used and distributed narcotics and regularly used firearms or other dangers weapons.
The case was investigated by the ATF’s Washington Field Division; the FBI’s Washington Field Office; the Virginia State Police; the Chesterfield County Police Department; the Maine State Police, and numerous other law enforcement partners throughout the country. The prosecution was handled by Assistant U.S. Attorneys Dennis Fitzpatrick and Peter S. Duffey, Special Assistant U.S. Attorney Sam Kaplan, and Trial Attorney Theryn G. Gibbons of the Justice Department’s Criminal Division’s Gang Unit.
Natural Gas Company Pleads Guilty in Arkansas in Connection with Fayetteville Shale Pipeline Construction ActivitiesRead the Press Release
WASHINGTON – Hawk Field Services LLC, a wholly-owned subsidiary of Houston-based Petrohawk Energy Corporation, pleaded guilty today in federal court in Little Rock, Ark., to charges stemming from the illegal take of endangered species in north-central Arkansas, the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Arkansas announced.
Hawk Field Services, pleaded guilty to three counts of violating the Endangered Species Act. The Endangered Species Act is a federal law that makes it illegal to take endangered species, by harassing the wildlife to such an extent that it significantly disrupts normal behavioral patterns such as breeding, feeding or sheltering.
According to the information filed in the case and today’s plea agreement, Hawk Field Services, was engaged in gathering, conditioning and treating activities related to the development of natural gas properties in the Fayetteville Shale in north-central Arkansas. The Fayetteville Shale is an unconventional gas reservoir located in the Arkoma Basin in Arkansas, at a depth of approximately 1,500 to 6,500 feet and ranging in thickness from 100 to 500 feet. The South, Middle and Archey Forks of the Little Red River, and their tributaries, are located in steep, mountainous terrain within the Fayetteville Shale region and contain the endangered speckled pocket book mussel.
Hawk Field Services acquired and developed land in the Fayetteville Shale, on which wells and pipelines were installed. The pipelines are subsurface and were constructed by Hawk Field Services, across the streams by either trenching or using a technique known as directional drilling. In either case, Hawk Field Services cleared the land on both sides of a stream, exposing bare ground until the pipeline was installed and the land remediated, by re-seeding and re-foresting. In today’s plea agreement, Hawk Field Services admitted that it did not adequately control erosion during construction, from October 2008 to April 2009, of the pipelines in the Little Red River watershed. This lack of erosion control allowed silt to run downhill to the streams, causing sediment to build up at the stream crossing and downstream. This erosion and sedimentation occurred in waters containing the endangered speckled pocketbook mussel, and caused a take of at least one mussel by harassment, in the South Fork, Little Fork and Archey Fork of the Little Red River.
The maximum penalty for a corporation for a violation of the Endangered Species Act includes a $200,000 fine per count. According to the plea agreement filed today, Hawk Field Services agreed to pay a $350,000 fine and to donate $150,000 to the National Fish and Wildlife Foundation, for use in restoration projects in the Little Red River watershed. The sentencing hearing will be on a date to be determined by the court.
The case was investigated by the U.S. Fish & Wildlife Service, with assistance from the Arkansas Fish and Game Commission. The case is being jointly prosecuted by Assistant U.S. Attorney Edward O. Walker of the U.S. Attorney’s Office for the Eastern District of Arkansas and Trial Attorney Todd S. Mikolop of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Justice Department Settles Allegations of Immigration-Related Employment Discrimination in Iowa Against LF Staffing Services Inc.Read the Press Release
WASHINGTON – The Justice Department today announced that it has reached a settlement agreement with LF Staffing Services Inc., located in Cedar Rapids, Iowa, to resolve allegations that LF Staffing Services engaged in employment discrimination by improperly pre-screening job applicants and rejecting valid work authorization documents presented by certain groups of immigrant workers.
The department found that LF Staffing Services did not permit job applicants to begin the application process unless they were able to present documents sufficient to establish their employment eligibility and further failed to permit at least one individual who presented valid Employment Authorization Documents (EADs) to apply for employment. The Immigration and Nationality Act (INA) prohibits employers from refusing to honor valid employment authorization documents on the basis of citizenship status or national origin.
“The INA’s anti-discrimination provision protects all authorized workers from unfair documentary requests during the Form I-9 process,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to stopping workplace discrimination against citizens and work-authorized non-citizens alike.”
Under the terms of the settlement, LF Staffing Services Inc. has agreed to pay $1,100 in civil penalties and full back pay to the injured party. LF Staffing Services will also train its human resources personnel about employers’ nondiscrimination responsibilities in the I-9 process, and will provide periodic reports to the department.
The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired); e-mail [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Justice Department Requires Google Inc. to Develop and License Travel Software in Order to Proceed with Its Acquisition of ITA Software Inc.Read the Press Release
WASHINGTON – The Department of Justice announced today that in order for Google Inc. to proceed with its proposed acquisition of ITA Software Inc., the department will require Google to develop and license travel software, to establish internal firewall procedures and to continue software research and development. The department said that the proposed settlement will protect competition for airfare comparison and booking websites and ensure those websites using ITA’s software will be able to power their websites to compete against any airfare website Google may introduce. The department said that the acquisition, as originally proposed, would have substantially lessened competition among providers of comparative flight search websites in the United States, resulting in reduced choice and less innovation for consumers.
The department said that Google will also be required to provide mandatory arbitration under certain circumstances and provide for a formal reporting mechanism for complainants if Google acts in an unfair manner.
The Department of Justice’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns of the lawsuit.
“The Department of Justice’s proposed remedy promotes robust competition for airfare websites by ensuring those websites will continue to have access to ITA’s pricing and shopping software,” said Joseph Wayland, Deputy Assistant Attorney General of the Department of Justice’s Antitrust Division. “The proposed settlement assures that airfare comparison and booking websites will be able to compete effectively, providing benefits to consumers.”
Under the proposed settlement, Google will be required to continue to license ITA’s QPX software to airfare websites on commercially reasonable terms. QPX conducts searches for air travel fares, schedules and availability. Google will also be required to continue to fund research and development of that product at least at similar levels to what ITA has invested in recent years. Google will also be required to further develop and offer ITA’s next generation InstaSearch product to travel websites, which will provide near instantaneous results to certain types of flexible airfare search queries. InstaSearch is currently not commercially available, but is in development by ITA.
To prevent abuse of commercially sensitive information, Google will be required to implement firewall restrictions within the company that prevent unauthorized use of competitively sensitive information and data gathered from ITA’s customers. The proposed settlement delineates when and for what purpose that data may be used by Google. Google is also prohibited from entering into agreements with airlines that would inappropriately restrict the airlines’ right to share seat and booking class information with Google’s competitors. Finally, the proposed settlement provides for a formal reporting mechanism for complainants if Google acts in an unfair manner.
Google Inc. is the largest search engine in the United States. Google is a Delaware corporation with its principal place of business in Mountain View, Calif., and with 2009 revenues of more than $23 billion.
ITA Software Inc. is a leading producer of airfare pricing and shopping systems in the United States. ITA is headquartered in Cambridge, Mass.
As required by the Tunney Act, the proposed five-year settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to James J. Tierney, Chief, Networks and Technology Enforcement Section, 450 Fifth Street, N.W., Suite 7100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Justice Department Requires Divestiture in Stericycle Inc.'s Acquisition of Healthcare Waste SolutionsRead the Press Release
WASHINGTON – The Department of Justice announced today that it will require Stericycle Inc. to divest an asset used in the treatment of infectious waste in order to proceed with its acquisition of Healthcare Waste Solutions Inc. (HWS). The department said the transaction, as originally proposed, would substantially lessen competition in the provision of infectious waste treatment services to hospitals and other health care facilities in the New York City metropolitan area, resulting in higher prices and reduced service.
The department’s Antitrust Division, along with the attorney general of the state of New York, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department and the New York attorney general filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“Without the divestiture required by the department, critical healthcare facilities in the New York City metropolitan area would have lost the benefits of competition for the provision of infectious waste treatment services and faced higher prices for those services,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
According to the complaint, the acquisition would remove a significant competitor in the treatment of infectious waste in an already highly concentrated market. The proposed acquisition would reduce from three to two the number of competitors with local transfer stations, leaving Stericycle and HWS with approximately 90 percent of the New York City metropolitan area’s infectious waste treatment market. This loss of competition likely would have resulted in higher prices and lesser quality of service for New York City area health care providers.
Under the proposed settlement, Stericycle and HWS must divest HWS’s transfer station located in the Bronx, N.Y., to a viable purchaser approved by the department. Transfer stations are facilities at which infectious waste collected by daily route trucks is transferred onto tractor trailers for efficient shipment of the waste to distant treatment facilities.
Stericycle is a Delaware corporation with its principal place of business in Lake Forest, Ill. Stericycle is a worldwide provider of infectious waste treatment services, and the largest provider in the United States, with operations in all 50 states. In 2009, Stericycle’s U.S. revenues totaled $913 million.
HWS is a Delaware corporation with its principal place of business in Cincinnati, Ohio. It is the second largest U.S. provider of infectious waste treatment services, with operations in 15 states. Its total revenues in 2009 were about $31 million.
As required by the Tunney Act, the proposed settlement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Johnson & Johnson Agrees to Pay $21.4 Million Criminal Penalty <br /> to Resolve Foreign Corrupt Practices Act and Oil for Food InvestigationsRead the Press Release
WASHINGTON – Johnson & Johnson (J&J) has agreed to pay a $21.4 million criminal penalty as part of a deferred prosecution agreement with the Department of Justice to resolve improper payments by J&J subsidiaries to government officials in Greece, Poland and Romania in violation of the Foreign Corrupt Practices Act (FCPA), the Justice Department’s Criminal Division announced today. The agreement also resolves kickbacks paid to the former government of Iraq under the United Nations Oil for Food Program.
J&J is headquartered in New Brunswick, N.J., and is listed on the New York Stock Exchange. The company manufactures and sells medical devices, pharmaceuticals and consumer health care products.
“Today, Johnson & Johnson has admitted that its subsidiaries, employees and agents paid bribes to publicly-employed health care providers in Greece, Poland and Romania, and that kickbacks were paid on behalf of Johnson & Johnson subsidiary companies to the former government of Iraq under the United Nations Oil for Food program,” said Principal Deputy Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.” “Johnson & Johnson, however, has also cooperated extensively with the government and, as a result, has played an important role in identifying improper practices in the life sciences industry. As today’s agreement reflects, we are committed to holding corporations accountable for bribing foreign officials while, at the same time, giving meaningful credit to companies that self-report and cooperate with our investigations.”
According to the agreement, J&J has acknowledged responsibility for the actions of its subsidiaries, employees and agents who made various improper payments to publicly-employed health care providers in Greece, Poland and Romania in order to induce the purchase of medical devices and pharmaceuticals manufactured by J&J subsidiaries. J&J also acknowledged that kickbacks were paid on behalf of J&J subsidiary companies to the former government of Iraq under the United Nations Oil for Food Program in order to secure contracts to provide humanitarian supplies. A criminal information, filed in U.S. District Court in the District of Columbia in connection with the deferred prosecution agreement, charges J&J subsidiary DePuy Inc. with conspiracy and violations of the FCPA in connection with the payments to public physicians in Greece.
The agreement recognizes J&J’s timely voluntary disclosure, and thorough and wide-reaching self-investigation of the underlying conduct; the extraordinary cooperation provided by the company to the department, the SEC and multiple foreign enforcement authorities, including significant assistance in the industry-wide investigation; and the extensive remedial efforts and compliance improvements undertaken by the company. In addition, J&J received a reduction in its criminal fine as a result of its cooperation in the ongoing investigation of other companies and individuals, as outlined in the U.S. Sentencing Guidelines. J&J’s fine was also reduced in light of its anticipated resolution in the United Kingdom. Due to J&J’s pre-existing compliance and ethics programs, extensive remediation, and improvement of its compliance systems and internal controls, as well as the enhanced compliance undertakings included in the agreement, J&J was not required to retain a corporate monitor, but it must report to the department on implementation of its remediation and enhanced compliance efforts every six months for the duration of the agreement.
In a related matter, J&J reached a settlement today with the SEC under which it agreed to pay more than $48.6 million in disgorgement of profits, including pre-judgment interest.
This case is being prosecuted by Trial Attorney Kathleen M Hamann of the Criminal Division’s Fraud Section with assistance from the FBI’s Washington Field Office’s dedicated FCPA squad. The Criminal Division’s Office of International Affairs provided assistance in this matter.
The Justice Department acknowledges and expresses its appreciation for the significant assistance provided by the authorities of the 8th Ordinary Interrogation Department of the Athens Court of First Instance and the Athens Economic Crime Squad in Greece; the 5th Investigation Department of the Regional Prosecutor’s Office in Radom, Poland; the Fraud Squad of the West Yorkshire Police Department in the United Kingdom; and the SEC’s Division of Enforcement, as well as the coordination and cooperation with the authorities of the United Kingdom’s Serious Fraud Office.
Houston Registered Nurse Pleads Guilty in Connection with an Alleged $5.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A registered nurse employed by a Houston health care company pleaded guilty today in connection with an alleged $5.2 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Adelma Casas Sevilla, 54, pleaded guilty before U.S. District Court Judge Nancy Atlas in Houston to one count of conspiracy to commit health care fraud. According to court documents, Family Healthcare Group, a home health care company, purported to provide skilled nursing to Medicare beneficiaries. According to court documents, Family Group hired co-conspirators to recruit Medicare beneficiaries for the purpose of filing claims with Medicare for skilled nursing that was medically unnecessary and/or not provided. After the Medicare beneficiaries were recruited, Casas Sevilla, in her capacity as a registered nurse, fraudulently signed plans of care stating that the beneficiaries needed home health care when in fact she knew the beneficiaries were not home-bound and not in need of skilled nursing.
At sentencing, scheduled for July 21, 2011, Casas Sevilla faces a maximum sentence of 10 years in prison for the health care fraud conspiracy count.
Today’s guilty plea was announced by Assistant Attorney General of the Criminal Division Lanny A. Breuer; U.S. Attorney José Angel Moreno of the Southern District of Texas; Special Agent-in-Charge Richard C. Powers of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations; and Texas Attorney General Greg Abbott.
This case is being prosecuted by Trial Attorneys Charles D. Reed and Laura Cordova, and Assistant Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Former Jena, La., Corrections Officer Pleads Guilty to Criminal Sexual ActivityRead the Press Release
WASHINGTON - The Justice Department announced today that Joseph Taunton, 31, from Jonesville, La., a former corrections officer at the LaSalle Parish Detention Center in Jena, La., pleaded guilty in federal court for engaging in a sexual act with a federal detainee.
During his guilty plea, Taunton admitted that on Dec. 16, 2010, while working as an officer at the detention center, he engaged in a sexual act with a federal detainee under his supervision.
“Those who are sworn to protect our citizens will be held accountable when they violate the public trust and abuse the rights of individuals in their custody,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
“The defendant violated his oath; he crossed the line. This kind of behavior by prison employees can not and will not be tolerated, and we will continue to prosecute these types of cases,” said Stephanie Finley, U.S. Attorney for the Western District of Louisiana.
Sentencing is scheduled for July 28, 2011. Taunton faces a maximum penalty of 15 years in prison, a $250,000 fine, or both.
Today’s plea resulted from the work of the Department of Homeland Security – Office of Inspection General. The case is being prosecuted by Assistant U.S. Attorney Mary Mudrick of the Western District of Louisiana and Trial Attorney Angie Cha of the Civil Rights Division of the U.S. Department of Justice.
Former Employee of U.S. Embassy in Baghdad<br /> Sentenced to 42 Months in Prison for Stealing Nearly $250,000Read the Press Release
WASHINGTON – A former employee of the U.S. Embassy in Baghdad, Iraq, was sentenced today in U.S. District Court in Alexandria, Va., to 42 months in prison for stealing nearly $250,000 intended for the payment of shipping and customs services for the embassy, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Osama Esam Saleem Ayesh, 36, was also ordered to pay $243,416 in restitution and a $5,000 fine, as well as to serve three years of supervised release following his prison term. A federal jury convicted Ayesh on two counts of theft of public money and one count of engaging in acts affecting a personal financial interest. Ayesh was arrested at Dulles International Airport on Aug. 16, 2010, and indicted on Oct. 15, 2010, on the charges for which he was convicted.
Ayesh, a resident of Jordan, was hired by the Department of State as a shipping and customs supervisor at the embassy in Baghdad, who oversaw the shipments of personal property of embassy officials and personnel in Iraq. His duties required that he maintain close contact with local Iraqi companies and vendors with expertise in clearing goods through Iraqi customs. As a State Department employee, Ayesh was aware that he would be subject to the conflict of interest laws of the United States that prohibit government employees from using their position for personal profit.
According to court records, Ayesh used his State Department computer to create a phony e-mail account in the name of a real Iraqi contractor and used that e-mail account to impersonate the contractor in communications with embassy procurement officials. He also established a bank account in Jordan under his wife’s name to further his criminal scheme and falsified wire transfer instructions that directed U.S. government electronic funds transfers to that account.
Court records and evidence at trial showed that Ayesh was personally involved in establishing and operating blanket purchase agreements for the provision of customs clearance and delivery services to the U.S. Embassy in Baghdad. From November 2008 to June 2010, Ayesh submitted false invoices in the name of an Iraqi contractor – which Ayesh fabricated on blank stationery he kept in his embassy apartment – and caused the U.S. Department of State to wire $243,416 to his wife’s account in Jordan.
This case was prosecuted by David Laufman of the Criminal Division’s Fraud Section, who is on detail to the Department of Justice from the Special Inspector General for Iraq Reconstruction, and Assistant U.S. Attorney Thomas McQuillan of the Eastern District of Virginia. The Criminal Division’s Office of International Affairs provided assistance in this matter. The case was investigated by special agents of the State Department’s Office of Inspector General and the FBI’s Washington Field Office.
Attorney General Holder Recognizes Seven Individuals, Three Organizations for Outstanding Service <br /> to Crime VictimsRead the Press Release
WASHINGTON – Attorney General Eric Holder today at an awards ceremony hosted by the Department of Justice recognized seven individuals and three organizations for outstanding work on behalf of crime victims.
The Attorney General’s Annual Victims’ Service Awards are presented as a prelude to the nation’s observance of National Crime Victims’ Rights Week, April 10-16, 2011. This year’s theme —“Reshaping the Future, Honoring the Past” — highlights the importance of crime victims’ rights and recognizes individuals and organizations that demonstrate a commitment to this effort.
“Each of the leaders, legal advocates, public servants and concerned citizens here today are part of a powerful, national movement—one that inspired the passage of the historic 1984 Victims of Crime Act (VOCA) that created the Crime Victims Fund, as well as the 1994 crime bill and the Violence Against Women Act,” said Attorney General Holder. “We commend these individuals and serviceproviders who, when faced with emerging challenges, seek out new ways to protect our communities, and to more effectively assist and empower crime victims.”
“Today’s Justice Department is working with medical and law enforcement professionals, service providers and crime victim advocates to reach those victims most in need of help,” said Attorney General Holder. “We’re also evolving to meet new challenges and emerging threats. As criminals adapt to an inter-connected world, – in partnership with law enforcement – we are working hard to serve victims of youth violence, cybercrime, identify theft, human trafficking and fraud.”
The award presentation, along with the Candlelight Observance held yesterday in Washington, D.C., was organized by the Department of Justice’s Office of Justice Programs (OJP) and its Office for Victims of Crime (OVC). In addition to the attorney general, others participating in today’s awards ceremony were Assistant Attorney General for OJP Laurie O. Robinson and OVC Acting Director Joye E. Frost.
The recipients of today’s awards were nominated by their colleagues in the victim service and criminal justice fields. These awards recognize their courageous responses in the aftermath of a crime; their professional efforts to better serve the needs of victims of human trafficking, identity theft and elder abuse; and their assurance that victims receive the compensation and other services available to them at the state and local level. The following awards were presented by the attorney general:
National Crime Victim Service Award: Honors extraordinary efforts in direct service to crime victims.
· Recipient: House of Ruth Maryland (HRM), for assisting victims of domestic violence and serving as the state’s first shelter for battered women and their children. HRM is one of the most comprehensive domestic violence centers in the country. Its services include emergency shelter services, transitional house, a 24-hour crisis hotline, counseling for victims and their children, legal advocacy, a legal clinic and a variety of outreach and education programs to change beliefs and attitudes towards domestic violence in the community.
Award for Professional Innovation in Victim Services: Recognizes a program, organization or individual that has helped expand the reach of victims’ rights and services.
· Recipient: Elder Abuse Forensic Center (EAFC), Orange County, Calif., for providing direct services for the prevention, assessment and treatment of elder abuse and neglect. EAFC addresses cases of elder abuse and neglect using a multidisciplinary collaboration of area agencies. EAFC takes all of the resources available from existing elder advocacy agencies and channels them to combat and prosecute elder mistreatment.
Volunteer for Victims Award: Honors individuals for their uncompensated efforts to reach out to victims.
· Recipient: Pamela Faith Young McCarter, M.D., York, Penn., for providing invaluable assistance to two victims of human trafficking, as well as information to federal authorities that led to the conviction of three human traffickers. Dr. McCarter became an important advocate for the two victims and has continued to help them rebuild their lives and obtain appropriate services.
Special Courage Award: Recognizes individuals who have demonstrated extraordinary bravery in the aftermath of a crime or who have performed a courageous act on behalf of a crime victim.
· Recipient: Nicole M. Robinson, Clinton, Md., for being an outspoken advocate for the victims of identity theft and its devastating impacts. Almost immediately following her victimization, Ms. Robinson testified before the Federal Trade Commission on a victim impact panel. Her willingness to share her experience was an act of courage that has resulted in significant strides in the government and business community’s response to identity theft.
Allied Professional Award: Recognizes an individual or an organization outside the victim assistance field for services or contributions to the victims’ field.
· Recipient: The Honorable Ronald Reinstein, Phoenix, for diligently enforcing Arizona’s Victims’ Bill of Rights and ensuring that crime victims’ voices were heard in the courtroom. Judge Reinstein is a strong proponent of improving the judiciary to address the concerns of crime victims. During his judicial career, Judge Reinstein established an ad hoc committee to review, modify and develop a more understandable and effective restitution process for victims in his county.
· Recipient: Sarah Deer, St. Paul, Minn., for dedicating herself to addressing and ending the crime of sexual violence against Native American women. Her vast knowledge about issues related to addressing the epidemic levels of sexual violence against Native American women and jurisdiction issues was vital in the development of a series of comprehensive recommendations in Amnesty International’s 2007 report Maze of Injustice. This report drew congressional attention to sexual violence against Native American women and contributed to the 2010 enactment of the Tribal Law and Order Act.
Ronald Wilson Reagan Public Policy Award: Honors an individual whose leadership, vision and innovation results in significant changes to public policy and practice benefiting crime victims.
· Recipient: Brooks Douglass, Malibu, Calif., for serving victims of crime and changing state legislation to help guide victims through the criminal justice system. As an Oklahoma State Senator, Mr. Douglas authored and worked to pass numerous crime rights’ bills and laws, including the Oklahoma Victims’ Bill of Rights, which dramatically changed the state criminal justice system. He also worked to pass laws regulating rights to restitution; confidentiality of victim information; rights of victims to attend all court proceedings; rights to be informed of case status; and right of victims to attend the execution of their loved one’s convicted killer.
Federal Service Award: Honors exceptional contributions and extraordinary impact on behalf of victims in Indian Country, on military installations, in national parks or in other areas governed by federal jurisdiction.
· Recipient: Robert S. Mueller III, Washington, D.C., for serving victims with unparalleled commitment as a federal prosecutor, Assistant Attorney General, U.S. Attorney, Acting Deputy Attorney General and Director of the FBI. Director Mueller assumed the leadership of the FBI one week before the September 11th attacks. Shortly after assuming his duties, Director Mueller signed an order establishing the Office for Victim Assistance (OVA). Since OVA was created, the FBI has demonstrated, both nationally and internationally, that victim assistance can be incorporated into the operational side of a law enforcement agency with dual benefits for investigations and victims.
· Recipient: Charlotte Leigh Moerbe, Ph.D., Fort Sam Houston, Texas, for supporting several hundred military members recovering from sexual violence. In 2004, Dr. Moerbe created the Lackland Sexual Assault Prevention and Outreach (SAPO) program which is the largest Air Force sexual assault response and training program. Dr. Moerbe has created and oversees two additional volunteer trainer programs. The SAPO Representative Program includes more than 180 military personnel who provide sexual assault awareness and education for the general population located at Lackland, Texas. A second volunteer pool works primarily with the student population at Lackland.
Crime Victims Fund Award: Recognizes individuals or teams for their outstanding work in pursuing federal criminal offenders and imposing and collecting the criminal fines.
· Recipient: Financial Litigation Unit, U.S. Attorney’s Office, Eastern District of Texas, Tyler, Texas, for its efforts to maximize fine collections on behalf of the Crime Victims Fund and the restitution payments to victims of crime. The Financial Litigation Unit (FLU) assures defendants meet their responsibilities to victims in restitution cases, by coordinating with prosecutors and investigating agencies to prevent fraudulent asset transfers, or the hiding of assets, by defendants.
Arkansas Men Charged with Federal Hate Crime Related to the Assault of Five Hispanic MenRead the Press Release
WASHINGTON – The Justice Department announced today the arrest of Sean Popejoy, 19, and Frankie Maybee, 20, both of Green Forest, Ark., on charges related to a racially-motivated assault on five Hispanic men. A federal grand jury in the Western District of Arkansas returned an indictment on April 5, 2011, charging Popejoy and Maybee with federal hate crime charges and conspiracy to commit a federal hate crime.
According to the indictment, Popejoy and Maybee have been charged with one count of conspiracy and five counts of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, which was enacted in October 2009. Specifically, the indictment alleges that on June 20, 2010, the defendants yelled anti-Latino epithets at the victims while at a gas station parking lot. When the victims drove away, the defendants chased after them in the defendants’ truck. The defendants eventually caught up to the victims’ car and repeatedly rammed their truck into the victims’ car, causing the victims’ car to go off the road, overturn and ignite. All five of the victims were physically injured as a result of the defendants’ actions.
If convicted, the defendants face maximum penalties of 10 years in prison on each of the civil rights charges.
This case is being investigated by the FBI’s Fayetteville Division in cooperation with the Arkansas State Police Department and the Carroll County Sheriff’s Office. The case is being prosecuted by U.S. Attorney Conner Eldridge and Assistant U.S. Attorney Kyra Jenner for the Western District of Arkansas and Trial Attorney Edward Chung of the Department of Justice’s Civil Rights Division.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
Thursday 7 April 2011
Miami-Area Marketing Director Pleads Guilty for Her Role in Community Mental Health Care Fraud Scheme Involving More Than $100 Million in Fraudulent Medicare ClaimsRead the Press Release
WASHINGTON – A Miami-area resident pleaded guilty today in U.S. District Court in Miami for her role in managing a community mental health care fraud scheme that resulted in the submission of more than $100 million in fraudulent claims to Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
Margarita Acevedo pleaded guilty before U.S. Magistrate Judge Barry L. Garber to one count of conspiracy to commit health care fraud and one count of conspiracy to pay and receive illegal health care kickbacks. In pleading guilty, Acevedo admitted that since 2005, she served as the marketing director for American Therapeutic Corporation (ATC), a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for mental illness.
Acevedo admitted that as marketing director, her job was to orchestrate the payment of kickbacks and bribes used to recruit Medicare beneficiaries to attend ATC and a related company, American Sleep Institute (ASI). Acevedo admitted that the Medicare beneficiaries recruited by ATC and ASI, were not eligible to receive the PHP and sleep study services that ATC and ASI billed to Medicare, and that the services were not medically necessary. During the period of her involvement in the fraud scheme, the defendant admitted that she and her co-conspirators caused between $100 million and $200 million in fraudulent claims to be submitted to Medicare for services purportedly provided at ATC and ASI.
According to court documents, Acevedo and others paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for providing ineligible patients to ATC and ASI. Acevedo and her co-conspirators knew that Medicare beneficiaries were recruited regardless of their medical needs and in some cases the beneficiaries received a portion of the kickbacks. Acevedo and her co-conspirators actively recruited ALF and halfway house owners and operators and patient brokers to participate in this kickback scheme. Acevedo admitted that she and other co-conspirators paid and caused the payment of millions of dollars in kickbacks in exchange for Medicare beneficiaries to attend ATC and ASI programs for which they did not qualify so that ATC and ASI could bill Medicare for medically unnecessary services.
Acevedo also admitted that she and her co-conspirators engaged in elaborate and sophisticated measures to conceal their fraudulent activities from Medicare and from law enforcement.
Acevedo and her co-conspirators were charged in a superseding indictment unsealed on Feb. 15, 2011. The superseding indictment alleges that ATC and ASI submitted a total of more than $200 million in claims to Medicare.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the 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 Attorneys Jennifer L. Saulino and 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 Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants that collectively have billed the Medicare program for more than $2.3 billion.In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Justice Department Files Suit Against Woman for FACE Act Violations Against Kansas PhysicianRead the Press Release
WASHINGTON – The Justice Department today filed a civil complaint in the U.S. District Court for the District of Kansas against Angel Dillard for violating the Freedom of Access to Clinic Entrances Act (FACE Act).
According to court documents, on or about Jan. 15, 2011, Dillard mailed a threatening letter to a doctor training to perform abortions in Wichita, Kan. The letter, among other threatening language, referenced explosives placed under the doctor’s car. The FACE Act prohibits threats of force against any person providing or obtaining reproductive health services, with the intent to intimidate or interfere with that person.
Among other things, Dillard wrote: “Thousands of people are already looking into your background, not just in Wichita, but from all over the U.S. They will know your habits and routines. They will know where you shop, who your friends are, what you drive, where you live. You will be checking under your car everyday-because maybe today is the day someone places an explosive under it.” Later Dillard added: “We will not let this abomination continue without doing everything we can to stop it.”
In its complaint, the United States seeks an order preventing Dillard from contacting the doctor and from coming within 250 feet of the doctor, her home, car or place of business. The complaint also seeks monetary damages.
“Protecting the right of reproductive health services providers to do their jobs free from the threat of harm is of the utmost importance,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Department of Justice will continue to aggressively enforce the FACE Act against those who seek to violate the rights of their fellow Americans to safely provide or obtain such services.”
“The murder of Dr. George Tiller brought home to many of us the terrible potential for violence and the need to use every legal means at our disposal to prevent it,” said Barry Grissom, U.S. Attorney in the District of Kansas.
This civil action was filed by the Civil Rights Division Special Litigation Section Deputy Chief Julie Abbate and Trial Attorney Aaron Fleisher.
Justice Department Files Lawsuit in Alaska Against Air Methods Corporation and LifeMed Alaska LLC to Enforce Employment Rights of Army National Guard MemberRead the Press Release
WASHINGTON — The Justice Department today announced that it has filed a lawsuit alleging that Air Methods Corp. and LifeMed Alaska LLC willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by discriminating against and failing to reemploy Chief Warrant Officer Third Class Jonathon L. Goodwin of Wasilla, Alaska. The suit was filed in federal district court in Alaska.
Under USERRA, an employer is prohibited from discriminating against service members because of their membership in the military, past military service or future service obligations. In addition, and subject to certain limitations, USERRA requires that service members who leave their civilian jobs to serve in the military be reemployed promptly by their civilian employers in the positions they would have held if their employment had not been interrupted by military service or in positions of comparable seniority, pay and status.
Goodwin has been a member of the Army National Guard for almost 20 years, with honorable service as both a fixed-wing and helicopter pilot. The Justice Department’s complaint alleges that Goodwin was employed by Air Methods as a helicopter pilot when he was called upon for a nine month period of active duty, including a period of deployment to Iraq. According to the complaint, at the end of his deployment, Goodwin sought to be reemployed by Air Methods and assigned to a contract helicopter pilot position with LifeMed Alaska. The complaint alleges that LifeMed refused to accept Goodwin for the contract position due to LifeMed’s bias against recently returned service members as well as an unwillingness to accommodate Goodwin’s possible future military obligations. The complaint also alleges that Air Methods furthered LifeMed’s discriminatory action by refusing to assign Goodwin to the LifeMed contract and, consequently, failed to offer Goodwin proper reemployment
“When Congress enacted USERRA, it was to protect our men and women in uniform from experiencing exactly this kind of injustice,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our service members.”
The case stems from a referral by the Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service. The case will be jointly litigated by the Civil Rights Division and the U.S. Attorney’s Office in Alaska.
Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp , as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm .
Justice Department Asks Court to Allow IRS to Seek HSBC India Bank Account RecordsRead the Press Release
WASHINGTON - The United States is seeking an order from a federal court in San Francisco authorizing the Internal Revenue Service (IRS) to request information from HSBC Bank USA, N.A. about U.S. residents who may be using accounts at The Hong Kong and Shanghai Banking Corporation in India (HSBC India) to evade federal income taxes, the Justice Department announced today.
The government filed a petition with the court to allow the IRS to serve what is known as a “John Doe” summons on the bank. The IRS uses a John Doe summons to obtain information about possible tax fraud by people whose identities are unknown. If approved, the John Doe summons would direct HSBC USA to produce records identifying U.S. taxpayers with accounts at HSBC India, many of whom are believed by the government to have hidden their accounts from the IRS.
According to documents filed with the government’s petition, on Jan. 26, 2011, a grand jury in Newark, N.J., indicted Vaibhav Dahake of Somerset, N.J., charging him with conspiracy to defraud the United States by using undeclared accounts in the British Virgin Islands and at HSBC India to evade his income taxes. According to those documents, employees of HSBC Holdings plc and its affiliates operating in the United States assured Dahake that accounts maintained in India would not be reported to the IRS.
The government alleges that, according to HSBC’s website, in 2002 HSBC India opened a “representative office” at an HSBC USA office in New York City to enable “Non-Resident Indians” (NRIs) living in the United States to open accounts in India. In 2007, HSBC India allegedly opened a second representative office at an HSBC USA office in Fremont, Calif., purportedly “to make banking transactions more convenient for the NRI community based in California.” Although HSBC India closed those offices in June 2010, the government alleges that NRI clients may still access their accounts at HSBC India from the United States. According to the petition documents, NRI clients have told IRS investigators that NRI representatives in the United States assured the clients that they could invest in accounts at HSBC India without paying U.S. income tax on interest earned on the accounts and that HSBC would not report the income earned on the HSBC India accounts to the IRS.
“The Department of Justice is committed to ensuring that all U.S. taxpayers meet their obligations to declare and pay taxes on foreign bank accounts,” said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division. “The ability to hide accounts in foreign countries is rapidly dwindling. We will continue working hand-in-hand with the IRS to enforce the tax laws against those who are using offshore accounts – wherever they are located – to evade taxes.”
“The IRS continues to focus its attention on international tax evasion,” said IRS Commissioner Douglas Shulman. “This summons request is focused on obtaining more information to help us determine if additional actions are needed. As I’ve said all along, our international efforts are not about just one country or one bank – it’s about our wider effort to ensure compliance with the nation’s tax laws.”
Federal law requires U.S. taxpayers to pay federal income taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. A willful failure to report a foreign account can result in a penalty of up to 50 percent of the amount in the account at the time of the violation.
Additional information about the offshore compliance initiative of the Justice Department’s Tax Division, including its enforcement efforts against Swiss bank UBS AG, is available here.
Four Men and One Woman from Arkansas Indicted on Charges Stemming from the Firebombing of an Interracial Couple’s HomeRead the Press Release
WASHINGTON – Jason Barnwell, 37, of Evening Shade, Ark.; Gary Dodson, 32, of Waldron, Ark.; Jake Murphy, 19, also of Waldron; and Dustin Hammond, 20, of Hardy, Ark., were indicted by a federal grand jury on civil rights charges and other federal charges stemming from their participation in an incident in January 2011 involving Molotov cocktails thrown at and into the home of a mixed-race couple living near Hardy, Ark. The couple was also barraged with racial slurs and threatened with future violence if they did not leave Arkansas. Wendy Treybig, 31, of Evening Shade, Ark., was indicted for obstruction of justice for her role in trying to cover up the incident.
Specifically, Barnwell, Dodson, Murphy and Hammond are charged with one count of conspiracy to interfere with the housing rights of another, one count of interfering with the housing rights of another, one count of possessing an unregistered firearm, one count of using fire in the commission of a felony, and one count of using a destructive device in furtherance of a crime of violence. Barnwell is also charged with unlawfully possessing a firearm.
If convicted, Barnwell faces up to 85 years in prison. If convicted, Dodson, Murphy and Hammond face up to 70 years in prison. If convicted, Treybig faces up to 20 years in prison.
This investigation was led by the Joint Terrorism Task Force (JTTF) of the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives; along with the Arkansas State Police; the Hardy and Waldron Police Departments; and the Scott and Sharp County Sheriff's Offices.
The charges set forth in an indictment are merely allegations. The defendants are presumed innocent until proven guilty.
Comverse Technology INC. Agrees to Pay $1.2 Million Penalty to Resolve Violations of the Foreign Corrupt Practices ActRead the Press Release
WASHINGTON - Comverse Technology Inc. (CTI), a New York City headquartered corporation, has agreed to pay a $1.2 million penalty for violations of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. CTI, through its main operating subsidiary Comverse Inc. and Comverse Inc.’s subsidiaries, is a global provider of software and software systems for communication and billing services.
According to the non-prosecution agreement, CTI has accepted responsibility for violating the books and records provisions of the FCPA arising from and related to CTI’s failure to record accurately certain improper payments that were made between 2003 and 2006 by employees and a third-party agent of Comverse Inc. subsidiaries to individuals connected to OTE, a Greek telecommunications provider, in order to obtain purchase orders. The payments, totaling approximately $536,000, were inaccurately characterized as legitimate agent commissions in the books and records of Comverse Ltd., a wholly owned subsidiary of Comverse Inc. that is based in Tel Aviv, Israel.
The agreement recognizes the company’s thorough self-investigation and the results of its investigation, voluntary disclosure of the underlying conduct, and full cooperation with the department. CTI has also undertaken extensive remedial efforts and overhauled its overall compliance culture, including through the implementation of mandatory training programs focused on anti-corruption and the use of third-party agents and intermediaries, as well as more rigorous accounting controls for the approval of third-party payments.
As a result of these mitigating factors, the department has agreed not to prosecute CTI or its subsidiaries for failing to maintain accurate books and records, provided that CTI satisfies its obligations under the agreement for a period of two years. Those obligations include ongoing cooperation, payment of the $1.2 million penalty, and the continued implementation of rigorous internal controls.
In a related matter, CTI reached a settlement today with the U.S. Securities and Exchange Commission in which it agreed to pay approximately $1.6 million in disgorgement and pre-judgment interest.
This case is being handled by Trial Attorney Amanda Aikman of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ilene Jaroslaw of the U.S. Attorney’s Office for the Eastern District of New York. The department acknowledges and expresses its appreciation for the significant assistance provided by the staff of the SEC during the course of this investigation.
Wednesday 6 April 2011
Tax Defendant Indicted for Filing False Liens for Billions of Dollars Against Federal Law EnforcementRead the Press Release
WASHINGTON - Mark D. Leitner has been indicted by a grand jury in the Northern District of Florida for filing false liens against federal law enforcement, corruptly endeavoring to impede and impair the Internal Revenue Service (IRS), and public disclosure of another’s Social Security number in the commission of illegal activity, the Justice Department announced today.
According to the indictment, Leitner was previously a defendant in a criminal trial, United States v. Hirmer, et. al., in the Northern District of Florida in March 2010. A jury in Pensacola, Fla., found him guilty of conspiracy to defraud the IRS after a month-long jury trial.
According to the indictment, during the jury trial and after the jury returned the guilty verdict, Leitner caused false maritime liens to be publicly filed against the property of prosecutors, investigators and court personnel involved in the criminal trial. The liens falsely claimed that Leitner was owed $48.489 billion from each individual. On five of the seven false liens, Leitner publicly disclosed individuals’ correct Social Security numbers; this information was publicly available in each state where the liens were filed. Leitner also filed and mailed numerous harassing and frivolous documents to the court and personnel involved in this case.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. Each count of filing false liens carries a penalty of up to 10 years in prison and a $250,000 fine. Each count of Social Security fraud carries a maximum penalty of up to five years in prison and a $250,000 fine. The corruptly obstructing the IRS charge carries a maximum penalty of up to three years in prison and a $250,000 fine.
The case was investigated by Treasury Inspector General for Tax Administration, Department of Treasury.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax .
Shenandoah, Pennsylvania, Man Sentenced for Involvement in the Fatal Beating of Luis RamirezRead the Press Release
WASHINGTON – Colin Walsh, 19, of Shenandoah, Pa., was sentenced today to 55 months in prison for his role in the fatal beating of Luis Ramirez, the Justice Department announced today. Walsh was also ordered to serve three years of supervised release and pay $550 to the Pennsylvania victim compensation fund, as well as a special assessment.
On April 8, 2009, Walsh pleaded guilty to one felony violation of the Federal Fair Housing Act for his role in aiding and abetting Brandon Piekarsky, 19, and Derrick Donchak, 21, in the beating of Ramirez. Walsh testified against Piekarsky, Donchak and members of the Shenandoah Police Department in two federal trials. On Oct. 14, 2010, a federal jury in the Middle District of Pennsylvania found Piekarsky and Donchak guilty of violating the Federal Fair Housing Act for fatally beating Ramirez because he was Latino and because they did not want him living in Shenandoah. On Jan. 27, 2011, a federal jury in the Middle District of Pennsylvania found former Shenandoah police officer William Moyer and former Shenandoah Police Chief Matthew Nestor guilty of offenses related to the obstruction of the state and federal investigations into the fatal beating.
According to evidence presented at the federal trials, on July 12, 2008, Piekarsky, Donchak and Walsh came upon Ramirez in a park after leaving a community festival. Piekarsky and Donchak, and several of their friends, including Walsh, attacked Ramirez. During the course of the beating, some of the assailants yelled racial epithets in which they repeatedly referred to Ramirez in derogatory racial terms and told him: “this is Shenandoah. This is America. Go back to Mexico.” According to testimony, Donchak beat Ramirez while holding a thick piece of metal identified at trial as a “fist pack.” Walsh punched Ramirez in the face and Piekarsky kicked Ramirez in the head as he lay prone on the ground. After Piekarsky kicked Ramirez, he told a bystander who was married to a Latino man to “tell your Mexican friends to get out of Shenandoah or you will be lying next to him.” After the fight concluded, Ramirez was air-lifted to Geisinger Regional Medical Center, where he died of massive head injuries. The jury also heard evidence that, immediately following the beating, Donchak conspired with members of the Shenandoah Police Department and others to obstruct the investigation of the assault.
“Acts of racially-motivated violence like this one have no place in America. Their occurrence is a reminder that bigotry persists in 2011,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division of the Department of Justice. “The Civil Rights Division will vigorously enforce the rights of every American.”
This case was investigated by special agents from the FBI’s Philadelphia Division and was prosecuted by Myesha Braden and Gerard V. Hogan of the Civil Rights Division’s Criminal Section with the assistance of the U.S. Attorney’s Office for the Middle District of Pennsylvania.
New Jersey Wastewater Treatment and Chemical Supply Company and Owner Sentenced for Their Role in Fraud ConspiracyRead the Press Release
WASHINGTON — A Laurel Springs, N.J., wastewater treatment and chemical supply company and its owner were sentenced today for participating in a fraud conspiracy in connection with sub-contracts for wastewater treatment supplies and services at two Superfund sites in New Jersey, the Department of Justice announced today. The Environmental Protection Agency (EPA)-designated Superfund sites are the Federal Creosote Superfund site in Manville, N.J., and the Diamond Alkali Superfund site in Newark, N.J.
John Drimak Jr. was sentenced in U.S. District Court in Newark by Judge Susan D. Wigenton to serve 18 months in prison, to pay a $30,000 criminal fine and to pay $283,241 in restitution to the victim, the EPA. J.M.J. Environmental Inc. was also sentenced to pay $283,241 in restitution. The company and its owner pleaded guilty on July 23, 2008, to rigging bids and allocating certain sub-contracts at Federal Creosote from approximately the spring of 2002 to approximately May 2007. Drimak also pleaded guilty to one count of conspiracy to defraud the EPA at Federal Creosote and to defraud Tierra Solutions Inc. at Diamond Alkali. Tierra Solutions is a general contractor based in The Woodlands, Texas. As part of the conspiracy, Drimak participated in a false invoicing and kickback scheme from January 2002 until May 2007. He also pleaded guilty to filing false income tax returns for 2002 through 2005.
According to court documents, Drimak paid approximately $411,000 in kickbacks to co-conspirators, at both the Federal Creosote and Diamond Alkali sites, in exchange for their assistance in allocating certain sub-contracts to J.M.J. Environmental. The department said that the kickbacks were in the form of checks, cash, paid vacations, home renovations, boat trailers and payment of personal business expenses.
The cleanup at Federal Creosote is partly funded by the EPA. An interagency agreement between the EPA and the Army Corps of Engineers designated that the EPA hire the prime contractors at Federal Creosote. According to a settlement with the EPA and the New Jersey Department of Environmental Protection, Tierra Solutions was required to fund remedial action and maintenance of Diamond Alkali. Tierra Solutions hired the prime contractor for the remedial action and maintenance of Diamond Alkali.
Including Drimak and J.M.J Environmental, 10 individuals and three companies have been charged in this investigation. More than $3 million in criminal fines and restitution have been imposed and four individuals have been sentenced to jail.
Today’s sentence is the result of an ongoing investigation being conducted by the Antitrust Division’s New York Field Office, the EPA’s Office of Inspector General and the Internal Revenue Service-Criminal Investigation. Anyone with information concerning bid rigging relating to contracts awarded at Federal Creosote or Diamond Alkali should contact the Antitrust Division’s New York Field Office at 212-264-9308 or visit www.justice.gov/atr/contact/newcase.htm.