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Thursday 3 March 2011
Former Washington County Sheriff’s Deputy Convicted of Federal Civil Rights ChargesRead the Press Release
WASHINGTON - A jury in St. Louis today convicted Vernon Wilson, 57, former chief deputy of the Washington County Sheriff’s Department, of violating the civil rights of four former inmates of the Washington County Jail on four separate occasions by beating two of the inmates and by arranging for the beatings of two other inmates, announced the Department of Justice. Wilson was also convicted of two counts of lying to the FBI about his role in two of the attacks. Wilson will be sentenced on June 1, 2011.
According to evidence presented at trial, on two occasions, Wilson struck the inmates repeatedly in the face, banging their heads into a concrete wall. Two other times, Wilson orchestrated the beatings of inmates by using another inmate known for fighting to assault them. Both times Wilson rewarded the inmate for the beatings by giving the inmate cigarettes. One of the inmates was so severely beaten he had to be hospitalized for his injuries, which included a broken orbital bone.
“Wilson used the power of his position to punish these inmates,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “His actions brought shame to his fellow law enforcement officers, but even more than that, they served to undermine our faith and confidence in the criminal justice system.”
“When Vernon Wilson goes to prison, he should not experience the same vulnerability he made his victims feel,” said Dennis L. Baker, Special Agent in Charge of the FBI St. Louis Division. “Fortunately, the vast majority of the men and women who swore to uphold the law are not like him.”
Wilson’s daughter, Valeria Wilson Jackson, 26, previously pleaded guilty on July 14, 2010, to one count of obstruction of justice for lying to the FBI about her role in one of the beatings.
The case was investigated by the St. Louis Division of the FBI and was prosecuted by Fara Gold and Patricia Sumner of the Civil Rights Division of the Department of Justice.
Former Washington County Sheriff’s Deputy Convicted of Federal Civil Rights ChargesRead the Press Release
WASHINGTON - A jury in St. Louis today convicted Vernon Wilson, 57, former chief deputy of the Washington County Sheriff’s Department, of violating the civil rights of four former inmates of the Washington County Jail on four separate occasions by beating two of the inmates and by arranging for the beatings of two other inmates, announced the Department of Justice. Wilson was also convicted of two counts of lying to the FBI about his role in two of the attacks. Wilson will be sentenced on June 1, 2011.
According to evidence presented at trial, on two occasions, Wilson struck the inmates repeatedly in the face, banging their heads into a concrete wall. Two other times, Wilson orchestrated the beatings of inmates by using another inmate known for fighting to assault them. Both times Wilson rewarded the inmate for the beatings by giving the inmate cigarettes. One of the inmates was so severely beaten he had to be hospitalized for his injuries, which included a broken orbital bone.
“Wilson used the power of his position to punish these inmates,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “His actions brought shame to his fellow law enforcement officers, but even more than that, they served to undermine our faith and confidence in the criminal justice system.”
“When Vernon Wilson goes to prison, he should not experience the same vulnerability he made his victims feel,” said Dennis L. Baker, Special Agent in Charge of the FBI St. Louis Division. “Fortunately, the vast majority of the men and women who swore to uphold the law are not like him.”
Wilson’s daughter, Valeria Wilson Jackson, 26, previously pleaded guilty on July 14, 2010, to one count of obstruction of justice for lying to the FBI about her role in one of the beatings.
The case was investigated by the St. Louis Division of the FBI and was prosecuted by Fara Gold and Patricia Sumner of the Civil Rights Division of the Department of Justice.
Former U.S. Official Sentenced to 65 Months in Prison for Sexually <br /> Assaulting Woman on Embassy Property in AlgeriaRead the Press Release
WASHINGTON - Andrew Warren, 43, a former official with the Central Intelligence Agency (CIA), was sentenced today to 65 months in prison on charges of abusive sexual contact and unlawful use of cocaine while possessing a firearm, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Ronald C. Machen Jr., and Eric J. Boswell, Assistant Secretary of State for Diplomatic Security.
Warren pleaded guilty to the charges in June 2010 and was sentenced in U.S. District Court for the District of Columbia by the U.S. District Court Judge Ellen S. Huvelle. Judge Huvelle also sentenced Warren to 10 years of supervised release following his prison term.
During the plea hearing last year, Warren admitted that on Feb. 17, 2008, he committed abusive sexual contact while on U.S. embassy property in Algiers, Algeria, by engaging in sexual contact with a female victim after he rendered her unconscious. Additionally, Warren admitted that on April 26, 2010, he unlawfully used cocaine while possessing a Glock, 9 millimeter semi-automatic pistol in Norfolk, Va.
This case was investigated by Diplomatic Security Service; the U.S. Marshals Service in Norfolk; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Norfolk Police Department; and the Inspector General and the General Counsel of the CIA. The case was prosecuted by Trial Attorney Christine Duey of the Criminal Division’s Human Rights and Special Prosecutions Section, Assistant U.S. Attorney Julieanne Himelstein of the District of Columbia and Assistant U.S. Attorney Steve Haynie from the Eastern District of Virginia.
Ex Ayudante de Alguacil del Condado de Washington fue condenado por cargos de violación de los derechos civiles federalesRead the Press Release
WASHINGTON - Un jurado en St. Louis condenó hoy a Vernon Wilson, 57, ex ayudante en jefe del Departamento del Alguacil del Condado de Washington, por violar los derechos civiles de cuatro ex presidiarios de la Cárcel del Condado de Washington en cuatro ocasiones distintas, al golpear a dos de los prisioneros y realizar arreglos para golpizas contra los otros dos presidiarios, anunció el Departamento de Justicia. Wilson también fue condenado por dos cargos de mentir al Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] acerca de su papel en dos de los ataques. Wilson será sentenciado el 1º de junio de 2011.
De acuerdo con pruebas presentadas en el juicio, en dos ocasiones, Wilson golpeó repetidas veces a prisioneros en el rostro, golpeando sus cabezas contra una pared de cemento. Otras dos veces, Wilson orquestó las golpizas de prisioneros utilizando a otro prisionero conocido por pelear para atacarlos. En ambas oportunidades, Wilson recompensó al prisionero por las golpizas dándole cigarrillos. Uno de los prisioneros recibió una golpiza tan brutal que tuvo que ser hospitalizado por sus lesiones, las que incluyeron un hueso orbital fracturado.
"Wilson utilizó el poder de su cargo para castigar a estos prisioneros", dijo Thomas E. Perez, Secretario de Justicia Auxiliar de la División de Derechos Civiles. "Sus acciones avergüenzan a sus colegas de las fuerzas del orden público, pero más que eso, sirvieron para socavar la fe y la confianza en el sistema de justicia penal".
"Cuando Vernon Wilson vaya a la prisión, no experimentará la misma vulnerabilidad que hizo sentir a sus víctimas", dijo Dennis L. Baker, Agente Especial a Cargo del FBI, División de St. Louis. "Afortunadamente, la gran mayoría de los hombres y mujeres que juraron respetar la ley no son como él".
La hija de Wilson, Valeria Wilson Jackson, 26, se había declarado culpable anteriormente, el 14 de julio de 2010, de un cargo de obstrucción de la justicia por mentir al FBI acerca de su papel en una de las golpizas.
El caso fue investigado por la División de St. Louis del FBI; estuvieron a cargo de la acusación Fara Gold y Patricia Sumner de la División de Derechos Civiles del Departamento de Justicia.
Wednesday 2 March 2011
Justice Department Signs Agreement with Des Moines, Iowa, and Des Moines Public Library to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – An agreement has been reached with the city of Des Moines, Iowa, and the Des Moines Public Library, to improve access to all aspects of civic life for persons with disabilities, the Justice Department today announced. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“Access to public programs and facilities is a civil right, and individuals with disabilities must have the opportunity to participate in local government programs, services and activities on an equal basis with their neighbors,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “In reaching this agreement, the city of Des Moines and the city’s public library have made an important commitment to residents and visitors with disabilities.”
“I am very pleased that the city of Des Moines and the Department of Justice have reached an amicable agreement in this matter to ensure access to persons with disabilities,” said Nicholas A. Klinefeldt, U.S. Attorney for the Southern District of Iowa.
As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. This agreement is the 188th under the PCA initiative.
Under the agreement announced today, Des Moines will take important steps to improve access for individuals with disabilities, such as:
- Making physical modifications to facilities surveyed by the department so that parking, routes into buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
- Surveying other facilities and programs and making modifications wherever necessary to achieve full compliance with ADA requirements;
- Adopting a grievance procedure to deal with complaints of disability discrimination relating to city programs, services, activities and facilities;
- Posting, publishing and distributing a notice to inform members of the public of the provisions of Title II and their applicability to the city’s programs, services, and activities;
- Officially recognizing the Iowa telephone relay service as a key means of communicating with individuals who are deaf, are hard-of-hearing, or have speech impairments and training staff in using the relay service for telephone communications;
- Ensuring that the city’s official website and other web-based services are accessible to people with disabilities; and
- Implementing a comprehensive plan to improve the accessibility of the city’s sidewalks and pedestrian crossings by installing accessible curb ramps throughout Des Moines.
Des Moines, incorporated in 1851, is the capital of and the most populous city in the state of Iowa. It is located just south of the center of the state. More than 20 percent of Des Moines residents have a disability and will benefit from this agreement.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement requires most actions to be completed within three years. For the required accessibility modifications to sidewalks, pedestrian crossings, transportation stops and curb ramps, the city will work with the disability community to prioritize and complete these modifications within seven years. The department will actively monitor compliance with the agreement, which will remain in effect until the department has confirmed that all required actions have been completed.
People interested in finding out more about the ADA, today’s agreement with Des Moines, the PCA initiative or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA Web page at www.ada.gov or call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).
Hombre de Alabama fue sentenciado a 36 meses en prisión por fraude tributario y robo de identidadRead the Press Release
WASHNGTON - Jeffrey Leon Ceaser, un residente del Condado de Montgomery, Ala., fue sentenciado hoy a 36 meses en prisión, anunciaron hoy el Departamento de Justicia y el Servicio de Impuestos Internos [Internal Revenue Service (IRS)]. Además de la sentencia en prisión, se le ordenó a Ceaser pagar 621,738.41 dólares en restitución a los Estados Unidos y cumplir con tres años de libertad bajo supervisión.
De acuerdo con el expediente judicial, entre marzo de 2009 y septiembre de 2009, Ceaser conspiró con terceros para defraudar a los Estados Unidos al presentar 158 declaraciones de impuestos a la renta federales falsas. Ceaser obtuvo fraudulentamente nombres y números de Seguro Social de personas y proporcionó dicha información a Ora Mae Adamson, quien presentó las declaraciones de impuestos falsas sin la autorización de dichas personas. Las declaraciones de impuestos reclamaban falsamente créditos de comprador de primera vivienda y créditos de impuestos al combustible. Los reembolsos de las declaraciones de impuestos falsas fueron depositados en cuentas bancarias controladas por Ceaser y otros coconspiradores. En total, el IRS desembolsó 621,738 dólares en reembolsos de impuestos falsos. Adamson también se declaró culpable de conspiración y cargos de robo de identidad y deberá recibir su sentencia el 10 de marzo de 2011.
John A. DiCicco, Secretario de Justicia Auxiliar Interino de la División de Impuestos del Departamento de Justicia y Leura G. Canary, Fiscal Federal para el Distrito Medio de Alabama, felicitaron a los agentes especiales del IRS que investigaron este caso y los abogados litigantes de la División de Impuestos Jason Poole y Michael Boteler, quienes estuvieron a cargo de la acusación en el caso.
Existe información adicional sobre la División de Impuestos del Departamento de Justicia y su labor de coacción en www.usdoj.gov/tax/. Para obtener información adicional sobre la labor reciente del Departamento de Justicia para acabar con los reclamos fraudulentos de créditos de comprador de primera vivienda, haga clic aquí .
Former Senior Vice President of Colonial Bank Pleads Guilty <br /> to Fraud SchemeRead the Press Release
WASHINGTON – Catherine Kissick, a former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division, pleaded guilty today to conspiring to commit bank, wire and securities fraud for her role in a fraud scheme that contributed to the failures of Colonial Bank and Taylor, Bean & Whitaker (TBW).
The guilty plea was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Special Inspector General Neil Barofsky for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA OIG); and Victor F. O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.
Kissick, 50, of Orlando, Fla., pleaded guilty before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Kissick faces a maximum penalty of 30 years in prison when she is sentenced on June 17, 2011. In a related action, the U.S. Securities and Exchange Commission (SEC) today filed an enforcement action against Kissick in the Eastern District of Virginia.
According to court documents, Kissick admitted that from 2002 through August 2009, she and her co-conspirators, including former TBW chairman Lee Farkas, engaged in a scheme to defraud various entities and individuals, including Colonial Bank, a federally-insured bank; Colonial BancGroup Inc.; the Troubled Asset Relief Program (TARP); and the investing public. Kissick admitted that she knowingly and intentionally placed Colonial Bank and Colonial BancGroup at significant risk by causing them to purchase and hold more than $400 million in assets on their books that had no value.
Court documents state that in early 2002, TBW began running overdrafts in its master bank account at Colonial Bank because of TBW’s inability to meet its operating expenses, which included payroll, servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities and other obligations. Kissick and her co-conspirators engaged in a series of fraudulent actions to cover up the overdrafts, first by sweeping overnight money from one TBW account with excess funds into another, and later through the fictitious “sales” of mortgage loans to Colonial Bank, a fraud scheme the conspirators dubbed “Plan B.” The conspirators accomplished this by sending mortgage data to Colonial Bank for loans that did not exist or that TBW had already committed or sold to other third-party investors. Kissick admitted that she knew and understood she and her co-conspirators had caused Colonial Bank to pay TBW for assets that were worthless to the bank.
According to court documents, Kissick and her conspirators also caused TBW to engage in sales to Colonial Bank of fictitious trades that had no collateral backing them and had no value. Kissick or another co-conspirator at Colonial Bank were the points of contact for conspirators at TBW when the mortgage company needed an advance from the bank, and Kissick would generally discuss new advances with Farkas before releasing the funds to TBW. Conspirators at TBW would wire a request that included false documentation purporting to represent the sale of the trades to Colonial Bank to support the release of the funds. Kissick and others caused the false information to be entered into Colonial Bank’s books and records, giving the appearance that Colonial Bank owned a 99 percent interest in legitimate securities, when in fact the securities had no value and could not be sold.
In the fall of 2008, Colonial BancGroup submitted an application to obtain $570 million in taxpayer funding through the Capital Purchase Program, a sub-program of the U.S. Treasury Department’s TARP program. Court documents indicate that in connection with the application, Colonial BancGroup submitted financial data and filings that included materially false information related to mortgage loan and securities assets held by Colonial Bank as a result of the fraudulent scheme perpetrated by Kissick and her co-conspirators. Colonial BancGroup never received the TARP funding, and Kissick admitted that she deleted and instructed members of her staff to delete electronic communications on their Blackberry PDAs to evade subpoenas for documents from the Special Inspector General for TARP.
In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver. Colonial BancGroup also filed for bankruptcy in August 2009.
In June 2010, Farkas was arrested and charged in a 16-count indictment for his role in the fraud scheme. His trial is scheduled to begin in April 2011. An indictment is merely a charge and a defendant is presumed innocent until proven guilty. Desiree Brown, the former treasurer of TBW, pleaded guilty on Feb. 24, 2011, for her role in the fraud scheme.
The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC OIG, HUD OIG, FHFA OIG and the IRS Criminal Investigation. The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.
This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. The task force is also making the public aware of resources available to protect against these types of fraud and how to report fraud when it occurs. To learn more about the task force visit its website, www.StopFraud.gov .
Former Army Major and Wife Convicted on All Charged Counts for Roles in Bribery Scheme Related to Defense Contracts to Support Iraq WarRead the Press Release
WASHINGTON - A federal jury in Decatur, Ala., has convicted Eddie Pressley, a former U.S. Army Major, and his wife, Eurica Pressley, on 22 counts in connection with a bribery and money laundering scheme related to defense contracts awarded in support of Operation Iraqi Freedom, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Eddie and Eurica Pressley were found guilty yesterday of one count of bribery, one count of conspiracy to commit bribery, eight counts of honest services fraud, one count of money laundering conspiracy and 11 counts of engaging in monetary transactions with criminal proceeds.
The case against the Pressleys arose from a corruption probe focusing on Camp Arifjan, a U.S. military base in Kuwait. As a result of this investigation, 16 individuals including the Pressleys, have pleaded guilty or been found guilty at trial for their roles in the scheme.
“The Pressleys are the latest in a line of 16 defendants to be convicted at trial or plead guilty for the bribery scheme at Camp Arifjan,” said Assistant Attorney General Breuer. “Eddie Pressley recruited his wife to join him in an audacious plan to take bribes in exchange for official contracting action on behalf of the U.S. Army, and together they accepted nearly $3 million in illegal payments. They hid their criminal proceeds in off-shore bank accounts and spent their gains on lavish personal items. Thanks to the hard work and dedication of prosecutors from the Criminal Division’s Public Integrity Section and federal law enforcement agents, the Pressleys are today facing the consequences for their flagrant betrayal of the public trust.”
“The government places special trust in its contracting officers, whether military or civilian, and the egregious behavior exhibited in this case undermines the tremendous efforts by those honorable service members and civilians risking their lives to protect U.S. interests,” said Special Agent in Charge Robert E. Craig Jr. for the Defense Criminal Investigative Service-Mid-Atlantic Field Office. “The Defense Criminal Investigative Service continues to aggressively investigate and bring to justice those who, for their own personal gain, criminally violate the special trust and confidence instilled in them by the Department of Defense.”
“This guilty verdict of the Pressley’s sends a very strong message to all who attempt to defraud the U.S. Army,” said James Podolak, Director of Army Criminal Investigation Division’s Major Procurement Fraud Unit. “Regardless of how perpetrators attempt to disguise their thievery, we will ultimately catch them and we will work diligently to see them brought to justice. Secret bank accounts abroad and an elaborate bribery scheme are not enough to hide illegal actions from our specially-trained Army CID Special Agents working in cooperation with our other law enforcement partners.”
“Today’s verdict demonstrates the value IRS Criminal Investigation brings to multi-agency investigations,” said Victor Song, Chief, Internal Revenue Service-Criminal Investigation (IRS-CI.) “Our expertise in following the money in this case, along with the collective efforts of our law enforcement partners, has resulted in justice for the American taxpayer.”
Evidence presented at trial demonstrated that Eddie Pressley took various contracting actions to benefit certain contractors who paid him bribes, including Terry Hall. Pressley served as a U.S. Army contracting official at Camp Arifjan between 2004 and 2005. From spring 2004 through fall 2007, Hall operated and had an interest in several companies, including Freedom Consulting and Catering Co. and Total Government Allegiance. In February 2005, Eddie Pressley arranged for Hall to obtain a blanket purchase agreement (BPA) to deliver goods and services to the U.S. Department of Defense (DoD) and its components in Kuwait and elsewhere.
A BPA is a type of contract by which the DoD agrees to pay a contractor a specified price for a particular good or service. Based on a BPA, the DoD orders the supplies on an as-needed basis. The contractor is then obligated to deliver the supplies ordered at the price agreed upon in the BPA. The term for such an order by the DoD is a “call.”
According to Hall’s testimony and other evidence presented at trial, Pressley demanded a $50,000 bribe before he would issue bottled water calls to Hall. Hall testified that in April 2005, he and his associates arranged for Pressley to receive the money in a bank account established in the name of a shell company, EGP Business Solutions Inc.
Hall’s testimony and other evidence at trial showed that soon after the $50,000 bribe was paid, Pressley and John Cockerham, another U.S. Army contracting official, increased the bribe demand to $1.6 million, which consisted of $800,000 for Pressley and $800,000 for Cockerham. After Hall and others agreed to pay the money, Pressley and Cockerham took various official acts to benefit Hall, including, among other things, issuing calls for bottled water and fencing, arranging for Hall to receive a fence contract, and modifying Hall’s BPA to remove the upper limit of the money Hall could receive from the DoD under the bottled water BPA.
Evidence at trial also showed that Eddie Pressley enlisted the help of his wife, Eurica, to receive the bribes. On March 9, 2005, he sent his wife an e-mail in which he told her, among other things, “You will be getting some paperwork with your maiden name on it,” “I need you to sign it and mail to whatevery (sic) address on it,” “I am doing some consulting,” and “Of course I am not going to turn down any money, but I can’t have anyone paying me in my name because I am in the military so I had them put everything in your maiden name.”
According to evidence presented at trial, Eurica Pressley traveled to Dubai in May 2005 and to the Cayman Islands in June 2005 to open bank accounts to receive the bribe money. She also took control of the U.S.-based account in the name of EGP Business Solutions Inc. A law enforcement agent testified at the trial about various false and misleading statements Eurica Pressley made to him during a voluntary interview at her home, including her denial that she had any foreign bank accounts. In addition, the evidence presented at trial demonstrated that Eddie and Eurica Pressley, Hall and others attempted to conceal the true nature of their corrupt scheme by having Eurica Pressley execute bogus “consulting agreements.” They also prepared false invoices that were designed to justify the bribe payments as payment for non-existent “consulting services.”
Bank statements and wire transfer reports demonstrated that, in total, the Pressleys received approximately $2.9 million in bribe payments, approximately $1.6 million of which consisted of payments from other contractors that Hall facilitated for Eddie Pressley. Bank statements, wire transfer reports and other records presented at trial showed that the Pressleys used the money to purchase real estate, expensive automobiles and home decorating services, among other things.
Former U.S. Army Major James Momon also testified at trial that Pressley and Cockerham recruited him to join the bribe scheme and that he took various official acts to receive bribes from some of the same contractors who paid Pressley and Cockerham, including Hall. Additionally, he testified that Pressley told him that if they got caught they would spend “six years in jail” and that Cockerham and Pressley warned him to be careful.
Eddie and Eurica Pressley each face a maximum sentence of 15 years in prison for bribery, five years in prison for conspiracy, 20 years in prison for each of the eight counts of honest services fraud, 20 years in prison for money laundering conspiracy and 15 years in prison for each of the counts of engaging in monetary transactions with criminal proceeds. They also face maximum fines of $250,000 per count. Following the guilty verdict, the defendants agreed to forfeit $27,178,407. U.S. District Judge Virginia Emerson Hopkins scheduled sentencing for June 29, 2011.
On Feb. 18, 2010, Hall pleaded guilty to bribery conspiracy and money laundering conspiracy and agreed to forfeit $15.7 million to the U.S. government in connection with his payment of more than $3 million in bribes to Cockerham, Eddie Pressley, Momon and Christopher Murray.
On Aug. 13, 2009, Momon pleaded guilty to receiving approximately $1.6 million in bribes and agreed to pay $5.7 million in restitution. On Jan. 8, 2009, Murray pleaded guilty to charges of bribery and making a false statement. He was sentenced on Dec. 17, 2009, to 57 months in prison and ordered to pay $245,000 in restitution.
On Jan. 31, 2008, Cockerham pleaded guilty to participating in a bribery and money laundering scheme at Camp Arifjan. He was sentenced on Dec. 2, 2009, to 210 months in prison and ordered to pay $9.6 million in restitution.
The case is being prosecuted by Trial Attorneys Peter C. Sprung and Edward J. Loya Jr. of the Criminal Division’s Public Integrity Section. The case is being investigated by special agents of the Defense Criminal Investigative Service, the Army Criminal Investigation Command Division , IRS-CI, the FBI’s Washington Field Office and the Special Inspector General for Iraq Reconstruction.
Forest Pharmaceuticals fue sentenciada a pagar 164 millones de dólares por violaciones penalesRead the Press Release
WASHINGTON - La fabricante de medicamentos Forest Pharmaceuticals Inc. fue sentenciada hoy por la Juez Federal de Distrito Nancy Gertner a pagar una multa penal de 150 millones de dólares y a la confiscación de activos por 14 millones de dólares después de que la empresa se declarara culpable en noviembre de 2010 de un cargo penal de obstrucción de la justicia, un delito menor de distribuir un medicamento nuevo no aprobado en comercio interestatal y un delito menor de distribuir un medicamento indebidamente rotulado en comercio interestatal, anunció el Departamento de Justicia. La empresa, una subsidiaria de Forest Laboratories Inc. con sede en la Ciudad de Nueva York, se declaró culpable de cargos relacionados con la obstrucción de una inspección regulatoria de la Administración de Fármacos y Alimentos [Food and Drug Administration (FDA)], la distribución de Levothroid, en dicho momento un medicamento nuevo no aprobado, y la promoción ilegal del medicamento antidepresivo Celexa para su uso en el tratamiento de niños y adolescentes.
La sentencia emitida contra Forest hoy fue el componente final de una resolución global por un total de más de 313 millones de dólares en resolución de alegatos penales y civiles contra Forest y su empresa madre en conexión con la distribución y comercialización de ciertos medicamentos. En septiembre de 2010, Forest Laboratories y Forest Pharmaceuticals realizaron un acuerdo civil en resolución de cargos de violación de la Ley de Reclamos Falsos asociados a tres de sus medicamentos. Levothroid, Celexa y Lexapro. Como parte del acuerdo conciliatorio civil, Forest aceptó pagar más de 149 millones de dólares, incluidos más de 88 millones de dólares al gobierno federal y más de 60 millones de dólares a los estados.
De acuerdo con el expediente judicial, Forest Pharmaceuticals comenzó a distribuir el Levothroid para el tratamiento del hipotiroidismo a principios de la década de 1990 sin haber obtenido primero la aprobación de la FDA. En 1997, la FDA, después de haber determinado que los medicamentos eran médicamente necesarios, les dio a los fabricantes un plazo determinado para conducir los estudios necesarios y obtener la aprobación de la FDA. En 2001, la FDA indicó que seguiría permitiendo a los fabricantes de medicamentos de sodio de levotiroxina no aprobados distribuir sus medicamentos no aprobados después del 14 de agosto de 2001, bajo ciertas condiciones. Una de esas condiciones era que cualquier fabricante que no hubiera obtenido la aprobación necesaria debía realizar una reducción gradual de la distribución de su medicamento no aprobado hasta obtener la aprobación de la FDA. De acuerdo con el expediente judicial, Forest tomó la decisión deliberada de seguir distribuyendo su producto Levothroid no aprobado en cantidades muy superiores a las permitidas por el plan de reducción gradual de la distribución de la FDA.
La FDA envió una carta de advertencia a Forest Pharmaceuticals el 7 de agosto de 2003, informando a la empresa que ya no tendría derecho a distribuir su producto Levothroid no aprobado.
De acuerdo con los fiscales a cargo de la acusación, después de haber recibido la carta, Forest instruyó a sus empleados en su centro de distribución de St. Louis que trabajaran horas extras hasta aproximadamente la 1 de la mañana siguiente y que, durante ese tiempo, siguieran embarcando todo el Levothroid no aprobado posible.
El expediente judicial también indica que Forest obstruyó una inspección regulatoria de la FDA relacionada con Levothroid en la fábrica de Cincinnati de Forest en noviembre de 2003. De acuerdo con los fiscales, el personal gerencial en la fábrica de Cincinnati sabía que el malfuncionamiento grave de equipos había resultado en condiciones de prueba que, por centenas de días y miles de horas, no cumplían con las exigencias de la FDA para el Levothroid fabricado para fines de investigación. Los fiscales indicaron que, en un intento de corregir este problema, ciertos miembros de la gerencia de Forest en la fábrica de Cincinnati decidieron utilizar un humidificador doméstico portátil en la sala de pruebas como solución temporal. Más tarde, cuando los inspectores de la FDA vieron este humidificador en la sala de pruebas durante una inspección regulatoria de la fábrica, ciertos miembros de la gerencia dijeron falsamente a los investigadores que simplemente se estaba guardando el humidificador portátil en la sala y que el mismo no había sido utilizado para controlar la humedad. Esta conducta fue la base para el cargo de delito mayor de obstrucción del que Forest se declaró culpable.
Forest detuvo su distribución comercial de su versión no aprobada de Levothroid a partir del 9 de agosto de 2003. Desde el otoño de 2003, Forest ha venido distribuyendo comercialmente otro medicamento de sodio de levotiroxina administrado oralmente, también llamado Levothroid. Esta resolución no está asociada a dicha producto.
Con respecto a Celexa, el expediente judicial indica que Forest promovió el uso del medicamento en tratamientos para niños y adolescentes que padecen depresión, a pesar del hecho de que la FDA solo había aprobado el medicamento para el tratamiento de la depresión adulta. Los fiscales indicaron que la promoción por Forest del uso no aprobado consistió en diversas técnicas de ventas, incluidos instruir a sus representantes que promovieran el uso de Celexa en llamadas de ventas a médicos que trataban a niños y adolescentes, y la contratación de oradores externos para que hablaran a especialistas pediátricos sobre los beneficios de recetar Celexa a niños y adolescentes. Los fiscales indicaron que, en conjunto con esta promoción de uso no aprobado, Forest publicitó enérgicamente los resultados positivos del estudio doble ciego controlado por placebo sobre el uso de Celexa en adolescentes mientras que, al mismo tiempo, Forest Pharmaceuticals ocultó los resultados negativos de un estudio europeo doble ciego y controlado por placebo contemporáneo sobre el uso de Celexa en adolescentes.
"Forest Pharmaceuticals se declaró culpable de obstruir la justicia y comercializar medicamentos para usos no aprobados, incluida la promoción indebida de un antidepresivo para uso en niños y adolescentes", dijo Tony West, Secretario de Justicia Auxiliar de la División de lo Civil del Departamento de Justicia. "Como demuestra la sentencia estricta del tribunal, no solo es inaceptable dicha conducta, sino que los contribuyentes no deben tener que pagar la cuenta por prácticas que violan la ley. "
"Tanto los casos penales como civiles se basaron en el hecho de que Forest Pharmaceuticals tomó una decisión calculada de dar mayor prioridad a aumentar las ventas de la empresa que en cumplir con las exigencias básicas legales que el Congreso y la FDA crearon para proteger al público estadounidense", dijo Carmen Ortiz, Fiscal Federal para el Distrito de Massachusetts.
Además de su sentencia de hoy, y habiendo aceptado previamente un acuerdo conciliatorio civil, Forest también ya había firmado un Acuerdo de Integridad Empresarial con el Departamento de Salud y Servicios Humanos, Oficina del Inspector General [Department of Health and Human Services, Office of Inspector General (HHS-OIG)].
"La sentencia de hoy contra Forest Pharmaceuticals es una victoria para el sistema diseñado para proteger a los pacientes contra medicamentos bajo receta potencialmente nocivos", dijo Daniel R. Levinson, Inspector General del Departamento de Salud y Servicios Humanos. "Los intentos de evadir dicho sistema al vender medicamentos indebidamente rotulados y sin aprobación sencillamente no se tolerarán".
El caso penal fue investigado y enjuiciado por el Fiscal Federal Auxiliar James E. Arnold de la Fiscalía Federal para el Distrito de Massachusetts y el Abogado Litigante Jeffrey I. Steger de la Oficina de Litigio de Consumo del Departamento de Justicia. El caso fue investigado por agentes del FBI, la HHS-OIG, la Oficina de Investigaciones Penales de la FDA y la Oficina del Inspector General del Departamento de Asuntos Veteranos. También brindaron asistencia la Oficina del Consejero General y la Oficina de Administración de Personal de la FDA.
Forest Pharmaceuticals Sentenced to Pay $164 Million for Criminal ViolationsRead the Press Release
WASHINGTON -- Drug manufacturer Forest Pharmaceuticals Inc. was sentenced today by U.S. District Judge Nancy Gertner to pay a criminal fine of $150 million and forfeit assets of $14 million following the company’s guilty plea in November 2010 to one felony count of obstructing justice, one misdemeanor count of distributing an unapproved new drug in interstate commerce and one misdemeanor count of distributing a misbranded drug in interstate commerce, the Justice Department announced. The company, a subsidiary of New York City-based Forest Laboratories Inc., pleaded guilty to charges related to obstruction of an FDA regulatory inspection, to the distribution of Levothroid, which at the time was an unapproved new drug, and to the illegal promotion of the anti-depressant drug Celexa for use in treating children and adolescents.
Today’s sentencing of Forest was the final component of a global resolution totaling more than $313 million to resolve criminal and civil allegations against Forest and its parent company in connection with the distribution and marketing of certain drugs. In September 2010, Forest Laboratories and Forest Pharmaceuticals entered a civil settlement to resolve False Claims Act charges involving three of its drugs: Levothroid, Celexa and Lexapro. As part of the civil settlement, Forest agreed to pay more $149 million, including more than $88 million to the federal government and more than $60 million to the states.
According to court documents, Forest Pharmaceuticals began distributing Levothroid for treatment of hypothyroidism in the early 1990s without first obtaining Food and Drug Administration (FDA) approval. In 1997, the FDA, after determining that the drugs were medically necessary, gave manufacturers a certain amount of time to conduct the necessary studies and obtain FDA approval. In 2001, the FDA stated that it would continue to permit manufacturers of unapproved levothyroxine sodium drugs to distribute their unapproved drugs after Aug. 14, 2001, on certain conditions. One of those conditions was that any manufacturer which had not obtained approval needed to comply with a gradual distribution phase-down of its unapproved drug until it obtained FDA approval. According to court documents, Forest made a deliberate decision to continue distributing its unapproved Levothroid product in quantities far exceeding the amounts permitted by the FDA’s distribution phase-down plan.
The FDA sent a warning letter to Forest Pharmaceuticals on Aug. 7, 2003, informing the company that it was no longer entitled to distribute its unapproved Levothroid product.
According to prosecutors, after Forest received the letter, the company directed its employees at its St. Louis distribution center to work overtime until approximately 1:00 a.m. the following morning and, during that time, to continue shipping as much of its unapproved Levothroid as possible.
Court documents also indicate that Forest obstructed an FDA regulatory inspection relating to Levothroid at Forest’s Cincinnati plant in November 2003. According to prosecutors, management personnel at the Cincinnati plant were aware that serious equipment malfunctions had resulted in testing conditions that, for hundreds of days and thousands of hours, did not comply with the FDA’s requirements for Levothroid that had been manufactured for research purposes. Prosecutors stated that in an attempt to remedy this problem, certain Forest management personnel at the Cincinnati plant decided to use a portable home humidifier in the testing room as a temporary fix. Later, when FDA inspectors saw this humidifier in the testing room during a regulatory inspection of the plant, certain management personnel falsely told the investigators that the portable humidifier was merely being stored in the room and had not been used for humidity control. This conduct was the basis for the felony obstruction charge to which Forest pleaded guilty.
Forest halted its commercial distribution of its unapproved version of Levothroid as of August 9, 2003. Since the fall of 2003, Forest has been commercially distributing a different orally administered levothyroxine sodium drug, also called Levothroid. This resolution does not involve that product.
Regarding Celexa, court documents state that Forest promoted the drug for use in treating children and adolescents suffering from depression despite the fact that the FDA had only approved the drug to treat adult depression. Prosecutors stated that Forest’s off-label promotion consisted of various sales techniques, including directing its representatives to promote pediatric use of Celexa in sales calls to doctors who treated children and adolescents, and hiring outside speakers to talk to pediatric specialists about the benefits of prescribing Celexa to children and teens. Prosecutors stated that in conjunction with this off-label promotion, Forest aggressively publicized the positive results of a double-blind, placebo-controlled Forest study on the use of Celexa in adolescents while, at the same time, Forest Pharmaceuticals suppressed the negative results of a contemporaneous double-blind, placebo-controlled European study on the use of Celexa in adolescents.
" Forest Pharmaceuticals pleaded guilty to obstructing justice and marketing drugs for unapproved uses, including improperly promoting an anti-depressant to children and adolescents," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "As the court’s stiff sentence demonstrates, not only is such conduct unacceptable, taxpayers should not foot the bill for practices that violate the law."
“Both the criminal and civil cases were predicated upon the fact that Forest Pharmaceuticals made a calculated decision to place a higher priority on increasing corporate sales than on complying with the basic, legal requirements that Congress and the FDA created to protect the American public,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts.
In addition to its sentence today, and previously agreeing to a civil settlement, Forest also previously signed a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG).
"Today’s sentencing of Forest Pharmaceuticals is a victory for the system designed to protect patients from potentially harmful prescription drugs," said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. "Attempts to circumvent that system by selling misbranded and unapproved drugs simply will not be tolerated."
The criminal case was investigated and prosecuted by Assistant U.S. Attorney James E. Arnold of the U.S. Attorney’s Office for the District of Massachusetts and Trial Attorney Jeffrey I. Steger of the Justice Department’s Office of Consumer Litigation. The case was investigated by agents from the FBI, the HHS-OIG, the FDA’s Office of Criminal Investigations and the Department of Veterans Affairs’ Office of Inspector General. Assistance was also provided by the FDA’s Office of General Counsel and the Office of Personnel Management.
Alabama Man Sentenced to 36 Months in Prison for Tax Fraud and Identity TheftRead the Press Release
WASHINGTON – Jeffery Leon Ceaser, a resident of Montgomery County, Ala., was sentenced today to 36 months in prison, the Justice Department and the Internal Revenue Service (IRS) announced today. In addition to the prison sentence, Ceaser was also ordered to $621,738.41 in restitution to the United States and serve three years of supervised release.
According to court documents, between March 2009 and September 2009, Ceaser conspired with others to defraud the United States by filing 158 false federal income tax returns. Ceaser fraudulently obtained names and Social Security numbers of individuals and provided that information to Ora Mae Adamson, who filed the false tax returns without authorization from the individuals. The tax returns falsely claimed the first-time home buyer credits and fuel tax credits. The refunds from the false tax returns were deposited into bank accounts controlled by Ceaser and other co-conspirators. In all, the IRS disbursed $621,738 in false tax refunds. Adamson has also pleaded guilty to conspiracy and identity theft charges and is scheduled to be sentenced on March 10, 2011.
John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division and Leura G. Canary, U.S. Attorney for the Middle District of Alabama, commended the IRS special agents who investigated this case and Tax Division trial attorneys Jason Poole and Michael Boteler, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/. Additional information about the Justice Department’s recent efforts to combat fraudulent claims for the first-time home buyer tax credit is available here
Tuesday 1 March 2011
South Carolina Tax Preparer Sentenced to 30 Months in Prison for Preparing False ReturnsRead the Press Release
WASHINGTON - Teresa Little Moss, a tax return preparer from McCormick, S.C., was sentenced today to 30 months in prison by U.S. District Judge J. Michelle Childs in Greenville, S.C., the Justice Department and Internal Revenue Service (IRS) announced.
On Oct. 14, 2010, Moss, formerly known as Teresa Waller Little, pleaded guilty to two counts of aiding and assisting in the preparation of false tax returns. According to court documents, Moss owned and operated The Little Tax Shop, a tax return preparation business with locations in McCormick and Abbeville, S.C.. The business served clients from throughout the state. For tax years 2004 through 2007, she willfully prepared, and aided and assisted in the preparation of, materially false tax returns for numerous clients.
The charges to which Moss pleaded guilty relate to the 2005 and 2006 tax returns of a particular client. The tax loss associated with these charged counts was $18,977. Including relevant conduct, the tax loss associated with this case was $557,429.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in the case and Tax Division trial attorneys Tracy Gostyla and Michelle Petersen, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.justice.gov/tax/.
Oregon Man Pleads Guilty to Operating Illegal Money Transmitting Business That Moved More Than $172 Million Through Shell Corporations in the United StatesRead the Press Release
WASHINGTON – Victor Kaganov, who emigrated from Russia and set up numerous shell corporations in Oregon on behalf of Russian clients, pleaded guilty today to charges of operating an unlicensed money transmitting business, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Dwight C. Holton for the District of Oregon. The shell corporations were used to move more than $172 million into the United States and out to more than 50 countries.
"Using shell corporations to hide his illegal activities, Mr. Kaganov funneled more than $170 million into the United States and then back out to more than 50 countries around the world," said Assistant Attorney General Breuer. "Following the money trail is a hallmark of good law enforcement, but those efforts depend on transparency in financial transactions. Now more than ever, we are determined to bring to justice those who attempt to hide funds in U.S. financial institutions."
"When shell corporations are illegally manipulated in the shadows to hide the flow of tens of millions dollars overseas, it threatens the integrity of our financial system. Sunshine kills the stink of corruption – our laws aim to bring the sunshine in, and we will enforce these laws vigorously," said U.S. Attorney Holton.
"We will not allow Oregon to be used like the corner ATM for people in foreign countries," said Arthur Balizan, Special Agent in Charge of the FBI in Oregon. "Crimes like these eat away at the stability and prosperity of the American financial system."
Kaganov, 69, a naturalized U.S. citizen living in Tigard, Ore., pleaded guilty to one count of operating an unlicensed money transmitting business after more than 4,200 wire transactions had been made. Kaganov was charged with the offense on March 3, 2010.
According to court documents, Kaganov emigrated from Russia to the United States in 1998. In order to move money in and out of the United States, Kaganov created various shell corporations under Oregon law, and then opened bank accounts into which he deposited money he received from his Russian clients. Kaganov admitted he would then wire the money out of the accounts based on wire instructions he received from his clients.
According to court documents, Kaganov did not comply with Oregon laws requiring him to obtain a license to operate the money transmitting business and he failed to register his money transmitting operation with the U.S. Department of Treasury, as required by federal statutes and regulations.
At sentencing, scheduled for April 19, 2011, Kaganov faces a maximum penalty of five years in prison, a $250,000 fine and three years of supervised release following the prison term. However, as part of Kaganov’s plea agreement, the government has agreed to recommend a sentence of not more than 18 months.
This case was investigated by the FBI as part of a larger investigation into the use of Oregon shell corporations by foreign businesses and individuals to facilitate the movement of illicit funds. This case included significant assistance received from FBI field offices located throughout the United States, as well as various FBI Legal Attaché offices in Europe and Asia.
This case is being prosecuted by Assistant U. S. Attorney and Senior Litigation Counsel Allan M. Garten for the District of Oregon, Trial Attorney Robert Livermore of the Criminal Division’s Organized Crime and Racketeering Section and Trial Attorney Michael Mosier of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
Massachusetts Antique Dealer Sentenced to 33 Months in Prison for Trafficking in Illegally-Imported Narwhal Tusks and Sperm Whale TeethRead the Press Release
WASHINGTON—David L. Place, owner of Manor House Antiques Cooperative in Nantucket, Mass., was sentenced to 33 months in prison for illegally importing and trafficking in Narwhal tusks and Sperm Whale teeth, the Department of Justice and the National Oceanic and Atmospheric Association (NOAA) announced today.
On Nov. 19, 2010, a federal jury in Boston convicted Place of eight counts including conspiracy, Lacey Act violations and smuggling for buying and illegally importing Sperm Whale teeth and Narwhal tusks into the United States, as well as selling the teeth and tusks after their illegal importation. The market value of the teeth and tusks illegally imported and sold by Place was determined to be between $200,000 and $400,000. One of Place’s co-conspirators, Andrei Mikhalyov of Odessa, Ukraine, pleaded guilty in federal court in Boston on related charges. Mikhalyov served a nine month prison sentence and was deported to the Ukraine.
Sperm Whales are listed as “endangered” under the Endangered Species Act (ESA), and are listed on Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Narwhals are listed as “threatened” under the ESA, and are listed on Appendix II of CITES. It is illegal to import parts of either the Sperm Whale or the Narwhal into the United States without the requisite permits/certifications, and without declaring the merchandise at the time of importation to U.S. Customs and Border Protection and the U.S. Fish and Wildlife Service.
“The unlawful importation of endangered species is a serious crime that the Justice Department is committed to stopping,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “We will not tolerate the illegal market in endangered species such as the Narwhal and the Sperm Whale, and we will continue to prosecute those who violate the law.”
“NOAA takes its responsibilities for protection of marine species under the Endangered Species Act and CITES very seriously,” said Eric Schwaab, Assistant Administrator for NOAA's Fisheries Service. “We applaud today's decision and hope it serves as a strong warning to others who would harm threatened or endangered species for commercial gain.”
The case was investigated by agents from the Law Enforcement Offices of NOAA, U.S. Fish and Wildlife Service and Immigration and Customs Enforcement. The case was prosecuted by Trial Attorneys Gary N. Donner and James B. Nelson of the Department of Justice’s Environmental Crimes Section.
Four Individuals Arrested for Armed Home Invasion Robbery in Bartonsville, PennsylvaniaRead the Press Release
WASHINGTON - FBI agents today arrested four people in connection with an armed home invasion robbery in Bartonsville, Penn., announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania and Special Agent in Charge George C. Venizelos of the FBI’s Philadelphia Field Office.
A federal grand jury in Philadelphia returned the seven-count indictment unsealed today, which charges Buu Huu Truong, aka "Thanh," 35, of Upper Darby, Penn.; Den Van Nguyen, aka "Son," 40, of Philadelphia; Tahn Le, 43, of Philadelphia; and Thach Van Truong aka "Michael," 33, of Wall Township, N.J. The defendants are charged variously with conspiracy to commit robbery that interferes with interstate commerce, robbery that interferes with interstate commerce, brandishing a firearm during a crime of violence and possession of a firearm by a convicted felon. The defendants were arrested without incident this morning and will make initial appearances in U.S. District Court in Philadelphia today.
According to the indictment, in January 2010, Truong, Den Van Nguyen, Thach Van Nguyen, Le and Teo Van Bui met in Philadelphia and discussed the fact that they believed that a nail salon owner kept a large amount of proceeds from his businesses in his residence. On Jan. 26, 2010, these defendants entered the owner’s residence shortly after he and his family arrived home. The defendants brandished weapons, threatened the victims and tied the nail salon owner up with duct tape. The indictment alleges the defendants stole, or attempted to steal, cash, jewelry and other valuables from the home.
Bui was previously indicted on Nov. 3, 2010, for the same offenses. The conspiracy to commit robbery and robbery charges each carry a maximum penalty of 20 years in prison and a $250,000 fine. The firearms charges each carry a maximum penalty of life in prison and a $250,000 fine.
An indictment is merely an accusation, and defendants are presumed innocent until proven guilty in a court of law.
The case was investigated by the FBI; the Pocono, Penn., Township Police; the Philadelphia Police Department and the Pennsylvania State Police. The case is being prosecuted by Trial Attorney Robert J. Livermore of the Criminal Division’s Organized Crime and Racketeering Section.
Arch Coal to Pay $4 Million to Settle Clean Water Act Violations in Appalachian Mining OperationsRead the Press Release
WASHINGTON -- Arch Coal Inc., the second largest supplier of coal in the United States, has agreed to pay a $4 million penalty to settle alleged violations of the Clean Water Act in Virginia, West Virginia and Kentucky, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced today. Under the settlement, Arch Coal will implement changes to its mining operations in Virginia, West Virginia and Kentucky to ensure compliance with the Clean Water Act.
“The measures required by this settlement will prevent pollutants from entering waterways and bring wide-ranging improvements to mining operations in four mining complexes across three states,” said Ignacia. S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice. “These changes will mean a healthier environment for local communities and will help ensure Arch Coal’s compliance with the Clean Water Act.”
“Violations at mining operations can have significant environmental and public health consequences, including the pollution of the waters that people use for drinking, swimming and fishing,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “It is critical that companies operating next door to homes, schools and other businesses meet the standards established to protect the health and the environment for these communities.”
As part of the settlement, Arch Coal has agreed to take measures that will prevent an estimated two million pounds of pollution from entering the nation’s waters each year. Arch will also implement a treatment system to reduce discharges of selenium, a pollutant found in mine discharges. Selenium runoff from mining operations can build up in streams and have an adverse impact on aquatic organisms.
A joint federal-state complaint filed in U.S. District Court in the Southern District of West Virginia by the United States, West Virginia and Kentucky alleged numerous violations of Arch Coal’s permits that set limits on pollutants to be discharged into streams. The alleged excess discharges of iron, total suspended solids, manganese and other pollutants reflect deficiencies in operation and maintenance of wastewater treatment systems in place at four of the company’s mining facilities: Coal Mac Inc; Lone Mountain Processing Inc; Cumberland River Coal Co.; and Mingo Logan Coal Co.
As part of the settlement, the company has agreed to implement a series of inspections, audits and tracking measures to ensure treatment systems are working properly and that future compliance is achieved. The company is also required to develop and implement a compliance management system to help foster a top-down, compliance and prevention-focused approach to Clean Water Act issues.
Under the settlement, $2 million of the $4 million civil penalty will be paid to the United States and the remaining $2 million will be divided between West Virginia and Kentucky based on the percentage of alleged violations in each state.
The consent decree, which is subject to a 30-day public comment period and final court approval, is available at: www.justice.gov/enrd/
More information on the settlement: www.epa.gov/compliance/resources/cases/civil/cwa/arch.html
Alleged New England La Cosa Nostra Members and Associates Charged in Superseding Indictment with Racketeering and Other CrimesRead the Press Release
WASHINGTON – Four alleged members and associates of the New England La Cosa Nostra (LCN), including an alleged former boss, were charged with crimes involving racketeering, extortion and related crimes in a superseding indictment unsealed today in Providence, R.I.
The charges and arrests were announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Peter F. Neronha for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Brendan P. DohertySuperintendent of the Rhode Island State Police; Steven M. Pare, Providence Public Safety Commissioner; and William P. Offord, Special Agent in Charge of the Boston office of the Internal Revenue Service, Criminal Investigations (IRS-CI.)
The superseding indictment charges alleged longtime New England LCN boss Luigi Manocchio, 83, aka “Louie,” aka “Baby Shacks,” aka “the Professor,” and aka “the Old Man;” and associates Thomas Iafrate, 61; Richard Bonafiglia, 57; and Theodore Cardillo, 67, with racketeering conspiracy and extortion conspiracy. Manocchio and Iafrate, who were charged previously in an indictment unsealed on Jan. 20, 2011, also face extortion charges.
The department announced charges against 127 individuals, including 91 alleged leaders, members and associates – including Manocchio and Iafrate - of LCN families in four districts on Jan. 20, 2011, as part of a coordinated enforcement action against the LCN.
“Today’s arrests and charges are among a series of recent blows to organized crime across the country, including in Rhode Island,” said Assistant Attorney General Breuer. “This indictment comes on the heels of last month’s takedown of over 100 defendants associated with Armenian Power and other transnational organized crime groups, and of our historic enforcement action in January against nearly 100 La Cosa Nostra members and associates. If the mafia thought they could operate in the shadows and get away with it, they now know better. Our recent and sustained efforts leave no doubt that we are pursuing La Cosa Nostra and other violent organized crime groups aggressively.”
“As Attorney General Holder stated in New York earlier this year, battling organized crime remains a priority for the Department of Justice. Unchecked, it extends its tentacles into our citizens’ everyday lives. This office will continue to work closely with the investigative team and our colleagues in the department’s Criminal Division to deal with this threat,” said U.S. Neronha. “This indictment is the result of a multi-year investigation in which my office has worked closely with the Department of Justice’s Organized Crime and Racketeering Section in Washington. I also want to acknowledge the excellent work of investigators in this case, from the FBI, the Rhode Island State Police and the Providence Police Department. I have seen no better example of federal, state and local law enforcement cooperation.”
“The investigation that led to today’s indictment is an example of the cooperative efforts of the Providence Organized Crime Task Force,” said Special Agent in Charge DesLauriers of the FBI’s Boston Field Office. “The combined decades of investigative experience and knowledge of La Cosa Nostra of the Rhode Island State Police, Providence Police Department, IRS, FBI and the U.S. Attorney’s Office resulted in this extraordinary investigation. In Rhode Island, and throughout New England, organized crime will continue to be a top criminal priority of the FBI. Our joint efforts will continue to disrupt and dismantle national and transnational criminal syndicates. Through our task force and intelligence based model, we will use every capability and tool we have at our disposal to target the NELCN and other similar organized crime groups.”
The superseding indictment alleges that for more than two decades, the defendants and others extorted local adult bookstores and nightclubs for monthly “protection” payments by promoting a climate of fear through threats of force and violence, among other illegal activity.
Bonafiglia and Cardillo were arrested this morning and made initial appearances in U.S. District Court in Providence today. The court entered not guilty pleas on Bonafiglia and Cardillo’s behalf. Cardillo was released on a $50,000 unsecured bond and was ordered to have no contact with the business, employees or owners of any adult entertainment establishment. Bonafiglia was detained, pending a bail hearing on March 10, 2011. Manocchio was arrested in Miami on Jan. 19, 2011, and was removed to Rhode Island, where he continues to be detained pending a bail hearing on March 8, 2011. Iafrate was arrested in Providence on Jan. 20, 2011, and released on bail.
According to the indictment, the New England LCN family operates in Providence, among other places, and routinely engages in violence and threatens violence to promote a climate of fear, preserve its power, and enrich its members and associates through extortion. The New England LCN has a hierarchical structure, with an administration comprised of a boss, underboss and capos at the top overseeing crews of criminals, including members and associates who commit crimes and serve as insulation from criminal exposure for the leadership of the enterprise.
The superseding indictment alleges that Manocchio received monthly protection payments, paid in cash by the owners and operators of certain adult entertainment businesses in Providence, including the Satin Doll and the Cadillac Lounge. Iafrate served as the bookkeeper for these and other businesses. Iafrate was responsible for setting aside, collecting and delivering the protection payments to Manocchio on behalf of these businesses. According to the superseding indictment, the monthly payments ranged from $4,000 to $6,000 per month. Finally, Bonafiglia and Cardillo allegedly were hired as a bouncer and manager, respectively, at the Cadillac Lounge upon direction from Manocchio to the owner. The indictment alleges that Bonafiglia and Cardillo provided information to Manocchio about the ongoing business affairs of the lounge in order for Manocchio to maintain control over the club.
Each charge of racketeering conspiracy, extortion conspiracy and extortion carries a maximum penalty of 20 years in prison and a $250,000 fine. The charges announced today are merely allegations, and defendants are presumed innocent unless proven guilty in a court of law.
The case is being prosecuted by Trial Attorney Scott Lawson of the Criminal Division’s Organized Crime and Racketeering Section, Trial Attorney Sam Nazzaro of the Criminal Division’s Gang Unit and by Assistant U.S. Attorney William Ferland for the District of Rhode Island. The case is being investigated by the FBI, IRS-CI, the Rhode Island State Police and the Providence Police Department.
Monday 28 February 2011
Mississippi Companies to Pay $2 Million for Selling Thousands of Engines from China That Failed to Meet Clean Air Act StandardsRead the Press Release
WASHINGTON – Mississippi-based PowerTrain Inc., Wood Sales Inc., and Tool Mart Inc., (collectively known as “PowerTrain”) will jointly pay a civil penalty of $2 million to resolve claims that the company imported and sold almost 80,000 nonroad engines and equipment that were not covered by emissions-related certificates of conformity, and in most cases could not be certified because they exceeded emissions standards under the Clean Air Act, the U.S. Justice Department and the U.S. Environmental Protection Agency (EPA) announced today.
Under the settlement filed in federal court today, PowerTrain will implement a plan to ensure that the engines and equipment they import in the future comply with Clean Air Act regulatory requirements. PowerTrain will also implement projects to offset the excess pollution from these engines. For one of its offset projects, which is estimated to cost $600,000, PowerTrain will provide subsidies for consumers to replace older, dirtier wood stoves with efficient, EPA-certified wood stoves.
“As this settlement shows, we will vigorously enforce the law to ensure that Americans buying foreign imports get environmentally sound products that conform with U.S. laws,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “We will not allow those who cut corners and violate federal emission standards to gain an unfair economic advantage over responsible businesses who comply with our nation's clean air law.”
“We enforce the standards for emissions from imported engines to protect the air we breathe and at the same time protect responsible companies that play by the rules,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement helps ensure cleaner air and a level playing field for companies that meet U.S. emissions standards.”
Between 2002 and 2008, PowerTrain Inc. imported 79,830 nonroad engines or pieces of equipment into the U.S. that were not covered by Clean Air Act-required certificates of conformity. The engines and equipment were then sold to businesses and individuals through Wood Sales Inc. and Tool Mart Inc. The engines and equipment were not covered by certificates of conformity because they were different models, had different power ratings or were made by a different manufacturer than was listed on the certificates. The engines also lacked two-year emissions-related warranties, as required by law.
EPA estimates that the PowerTrain engines that were sold to the public caused excess emissions of hydrocarbons and nitrogen oxides, which contribute to the formation of ground-level ozone. Ground level ozone can trigger a variety of health problems, including chest pain, coughing, throat irritation and congestion. It can also worsen bronchitis, emphysema and asthma.
The settlement is the latest in a series of cases brought as part of EPA’s effort to ensure that vehicles and engines imported into the U.S. comply with Clean Air Act standards. The Justice Department and EPA announced settlements with Pep Boys – Manny, Moe and Jack and Baja Inc., in 2010 and with the McCulloch Corporation, Jenn Feng Industrial Co. Ltd., MTD Southwest Inc. and MTD Products Inc. in 2008.
The proposed consent decree lodged with the U.S. District Court for the District of Columbia, will be subject to a 30-day public comment period.
Information on EPA requirements for imported vehicles and engines: www.epa.gov/otaq/imports/index.htm
Justice Department Sues California Lawyer and Accountant to Bar Them from Promoting Tax Fraud SchemesRead the Press Release
WASHINGTON - The United States has asked a federal court to bar Scott Waage, a San Diego tax lawyer, and Robert Jensen, a San Diego accountant, from promoting several fraudulent tax schemes and from preparing any more federal tax returns, the Justice Department announced today. According to the government’s civil injunction complaint, Waage promotes schemes that illegally reduce the taxes of his high-income customers through the use of sham consulting companies and through the creation of discriminatory pension and employee benefit plans that only benefit highly-compensated employees. Jensen allegedly prepares tax returns claiming bogus tax deductions associated with these schemes.
As alleged in the complaint, one of the schemes involves creating sham consulting corporations, purportedly headquartered in customers’ personal residences, that do not actually perform consulting services. Rather, customers allegedly funnel funds to the corporations to pay for their personal expenses, which they then deduct on the corporate income tax returns. Other alleged schemes involve unlawfully using employee benefit plans to pay customers’ personal expenses and unlawfully using pension plans to increase and accelerate deductions and avoid income taxes on plan pay outs.
In an example detailed in the government complaint, Waage allegedly assisted a Solana Beach, Calif., couple in establishing a new consulting corporation “headquartered” in their personal residence. Waage and Jensen then allegedly helped the couple improperly deduct their personal living expenses, including utility bills, gardening expenses and even personal vacations to Hawaii. The complaint also alleges that Waage has used these fraudulent schemes to reduce his own reported taxable income by $4.5 million and that Jensen has used them to deduct personal vacations and his daughter’s college tuition. The government alleges that the Internal Revenue Service has audited more than 1,000 tax returns as a result of Waage and Jensen’s tax schemes, and it estimates that the harm to the U.S. Treasury from the schemes exceeds $10.8 million.
Since 2001, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent tax returns. Information about these cases is available on the Tax Division’s website.
Related Documents:
United States v. Scott Waage, et al.
Complaint for Permanent Injunction and Other Relief
(PDF document)Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader
Accessibility InformationFormer Tennessee Inmate Pleads Guilty to Filing False ClaimsRead the Press Release
WASHINGTON - Walter Allen Johnson, aka “Beau” Johnson, a former Tennessee prison inmate, has pleaded guilty to an indictment charging a conspiracy to defraud the United States by filing false claims as well as 11 counts of filing false claims against the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to charging documents, from February 2006 through January 2007, Johnson, while incarcerated in the Tennessee Department of Correction, conspired to defraud the United States by submitting false tax returns claiming refunds on behalf of inmates. Johnson collected Social Security numbers from inmates and recruited other inmates to collect the numbers for him. Johnson and his co-conspirators then used those numbers to file false income tax forms with the IRS in the names of inmates, claiming refunds to which the inmates were not entitled.
According to the indictment, as a result of the scheme to file false tax returns, Johnson and his co-conspirators collected approximately 88 U.S. Treasury checks totaling $58,651.80.
A sentencing date has not yet been set. If convicted, Johnson faces a maximum potential sentence of 65 years in prison and maximum fines of $3 million.
The case is being prosecuted by Tax Division trial attorneys Michelle M. Petersen and Kathryn B. Ward. The case was investigated by the IRS-Criminal Investigation Division.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.justice.gov/tax/.
California Man Convicted of Producing <br /> and Possessing Child PornographyRead the Press Release
WASHINGTON – Edward Lee Sullivan, of Oakland, Calif., was convicted on Feb. 25, 2011, of one count of producing and one count of possessing child pornography, announced U.S. Attorney Melinda Haag of the Northern District of California and Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Sullivan, 38, was found guilty by U.S. District Court Judge D. Lowell Jensen of the Northern District of California after a bench trial.
Evidence presented at trial showed that during a two-week period in March 2008, Sullivan trained a 14 year-old girl to work for him as a child prostitute. During the course of those two weeks, Sullivan produced numerous photographs and videos of the minor, which documented the steps Sullivan took to prepare the 14 year-old to work as a prostitute. According to trial evidence, Sullivan filmed at least one pornographic video of the minor, which depicted Sullivan instructing the minor as she performed oral sex on him. Evidence at trial established that Sullivan uploaded at least one photograph to the Internet as part of a sexually explicit posting on an adult dating website.
Sullivan is scheduled to be sentenced on June 10, 2011, and faces a maximum sentence of up to life in prison and a fine of $250,000.
The case is being prosecuted by Assistant U.S. Attorneys Andrew S. Huang and Maureen C. Bessette of the Northern District of California and Trial Attorney Alecia Riewerts Wolak of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The investigation was conducted by the FBI, the Berkeley Police Department and the Oakland Police Department.
Friday 25 February 2011
New Hampshire Man Sentenced to 15 Years in Prison for<br /> Engaging in a Child Exploitation EnterpriseRead the Press Release
WASHINGTON – Patrick Carney of Manchester, N.H., was sentenced today in the Western District of Pennsylvania to 15 years in prison and a lifetime of supervised release for engaging in a child exploitation enterprise, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the Western District of Pennsylvania David J. Hickton and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge John Kelleghan.
Carney, 67, pleaded guilty before U.S. District Court Judge Arthur J. Schwab on June 4, 2010, to one count of engaging in a child exploitation enterprise. According to court documents and proceedings, Carney and others distributed images and videos of children being sexually abused to other members of an international group that had restricted membership and was formed on a social networking website. Members of the group distributed to one another thousands of sexually explicit images and videos of children, many of which graphically depicted prepubescent, male children, including some infants, being sexually abused and sometimes sodomized or subjected to bondage.
This case was investigated by HSI in Pittsburgh and the High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Assistant U.S. Attorney Craig W. Haller of the Western District of Pennsylvania and CEOS Trial Attorney Andrew McCormack prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Massachusetts Man Sentenced to 10 Years in Prison for Child Pornography ChargeRead the Press Release
WASHINGTON – William F. Murphy, 51, of West Roxbury, Mass., was sentenced today to 10 years in prison to be followed by 10 years of supervised release for a child pornography offense, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the District of Massachusetts Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office.
Murphy was sentenced by U.S. District Court Chief Judge Mark L. Wolf in the District of Massachusetts. On Aug. 13, 2010, Murphy pleaded guilty to one count of knowingly accessing child pornography with intent to view. This case arose from an FBI investigation of Murphy’s use of online peer-to-peer software to access and view visual depictions of minor females engaging in sexually explicit conduct. These images included depictions of prepubescent girls, and sadistic and masochistic conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case against Murphy was prosecuted by Assistant U.S. Attorney Michael I. Yoon of the District of Massachusetts and CEOS Trial Attorney Bonnie L. Kane of the Criminal Division. The case was investigated by the FBI.
Justice Department Reaches Settlement with Texas Hospital Prohibiting Anticompetitive Contracts with Health InsurersRead the Press Release
WASHINGTON – The Department of Justice announced today that it has reached a settlement with United Regional Health Care System of Wichita Falls, Texas, that prohibits it from entering into contracts that improperly inhibit commercial health insurers from contracting with United Regional’s competitors. The department said that United Regional unlawfully used these contracts to maintain its monopoly for hospital services in violation of Section 2 of the Sherman Act, causing consumers to pay higher prices for health care services. This is the first case brought by the department since 1999 that challenges a monopolist with engaging in traditional anticompetitive unilateral conduct.
The Department of Justice’s Antitrust Division, along with the Texas Attorney General’s office, filed a civil antitrust lawsuit in U.S. District Court for the Northern District of Texas, along with a proposed settlement that, if approved by the court, would resolve the lawsuit.
"Unfettered competition among hospitals is vital to ensuring that patients receive high-quality, low-cost health care," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "Today’s settlement prevents a dominant hospital from using its market power to harm consumers by undermining its competitors’ ability to compete in the marketplace."
According to the complaint, United Regional is by far the largest hospital in Wichita Falls. Its share of general acute-care inpatient hospital services is approximately 90 percent, and its share of outpatient surgical services is more than 65 percent. It is the region’s only provider of certain essential services such as cardiac surgery, obstetrics and high-level trauma care. In Wichita Falls, United Regional’s average per-day rate for inpatient hospital services sold to commercial health insurers is about 70 percent higher than its closest competitor for the services that are offered by both hospitals.
The department said that in order to maintain its monopoly in the provision of inpatient hospital and outpatient surgical services, United Regional systematically required most commercial health insurers to enter into contracts that effectively prohibited them from contracting with United Regional’s competitors. United Regional’s contracts required these insurers to pay significantly higher prices if they contracted with a nearby competing facility. Since United Regional is a must-have hospital for any insurer that wants to sell health insurance in the Wichita Falls area, and because the penalty for contracting with United Regional’s rivals was so significant, almost all insurers offering health insurance in Wichita Falls entered into exclusionary contracts with United Regional. As a result, competing hospitals and facilities could not obtain contracts with most insurers and were less able to compete, helping United Regional maintain its monopoly in the relevant markets and raising health-care costs to the detriment of consumers.
The proposed settlement, which if accepted by the court would be in effect for seven years, restores lost competition by prohibiting United Regional from using agreements with commercial health insurers that improperly inhibit insurers from contracting with United Regional’s competitors. In particular, United Regional is prohibited from conditioning the prices or discounts that it offers to commercial health insurers based on whether those insurers contract with other health-care providers and from inhibiting insurers from entering into agreements with United Regional’s rivals. United Regional is also prohibited from taking any retaliatory actions against an insurer that enters into an agreement with a rival provider.
United Regional Health Care System is a private Texas nonprofit corporation, with its principal place of business in Wichita Falls. United Regional had net patient revenues of approximately $265 million for 2009.
The proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Joshua H. Soven, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St. N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Jury Convicts Alabama Woman of Aggravated Identity Theft and Making False Statements to the Internal Revenue ServiceRead the Press Release
WASHINGTON - A Montgomery, Ala., jury has convicted Sharon Thurman of Elmore, Ala., of 14 counts of making false claims, two counts of theft of government money and two counts of aggravated identity theft, the Justice Department and Internal Revenue Service (IRS) announced today. The trial began on Feb. 22, 2011.
According to the indictment and evidence introduced during trial, Thurman owned and operated Sharon’s Tax Service in Elmore. Between January and April 2008, Thurman filed 14 fraudulent tax returns using stolen identities. Thurman directed the tax refunds for those returns to be deposited into her bank accounts. At trial, the 14 victims of identity theft testified that they did not know Thurman, they did not authorize her to file tax returns on their behalf, the tax returns filed by Thurman were fictitious and they did not receive any of the tax refunds from those false returns.
U.S. District Judge W. Harold Albritton III, has not yet scheduled sentencing. Thurman faces a minimum of two years in prison, a maximum of 94 years in prison and a maximum fine of $4 million.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the IRS Criminal Investigation special agents who investigated the case as well as Tax Division Trial Attorneys Justin Gelfand and Michael Boteler and Assistant U.S. Attorney Jared Morris, who prosecuted the case. Acting Assistant Attorney General DiCicco also thanked U.S. Attorney for the Middle District of Alabama Leura G. Canary and her entire office for their assistance.
El Departamento de Justicia logra acuerdo conciliatorio con hospital de Texas que prohíbe contratos anticompetitivos con aseguradoras de saludRead the Press Release
WASHINGTON - El Departamento de Justicia anunció hoy que ha logrado un acuerdo conciliatorio con United Regional Health Care System de Wichita Falls, Texas, que le prohíbe la realización de contratos que inhiban indebidamente a aseguradoras de salud comerciales realizar contratos con la competencia de United Regional. El departamento dijo que United Regional utilizó estos contratos ilícitamente para mantener su monopolio de servicios hospitalarios en violación de la Sección 2 de la Ley Sherman, haciendo con que los consumidores pagaran precios más altos por servicios médicos. Esta es la primera demanda entablada por el departamento desde 1999 disputando conducta unilateral anticompetitiva tradicional de un monopolista.
La División Antimonopolios del Departamento de Justicia, junto con la oficina del Secretario de Justicia de Texas, entabló una demanda civil antimonopolios en el Tribunal Federal para el Distrito Norte de Texas, junto con la propuesta de un acuerdo conciliatorio que, de ser aprobada por el tribunal, resolvería la demanda.
"La competencia sin trabas entre hospitales es vital para garantizar que los pacientes reciban atención médica de bajo costo y alta calidad", dijo Christine Varney, Secretaria de Justicia Auxiliar a cargo de la División Antimonopolios del Departamento de Justicia. "El acuerdo conciliatorio de hoy evita que un hospital dominante utilice su poder de mercado para perjudicar a los consumidores al socavar la capacidad de la competencia de competir en el mercado. "
De acuerdo con la demanda, United Regional es primordialmente el hospital más grande de Wichita Falls. Su participación en servicios hospitalarios generales de cuidados agudos con internación es de aproximadamente el 90 por ciento, y su participación en servicios quirúrgicos ambulatorios es superior al 65 por ciento. Es el único proveedor en la región de ciertos servicios esenciales, tales como cirugía cardiaca, obstetricia y atención de trauma de alto nivel. En Wichita Falls, la tasa media diaria de United Regional de servicios hospitalarios con internación vendidos a aseguradoras de salud comercial es alrededor de un 70 por ciento superior a la de su competidor más cercano por los servicios ofrecidos por ambos hospitales.
El departamento dijo que, a fin de mantener su monopolio en la provisión de servicios hospitalarios con internación y quirúrgicos ambulatorios, United Regional sistemáticamente exigió que la mayoría de las aseguradoras de salud comerciales firmaran contratos que las prohibía efectivamente de realizar contratos con la competencia de United Regional. Los contratos de United Regional exigían que dichas aseguradoras pagaran precios significativamente más altos si realizaban contratos con un establecimiento próximo. Debido a que United Regional es un hospital con el que una aseguradora no puede dejar de trabajar si desea vender seguros de salud en el área de Wichita Falls, y porque la penalidad por realizar contratos con los rivales de United Regional era tan significativa, casi todas las aseguradoras que ofrecían seguros de salud con Wichita Falls realizaban contratos exclusivos con United Regional. Como resultado, los hospitales y establecimientos de la competencia no podían obtener contratos con la mayoría de las aseguradoras y tenían menos posibilidades de competir, ayudando a United Regional a mantener su monopolio en mercados relevantes y elevando los costos de atención médica en perjuicio de los consumidores.
El acuerdo conciliatorio propuesto, el que, si aceptado por el tribunal tendría vigencia por siete años, restaura la competencia perdida al prohibirle a United Regional utilizar acuerdos con aseguradoras comerciales que inhiban indebidamente a las aseguradoras de realizar contratos con la competencia de United Regional. En particular, se le prohíbe a United Regional condicionar los precios o descuentos que ofrece a aseguradoras de salud comerciales con base en si dichas aseguradoras realizan contratos con otros proveedores de salud, así como inhibir a las aseguradoras de realizar acuerdos con los rivales de United Regional. También se le prohíbe a United Regional tomar represalias contra una aseguradora que realice un acuerdo con un proveedor rival.
United Regional Health Care System es una empresa privada sin fines de lucro establecida en Texas, con su principal sede comercial en Wichita Falls. United Regional obtuvo ingresos netos de aproximadamente 265 millones de dólares por servicios prestados a pacientes en 2009.
El acuerdo conciliatorio propuesto, junto con la declaración de impacto competitivo del departamento, será publicado en el Registro Federal, como lo exige la Ley de Procedimientos y Penalidades Antimonopolios. Cualquier persona puede presentar comentarios por escrito relacionados con el acuerdo conciliatorio propuesto dentro delos 60 días de su publicación a durante un periodo de comentario de 60 días a Joshua H. Soven, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St. N.W., Suite 4100, Washington, D.C. 20530. Al finalizar el periodo de comentario de 60 días, el tribunal puede emitir su fallo final sobre este hecho de interés público.
Department of Justice and USDA Announce Process to Resolve Discrimination Claims of Hispanic and Women FarmersRead the Press Release
WASHINGTON – As part of continued efforts to close the chapter on allegations that discrimination occurred at U.S. Department of Agriculture (USDA) in past decades, Agriculture Secretary Tom Vilsack and Assistant Attorney General for the Civil Division Tony West today announced the establishment of a process to resolve the claims of women and Hispanic farmers and ranchers who assert that they were discriminated against when seeking USDA farm loans.
“The Obama Administration has made it a priority to resolve all claims of past discrimination at USDA, and we are committed to closing this sad chapter in USDA’s history,” said Secretary Vilsack. “Women and Hispanic farmers and ranchers who allege past discrimination can now come forward to participate in a claims process in which they have the opportunity to receive compensation.”
“Under the resolution announced today, USDA and Hispanic and women farmers will be able to move forward and focus on the future,” said Assistant Attorney General West. “The administrative process being established will give Hispanic and women farmers who believe they suffered discrimination the chance to have their claims heard.”
The claims process offers a streamlined alternative to litigation and provides at least $1.33 billion in compensation, plus up to $160 million in farm debt relief, to eligible women and Hispanic farmers and ranchers. This announcement follows the Obama Administration’s settlement of longstanding litigation brought by African-American farmers and Native American farmers.
The program announced today provides up to $50,000 for each Hispanic or woman farmer who can show that USDA denied them a loan or loan servicing for discriminatory reasons for certain time periods between 1981 and 2000. Hispanic or female farmers who provide additional proof and meet other requirements can receive a $50,000 reward. Successful claimants are also eligible for funds to pay the taxes on their awards and for forgiveness of certain existing USDA loans. There are no filing fees or other costs to claimants to participate in the program. Participation is voluntary, and individuals who opt not to participate are not precluded by the program from filing a complaint in court.
In conjunction with this announcement, USDA is launching an outreach effort to potential claimants that will include a call center for farmers and ranchers, a website, public service announcements and in-person meetings around the country. Individuals interested in participating in the claims process may register to receive a claims package, or may obtain more information, by visiting www.farmerclaims.gov . Beginning March 15, 2011, individuals can register to receive a claims package by calling the Farmer and Rancher Call Center at 1-888-508-4429. USDA cannot provide legal advice to potential claimants. Persons seeking legal advice may contact a lawyer or other legal services provider.
Under Secretary Vilsack’s leadership, USDA is addressing civil rights complaints that go back decades, and today’s announcement is another major step towards achieving that goal. USDA is committed to resolving allegations of past discrimination and ushering in “a new era of civil rights” for USDA. In February 2010, Secretary Vilsack and Associate Attorney General Tom Perrelli announced the Pigford II settlement with African-American farmers. In October 2010, Secretary Vilsack and Assistant Attorney General West announced the Keepseagle settlement with Native American farmers. Meanwhile, Secretary Vilsack continues to advocate for resolution of all remaining claims of past discrimination against USDA.
Thursday 24 February 2011
Virginia Man Sentenced to 25 Years in Prison<br /> for Providing Material Support and <br /> Encouraging Violent Jihadists to Kill U.s. CitizensRead the Press Release
WASHINGTON – Zachary Adam Chesser, 21, of Fairfax County, Va., was sentenced today to 25 years in prison, followed by three years of supervised release, for communicating threats against the writers of the South Park television show, soliciting violent jihadists to desensitize law enforcement, and attempting to provide material support to Al-Shabaab, a designated foreign terrorist organization.
The sentencing was announced by David Kris, Assistant Attorney General for the National Security Division; Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; and James W. McJunkin, Assistant Director in Charge of the FBI Washington Field Office.
“Zachary Chesser attempted to provide material support to a foreign terrorist organization and used the Internet to incite violence,” said Assistant Attorney General Kris. “Today he is being held accountable for his actions. I applaud the many agents, prosecutors and analysts who worked tirelessly to bring this man to justice.”
“Zachary Chesser will spend 25 years in prison for advocating the murder of U.S. citizens for engaging in free speech about his religion,” said U.S. Attorney MacBride. “His actions caused people throughout the country to fear speaking out – even in jest – to avoid being labeled as enemies who deserved to be killed. The fact that a young man from Northern Virginia could support such violence and terror is a sobering reminder of the serious threat that homegrown jihadists pose to this country.”
“Zachary Chesser encouraged violent jihad,” said James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office. “The FBI is concerned about U.S. citizens traveling overseas to join Al-Shabaab, and we are vigilant in working to disrupt potential plots where U.S. citizens become further indoctrinated and return with actual terrorism experience and training.”
According to court documents filed with his plea agreement on Oct. 20, 2010, Chesser maintained several online profiles dedicated to extremist jihad propaganda. Chesser admitted to taking repeated steps in April 2010 to encourage violent jihadists to attack the writers of South Park for an episode that included Muhammad in a bear suit, including highlighting their residence and urging online readers to “pay them a visit.” Among the steps he took was posting on multiple occasions speeches by Anwar Al-Awlaki, which explained the Islamic justification for killing those who insult or defame Muhammad. Al-Awlaki was designated by the United States as a “Specially Designated Global Terrorist” on July 12, 2010.
Chesser also admitted that in May 2010, he posted to a jihadist website the personal contact information of individuals who had joined the “Everybody Draw Muhammad Day” group on Facebook, with the prompting that this is, “Just a place to start.”
Chesser also pleaded guilty to soliciting others to desensitize law enforcement by placing suspicious-looking but innocent packages in public places. Chesser explained through a posting online that once law enforcement was desensitized, a real explosive could be used. Chesser ended the posting with the words, “Boom! No more kuffar.” According to court documents, “kuffar” means unbeliever, or disbeliever.
According to court records, Chesser also admitted that from at least January 2010 through July 2010, he posted numerous messages online that included calls from Al-Awlaki to join violent jihadists and step-by-step actions individuals needed to take to leave for jihad. Among those postings included a video Chesser made that featured images of mujahedeen in Somalia and a song, sung by Chesser, with the translated title, “America We Are Coming.”
Chesser admitted that he promoted online what he called “Open Source Jihad,” where he would direct jihadists through his online forums to information on the Internet that they could use to elude capture and death while maintaining relevance and striking capability. This included linking to the entire security screening manual used by the Transportation Security Administration and hundreds of books that contained information on the construction of antiaircraft missiles, and tactics, techniques and weapons for targeting aircraft such as jet airplanes and helicopters.
In addition, Chesser pleaded guilty to attempting to provide material support to Al-Shabaab. On Feb. 29, 2008, the U.S. Department of State designated Al-Shabaab as a foreign terrorist organization, describing it as a violent and brutal extremist group based in Somalia with a number of individuals affiliated with Al-Qaeda. This designation prohibits providing material support or resources to Al-Shabaab.
According to court records, Chesser admitted that he twice attempted to leave the United States and travel to Somalia for the purpose of joining Al-Shabaab and engage in violent jihad as a foreign fighter. The first attempt was in November 2009, which was postponed because his wife was unable to obtain her passport. The second attempt was on July 10, 2010, when he sought to board a flight from New York to Uganda with his infant son. He was prevented from boarding the plane, and Chesser admitted that he brought his son with him as part of his “cover” to avoid detection of his intention to join Al-Shabaab in Somalia. He also attempted to board the plane with a video camera, which he admitted in court that he intended to use to make production quality videos for al-Shabaab’s propaganda campaign.
Chesser also admitted in court that he posted several online messages in support of Al-Shabaab, including videos of attacks by Al-Shabaab on a government building in Mogadishu, a video claiming that African Union troops are responsible for killing civilians in Somalia, a video supporting the merger of Al-Shabaab with another organization, and links to what Chesser described as the “Al Qaeda Manual” that included instructions in support of violent jihad.
This case is being investigated by the FBI Washington Field Office. Assistant U.S. Attorneys Gordon Kromberg and Thomas H. McQuillan of the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney John T. Gibbs of the Counterterrorism Section in the National Security Division are prosecuting the case.
U.S. Seeks to Shut Down Chicago Tax Return PreparerRead the Press Release
WASHINGTON – The United States has sued a Chicago tax return preparer seeking to bar her from preparing any more federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Rita Augustus and her businesses, Windy City Insurance Agency Inc. and Windy City Tax Service, claim bogus tax deductions and credits on customer tax returns.
According to the government complaint, Augustus has included fabricated charitable donations, employee business expenses and other deductions on tax returns that she has prepared since 2006. For tax years 2005 through 2009, Augustus allegedly prepared more than 4,000 federal income tax returns for customers with an unusually high refund rate. The Internal Revenue Service estimates that her return preparation for those years could have resulted in as much as $20 million or more in lost tax revenue.
The government’s complaint alleges that Augustus prepared 2006 and 2007 tax returns for one customer, a supervisor at a steel mill, claiming that the customer had business losses related to a non-existent barber shop. Augustus allegedly used the address of her businesses as the location for the fake barber shop.
In the past 10 years, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website.
Texas Resident Arrested on Charge of Attempted Use of <br /> Weapon of Mass DestructionRead the Press Release
WASHINGTON – Khalid Ali-M Aldawsari, 20, a citizen of Saudi Arabia and resident of Lubbock, Texas, was arrested late yesterday by FBI agents in Texas on a federal charge of attempted use of a weapon of mass destruction in connection with his alleged purchase of chemicals and equipment necessary to make an improvised explosive device (IED) and his research of potential U.S. targets.
The arrest and the criminal complaint, which was unsealed in the Northern District of Texas, were announced by David Kris, Assistant Attorney General for National Security; James T. Jacks, U.S. Attorney for the Northern District of Texas; and Robert E. Casey Jr., Special Agent in Charge of the FBI Dallas Field Division.
Aldawsari is expected to make his initial appearance in federal court in Lubbock at 9:00 a.m. on Friday morning. Aldawsari, who was lawfully admitted into the United States in 2008 on a student visa and is enrolled at South Plains College near Lubbock, faces a maximum sentence of life in prison and a $250,000 fine if convicted of attempted use of a weapon of mass destruction.
According to the affidavit filed in support of the complaint, Aldawsari has been researching online how to construct an IED using several chemicals as ingredients. He has also acquired or taken a substantial step toward acquiring most of the ingredients and equipment necessary to construct an IED and he has conducted online research of several potential U.S. targets, the affidavit alleges. In addition, he has allegedly described his desire for violent jihad and martyrdom in blog postings and a personal journal.
“As alleged in the complaint, Aldawsari purchased ingredients to construct an explosive device and was actively researching potential targets in the United States. Thanks to the efforts of many agents, analysts and prosecutors, this plot was thwarted before it could advance further,” said Assistant Attorney General Kris. “This case serves as another reminder of the need for continued vigilance both at home and abroad.”
“Yesterday’s arrest demonstrates the need for and the importance of vigilance and the willingness of private individuals and companies to ask questions and contact the authorities when confronted with suspicious activities. Based upon reports from the public, Aldawsari’s plot was uncovered and thwarted. We’re confident we have neutralized the alleged threat posed by this defendant. Those reports resulted in the initiation of a complex and far-reaching investigation requiring almost around the clock work by hundreds of dedicated FBI agents, analysts, prosecutors and others. Their effort is another example of the work being done to protect our country and its citizens. These individuals are deserving of our respect and gratitude,” said U.S. Attorney Jacks.
“This arrest and criminal charge is a result of the success of the FBI's counterterrorism strategy, which is to detect, penetrate, and disrupt terrorist plots in the United States and against U.S. interests abroad. In this case, FBI Agents and other FBI experts worked tirelessly to neutralize the imminent terrorist threat described in the criminal complaint. The public can be justifiably proud of the national security expertise shown by the FBI in this investigation,” said Special Agent in Charge Casey.
Purchases of Chemical Ingredients and Other Equipment
The affidavit alleges that on Feb. 1, 2011, a chemical supplier reported to the FBI a suspicious attempted purchase of concentrated phenol by a man identifying himself as Khalid Aldawsari. According to the affidavit, phenol is a toxic chemical with legitimate uses, but can also be used to make the explosive trinitrophenol, also known as T.N.P., or picric acid. The affidavit alleges that other ingredients typically used with phenol to make picric acid, or T.N.P., are concentrated sulfuric and nitric acids.
Aldawsari allegedly attempted to have the phenol order shipped to a freight company so it could be held for him there, but the freight company returned the order to the supplier and called the police. Later, Aldawsari falsely told the supplier he was associated with a university and wanted the phenol for “off-campus, personal research.” Frustrated by questions being asked over his phenol order, Aldawsari cancelled his order and later e-mailed himself instructions for producing phenol. The affidavit alleges that in December 2010, he successfully purchased concentrated nitric and sulfuric acids.
According to the affidavit, legally authorized electronic surveillance revealed that Aldawsari used various e-mail accounts in researching explosives and targets, and often sent emails to himself as part of this process. On Feb. 11, 2011, for instance, he allegedly e-mailed himself a recipe for picric acid, which the e-mail describes as a “military explosive.” He also allegedly sent himself an e-mail on Oct. 19, 2010 that contained information on the material required for Nitro Urea, how to prepare it, and the advantages of using it.
The affidavit alleges that Aldawsari also e-mailed himself instructions on how to convert a cellular phone into a remote detonator and how to prepare a booby-trapped vehicle using items available in every home. One e-mail allegedly contained a message stating that “one operation in the land of the infidels is equal to ten operations against occupying forces in the land of the Muslims.” During December 2010 and January 2011, Aldawsari allegedly purchased many other items, including a gas mask, a Hazmat suit, a soldering iron kit, glass beakers and flasks, wiring, a stun gun, clocks and a battery tester.
Searches of Aldawsari’s Residence
Two legally authorized searches of Aldawsari’s apartment conducted by the FBI in February 2011 indicated that the concentrated sulfuric and nitric acids; the beakers and flasks; wiring; Hazmat suit; and clocks were present in Aldawsari’s residence.
FBI agents also found a notebook at Aldawsari’s residence that appeared to be a diary or journal. According to the affidavit, excerpts from the journal indicate that Aldawsari had been planning to commit a terrorist attack in the United States for years. One entry describes how Aldawsari sought and obtained a particular scholarship because it allowed him to come directly to the United State and helped him financially, which he said “will help tremendously in providing me with the support I need for Jihad.” The entry continues: “And now, after mastering the English language, learning how to build explosives and continuous planning to target the infidel Americans, it is time for Jihad.”
In another entry, Aldawsari allegedly wrote that he was near to reaching his goal and near to getting weapons to use against infidels and their helpers. He also listed a “synopsis of important steps” that included obtaining a forged U.S. birth certificate; renting a car; using different driver’s licenses for each car rented; putting bombs in cars and taking them to different places during rush hour; and leaving the city for a safe place.
Research on Potential Targets
According to the affidavit, Aldawsari conducted research on various targets and e-mailed himself information on these locations and people. One of the documents he sent himself, with the subject line listed as “Targets,” allegedly contained the names and home addresses of three American citizens who had previously served in the U.S. military and had been stationed for a time at Abu Ghraib prison in Iraq.
In another e-mail titled “NICE TARGETS 01,” Aldawsari allegedly sent himself the names of 12 reservoir dams in Colorado and California. In another e-mail to himself, titled “NICE TARGETS,” he listed two categories of targets: hydroelectric dams and nuclear power plants. On Feb. 6, 2011, the affidavit alleges, Aldawsari sent himself an e-mail titled “Tyrant’s House,” in which he listed the Dallas address for former President George W. Bush. The affidavit also alleges that Aldawsari conducted research that could indicate his consideration of the use of infant dolls to conceal explosives and possible targeting of a nightclub with an explosive concealed in a backpack.
The affidavit also alleges that Aldawsari created a blog in which he posted extremist messages. In one posting, he expressed dissatisfaction with current conditions of Muslims and vowed jihad and martyrdom. “You who created mankind….grant me martyrdom for Your sake and make jihad easy for me only in Your path,” he wrote.
This case was investigated by the FBI’s Dallas Joint Terrorism Task Force, with assistance from the Lubbock Police Department. The prosecution is being handled by Assistant U.S. Attorneys Richard Baker and Denise Williams from the U.S. Attorney’s Office for the Northern District of Texas, and Trial Attorney David Cora from the Counterterrorism Section of the Justice Department’s National Security Division.
The charges contained in the criminal complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
South Florida Man Pleads Guilty to Tax FraudRead the Press Release
WASHINGTON – Ruben Reyes, a South Florida resident, pleaded guilty today to one count of filing a false tax return, the Justice Department and the Internal Revenue Service (IRS) announced.
According to court documents, Reyes acted as a "recruiter" or "promoter" for two shell companies, which were used by construction businesses to avoid employment taxes and worker’s compensation insurance requirements. Construction companies wrote checks to Reyes’s shell companies, pretending that the shell companies were legitimate subcontractors. In reality, the shell companies performed no work for the construction companies.
Reyes arranged for businesses to use his shell companies and for the checks written to those companies to be cashed at local check-cashing stores. He would then give the cash to the construction companies, which would in turn pay their workers in cash. By doing so, the construction companies were able to avoid reporting their workers to the IRS or insurance companies, evading taxes and higher insurance premiums.
Reyes received a cut of each check written to one of his shell companies. Between 2005 and 2006, more than $15 million in checks were funneled through the shell companies. Reyes derived substantial income from his share of this money, which he did not report on his tax returns.
The court scheduled Reyes’s sentencing for May 4, 2011. He faces a maximum of three years in prison.
IRS Criminal Investigation agents investigated the matter, and Justice Department Tax Division trial attorneys Jason Poole and Matthew Mueller are prosecuting the case with assistance from the U. S. Attorney’s Office for the Southern District of Florida.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax.
Nigerian National Sentenced in North Carolina to 108 Months in Prison for Role in Advance Fee Fraud SchemeRead the Press Release
WASHINGTON - Ugochukwu Enwerem, aka Joseph Smith, was sentenced yesterday in U.S. District Court in Charlotte, N.C., to 108 months in prison for his role in an advance-fee fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Daniel S. Cortez, Deputy Chief Inspector of the U.S. Postal Inspection Service.
U.S. District Judge Graham C. Mullen also ordered Enwerem to serve three years of supervised release following his prison term. In addition, Enwerem was ordered to forfeit $9,453,815 and to pay restitution in the same amount, jointly and severally with co-defendant Kent Okojie.
Enwerem was found guilty in March 2010 by a federal jury in the Western District of North Carolina on one count of conspiracy to commit mail and wire fraud, and 14 counts of wire fraud. In September 2009, co-defendant Okojie pleaded guilty to one count of conspiracy and two counts of wire fraud. In November 2010, Okojie was sentenced to 72 months in prison. Okojie and Enwerem, Nigerian citizens who resided in the Netherlands, originally were charged in a June 2007 complaint and were subsequently extradited to the United States from The Netherlands, where they had been in custody on Dutch charges.
Evidence at trial showed that between at least Aug. 25, 2004, and April 23, 2007, Enwerem and his co‑conspirators solicited individuals in the United States, Europe and Australia by sending spam e‑mails informing potential victims that they had either won a foreign lottery, inherited a large sum of money from a long lost relative, or were eligible to recover outstanding construction contract payments. When individuals responded to the e‑mails, the defendants, posing as lawyers, bankers and European government officials, solicited fees from victims ostensibly to pay for things such as “anti‑terrorism certificates,” “EU bank clearances,” “anti-money laundering certificates,” and legal fees in order to secure their purported lotto winnings, inheritance or contract payments.
According to evidence presented at trial, Enwerem and Okojie instructed U.S. victims to wire funds, using Western Union and other money transfer services, to them and their designees in The Netherlands, Spain and the United Kingdom. According to trial testimony, at least 18 U.S. and international victims were defrauded of more than $9.5 million during the period when Enwerem was a member of the conspiracy.
The case was investigated by a team of U.S. Postal Inspectors working with the Criminal Division’s Fraud Section and the Amsterdam Politie. The case was prosecuted by Trial Attorneys Laura Perkins and Nicole H. Sprinzen of the Fraud Section. Significant assistance was provided by the Criminal Division’s Office of International Affairs. Assistance regarding forfeiture and restitution was provided by Assistant U.S. Attorney Benjamin Bain-Creed with the U.S. Attorney’s Office in the Western District of North Carolina.
Horizon Lines LLC Agrees to Plead Guilty to Price Fixing on Coastal Water Freight Services Between the Continental United States and Puerto RicoRead the Press Release
WASHINGTON – Horizon Lines LLC has agreed to plead guilty and to pay a $45 million criminal fine for its role in a conspiracy to fix prices in the coastal water freight transportation industry, the Department of Justice announced today.
According to a one-count felony charge, filed today in U.S. District Court for the District of Puerto Rico, Horizon Lines LLC, whose principal place of business is in Charlotte, N.C., engaged in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico from at least as early as May 2002, until at least April 2008.
Horizon Lines LLC transports a variety of cargo shipments, such as heavy equipment, medicines and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.
According to the charge, Horizon Lines LLC and co-conspirators carried out the conspiracy by agreeing during meetings and discussions to allocate customers of Puerto Rico freight services and to fix the rates and surcharges to be charged to purchasers of water transportation of freight between the continental United States and Puerto Rico. The department said that Horizon Lines LLC and co-conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates.
In addition to today’s charge, as a result of this investigation, five former executives have been charged and sentenced to serve prison time. On Oct. 20, 2008, three former Horizon Lines LLC executives, R. Kevin Gill, Gregory Glova and Gabriel Serra, and another former shipping executive, Peter Baci, pleaded guilty to a wide-ranging conspiracy to rig bids, fix prices and allocate customers transporting goods between the continental United States and Puerto Rico by ocean vessel. On the same day, Alexander Chisholm pleaded guilty for his conduct in obstructing the Department of Justice’s investigation of the shipping conspiracy.
Horizon Lines LLC is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the coastal water freight transportation industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section; the Baltimore Resident Agency of the Department of Defense’s Office of the Inspector General; Defense Criminal Investigative Service (DCIS); the Miami Field Office of the Department of Transportation’s Office of Inspector General; and the Jacksonville, Fla., Field Office of the FBI. Anyone with information concerning this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm or contact DCIS’s Baltimore Resident Agency at 410-347-1620.
Hombre del Sur de Florida se declara culpable de fraude tributarioRead the Press Release
WASHINGTON - Ruben Reyes, un residente del Sur de Florida, se declaró culpable hoy de un cargo de presentación de una declaración de impuestos falsa, anunciaron el Departamento de Justicia y el Servicio de Impuestos Internos [Internal Revenue Service (IRS)].
De acuerdo con el expediente judicial, Reyes actuó como "reclutador" o "promotor" de dos empresas fantasma utilizadas por empresas de construcción para evadir impuestos asociados al empleo y exigencias de seguro de compensación del trabajador. Las empresas de construcción emitían cheques a las empresas fantasma de Reyes, de modo que pareciera que las empresas fantasma eran subcontratistas legítimos. En realidad, las empresas fantasma no realizaban ningún trabajo para las empresas de construcción.
Reyes realizó arreglos para que las empresas utilizaran sus empresas fantasmas y para que los cheques emitidos a dichas empresas fueran cambiados en tiendas locales de cambio de cheques. Luego, les daba el efectivo a las empresas de construcción, quienes, a su vez, pagaban a sus trabajadores en dinero en efectivo. Al hacer esto, las empresas de construcción lograban evitar declarar sus trabajadores al IRS o a compañías aseguradoras, evadiendo impuestos y primas de seguro más altas.
Reyes recibía una parte de cada cheque emitido a una de sus empresas fantasma. Entre 2005 y 2006, más de 15 millones de dólares en cheques fueron canalizados a través de empresas fantasma. Reyes obtuvo ingresos sustanciales de su parte de este dinero, los que no declaró en sus declaraciones de impuestos a la renta.
El tribunal programó la lectura de la sentencia de Reyes para el 4 de mayo de 2011. Enfrenta un máximo de tres años en prisión.
Agentes de Investigaciones Penales del IRS investigaron el asunto, y los abogados litigantes Jason Poole y Matthew Mueller de la División de Impuestos del Departamento de Justicia están a cargo de la acusación en el caso con la asistencia de la Fiscalía Federal para el Distrito Sur de Florida.
Existe información adicional sobre la División de Impuestos del Departamento de Justicia y su labor de coacción en http://www.usdoj.gov/tax.
Four CD and DVD Counterfeiters and Suppliers in Atlanta Sentenced to PrisonRead the Press Release
WASHINGTON – Four individuals have been sentenced this week in Atlanta by U.S. District Judge William S. Duffey Jr., for their involvement in a counterfeit DVD and CD ring, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Sally Quillian Yates for the Northern District of Georgia.
Mamadou Sadio Barry, 40, was sentenced to 60 months in prison; Moussa Baradji, 29, was sentenced to 50 months in prison; Sedikey Sankano, 42, was sentenced to 24 months in prison; and Won Ahn, 69, was placed on probation for one year. Barry, Baradji and Sankano also were ordered to serve three years of supervised release following their prison terms. Barry and Baradji were ordered to pay $70,894 in restitution and Sankano was ordered to pay $3,867 in restitution. The court found that these defendants were responsible for distributing illegal copies of products that, if legitimate, would have been valued at more than $2 million.
On Dec. 10, 2009, Sankano pleaded guilty to one count of conspiracy to commit criminal copyright infringement, to traffic in counterfeit goods and to traffic in counterfeit labels. On Sept. 24, 2010, Ahn pleaded guilty to being an accessory after the fact for illegally smuggling patent infringing digital media contrary to law.
On Oct. 6, 2010, a federal jury in Atlanta found Barry and Baradji guilty of one count each of criminal copyright infringement. The evidence at trial established that Baradji and Barry used space in warehouses on Metropolitan Parkway in Atlanta to “burn” or copy DVDs and CDs. According to evidence at trial, Baradji and Barry produced and paid others to produce counterfeit labels and packaging and to assemble the final product, which Baradji and Barry sold through their retail stores. According to the evidence at trial, the defendants’ warehouse operation reproduced thousands of CDs and DVDs per week for distribution. According to court records, Sankano also acquired labels, packaging and blank digital media at the warehouse for use in manufacturing infringing copies of copyrighted materials on DVDs and CDs. Ahn assisted in supplying the producers with blank DVDs and CDs that had been illegally smuggled into the United States.
The sentenced defendants were among 13 charged by a federal grand jury on May 19, 2009, in an indictment alleging various copyright, trademark and counterfeit goods offenses.
The case was prosecuted by Assistant U.S. Attorney Brian Pearce in the Northern District of Georgia and Senior Counsel John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section. The case was investigated by special agents of the FBI and the Department of Homeland Security, Immigration and Customs Enforcement, together with officers of the Atlanta Police Department Organized Crime Unit; College Park, Ga., Police Department; and East Point, Ga., Police Department. Assistance was provided by the Recording Industry Association of America and the Motion Picture Association of America.
Former Treasurer of Taylor, Bean & Whitaker <br /> Pleads Guilty to $1.9 Billion Fraud Scheme That <br /> Contributed to the Failure of Colonial BankRead the Press Release
WASHINGTON – Desiree Brown, the former treasurer of a private mortgage lending company, Taylor, Bean & Whitaker (TBW), pleaded guilty today to conspiring to commit bank, wire and securities fraud for her role in a more than $1.9 billion fraud scheme that contributed to the failures of Colonial Bank and TBW.
The guilty plea was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Special Inspector General Neil Barofsky for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA OIG); and Victor F. O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.
Brown, 45, of Hernando, Fla., pleaded guilty before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Brown faces a maximum penalty of 30 years in prison when she is sentenced on June 10, 2011. In a related action, the U.S. Securities and Exchange Commission (SEC) today filed an enforcement action against Brown in the Eastern District of Virginia.
According to court documents, Brown admitted that from late 2003 through August 2009, she and her co-conspirators, including former TBW chairman Lee Farkas engaged in a scheme to defraud various entities and individuals, including Colonial Bank, a federally-insured bank; Colonial BancGroup Inc.; shareholders of Colonial BancGroup; investors in Ocala Funding LLC, including Deutsche Bank and BNP Paribas; the Troubled Asset Relief Program (TARP); and the investing public. One of the goals of the scheme to defraud was to obtain funding for TBW to assist it in covering expenses related to operations and servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities.
According to court documents, Brown and her co-conspirators referred to one aspect of the fraud scheme as “Plan B.” “Plan B” generated money for TBW through the fictitious “sales” of mortgage loans to Colonial Bank. The conspirators accomplished this by sending mortgage data to Colonial Bank for loans that did not exist or that TBW had already committed or sold to other third-party investors. As a result, the Plan B loan data was recorded in Colonial Bank’s books and records, and gave the false appearance that Colonial Bank had purchased legitimate interests in mortgage loans from TBW. Brown admitted that she and her co-conspirators caused Colonial Bank to pay TBW for assets that were worthless to Colonial Bank.
Brown admitted that, as part of the fraud scheme, she and her co-conspirators also caused TBW to sell fictitious trades, which had no pools of loans collateralizing them, to Colonial Bank. Brown and her co-conspirators caused false information about the trades to be entered on Colonial Bank’s books and records, giving the appearance that the bank owned interests in legitimate trades, when in fact the trades had no value and could not be sold.
Court documents indicate that the conspirators caused Colonial Bank to pay TBW more than $400 million for assets that in fact had no value, and caused Colonial Bank and Colonial BancGroup to hold these assets on their books as if they had actual value. Additionally, the conspirators caused TBW to misappropriate more than $1 billion in collateral from Ocala Funding LLC, a mortgage lending facility owned by TBW.
According to court documents, the fraud scheme also included an effort by the conspirators in the fall of 2008 to obtain $570 million in taxpayer funding through the Capital Purchase Program (CPP), a sub-program of the U.S. Treasury Department’s TARP program. In connection with the application, Colonial BancGroup submitted financial data and filings that included materially false information related to mortgage loan and securities assets held by Colonial Bank as a result of the fraudulent scheme admitted to by Brown. Colonial BancGroup never received the TARP funding.
In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver. Colonial BancGroup also filed for bankruptcy in August 2009.
In June 2010, Farkas was arrested and charged in a 16-count indictment for his role in the fraud scheme. His trial is scheduled to begin in April 2011. An indictment is merely a charge and a defendant is presumed innocent until proven guilty.
The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC OIG, HUD OIG, FHFA OIG and the IRS Criminal Investigation. The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.
This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
BlueCross BlueShield of Illinois to Pay $25 Million to Settle Civil False Claims Act AllegationsRead the Press Release
WASHINGTON - BlueCross BlueShield of Illinois, a division of Health Care Service Corporation, has agreed to pay the United States and the state of Illinois $25 million to settle False Claims Act allegations, the Justice Department announced today. The settlement resolves claims by the United States that BlueCross BlueShield of Illinois wrongly terminated insurance coverage for private duty skilled nursing care for medically fragile, technologically dependent children, in order to shift the costs of such care to the Medicaid program. Medicaid funds a special program designed to provide home care for children at risk of institutionalization.
As a result, children whose specialized care should have been covered by BlueCross BlueShield of Illinois under the terms of existing insurance policies, were shifted to the government-funded Home and Community Based Services Medicaid program, operated by the Illinois Division of Specialized Care for Children under an agreement with the Illinois Department of Healthcare and Family Services. As a result, Medicaid spent millions of dollars providing care that should have been paid for by private insurance.
The settlement resolves claims that BlueCross BlueShield of Illinois denied patient claims based on internal, undisclosed guidelines that were more restrictive than the language provided to beneficiaries in plan policy materials. Additionally, the government alleged that BlueCross BlueShield of Illinois improperly told policy holders that children were not covered for private duty nursing during the claims review process sought after initial denials.
Under the agreement, BlueCross BlueShield of Illinois will pay $14.25 million to the state of Illinois and $9.5 million to the United States. The company will also pay $1.25 million to Illinois for allegations under the state consumer fraud statute.
“It is appalling for a major insurance company to terminate medical services coverage for sick children in need just to boost their bottom line at taxpayers’ expense, as we’ve alleged here,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “When private insurance companies improperly force patients to turn to Medicaid for medical coverage those companies should be providing, we will hold them accountable.”
“The case filed today is a good example of this office's ongoing commitment to combat health care fraud, said Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois. We will make all efforts to return money to the federal Medicaid program as well as to the Illinois Medicaid program.”
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Illinois and the Office of Inspector General of the Department of Health and Human Services (OIG-HHS).
“Private insurance companies that deny properly payable claims in order to inappropriately shift costs to federal health care programs -- as BC/BS of IL is alleged to have done – will be held accountable,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “OIG, along with our federal and state partners, will continue to protect patients and taxpayers by prosecuting those behind these schemes."
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.5 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are nearly $7 billion.
<br /> <br /> Cuatro falsificadores y proveedores de CDs y DVDs en Atlanta fueron sentenciados a prisión<br /> <br />Read the Press Release
WASHINGTON - Cuatro personas fueron sentenciadas esta semana en Atlanta por el Juez Federal de Distrito William S. Duffey, Jr., por su participación en una red de DVDs y CDs falsificados, anunciaron el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal y la Fiscal Federal Sally Quillian Yates para el Distrito Norte de Georgia.
Mamadou Sadio Barry, 40, fue sentenciado a 60 meses en prisión; Moussa Baradji, 29, fue sentenciado a 50 meses en prisión; Sedikey Sankano, 42, fue sentenciado a 24 meses en prisión; y Won Ahn, 69, fue puesto en libertad condicional por un año. También se les ordenó a Barry, Baradji y Sankano cumplir con tres años de libertad bajo supervisión después de haber cumplido sus sentencias en prisión. Se les ordenó a Barry y Baradji pagar 70,894 dólares en restitución y a Sankano, 3,867 dólares en restitución. El tribunal encontró que estos demandados eran responsables de distribuir copias ilegales de productos que, si hubieran sido legítimas, hubieran valido más de 2 millones de dólares.
El 10 de diciembre de 2009, Sankano se declaró culpable de un cargo de conspiración para cometer violación delictiva de propiedad intelectual, tráfico de mercadería falsificada y tráfico de rótulos falsificados. El 24 de septiembre de 2010, Ahn se declaró culpable de ser cómplice por encubrimiento por contrabando ilegal de medios digitales que violan patentes contra la ley.
El 6 de octubre de 2010, un jurado federal en Atlanta encontró a Barry y Baradji culpables de un cargo cada uno de violación delictiva de derechos de propiedad intelectual. Las pruebas presentadas en el juicio establecieron que Baradji y Barry utilizaron espacio en almacenes en Metropolitan Parkway en Atlanta para "quemar" o copiar DVDs y CDs. Según las pruebas presentadas en el juicio, Baradji y Barry produjeron y pagaron a terceros para que produjeran rótulos y embalajes falsificados para armar el producto final vendido por Baradji y Barry a través de sus tiendas minoristas. De acuerdo con pruebas presentadas en el juicio, la operación de almacén de los demandados reprodujo miles de CDs y DVDs por semana para distribución. De acuerdo con el expediente judicial, Sankano también adquirió rótulos, embalaje y medios digitales en blanco en el almacén para su uso para la fabricación de copias ilegales de materiales con copyright en DVDs y CDs. Ahn asistió en proveer a los productores DVDs y CDs en blanco que habían sido ilegalmente contrabandeados a los Estados Unidos.
Los demandados sentenciados estaban entre 13 acusados por un gran jurado federal el 19 de mayo de 2009, en una acusación formal que alegaba diversos delitos asociados a copyright, marcas y falsificación.
Estuvieron a cargo de la acusación en el caso el Fiscal Federal Auxiliar Brian Pearce del Distrito Norte de Georgia y el Consejero Principal John H. Zacharia de la Sección de Delitos de Informática y Propiedad Intelectual de la División de lo Penal. El caso fue investigado por agentes especiales del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] y el Departamento de Seguridad Nacional, Servicios de Inmigración y Control de Aduanas, en conjunto con agentes de la Unidad de Delincuencia Organizada del Departamento de Policía de Atlanta; el Departamento de Policía de College Park, Ga.; y el Departamento de Policía de East Point, Ga. Brindaron asistencia la Asociación de la Industria de Grabaciones de EE.UU. [Recording Industry Association of America] y la Asociación Cinematográfica de EE.UU. [Motion Picture Association of America].
Wednesday 23 February 2011
U.S. Sues Two California Lawyers & Kentucky Financial Professional to Block Nationwide Promotion of "Intermediary Transaction" Tax ShelterRead the Press Release
WASHINGTON – The United States has sued two Southern California attorneys and a Kentucky financial professional to bar them from promoting an allegedly abusive tax shelter known as an “intermediary transaction,” the Justice Department announced today. The lawsuit was filed in federal court in Camden, N.J., against Charles Klink of Fontana, Calif., Caleb Grodsky of Los Angeles and Steven Block of Louisville, Ky. According to the government’s civil injunction complaint, Klink is a former partner in the Los Angeles office of the law firm Manatt, Phelps & Phillips LLP, while Block has worked in the financial services industry for over two decades. The complaint asserts that Klink, Grodsky and Block have made millions of dollars helping individuals across the country sell corporate assets without paying federal corporate income taxes on the resulting capital gain income.
“Stopping the marketing and use of abusive tax shelters remains one of our top priorities for 2011,” said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. “White-collar professionals who promote these schemes face the prospect of significant legal sanctions. The IRS and the Justice Department are working diligently to ensure that people who buy into these sophisticated tax dodges ultimately have to pay the taxes they owe, along with interest and appropriate penalties.”
Klink, Grodsky and Block purportedly use an intricate web of trusts and corporations to act as intermediaries between their customers, who own closely held corporations, and buyers who want to buy the customers’ corporate assets. Examples of such assets discussed in the complaint include a $205 million, twelve-story office building in Washington, D.C.; a $3.5 million vineyard in St. Helena, Calif.; and a $22.2 million, six-building office campus in Laguna Hills, Calif.
According to the complaint, the defendants purchase all of the stock in a customer’s corporation shortly before or after the asset sale. The government alleges that they then falsely tell the customer that, following the defendants’ purchase of the corporation, the defendants will restructure the corporation into a profitable new business and have it pay federal income taxes on the capital gain from the asset sale.
However, the complaint alleges, Klink, Grodsky and Block never intend to pay the corporate income taxes on those capital gains. Rather, within days of taking control of the corporation, and following the sale of all its assets, the defendants allegedly implement what is known as a “distressed asset trust” (DAT) tax shelter and claim deductions for sham fees to offset most or all of the capital gains. The defendants also allegedly take steps to siphon off the corporation’s assets, leaving it with no funds to pay any taxes due once the Internal Revenue Service (IRS) learns of the scheme and assesses taxes.
According to the complaint, Klink, Grodsky and Block obtain the DAT tax shelters from John Rogers, a Chicago attorney and former partner at Seyfarth Shaw LLP. In November 2010 the Justice Department sued Rogers to bar him from promoting the DAT tax shelter. According to that lawsuit, Rogers’s DAT scheme involves a foreign business essentially selling low-value debt, such as bad checks, to a U.S. entity created and controlled by Rogers. In return, the U.S. entity allegedly pays the foreign company 1 to 2 percent of the debt’s face value and then contributes portions of the debt to multiple supposed “trusts,” which are also created and controlled by Rogers. Rogers then allegedly sells the trusts to his customers for a price pegged to the tax loss to be generated by the tax shelter.
The complaint against Klink, Grodsky and Block alleges that they have caused the corporations they acquired to deduct improperly over $112 million of distressed consumer receivables. The government estimates that the tax loss resulting from their promotion of the tax schemes at issue in this case exceeds $40 million. The complaint also asks the court to require them to produce any records identifying any persons who have participated in any tax scheme they promoted.
More information about the Tax Division’s enforcement efforts can be found on the Division’s website.
Two Shenandoah, Pa., Men Sentenced for the Fatal Beating of Luis RamirezRead the Press Release
WASHINGTON - Brandon Piekarsky,19, and Derrick Donchak, 21, both of Shenandoah, Pa., were sentenced today to nine years in prison for the fatal beating of Luis Ramirez, the Justice Department announced.
Piekarsky and Donchak were ordered to serve three years of supervised release and pay $550 to the Pennsylvania victim compensation fund, as well as the special assessments for each count. Donchak was also sentenced to an additional 30 months for obstruction, which will be served concurrently.
On Oct. 14 2010, a federal jury in the Middle District of Pennsylvania found both defendants guilty of a felony violation of the federal Fair Housing Act for fatally beating Luis Ramirez because he was Latino and because they did not want Latinos living in Shenandoah. In addition, the jury found that Donchak conspired to, and did in fact, obstruct justice during the investigation of this crime.
According to the evidence presented at trial, on July 12, 2008, the defendants came upon Ramirez in a park after leaving a community festival. The defendants and several of their friends, some of whom testified during the trial, attacked Ramirez. During the course of the beating, the defendants and their friends yelled racial epithets in which they repeatedly referred to Ramirez in derogatory racial terms and told him "This is Shenandoah. This is America. Go back to Mexico." According to testimony, Donchak beat Ramirez while holding a thick piece of metal identified at trial as a "fist pack." After another of their friends punched Ramirez in the face, causing him to fall back and hit his head on the ground, Piekarsky kicked Ramirez in the head as he lay unconscious and prone on the ground. After Piekarsky kicked Ramirez, he told a bystander who was married to a Latino man to "tell your Mexican friends to get out of Shenandoah or you will be lying next to him." After the fight concluded, Ramirez was air-lifted to Geisinger Regional Medical Center, where he died of massive head injuries. The jury also heard evidence that, immediately following the beating, Donchak conspired to obstruct the investigation of the fatal assault.
"Acts of violence, like the beating of Luis Ramirez, have no place in this country," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division of the Department of Justice. "As this case illustrates, the Civil Rights Division is committed to vigorously protecting the civil rights of every person who lives in this country."
This case was investigated by special agents from the FBI’s Philadelphia Division and was prosecuted by Myesha Braden and Gerard V. Hogan of the Civil Rights Division’s Criminal Section with assistance from the U.S. Attorney’s Office for the Middle District of Pennsylvania.
Texas Man Pleads Guilty to Federal Hate Crime in Connection with Mosque Arson in Arlington, TexasRead the Press Release
WASHINGTON – Henry Clay Glaspell, of Arlington, Texas, pleaded guilty today to a hate crime charge stemming from the ethnically-motivated arson of a children’s playground at the Dar El-Eman Islamic Center in Arlington in July 2010, the Justice Department announced today.
Glaspell, 34, pleaded guilty to damaging religious property in violation of federal hate crime laws before U.S. District Judge Terry R. Means in federal court in Fort Worth, Texas. During the plea hearing, Glaspell admitted that he set fire to playground equipment at the mosque as part of a series of ethnically-motivated acts directed at individuals of Arab or Middle Eastern descent associated with the mosque. Glaspell further admitted that he stole and damaged mosque property, threw used cat litter at the front door of the mosque, and shouted racial or ethnic slurs at individuals of Arab or Middle Eastern descent at the mosque on multiple occasions. This is the 50th prosecution of post-Sept. 11, 2001, backlash against Arab and Muslim Americans.
"Arab-Americans are part of the American family, and the defendant today admitted that he targeted Arabs at a Mosque where people worship peacefully and children play," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "Hate-fueled incidents of this kind will not be tolerated in our country. The Justice Department is committed to vigorously prosecuting hate crimes against all persons."
"All members of our community must be free to live without fear that they will be targeted because of their ethnicity or religion. This office will vigorously prosecute those who commit such despicable acts of hatred," said U.S. Attorney for the Northern District of Texas James T. Jacks.
"The crime in this case underscores the importance of enforcing the nation’s civil rights laws, and the FBI is firmly committed to that enforcement. One of our most important responsibilities is protecting the right to worship free from violence, fear or intimidation," said Robert E. Casey Jr., Special Agent in Charge, FBI, Dallas Division. "As this case indicates, the FBI, together with and our state and local law enforcement allies, will vigorously investigate and prosecute those who attack that right."
Glaspell’s sentencing has been set for July 11, 2011. Glaspell faces a maximum penalty of 20 years in prison for using fire to damage religious property in violation of federal hate crimes laws.
This case was jointly investigated by Arlington Police Department and the FBI. The case is being prosecuted by Trial Attorney Victor Boutros from the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Alex Lewis for the Northern District of Texas, with assistance from the Tarrant County District Attorney's Office.
Statement of the Attorney General on Litigation Involving the Defense of Marriage ActRead the Press Release
WASHINGTON – The Attorney General made the following statement today about the Department’s course of action in two lawsuits, Pedersen v. OPM and Windsor v. United States, challenging Section 3 of the Defense of Marriage Act (DOMA), which defines marriage for federal purposes as only between a man and a woman:
In the two years since this Administration took office, the Department of Justice has defended Section 3 of the Defense of Marriage Act on several occasions in federal court. Each of those cases evaluating Section 3 was considered in jurisdictions in which binding circuit court precedents hold that laws singling out people based on sexual orientation, as DOMA does, are constitutional if there is a rational basis for their enactment. While the President opposes DOMA and believes it should be repealed, the Department has defended it in court because we were able to advance reasonable arguments under that rational basis standard.
Section 3 of DOMA has now been challenged in the Second Circuit, however, which has no established or binding standard for how laws concerning sexual orientation should be treated. In these cases, the Administration faces for the first time the question of whether laws regarding sexual orientation are subject to the more permissive standard of review or whether a more rigorous standard, under which laws targeting minority groups with a history of discrimination are viewed with suspicion by the courts, should apply.
After careful consideration, including a review of my recommendation, the President has concluded that given a number of factors, including a documented history of discrimination, classifications based on sexual orientation should be subject to a more heightened standard of scrutiny. The President has also concluded that Section 3 of DOMA, as applied to legally married same-sex couples, fails to meet that standard and is therefore unconstitutional. Given that conclusion, the President has instructed the Department not to defend the statute in such cases. I fully concur with the President’s determination.
Consequently, the Department will not defend the constitutionality of Section 3 of DOMA as applied to same-sex married couples in the two cases filed in the Second Circuit. We will, however, remain parties to the cases and continue to represent the interests of the United States throughout the litigation. I have informed Members of Congress of this decision, so Members who wish to defend the statute may pursue that option. The Department will also work closely with the courts to ensure that Congress has a full and fair opportunity to participate in pending litigation.
Furthermore, pursuant to the President ’ s instructions, and upon further notification to Congress, I will instruct Department attorneys to advise courts in other pending DOMA litigation of the President's and my conclusions that a heightened standard should apply, that Section 3 is unconstitutional under that standard and that the Department will cease defense of Section 3.
The Department has a longstanding practice of defending the constitutionality of duly-enacted statutes if reasonable arguments can be made in their defense. At the same time, the Department in the past has declined to defend statutes despite the availability of professionally responsible arguments, in part because – as here – the Department does not consider every such argument to be a “reasonable” one. Moreover, the Department has declined to defend a statute in cases, like this one, where the President has concluded that the statute is unconstitutional.
Much of the legal landscape has changed in the 15 years since Congress passed DOMA. The Supreme Court has ruled that laws criminalizing homosexual conduct are unconstitutional. Congress has repealed the military’s Don’t Ask, Don’t Tell policy. Several lower courts have ruled DOMA itself to be unconstitutional. Section 3 of DOMA will continue to remain in effect unless Congress repeals it or there is a final judicial finding that strikes it down, and the President has informed me that the Executive Branch will continue to enforce the law. But while both the wisdom and the legality of Section 3 of DOMA will continue to be the subject of both extensive litigation and public debate, this Administration will no longer assert its constitutionality in court.
Six Alleged Bloods Gang Members and Associates Indicted in Tennessee on Federal Racketeering and Murder ChargesRead the Press Release
WASHINGTON – A superseding indictment returned by a federal grand jury in Nashville, Tenn., was unsealed today, charging s ix alleged members of the violent gang known as the Bloods with various racketeering and murder charges, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the Middle District of Tennessee Jerry E. Martin and Glenn Anderson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Nashville Field Division.
The superseding indictment charges the following defendants with conspiracy to participate in the racketeering activities of the Bloods:
· Keairus Wilson, aka “Key-Thang,” 21;
· Montez Hall, aka “Tez,” 21;
· Cedric Woods, aka “Lil Ced,” 22;
· Rondarius Williamson, aka “Killa,” 20;
· William Walden, aka “Wild Bill,” 22; and
· Kenneth Gaddie, aka “K.G.,” 21; all of Nashville.
The defendants are also charged with various counts of murder in aid of racketeering, murder resulting from the use and carrying of a firearm during and in relation to crimes of violence, using and carrying firearms during and in relation to crimes of violence, and conspiracy to use and carry firearms during and in relation to crimes of violence. Woods was arrested on Feb. 18, 2011, and appeared before U.S. Magistrate Judge John S. Bryant on that date. Walden was arrested this morning and is currently in state custody. Wilson, Hall and Williamson are currently in state custody. Gaddie has not yet been arrested.
“With today’s indictment, we have charged a total of 32 individuals with committing violent crimes, including murder, to advance the goals of their destructive gang,” said Assistant Attorney General Breuer. “The Bloods, like other street gangs, deal in violence and spread fear throughout our communities. But with these charges, and others we have announced in recent weeks, we are waging an aggressive fight against such violent organized groups.”
“The United States Attorney’s Office and our law enforcement partners will continue our vigilance directed at organized gangs and those who wreak havoc in our communities by their violent acts,” said U.S. Attorney Martin. “Those who choose to become involved in such a lifestyle should know that law enforcement at every level will work together tirelessly to bring them to justice.”
“If you insist on being involved in criminal activity with gangs and their undeniable acts of violence as alleged in the most recent indictment, be prepared for the consequences. It is only a matter of time until you will become the focal point of an investigation. Our goal is clear and has not changed. ATF and our law enforcement partners will continue to aggressively investigate those people who perpetuate the violence and remove them from the streets,” stated ATF Special Agent in Charge Anderson. “Cases like this continue to make communities large and small a safer place for all.”
“The tireless work of our Gang Unit and other police department investigative components ultimately showed that Bloods members were responsible for violence, including homicides, in more than one area of this city,” Nashville Police Chief Steve Anderson said. “This police department and our partners at the District Attorney’s Office and at the federal level will not tolerate this abhorrent behavior in our neighborhoods.”
According to the superseding indictment, the defendants were members and associates of the Bloods, a violent street gang that originated in Los Angeles in the 1970s, and ultimately migrated to cities throughout the United States, including Nashville. The Bloods gang has a hierarchal structure and a long-term and often lethal rivalry with the Crips gang.
The superseding indictment charges that from approximately 2006 until January 2011, Bloods gang members committed and conspired to commit acts of murder, attempted murder, robbery, narcotics trafficking, bribery and extortion. The superseding indictment alleges that the Bloods gang members met regularly to plan and agree upon the commission of crimes; maintained and circulated a collection of firearms for use in criminal activity by Bloods members; distributed controlled substances including cocaine, cocaine base, marijuana and hydromorphone, and used the proceeds of those drug transactions to help finance the gang’s illegal activities. The superseding indictment also alleges that Bloods gang members committed murder and other acts of violence against rival gang members and others.
The superseding indictment alleges that on June 14, 2008, Wilson shot and killed Michael Goins; on June 25, 2008, Gaddie shot and wounded two known individuals; on July 17, 2008, Wilson and Gaddie shot at a known individual; on July 19, 2008, Wilson, Hall and Woods shot and killed Alexandra Franklin; and on Dec. 20, 2008, Wilson assaulted a known individual during a gang-related incident at the Davidson County Jail. The superseding indictment also alleges that on Feb. 9, 2009, Williamson shot and wounded a known individual; on May 19, 2009, Williamson shot and killed Andreus Taylor; on Oct. 31, 2009, Williamson carjacked a known individual; and on Feb. 21, 2010, Walden and others, while armed with various firearms, shot and wounded two known individuals who were in a vehicle in Nashville.
The original indictment, returned by a federal grand jury in June 2010, charged 26 other members and associates of the Bloods with various racketeering, assault and murder charges. The indictment also alleged that Lonnie Greenlee, co-founder of the Galaxy Star Drug Awareness and Gang Prevention Center located in Nashville, allowed Bloods gang members to use the facility to conduct gang meetings. According to the indictment, Lonnie Greenlee and Galaxy Star employee Rodney Britton allegedly provided numerous Bloods gang members with fraudulent documentation of court-ordered community service hours in exchange for money.
An indictment is merely an accusation and is not evidence of guilt. All defendants have the right to a trial at which the government would have to bear the burden of proof beyond a reasonable doubt.
The case was investigated by the ATF; the Metropolitan Nashville Police Department; the Gallatin Police Department; and assisted by the U.S. Marshals Service and the Davidson County District Attorney’s Office.
The case is being prosecuted by Assistant U.S. Attorney Scarlett Singleton and Trial Attorney Cody L. Skipper of the Criminal Division’s Gang Unit.
The public is encouraged to report any information on Gaddie’s whereabouts to your local police department.
Los Angeles Man Pleads Guilty to Conspiracy to Violate the Clean Air Act’s Asbestos Work Practice StandardsRead the Press Release
WASHINGTON – John Bostick pleaded guilty today to conspiracy to violate the Clean Air Act’s asbestos work practice standards during the renovation of a 204-unit apartment building in Winnetka, Calif., in 2006.
The federal Clean Air Act requires those who own or supervise the renovation of buildings that contain asbestos to adhere to certain established work practice standards. These standards were created to ensure the safe removal and disposal of the asbestos and the protection of workers.
According to the plea agreement filed in federal court, Mr. Bostick knew in January 2006 that asbestos was present in the ceilings of the units of the apartment complex known as Forest Glen. Knowing that the asbestos was there, Mr. Bostick and his co-conspirators hired a group of workers who were not trained or certified to conduct asbestos abatements, and had them scrape the ceilings of the apartment units without telling the workers about the asbestos. The illegal scraping resulted in the repeated release of asbestos-containing material throughout the apartment complex and the surrounding area and also caused the unlicensed workers to potentially be exposed to asbestos. After the illegal asbestos abatement was shut down by an inspector from the California South Coast Air Quality Management District, the asbestos was cleaned up at a cost of about $1.2 million dollars.
On June 14, 2010, Joseph Yoon, the project manager, pleaded guilty to conspiracy to violate the Clean Air Act’s asbestos work place standards at the apartment site. A sentencing date has been set for April 25, 2011.
A six-count indictment charging conspiracy and multiple Clean Air Act violations is pending against co-defendant Charles Yi, who was the owner of the Forest Glen condominiums. The trial in this case is scheduled for Mar.15, 2011. 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.
The case was investigated by the U.S. Environmental Protection Agency’s Office of Criminal Enforcement, the California South Coast Air Quality Management District and the California Department of Toxic Substances Control. The case is being prosecuted by the U.S. Attorney’s Office for the Central District of California and the U.S. Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
Liberian Shipping Company Sentenced to Pay $2.4 Million for Falsifying Oil Record Book and Lying to Cover up Illegal Discharges of WasteRead the Press Release
WASHINGTON – Cardiff Marine Inc, a Liberian-registered shipping company, was sentenced today in federal court in Baltimore after pleading guilty to a felony violation of the Act to Prevent Pollution from Ships. The company admitted falsifying records of illegal discharges of oily waste from the M/V Capitola , making false statements to the Coast Guard and other acts of concealment. U.S. District Judge Marvin J. Garbis sentenced Cardiff to pay a $2.4 million fine and serve three years probation, subject to an environmental compliance plan that includes audits by an independent third party auditor.
The guilty plea and sentencing were announced by U.S. Attorney for the District of Maryland Rod J. Rosenstein; Ignacia S. Moreno, Assistant Attorney General, Environment & Natural Resources, U.S. Department of Justice; Rear Adm. Dean Lee, Commander of the U.S. Coast Guard's 5th District; Special Agent in Charge Otis E. Harris, Jr. of the Coast Guard Investigative Service-Chesapeake Region; and Special Agent in Charge David M. Dillon of Environmental Protection Agency’s Criminal Investigation Division.
According to court documents, the investigation into the M/V Capitola was launched on May 3, 2010, at the Port of Baltimore, after a crew member informed a clergyman, who was on board the Capitola on a pastoral visit, that there had been “monkey business in the engine room,” which involved a “magic pipe.” The magic pipe proved to be a bypass hose that allowed the dumping of waste oil overboard, circumventing pollution prevention equipment required by law. The crew member asked the minister to alert the Coast Guard and to pass on a flash drive bearing video taken in the ship’s engine room. That triggered an inspection of the Capitola, and ultimately, today’s guilty plea.
“The Department of Justice will continue to hold shipping companies like Cardiff accountable for breaking the laws that protect our oceans,” said Assistant Attorney General Moreno. “Shippers who fail to record discharges of oily waste, discharge waste illegally, or try to cover up this unacceptable and illegal practice will be prosecuted.”
“Cardiff Marine blatantly violated the law by dumping oil in the ocean and then lying to the Coast Guard about it,” said U.S. Attorney Rosenstein. “As part of the punishment for this crime, Cardiff Marine will pay a fine of $2.4 million, and Cardiff will remain under court supervision for three years.”
“The resolution of this case is a credit to our strong partnership with the Department of Justice,” said Rear Admiral Lee. “The Coast Guard brings to bear the expertise and detection capability of our marine inspectors, and our partnership with the Department of Justice allows us to hold marine polluters accountable.”
“The oceans must be protected from shipping companies that look to cut corners by dumping waste improperly,” said Special Agent-in-Charge Dillon. “Today’s action demonstrates that neither the government nor the public will tolerate the flagrant disregard of U.S. laws. Those who violate the law and pollute our waters will be vigorously prosecuted.”
An investigation, involving agents from the Coast Guard Investigative Service and EPA’s Criminal Investigative Division, with support from their agencies, confirmed that there had been an illegal discharge system on the Capitola as depicted in the whistleblower’s video. It showed a black hose tied in several places to overhead piping in the Capitola’s engine room. The hose connected one of the vessel’s waste oil tanks to a valve that opened directly to the ocean.
During its inspection, the Coast Guard interviewed members of the Capitola’s engine room crew, including the whistleblower. Three of these crew members had served on the Capitola for more than six months and during that time had witnessed multiple occasions when a hose was used to discharge the waste oil, sludge and water that had accumulated in the separated oil tank overboard, as directed by a senior engineering officer. None of these illegal discharges were recorded in the Oil Record Book, as required by law.
Investigators also learned that there had been a document called the Daily Sounding Record on the Capitola, and that it had tracked how much waste oil, sludge and bilge water was in each waste tank, on a daily basis. This record would have been useful during the Coast Guard’s inspection of the Capitola in that it could have shown when the levels of the waste tanks changed, which could be compared to entries in the Oil Record Book. Sudden, unexplained drops in the measurements could have indicated specific dates when wastes were discharged overboard. The Daily Sounding Record was not produced to the Coast Guard. The senior engineering officer who kept these records told the Coast Guard that the only record of waste tank levels that he had were undated scraps of paper in his office.
This prosecution was made possible through the combined efforts of the U.S. Coast Guard Sector-Baltimore; the Coast Guard Investigative Service-Baltimore; Coast Guard Fifth District Legal Office; Coast Guard Office of Maritime and International Law; Coast Guard Office of Investigations and Analysis; EPA Criminal Investigations Division. The cases were prosecuted by Thomas T. Ballantine of the Environmental Crimes Section of the U.S. Department of Justice and Justin S. Herring, Assistant U.S. Attorney in Baltimore.
Letter from the Attorney General to Congress on Litigation Involving the Defense of Marriage ActRead the Press Release
WASHINGTON – The Attorney General sent the following letter today to Congressional leadership to inform them of the Department’s course of action in two lawsuits, Pedersen v. OPM and Windsor v. United States, challenging Section 3 of the Defense of Marriage Act (DOMA), which defines marriage for federal purposes as only between a man and a woman. A copy of the letter is also attached.
The Honorable John A. Boehner
Speaker
U.S. House of Representatives
Washington, DC 20515Re: Defense of Marriage Act
Dear Mr. Speaker:
After careful consideration, including review of a recommendation from me, the President of the United States has made the determination that Section 3 of the Defense of Marriage Act (“DOMA”), 1 U.S.C. § 7, i as applied to same-sex couples who are legally married under state law, violates the equal protection component of the Fifth Amendment. Pursuant to 28 U.S.C. § 530D, I am writing to advise you of the Executive Branch’s determination and to inform you of the steps the Department will take in two pending DOMA cases to implement that determination.
While the Department has previously defended DOMA against legal challenges involving legally married same-sex couples, recent lawsuits that challenge the constitutionality of DOMA Section 3 have caused the President and the Department to conduct a new examination of the defense of this provision. In particular, in November 2010, plaintiffs filed two new lawsuits challenging the constitutionality of Section 3 of DOMA in jurisdictions without precedent on whether sexual-orientation classifications are subject to rational basis review or whether they must satisfy some form of heightened scrutiny. Windsor v. United States, No. 1:10-cv-8435 (S.D.N.Y.); Pedersen v. OPM, No. 3:10-cv-1750 (D. Conn.). Previously, the Administration has defended Section 3 in jurisdictions where circuit courts have already held that classifications based on sexual orientation are subject to rational basis review, and it has advanced arguments to defend DOMA Section 3 under the binding standard that has applied in those cases.ii
These new lawsuits, by contrast, will require the Department to take an affirmative position on the level of scrutiny that should be applied to DOMA Section 3 in a circuit without binding precedent on the issue. As described more fully below, the President and I have concluded that classifications based on sexual orientation warrant heightened scrutiny and that, as applied to same-sex couples legally married under state law, Section 3 of DOMA is unconstitutional.
Standard of Review
The Supreme Court has yet to rule on the appropriate level of scrutiny for classifications based on sexual orientation. It has, however, rendered a number of decisions that set forth the criteria that should inform this and any other judgment as to whether heightened scrutiny applies: (1) whether the group in question has suffered a history of discrimination; (2) whether individuals “exhibit obvious, immutable, or distinguishing characteristics that define them as a discrete group”; (3) whether the group is a minority or is politically powerless; and (4) whether the characteristics distinguishing the group have little relation to legitimate policy objectives or to an individual’s “ability to perform or contribute to society.” See Bowen v. Gilliard, 483 U.S. 587, 602-03 (1987); City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 441-42 (1985).
Each of these factors counsels in favor of being suspicious of classifications based on sexual orientation. First and most importantly, there is, regrettably, a significant history of purposeful discrimination against gay and lesbian people, by governmental as well as private entities, based on prejudice and stereotypes that continue to have ramifications today. Indeed, until very recently, states have “demean[ed] the[] existence” of gays and lesbians “by making their private sexual conduct a crime.” Lawrence v. Texas, 539 U.S. 558, 578 (2003).iii
Second, while sexual orientation carries no visible badge, a growing scientific consensus accepts that sexual orientation is a characteristic that is immutable, see Richard A. Posner, Sex and Reason 101 (1992); it is undoubtedly unfair to require sexual orientation to be hidden from view to avoid discrimination, see Don’t Ask, Don’t Tell Repeal Act of 2010, Pub. L. No. 111-321, 124 Stat. 3515 (2010).
Third, the adoption of laws like those at issue in Romer v. Evans, 517 U.S. 620 (1996), and Lawrence, the longstanding ban on gays and lesbians in the military, and the absence of federal protection for employment discrimination on the basis of sexual orientation show the group to have limited political power and “ability to attract the [favorable] attention of the lawmakers.” Cleburne, 473 U.S. at 445. And while the enactment of the Matthew Shepard Act and pending repeal of Don’t Ask, Don’t Tell indicate that the political process is not closed entirely to gay and lesbian people, that is not the standard by which the Court has judged “political powerlessness.” Indeed, when the Court ruled that gender-based classifications were subject to heightened scrutiny, women already had won major political victories such as the Nineteenth Amendment (right to vote) and protection under Title VII (employment discrimination).
Finally, there is a growing acknowledgment that sexual orientation “bears no relation to ability to perform or contribute to society.” Frontiero v. Richardson, 411 U.S. 677, 686 (1973) (plurality). Recent evolutions in legislation (including the pending repeal of Don’t Ask, Don’t Tell), in community practices and attitudes, in case law (including the Supreme Court’s holdings in Lawrence and Romer), and in social science regarding sexual orientation all make clear that sexual orientation is not a characteristic that generally bears on legitimate policy objectives. See, e.g., Statement by the President on the Don’t Ask, Don’t Tell Repeal Act of 2010 (“It is time to recognize that sacrifice, valor and integrity are no more defined by sexual orientation than they are by race or gender, religion or creed.”)
To be sure, there is substantial circuit court authority applying rational basis review to sexual-orientation classifications. We have carefully examined each of those decisions. Many of them reason only that if consensual same-sex sodomy may be criminalized under Bowers v. Hardwick, then it follows that no heightened review is appropriate – a line of reasoning that does not survive the overruling of Bowers in Lawrence v. Texas, 538 U.S. 558 (2003).iv Others rely on claims regarding “procreational responsibility” that the Department has disavowed already in litigation as unreasonable, or claims regarding the immutability of sexual orientation that we do not believe can be reconciled with more recent social science understandings.v And none engages in an examination of all the factors that the Supreme Court has identified as relevant to a decision about the appropriate level of scrutiny. Finally, many of the more recent decisions have relied on the fact that the Supreme Court has not recognized that gays and lesbians constitute a suspect class or the fact that the Court has applied rational basis review in its most recent decisions addressing classifications based on sexual orientation, Lawrence and Romer.vi But neither of those decisions reached, let alone resolved, the level of scrutiny issue because in both the Court concluded that the laws could not even survive the more deferential rational basis standard.
Application to Section 3 of DOMA
In reviewing a legislative classification under heightened scrutiny, the government must establish that the classification is “substantially related to an important government objective.” Clark v. Jeter, 486 U.S. 456, 461 (1988). Under heightened scrutiny, “a tenable justification must describe actual state purposes, not rationalizations for actions in fact differently grounded.” United States v. Virginia , 518 U.S. 515, 535-36 (1996). “The justification must be genuine, not hypothesized or invented post hoc in response to litigation.” Id. at 533.
In other words, under heightened scrutiny, the United States cannot defend Section 3 by advancing hypothetical rationales, independent of the legislative record, as it has done in circuits where precedent mandates application of rational basis review. Instead, the United States can defend Section 3 only by invoking Congress’ actual justifications for the law.
Moreover, the legislative record underlying DOMA’s passage contains discussion and debate that undermines any defense under heightened scrutiny. The record contains numerous expressions reflecting moral disapproval of gays and lesbians and their intimate and family relationships – precisely the kind of stereotype-based thinking and animus the Equal Protection Clause is designed to guard against.vii See Cleburne, 473 U.S. at 448 (“mere negative attitudes, or fear” are not permissible bases for discriminatory treatment); see also Romer, 517 U.S. at 635 (rejecting rationale that law was supported by “the liberties of landlords or employers who have personal or religious objections to homosexuality”); Palmore v. Sidotti, 466 U.S. 429, 433 (1984) (“Private biases may be outside the reach of the law, but the law cannot, directly or indirectly, give them effect.”).
Application to Second Circuit Cases
After careful consideration, including a review of my recommendation, the President has concluded that given a number of factors, including a documented history of discrimination, classifications based on sexual orientation should be subject to a heightened standard of scrutiny. The President has also concluded that Section 3 of DOMA, as applied to legally married same-sex couples, fails to meet that standard and is therefore unconstitutional. Given that conclusion, the President has instructed the Department not to defend the statute in Windsor and Pedersen, now pending in the Southern District of New York and the District of Connecticut. I concur in this determination.
Notwithstanding this determination, the President has informed me that Section 3 will continue to be enforced by the Executive Branch. To that end, the President has instructed Executive agencies to continue to comply with Section 3 of DOMA, consistent with the Executive’s obligation to take care that the laws be faithfully executed, unless and until Congress repeals Section 3 or the judicial branch renders a definitive verdict against the law’s constitutionality. This course of action respects the actions of the prior Congress that enacted DOMA, and it recognizes the judiciary as the final arbiter of the constitutional claims raised.
As you know, the Department has a longstanding practice of defending the constitutionality of duly-enacted statutes if reasonable arguments can be made in their defense, a practice that accords the respect appropriately due to a coequal branch of government. However, the Department in the past has declined to defend statutes despite the availability of professionally responsible arguments, in part because the Department does not consider every plausible argument to be a “reasonable” one. “[D]ifferent cases can raise very different issues with respect to statutes of doubtful constitutional validity,” and thus there are “a variety of factors that bear on whether the Department will defend the constitutionality of a statute.” Letter to Hon. Orrin G. Hatch from Assistant Attorney General Andrew Fois at 7 (Mar. 22, 1996). This is the rare case where the proper course is to forgo the defense of this statute. Moreover, the Department has declined to defend a statute “in cases in which it is manifest that the President has concluded that the statute is unconstitutional,” as is the case here. Seth P. Waxman, Defending Congress, 79 N.C. L.Rev. 1073, 1083 (2001).
In light of the foregoing, I will instruct the Department’s lawyers to immediately inform the district courts in Windsor and Pedersen of the Executive Branch’s view that heightened scrutiny is the appropriate standard of review and that, consistent with that standard, Section 3 of DOMA may not be constitutionally applied to same-sex couples whose marriages are legally recognized under state law. If asked by the district courts in the Second Circuit for the position of the United States in the event those courts determine that the applicable standard is rational basis, the Department will state that, consistent with the position it has taken in prior cases, a reasonable argument for Section 3’s constitutionality may be proffered under that permissive standard. Our attorneys will also notify the courts of our interest in providing Congress a full and fair opportunity to participate in the litigation in those cases. We will remain parties to the case and continue to represent the interests of the United States throughout the litigation.
Furthermore, pursuant to the President’s instructions, and upon further notification to Congress, I will instruct Department attorneys to advise courts in other pending DOMA litigation of the President's and my conclusions that a heightened standard should apply, that Section 3 is unconstitutional under that standard and that the Department will cease defense of Section 3.
A motion to dismiss in the Windsor and Pedersen cases would be due on March 11, 2011. Please do not hesitate to contact us if you have any questions.
Sincerely yours,
Eric H. Holder, Jr.
Attorney General______________________________________
i DOMA Section 3 states: “In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.”
ii See , e.g., Dragovich v. U.S. Department of the Treasury, 2011 WL 175502 (N.D. Cal. Jan. 18, 2011); Gill v. Office of Personnel Management, 699 F. Supp. 2d 374 (D. Mass. 2010); Smelt v. County of Orange, 374 F. Supp. 2d 861, 880 (C.D. Cal.,2005); Wilson v. Ake, 354 F.Supp.2d 1298, 1308 (M.D. Fla. 2005); In re Kandu, 315 B.R. 123, 145 (Bkrtcy. W.D. Wash. 2004); In re Levenson, 587 F.3d 925, 931 (9th Cir. E.D.R. Plan Administrative Ruling 2009).
iii While significant, that history of discrimination is different in some respects from the discrimination that burdened African-Americans and women. See Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 216 (1995) (classifications based on race “must be viewed in light of the historical fact that the central purpose of the Fourteenth Amendment was to eliminate racial discrimination emanating from official sources in the States,” and “[t]his strong policy renders racial classifications ‘constitutionally suspect.’”); United States v. Virginia, 518 U.S. 515, 531 (1996) (observing that “‘our Nation has had a long and unfortunate history of sex discrimination’” and pointing out the denial of the right to vote to women until 1920). In the case of sexual orientation, some of the discrimination has been based on the incorrect belief that sexual orientation is a behavioral characteristic that can be changed or subject to moral approbation. Cf. Cleburne, 473 U.S. at 441 (heightened scrutiny may be warranted for characteristics “beyond the individual’s control” and that “very likely reflect outmoded notions of the relative capabilities of” the group at issue); Boy Scouts of America v. Dale, 530 U.S. 640 (2000) (Stevens, J., dissenting) (“Unfavorable opinions about homosexuals ‘have ancient roots.’” (quoting Bowers, 478 U.S. at 192)).
iv See Equality Foundation v. City of Cincinnati, 54 F.3d 261, 266–67 & n. 2. (6th Cir. 1995); Steffan v. Perry, 41 F.3d 677, 685 (D.C. Cir. 1994); Woodward v. United States, 871 F.2d 1068, 1076 (Fed. Cir. 1989); Ben-Shalom v. Marsh, 881 F.2d 454, 464 (7th Cir. 1989); Padula v. Webster, 822 F.2d 97, 103 (D.C. Cir. 1987).
v See, e.g., Lofton v. Secretary of the Dep’t of Children & Family Servs., 358 F.3d 804, 818 (11th Cir. 2004) (discussing child-rearing rationale); High Tech Gays v. Defense Indust. Sec. Clearance Office, 895 F.2d 563, 571 (9th Cir. 1990) (discussing immutability). As noted, this Administration has already disavowed in litigation the argument that DOMA serves a governmental interest in “responsible procreation and child-rearing.” H.R. Rep. No. 104-664, at 13. As the Department has explained in numerous filings, since the enactment of DOMA, many leading medical, psychological, and social welfare organizations have concluded, based on numerous studies, that children raised by gay and lesbian parents are as likely to be well-adjusted as children raised by heterosexual parents.
vi See Cook v. Gates, 528 F.3d 42, 61 (1st Cir. 2008); Citizens for Equal Prot. v. Bruning, 455 F.3d 859, 866 (8th Cir. 2006); Johnson v. Johnson, 385 F.3d 503, 532 (5th Cir. 2004); Veney v. Wyche, 293 F.3d 726, 732 (4th Cir. 2002); Equality Foundation of Greater Cincinnati, Inc. v. City of Cincinnati, 128 F.3d 289, 292-94 (6th Cir. 1997).
vii See, e.g., H.R. Rep. at 15–16 (judgment [opposing same-sex marriage] entails both moral disapproval of homosexuality and a moral conviction that heterosexuality better comports with traditional (especially Judeo-Christian) morality”); id. at 16 (same-sex marriage “legitimates a public union, a legal status that most people . . . feel ought to be illegitimate” and “put[s] a stamp of approval . . . on a union that many people . . . think is immoral”); id. at 15 (“Civil laws that permit only heterosexual marriage reflect and honor a collective moral judgment about human sexuality”); id. (reasons behind heterosexual marriage—procreation and child-rearing—are “in accord with nature and hence have a moral component”); id. at 31 (favorably citing the holding in Bowers that an “anti-sodomy law served the rational purpose of expressing the presumed belief . . . that homosexual sodomy is immoral and unacceptable”); id. at 17 n.56 (favorably citing statement in dissenting opinion in Romer that “[t]his Court has no business . . . pronouncing that ‘animosity’ toward homosexuality is evil”).
Justice Department Sues Georgia Man to Stop Him from Preparing Tax Returns for OthersRead the Press Release
WASHINGTON – The United States has asked a federal court to stop Cecil Collier, who operates under the trade name "Cairo Fast Tax," from preparing federal tax returns for others, the Justice Department announced today. The government’s civil injunction complaint, filed in U.S. District Court in Albany, Ga., alleges that Collier prepares tax returns for customers that falsely claim the earned income tax credit (EITC).
The government alleges that Collier claimed the credit, or a far larger credit than was warranted, on his customers’ returns even though he knew or should have known that the customers were not entitled to the credit claimed. Collier allegedly did so by falsely claiming dependents or qualifying children and by overstating earned income. Collier also allegedly has not filed his own federal income tax returns since 2004, and in March 2010 the Internal Revenue Service (IRS) assessed over $37,000 in penalties against him.
According to the complaint, of the more than 3,500 tax returns prepared by Collier during the 2006 through 2009 tax years, at least 87 percent claimed an EITC. The complaint further states that, of the returns prepared by Collier that the IRS audited for issues concerning the EITC, 98 percent of them required adjustments. The government estimates that Collier’s tax return preparation may have resulted in more than $12 million in lost taxes.
Additional information about the Justice Department’s recent efforts to stop fraudulent claims for tax credits is available here . In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department website.
Hombre de Los Ángeles se declara culpable de conspiración para violar las normas de práctica laboral contra el amianto de la Ley de Aire LimpioRead the Press Release
WASHINGTON - John Bostick se declaró culpable hoy de conspiración para violar las normas de práctica laboral contra el amianto de la Ley de Aire Limpio durante la renovación de un edificio de apartamentos de 204 unidades en Winnetka, Calif., en 2006.
La Ley de Aire Limpio federal exige que quienes sean propietarios de o supervisen la renovación de edificios que contengan amianto cumplan con ciertas normas de práctica laboral establecidas. Dichas normas fueron creadas para garantizar la eliminación y remoción seguro del amianto y la protección de los trabajadores.
Según el acuerdo de declaración de culpabilidad presentado hoy al tribunal federal, el Sr. Bostick sabía en enero de 2006 que había amianto presente en los cielorrasos de las unidades del complejo de apartamentos conocido como Forest Glen. A sabiendas de que había amianto presente, el Sr. Bostick y sus coconspiradores contrataron a un grupo de trabajadores no capacitados o certificados para realizar la eliminación de amianto, haciéndolos raspar los cielorrasos de los apartamentos sin informar a los trabajadores acerca del amianto. El trabajo ilegal resultó en la liberación repetida de material que contenía amianto en todo el complejo de apartamentos y el área adyacente, causando también la exposición potencial al amianto de los trabajadores sin licencia. Después de que acabó con la eliminación ilegal de amianto un inspector del Distrito de Gestión de Calidad del Aire de la Costa Sur de California, se eliminó el amianto a un costo de alrededor de 1.2 millones de dólares.
El 14 de junio de 2010, Joseph Yoon, el gerente de proyecto, se declaró culpable de conspirar para violar las normas de lugar de trabajo con amianto de la Ley de Aire Limpio en el predio del complejo. La fecha de la lectura de la sentencia ha sido programada para el 25 de abril de 2011.
Una acusación formal de seis cargos que acusa al codemandado Charles Yi, propietario de los condominios Forest Glen, de conspiración y múltiples violaciones de la Ley de Aire Limpio se encuentra pendiente. El enjuiciamiento correspondiente ha sido programado para el 15 de marzo de 2011. Los alegatos en la acusación formal son meras acusaciones y se supone que todas las personas son inocentes hasta que se haya probado su culpabilidad más allá de la duda razonable en un tribunal.
El caso fue investigado por la Oficina de Coacción Penal de la Agencia de Protección Ambiental de EE.UU., el Distrito de Gestión de Calidad de la Costa Sur de California y el Departamento de Control de Sustancias Tóxicas de California. Están a cargo de la acusación en el caso la Fiscalía Federal para el Distrito Central de California y la Sección de Delitos Ambientales de la División de Recursos Naturales del Departamento de Justicia de EE.UU.
Four Swiss Bankers Charged with Helping U.S. Taxpayers Use Secret Accounts at Swiss Banks to Evade U.S. TaxesRead the Press Release
WASHINGTON – Marco Parenti Adami, Emanuel Agustino, Michele Bergantino and Roger Schaerer, bankers at an international bank incorporated and with its headquarters in Zurich, Switzerland, with offices worldwide, including New York City and Miami, were indicted by a federal grand jury in the Eastern District of Virginia and charged with conspiring with other Swiss bankers to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.
Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division; and Douglas Shulman, Commissioner of the IRS, made the announcement.
According to the indictment, the international bank’s managers and bankers engaged in illegal cross-border banking that was designed to assist U.S. customers evade their income taxes by opening and maintaining secret bank accounts at the bank and other Swiss banks. As of the fall of 2008, the international bank maintained thousands of secret accounts for customers in the United States with as much as $3 billion in total assets under management in those accounts. The conspiracy dates back to 1953 and involved two generations of U.S. tax evaders including U.S. customers who inherited secret accounts at the international bank.
The indictment asserts that Marco Parenti Adami, an Italian national, was a Geneva, Switzerland-based member of senior management at the bank where he catered to high net worth individuals in North America and managed other bankers with similar clientele. It is also alleged that Roger Schaerer, a Swiss national, worked for the bank in New York City where he assisted U.S. taxpayers with their secret accounts. The indictment also alleges that Emanuel Agustino and Michele Bergantino were bankers for the international bank who traveled to the United States to assist U.S. taxpayers in evading their U.S. taxes through the use of secret bank accounts in Switzerland. It is further alleged in the indictment that Emanuel Agustino left the international bank and continued the tax fraud scheme at two other private Swiss banks.
According to the indictment, the defendants and their co-conspirators solicited U.S. customers to open secret accounts because Swiss bank secrecy would permit them to conceal from the IRS their ownership of accounts at the bank and other Swiss banks. It is further alleged that they provided unlicensed and unregistered banking services and investment advice to customers in the United States in person while on travel to here, including at the international bank’s representative office in New York City and by mailings, e-mail and telephone calls to and from the United States.
The indictment further alleges that the defendants and their co-conspirators caused U.S. customers to travel outside the United States, to destinations including Switzerland and the Bahamas, to conduct banking related to their secret accounts; opened secret accounts in the names of nominee tax haven entities for U.S. customers; accepted IRS forms that falsely stated under penalties of perjury that the owners of the secret accounts were not subject to U.S. taxation; advised U.S. customers to structure withdrawals from their secret accounts in amounts less than $10,000 in an attempt to conceal the secret account and the transactions from American authorities; and advised U.S. customers to utilize offshore credit, and debit cards linked to their secret accounts and provided the customers with such cards, including cards issued by American Express, Visa and Maestro.
According to the indictment, after the bank decided to close the secret accounts maintained by U.S. customers, the defendants encouraged and assisted the customers to transfer their secret accounts to other banks in Switzerland and Hong Kong as a means of continuing to hide their assets from the IRS and discouraged the customers from disclosing their secret accounts to the IRS through the Voluntary Disclosure Program.
A criminal indictment is only an accusation and a defendant is presumed innocent until proven guilty. If convicted, the defendants each face a maximum of five years in prison and a maximum fine of $250,000.
U.S. Attorney MacBride and Acting Assistant Attorney General DiCicco commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsels Kevin M. Downing and John E. Sullivan and Trial Attorneys Mark F. Daly, Tino M. Lisella and Melissa Siskind of the Tax Division, and Assistant U.S. Attorney Mark Lytle, who are prosecuting the case.
Dos hombres de Shenandoah, Pa., fueron sentenciados por la golpiza fatal de Luis RamirezRead the Press Release
WASHINGTON - Brandon Piekarsky,19, y Derrick Donchak, 21, ambos de Shenandoah, Pa. , fueron sentenciados hoy a nueve años en prisión por la golpiza fatal de Luis Ramirez, anunció el Departamento de Justicia.
Se les ordenó a Piekarsky y Donchak cumplir con tres años de libertad bajo supervisión y pagar 550 dólares al fondo de compensación de víctimas de Pensilvania, así como las tasas especiales por cada cargo. Donchak fue sentenciado también a 30 meses adicionales por obstrucción, sentencia que cumplirá concomitantemente.
El 14 de octubre de 2010, un jurado federal en el Distrito Medio de Pensilvania encontró a ambos demandados culpables de violación delictiva de la Ley de Vivienda Justa federal por matar a Luis Ramirez a golpes por ser hispano y porque no deseaban que hispanos vivieran en Shenandoah. Además, el jurado encontró que Donchak conspiró para obstruir la justicia, y de hecho la obstruyó, durante la investigación de este delito.
De acuerdo con pruebas presentadas en el juicio el 12 de julio de 2008, los demandados se encontraron con Ramirez en una plaza al salir de un festival comunitario. Los demandados y varios de sus amigos, algunos de los cuales prestaron testimonio durante el juicio, atacaron a Ramirez. Durante la golpiza, los demandados y sus amigos gritaron epítetos raciales en los que repetidamente se refirieron a Ramirez en términos raciales derogatorios y le dijeron "Esto es Shenandoah. Esto es Estados Unidos. Vuelve a México". De acuerdo con el testimonio, Donchak golpeó a Ramirez sujetando un pedazo grueso de metal identificado en el juicio como siendo un "fist pack" (un elemento de metal grueso utilizado para intensificar el daño causado por un puñetazo). Después de que otro amigo golpeó a Ramírez en el rostro haciendo que se callera y se golpeara la cabeza contra el suelo, Piekarsky pateó a Ramirez en la cabeza cuando estaba inconsciente y caído. Después de patear a Ramirez, Piekarsky le dijo a una transeúnte casada con un hispano: "diles a tus amigos mexicanos que se vayan de Shenandoah o acabarás tirada al lado de él". Una vez terminada la pelea, Ramirez fue llevado al Centro Médico Regional Geisinger por vía aérea, donde falleció debido a lesiones masivas en la cabeza. El jurado también oyó testimonios de que, inmediatamente después de la golpiza, Donchak conspiró para obstruir la investigación de la agresión fatal.
"Los actos de violencia, como la golpiza que sufrió Luis Ramirez, no se aceptarán en este país", dijo Thomas E. Perez, Secretario de Justicia Auxiliar de la División de Derechos Civiles del Departamento de Justicia. "Como ilustra este caso, la División de Derechos Civiles se empeña en proteger enérgicamente los derechos civiles de cada persona que viva en este país".
Este caso fue investigado por agentes especiales de la División de Filadelfia del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)]. Estuvieron a cargo de la acusación Myesha Braden y Gerard V. Hogan de la Sección de lo Penal de la División de Derechos Civiles, con la asistencia de la Fiscalía Federal del Distrito Medio de Pensilvania.