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26 November 2012
Los Angeles-Area Doctor Pleads Guilty to Conspiring to Defraud Medicare of over $11 MillionRead the Press Release
WASHINGTON— A Los Angeles-area doctor pleaded guilty today to conspiring to defraud Medicare of over $11 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse.
Dr. Juan Tomas Van Putten, 66, of Ladera Heights, Calif., pleaded guilty today before U.S. District Judge George Wu in the Central District of California to one count of conspiracy to commit health care fraud.
Van Putten pleaded guilty to obtaining patients for his medical clinic, Greater South Bay Medical Group, which was located in Carson, Calif., and a nursing home where he also saw patients from street-level patient recruiters or “marketers” who illegally solicited patients with Medicare benefits for expensive, highly-specialized power wheelchairs and other durable medical equipment (DME) that the patients did not need. According to the indictment to which Van Putten pleaded guilty, some of the marketers worked for the operators of fraudulent DME supply companies, including Van Putten’s co-defendants Charles Agbu, a church pastor, and his daughter Obiageli Agbu, who both operated Bonfee Inc. d/b/a “Bonfee Medical Supplies” and Ibon Inc., which were located in Carson.
Van Putten admitted that operators of fraudulent DME supply companies paid him cash kickbacks to write prescriptions for power wheelchairs and other DME that Van Putten knew the patients did not need. Van Putten admitted that he exaggerated the symptoms and diagnoses that he wrote on the prescriptions to make it appear as if the patients met both the medical and Medicare requirements for the power wheelchairs and DME. Van Putten admitted that he knew when he provided the prescriptions to the DME company operators that they would use the prescriptions to submit false claims to Medicare. Van Putten also admitted that he submitted claims to Medicare for services that he provided to the patients at Greater South Bay and the nursing home even though he knew it was illegal for him to provide services to patients who had been recruited by marketers.As a result of this scheme, court documents indicate that Van Putten and his co-defendants submitted approximately $11,094,918 in false claims to Medicare and received approximately $5,788,725 on those claims.
Charles Agbu and Obiageli Agbu are scheduled for trial on Feb. 26, 2013, for their alleged roles in the conspiracy. Co-defendants Dr. Emmanuel Ayodele, Alejandro Maciel and Candalaria Estrada have also been charged for their alleged roles in the conspiracy.
Defendants are presumed innocent until proven guilty at trial.
At sentencing, scheduled for March 28, 2013, Van Putten faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section. The case is being investigated by the FBI, HHS-OIG, the California Department of Justice and the Internal Revenue Service.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is 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.
Fraudulent Telemarketer Sentenced to 108 Months in PrisonRead the Press Release
WASHINGTON – An employee of Costa Rica-based telemarketing call centers was sentenced today to serve 108 months in prison for his role in a phony sweepstakes scheme that defrauded thousands of U.S. victims of more than $10 million, announced Assistant Attorney General for the Justice Department’s Criminal Division Lanny A. Breuer.
Osman Bah, 25, of Owings Mills, Md., was sentenced today by U.S. District Judge Max O. Cogburn of the Western District of North Carolina. In addition to his prison term, Bah was sentenced to serve two years of supervised release and ordered to pay $187,500 in restitution.
On July 26, 20l1, Bah pleaded guilty to one count of wire fraud and one count of conspiracy to commit wire fraud.
According to court documents, Bah participated in a conspiracy to defraud U.S. residents, most above the age of 55, out of millions of dollars by deceiving them into believing each person had won a large monetary prize in a “sweepstakes contest.” Calls to victims were made from Costa Rica using Internet-connected computers that disguised the originating location of the calls. Victims were informed that the callers were from the Federal Trade Commission, and that to receive their prize, victims had to wire thousands of dollars for a purported refundable insurance fee to Bah. Bah received the victims’ money in Maryland and, after keeping a portion for himself, forwarded the rest of the money on to his co-conspirators in Costa Rica. As long as the victims continued to pay, the co-conspirators continued to solicit more money from them.
Bah’s co-conspirator Ercell Carey pleaded guilty in June 2011 to one count of conspiracy to commit wire fraud and one count of wire fraud for his role in the scheme. He was sentenced to serve eight months of home confinement, forfeit $61,689 and pay $43,022 in restitution, jointly and severally.
To date, 45 defendants have been convicted for their participation in this scheme.
The case was prosecuted by Senior Trial Attorney William H. Bowne, Senior Litigation Counsel Patrick M. Donley and former Senior Trial Attorney Peter B. Loewenberg of the Criminal Division’s Fraud Section. The case was investigated by the U.S. Postal Inspection Service; Federal Trade Commission, Office of the Inspector General; FBI; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; and Internal Revenue Service-Criminal Investigation.
Former Chicago Massage Parlor Operator Sentenced to Life in Prison for Human Trafficking of Four WomenRead the Press Release
Alex Campbell, 45, of Glenview, Ill., a former northwest suburban massage parlor owner was sentenced today to life in federal prison for various crimes including sex-trafficking, forced labor, harboring illegal aliens, confiscating passports to further forced labor and extortion involving four foreign women whom he mentally and physically abused while forcing them to work for him, the Justice Department announced today. The defendant, who operated the Day and Night Spa on Northwest Highway in Mt. Prospect, Ill., used violence and threats of violence to force three women from the Ukraine and one from Belarus to work for him without pay and, at times, little to no subsistence between July 2008 and January 2010.
Campbell, also known as “Dave” and “Daddy” and who called himself “Cowboy,” was also ordered to pay approximately $124,000 restitution by U.S. District Judge Robert Gettleman. There is no parole in the federal prison system.
Campbell was convicted at trial in January of this year of three counts each of forced labor, harboring illegal aliens for financial gain and confiscating passports and other immigration documents to force the victims to work and one count each of sex trafficking by force, and extortion. He faced a mandatory minimum sentence of 15 years in prison and a maximum of life on the sex-trafficking count alone, and the judge also imposed maximum prison terms ranging from five to 20 years on each of the remaining counts, to run concurrent with the life sentence.
“Alex Campbell abused women by violently coercing them into labor and commercial sex. By working together with law enforcement and community groups, those women were able to testify about that abuse,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “Today’s sentence is a victory not only for the Department and the Cook County Human Trafficking Task Force, but also for those women who so bravely came forward and told the truth about their exploitation.”
“If you treat human beings as property, to be branded, beaten, raped, and sold, the law will punish you to the greatest extent possible,” said Gary S. Shapiro, Acting U.S. Attorney for the Northern District of Illinois. “This sentence ensures Alex Campbell’s incapacitation, which will prevent him from victimizing other women.”
“The sentence handed down today sends a clear message to those who think they can callously prey upon vulnerable women to turn a profit,” said Gary J. Hartwig, Special Agent-in-Charge of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations in Chicago. “HSI will continue to work with our law enforcement partners to ensure that those who engage in human trafficking are held accountable for their actions.”
Cook County Sheriff Thomas J. Dart, whose sheriff’s police initiated the investigation, said, “I am extremely proud of the effort and resolution of all the agencies involved with the successful investigation, conviction and now sentencing of such a violent individual.”
All four victims testified as government witnesses at trial, as well as co-defendant, Danielle John, 25, who pleaded guilty before trial to two counts of harboring illegal aliens for financial gain. She was sentenced previously to three years’ probation. In addition to the trial victims, the government presented evidence that investigators learned of approximately 20 women that Campbell victimized.
The trial showed that Campbell recruited and groomed foreign women without legal status in the United States to become part of his “Family,” which he claimed was an international organization that would provide them with support. He offered them jobs in his massage parlor, a place to live, assistance with immigration, and lured each of them to enter into a romantic relationship with him. After gaining their trust, he forced the victims to get tattooed with his moniker, which he said made them his property and allowed him to stop paying them. At the same time, he acquired the women’s passports and visas. The women were forced to work long hours every day and do as Campbell instructed them, and they were beaten and punished if they disobeyed him.
Trial testimony established that Campbell confiscated passports and identity documents from three of the victims, as well as harbored and transported them to ensure their continued labor. Campbell forced one victim to engage in commercial sex acts with customers at various other massage parlors, but not at the Day and Night Spa, which testimony showed he operated “cleanly” to avoid problems with law enforcement. He extorted another victim to pay him more than $25,000 to leave the “Family” by threatening to send a sexually-explicit video recording to her parents in Belarus.
The Cook County State’s Attorney’s Office assisted in the investigation, which was coordinated by the Cook County Human Trafficking Task Force. The task force, together with the Salvation Army Family and Community Services STOP-IT Initiative Against Human Trafficking, operate a toll-free hotline, (877) 606-3158, which victims of trafficking or those with information about human trafficking can call for assistance. The government is represented by Assistant U.S. Attorneys Diane MacArthur and Steven Grimes and Special Litigation Counsel John Richmond of the Civil Rights Division’s Human Trafficking Prosecution Unit.
23 November 2012
Two Members and One Associate of Violent North Carolina Latin Kings Gang Convicted for Racketeering ConspiracyRead the Press Release
A federal jury in Winston-Salem, N.C., has convicted two members of the North Carolina Almighty Latin King and Queen Nation (ALKQN) and one associate of the gang for a racketeering conspiracy involving violent crimes and drug distribution for the benefit of the criminal organization.
The convictions, which occurred late Wednesday, were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Ripley Rand for the Middle District of North Carolina; and Chris Briese, Special Agent in Charge of the Charlotte, N.C. Division of the FBI.
“Acting on behalf of the Latin Kings, these defendants committed horrific acts of violence in their community, and they face substantial prison sentences as a result,” said Assistant Attorney General Breuer. “Gangs wreak havoc on our streets and in our neighborhoods, and we are determined to continue bringing dangerous criminals like the Latin Kings to justice.”
“The result in this case speaks to the value of effective partnerships - effective partnerships between the many law enforcement agencies involved in the investigation of this case, and the effective partnership between our office and the Organized Crime and Gang Section of the Department of Justice’s Criminal Division in the prosecution of the case,” said U.S. Attorney Rand. “We would like to thank the jury for their time and attention during this lengthy trial - their deliberations and verdict show that they took this case very seriously, and our office will continue to take violent crime in the District very seriously as well.”
“This verdict is a direct result of the outstanding joint investigative efforts of our federal, state, and local law enforcement partners,” said Special Agent in Charge Briese. “The Piedmont-Triad Safe Streets Task Force will continue to investigate and help eradicate violent gangs to keep our communities safe.”
The leader of the North Carolina ALKQN, Jorge Cornell, aka “King J,” 36, of Greensboro, was convicted of racketeering conspiracy and violent crime in aid of racketeering activity. He was also convicted of use of a firearm during and in relation to a crime of violence for an April 2008 assault with a dangerous weapon.
Russell Lloyd Kilfoil, aka “King Peaceful,” 26, of Greensboro, and Ernesto Wilson, aka “Yayo,” 54, of New York, were also convicted of racketeering conspiracy. Randolph Leif Kilfoil, aka “King Paul,” 27, of Greensboro; Samuel Isaac Velasquez, aka “King Hype,” 23, of Garner, N.C.; and Irvin Vasquez, aka “King Dice,” 23, of Raleigh, N.C. were found not guilty after three days of jury deliberations.
According to evidence presented at trial, the defendants were members and associates of the ALKQN in North Carolina, a violent street gang that originated in Chicago in the 1960s and ultimately migrated to cities throughout the United States, including to Greensboro in 2002. Evidence at trial showed that from approximately 2005 until December 2011, the Latin Kings gang members met on a regular basis to increase their knowledge base of the gang rules; to discuss criminal activity and how to deal with rival gangs, including by attempted murder; to purchase firearms and circulate firearms for use in criminal activity by Latin Kings members; to engage in violent take-over robberies; and to use juveniles to distribute cocaine. The proceeds of this criminal activity helped to finance the gang’s illegal activities. Latin Kings members also attempted to murder members of their own gang when they attempted to leave the gang.
Evidence presented at trial also showed that Cornell conspired with other members of the Latin Kings to commit these racketeering acts, including the April 2008 shooting of a rival gang member; distribution of cocaine; the commission of no fewer than five Hobbs Act robberies of business located throughout the Greensboro area; plotting to firebomb the residences of former Latin Kings members; attacking former Latin Kings members; and the conspiracy to kill former Latin Kings members in drive-by shootings.
Six other individuals have pleaded guilty in the Middle District of North Carolina to racketeering conspiracy related to their involvement in the Latin Kings gang. Carlos Coleman, aka “King Spanky,” was acquitted of charges in a motion granted by the court during trial.
U.S. District Judge James A. Beaty Jr. presided over the trial. Each of the defendants convicted today faces a maximum potential penalty of 20 years in prison on the Racketeering Conspiracy count. Cornell also faces a maximum potential penalty of 20 years in prison on the violent crime in aid of racketeering count, and a minimum of 10 years in prison and a maximum of life in prison on the use of a firearm count. Each count also carries a maximum potential $250,000 fine.
The investigation was a joint operation conducted by the FBI’s Greensboro Field Office; the Greensboro, N.C. Police Department, under the direction of Chief Ken Miller; and the Guilford County Sheriff’s Office, under the direction of Sheriff B. J. Barnes. The case was prosecuted by Trial Attorney Leshia Lee-Dixon of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Robert A.J. Lang for the Middle District of North Carolina.
21 November 2012
Hungarian Woman Pleads Guilty in Tennessee for Role in International Fraud Scheme Involving Online Marketplace WebsitesRead the Press Release
WASHINGTON – A Hungarian woman pleaded guilty today in Nashville, Tenn., for her role in moving approximately $550,000 in illicit proceeds derived from an international online marketplace fraud scheme, announced Assistant Attorney General Lanny Breuer of the Justice Department’s Criminal Division and U.S. Attorney Jerry E. Martin for the Middle District of Tennessee.
Beatrix Boka, 34, of Hungary, pleaded guilty today before U.S. District Judge Aleta A. Trauger in the Middle District of Tennessee to one count of conspiracy to commit bank and wire fraud. Boka and co-conspirator Aleksandar Kunkin, also of Hungary, were charged in a one-count indictment by a federal grand jury in August 2012. Kunkin pleaded guilty on Nov. 15, 2012.
Boka admitted in her plea hearing today that members of the conspiracy fraudulently listed vehicles for sale at online marketplaces such as eBay. When victims expressed interest in purchasing the vehicles, co-conspirators sent emails that directed victims to wire payments to certain bank accounts, and victims never received the vehicles for which they paid.
Boka further admitted that, from May to June 2012, she and Kunkin visited Bank of America branches in North Carolina and South Carolina and opened bank accounts under false identities, which were supported by fraudulent identity documents including counterfeit Hungarian passports. Boka pleaded guilty to opening 17 such accounts, each under a different name. In total, 36 victims sent approximately $550,102 to accounts opened by Boka and Kunkin. Boka admitted that she and Kunkin subsequently sent the bulk of the money to co-conspirators located abroad.
According to the criminal complaint affidavit, in June 2012, Boka and Kunkin traveled together to Madison, Tenn., where Kunkin was apprehended as he attempted to open an account at a Bank of America branch using a Hungarian passport bearing an alias. Boka was subsequently apprehended in Kennesaw, Ga., when she attempted to open an account at a Bank of America branch using a Hungarian passport bearing an alias.
Boka faces a maximum sentence of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 21, 2013.
The case is being prosecuted by Assistant U.S. Attorney Byron M. Jones of the Middle District of Tennessee and Trial Attorney Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section. The case is being investigated by the FBI, the Tennessee Bureau of Investigation, the Metropolitan Nashville Police Department, and the Cobb County, Ga., Sheriff’s Department.
California Jewelry Store Owner Convicted of Conspiracy to Defraud the United States and Conspiracy to Launder the Proceeds of Bank FraudRead the Press Release
A federal jury sitting in Santa Ana, Calif., on Wednesday, Nov. 21, 2012, convicted Safieh Fard of one count of conspiracy to defraud the Internal Revenue Service (IRS) and one count of conspiracy to launder the proceeds of bank fraud obtained after submitting fraudulent mortgage applications, the Justice Department and IRS Criminal Investigation announced. Fard’s co-conspirators, her sister Sedigheh Bahramian, and two of her sons, Mohsen Kikalaye and Ahmad Kikalaye, pleaded guilty to related counts of bank fraud in 2010.
According to the indictment and evidence introduced at trial, starting in 1997 and continuing through 2004, Fard and her co-conspirators purchased valuable residential real estate properties, including numerous beachfront properties in Newport Beach, Calif. In order to obtain mortgages to purchase these properties, Fard and her co-conspirators provided false information to federally-insured banks that substantially overstated their income and assets on mortgage applications. Fard submitted mortgage applications that falsely stated she earned over $40,000 per month, despite claiming no taxable income on her federal income tax returns during the eight year conspiracy.
The evidence also established that Fard and her co-conspirators bought, sold, and transferred ownership of the properties between and among themselves. Ultimately, the properties were sold to third parties resulting in substantial monetary gain. Fard and her co-conspirators then failed to report capital gains on more than $3.7 million from these sales on their federal income tax returns.
The evidence further established that Fard and her co-conspirators Mohsen Kikalaye and Ahmad Kikalaye sold Newport Beach properties to unrelated third parties and received the proceeds in a large lump-sum payment by either wire transfer or check. Fraud proceeds were then transferred through multiple bank accounts to an account in the name of Fard’s co-conspirator Ahmad Kikalaye, who withdrew proceeds in cash in amounts slightly below the $10,000 federal reporting requirement. Fraud proceeds were also used to buy new real estate properties.
Sentencing is scheduled for April 8, 2013.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents from IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations of Orange County, Calif., who jointly investigated the case, and Tax Division Trial Attorneys Erin S. Mellen and Mark L. Williams, who prosecuted the case with valuable support from the U.S. Attorney’s Office for the Central District of California.
20 November 2012
U.S. and Mississippi Announce Clean Water Act Agreement with the City of JacksonRead the Press Release
The Department of Justice, the U.S. Environmental Protection Agency (EPA) and the Mississippi Department of Environmental Quality (MDEQ) announced today a comprehensive Clean Water Act settlement with the city of Jackson, Miss. Jackson has agreed to make improvements to its sewer systems to eliminate unauthorized overflows of untreated raw sewage and unauthorized bypasses of treatment at the Savanna Street Wastewater Treatment Plant (WWTP), the city’s largest wastewater treatment facility. When wastewater systems overflow, they can release untreated sewage and other pollutants into local waterways, threatening water quality and contributing to beach closures and disease outbreaks.
“This agreement will bring lasting benefits to the people of Jackson by reducing the threats to public health posed by untreated sewage overflows,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The settlement will bring the city into compliance with the nation’s Clean Water Act, requiring significant upgrades to the existing sewer system. Under the settlement, assistance will be provided to residents to repair sewer connections in lower-income areas that have suffered historically from overflows of untreated sewage.”
“EPA is working with cities to protect the nation’s waters from raw sewage overflows that can have significant impacts on people’s health and the environment,” said Cynthia Giles, Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement will lead to improvements in the management of wastewater overflows, which will reduce water pollution and benefit the Jackson community for years to come.”
“MDEQ has worked for several years with the city of Jackson on compliance issues and corrections to their wastewater system,” said Mississippi Department of Environmental Quality Executive Director Trudy Fisher. “Our efforts will continue to cooperatively work with the city and help them move forward. We are hopeful this settlement will result in a better quality of life for the city’s citizens and an improvement in water quality for the Pearl River and surrounding streams.”
The consent decree requires Jackson to implement specific programs designed to ensure proper management, operation and maintenance of its sewer systems. In order to address the problem of wet weather overflows of raw sewage from the sewer lines, Jackson will develop and implement a comprehensive sewer system assessment and rehabilitation program. The city will also develop and implement a comprehensive performance evaluation and composite correction program to reduce the bypasses of treatment at the Savanna Street WWTP.
The consent decree also requires Jackson to develop and implement numerous sewer system capacity, management, operations and maintenance programs, including a pump station operation and preventive maintenance program, a WWTP operation and maintenance program and a water quality monitoring program.
In addition to the control requirements, the consent decree requires Jackson to pay a civil penalty of $437,916. As part of the settlement, Jackson has also agreed to implement a supplemental environmental project valued at $875,000 that will provide additional environmental benefits to the local community. The project involves reducing the flow of water from entering the sewer system by eliminating illicit stormwater connections and repairing defective private lateral sewer lines from the low-income residential properties.
Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of the EPA’s national enforcement initiatives for 2011 to 2013. The initiative focuses on reducing sewer overflows, which can present a significant threat to human health and the environment. These reductions are accomplished by obtaining cities’ commitments to implement timely, affordable solutions to these problems, including the increased use of green infrastructure and other innovative approaches.
The United States has reached similar agreements in the past with numerous municipal entities across the country including Mobile and Jefferson County (Birmingham), Ala.; Atlanta and Dekalb County, Ga.; Memphis, Knoxville and Nashville, Tenn.; Miami-Dade County, Fla.; New Orleans, La.; Hamilton County (Cincinnati), Oh.; Northern Kentucky Sanitation District #1 and Louisville MSD, Ky.
The proposed consent decree with Jackson is subject to a 30-day public comment period and final court approval before becoming effective. A copy of the consent decree lodged today is available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html
More about the settlement: www.epa.gov/enforcement/water/cases/cityofjacksonmississippi.html
More information on EPA’s national enforcement initiative: www.epa.gov/compliance/data/planning/initiatives/2011sewagestormwater.html
Two Plead Guilty in Miami for Roles in $63 Million Mental Health Care Fraud SchemeRead the Press Release
WASHINGTON –A registered nurse pleaded guilty today and a former program coordinator pleaded guilty yesterday in connection with a health care fraud scheme involving defunct health provider Health Care Solutions Network Inc. (HCSN), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
John Thoen, 53, of Miami, pleaded guilty today before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering. Alexandra Haynes, 36, of Taylor, S.C., pleaded guilty yesterday before Judge Altonaga to one count of conspiracy to commit health care fraud in the same case.
According to court documents, HCSN operated community mental health centers (CMHC) at three locations Miami-Dade County, Fla., and one location in Hendersonville, N.C. HCSN purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness. A PHP is a form of intensive treatment for severe mental illness.
According to an indictment unsealed on May 2, 2012, HCSN obtained Medicare beneficiaries to attend HCSN for purported PHP treatment that was unnecessary and, in many instances, not even provided. HCSN obtained those beneficiaries in Miami by paying kickbacks to owners and operators of assisted living facilities.
According to court documents, Thoen was a licensed registered nurse in both Florida and North Carolina. In Florida, Thoen participated in the admission to HCSN of patients who were ineligible for PHP services. Thoen participated in the routine fabrication of patient medical records that were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Medicaid.
In North Carolina, Thoen, according to court documents, routinely submitted fraudulent PHP claims for Medicare patients who were not even present at the CMHC on days PHP services were purportedly rendered. Thoen also caused the submission of fraudulent Medicare claims on days the CMHC was closed due to snow.
Thoen also admitted to his role in a money laundering scheme, involving Psychiatric Consulting Network Inc. (PCN), a Florida corporation that was utilized by HCSN as a shell corporation to launder health care fraud proceeds. According to court documents, Thoen was president of PCN.
According to court documents, Haynes was employed in Miami as an intake specialist and routinely fabricated patient medical records. In North Carolina, Haynes was employed as a program coordinator and conducted group therapy sessions and fabricated corresponding group therapy notes even though she was not licensed to provide mental health services in the state.
According to court documents, from 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
Nine defendants have been charged for their alleged roles in the HCSN health care fraud scheme. Six defendants have pleaded guilty, and three defendants are scheduled for trial on Jan. 14, 2013, before U.S. District Judge Altonaga in Miami. Defendants are presumed innocent until proven guilty at trial.
The cases are being prosecuted by Special Trial Attorney William Parente and Trial Attorney Allan J. Medina of the Criminal Division’s Fraud Section. This 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, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
South Carolina-based Harmony Care Hospice Inc. <br /> <br /> and CEO/Owner Daniel J. Burton to Pay U.S. $1.286 Million <br /> <br /> to Resolve False Claims Act AllegationsRead the Press Release
Harmony Care Hospice Inc. (Harmony) and Harmony owner and chief executive officer Daniel J. Burton have agreed to pay the United States $1,286,999.32 to settle allegations that the South Carolina-based company submitted false claims to Medicare for patients under care at its hospice facilities, the Justice Department announced today.
Hospices provide palliative care – medical treatment that concentrates on reducing the severity of a disease’s symptoms – to patients who decide to forego curative care of their illness. Medicare beneficiaries are entitled to hospice care if they have a terminal prognosis of six months or less. The United States alleged that Harmony and Burton knowingly submitted or caused to be submitted false claims for patients who did not have such a prognosis and thus were not eligible for hospice care. Under today’s agreement, Burton is individually liable for $200,000 of the settlement amount.
“Billing Medicare for unnecessary or inappropriate end-of-life care contributes to the soaring costs of health care for everyone. Today’s settlement demonstrates the Department of Justice’s efforts both to protect public funds and safeguard Medicare beneficiaries,” said Stuart F. Delery, Principal Deputy Assistant Attorney General of the Civil Division.
Today’s settlement with Harmony and Burton resolves a lawsuit filed by former Harmony employees Mona Singletary and Lynda Fulton under the qui tam, or whistleblower, provisions of the False Claims Act. Under the False Claims Act, private citizens can bring suit for false claims on behalf of the United States and share in any recovery. Together, Singletary and Fulton will receive $244,529.87 as their share of the government’s recovery.As part of the settlement, Harmony and Burton will enter into a Corporate Integrity Agreement with the Office of Inspector General (OIG), Department of Health and Human Services (HHS), to address the allegations raised in the qui tam complaint.
“As budget pressures increase it is more important than ever to protect Medicare dollars and vigilantly guard against needless health spending,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. “The company and its owner have agreed to Federal monitoring and reporting requirements designed to avoid such problems in the future.”
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 $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.9 billion.
The investigation was jointly handled by the U.S. Attorney’s Office for the District of South Carolina, the Justice Department’s Civil Division and the Office of the Inspector General of the Department of Health and Human Services. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The qui tam case is captioned United States ex rel. Singletary, et al. v. Harmony Care Hospice, Inc., et al. , Case No. 2:10-cv-01404-PMD (D.S.C.).
Residential Mortgage-Backed Securities Working Group Members Announce Charges Against Credit SuisseRead the Press Release
Residential Mortgage-Backed Securities (RMBS) Working Group Co-Chair New York Attorney General Eric T. Schneiderman today filed a Martin Act complaint against Credit Suisse Securities (USA) LLC and its affiliates for making fraudulent misrepresentations and omissions to promote the sale of RMBS to investors. According to New York Attorney General Schneiderman’s lawsuit, Credit Suisse deceived investors as to the care with which they evaluated the quality of mortgage loans packaged into residential mortgage-backed securities prior to 2008. The lawsuit also alleges that RMBS sponsored and underwritten by Credit Suisse in 2006 and 2007 have suffered losses of approximately $11.2 billion.
This is the fourth enforcement action from the RMBS Working Group, a joint federal and state initiative created by President Obama earlier this year to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of RMBS. RMBS were pools of mortgages deposited into trusts and then sold as securities to investors who were to receive a stream of income from the mortgages packaged in the RMBS.
According to the complaint, Credit Suisse led its investors to believe that the quality of the loans in its mortgage-backed securities had been carefully evaluated and would be continuously monitored however, Credit Suisse did neither. The complaint alleges that instead, Credit Suisse systematically failed to adequately evaluate the loans, ignored defects that its limited review did uncover, and kept its investors in the dark about the inadequacy of its review procedures and defects in the loans. The complaint further alleges that the loans in Credit Suisse’s mortgage-backed securities included many that had been made to borrowers who were unable to repay the loans, were very likely to default, and ultimately did default in large numbers.
“This lawsuit against Credit Suisse marks another significant step in our efforts to hold financial institutions accountable for the misconduct that led to the worst financial crisis in nearly a century,” said New York Attorney General Schneiderman. “Our investigations and legal actions demonstrate that there must be one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. We need real accountability for the illegal and deceptive conduct in the creation of the housing bubble in order to bring justice for New York’s homeowners and investors.”
RMBS Working Group members contributed significantly to this effort. The Federal Housing Finance Agency Inspector General played a key role working with the New York Attorney General’s Office on the investigation, providing investigators and lawyers, the U.S. Securities and Exchange Commission (SEC) collaborated and assisted with the case, and the Department of Justice provided resources from U.S. Attorney’s offices around the country as well as from the RMBS Coordinating Team.
“Credit Suisse allegedly engaged in a far-reaching scheme to defraud investors, including Fannie Mae and Freddie Mac,” said FHFA Inspector General Steve Linick. “As victims, Fannie Mae and Freddie Mac have sustained significant losses, which to date have been borne by taxpayers. This lawsuit sends the clear message that reckless lending practices will not be tolerated.”
The Department of Justice’s specific role in the investigation included providing 11 Assistant U.S. Attorneys from offices all over the United States who interviewed more than 40 significant market participants. In addition, the Department of Justice provided 11 investigative analysts to assist in the review of millions of documents.
Today’s filing by our working group partner and my fellow co-chair New York Attorney General Schneiderman, represents another step toward holding accountable those whose actions led to the financial crisis and hurt so many Americans,” said Principal Deputy Assistant Attorney General for the Civil Division Stuart Delery. “This action demonstrates the value and strength of the working group model and was made possible by contributions from a variety of members of the working group, who contributed resources, personnel and expertise to the development of this case.”
“The number and breadth of recent RMBS actions, and the coordination and sharing among enforcement authorities that underlie them, prove that the whole of the RMBS Working Group is greater than the sum of its parts,” said Robert Khuzami, Director of the SEC’s Enforcement Division.
The New York Attorney General seeks investor damages to recoup these losses, as well as other equitable relief.
Today's announcement is part of the ongoing efforts of President Obama's Financial Fraud Enforcement Task Force's Residential Mortgage-Backed Securities (RMBS) Working Group, a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice together with 10 U.S. Attorneys' Offices and the FBI, the SEC, the Department of Housing and Urban Development (HUD), HUD's Office of Inspector General, the Federal Housing Finance Agency's Office of Inspector General, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board's Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and more than 10 state attorneys general offices around the country.
The Working Group is led by five co-chairs: Director of Enforcement for the SEC Robert Khuzami, New York State Attorney General Eric Schneiderman, Assistant Attorney General for the Justice Department's Criminal Division Lanny Breuer, Principal Deputy Assistant Attorney General for the Justice Department's Civil Division Stuart Delery and U.S. Attorney for the District of Colorado John Walsh. The RMBS Working Group Coordinator is Matthew Stegman. For more information about the RMBS working group and the Financial Fraud Enforcement Task Force, which is chaired by Attorney General Eric Holder, visit: www.stopfraud.gov .
Louisiana Generating to Install Pollution Controls and Pay $14 Million in Penalties and Projects to Resolve Clean Air Act ViolationsRead the Press Release
Louisiana Generating, an electric generating company owned by NRG Energy Inc., has agreed to a settlement at its Big Cajun II coal-fired power plant in New Roads, La., which will result in the elimination of over 27,300 tons of harmful emissions per year, the Department of Justice and U.S. Environmental Protection Agency (EPA) announced today. The settlement, lodged in federal court today in Baton Rouge, will require Louisiana Generating to spend approximately $250 million to reduce air pollution and also requires the company to pay a civil fine of $3.5 million and spend $10.5 million on environmental mitigation projects.
Louisiana Generating will achieve these reductions through a combination of new pollution controls, natural gas conversion and annual emission caps at all three units at the Big Cajun II plant. Emissions of sulfur dioxide (SO2) will be reduced by approximately 20,000 tons and nitrogen oxides (NOx) by about 3,300 tons. Louisiana Generating will spend an estimated $250 million in capital costs to comply with the consent decree through the end of 2015. Louisiana Generating also has agreed to further air pollution reductions by 2025, which will reduce SO 2 by at least an additional 4,000 tons each year.
The state of Louisiana joined in the settlement and will receive $1.75 million, one-half of the $3.5 million civil penalty.
The Clean Air Act, federal and Louisiana regulations require owners and operators of power plants to obtain permits and install best available control technology after major modifications are made to power plants. The governments alleged that Louisiana Generating violated federal and state law by continuing to operate Big Cajun II Units 1 and 2 without getting the required permits and installing modern air pollution controls after the largest boiler modifications in the history of the plant were made at the facility.
“The Big Cajun II Power Plant is the largest source of illegal air pollution in Louisiana. This settlement will secure substantial reductions in harmful emissions from the plant which will have a beneficial impact on air quality for residents of Louisiana and downwind states, including low-income communities who have been historically overburdened with pollution,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Louisiana Generating will install modern air pollution controls that will significantly reduce harmful emissions and also will perform environmental projects that will conserve energy.”
“This settlement represents a big win for the people of Louisiana and surrounding states, showing that we can both protect public health and the environment without taking away the electricity and jobs essential to our community,” said Donald J. Cazayoux, Jr., the U.S. Attorney for the Middle District of Louisiana.
“This settlement continues our important enforcement initiative to reduce harmful illegal air pollution from the largest sources of emissions,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Pollution from these sources can cause severe respiratory and cardiovascular impacts, and EPA is committed to making sure that they all comply with the law.”
“Louisiana continues to see the positive effects from emission reductions from facilities across the state,” said Peggy Hatch, Secretary of the Louisiana Department of Environmental Quality. “The reduction in air emissions from this settlement will be beneficial to our citizens. The health of Louisiana’s environment is the best it has been since the creation of the Clean Air and Clean Water Acts. Reductions such as these will only continue that trend. We’ll continue to work with our local, state and federal partners to protect human health and the environment.”
Louisiana Generating will spend $10.5 million on environmental mitigation projects that will further reduce emissions and benefit communities adversely affected by pollution from the Big Cajun II plant as follows:
· Install solar photovoltaic panels at local schools, government-owned facilities or buildings owned by nonprofit groups;
· Restore and protect land, watersheds, vegetation and forests;
· Fund creation of one or more charging stations for electric vehicles in the South Louisiana area that are supplied with zero emission renewable energy sources;
· Mitigate nitrogen loading in the False River, which will have the co-benefit of reducing phosphorus loading and preventing harmful algal blooms;
· Conduct energy efficiency projects, which could include voltage optimization, residential energy efficiency and assistance with commercial or industrial energy efficiency improvements; and
· Pay $1.5 million to the state of Louisiana to implement projects which could include the following: retrofitting vehicles with pollution controls, truck stop electrification, purchase and installation of photo-voltaic cells on buildings, building energy conservation and efficiency, buyback programs for dirty old motors and removal or replacement of oil-fired home heaters with ultra-low sulphur oil and outdoor wood-fired boilers.
The settlement marks the federal government’s 24th settlement under its national enforcement initiative to reduce emissions from coal-fired power plants under the Clean Air Act’s New Source Review requirements. SO2 and NOx, two key pollutants emitted from power plants, have numerous adverse effects on human health and the environment. These pollutants are converted in the air to fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. SO2 and NOx are also significant contributors to acid rain, smog and haze. In addition, air pollution from power plants can drift significant distances downwind, thereby affecting not only local communities, but also communities in a much broader area.
The proposed settlement will be lodged in the U.S. District Court for the Middle District of Louisiana is subject to a public comment period and final court approval. The consent decree can be viewed at the Department of Justice website: www.justice.gov/enrd/Consent_Decrees.html .
Justice Department Enters into Settlement Agreement to Reform the East Haven, Conn., Police DepartmentRead the Press Release
The Justice Department today announced that it has entered into a comprehensive settlement agreement with the town of East Haven, Conn., to resolve the department’s complaint alleging that the East Haven Police Department (EHPD) engaged in a pattern or practice of unlawful discrimination against individuals on account of race, color or national origin. The agreement also resolves allegations that EHPD engaged in a pattern or practice of use of excessive force and unconstitutional searches and seizures. The department and town jointly filed the agreement in federal district court today seeking the court’s approval and continued jurisdiction to enforce its terms.
The agreement is designed to ensure that the policies and practices of EHPD uphold constitutional protections against unlawful discrimination and unreasonable searches and seizures for the town’s 29,000 residents and other individuals who visit the town. The agreement, which draws from contemporary policing practices from around the country, is also designed to strengthen the community’s trust in EHPD and enable police officers to more effectively protect public safety. Once the agreement is implemented, the town is required to maintain two years of sustained compliance to ensure that the reforms become part of the agency’s standard procedures and institutional culture.
On Oct. 22, 2012, the department and the mayor of East Haven signed a letter of intent to enter into the agreement that provided the mayor an opportunity to consult with other town officials on the agreement’s comprehensive reforms. Following a series of board and council meetings, town officials unanimously endorsed the agreement. On Nov. 15, 2012, the mayor and police commission chairman executed the agreement.
“We are pleased that town officials have joined the mayor and the board of police commissioners in supporting the broad reforms embodied in the agreement.” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The agreement reflects a strong commitment to effective and constitutional law enforcement in East Haven for all who live, work and visit the town.”
“We commend the mayor, board of police commissioners, police chief, police officers and other town officials for taking this important step forward toward reform,” said David B. Fein, the U.S. Attorney for the District of Connecticut. “This agreement will provide the men and women of EHPD with the necessary support and guidance they need to fulfill their duties in a manner that protects public safety and upholds individuals’ civil rights.”
The agreement provides for comprehensive reforms in seven core areas, and provides for a joint compliance expert who will independently assess EHPD’s implementation of the agreement. The seven core areas are:
- Biased-free policing, including measures on mandatory training, collection and analysis of data on police encounters, development of a meaningful language access plan, notification to consulates when foreign nationals are detained, and steps to promote biased-free policing in EHPD’s hiring, promotion and performance assessment processes;
- Use of force, including the development of current policies on use of force and measures that provide for comprehensive training, consistent force reporting and thorough force reviews and investigations by supervisors and the internal affairs officer;
- Searches and seizures, including the development of up-to-date policies and measures on applying for search warrants, documenting consent searches, notifying supervisors of felony arrests and other “contempt-of-cop” situations, inspecting detainees for injuries and preserving individuals’ First Amendment rights to observe and record police activity;
- Policies and training, including measures to ensure that officers and supervisors have sufficient guidance to carry out their law enforcement responsibilities in a lawful, effective and ethical manner;
- Civilian complaints, internal investigations and discipline, including measures to ensure that all allegations of officer misconduct are received and thoroughly investigated and that officers who engage in misconduct are held accountable by a disciplinary system that is fair and consistent;
- Supervision and management, including steps that provide for close and effective supervision to assist officers in carrying out their duties in a lawful manner and systems that allow supervisors to identify, correct and prevent misconduct; and
- Community engagement and oversight, including measures to create robust partnerships with all segments of the East Haven community, disseminate public information on reforms and policing activities and solicit feedback on the relationship between EHPD and the community.
In September 2009, the Justice Department opened a pattern or practice investigation into allegations that EHPD officers engaged in discriminatory traffic enforcement, use of excessive force and unconstitutional searches and seizures in violation of the Constitution and federal anti-discrimination laws. In December 2011, the department completed its investigation and issued a letter finding reasonable cause to believe that EHPD engaged in a pattern or practice of unlawful discrimination and other misconduct. The investigation was conducted jointly by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the District of Connecticut.
The full text of the 2011 Findings Letter, the Letter of Intent, the United States’ complaint and the settlement agreement are available at www.justice.gov/crt/about/spl/findsettle.php . For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt .
Justice Department Asks Court to Dismiss Matter Involving the Arkansas Juvenile Assessment and Treatment Center Because Center Has Complied with AgreementRead the Press Release
The Justice Department announced that it has filed a joint motion with the state of Arkansas to dismiss the settlement in United States v. Arkansas, a case involving conditions at the Arkansas Juvenile Assessment and Treatment Center in Alexander, Ark. The state has fully complied with the settlement, which includes reforms in mental health care, fire safety, education and religious freedom for the youth residing at the facility. In addition to complying with the settlement, during the course of the department’s investigation and settlement, the state shifted its focus on juvenile justice from an institution-based model to a community-based model. The result has been a significant statewide decrease in the number of incarcerated youth. At the same time, crime in Arkansas has dropped even though the population of youth under 18 has grown.
“In the Justice Department’s view, the state has met the requirements necessary for dismissal of this case. We reached this conclusion after thoroughly reviewing information gathered during the department’s enforcement of the settlement,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We commend the state for its successful efforts to reduce the number of youth in secure institutional confinement, and for its commitment to ensuring that the constitutional rights of youth are protected.”
In March 2003, the Justice Department and state of Arkansas entered into the settlement to resolve the department’s findings of unlawful conditions at the then-named Alexander Youth Services Center following a comprehensive investigation under the Civil Rights of Institutionalized Persons Act and the Violent Crime Control and Law Enforcement Act of 1994. The settlement called for broad reforms in areas related to mental health care, fire safety, education and religious freedom.
For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt .
Iranian National and His Company Charged in Plot Involving Export of Military Antennas from the United StatesRead the Press Release
Amin Ravan, a citizen of Iran, and his Iran-based company, IC Market Iran (IMI), have been charged in an indictment unsealed today with conspiracy to defraud the United States, smuggling, and violating the Arms Export Control Act (AECA) in connection with the unlawful export of 55 military antennas from the United States to Singapore and Hong Kong.
The indictment was announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John Morton, Director of the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE); Stephanie Douglas, Executive Assistant Director of the FBI’s National Security Branch; and Eric L. Hirschhorn, Under Secretary for Industry and Security at the Commerce Department.
According to the indictment, which was returned under seal by a grand jury in the District of Columbia on Nov. 16, 2011, Ravan was based in Iran and, at various times, acted as an agent of IMI in Iran and an agent of Corezing International, Pte, Ltd, a company based in Singapore that also maintained offices in Hong Kong and China.
On Oct. 10, 2012, Ravan was arrested by authorities in Malaysia in connection with a U.S. provisional arrest warrant. The United States is seeking to extradite him from Malaysia to stand trial in the District of Columbia. If convicted of the charges against him, Ravan faces a potential 20 years in prison for the AECA violation, 10 years in prison for the smuggling charge and five years in prison for the conspiracy charge.
According to the indictment, in late 2006 and early 2007, Ravan attempted to procure for shipment to Iran export-controlled antennas made by a company in Massachusetts, through an intermediary in Iran. The antennas sought by Ravan were cavity-backed spiral antennas suitable for airborne or shipboard direction finding systems or radar warning receiver applications, as well as biconical antennas that are suitable for airborne and shipboard environments, including in several military aircraft.
After this first attempt was unsuccessful, Ravan joined with two co-conspirators at Corezing in Singapore so that Corezing would contact the Massachusetts company and obtain the antennas on behalf of Ravan for shipment to Iran. When Corezing was unable to purchase the export-controlled antennas from the Massachusetts firm, Corezing then contacted another individual in the United States who was ultimately able to obtain these items from the Massachusetts firm by slightly altering the frequency range of the antennas to avoid detection by the company’s export compliance officer.
In March 2007, Ravan and the co-conspirators at Corezing agreed on a purchase price of $86,750 for 50 cavity-backed antennas from the United States and discussed structuring payment from Ravan to his Corezing co-conspirators in a manner that would avoid transactional delays caused by the Iran embargo. Ultimately, between July and September 2007, a total of 50 cavity-backed spiral antennas and five biconical antennas were exported from the United States to Corezing in Singapore and Hong Kong.
According to the indictment, no party to these transactions -- including Ravan or IMI -- ever applied for or received a license from the State Department’s Directorate of Defense Trade Controls to export any of these antennas from the United States to Singapore or Hong Kong.
Two of Ravan’s co-conspirators, Lim Kow Seng (aka Eric Lim) and Hia Soo Gan Benson (aka Benson Hia), principals of Corezing, have been charged in a separate indictment in the District of Columbia in connection with this particular transaction involving the export of military antennas to Singapore and Hong Kong. The two Corezing principals were arrested in Singapore last year and the United States is seeking their extradition.
This investigation was jointly conducted by ICE agents in Boston and Los Angeles; FBI agents and analysts in Minneapolis; and Department of Commerce, Office of Export Enforcement agents and analysts in Chicago and Boston. Substantial assistance was provided by the U.S. Department of Defense, U.S. Customs and Border Protection, the State Department’s Directorate of Defense Trade Controls, and U.S. Department of Justice, Office of International Affairs.
The prosecution is being handled by Assistant U.S. Attorney Anthony Asuncion of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Richard S. Scott of the Counterespionage Section of the Justice Department’s National Security Division.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
Group of Owned and Affiliated Florida Hospitals Agree to Pay US $10.1 Million to Resolve False Claims Act AllegationsRead the Press Release
Morton Plant Mease Health Care Inc. and its affiliated hospitals (Morton Plant) have agreed to pay $10,169,114 to the federal government to resolve allegations that they violated the False Claims Act by submitting false claims for services rendered to Medicare patients, the Justice Department announced today. Morton Plant owns and operates, or is affiliated with, Morton Plant Hospital, St. Joseph’s Hospital, Morton Plant North Bay Hospital, St. Anthony’s Hospital, Mease Countryside Hospital and Mease Dunedin Hospital. These hospitals are part of the BayCare Health System in Florida’s Pinellas, Hillsborough and Pasco counties.
The settlement announced today resolves allegations that, between July 1, 2006 and July 31, 2008, Morton Plant improperly billed for certain interventional cardiac and vascular procedures as inpatient care when those services should have been billed as less costly outpatient care or as observational status.
“Overbilling the government for routine procedures wastes valuable resources that could be used to care for other patients,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “At a time when we are trying to reduce public spending, it is especially important to ensure that hospitals do not overcharge the government by improperly inflating their billing.”
“We hold medical providers to a high standard in our district, and we will not hesitate to hold them to account when we find evidence of serious misconduct,” said Robert O’Neill, U.S. Attorney for the Middle District of Florida. “This settlement should send a strong message that health care fraud enforcement is a growing priority in our office.”
Today’s settlement resolves a qui tam, or whistleblower, lawsuit filed by Randi Ferrare, a former director of Health Management Services at Morton Plant Hospital. Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and
share in any recovery. Ms. Ferrare will receive over $1.8 million as her share of the government’s recovery.
“When hospitals attempt to boost profits with improper inpatient admissions, they squander scarce dollars from Medicare and Medicaid,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “Our corporate integrity agreements hold providers accountable for preventing such abuse of government health care programs.”
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 $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.8 billion
The United States’ investigation was conducted by the U.S. Attorney’s Office for the Middle District of Florida, the Civil Division of the Department of Justice, the FBI and the Department of Health and Human Services, Office of Inspector General.
The claims settled by this agreement are allegations only; there has been no determination of liability.
The case is docketed as United States ex rel. Randi Ferrare v. Morton Plant Mease Health Care, Inc., No. 08:cv:01689-T-266MSS (M.D. Fl.).
Former Executive at Florida-Based Lender Processing Services Inc. Admits Role in Mortgage-Related Document Fraud SchemeRead the Press Release
WASHINGTON – A former executive of Lender Processing Services Inc. (LPS) – a publicly traded company based in Jacksonville, Fla. – pleaded guilty today, admitting her participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States.
The guilty plea of Lorraine Brown, 56, of Alpharetta, Ga., was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Middle District of Florida Robert E. O’Neill; and Michael Steinbach, Special Agent in Charge of the FBI’s Jacksonville Field Office.
The plea, to conspiracy to commit mail and wire fraud, was entered before U.S. Magistrate Judge Monte C. Richardson in Jacksonville federal court. Brown faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the crime. The date for sentencing has not yet been set.
“Lorraine Brown participated in a scheme to fabricate mortgage-related documents at the height of the financial crisis,” said Assistant Attorney General Breuer. “She was responsible for more than a million fraudulent documents entering the system, directing company employees to forge and falsify documents relied on by property recorders, title insurers and others. Appropriately, she now faces the prospect of prison time.”
“Homeownership is a huge step for American citizens,” said U.S. Attorney O’Neill. “The process itself is often intimidating and lengthy. Consumers rely heavily on the integrity and due diligence of those serving as representatives throughout this process to secure their investments. When the integrity of this process is compromised, illegally, public confidence is eroded. We must work to assure the public that their investments are sound, worthy, and protected.”
Special Agent in Charge Steinbach stated, “Our country is increasingly faced with more pervasive and sophisticated fraud schemes that have the potential to disrupt entire markets and the economy as a whole. The FBI, with our partners, is committed to addressing these schemes. As these schemes continue to evolve and become more sophisticated, so too will we.”
Brown was the chief executive of DocX LLC, which was involved in the preparation and recordation of mortgage-related documents throughout the country since the 1990s. DocX was acquired by an LPS predecessor company, and was part of LPS’s business when LPS was formed as a stand-alone company in 2008. At that time, DocX was rebranded as “LPS Document Solutions, a Division of LPS.” Brown was the president and senior managing director of LPS Document Solutions, which constituted DocX’s operations.
DocX’s main clients were residential mortgage servicers, which typically undertake certain actions for the owners of mortgage-backed promissory notes. Servicers hired DocX to, among other things, assist in creating and executing mortgage-related documents filed with recorders’ offices. Only specific personnel at DocX were authorized by the clients to sign the documents.
According to plea documents filed today, employees of DocX, at the direction of Brown and others, began forging and falsifying signatures on the mortgage-related documents that they had been hired to prepare and file with property recorders’ offices. Unbeknownst to the clients, Brown directed the authorized signers to allow other DocX employees, who were not authorized signers, to sign the mortgage-related documents and have them notarized as if actually executed by the authorized DocX employee.
Also according to plea documents, Brown implemented these signing practices at DocX to enable DocX and Brown to generate greater profit. Specifically, DocX was able to create, execute and file larger volumes of documents using these signing and notarization practices. To further increase profits, DocX also hired temporary workers to sign as authorized signers. These temporary employees worked for much lower costs and without the quality control represented by Brown to DocX’s clients. Some of these temporary workers were able to sign thousands of mortgage-related instruments a day. Between 2003 and 2009, DocX generated approximately $60 million in gross revenue.
After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country. Many of these documents – particularly mortgage assignments, lost note affidavits and lost assignment affidavits – were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions. Brown admitted she understood that property recorders, courts, title insurers and homeowners relied upon the documents as genuine.
Brown also admitted that she and others also took various steps to conceal their actions from clients, LPS corporate headquarters, law enforcement authorities and others. These actions included testing new employees to ensure they could mimic signatures, lying to LPS internal audit personnel during reviews of the operation in 2009, making false exculpatory statements after being confronted by LPS corporate officials about the acts and lying to the FBI during its investigation. LPS closed DocX in early 2010.
This case is being prosecuted by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida. This case is being investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Florida’s Technological Research and Development Authority Pays $15 Million to Resolve False Claims AllegationsRead the Press Release
The Technological Research and Development Authority (TRDA) has agreed to pay $15 million to resolve allegations that it violated the False Claims Act in connection with grants from the National Aeronautics and Space Administration (NASA) and the Economic Development Administration (EDA) of the Department of Commerce, the Justice Department announced today. TRDA, which was created by the Florida legislature as a special district, owns and operates a system of incubator facilities to nurture small businesses by providing low-rent office space and business development assistance.
TRDA and the Melbourne Airport Authority entered into an agreement to use NASA and EDA grant funds to construct an office building at the airport to be used as TRDA’s headquarters and an incubator facility. In a lawsuit filed against TRDA, the United States alleged that construction of the office building was outside the scope of the NASA grants awarded to TRDA and contrary to the terms of the EDA grant awarded jointly to TRDA and the airport authority, which prohibited combining funds from more than one federal agency for the project. Under the terms of a consent judgment executed by TRDA, the special district has agreed to settle these allegations, and to wind down its operations.
Relatedly, the Melbourne International Airport and its governing body, the Melbourne Airport Authority, have agreed to pay the United States $4 million to resolve alleged False Claims Act violations based on the same events described in the government’s lawsuit against TRDA.
“The government encourages economic development through grants such as those awarded here, but entities that expend these funds must ensure that they are doing so in a manner consistent with the terms and conditions of the grants,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “As this settlement demonstrates, the Department of Justice will hold accountable those who fail to take reasonable steps to avoid the use of federal funds in a manner contrary to grant requirements.”
“The consent judgment and settlement are testament to the commitment of the NASA Office of Inspector General and the Department of Justice to ensure that public funds are used appropriately,” said NASA Inspector General Paul Martin.
This case was handled by the Justice Department’s Civil Division and NASA’s Office of General Counsel, Acquisition Integrity Program, and Office of Inspector General. The claims settled by the agreements are allegations only; there has been no determination of liability.
The lawsuit against TRDA was filed in the United States District Court for the Southern District of Mississippi and is captioned United States v. Technological Research and Development Authority, No. 1:12-cv-00065-LG-JMR.
Colorado Tax Defier Sentenced to 10 Years in Prison<br /> <br /> for Fraud and Tax ConspiracyRead the Press Release
Curtis L. Morris, age 43, of Elizabeth, Colo., was sentenced Monday in Denver to 120 months in prison followed by 3 years of supervised release by U.S. District Court Judge Robert E. Blackburn, the Justice Department and Internal Revenue Service (IRS) announced. Judge Blackburn also ordered Morris to pay $ $1,916,831 in restitution to the IRS.
Morris was found guilty on April 30, 2012, after a three week jury trial, of three counts of mail fraud, seventeen counts of filing false claims against the United States, and one count of conspiracy to defraud the United States. According to the testimony at trial, Armstrong, Morris and others conspired to file false federal income tax returns claiming large tax refunds based upon fictitious federal income tax withholdings taken from bogus Forms 1099-OID for themselves and others. Codefendant Richard Kellogg Armstrong, age 77, of Prescott, Ariz., was sentenced on Aug. 10, 2012, to 9 years in prison followed by 3 years of supervised release.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of special agents of IRS – Criminal Investigation Denver Field Office, who investigated the case, and Assistant United States Attorney Kenneth Harmon and Tax Division Trial Attorney Kevin F. Sweeney, who prosecuted the case.
19 November 2012
United States Sues Houston-based KBR and Kuwaiti Subcontractor for False Claims on Contracts to House American Troops in IraqRead the Press Release
The United States has filed a civil complaint against Kellogg, Brown & Root Services Inc. (KBR) and First Kuwaiti Trading Company for submitting inflated claims for the delivery and installation of trailers to house troops in Iraq, the Justice Department announced today. KBR is headquartered in Houston. First Kuwaiti, a KBR subcontractor, is based in Kuwait.
KBR is the Army’s primary contractor for logistical support in Iraq. On Dec. 14, 2001, t he Army awarded KBR the LOGCAP III contract, the third generation of contracts under the Army’s Logistics Civil Augmentation Program (LOGCAP) since the program’s inception in the 1980s. LOGCAP III required KBR to provide logistical support in the military theater whenever and wherever it was needed. Support included services such as transportation, dining services, facilities management, maintenance and living accommodations for United States and coalition forces. LOGCAP III was originally awarded to Brown and Root Services, a division of KBR. The United States has paid KBR tens of billions of dollars for logistical support services since awarding the contract.
The government’s complaint arises from the Bed Down Mission, a push to replace the tents used to house soldiers during the early days of the war with trailers, also called living containers. KBR performed many of the services required under LOGCAP III, including the Bed Down Mission, through foreign and domestic subcontractors. According to the complaint, KBR awarded a subcontract to First Kuwaiti on Oct. 16, 2003, to supply, transport and install 2,252 living containers at Camp Anaconda in Iraq for about $80 million. The government alleges that First Kuwaiti was required to complete delivery and installation of the trailers at Camp Anaconda by Dec. 15, 2003. The government further alleges that in July 2004, First Kuwaiti presented two claims to KBR contending that government-caused delays in providing military escorts for convoys into Iraq entitled the company to an increase in the contract price to cover its increased costs. According to the complaint, KBR agreed to pay First Kuwaiti an additional $48.8 million and passed that cost on to the United States.
The government’s complaint alleges that First Kuwaiti knowingly inflated its crane and truck costs, among other items, and misrepresented the cause of its delays. The complaint further alleges that KBR charged these costs to the United States knowing they were improper.
“We depend on companies like KBR to provide valuable noncombat services to our military such as housing and feeding our troops,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice. “We will en sure that contractors live up to their promises, and are not permitted to profit at the expense of the taxpayers at home who are supporting our men and women in uniform.”
“When dealing with the government, just like dealing with anyone else, it’s important to give an honest account,” said Jim Lewis, U.S. Attorney for the Central District of Illinois. “The facts alleged in the complaint indicate that KBR and First Kuwaiti did not provide an honest accounting.”
The United States is suing KBR and First Kuwaiti under the False Claims Act. The act holds persons responsible for presenting, or causing to be presented, claims for gov ernment money or property they know are false. The statute entitles the government to recover three times its damages, plus a $5,500 to $11,000 civil penalty for each false claim.
The United States is also suing KBR under the antifraud section of the Contract Disputes Act and for breach of contract. The Contract Disputes Act establishes liability for contractors who certify that they are entitled to money under a contract, if any part of their claim is unsupported due to a misrepresentation of fact or fraud. Under the Contract Disputes Act, the government may recover the false and unsupported part of the claim, plus its costs of review.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Central District of Illinois; and the Defense Contract Audit Agency, the Defense Criminal Investigative Service, and the Defense Contract Management Agency of the Department of Defense. The claims asserted against KBR and First Kuwaiti in the United States’ complaint are allegations only and there has been no determination of liability.
The lawsuit was filed in the Central District of Illinois and is captioned United States v. Kellogg, Brown & Root Services, Inc., et al.
The United States has filed a civil complaint against Kellogg, Brown & Root Services Inc. (KBR) and First Kuwaiti Trading Company for submitting inflated claims for the delivery and installation of trailers to house troops in Iraq, the Justice Department announced today. KBR is headquartered in Houston. First Kuwaiti, a KBR subcontractor, is based in Kuwait.
KBR is the Army’s primary contractor for logistical support in Iraq. On Dec. 14, 2001, t he Army awarded KBR the LOGCAP III contract, the third generation of contracts under the Army’s Logistics Civil Augmentation Program (LOGCAP) since the program’s inception in the 1980s. LOGCAP III required KBR to provide logistical support in the military theater whenever and wherever it was needed. Support included services such as transportation, dining services, facilities management, maintenance and living accommodations for United States and coalition forces. LOGCAP III was originally awarded to Brown and Root Services, a division of KBR. The United States has paid KBR tens of billions of dollars for logistical support services since awarding the contract.
San Diego Used Car Wholesaler Sentenced on Tax EvasionRead the Press Release
Mohammad Jafar Nikbakht, aka Freydoon Nikbakht, was sentenced Friday to 15 months in prison for evading his individual income taxes, the Justice Department and Internal Revenue Service (IRS) announced. According to the indictment and other documents filed with the court, Nikbakht ran a series of lucrative auto dealerships in the greater San Diego area and significantly under-reported income earned through these businesses. John A. Houston, U.S. District Court Judge for the Southern District of California, who presided over the sentencing hearing, found that Nikbakht caused over $200,000 in tax loss. Judge Houston ordered Nikbakht to make restitution payments to the IRS for $124,454 of this amount.
Nikbakht had pleaded guilty to tax evasion on March 30, 2011. At his plea hearing, he admitted that during 2007 he earned income through auto dealership operations, including through a dealership called Southern California Car Exchange. Nikbakht further admitted that he willfully failed to file his personal tax return and pay his taxes for 2007, and that he engaged in various acts to conceal income from the IRS. For example, Nikbakht admitted that he operated under another dealer’s license and that he instructed the other dealer to write his income payment checks to the order of a third-party or to “cash”.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended special agents of IRS - Criminal Investigation, who prosecuted the case, and Tax Division Trial Attorneys Thomas W. Flynn and Joseph A. Rillotta, who prosecuted the case.
More information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/ .
New Mexico Man Sentenced to Prison for Stolen Identity Refund FraudRead the Press Release
Douglas Kuester, 43, a tax preparer from Silver City, N.M., was sentenced today to 48 months in prison for filing false claims and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Kuester was also ordered to pay $911,000 in restitution and will be on supervised release for three years after completing his prison sentence.
Kuester had pleaded guilty to the charges in May. He was originally indicted by a federal grand jury on Jan. 18, 2012, and has been in custody since his arrest on January 24.
According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds. He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself. Kuester also admitted to using an anonymizer to help conceal his filing of the false returns.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and U.S. Attorney Kenneth J. Gonzales commended special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Gregory P. Bailey, who prosecuted the case with assistance from the New Mexico U.S. Attorney’s Office.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
New Mexico Man Sentenced to Prison for StolenRead the Press Release
IDENTITY REFUND FRAUDWASHINGTON – Douglas Kuester, 43, a tax preparer from Silver City, N.M., was sentenced today to 48 months in prison for filing false claims and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. Kuester was also ordered to pay $911,000 in restitution and will be on supervised release for three years after completing his prison sentence.
Kuester had pleaded guilty to the charges in May. He was originally indicted by a federal grand jury on Jan. 18, 2012, and has been in custody since his arrest on January 24.
According to court documents, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds. He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself. Kuester also admitted to using an anonymizer to help conceal his filing of the false returns.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and U.S. Attorney Kenneth J. Gonzales commended special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Jason H. Poole and Gregory P. Bailey, who prosecuted the case with assistance from the New Mexico U.S. Attorney’s Office.Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
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Nearly $1 Million Now Available to Support Partnerships Offering Education and Workforce Training for Incarcerated Individuals Exiting PrisonsRead the Press Release
The Department of Justice and the U.S. Department of Education announced today a new, nearly $1 million grant fund entitled, “Promoting Reentry Success through Continuity of Educational Opportunities” (PRSCEO), that will invest in innovative programs preparing incarcerated individuals to successfully reenter society with the support of education and workforce training. Eligible applicants include adult education providers partnering to connect education in state correctional facilities with local communities.
PRSCEO provides an important opportunity for applicants to create new approaches and improvements for existing rehabilitation services. Every year, more than 700,000 incarcerated individuals leave federal and state prisons. Yet, existing policies and programs too often fail to prepare released prisoners to reenter society, leading 4 of every 10 to commit new crimes or violate terms of their release within 3 years. Failure to support successful rehabilitation costs states more than $50 billion annually.
Based on a cooperative agreement, the one-time grant funding comes from a section of the Second Chance Act, administered by the Bureau of Justice Assistance, a component within the Office of Justice Programs at the Department of Justice.
“Expanding access to education is a proven strategy for reducing recidivism and preventing crime,” said Attorney General Eric Holder. “By working together to support education and training programs for those rejoining our communities, the Departments of Justice and Education are helping to improve outcomes and ensure public safety.”
“Education is key to creating successful pathways toward prosperity and opportunity for children and adults,” said U.S. Secretary of Education Arne Duncan. “Promoting effective policies that offer education and workforce training to low-skill individuals will protect our communities and benefit our economy.”
The announcement was made today during a Department of Education-hosted Correctional Education Summit that gathered outside experts engaged in pursuing developing innovations to improve educational opportunities for youth and adults in secure confinement facilities. In conjunction with the event, the Department of Education released a new Reentry Education Model guidance document. Guidance outlined in the reentry model offers evidence-based improvements to support low-skill individuals leaving prison to successfully transition back into society through education and career advancement.
Suggested improvements include establishing an integrated reentry program that offers and incorporates education services, workforce training, and job search support into intake and prerelease processes and links education to employment services; targeting job support to labor market demands that do not have criminal history restrictions; using technology to increase program access and data to measure performance and outcomes; and conducting thorough program evaluations to further share lessons learned and best practices.
Additional guidance on educational resources for incarcerated individuals reintegrating into society is available through the Department of Education‘s Office of Vocational and Adult Education’s Take Charge of Your Future. The guide was recently updated to offer advice and information that serves a broader population, members of the community corrections population – the nearly five million Americans on parole or probation -- as well as incarcerated individuals.
Applications will be accepted until Dec. 26, 2012. The Department of Education anticipates awarding two to four grants ranging from $200,000 to $400,000. Awards will be made in January 2013.
Former Executives of Stanford Financial Group Entities<br /> Convicted for Roles in Fraud SchemeRead the Press Release
WASHINGTON – A Houston federal jury has convicted Gilbert T. Lopez Jr., the former chief accounting officer of Stanford Financial Group Company, and Mark J. Kuhrt, the former global controller of Stanford Financial Group Global Management, for their roles in helping Robert Allen Stanford perpetrate a fraud scheme involving Stanford International Bank (SIB).
The guilty verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Kevin Perkins of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell; and Special Agent in Charge Lucy Cruz of IRS-Criminal Investigation.
Stanford, who was convicted in a separate trial held earlier this year, illegally used billions of dollars of SIB’s assets to fund his personal business ventures, to live a lavish lifestyle, and for other improper purposes.
The evidence presented at the trial of Lopez and Kuhrt established that they were aware of and tracked Stanford’s misuse of SIB’s assets, kept the misuse hidden from the public and from almost all of Stanford’s other employees, and worked behind the scenes to prevent the misuse from being discovered.
The trial against Lopez and Kuhrt spanned five weeks. After approximately three days of deliberations, the jury found both Lopez, 70, and Kuhrt, 40, both of Houston, guilty of 10 of 11 counts in the indictment. Each defendant was convicted of one count of conspiracy to commit wire fraud and nine counts of wire fraud. Each was found not guilty on one wire fraud count.
Both defendants were immediately remanded into custody.
U.S. District Judge David Hittner, who presided over the trial, has set sentencing for Feb. 14, 2013. At sentencing, Lopez and Kuhrt will each face a maximum of 20 years in prison on each count of conviction.
The investigation was conducted by the FBI, U.S. Postal Inspection Service, IRS-CI and the U.S. Department of Labor, Employee Benefits Security Administration. The case was prosecuted by Deputy Chief Jeffrey Goldberg and Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Jason Varnado of the Southern District of Texas.
Detroit-Area Nurse Sentenced to 30 Months in Prison for Role in $13.8 Million Home Health Care Fraud SchemeRead the Press Release
WASHINGTON—A Detroit-area registered nurse was sentenced today to serve 30 months in prison for his role in a nearly $13.8 million Medicare fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office.
Anthony Parkman, 41, of Southfield, Mich., was sentenced today by U.S. District Judge Gerald E. Rosen in the Eastern District of Michigan. In addition to his prison term, Parkman was sentenced to three years of supervised release and was ordered to pay $450,988 in restitution, jointly and severally with his co-defendants.
Parkman pleaded guilty on June 26, 2012, to one count of conspiracy to commit health care fraud.
According to Parkman’s plea agreement, beginning in approximately December 2008, Parkman, a registered nurse, was paid to sign medical documentation for Physicians Choice Home Health Care LLC, a home health agency that billed and received payments from Medicare for home health care services that were never rendered. Parkman admitted to not seeing or treating the beneficiaries for whom he signed medical documentation and admitted he knew that the documents he signed would be used to support false claims to Medicare. Parkman was paid approximately $150 for each false and fictitious file that he signed.
Parkman was subsequently paid to sign falsified medical documentation and files for First Care Home Health Care LLC, Quantum Home Care Inc. and Moonlite Home Care Inc., which were Detroit-area home health care companies owned by Parkman’s co-conspirators that billed Medicare for services that were never rendered.
The four home health companies for which Parkman worked were paid in total approximately $13.8 million by Medicare. From approximately December 2008 through September 2011, Medicare paid approximately $450,988 to the four home health care companies for fraudulent skilled nursing claims based on falsified files signed by Parkman.
Nine of Parkman’s co-defendants have pleaded guilty and await sentencing. Three co-defendants are fugitives, and six co-defendants await trial.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is 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.
Department of Justice, Federal Trade Commission to Hold<br /> Workshop on Patent Assertion Entity ActivitiesRead the Press Release
WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) announced today that they will hold a joint public workshop on Dec. 10, 2012, to explore the impact of patent assertion entity (PAE) activities on innovation and competition and the implications for antitrust enforcement and policy.
This workshop will examine the economic and legal implications of PAE activity, as distinct from prototypical “non-practicing entity” (NPE) activity, such as developing and transferring technology. By contrast, PAE activities often include purchasing patents from existing owners and seeking to maximize revenues by licensing the intellectual property to (or litigating against) manufacturers who are already using the patented technology.
Supporters of the PAE business model say that it facilitates the transfer of patent rights, rewards inventors and funds ongoing research and development efforts. Critics describe adverse effects on competition and innovation, including increased costs and a lack of technology transfer, ultimately taxing consumers and industry.
The workshop will provide a forum for industry participants, academics, economists, lawyers and other interested parties to discuss the economic and legal analyses of PAE activity. It will consist of a series of panels examining, among other topics, the legal treatment of PAE activity, economic theories concerning PAE activity and industry experiences. Panelists for the workshop will include academics, private attorneys, economists and industry representatives.
T he Department of Justice and the FTC are interested in receiving comments on PAE activities and will accept written submissions from the public before the workshop and until March 10, 2013. Interested parties may submit public comments to: [email protected] . Submitted comments will be made publicly available on the Department of Justice and FTC websites.
The all-day workshop is free and open to the public. Individuals are encouraged to register by Dec. 5, 2012, for the workshop by sending an email to: [email protected] . Please include “RSVP” in the subject line. Seating will be on a first-come, first-served basis.
The workshop will take place at the FTC’s satellite conference center at 601 New Jersey Ave., N.W., Washington, D.C. from 9:00 a.m. to 5:30 p.m. EST on Dec. 10, 2012. Additional participants will be added to the agenda as they are confirmed. Updates to the agenda will be posted on the Department of Justice and FTC websites. The workshop will include the following panels, presentations and confirmed participants:
9:00 a.m. – Opening Remarks : FTC Chairman Jon Leibowitz
SESSION A: FRAMEWORK
9:15 a.m. – Lecture 1: Introduction to PAE Activity
Colleen Chien, Assistant Professor of Law, Santa Clara University School of Law
9:35 a.m. – Lecture 2: Introduction to PAE Licensing
Carl Shapiro, Transamerica Professor of Business Strategy, University of California at Berkeley, Walter A. Hass School of Business
10:05 a.m. – Q & A with Professors Chien and Shapiro
BREAK (10:20 - 10:30 a.m.)
10:30 a.m. – Panel 1: Realities of Licensing and Litigation Practices
- Cynthia Bright, Associate General Counsel, IP Litigation and Public Policy, Hewlett-Packard
- Scott Burt, Vice President & Chief Intellectual Property Counsel, Mosaid Technologies Inc.
- John Desmarais, Partner, Desmarais LLP; Founder, Round Rock Research LLC
- Peter Detkin, Founder and Vice-Chairman, Intellectual Ventures
- Sarah Guichard, Vice President of Patent & Standards Strategy, Research In Motion (RIM)
- Paul Melin, Chief Intellectual Property Officer, Nokia
- Neal Rubin, Vice President Litigation, Cisco Systems Inc.
- Alan Schoenbaum, Senior Vice President, General Counsel and Secretary, Rackspace Hosting
- Mallun Yen, Executive Vice President, RPX Corporation
LUNCH (12:00 - 1:15 p.m.)
1:15 p.m. – Remarks
Stuart Graham, Chief Economist, U.S. Patent & Trademark Office
Session B: Potential Efficiencies and Harms from PAE ACTIVITY: Effects on competition and innovation
1:45 p.m. – Academic Introduction to Potential Efficiencies from PAE Activity
Panel 1: Potential Efficiencies from PAE Activity
- Ron Epstein, CEO, Epicenter IP Group LLC
- Anne Layne-Farrar, Vice President, Antitrust & Competition Economics Practice, Charles River Associates
Academic Introduction to Potential Harms from PAE Activity
Panel 2: Potential Harms from PAE Activity
- Thomas Ewing, Principal Consultant, Avancept LLC
- Robin Feldman, Professor of Law, University of California Hastings College of the Law
- Michael Meurer, Professor of Law and Abraham and Lillian Benton Scholar, Boston University School of Law
- David Schwartz, Associate Professor of Law, Illinois Institute of Technology Chicago-Kent College of Law
Panel 3: Industry Reaction
BREAK (3:45 - 4:00 p.m.)
SESSION C: HOW DOES ANTITRUST APPLY TO THE POTENTIAL EFFICIENCIES AND HARMS GENERATED BY PAE ACTIVITY
4:00 p.m. – Academic Introduction
Phillip Malone, Clinical Professor of Law, Harvard Law School; Clinical Co-Director and Senior Fellow, Berkman Center for Internet & Society, Harvard Law School
4:20 p.m. – Panel Discussion
- Logan Breed, Partner, Hogan Lovells
- Susan Creighton, Partner, Wilson, Sonsini, Goodrich & Rosati PC
- Hanno Kaiser, Partner, Latham & Watkins LLP
- Hill Wellford III, Partner, Bingham McCutchen LLP
5:00 p.m. – Q & A
5:20 p.m. – Closing Remarks: Acting Assistant Attorney General for the Antitrust Division Renata B. Hesse
Directions to the FTC’s Conference Center are available at http://www.ftc.gov/bcp/workshops/transportationguide.shtml.
Reasonable accommodations for people with disabilities are available upon request. Requests should be submitted via email to [email protected] or by calling Samantha Konstandt at 202-326-3348. Requests should be made in advance. Please include a detailed description of the accommodation needed and provide contact information.
Agreement Furthers Cleanup of the Quanta Resources Superfund Site in Edgewater, New JerseyRead the Press Release
Another important step toward cleaning up the Quanta Resources Superfund site in Edgewater, N.J., was announced today by the Department of Justice and the U.S. Environmental Protection Agency (EPA). The agreement with Honeywell International Inc. and 23 other parties, embodied in a consent decree lodged today in federal court, requires the performance of pre-construction project design work and requires Honeywell to carry out the actual cleanup work under the EPA’s oversight. The cleanup of the Quanta Site is expected to result in its redevelopment.
After the design is completed and approved by EPA, the cleanup will proceed at the Quanta Site, which is located adjacent to the Hudson River. The work is expected to take approximately two to three years and cost $78 million.
Currently, soil and ground water at the site are contaminated with arsenic, lead, polycyclic aromatic hydrocarbons and volatile organic compounds resulting from over 100 years of industrial activities in the area. Exposure to these pollutants can have serious health effects, and in some cases, increase the risk of cancer.
“This agreement marks a major milestone toward finally cleaning up the industrial pollution legacy at the Quanta Site,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The settlement holds those responsible for the pollution accountable for the cleanup, and brings us closer to the future redevelopment of this site for the benefit of the people of New Jersey.”
“The Superfund program operates on the principle that polluters should pay for the cleanups, rather than passing the costs to taxpayers,” said EPA Regional Administrator Judith A. Enck. “The EPA searches for parties responsible for the contamination and holds them accountable. This agreement is an important part of that process and a step in the right direction.”
The Quanta site, located on River Road at the intersection of Gorge Road in Edgewater, was built as a coal tar facility beginning in the 1880s. In the 1970s, the site’s “tank farm” was used to store waste oil prior to reprocessing. The state of New Jersey closed the facility in 1981 when some storage tanks were found to contain waste oil contaminated with polychlorinated biphenyls. The EPA supervised a series of emergency actions at the site that included safely removing and disposing of millions of gallons of waste oil, sludge and contaminated water from the tanks, and cleaning and dismantling the emptied tanks and piping.
Because of the nature and complexity of the contamination, the EPA divided the investigation and cleanup into two phases – one addressing the contaminated soil and ground water, and the other focused on contamination in the river and sediment. The plan to address the contaminated soil and ground water was finalized in July 2010. The EPA took public comment for 60 days and considered public input before selecting a cleanup plan. This phase of the cleanup is addressed in the consent decree lodged today. A separate study of the Hudson River and sediment contamination will lead to a subsequent cleanup plan for the next phase.
The site contains an estimated 150,000 cubic yards of contaminated soil requiring treatment to protect people that may come into contact with it. Among other steps, the EPA will solidify and stabilize areas of soil contaminated with oily liquid and arsenic by turning them into leak-proof blocks underground. Throughout the cleanup, monitoring, testing and further studies will be conducted to ensure the effectiveness of the remedy.
Aside from Honeywell International Inc., the other parties that have agreed to the consent decree are, for the most part, waste oil generators whose wastes were disposed of at the Quanta site. They include: BASF Corporation; Beazer East Inc.; BFI Waste Systems of New Jersey Inc.; BorgWarner Inc.; Buckeye Pipe Line Co. LP; Chemical Leaman Tank Lines Inc. (now Quality Carriers); Colonial Pipeline Co.; Consolidated Rail Corp.; Exxon Mobil Corp; Ford Motor Company; General Dynamics Land Systems Inc.; Hess Corp.; Miller Brewing Co.; NEAPCO Inc.; Northrup Grumman Systems Corp.; Petroleum Tank Cleaners Inc.; Rome Strip Steel Co. Inc.; Quanta Resources Corp.; Stanley Black & Decker Inc.; Textron Inc.; and United Technologies Corp.
For a full description of the EPA’s cleanup plan and the history of the site, please visit: www.epa.gov/region02/superfund/npl/quanta
16 November 2012
Two Patient Recruiters Sentenced in Miami for Roles in $50 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two former patient recruiters for Miami-based mental health clinic Biscayne Milieu Health Care Inc. were sentenced today for their participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, announced Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Anthony Roberts, 45, and Derek Alexander, 39, both of Miami, were each sentenced today by U.S. District Judge Robert N. Scola Jr. in the Southern District of Florida. Roberts was sentenced to serve 87 months in prison and ordered to pay $887,085 in restitution. Alexander was sentenced to serve 42 months in prison and ordered to pay $300,876 in restitution.
Roberts and Alexander were each convicted of one count of conspiracy to commit a health care kickback scheme and a substantive kickback charge on Aug. 24, 2012, after a two-month trial.
Various owners, doctors, managers, therapists, patient brokers and other employees of Biscayne Milieu were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in September 2011 and June 2012. Biscayne Milieu, its owners and more than 25 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial. Antonio and Jorge Macli, and Sandra Huarte, the owners and operators of Biscayne Milieu, and Dr. Gary Kushner, its medical director, were each convicted of various offenses at trial and will be sentenced on Dec. 20, 2012.
Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of millions of dollars in false and fraudulent claims to Medicare through Biscayne Milieu, a Florida corporation headquartered in Miami that operated a purported partial hospitalization program (PHP) in Miami. A PHP is a form of intensive treatment for severe mental illness. Biscayne Milieu purported to provide PHP services for Medicare beneficiaries suffering from mental illnesses. In fact, however, the co-conspirators devised a scheme in which they paid patient recruiters, such as Roberts and Alexander, to refer ineligible Medicare beneficiaries to Biscayne Milieu for purported PHP services that were never provided. Many of the patients admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia or Alzheimer’s disease and would not benefit from group therapy, or had no mental health diagnosis at all but were seeking fraudulent mental health treatment in order to be declared exempt from certain requirements for their applications for United States citizenship. The evidence at trial showed that Alexander and Roberts solicited and received illegal kickbacks in exchange for sending ineligible patients to Biscayne Milieu.
The criminal case was prosecuted by Assistant U.S. Attorneys Michael Davis and Marlene Rodriguez of the Southern District of Florida, and by Trial Attorney James V. Hayes of the Criminal Division’s Fraud Section. The investigation was led by the FBI with the assistance of HHS-OIG, and was brought by the U.S. Attorney’s Office for the Southern District of Florida in coordination with the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is 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.
Spokane Police Officer Sentenced for Civil Rights and Obstruction Violations in Connection with <br /> <br /> In-custody Death of Otto ZehmRead the Press Release
A federal judge sentenced Spokane, Wash., Police Officer Karl F. Thompson Jr. to 51 months in prison followed by three years supervised release for civil rights and obstruction violations stemming from his March 18, 2006, beating of an unarmed citizen and an extensive cover-up that followed, the Justice Department announced today. Following a Taser deployment and a rapid series of baton blows to the head, neck and body, the victim, the late Otto Zehm, 36, was hogtied, stopped breathing and was transported to the hospital, where he died two days later. The defendant claimed the beating was justified because he felt threatened by a plastic bottle of soda Zehm was holding.
The evidence at trial established that on the evening of March 18, 2006, Zehm went to a convenience store to buy soda and snacks. Security video showed that the defendant ran into the store, drew his baton and rushed toward Zehm from behind, subsequently delivering two baton blows toward Zehm’s head, knocking him backwards onto the floor. The defendant then stood over Zehm and fired Taser probes into him, also continuing to deliver overhand baton blows, including a final flurry of seven baton strikes in eight seconds, which was captured by the convenience store’s security cameras. The defendant never asked Zehm any questions or even mentioned the ATM. Witnesses testified that Zehm’s last words were: “all I wanted was a Snickers.”
The defendant went to the convenience store after two teenagers reported that a man fitting Zehm’s description had approached a drive-up ATM on foot as they were conducting a transaction, and they felt uncomfortable. After the teenagers pulled away from the ATM, they were unsure whether they had cancelled their transaction. Prior to the defendant’s first strike, dispatchers made clear that the complainants were not sure whether the man at the ATM had taken any of their money. One of the women at the ATM who called 911 that night testified at trial that she was horrified by the defendant’s rapid series of overhand baton blows to Zehm.
The defendant gave his report of the incident on March 22, 2006, after he knew Zehm had died. In his report, the defendant denied hitting Zehm in the head with his baton because that would have constituted deadly force, which he admitted was not justified in this case. However, trial testimony established that the defendant admitted to Spokane Police Officer Timothy Moses on-scene that night that he had struck Zehm in the head and neck with his baton. Witnesses and medical testimony also confirmed that the defendant had delivered baton blows to Zehm’s head and neck.
“The defendant was given considerable power to enforce the law, but instead he abused his authority when he brutally beat an innocent man,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This prosecution reflects the department’s commitment to prosecuting official misconduct cases, and today’s sentence sends a message that such violent abuse of power will not be tolerated.”
“A large majority of law enforcement officers work courageously every day to make our communities safe,” said Michael Ormsby, U.S. Attorney for the Eastern District of Washington. “Since those in uniform deserve our respect and support, it is vitally important to prosecute those officers who violate their oaths of office and the public trust placed in them. Our community has learned many lessons from this incident, it is now incumbent upon all of us to apply those lessons to reforms within the Police Department.”
“This investigation is emblematic of the FBI's vigorous commitment to the protection of the civil rights that define what it means to be an American," said Assistant Special Agent in Charge Carlos Mojica of the FBI Seattle Division. "While the vast majority of law enforcement officers uphold and obey the law, in those rare instances where serious transgressions occur, the FBI will conduct a comprehensive investigation to preserve and restore the public trust that forms the fabric of our society."
This case was investigated by the FBI’s Spokane Field Office, and was prosecuted by Trial Attorney Victor Boutros of the Justice Department’s Civil Rights Division, and by Assistant U.S. Attorneys Timothy Durkin and Aine Ahmed of the Eastern District of Washington.
Program Director and Therapist from Miami-Area Mental Health Care Corporation Convicted for Participating in $205 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A federal jury yesterday convicted a Miami-area program director and a Miami-area therapist for their participation in a Medicare fraud scheme involving more than $205 million in fraudulent billings by mental health care corporation American Therapeutic Corporation (ATC), announced Assistant Attorney General Lanny A. Breuer of the Justice Department=s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent in Charge of the FBI=s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
Program director Lydia Ward, 47, and therapist Nichole Eckert, 35, were each found guilty of one count of conspiracy to commit health care fraud.
The defendants were charged in an indictment returned on Feb. 8, 2011. ATC, the management company associated with ATC and 20 individuals, including the ATC owners, have all previously pleaded guilty or have been convicted at trial.
Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of 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. The defendants and their co-conspirators also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
ATC billed Medicare for hundreds of millions of dollars in false and fictitious services, for thousands of patients who were not qualified, based on fraudulent documents created by Ward, Eckert and others.
Throughout the course of the fraud conspiracy, tens of 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. ATC and ASI billed Medicare for more than $205 million in services to patients who did not need the services and to whom the appropriate services were not provided. According to the evidence, Ward, Eckert, and co-conspirators personally altered and caused the alteration of patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by ATC were qualified for PHP treatments and that the treatments provided were legitimate PHP treatments.Evidence further revealed that doctors at ATC signed patient files without reading them or seeing the patients. Included in these false and fraudulent submissions to Medicare were claims for patients in neuro-vegetative states, along with patients who were in the late stages of diseases causing permanent cognitive memory loss and patients who were suffering from substance abuse addiction without a severe mental illness – all of whom were ineligible for PHP treatment.
Ward and Eckert were remanded into custody.
ATC executives Lawrence Duran, Marianella Valera, Judith Negron and Margarita Acevado were sentenced to 50 years, 35 years, 35 years and 91 months in prison, respectively, for their roles in the fraud scheme. Sentencing for Ward and Eckert is scheduled for Jan. 25, 2013. The maximum penalty for each conspiracy count is 10 years in prison.
A mistrial was declared today against ATC patient marketer Hilario Morris, who was charged with one count of conspiracy to commit health care fraud. Previously, Morris had been convicted of one count of conspiracy to pay health care kickbacks.
The criminal case is being prosecuted by Trial Attorneys Jennifer L. Saulino and Laura Cordova of the Criminal Division’s Fraud Section. A 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, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is 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.
Ohio Automobile Parts Supplier Executive Pleads Guilty <br /> in Price-Fixing and Bid-Rigging ConspiracyRead the Press Release
WASHINGTON – An executive at the Ohio subsidiary of a Japanese automotive supplier pleaded guilty today for his role in a conspiracy to fix prices and rig bids of anti-vibration rubber parts sold in the United States and elsewhere, the Department of Justice announced. This is the first charge in the department’s ongoing investigation into price fixing and bid rigging in the automobile anti-vibration rubber parts industry, which is one of the department’s ongoing investigations into anticompetitive conduct in the automotive parts industry.According to a one-count felony charge filed on Oct. 30, 2012, in the U.S. District Court for the Northern District of Ohio, in Toledo, Hiroshi Yoshida, a Japanese national employed at the Ohio-based U.S. subsidiary of an automobile anti-vibration rubber supplier headquartered in Saitama, Japan, participated in a conspiracy to rig bids for, and to fix prices of, automobile anti-vibration rubber parts sold in the United States and elsewhere. According to the charge, Yoshida’s involvement in the conspiracy began at least as early as October 2005 and continued until at least June 2011. The department said Yoshida and his co-conspirators carried out the conspiracy by agreeing, in meetings and discussions, to allocate the supply of certain automobile anti-vibration rubber parts, to exchange prices, to submit noncompetitive bids and to sell the parts at collusive and noncompetitive prices in the United States and elsewhere.
According to the plea agreement, Yoshida has agreed to serve 12 months and one day in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation. Yoshida’s sentencing is scheduled to take place on Dec. 20, 2012.
Anti-vibration rubber parts are comprised primarily of rubber and metal, and are installed in automobiles to reduce engine and road vibration. Anti-vibration rubber parts are installed in suspension systems and engine mounts, as well as other parts of an automobile.
“This is the first charge in the division’s investigation into anticompetitive conduct involving automotive parts used to reduce engine and road vibration,” said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The aim of this multi-year conspiracy was to do away with competition among suppliers, through bid rigging and price fixing, in order to maximize profits.”
“We are pleased with the guilty plea entered today by Mr. Yoshida and his acceptance of responsibility, as the anti-vibration rubber parts industry is a critical component of the automobile manufacturing process,” said Stephen D. Anthony, Special Agent in Charge of the FBI Cleveland Division. “The Cleveland FBI is committed to working with our Department of Justice partners in the Antitrust Division to keep this industry and other critical industries competitive by aggressively pursuing any conspiracy in Northern Ohio that undermines free competition and our economy.”
Including Yoshida, nine companies and 12 executives have pleaded guilty or agreed to plead guilty in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd., DENSO Corp., Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc. and TRW Deutschland Holding GmbH pleaded guilty and were sentenced to pay a total of more than $790 million in criminal fines. Nippon Seiki Co. Ltd. and Tokai Rika Co. Ltd. have agreed to plead guilty and await arraignment and sentencing. Additionally, Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoki Kawai, Shigeru Ogawa, Hisamitsu Takada, Norihiro Imai, Kazuhiko Kashimoto, Toshio Sudo and Makoto Hattori have pleaded guilty and been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each.
Yoshida is charged with violating the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s guilty plea arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automobile anti-vibration rubber parts industry, which is being conducted by the Antitrust Division’s Chicago Field Office and the FBI’s Cleveland Field Office. Anyone with information concerning the subject of this investigation should contact the Antitrust Division's Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.Justice Department and Equal Employment Opportunity Commission Settle Pay Discrimination Lawsuits Against Two Texas State AgenciesRead the Press Release
The Justice Department and the Equal Employment Opportunity Commission (EEOC) announced today that they have reached a settlement with the Texas Department of Agriculture (TDA) and the Texas General Land Office (GLO) to resolve allegations that both state agencies were liable for pay discrimination on the basis of sex, in violation of Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963.
The Justice Department’s complaint, filed in the U.S. District Court for the Western District of Texas, alleges that the TDA and GLO, as successors in interest to the now-defunct Texas Department of Rural Affairs (TDRA), violated Title VII when the TDRA discriminated against three female TDRA program specialists on the basis of their sex by paying them significantly less than their male counterparts for performing essentially the same work. The complaint further alleges that when the TDRA ultimately acted to address the salary disparities between its male and female employees who were doing comparable work, it increased the women’s salaries but did not raise them to the same level as those of their male counterparts. According to the department’s complaint, TDRA also did not retroactively compensate the women for the prior undervaluing of their salaries. The EEOC’s complaint contends that these same actions by the TDRA violated the Equal Pay Act.
The Justice Department’s complaint also alleges that the three women were subjected to retaliation when they were terminated from their employment as a consequence of their opposition to the pay disparities.
“This settlement demonstrates the Civil Rights Division’s commitment to the bedrock principle of equal pay for equal work,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will continue to vigilantly enforce the nation’s employment discrimination laws to help to close the persistent wage gap in our country. This case is but one example of our critical collaboration with the EEOC and a demonstration of the strong commitment we share to eradicating pay disparities based on sex.”
Under the terms of the settlement agreement, which resolves both the Justice Department and EEOC complaints, the TDA and GLO will pay a total of $175,000 in back pay to the three female employees. Under the settlement, the TDA and GLO agree to maintain employment policies, practices and procedures that comply with all federal laws and regulations, including Title VII and the Equal Pay Act, and will educate and train their employees on these laws and provisions. Finally, as part of the settlement, the TDA and GLO provided their anti-discrimination policies to the Justice Department and EEOC for review and comment.
“This resolution reflects the EEOC's commitment to work collaboratively with its governmental partner to enforce laws that require equal pay for men and women performing the same jobs,” said EEOC General Counsel David Lopez. “This case highlights the fact that there is still much work to be done in the area of equal pay, 49 years after the Equal Pay Act was enacted.”
Enforcement of federal employment discrimination laws is a top priority for the Justice Department and the EEOC. Additional information about Title VII is available on the Civil Rights Division’s website at www.justice.gov/crt . Additional information about the Equal Pay Act is available on the EEOC’s website at www.eeoc.gov .
Justice Department Files Lawsuit Against Ebay Inc. <br /> over Agreement Not to Hire Intuit Inc. EmployeesRead the Press Release
WASHINGTON – The Department of Justice filed a civil antitrust lawsuit today against eBay Inc., alleging that it violated antitrust laws when it entered into an agreement not to recruit or hire Intuit Inc.’s employees. The department said that the agreement eliminated a significant form of competition to the detriment of affected employees who were likely deprived of access to better job opportunities and salaries.The department’s Antitrust Division worked closely with the Office of the Attorney General of the State of California, which conducted its own investigation and filed a similar lawsuit today.
The department filed its lawsuit in U.S. District Court in the Northern District of California, in San Jose. The lawsuit seeks to prevent eBay from adhering to or enforcing the agreement and from entering into any similar agreements with any other companies. Intuit is already subject to a settlement prohibiting it from entering into such agreements as part of an earlier case with the department.
The department alleges the agreement, which was enforced at the highest levels of each company, barred either firm from soliciting each other’s employees, and for over a year barred at least eBay from hiring any employees from Intuit at all. In court papers, the department alleges that Meg Whitman, then eBay’s CEO, and Scott Cook, Intuit’s founder and executive committee chair, were intimately involved in forming, monitoring and enforcing the anticompetitive agreement. Cook was serving as a member of eBay’s board of directors at the same time he was making complaints about eBay’s recruiting of Intuit employees.
“eBay’s agreement with Intuit hurt employees by lowering the salaries and benefits they might have received and deprived them of better job opportunities at the other company,” said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division has consistently taken the position that these kinds of agreements are per se unlawful under the antitrust laws.”
According to the complaint, beginning no later than 2006, and lasting at least until 2009, eBay and Intuit entered an illegal agreement that restricted their ability to actively recruit employees from the other company, and for some period of time even restricted at least eBay from hiring any employees at Intuit. In 2007, the pact evolved into an agreement that eBay would not recruit Intuit’s employees. eBay’s recruiting personnel were instructed to not pursue potential applications that came from Intuit and to throw away such resumes, the department said.
As stated in the department’s complaint, eBay and Intuit are direct competitors for employees, including specialized computer engineers and scientists covered by the agreements at issue in the case.
The department said it was not necessary to name Intuit in today’s complaint because the company had previously been named in the division’s September 2010 lawsuit and settlement, and the relief the department obtained in the previous settlement is sufficient to prevent Intuit from entering into these types of agreements. In September 2010, the Antitrust Division filed a lawsuit against six high technology companies–Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar–over a series of bilateral agreements not to solicit each other’s employees. All six companies entered into a settlement which prohibited them from entering agreements to refrain from, or pressure others to refrain from, soliciting, recruiting, or otherwise competing for another firm’s employees. The Antitrust Division also filed a lawsuit against Lucasfilm in December 2010 for entering into a similar agreement with Pixar, and Lucasfilm entered into a similar settlement. The eBay case grew out of the same investigation.eBay is a Delaware corporation with its principal place of business in San Jose. In 2011, eBay had revenues of $11.7 billion.
Intuit is a Delaware corporation with its principal place of business in Mountain View, Calif. In 2011, Intuit had revenues of $3.85 billion.Former Police of Puerto Rico Officer Sentenced to 181 Months in Prison for Providing Armed Security for Drug TransactionRead the Press Release
WASHINGTON – A former Police of Puerto Rico officer was sentenced today to 181 months in prison for her role in providing armed security for a drug transaction, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico, and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Field Office.
Yamil Navedo Ramirez, 39, was sentenced today by U.S. District Judge Juan M. Perez-Gimenez in the District of Puerto Rico.
In May 2012, a federal jury in San Juan found Navedo Ramirez guilty of one count of attempting to possess with the intent to distribute more than five kilograms of cocaine and possession of a firearm in furtherance of a drug transaction. The jury acquitted her of one count of conspiracy to possess with the intent to distribute more than five kilograms of cocaine.
According to the evidence presented in court, Navedo Ramirez provided security on April 14, 2010, for what she believed was an illegal cocaine deal. In fact, the purported drug transaction was part of an undercover FBI operation. On that day, Navedo Ramirez provided armed protection for the deal and escorted the buyer in and out of the transaction.
Navedo Ramirez was charged in a superseding indictment unsealed on Oct. 28, 2010, along with 89 law enforcement officers in Puerto Rico and 44 other individuals charged as part of the FBI undercover operation known as Guard Shack.
In return for the security she provided, Navedo Ramirez received a cash payment of $2,000. Judge Perez Gimenez ordered the defendant to forfeit the $2,000 she received in exchange for providing security for the drug transaction.
The case was prosecuted by Trial Attorneys Kevin Driscoll and Monique Abrishami of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
Federal Court Shuts Down South Florida Tax PreparerRead the Press Release
A federal court in Ft. Lauderdale, Fla., has permanently barred a Broward County man from preparing federal tax returns for others, the Justice Department announced today. Jayvon Copeland, who last month pleaded guilty in a criminal case to conspiracy to defraud the United States, consented to the injunction order without admitting the allegations in the civil complaint filed against him last April.
According to the civil complaint, filed in the U.S. District for the Southern District of Florida, Copeland used stolen identities to prepare and file fraudulent tax returns claiming tax refunds that Copeland kept for himself. A September 2012 report by the U.S. Treasury Inspector General for Tax Administration said that Florida has the highest rate of stolen identity tax refund fraud in the United States.
The complaint also alleged that Copeland fraudulently boosted tax refunds for his return-preparation customers by making false claims for the first-time homebuyer credit, reporting phony business expenses, claiming false education expenses, and fabricating income to inflate customers’ earned-income tax credits.
The court’s injunction order also shuts down two tax-return preparation businesses, Taxologist Inc. and Taxes in Miami Gardens LLC.
The court previously barred two of Copeland’s co-defendants in the civil injunction suit, Kisha Andrews and Brandon Johnson, from preparing federal tax returns. The injunction suit is still pending against the other two co-defendants, Aundrea Luc and James Daniels.
Copeland is awaiting sentencing for his criminal conspiracy guilty plea.
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 web site.
Related Documents:
United States v. Jayvon Copeland, et al.
Stipulated Order of Permanent Injunction Against Jayvon Copeland; Taxologist, Inc. and Taxes in Miami Gardens LLC (PDF)
Federal Court Permanently Bars Michigan Lawyer from Promoting Alleged Tax Fraud SchemeRead the Press Release
A federal court has permanently barred a Michigan lawyer, Tammy Daniels of Farmington Hills, from promoting an alleged tax fraud scheme, the Justice Department announced today. The civil injunction order, to which Daniels consented without admitting the allegations against her, was signed by Judge Paul D. Borman of the U.S. District Court for the Eastern District of Michigan. In August the court enjoined Daniels’s co-defendants, Damian and Holly Jackson, from preparing federal tax returns for others and promoting the scheme.
The government complaint in the civil injunction lawsuit alleged that the Jacksons and their business, Diamond & Associates Enterprises LLC, operated Diamond Tax Services and promoted a scheme involving the preparation of fraudulent federal income tax returns for customers seeking large tax refunds based on a frivolous tax-defier theory called “redemption” or “commercial redemption.” The suit alleged that tax returns prepared for at least 182 customers under the auspices of Diamond Tax Services sought over $29 million in fraudulent refunds by falsely reporting large amounts of tax withheld on bogus Internal Revenue Service (IRS) 1099 Forms.
While most such frivolous refund claims are intercepted by the IRS before refunds are issued, the complaint alleged that the defendants’ scheme caused the IRS to issue at least $1.6 million in erroneous refunds to defendants’ customers. The suit further alleged that tax returns that Damian and Holly Jackson prepared requested the IRS to issue the refunds to their customers “C/O Attorney Tammy Daniels,” that Daniels negotiated the refund check if one was issued, and that the Jacksons and Daniels took a 10 percent cut of any refund issued by the IRS.
Return-preparer fraud and false claims for refund using fake information returns, such as Form 1099, are among the IRS’s “Dirty Dozen” tax scams for 2012.
In the past decade the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website .
Related Documents:
United States v. Damian Jackson, et al
Order of Permanent Injunction Against Tammy Daniels
Al-Qaeda Operative Sentenced to Life in Prison in One of the Most <br /> Serious Terrorist Plots Against the United States since 9/11Read the Press Release
WASHINGTON – Earlier today, Adis Medunjanin, age 34, a Queens, N.Y., resident who joined al-Qaeda, then plotted and attempted to commit suicide terrorist attacks, was sentenced in the Eastern District of New York to life in prison for multiple federal terrorism offenses.
The defendant and his accomplices came within days of executing a plot to conduct coordinated suicide bombings in the New York City subway system in September 2009, as directed by senior al-Qaeda leaders in Pakistan. When the plot was foiled, the defendant attempted to commit a terrorist attack by crashing his car on the Whitestone Expressway in an effort to kill himself and others.
The sentence was announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York, and Lisa Monaco, Assistant Attorney General for National Security.
The government’s evidence at trial in this and related cases established that in 2008, Medunjanin and his co-plotters, Najibullah Zazi and Zarein Ahmedzay, agreed to travel to Afghanistan to join the Taliban and kill United States military personnel abroad. They arrived in Peshawar, Pakistan, in late August 2008, but Medunjanin and Ahmedzay were turned back at the Afghanistan border. Within days, Medunjanin, Zazi and Ahmedzay met with an al-Qaeda facilitator in Peshawar and agreed to travel to Waziristan for terrorist training. There, they met with al-Qaeda leaders Saleh al-Somali, then the head of al-Qaeda external operations, and Rashid Rauf, a high-ranking al-Qaeda operative, who explained that the three would be more useful to al-Qaeda and the jihad by returning to New York and conducting terrorist attacks.
In Waziristan, Medunjanin, Zazi and Ahmedzay received al-Qaeda training on how to use various types of high-powered weapons, including the AK-47, PK machine gun, and rocket-propelled grenade launcher. During the training, al-Qaeda leaders, including Adnan El Shukrijumah, continued to encourage Medunjanin and his fellow plotters to return to the United States to conduct a “martyrdom” operation, and emphasized the need to hit well-known targets and maximize the number of casualties. Medunjanin, Zazi and Ahmedzay agreed and discussed the timing of the attacks and possible target locations in Manhattan, including the subway system, Grand Central Terminal, the New York Stock Exchange, Times Square and movie theaters.
Upon their return to the United States, Medunjanin, Zazi and Ahmedzay met and agreed to carry out suicide bombings during the Muslim holiday of Ramadan, which fell in late August and September 2009. Zazi agreed to prepare the explosives, and all three agreed to conduct coordinated suicide bombings. In July and August 2009, Zazi purchased large quantities of the component chemicals necessary to produce the explosive TATP (Triacetone Triperoxide) and twice checked into a hotel room near Denver to mix the chemicals. Federal investigators later found bomb-making residue in the hotel room.
On Sept. 8, 2009, Zazi drove from Denver to New York, carrying operational detonator explosives and other materials necessary to build the suicide bombs. However, shortly after arriving in New York, he learned that law enforcement was closing in on the plotters. In an unsuccessful effort to avoid detection, the men discarded the explosives and other bomb-making materials, and Zazi traveled back to Denver, where he was arrested on Sept. 19, 2009.
On Jan. 7, 2010, law enforcement agents executed a search warrant at Medunjanin’s residence. Shortly thereafter, Medunjanin left his apartment and attempted to turn his car into a weapon of terror by crashing it into another car at high speed on the Whitestone Expressway. Moments before impact, Medunjanin called 9-1-1, identified himself, and left his message of martyrdom, shouting the al-Qaeda slogan: “We love death more than you love your life.”
On May 1, 2012, a jury convicted Medunjanin of:• conspiring to use weapons of mass destruction,
• conspiring to commit murder of U.S. military personnel abroad,
• providing and conspiring to provide material support to al-Qaeda,
• receiving military training from al-Qaeda,
• conspiring and attempting to commit an act of terrorism transcending national boundaries, and
• using explosives in relation to these offenses.
To date, seven defendants, including Medunjanin, Zazi and Ahmedzay, have been convicted in connection with the al-Qaeda New York City bombing plot and related charges.
“Adis Medunjanin sought martyrdom for himself and death for innocent New Yorkers as part of al-Qaeda’s plan to spread terror within our shores. Instead, he will now spend the rest of his life where he belongs, behind bars,” stated U.S. Attorney Lynch. “Justice demanded a sentence of life for this al-Qaeda operative, who was dedicated to mass murder and destruction in the New York City subways. Scores of innocent New Yorkers would have been killed or maimed had Medunjanin succeeded in his plot. The combined efforts of dedicated law enforcement stood as a bulwark against al-Qaeda’s reach.” Ms. Lynch expressed her gratitude and appreciation to the FBI Joint Terrorism Task Force in New York and each of the federal, state and local law enforcement personnel who took part in the investigation, as well as to the law enforcement authorities in the United Kingdom and Norwaywho assisted with the case.
“Adis Medunjanin was today held accountable for his role in one of the most serious terrorist plots against the homeland since 9/11. Were it not for the combined efforts of the law enforcement and intelligence communities, the suicide bomb attacks that he and others planned would have been devastating,” said Assistant Attorney General Monaco. “I thank the many agents, analysts and prosecutors who helped bring about today’s result.”
The government’s case was prosecuted by Assistant U.S. Attorneys David Bitkower, James P. Loonam and Berit W. Berger of the U.S. Attorney’s Office for the Eastern District of New York, and Jeffrey H. Knox, formerly of the U.S. Attorney’s Office, with assistance provided by the Counterterrorism Section of the Justice Department’s National Security Division.
15 November 2012
Justice Department Settles Civil Contempt Claim <br /> Against Exelon CorporationRead the Press Release
WASHINGTON — Exelon Corporation has agreed to pay $400,000 as part of a civil settlement with the Department of Justice that resolves Exelon’s alleged violations of two court orders entered in connection with Exelon’s acquisition of Constellation Energy Group.
The Department of Justice’s Antitrust Division yesterday filed a petition in the U.S. District Court for the District of Columbia asking it to find Exelon in civil contempt of a consent decree and a related order. At the same time, the department filed a settlement agreement and order, subject to court approval, that would resolve the department’s concerns. The payment to the United States represents disgorgement of profits gained through Exelon’s alleged violations and reimbursement to the department for the cost of its investigation.
“In order for the Antitrust Division’s settlements to be effective in preserving competition and protecting consumers, companies must fully adhere to the terms of their court-ordered agreements,” said Joseph F. Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will vigorously prosecute those who enter into agreements with the department and do not comply with their legal obligations.”
Under the consent decree filed in December 2011, Exelon was required to sell three electricity plants in Maryland—Brandon Shores and H.A. Wagner in Anne Arundel County, Md. and C.P. Crane in Baltimore County, Md.— in order to proceed with its $7.9 billion merger with Constellation. Exelon was required to abide by a hold separate stipulation and order that placed restrictions on Exelon’s conduct between the time Exelon closed its acquisition of Constellation and the time it completed the plant divestitures required by the consent decree. The hold separate required Exelon, during this period, to bid certain of its electricity generating plants at or below cost to ensure that Exelon would not be able to raise market prices for electricity. In consenting to entry of the hold separate and the consent decree, Exelon specifically agreed to “take all steps necessary to comply” with its legal obligations.
According to the petition filed by the department, Exelon failed to fulfill its obligations under the two court orders. The petition alleges that Exelon submitted certain offers for sales of electricity during this period at above-cost prices and that Exelon failed to take all necessary steps to ensure that its offers would comply with the hold separate’s requirements. Exelon claims, and the United States does not dispute, that Exelon’s above-cost offers were inadvertent.
In determining the disgorgement amount, the United States took into account that Exelon, upon recognizing that it had made above-cost offers, took appropriate remedial steps, including notifying the United States and market regulators (i.e. the Federal Energy Regulatory Commission and the Maryland Public Service Commission, both of which also approved Exelon’s acquisition of Constellation), implementing measures to ensure that no additional above cost-offers occurred, and agreeing with the market regulators to return any incremental revenues Exelon earned from, and to redress any market harm caused by, its above-cost offers. The $400,000 payment is separate and above the payments Exelon is making to the market regulators.
Exelon is incorporated in Pennsylvania and has its headquarters in Chicago. Exelon owns the PECO utility of Philadelphia and the Commonwealth Edison utility of Chicago. With its acquisition of Constellation Energy Group Inc., Exelon now owns the BG&E utility of Baltimore. Exelon had $18.9 billion of revenues in 2011.
Justice Department Requires Divestitures in Star Atlantic’s <br /> Acquisition of VeoliaRead the Press Release
WASHINGTON — The Department of Justice announced today that it has reached a settlement that will require Star Atlantic Waste Holdings L.P. and Veolia ES Solid Waste Inc. to divest commercial waste collection or disposal assets in northern New Jersey, central Georgia, and the Macon, Ga., metropolitan area in order to proceed with Star Atlantic’s proposed $1.9 billion acquisition of Veolia. The department said that the transaction, as originally proposed, would have resulted in higher prices for the collection of municipal solid waste from commercial businesses or the disposal of waste in these areas.
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 transaction. At the same time, the department filed a proposed settlement that, if approved by the court, will resolve the lawsuit and the competitive concerns.
“Without the divestitures required by the department, consumers in northern New Jersey, central Georgia and the Macon metropolitan area would have been harmed by a reduction in competition for commercial solid waste collection or disposal,” said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “This remedy ensures that the benefits of competition–namely, lower prices and better service–will be preserved in these areas.”
According to the complaint, the transaction, as originally proposed, would have substantially lessened competition in commercial waste collection or disposal services in the geographic areas of northern New Jersey, central Georgia and Macon. In each of these areas, Star Atlantic and Veolia are two of only a few significant firms providing commercial waste collection or municipal solid waste disposal services. The acquisition would have eliminated a major competitor in each of these areas and resulted in higher prices and poorer service for consumers.
Under the terms of the proposed settlement, Star Atlantic and Veolia will divest three specified transfer stations in northern New Jersey; a landfill and two transfer stations in central Georgia; and three commercial waste collection routes in the Macon metropolitan area. Each asset to be divested is currently owned by Veolia. To maximize the potential operational effectiveness of each purchaser of the divestiture assets, Star Atlantic and Veolia must divest to a single buyer the three transfer stations in northern New Jersey. Likewise, they must divest to a single purchaser the designated Georgia transfer stations and landfill and the specified commercial waste routes in the Macon metropolitan area.
Star Atlantic is a privately owned Delaware limited partnership with its headquarters in New York City. Star Atlantic provides small container commercial waste collection and/or municipal solid waste disposal services in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee through its subsidiary, Advanced Disposal Services Inc., and in Massachusetts, Vermont, New York, New Jersey, Pennsylvania, Maryland and West Virginia through its subsidiary, Interstate Waste Services Inc. Star Atlantic is one of the nation’s largest municipal solid waste hauling and disposal companies by revenue, and had estimated total revenues of $563 million in 2011.
Veolia Environnement S.A. is a French corporation headquartered in Paris. Its wholly owned U.S. subsidiary, Veolia ES Solid Waste Inc., provides small container commercial waste collection and/or municipal solid waste disposal services in Florida, Georgia, Alabama, Kentucky, Missouri, Illinois, Minnesota, Wisconsin, Michigan, Indiana, Pennsylvania and New Jersey. Veolia ES Solid Waste Inc. is also one of the nation’s largest solid waste hauling and disposal companies by revenue, and had estimated total revenues of $818 million in 2011.
As required by the Tunney Act, the proposed settlement, along with a 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 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 court may enter the final judgment upon a finding that it serves the public interest.
Justice Department Announces Sweep of Criminal and Civil Business Opportunity CasesRead the Press Release
The Justice Department announced today the filing of several criminal and civil business opportunity fraud cases, initiated as part of a joint sweep with the Federal Trade Commission and several states. Business opportunity fraud schemes take advantage of people looking for work by luring them in with false promises of big profits and leaving them worse off than they started. The cases include criminal charges against 14 individuals and civil cases against three businesses. The criminal and civil cases announced today are part of a series of investigations named “Operation Lost Opportunity.”
The Justice Department’s cases are part of the efforts of the President’s Financial Fraud Enforcement Task Force and are being handled by the Civil Division’s Consumer Protection Branch, in coordination with the U.S. Attorney’s Offices for the Central District of California, the Southern District of California, the Southern District of Florida, the District of Oregon, the Western District of North Carolina, the Western District of Pennsylvania and the Southern District of Texas.
Seven different business opportunity schemes are the targets of the Justice Department’s actions. According to the charging documents, the criminal schemes involved placement of advertisements online and in newspapers that touted the profits that could be earned by purchasing a business opportunity to own and operate vending machines or display racks. The United States alleges that the schemes operated as follows: Salespeople explained that consumers who purchased the opportunity would earn substantial income from the equipment. According to the sales pitch, the vending machines or display racks would be placed in store locations in the purchaser’s hometown and would offer candy, refreshments or jewelry, depending on which opportunity was being offered. According to the sales pitch, the purchaser would then receive profits based upon sales from the vending machines or display racks.
“In an attempt to lure wary consumers, fraudsters have crafted business opportunity schemes that promise what appear to be more realistic returns backed up by false success stories,” said Tony West, Acting Associate Attorney General. “But we are more determined than ever to bring to justice those who are defrauding Americans out of their time, money, and faith in our economic system – this law enforcement sweep represents a coordinated effort to combat business opportunity fraud on multiple fronts.”
“Although years of criminal law enforcement attention has disrupted and deterred many fraudulent business opportunity schemes, some perpetrators have not yet heard the message – that defrauding entrepreneurial Americans out of their hard-earned money will result in stiff penalties,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “Members of the public should be on guard for the deceptive tactics used to attract victims, and avoid schemes that fail to abide by the FTC’s Business Opportunity Rule.”
Enticed by the promise of a “turnkey” business, hundreds of consumers lost millions of dollars purchasing the fraudulent business opportunities targeted in this sweep. The four businesses involved in the criminal component of the sweep include the following:
· Mark Five Inc., a Houston company that promoted a jewelry business opportunity. O n November 12, 2012 and November 14, 2012, the Department of Justice filed criminal informations charging Billie Joyce Sanders and Michael Cupina in connection with their conduct at Mark Five. Each defendant was charged with conspiracy, which carries a maximum prison term of five years. According to the charging documents, Mark Five salespeople referred potential business opportunity buyers to Sanders and Cupina, who falsely claimed to own and operate successful jewelry display racks. One other individual was previously charged in connection with Mark Five. In February 2012, a grand jury in Houston indicted Mark Five principal Robert King on charges of conspiracy to commit mail and wire fraud, and substantive mail and wire fraud. King’s trial is scheduled for February 2013.
· The Lauren Jewelry Collection, an Atascocita, Texas, company that promoted a jewelry business opportunity. On November 13, 2012, the Department of Justice filed a criminal information in the Southern District of Texas charging Regina Rush in connection with the Lauren Jewelry Collection. Rush was charged with one count of conspiracy, which carries a maximum prison term of five years. According to the charging document, Rush served as the proprietor of the firm and made false representations about the success of distributors and the authenticity of references. The charges state that Rush encouraged potential purchasers to call references who made false statements about their experiences with the Lauren Jewelry Collection.
· American Vending Systems (AVS), a Colorado company that promoted energy candy business opportunities. On November 14, 2012, the Department of Justice filed a criminal information in the Western District of Pennsylvania charging Pearl Pastilock in connection with her conduct at AVS. Pastilock was charged with one count of conspiracy, which carries a maximum prison term of five years. According to the charging document, AVS salespeople referred potential buyers to Pastilock, who falsely claimed to own and operate successful energy candy vending machines. Five other individuals were previously charged for their conduct at AVS and related firms. Richard Black, Gary Luckner, Lou Gubitosa, Trey Friedmann and Mel Hendricks were all charged and pleaded guilty to conspiracy charges for this conduct.
· Multivend LLC, dba Vendstar, a New York company that promoted candy vending machine business opportunities. On Oct. 10, 2012, a grand jury in the Southern District of Florida indicted 10 individuals for misrepresenting a number of facts in connection with the sale of Vendstar business opportunities. More information about these charges can be found at:
www.justice.gov/opa/pr/2012/October/12-civ-1217.html
The charging documents referred to above contain only accusations against the defendants and are not evidence of guilt. The defendants should be presumed innocent unless and until proven guilty.
The civil cases the Justice Department filed allege that three businesses violated the Federal Trade Commission’s Business Opportunity Rule. The businesses include:
· The Zaken Corp., also doing business as The Zaken Corporation, QuickSell and QuikSell, (Zaken). Zaken is alleged to be a Thousand Oaks, Calif., corporation that offers a work-at-home business opportunity. According to the complaint against Zaken and its corporate officer Tiran Zaken, the defendants offer consumers a business plan to locate and contact businesses with excess inventory to sell. The complaint alleges that Zaken represents that once purchasers of the opportunity identify businesses interested in selling excess inventory, Zaken will find a buyer for the inventory and give the purchaser a “finder’s fee” equal to half of the total sales price. Among other allegations, the complaint filed by the Justice Department alleges that Zaken makes unsubstantiated claims, including that purchasers “can make thousands of dollars monthly for working just 2 to 4 hours a week from home.” This case was filed in the U.S. District Court for the Central District of California.
· Christopher Andrew Sterling, doing business as Sterling Visa, Rebate Data Processors and Credit Card Workers. Sterling is alleged to have run several work-at-home schemes from Southern California. According to the complaint, Sterling represents that purchasers of his opportunity will make a substantial income by “processing” applications for product rebates or credit card applications. Among other allegations, the government’s civil complaint alleges that Sterling failed to make required disclosures under the FTC’s Business Opportunity Rule and made unsubstantiated earnings claims. This case was filed in the U.S. District Court for the Southern District of California.
· Smart Tools LLC, a Tualatin, Ore., company. The complaint against Smart Tools and its corporate officer, Kirstin Hegg, alleges that the defendants have marketed a work-at-home business opportunity that teaches purchasers to locate people who are eligible for a partial refund of their FHA mortgage loan insurance premium. According to the complaint, the defendants tell potential buyers that they can charge a fee for information on how to obtain the refund. The defendants allegedly sent postcards to potential buyers stating that purchasers can earn up to $38,943 per year without stating what, if any, substantiation supports the earnings claim. Such a claim violates the FTC’s Business Opportunity Rule. This case was filed in the U.S. District Court for the District of Oregon.
Today’s announcement is part of efforts underway by the Consumer Protection Working Group (CPWG). The CPWG is part of President Obama’s Financial Fraud Enforcement Task Force which was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The CPWG brings together federal, state, and local law enforcement agencies, regulators, and other stakeholders to protect consumers from fraud that can devastate victims and cause widespread economic harm. Consumer fraud comes in many forms and can be found in fraud on our nation’s servicemembers, payday lending, high-pressure telemarketing schemes, internet scams, business opportunity scams, and unscrupulous third party payment processors. Scam artists often target vulnerable populations such as the unemployed and those already struggling with debt. Through this partnership, the CPWG is working to strengthen consumer protection efforts, leverage resources, enhance civil and criminal enforcement of consumer fraud and educate the public in an effort to prevent consumers from being victimized. For more information about the Financial Fraud Enforcement Task Force, visit www.stopfraud.gov .
Gamer Charged with Hacking into and Disabling New Hampshire Gaming Company’s Computer ServersRead the Press Release
WASHINGTON – A federal grand jury in the District of New Hampshire returned an indictment late yesterday charging a Dutch national with allegedly conspiring to hack into and disable computer servers belonging to Rampid Interactive, a New Hampshire-based company that publishes and hosts a multi-player online role-playing game called “Outwar,” Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire announced today.
Anil Kheda, 24, of the Netherlands, is charged with one count of conspiring to commit computer intrusion and one count of making extortionate interstate threats.
The indictment alleges that from November 2007 to August 2008, Kheda and other members of the conspiracy, all of whom were avid “Outwar” players, accessed Rampid’s computer servers without authorization and rendered “Outwar” unplayable for days at a time. According to the indictment, Kheda and his alleged co-conspirators also used their unauthorized access to Rampid’s servers to alter user accounts – causing the restoration of suspended player accounts and the accrual of unearned game points – and obtain a copy of all or portions of the “Outwar” computer source code, which they used to help create a competitor online game, “Outcraft.” The indictment also alleges that Kheda and his alleged co-conspirators sent Rampid interstate communications threatening to continue to hack into Rampid’s computer systems unless Rampid agreed to pay them money or provide them with other benefits.
According to the indictment, as a result of the defendants’ hacking activities, Rampid was unable to operate “Outwar” for a total of approximately two weeks over a nine-month period and incurred over $100,000 in lost revenues, wages, hosting costs, long term loss of business, as well as the loss of exclusive use of their proprietary source code, which it had invested approximately $1.5 million in creating.
According to court documents, Kheda earned approximately $10,000 in profits from operating “Outcraft,” which has approximately 10,000 players worldwide.
If convicted, Kheda faces a maximum sentence of five years in prison on the conspiracy charge and two years in prison on the interstate threats charge.
The case was investigated by the FBI and is being prosecuted by Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Department of Justice Completes Review of Las Vegas Metropolitan Police Department’s Use of Force Policies and PracticesRead the Press Release
The U.S. Department of Justice Office of Community Oriented Policing Services (COPS) today announced the completion and delivery of an eight-month review of the Las Vegas Metropolitan Police Department’s use of force policies and practices. The report, funded by a grant from the COPS Office, lists 75 findings and recommendations regarding officer-involved shootings and other use-of-force issues.
The Las Vegas Metropolitan Police Department volunteered to undergo the review by the COPS Office after a series of shootings in 2011. The report focused on the use of deadly force over the last five years, including an analysis of policies and procedures, training and tactics, investigation and documentation and case reviews. Interviews were conducted with 95 area stakeholders, including community members, current and former officers and prosecutors, community organizations and police union officials.
“One of the most important issues facing law enforcement is the public perception of the legitimate use of force,” said COPS Office Director Bernard Melekian. “And far too often, the public perception of police use of force is different from those who are in law enforcement. We’ve now developed a tool to help assist agencies address community concerns, effectively revamp policies and practices, and enhance both community engagement and community support.”
The report was administered as part of the COPS Office’s Critical Response Technical Assistance initiative, designed to provide technical assistance to agencies facing significant law enforcement-related issues. Using subject matter experts, interviews, direct observations, as well as conducting extensive research and analysis, the COPS Office assists law enforcement agencies with enhancing and improving their policies and procedures, their operating systems and their professional culture. The COPS Office can issue a series of recommendations and be instrumental in assisting agencies with the implementation of those recommendations.
Among the findings in the Las Vegas Metropolitan Police Department report is the need for significant changes to the use of force review board, new tactical practices when multiple officers respond to a crime scene and the implementation of new technologies, such as body cameras. The report also found that while the department’s new use of force policy is comprehensive, the format of the policy is cumbersome and not structured in a clear and concise manner that would allow for quick guidance when needed. The report recommends that the new policy be separated into smaller, specific policies that quickly address issues such as the use of firearms and less-lethal weapons.
The Las Vegas Metropolitan Police Department has already made progress on implementing a number of the report’s recommendations, addressing nearly half of the calls for action prior to the release of the report from the COPS Office.
“The issues facing the Las Vegas Metropolitan Police Department are not unique. Numerous agencies are facing similar challenges,” stated Director Melekian. “We are very encouraged by the Department’s proactive commitment to identifying problems and fixing them. The Sheriff and his team have been a partner throughout and we have seen results. There is much hard work ahead, but important initiatives have already begun. The approach taken by the Sheriff should be a model for departments across the nation.”
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $17 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 120,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.
BP Exploration and Production Inc. Agrees to Plead Guilty to Felony Manslaughter, Environmental Crimes and Obstruction<br /> of Congress Surrounding Deepwater Horizon IncidentRead the Press Release
BP Exploration and Production Inc. (BP) has agreed to plead guilty to felony manslaughter, environmental crimes and obstruction of Congress and pay a record $4 billion in criminal fines and penalties for its conduct leading to the 2010 Deepwater Horizon disaster that killed 11 people and caused the largest environmental disaster in U.S. history, Attorney General Eric Holder announced today. The 14-count information, filed today in U.S. District Court in the Eastern District of Louisiana, charges BP with 11 counts of felony manslaughter, one count of felony obstruction of Congress, and violations of the Clean Water and Migratory Bird Treaty Acts.
BP has signed a guilty plea agreement with the government, also filed today, admitting to its criminal conduct. As part of its guilty plea, BP has agreed, subject to the Court’s approval, to pay $4 billion in criminal fines and penalties – the largest criminal resolution in United States history.
“The $4 billion in penalties and fines is the single largest criminal resolution in the history of the United States and constitutes a major achievement toward fulfilling a promise that the Justice Department made nearly two years ago to respond to the consequences of this epic environmental disaster and seek justice on behalf of its victims,” said Attorney General Holder. “We specifically structured this resolution to ensure that more than half of the proceeds directly benefit the Gulf Coast region so that residents can continue to recover and rebuild.”
“The explosion of the rig was a disaster that resulted from BP’s culture of privileging profit over prudence,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “We hope that BP's acknowledgment of its misconduct – through its agreement to plead guilty to 11 counts of felony manslaughter – brings some measure of justice to the family members of the people who died onboard the rig.”
“The oil spill was catastrophic for the environment, but by hiding its severity BP also harmed another constituency – its own shareholders and the investing public who are entitled to transparency, accuracy and completeness of company information, particularly in times of crisis,” said Robert Khuzami, Director of the U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement. “Good corporate citizenship and responsible crisis management means that a company can’t hide critical information simply because it fears the backlash.”
In addition to the resolution of charges against BP, Robert M. Kaluza, 62, of Henderson, Nev., and Donald J. Vidrine, 65, of Lafayette, La. – the highest-ranking BP supervisors onboard the Deepwater Horizon on April 20, 2010 – are alleged to have engaged in negligent and grossly negligent conduct in a 23-count indictment charging violations of the federal involuntary manslaughter and seaman’s manslaughter statutes and the Clean Water Act. David I. Rainey, 58, of Houston – a former BP executive who served as a Deputy Incident Commander and BP’s second-highest ranking representative at Unified Command during the spill response – is charged with obstruction of Congress and making false statements to law enforcement officials. A grand jury in the Eastern District of Louisiana returned the indictments against Kaluza, Vidrine and Rainey, which were unsealed today.
According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions. In agreeing to plead guilty, BP has admitted that the two highest-ranking BP supervisors onboard the Deepwater Horizon, known as BP’s “Well Site Leaders” or “company men,” negligently caused the deaths of 11 men and the resulting oil spill. The information details that, on the evening of April 20, the two supervisors, Kaluza and Vidrine, observed clear indications that the Macondo well was not secure and that oil and gas were flowing into the well. Despite this, BP’s well site leaders chose not to take obvious and appropriate steps to prevent the blowout. As a result of their conduct, control of the Macondo well was lost, resulting in catastrophe.
Kaluza and Vidrine each are charged with 11 felony counts of seaman’s manslaughter, 11 felony counts of involuntary manslaughter and one violation of the Clean Water Act. If convicted, Kaluza and Vidrine each face a maximum potential penalty of 10 years in prison on each seaman’s manslaughter count, up to eight years in prison on each involuntary manslaughter count, and up to a year in prison on the Clean Water Act count.
The information charging BP further details that the company, through senior executive Rainey, obstructed an inquiry by the U.S. Congress into the amount of oil being discharged into the Gulf while the spill was ongoing. As part of its plea agreement, BP has admitted that, through Rainey, it withheld documents and provided false and misleading information in response to the U.S. House of Representatives’ request for flow-rate information. Among other things, BP admitted that Rainey manipulated internal estimates to understate the amount of oil flowing from the well and withheld data that contradicted BP’s public estimate of 5,000 barrels of oil per day. BP has also admitted that, at the same time Rainey was preparing his manipulated estimates, BP’s internal engineering response teams were using sophisticated methods that generated significantly higher estimates. The Flow Rate Technical Group, consisting of government and independent scientists, later concluded that more than 60,000 barrels per day were leaking into the Gulf during the relevant time, contrary to BP’s representations to Congress.
Rainey is charged with one count of obstruction of Congress, and one count of making false statements to law enforcement officials. If convicted, Rainey faces a maximum potential penalty of five years in prison on each count.
The criminal resolution is structured such that more than half of the proceeds will directly benefit the Gulf region. Pursuant to an order presented to the Court, approximately $2.4 billion of the $4.0 billion criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery will also be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill. An additional $350 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.
In addition to the historic $4 billion in criminal fines and penalties, BP has agreed as part of its guilty plea to retain a process safety and risk management monitor and an independent auditor, who will oversee BP’s process safety, risk management and drilling equipment maintenance with respect to deepwater drilling in the Gulf of Mexico. BP is also required to retain an ethics monitor to improve BP’s code of conduct for the purpose of seeking to ensure BP’s future candor with the United States government.
The United States continues to pursue a civil action to recover civil penalties under the Clean Water Act and hold BP and other defendants liable for natural resource damages under the Oil Pollution Act. A trial on liability matters is scheduled to begin in February 2013, during which the United States will seek to establish that the spill was caused by BP’s gross negligence. BP could face billions of dollars of additional exposure in the civil lawsuit.
The guilty plea agreement and charges announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill. The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force. The task force includes prosecutors from the Criminal Division and Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from the FBI, Environmental Protection Agency, Department of Interior, National Oceanic and Atmospheric Administration Office of Law Enforcement, U.S. Coast Guard, U.S. Fish and Wildlife Service and the Louisiana Department of Environmental Quality.
Today, the SEC simultaneously resolved civil securities fraud charges with BP in a $525 million settlement. The Justice Department also acknowledges and expresses its appreciation for the significant assistance provided by the SEC’s Division of Enforcement.
These cases are being prosecuted by Deepwater Horizon Task Force Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black, Edward Kang and Rohan Virginkar.
An indictment or information is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Due to public interest in this case, the Department of Justice is releasing documents that may not be in an accessible format. If you have a disability and the format of any material on the site interferes with your ability to access some information, please email the Department of Justice webmaster at [email protected] or contact Michael Passman at 202.514.2007. To enable us to respond in a manner that will be of most help to you, please indicate the nature of the accessibility problem, your preferred format (electronic format (ASCII, etc.), standard print, large print, etc.), the web address of the requested material, and your full contact information so we can reach you if questions arise while fulfilling your request.
Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader.Related Materials:
BP Guilty Plea
BP Information
Kaluza Vidrine Indictment
Rainey Indictment
Assistant Attorney General Lanny A. Breuer Speaks at the BP Press Conference
14 November 2012
U.S. Forfeits $2.1 Million Worth of Property Purchased with Alleged Bribes Paid to the Family of the Former President of TaiwanRead the Press Release
The Department of Justice has forfeited a Manhattan condominium and a Virginia residence – with a combined value of approximately $ 2.1 million – purchased with the proceeds of alleged bribes paid to the family of the former President of Taiwan, Shui-Bian Chen, as part of the department’s Kleptocracy Asset Recovery Initiative. Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced the forfeiture today with U.S . Immigration and Customs Enforcement (ICE) Director John Morton.
On Oct. 23, 2012, U.S. District Judge Norman M oon of the Western District of Virginia entered a final forfeiture judgment against a residence in Keswick, Va., and On Oct. 24, 2012, U.S. District Judge Katherine Forrest in the Southern District of New York entered a final forfeiture judgment against a condominium in Manhattan. Both properties were previously owned by the former first family of Taiwan through a British Virgin Islands shell company.
Today, ICE Homeland Security Investigations (HSI) took possession of the Virginia property. The title of the Manhattan condominium has been vested through court order to the government.
According to the civil forfeiture complaints filed in this case, during former President Chen’s administration, Yuanta Securities Co. Ltd. paid a bribe of 200 million New Taiwan dollars (equivalent to approximately $6 million USD) to former first lady Sue-Jen Wu in 2004 to ensure that the Taiwan government would not oppose Yuanta’s bid to acquire a financial holding company.
The former first family used Hong Kong and Swiss bank accounts, British Virgin Island companies and a St. Kitts and Nevis trust to purchase the two properties. One of the shell companies, Avallo Limited, which held title to both properties through U.S. domestic companies, settled both forfeiture actions under terms that provide for the sale of the property and forfeiture to the U.S. government of approximately 85 percent of the net proceeds from the sale of both properties.
“The Kleptocracy Initiative was established to prevent corrupt leaders from using the United States as a safe haven for their ill-gotten gains,” said Assistant Attorney General Breuer. “The former president of Taiwan’s family allegedly accepted millions in bribes in exchange for official action favoring Yuanta Securities, and we have now taken possession of two valuable properties purchased with their alleged spoils. We are committed to using every tool available to root out foreign official corruption.”
“This most recent seizure of luxury properties in New York City and Keswick, Va. belonging to the son of the former President of Taiwan Shui-Bian Chen is part of a continued effort by Homeland Security Investigations special agents to identify, locate, and seize properties and accounts in the United States belonging to him and his family,” said ICE Director Morton. “HSI will continue to find and seize the U.S. assets of foreign corrupt officials who try to use our country to conceal the illicit proceeds and profits of their crimes.”
The case was prosecuted by Deputy Chief Linda Samuel and Trial Attorney Jennifer Wallis of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The Criminal Division’s Office of International Affairs provided valuable assistance. The case was investigated by ICE- HSI’s Foreign Corruption Investigations Group, the HSI Miami Asset Identification and Removal Group and the HSI Attaché Hong Kong, with assistance from the Taiwan Ministry of Justice, Special Investigations Division.
This case is part of the Justice Department’s Kleptocracy Asset Recovery Initiative. This initiative is carried out by a dedicated team of prosecutors in the Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and where appropriate return those proceeds to benefit those harmed.
Individuals with information about possible proceeds of foreign corruption located in or laundered through institutions in the United States should contact federal law enforcement or send an email to [email protected] .
HSI’s Foreign Corruption Investigations Group in Miami targets corrupt foreign officials around the world that attempt to utilize U.S. financial institutions to launder illicit funds. The group conducts investigations into the laundering of proceeds emanating from foreign public corruption, bribery or embezzlement. The objective is to prevent foreign derived ill-gotten gains from entering the U.S. financial infrastructure, to seize identified assets in the United States and repatriate these funds on behalf of those affected.
Two Former Alabama Court Employees Indicted for Stealing Programming Code for Sensitive Court Data SystemRead the Press Release
Two former employees of the Alabama Administrative Office of the Courts were indicted today in Montgomery, Ala., for stealing the programming code for a sensitive court data system, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Joyce White Vance for the Northern District of Alabama.
The indictment charges Michael David Carroll, 58, and Jill Hawthorne, 35, both of Montgomery, with one count ofstealing property having a value of $5,000 or more by an employee of a state or local government agency that receives $10,000 or more annually in federal assistance. Carroll is the former Director of Information Systems for the Alabama Administrative Office of the Courts (AOC). Hawthorne is a former database administrator for AOC.
According to the indictment, Carroll and Hawthorne stole the code for the AOC’s county court records database called Namemaster. The indictment also alleges that Carroll and Hawthorne stole the digital blueprint, known as the schema, for how the Namemaster database was constructed. A database schema often includes information concerning tables, fields, relationships, views, indexes and other such elements.
According to a publicly filed search warrant affidavit, Hawthorne and Carroll facilitated the unlawful transfer of the code and schema for Namemaster to an Orlando-based private software development company CyberBest Technology Inc. They also allegedly facilitated the transfer to CyberBest of hundreds of thousands of Jefferson County, Ala., court records from the state Namemaster database.
If convicted, Carroll and Hawthorne each face a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Assistant U.S. Attorney David Estes for the Northern District of Alabama and Trial Attorney William Hall of the Criminal Division’s Computer Crime and Intellectual Property Section. The case was investigated by the U.S. Secret Service, Alabama Bureau of Investigation and Alabama Attorney General’s Office.
Indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
The Department of Justice and the Securities and Exchange Commission Release FCPA Resource GuideRead the Press Release
The Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) today released A Resource Guide to the U.S. Foreign Corrupt Practices Act (the Guide). The 120-page Guide provides a detailed analysis of the U.S. Foreign Corrupt Practices Act (FCPA) and closely examines the DOJ and SEC’s approach to FCPA enforcement.
The Guide provides helpful information to enterprises of all sizes – from small businesses doing their first transactions abroad to multi-national corporations with subsidiaries around the world. The Guide addresses a wide variety of topics, including who and what is covered by the FCPA’s anti-bribery and accounting provisions; the definition of a “foreign official”; what constitute proper and improper gifts, travel and entertainment expenses; facilitating payments; how successor liability applies in the mergers and acquisitions context; the hallmarks of an effective corporate compliance program; and the different types of civil and criminal resolutions available in the FCPA context. On these and other topics, the Guide takes a multi-faceted approach toward setting forth the statute’s requirements and providing insights into DOJ and SEC’s enforcement practices. It uses hypotheticals, examples of enforcement actions and matters DOJ and SEC have declined to pursue, and summaries of applicable case law and DOJ opinion releases.
“The fight against corruption is a law enforcement priority of the United States,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “Our FCPA enforcement is critical to protecting the integrity of markets for American companies doing business abroad, and we will continue to make clear that bribing foreign officials is not an acceptable shortcut. The Guide is an important illustration of our transparency and a useful reference for companies and individuals who wish to act responsibly and in compliance with the law.”
“Investors must have faith that the economic performance of public companies reflects lawful considerations of markets, price and product rather than a mirage resulting from bribery and corruption,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “This guide will protect investors by assisting businesses in preventing such unlawful behavior, thus avoiding FCPA violations in the first place, which is in the interest of law enforcement and business alike.”
The Guide is available to the public free of charge online at www.justice.gov/criminal/fraud/fcpa and at www.sec.gov/spotlight/fcpa.shtml.
Related Materials:
FCPA Guide Fact Sheet
A Resource Guide to the U.S. Foreign Corrupt Practices ActNew England Crime Boss Sentenced to 78 Months in Federal PrisonRead the Press Release
WASHINGTON – Anthony L. Dinunzio, the acting leader of the New England La Cosa Nostra (NELCN) crime family, was sentenced today to serve 78 months in federal prison for his role in a racketeering conspiracy to extort protection payments from adult entertainment businesses in Rhode Island.
Dinunzio’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence, R.I., Public Safety Commissioner Steven M. Paré.
“Today, the admitted leader of the New England La Cosa Nostra was sentenced to prison for the years of significant harm he caused to the people of Rhode Island,” said Assistant Attorney General Breuer. “Anthony Dinunzio and his NELCN subordinates used threats of violence to extort protection payments from business owners throughout the state, and his sentence sends a powerful message about the department’s determination to hold mafia leaders and associates to account.”
“Prosecution of Mr. Dinunzio and his fellow LCN leaders, members and associates was a true team effort, in which attorneys from the Criminal Division and this office, the Rhode Island State Police, the Providence Police and the FBI all played a critical part,” said U.S. Attorney Peter F. Neronha. “As a result of their painstaking, excellent work, Mr. Dinunzio and his fellow career criminals are going to federal prison for long periods of time. Rhode Island, and New England as a whole, is a better and safer place today as a result of their work.”
“Over the last several years, the FBI and its federal, state and local law enforcement partners have undeniably shattered Omerta, the New England LCN’s code of silence,” said FBI Boston Special Agent in Charge DesLauriers. “Through persistent, methodical and unyielding investigations, Mr. Dinunzio and others in the LCN know they no longer are able to rely on their sworn bonds for protection from the FBI and our partners.”
Dinunzio, 53, of East Boston, Mass., was sentenced today by U.S. District Court Judge William E. Smith in Providence, R.I. In addition to his prison term, Dinunzio was sentenced to serve three years of supervised release.
Dinunzio pleaded guilty on Sept. 13, 2012, to one count of conspiracy to participate in a racketeering enterprise (RICO).
According to court documents, Dinunzio was a member and leader of the NELCN from at least 2002. At the time of his guilty plea, Dinunzio admitted to committing multiple acts of extortion and knowingly assisted in a criminal racketeering conspiracy through the oversight and receipt of $2,000 to $6,000 in monthly protection payments, paid in cash by the owners and operators of several adult entertainment businesses in Rhode Island. Dinunzio also admitted to obstructing or impeding the administration of justice by, among other methods, attempting to influence, delay or prevent witness testimony related to the investigation and prosecution of NELCN members.
Previously, seven leaders, underbosses, members and associates of the NELCN have pleaded guilty and been sentenced to federal prison for their involvement in the racketeering and extortion conspiracy to extort protection payments from adult entertainment businesses and individuals in Rhode Island during the past two decades. Admitted NELCN crime boss Luigi “Louie” Manocchio is serving a sentence of 66 months in prison. Edward “Eddy” Lato, an admitted capo, is serving a sentence of 108 months in prison. Alfred “Chippy” Scivola, an admitted NELCN member, is serving a sentence of 46 months in prison. Admitted NELCN associates Richard Bonifiglia and Albino “Albie” Folcarelli are both serving sentences of 84 months in prison. Raymond “Scarface” Jenkins is serving a sentence of 37 months in prison. And Thomas Iafrate is serving a sentence of 30 months in prison.
A ninth defendant, Theodore Cardillo, 69, has signed a plea agreement and agreed to plead guilty to a racketeering charge contained in a second superseding indictment in this matter. A change-of-plea and sentencing hearing has been scheduled for Dec. 11, 2012.
Colonel O’Donnell of the Rhode Island State Police said, “La Cosa Nostra historically prides itself on preying on the weak to exploit their ideology of greed and power. The factors that brought them “power”, has contributed to their demise.”
Providence Public Safety Commissioner Paré added, “The prosecution and sentencing of Anthony Dinunzio is an example of government from federal, state and local law enforcement aggressively investigating organized criminal behavior and incarcerating those who use fear, intimidation, violence and threats to extort money from businesses in Providence. We will continue to seek severe penalties with prison sentences for this type of criminal. We will not let up until we rid this criminal activity from our community.”
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland of the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section. The matter was investigated by the FBI, the Rhode Island State Police and the Providence Police Department.
Justice Department Statement on Entergy Corp.’s Transmission System Commitments and Acquisition of KGen Power Corp.’s Plants in Arkansas and MississippiRead the Press Release
WASHINGTON – The Department of Justice’s Antitrust Division issued the following statement today regarding Entergy Corp.’s commitments to join a regional transmission organization (RTO) and divest its transmission system; Entergy’s proposed acquisitions of the Hinds and Hot Spring generating facilities in Mississippi and Arkansas, respectively, from KGen Power Corporation; and the division’s open investigation into Entergy’s alleged anticompetitive conduct:
“After a thorough review, and in light of the forthcoming changes in Entergy’s service area, the Antitrust Division has determined that Entergy’s acquisitions of KGen’s power plants in Jackson, Miss., and Hot Spring County, Ark., are unlikely to substantially lessen competition, and is closing its investigation into the proposed transactions.“In addition to the merger investigation of the KGen transactions, the division has been examining allegations that Entergy has engaged in exclusionary conduct in its four-state utility service area spanning parts of Arkansas, Louisiana, Mississippi and Texas. That investigation remains open. The conduct investigation has focused on whether certain of Entergy’s power generation dispatch, transmission planning and power procurement practices constitute exclusionary conduct under Section 2 of the Sherman Act.
“If Entergy follows through on its transmission system commitments, the Antitrust Division’s concerns will be resolved.
“The division has been investigating the effect of several of Entergy’s practices on competition and barriers to entry. The division has also evaluated professed efficiency and regulatory justifications, which have not been persuasive.
“Specifically, the division has been exploring whether Entergy has harmed consumers by exercising its control over its transmission system and dominant fleet of gas-fired power plants to exclude rival operators of low-cost combined-cycle gas turbine (CCGT) power plants from competing to sell long-term power. In particular, the division has been evaluating whether Entergy’s practices have effectively foreclosed these more efficient rivals from obtaining long-term firm transmission service, a necessary input for selling long-term power products to wholesale customers in the Entergy service area. As part of the conduct investigation, the division has also been reviewing the competitive impact of, and circumstances surrounding, Entergy’s serial acquisition of rivals’ CCGT power plants, including the KGen plants.
“Since the division began its investigation, Entergy announced that it intends to join the Midwest Independent Transmission System Operator (MISO) RTO and has entered into an agreement to divest its electric transmission business to ITC Holdings Corp. (ITC), an independent transmission company. In recent months, Entergy has initiated the state and federal regulatory processes in support of these significant structural changes, secured conditional MISO approval from several state regulators, and committed its utilities to a target MISO integration date of December 2013.
“Entergy’s commitments to obtain membership in an RTO and divest its transmission system to a third party with the incentive to make efficient transmission investments are significant steps towards restoring competition in the Entergy service area. If Entergy follows through on its commitments, these measures will address the Antitrust Division’s concerns by eliminating Entergy’s ability to maintain barriers to wholesale power markets, ensuring that all Entergy service area generation is dispatched independently and at lowest cost, increasing market transparency and oversight, and properly aligning incentives for the construction of transmission. Such measures will also directly benefit consumers, who will ultimately enjoy lower electricity prices and improved reliability as a result of RTO integration and the transmission system divestiture. The division does not endorse any particular RTO or independent transmission company.“The division will closely monitor developments, and in the event that Entergy does not make meaningful and timely progress, the division can and will take appropriate enforcement action, if warranted.”
13 November 2012
Vehicle and Engine Importers to Pay Civil Penalty to Resolve Clean Air Act ViolationsRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a settlement with two former importers of highway motorcycles, recreational vehicles and small spark ignition engines. The defendants, Yuan Cheng International Group Inc. (YCIG) and NST Inc. (NST), located in Montclair, Calif., allegedly imported and sold vehicles and engines from China in violation of Clean Air Act requirements.
The settlement resolves allegations that, between 2006 and 2011, the companies imported and introduced into commerce 17,521 recreational vehicles, highway motorcycles and nonroad spark ignition engines without proper EPA certifications required under the Clean Air Act to prevent excess emissions of pollutants. Vehicles and engines that are not certified may be operating without proper emissions controls and can emit excess carbon monoxide and nitrogen oxides and cause respiratory illnesses, aggravate asthma and contribute to the formation of ground level ozone or smog. The settlement also resolves claims for failure to adequately respond to EPA’s requests for information and labeling violations under the Clean Air Act.
The settlement requires the companies and John Cheng and Jenny Yu, senior company executives, to pay a combined civil penalty of $50,000. This amount is based on the United States’ determination that the parties have a limited ability to pay a civil penalty in this matter. Both companies have ceased importing vehicles and engines and are now dissolved. In the fall of 2010, NST agreed to pay $250,000 to the state of California to resolve similar violations concerning the illegal sale of uncertified vehicles.
“We will continue to vigorously enforce the law to ensure that imported vehicles and engines comply with U.S. laws so that American consumers get environmentally sound products and violators do not gain an unfair economic advantage,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “By holding individuals personally accountable under the consent decree, this settlement shows not only that we will pursue companies who violate the law, but where appropriate, will take additional measures to ensure that individual executives who act on behalf of companies cannot repeat the same conduct under a new corporate identity.”
In addition, Mr. Cheng and Ms. Yu must enter into a compliance plan with EPA prior to any future importation, distribution, selling, or offering for sale of any products covered by the Clean Air Act. They must also provide EPA with notice prior to forming any U.S. business entity that engages in the importation, distribution, selling or offering for sale of any products covered by the Clean Air Act, or before individually engaging in such activities. Mr. Cheng and Ms. Yu may be liable for any additional penalties for any violations of the settlement agreement, including $25,000 per vehicle or engine imported, sold or distributed that is not in accordance with an EPA-approved compliance plan, and up to $5,000 per day for each failure to provide notice to EPA as mentioned above.
John Cheng (also known as Yuan Cheng) was the sole shareholder, director, president, secretary, chief financial officer and treasurer of the YCIG. NST was the corporate successor to YCIG after YCIG dissolved. Cheng’s wife, Jenny Yu, was the president, secretary, chief financial officer, one of two directors and a 50 percent shareholder of NST. Mr. Cheng was the other 50 percent shareholder of NST. Both Cheng and Yu are individually bound by the terms of the settlement and are personally jointly and severally liable for the liabilities and obligations arising from the consent decree.
The Clean Air Act prohibits any vehicle or engine from being imported and sold in the United States unless it is covered by a valid, EPA-issued certificate of conformity indicating that the vehicle or engine meets applicable federal emission standards. The certificate of conformity is the primary way EPA ensures that imported vehicles and engines meet emission standards. This settlement is part of an ongoing effort by EPA to ensure that all imported vehicles and engines comply with the Clean Air Act’s requirements.
The consent decree is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html .
Two Florida Men and Company Charged in Philadelphia with Rattlesnake TraffickingRead the Press Release
Robroy MacInnes, 54, of Fort Myers, Fla., Robert Keszey, 47, of Bushnell, Fla., and Glades Herp Farm Inc., were charged in a two-count indictment today in federal court in Philadelphia, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania. The indictment charges MacInnes, Keszey and the Florida business they co-own, Glades Herp Farm, with conspiracy to traffic in endangered and threatened reptiles, as well as charging MacInnes and Glades with trafficking in protected timber rattlesnakes in violation of the Lacey Act.
According to the indictment, between 2007 and 2008, the defendants collected protected snakes from the wild in Pennsylvania and New Jersey, purchased protected eastern timber rattlesnakes that had been illegally collected from the wild in violation of New York law, and transported federally threatened eastern indigo snakes from Florida to Pennsylvania. The indictment also charges that defendants MacInnes and Glades violated the Lacey Act by purchasing illegal eastern timber rattlesnakes and having the snakes transported to Florida.
The eastern timber rattlesnake is a species of venomous pit viper native to the Eastern United States, and is considered endangered in New Jersey and threatened in New York. It is also illegal to possess an eastern timber rattlesnake without a permit in Pennsylvania. The eastern indigo snake, the longest native North American snake species, is listed as threatened by both Florida and Federal law.
The Lacey Act, one of the oldest statutes in the United States, prohibits interstate trafficking in wildlife known to be illegally obtained. The maximum penalty for conspiring to commit offenses and for violations of the Lacey Act is up to five years in prison and a $250,000 fine for each violation.
The allegations in the indictment are mere accusations and all persons are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement. The case is being prosecuted by Patrick M. Duggan of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Assistant U.S. Attorney Mary Kay Costello of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.