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29 August 2012
Leader of Internet Piracy Group “IMAGiNE”<br /> Pleads Guilty to Copyright Infringement ConspiracyRead the Press Release
WASHINGTON – A Virginia man pleaded guilty today to conspiring to willfully reproduce and distribute tens of thousands of infringing copies of copyrighted works without permission, including infringing copies of movies before they were commercially released on DVD, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Washington, D.C., announced today.
Jeramiah B. Perkins, 39, of Portsmouth, Va., pleaded guilty to one count of conspiracy to commit criminal copyright infringement. The plea was entered before U.S. Magistrate Judge Tommy E. Miller in the Eastern District of Virginia. At sentencing, scheduled for Jan. 3, 2013, Perkins faces a maximum sentence of five years in prison, a fine of $250,000 and three years of supervised release.
Perkins was indicted on April 18, 2012, along with three other leading members of the IMAGiNE Group, an organized online piracy group seeking to become the premier group to first release Internet copies of new movies only showing in theaters.
According to court documents, Perkins and his co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters. Perkins admitted he took the lead in renting computer servers in France and elsewhere for use by the IMAGiNE Group. He also admitted he registered domain names for use by the IMAGiNE Group, and opened e-mail and PayPal accounts to receive donations and payments from persons downloading or buying IMAGiNE Group releases of pirated copies of motion pictures and other copyrighted works. Perkins directed and participated in using receivers and recording devices in movie theaters to secretly capture the audio sound tracks of copyrighted movies and then synchronized the audio files with illegally recorded video files to create completed movie files suitable for sharing over the Internet among members of the IMAGiNE Group and others. Perkins also admitted the IMAGiNE Group’s conduct resulted in a readily provable and reasonably foreseeable infringement amount of more than $400,000.
Co-defendants Sean Lovelady, Willie Lambert and Gregory Cherwonik each pleaded guilty to one count of conspiracy to commit criminal copyright infringement on May 8, 2012, June 22, 2012, and July 10, 2012, respectively.
The investigation of the case and the arrests were conducted by agents with ICE-HSI. Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Justice Department Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Justice Department Criminal Division’s Office of International Affairs.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.
Justice Department Settles with Sacramento, Calif., Public Library Authority over Inaccessible “E-Reader” DevicesRead the Press Release
The Justice Department announced today that it and the National Federation of the Blind have reached a settlement with the Sacramento Public Library Authority in Sacramento, Calif., to remedy alleged violations of the Americans with Disabilities Act (ADA). The agreement resolves allegations that the library violated the ADA by using inaccessible Barnes & Noble NOOK electronic reader devices in a patron lending program.
Under the settlement agreement, the library will not acquire any additional e-readers for patron use that exclude persons who are blind or others with disabilities who need accessible features such as text-to-speech functions or the ability to access menus through audio or tactile options. The library has also agreed to acquire at least 18 e-readers that are accessible to persons with disabilities. The settlement agreement also requires the library to train its staff on the requirements of the ADA.
“Emerging technologies like e-readers are changing the way we interact with the world around us and we need to ensure that people with disabilities are not excluded from the programs where these devices are used,” said Assistant Attorney General Thomas E. Perez.
“We are pleased that the Sacramento Public Library Authority worked so cooperatively to adopt measures that will allow patrons with disabilities to avail themselves equally of the library’s programs and services,” said U.S. Attorney for the Eastern District of California, Benjamin B. Wagner.
The ADA protects individuals with disabilities from discrimination in the services, programs, or activities of state and local government entities. Under title II of the ADA, state and local governments must afford individuals with disabilities an equal opportunity to participate in or benefit from aids, benefits, or services provided. For more information about the ADA, call the Department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov .
28 August 2012
Two Investment Advisors Convicted in California of High Yield Investment FraudRead the Press Release
WASHINGTON – William J. Ferry, a former stock broker and investment advisor, and Dennis J. Clinton, a former real estate investment manager, were found guilty by a federal jury in Santa Ana, Calif., today for their roles in a conspiracy to defraud a wealthy investor of $1 billion in a high-yield investment fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. The investor was, in reality, part of an undercover FBI team that posed as wealthy investors and investment managers in an effort to stop fraudsters before they actually harmed victims.
“Mr. Ferry and Mr. Clinton tried to dupe undercover agents into believing their high-yield investment program would earn them extremely high rates of return,” said Assistant Attorney General Breuer. “In fact, Ferry and Clinton were conspiring to steal their money, along with the money of trusting investors. Undercover operations are an integral part of our efforts to stop financial fraudsters before they wipe out the life savings of innocent victims. Based on today’s verdict, the defendants will now pay a heavy price for their conduct.”
Ferry, 70, of Newport Beach , Calif., and Clinton, 64, of San Diego, were each found guilty in U.S. District Court for the Central District of California of one count of conspiracy, two counts of mail fraud and six counts of wire fraud. They face a maximum penalty of 20 years in prison on each fraud count. They will be sentenced on Feb. 1, 2013.Paul R. Martin, a former senior vice president and managing director of Bankers Trust, was found guilty in U.S. District Court for the Central District of California for his role in the scheme in a separate trial on Aug. 3, 2012. Martin, 63, of New Jersey, was convicted of one count of conspiracy, two counts of mail fraud and six counts of wire fraud. At sentencing, scheduled for Feb. 1, 2013, Martin faces a maximum penalty of 20 years in prison on each fraud count.
On Aug. 21, 2008, Ferry, Clinton and Martin were indicted along with Oregon resident John Brent Leiske, Canadian citizen and resident Alex Chelak, Iowa resident Richard Arthur Pundt, California resident Brad Keith Lee and Florida resident Ronald J. Nolte.
Evidence at trial established that, from February to December 2006, Ferry, Clinton, Martin and others conspired to promote a high-yield investment fraud scheme promising an extremely high return at little or no risk to principal. The defendants claimed that their high-yield investment program (HYIP) was a “Fed trade program” regulated by the “Fed” (Federal Reserve Bank), that they had to follow strict Fed guidelines, and that a Fed trade administrator administered their program, with compliance duties handled by a Fed compliance officer.
Investors also were told that once they had passed compliance, they would become registered in Washington, D.C., with the Fed. The defendants falsely represented to FBI undercover agents that they would arrange for them to meet a Federal Reserve official and/or the chairman of the board of a major U.S. bank to confirm the existence of the defendants’ HYIP. The defendants falsely claimed that these Fed investment programs existed primarily to generate funds for project funding and humanitarian purposes, such as Hurricane Katrina relief. They further falsely claimed that the promised profits from investing in a Fed program had to be divided, in equal amounts, with one portion going for some humanitarian purpose, another portion for some kind of project financing, and the remainder to the investor. The defendants represented to the undercover agents that the agents’ offshore bank account would be managed by a Swiss banker who was already managing billions of dollars for the defendants. In the scheme: Ferry acted as an underwriter and member of the compliance team; Martin acted as a banking expert; Clinton acted as a troubleshooter during the compliance phase and transfer of funds to the Swiss banker; Lee acted as the contact with the Swiss banker; and Leiske acted as the trader. Chelak is charged with having acted as a compliance officer.
On April 13, 2009, Lee pleaded guilty to wire fraud and conspiracy to commit mail and wire fraud. On Jan. 11, 2010, he was sentenced to 24 months in prison.
Leiske’s case was transferred to the District of Oregon, where he pleaded guilty to all counts on Jan. 24, 2012. He is scheduled to be sentenced on Sept. 19, 2012.
Nolte was acquitted today of all charges by a jury in the Central District of California. In August 2010, charges against Pundt were dismissed by the government.
Chelak remains a fugitive.
This continuing investigation is being conducted by the FBI. This case is being prosecuted by Senior Trial Attorney David Bybee and Trial Attorney Fred Medick of the Justice Department Criminal Division’s Fraud Section.Las Vegas Man Pleads Guilty to Foreclosure Rescue Scam and Theft of Government FundsRead the Press Release
WASHINGTON – A Las Vegas man pleaded guilty today to operating a foreclosure rescue scam that defrauded distressed homeowners who were struggling to pay their mortgages, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Alex P. Soria, 65, pleaded guilty before U.S. District Judge Lloyd D. George in the District of Nevada to one count of wire fraud and one count of theft of government funds in connection with a scheme to defraud homeowners who were behind on their mortgages.
According to court documents, Soria identified homeowners whose mortgage debt exceeded the value of their homes and charged them a fee purportedly to reduce the principal balance of their mortgages using money from the Department of the Treasury’s Troubled Asset Relief Program (TARP). Soria admitted in court that he lied to homeowners about his affiliation with several mortgage lenders and that he provided victims with fraudulent letters stating they had been approved for loans. Soria also admitted he falsely told victims that his loan program had been successful in the past and charged homeowners for loan modifications he knew he could not deliver. Court documents show that Soria concealed from homeowners the fact that the state of Nevada had issued a cease and desist order which legally prohibited him from working in the mortgage industry. Soria collected more than $100,000 in fees from distressed homeowners, many of whom lost their homes to foreclosure after Soria failed to deliver the loan modifications he promised.
As part of the same case, Soria also pleaded guilty to continuing to collect Social Security Disability Insurance benefits while at the same time receiving income from his foreclosure rescue operation. The Social Security Disability Insurance program is a federal program that replaces the wages of individuals who become unable to work due to a disability. Soria admitted to collecting more than $200,000 in disability benefits from 1990 to 2010 while at the same time receiving income that he concealed from the Social Security Administration.
This case is being prosecuted by Trial Attorneys Brian R. Young and Mary Ann McCarthy of the Justice Department Criminal Division’s Fraud Section. The case was investigated by the Offices of Inspector General for the Department of Housing and Urban Development and the Social Security Administration. The U.S. Attorney’s Office for the District of Nevada assisted with the investigation and prosecution of this case.
This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Justice Department Reaches Lending Discrimination Settlement with GFI Mortgage Bankers Inc.Read the Press Release
GFI Mortgage Bankers Inc., a large independent home mortgage firm that concentrates on the New York, New Jersey, and Florida markets, will pay $3.555 million to resolve a lending discrimination lawsuit filed by the Department of Justice and the U.S. Attorney’s Office for the Southern District of New York. The lawsuit alleges that GFI engaged in a pattern or practice of discrimination by pricing residential mortgage loans for qualified African-American and Hispanic borrowers higher than for similarly-qualified non-Hispanic white borrowers between 2005 and 2009.
The settlement provides $3.5 million in compensation to approximately 600 African-American and Hispanic GFI borrowers identified by the United States as paying more for a loan based on their race or national origin, and it requires GFI to pay the maximum $55,000 civil penalty allowed by the Fair Housing Act. The settlement also requires GFI to develop and implement new policies that limit the pricing discretion of its loan officers, require documentation of loan pricing decisions, and monitor loan prices for race and national origin disparities not justified by objective borrower credit characteristics or loan features.
As part of the settlement, GFI admits that an analysis of the note interest rates and fees that it charged on mortgage loans to qualified borrowers showed statistically significant disparities between non-Hispanic white borrowers and both African-American and Hispanic borrowers that could not be explained by objective borrower characteristics or loan product features. The company also admitted that it provided financial incentives to its loan officers to charge higher interest rates and fees to borrowers and that it did not have fair lending training and monitoring programs in place to prevent those interest rate and fee disparities from occurring. The settlement came after the United States had filed its opposition to GFI’s motion to dismiss the case and the court had stated it was “skeptical” of GFI’s argument that federal law allows lenders to price loans in a way that produces such disparate impacts on minority borrowers.
The settlement, which was entered by the court, was filed in federal court in Manhattan, where GFI is headquartered.
“The Justice Department will not hesitate to litigate against lenders to enforce federal fair lending laws where the evidence warrants and to obtain compensation for borrowers who were victims of unlawful lending practices,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This department is determined to address discriminatory lending practices and to ensure equal credit opportunity for all borrowers in the years to come. We also greatly appreciate our strong partnership with the U.S. Attorney’s Office for the Southern District of New York, which worked jointly with the department to prosecute this case.”
“With the settlement we announce today, the hundreds of victims of lending discrimination committed by GFI will be made whole, and the company has admitted the conduct that led to this lawsuit, and agreed to reform its residential lending practices,” said Preet Bharara, U.S. Attorney for the Southern District of New York. The swift resolution of this case demonstrates the commitment of this Office and of the entire Department of Justice to aggressively enforcing the laws against discriminatory lending, and to holding accountable those who engage in this illegal conduct .”
The Department of Housing and Urban Development (HUD) started the investigation into GFI’s lending practices by opening a Secretary-initiated investigation under the Fair Housing Act. HUD reviewed GFI’s documents and loan files, interviewed GFI’s employees, and analyzed GFI’s loan data. HUD referred the lender to DOJ in January 2010 for a potential pattern or practice of discrimination.
“No prospective home buyer should be saddled with a higher cost mortgage because of their race or national origin,” stated HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña. “This type of practice has no place in the mortgage market. HUD and the Justice Department have made a vigorous commitment to ending unlawful lending discrimination.”
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov .
A copy of the complaint and proposed consent order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing
The proposed settlement provides for an independent administrator to contact and distribute payments of compensation at no cost to borrowers whom the Justice Department identifies as victims of GFI’s discrimination. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator. The department will make a public announcement and post contact information on its website once the administrator begins contacting victims. Individuals who believe that they may have been victims of lending discrimination by GFI and have questions about the settlement may email the department at [email protected] or call 1-800-896-7743, extension 9992 or 212-637-0840, or write to the following address:
Chief, Civil Rights Unit
U.S. Attorney’s Office, S.D.N.Y.
86 Chambers Street, 3rd Floor
New York, NY 10007
Related Materials:
Consent Order
Japanese Automobile Parts Manufacturer Agrees to Plead Guilty to Price Fixing on Parts Installed in US CarsRead the Press Release
WASHINGTON – Nagoka, Japan-based Nippon Seiki Co. Ltd. has agreed to plead guilty and to pay a $1 million criminal fine for its role in a conspiracy to fix prices of instrument panel clusters, commonly known as meters, installed in cars sold in the United States and elsewhere, the Department of Justice announced today.
According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Nippon Seiki engaged in conspiracies to rig bids for, and to fix, stabilize and maintain the prices of instrument panel clusters sold to an automaker in the United States and elsewhere. According to the court document, Nippon Seiki’s involvement in the conspiracy lasted from at least as early as April 2008 until at least February 2010.
Nippon Seiki manufactures and sells a variety of automotive parts, including instrument panel clusters. Instrument panel clusters are the mounted array of instruments and gauges housed in front of the driver of an automobile. The department said that Nippon Seiki and its co-conspirators carried out the conspiracy by agreeing, during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of instrument panel clusters, sold to an automaker in the United States and elsewhere, on a model-by-model basis.
As part of the plea agreement, which will be subject to court approval, Nippon Seiki has agreed to cooperate with the department’s investigation.
“For nearly two years, Nippon Seiki conspired to sell instrument control panels at collusive and noncompetitive prices, affecting the prices of many automobiles sold in the United States,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The division will continue to hold companies accountable for these types of anticompetitive practices that harm American consumers.”
Including Nippon Seiki, eight companies and 11 executives have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd., DENSO Corp., Yazaki Corp., G.S. Electech Inc., Fujikura Ltd. and Autoliv Inc. pleaded guilty and were sentenced to pay a total of more than $785 million in criminal fines. In July 2012, TRW Deutschland Holding GmbH agreed to plead guilty and is awaiting sentencing. Additionally, seven of the individuals – Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoki Kawai, Shigeru Ogawa and Hisamitsu Takada – have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. Makoto Hattori and Norihiro Imai have pleaded guilty and await sentencing. Kazuhiko Kashimoto and Toshio Sudo have also agreed to plead guilty.
Nippon Seiki is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine for the company 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 prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. 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 call the FBI’s Detroit Field Office at 313-965-2323.
Former Alabama Police Officer Sentenced to Prison for Stealing Money and Property from Highway MotoristsRead the Press Release
Jessie Alan Fuller, 25, of Pensacola, Fla., was sentenced today by U.S. District Judge W. Keith Watkins to 37 months in prison and two years supervised release, the Justice Department announced. Fuller pleaded guilty on April 26, 2012, to one count of conspiracy against rights, a felony, and one count of deprivation of rights under color of law, a misdemeanor. These charges stemmed from Fuller’s stealing money and property from motorists on Interstate 65 in central Alabama while he was a police officer with the Fort Deposit Police Department.
During his plea, Fuller admitted that he and another former Fort Deposit police officer agreed to pull over vehicles under the guise of legitimate law enforcement activity and to steal cash from drivers and passengers. Fuller further admitted that between May and June 2009, he and the other officer committed numerous thefts together, including thefts of $200 each from two separate victims and $120 from a third victim. In each of these incidents, Fuller and the other officer worked together, acting with each other’s knowledge and cooperation, and shared the stolen money. In each incident, the two officers used a marked patrol car, wore police clothing and carried a firearm. Fuller also admitted to stealing a GPS device from a driver whom he pulled over and arrested on March 14, 2009.
“This defendant abused his power as a law enforcement officer for his own financial gain. He violated not only the law, but also the public trust,” said Thomas E. Perez, Assistant Attorney General for Civil Rights Division. “The Department of Justice is committed to holding those who abuse their authority and prey on members of the community accountable for their illegal actions.”
“It is terrible to see those sworn to uphold the law, break the law and prey on the public,” stated George L. Beck, U.S. Attorney for the Middle District of Alabama. “While it is always difficult to prosecute a member of our law enforcement community, my office is dedicated to protecting the community and seeking justice for all.”
On June 12, 2012, an eight-count indictment was unsealed charging Carlos Tyson Bennett, of Greenville, Ala., as the other officer. Bennett was charged with one count of conspiracy against rights, four counts of deprivation of rights under color of law, and three counts of obstruction of justice. An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty. Trial is scheduled to begin in Bennett’s case on Sept. 10, 2012.
This case is being investigated by the Alabama Bureau of Investigation; the Butler County, Ala., Sheriff’s Office; and the Lowndes County, Ala., Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Gray Borden for the Middle District of Alabama and Trial Attorney Chiraag Bains from the Justice Department’s Civil Rights Division.
Federal Court Permanently Bars California Lawyerfrom Tax Preparation and Giving Tax AdviceRead the Press Release
A federal court in San Diego has permanently barred a tax lawyer and his law firm from providing tax advice and from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order against Scott A. Waage, of San Diego, was signed by Judge William Q. Hayes of the U.S. District Court for the Southern District of California. Waage agreed to the injunction without admitting the allegations against him.
The government complaint in the case alleged that Waage, a self-proclaimed “visionary tax attorney,” promoted tax fraud schemes that helped customers evade income taxes through a concept he called “Strategic Integrated Planning.” According to the complaint, one of Waage’s schemes involved creating and using sham consulting corporations (purportedly headquartered in customers’ homes) that did not perform consulting services. Customers funneled funds to the sham companies to pay for and improperly deduct the customers’ personal expenses, the complaint alleged.
Waage also unlawfully used employee-benefit plans to pay customers’ personal expenses and used pension plans to illegally increase and accelerate deductions and avoid income taxes on plan payouts (illegally structured and funded by life insurance contracts), according to the allegations in the complaint. Robert O. Jensen, a certified public accountant, allegedly prepared the customers’ tax returns claiming the bogus deductions generated by Waage’s schemes. Last March the court enjoined Jensen from preparing tax returns that understate income.
The government complaint alleges that the harm to the Treasury as a result of Waage’s schemes exceeded $10.8 million.
The injunction order requires Waage to give the government a list of all clients who used his tax planning or tax preparation services since 2001. Waage also must send his former clients notice of the injunction order.
Since 2001, the Justice Department’s Tax Division has obtained hundreds injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. More information about these cases is available on the Justice Department website .
Related Documents: United States v. Scott A. Waage, etc., Stipulated Order and Judgment of Permanent Injunction (PDF)
El Departamento de Justicia llega a acuerdo conciliatorio en caso por discriminación en préstamos con GFI Mortgage Bankers, Inc.Read the Press Release
GFI Mortgage Bankers Inc., una compañía grandde e independiente de préstamos hipotecarios en los mercados de Nueva York, Nueva Jersey y Florida, pagará 3.555 millones de dólares para resolver una demanda por discriminación en préstamos presentada por el Departamento de Justicia [Department of Justice (DOJ)] y la Fiscalía Federal para el Distrito Sur de Nueva York. La demanda alega que GFI exhibió un patrón o práctica de discriminación al establecer un precio mayor a los préstamos hipotecarios residenciales de prestatarios calificados afroestadounidenses e hispanos a los precios dados a prestatarios blancos no hispanos similarmente calificados entre 2005 y 2009.
El acuerdo conciliatorio establece 3.5 millones de dólares de indemnización para alrededor de 600 prestatarios afroestadounidenses e hispanos de GFI que los Estados Unidos identificaron que pagaron más por un préstamo por su raza u origen nacional, y además exige que GFI pague la multa civil máxima de 55,000 dólares permitida por la Ley de Vivienda Justa. El acuerdo conciliatorio también exige que GFI desarrolle e implemente políticas nuevas que limiten la discreción tarifaria de sus agentes de préstamos, requiere que se documenten las decisiones de fijación de precios de préstamos y controla los precios de préstamos en busca de disparidades por raza y origen nacional no justificadas por características crediticias objetivas del prestatario.
Como parte del acuerdo conciliatorio, GFI admite que el análisis de las tasas de interés y las tarifas que le cobró a prestatarios calificados por préstamos hipotecarios demostró disparidades significativas estadísticamente entre prestatarios blancos no hispanos y prestatarios afroestadounidenses e hispanos que no se podían explicar por características objetivas del prestatario o del producto crediticio. La empresa también admitió que ofrecía incentivos financieros a sus agentes de préstamos para que cobraran tasas de interés y tarifas más elevadas a los prestatarios y que no había implementado programas de capacitación y monitoreo sobre préstamos justos para evitar que se produjeran esas disparidades en la tasa de interés y las tarifas. El acuerdo conciliatorio se produjo después de que los Estados Unidos presentaran su oposición a la petición de GFI de desestimar el caso y que el tribunal hubiera declarado que tomaba con “escepticismo” el argumento de GFI de que la ley federal permite que los prestamistas fijen precios para los préstamos de una manera que produce este tipo de impacto desigual en los prestatarios de minorías.
El acuerdo conciliatorio, emitido por el tribunal, fue presentado en el tribunal federal de Manhattan, donde GFI tiene su sede.
“El Departamento de Justicia no dudará en litigar contra prestamistas para hacer valer las leyes federales de préstamos justos cuando la evidencia lo justifique y en obtener una indemnización para los prestatarios que fueron víctimas de prácticas ilícitas en la obtención de préstamos”, dijo Thomas E. Perez, Secretario Auxiliar de la División de Derechos Civiles. “Este departamento está decidido a combatir las prácticas crediticias discriminatorias y garantizar la igualdad de oportunidades crediticias para todos los prestatarios en los años venideros. También agradecemos profundamente nuestra sólida asociación con la Fiscalía Federal para el Distrito Sur de Nueva York, que trabajó conjuntamente con el departamento para enjuiciar este caso”.
“Con el acuerdo conciliatorio que anunciamos hoy, los cientos de víctimas de la discriminación crediticia cometida por GFI serán compensados a capacidad. Además, la compañía admitió la conducta que llevó a esta demanda y aceptó reformar sus prácticas de préstamos residenciales”, dijo Preet Bharara, Fiscal Federal para el Distrito Sur de Nueva York. La rápida resolución de este caso demuestra el compromiso de esta Oficina y todo el Departamento de Justicia de hacer valer enérgicamente las leyes contra los préstamos discriminatorios y de responsabilizar a los que exhiben esta conducta ilegal”.
El Departamento de Vivienda y Desarrollo Urbano [Department of Housing and Urban Development (HUD)] inició la investigación sobre las prácticas crediticias de GFI abriendo una investigación iniciada por el Secretario bajo la Ley de Vivienda Justa. HUD revisó documentos y archivos crediticios de GFI, entrevistó a empleados de GFI y analizó los datos de préstamos de GFI. HUD remitió al prestamista al DOJ en enero de 2010 por un patrón o práctica potencial de discriminación.
“Ningún comprador potencial de vivienda debe tener que lidiar con una hipoteca de mayor costo por su raza u origen nacional”, declaró el Secretario Auxiliar de Vivienda Justa e Igualdad de Oportunidades de HUD John Trasviña. “Este tipo de práctica no tiene lugar en el mercado hipotecario. HUD y el Departamento de Justicia han hecho un fuerte compromiso para poner fin a la discriminación ilícita en los préstamos”.
El anuncio de hoy forma parte de iniciativas en curso de la Fuerza de Tarea de Coacción contra el Fraude Financiero del Presidente Barack Obama [Financial Fraud Enforcement Task Force (FFETF)], que fue creada en noviembre de 2009 para implementar una iniciativa agresiva, coordinada y proactiva para investigar y enjuiciar delitos financieros. Con más de 20 agencias federales, 94 fiscalías federales y asociados estatales y locales, es la coalición más amplia de la historia de agencias de las fuerzas del orden público, de investigación y regulatorias para combatir el fraude. Desde su formación, la fuerza de tarea ha hecho grandes avances para facilitar un incremento de la investigación y el enjuiciamiento de delitos financieros; mejorando la coordinación y cooperación entre autoridades federales, estatales y locales; abordando la discriminación en los mercados crediticios y financieros y brindando asistencia al público, las víctimas, instituciones financieras y otras organizaciones. En los últimos tres años fiscales, el Departamento de Justicia ha presentado más de 10,000 casos de fraude financiero contra casi 15,000 demandados, entre ellos más de 2,700 demandados por fraude hipotecario. Para obtener más información sobre la fuerza de tarea, visite www.stopfraud.gov.
Para obtener una copia de la demanda y del decreto por consentimiento propuesto, así como también información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en www.justice.gov/fairhousing.
El acuerdo conciliatorio propuesto establece a un administrador independiente para contactar y distribuir los pagos de indemnización sin costo para los prestatarios que el Departamento de Justicia identifica como víctimas de discriminación de GFI. Los prestatarios que son elegibles para recibir una indemnización del acuerdo conciliatorio serán contactados por el administrador. El departamento hará un anuncio público y publicará información de contacto en su portal una vez que el administrador comience a contactar a las víctimas. Las personas que crean haber sido víctimas de discriminación crediticia por parte de GFI y tengan preguntas sobre el acuerdo conciliatorio pueden enviar un correo electrónico al departamento a [email protected] o llamar al 1-800-896-7743, extensión 9992 o al 212-637-0840, o escribir a la siguiente dirección:
Chief, Civil Rights Unit
U.S. Attorney's Office, S.D.N.Y.
86 Chambers Street, 3rd Floor
New York, NY 10007Material relacionado:
- Acuerdo conciliatorio (en inglés)
Detroit-Area Resident Pleads Guilty in $13.8 Million <br /> Health Care Fraud SchemeRead the Press Release
WASHINGTON – A Detroit-area resident pleaded guilty today in federal court in the Eastern District of Michigan for his role in managing a $13.8 million psychotherapy fraud scheme, announced the Department of Justice, the Department of Health and Human Services (HHS) and the FBI.
Jawad Ahmad, 42, pleaded guilty today before U.S. District Judge Gerald E. Rosen in Detroit to one count of conspiracy to commit health care fraud. At his sentencing, scheduled for Nov. 28, 2012, Ahmad faces a maximum potential penalty of 10 years in prison and a $250,000 fine.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge of the FBI’s Detroit Field Office Robert D. Foley III; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (HHS-OIG) Chicago Regional Office.
According to court documents, beginning in July 2008, two of Ahmad’s co-conspirators, Tausif Rahman and Muhammad Ahmad, acquired control over a home health care company known as Physicians Choice Home Health Care LLC (Physicians Choice). From in or around January 2009 and continuing through in or around March 2010, Jawad Ahmad managed the operations of Physicians Choice.
Court documents indicate that Jawad Ahmad managed numerous aspects of the fraud at Physicians Choice, including delivering the payment of kickbacks to beneficiary recruiters who obtained Medicare beneficiaries’ information needed to bill Medicare for home health services, including physical therapy and skilled nursing, that were never rendered. Jawad Ahmad also provided information to employees of Physicians Choice to check the billing eligibility of the Medicare beneficiaries before Physicians Choice began billing them.
In exchange for kickbacks, Medicare beneficiaries pre-signed forms and visit sheets that were later falsified to indicate they received home health services they had never received. Jawad Ahmad delivered the pre-signed beneficiary paperwork to various medical professionals, including nurses, physical therapists and physical therapy assistants to create and/or sign fictitious patient files to document purported home health services that were never rendered. From in or around January 2009 through in or around March 2010, Medicare paid more than $5 million for fraudulent home health care claims submitted by Physicians Choice.
According to court documents, from in or around May 2010 through in or around September 2011, Jawad Ahmad managed Phoenix Visiting Physicians PLLC, a company incorporated by co-conspirator Dr. Dwight Smith. Dr. Smith signed home health care referrals for beneficiaries he had not seen or treated. Phoenix employed individuals who held themselves out to be “doctors,” but who were not, in fact, licensed in the state of Michigan to perform any medical services. The unlicensed “doctors” met and purported to examine non-homebound Medicare beneficiaries for home health care services. Jawad Ahmad drove one unlicensed “doctor” to meet and purportedly examine beneficiaries who were not, in fact, homebound.
Between 2008 and 2009, Ahmad's co-conspirators acquired beneficial ownership and control over three additional home health care companies: First Care Home Health Care LLC, Quantum Home Care Inc., and Moonlite Home Care Inc. Each of these home health companies billed Medicare and operated in a manner the same as or similar to Physicians Choice. Each of these companies received fraudulent home health referrals from Dr. Smith through Phoenix Visiting Physicians. From in or around May 2010 through in or around September 2011, Medicare paid more than $5 million for fraudulent home health care claims submitted by Physicians Choice, First Care, Quantum and Moonlite based on Dr. Smith’s fraudulent referrals. The four home health companies at the center of the indictment received approximately $13.8 million from Medicare in the course of the conspiracy.
Eight other defendants have pleaded guilty in this case, including Tausif Rahman and Muhammad Ahmad, who each pleaded guilty to one count of conspiracy to commit health care fraud and one count of money laundering, as well as Dr. Dwight Smith who pleaded guilty to one count of conspiracy to commit health care fraud.
The case is being prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
27 August 2012
Justice Department to Monitor Elections in Alabama and ArizonaRead the Press Release
The Justice Department announced today that it will monitor elections on Aug. 28, 2012, in Lanett, Reform, and Phenix City, Ala., and Maricopa County, Ariz., to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Lanett, Reform, Phenix City and Maricopa County based on the attorney general’s certification. The observers will watch and record activities during voting hours at polling locations in these counties, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Former Energy Drink Company Owner Sentenced to More Than Four Years in PrisonRead the Press Release
Russell Pike, 50, of Las Vegas, the former CEO of a Nevada sports energy drink company, Xyience Inc., was sentenced today by U.S. District Judge James C. Mahan to 52 months in prison for his April 2012 conviction for tax evasion, Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division and U.S. Attorney for the District of Nevada Daniel G. Bogden announced today.
On April 2, 2012, following a bench trial, Pike was convicted of one count of tax evasion for 2006 in which he evaded taxes due on over $7.9 million of income. According to evidence presented at trial, Pike founded Xyience Inc., which manufactured, marketed and sold sports energy drinks, most notably, Xenergy, which was sold in over 45,000 stores throughout the United States. Upon the inception of Xyience in 2004, Pike received at least 12 million shares of Xyience stock. During 2006, Pike sold over 4.4 million shares of his Xyience stock for approximately $7.9 million, which included a sale in November 2006 of over three million shares to an investor for $5 million. In early 2007, Pike requested that the investor change the date of the stock purchase agreement from 2006 to 2007, so that Pike could avoid paying taxes for 2006.
The evidence also established that during 2006, Pike expended millions of dollars to sustain his lavish lifestyle, drive luxury cars and bet millions of dollars at local sports books. Furthermore, Pike made payments on a 2005 Lexus SUV and 2005 Land Rover that were held in the name of a nominee. Also in 2006, Pike used a nominee to purchase a 2007 Mercedes Benz SL55 AMG for $151,614.
In addition to 52 months of prison, Judge Mahan sentenced Pike to three years of supervised release with a special condition that he pay $1,189,773 in restitution to the Internal Revenue Service (IRS).
U.S. Attorney Bogden and Assistant Attorney General Keneally commended the efforts of the special agents from IRS Criminal Investigation who investigated the case as well as Assistant United States Attorneys Nicholas D. Dickinson and Timothy Vasquez and Tax Division Trial Attorney Kimberly Shartar who prosecuted the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax.
24 August 2012
Pacific Health Corporation and Related Entities Agree to Pay $16.5 Million for Allegedly Engaging in an Illegal Kickback Scheme in Los AngelesRead the Press Release
WASHINGTON – The United States has entered into a settlement agreement with Pacific Health Corporation (PHC) and related entities in which they agreed to pay the government and the state of California $16.5 million for allegedly engaging in an illegal kickback scheme in Los Angeles, the Justice Department announced today. The civil settlement resolves a U.S. and state investigation of three PHC-affiliated hospitals for engaging in a scheme in which the hospitals paid recruiters to deliver homeless Medicare or Medi-Cal beneficiaries (homeless beneficiaries) by ambulance from the “Skid Row” area in Los Angeles to the hospitals for treatment that often was medically unnecessary.
The hospitals, Los Angeles Metropolitan Medical Center (LA Metro); Newport Specialty Hospital, formerly known as Tustin Hospital and Medical Center; and Anaheim General Hospital, then allegedly billed Medicare and Medi-Cal for these services, violating rules that permit payment only for necessary treatment. The governments contended that these services were induced by illegal remuneration in violation of the Anti-Kickback statute (AKS), and the resulting billings to Medicare and Medi-Cal violated the False Claims Act.
Also as part of the resolution of this matter, a subsidiary of PHC, Los Angeles Doctors Hospital Inc., has agreed to plead guilty to a federal conspiracy charge arising out of the illegal kickback scheme. In addition, the three hospitals, a fourth related hospital (Bellflower Medical Center), and their related entities have entered into a corporate integrity agreement with the Inspector General for the U.S. Department of Health and Human Services intended to deter future misconduct. PHC’s parent corporation, Health Investment Corporation, also is a party to the civil settlement and the corporate integrity agreement.
This settlement arises out of the same investigation which in 2010 resulted in consent judgments against Intercare Health Systems Inc., formerly doing business as City of Angels Medical Center, and its former owners Robert Bourseau and Rudra Sabaratnam, for a similar illegal kickback scheme in Los Angeles. Several individuals have pleaded guilty in connection with the scheme, including Mr. Bourseau and Dr. Sabaratnam, who were sentenced to three years and one month, and two years in prison, respectively, for their part in the scheme.
Prohibitions against illegal kickbacks are important to insure that financial motives do not undermine the integrity of the medical judgment of physicians and other health care workers.
“The integrity of government health care programs is threatened when hospitals pay kickbacks to induce unnecessary or unwanted medical care,” said Stuart Delery, the Acting Assistant Attorney General in charge of the Justice Department’s Civil Division. “Kickbacks subvert medical decision making and cause government programs to pay much more for services than would otherwise be warranted.”
The investigation was handled by the U.S. Attorney's Office for the Central District of California, the Office of Inspector General of the U.S. Department of Health and Human Services, the FBI, the IRS-Criminal Investigation, the Justice Department’s Civil Division, the Attorney General's Office of the State of California, the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse and the Health and Law Enforcement Team (HALT), a multi-agency task force operated by the Los Angeles County Health Department.
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 $9.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $12.8 billion.
Final Defendant Pleads Guilty in Scheme to Defraud Consumers Seeking Immigration ServicesRead the Press Release
A Missouri woman pleaded guilty today for her role in a scheme to defraud consumers seeking immigration-related services, the Justice Department announced.
Elizabeth Lindsey Meredith, 24, pleaded guilty to conspiracy to commit mail fraud and wire fraud, six counts of mail fraud and seven counts of wire fraud in connection with Immigration Forms and Publications (IFP), a Sedalia, Mo., company that sold immigration forms generally available at no charge from the government. According to court documents, IFP sales representatives fraudulently told consumers that the company was affiliated with the government and that fees paid to IFP covered government processing charges. Meredith faces up to 20 years’ in prison, three years of supervised release and a fine of up to $250,000.
“Over a year ago, the Department of Justice announced its commitment to combatting immigration services scams, which often prey upon individuals who are in this country legally and trying to abide by the rules,” said Acting Associate Attorney General Tony West. “Today’s guilty pleas represent an important step in our continued fight to protect vulnerable individuals against fraud.”
“Consumers trust that government services are what they claim. We will not tolerate those who exploit that trust,” said Stuart Delery, Acting Assistant Attorney General of the Department of Justice’s Civil Division.
According to court documents, Meredith was a manager of IFP, which operated in 2009 and 2010. In pleading guilty, Meredith admitted that IFP representatives falsely told consumers that the company employed paralegals who would help customers correctly fill out immigration forms, that IFP handled excess call volume for U.S. Citizenship and Immigration Services (USCIS), that fees paid to IFP included government processing fees, and that forms purchased through IFP would be processed more quickly than if consumers dealt directly with USCIS.
“Law-abiding immigrants sought help to complete government forms, but instead this company cheated hundreds of victims out of more than $400,000 and provided little or no help at all,” said David M. Ketchmark, Acting U.S. Attorney for the Western District of Missouri. “This defendant managed the day-to-day operations of the Sedalia office; with her guilty plea today, all of the conspirators now will be held accountable for their fraud and deceit.”
U.S. Magistrate Judge Matt J. Whitworth presided over the change of plea hearing.
Thomas Joseph Strawbridge, 49, and Thomas Barret Laurence, 30, previously pleaded guilty for th eir conduct in the same scheme.
These cases are being prosecuted by Alan Phelps and Adrienne Fowler, Trial Attorneys for the Civil Division’s Consumer Protection Branch, and Tony Gonzalez, Assistant U.S. Attorney for the Western District of Missouri. The cases were investigated by the FBI, the U.S. Postal Inspection Service, the Missouri Secretary of State Corporate Division, the Missouri Secretary of State Securities Division and the Missouri Attorney General’s Office. The Justice Department has also been working with the Federal Trade Commission on immigration services fraud cases and thanks the FTC for its assistance in this matter.
For i nformation regarding immigration forms and information concerning the immigration process, go to the U.S. Citizenship and Immigration Services website: www.uscis.gov/avoidscams .
Eight Individuals and a Corporation Convicted at Trial in Florida in $50 Million Medicare FraudRead the Press Release
WASHINGTON – Eight individuals and a Miami-based corporation were convicted by a federal jury for their participation in a Medicare fraud scheme involving the submission of more than $50 million in fraudulent billings to Medicare, the Department of Justice, the FBI and the Department of Health and Human Services (HHS) announced today.
Antonio Macli, the owner of Biscayne Milieu Health Center Inc., a mental health care corporation, his son Jorge Macli, Biscayne Milieu’s CEO, and Antonio Macli’s daughter Sandra Huarte, an executive at the company, were each found guilty in U.S. District Court for the Southern District of Florida of one count of conspiracy to commit health care fraud, and one or more substantive counts of health care fraud, conspiracy to commit a health care kickback scheme and conspiracy to commit money laundering and substantive counts of money laundering. Antonio Macli and Jorge Macli were also convicted of substantive kickback counts. Dr. Gary Kushner, the medical director at Biscayne Milieu, was found guilty of conspiracy to commit health care fraud and a substantive count of health care fraud. Rafael Alalu, a therapist, and Jacqueline Moran, who handled Medicare billing for Biscayne Milieu, were each found guilty of conspiracy to commit health care fraud and substantive counts of health care fraud. Anthony Roberts and Derek Alexander, two patient recruiters, were each found guilty of one count of conspiracy to commit a health care kickback scheme, and each was convicted of one health care kickback count.
The defendants were charged in a superseding indictment returned June 5, 2012. Twenty other individuals who worked at Biscayne Milieu have all previously pleaded guilty.
Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through Biscayne Milieu, a Florida corporation headquartered in Miami that purported to operate a partial hospitalization program (PHP) in that city. Biscayne Milieu purported to provide PHP services, a form of intensive treatment for severe mental illness, for Medicare beneficiaries suffering from mental illnesses. In fact, however, the defendants devised a scheme in which they paid patient recruiters to refer ineligible Medicare beneficiaries to Biscayne Milieu for PHP services, which were never provided. Many of the beneficiaries admitted to Biscayne Milieu were not eligible for PHP because they were chronic substance abusers, suffered from severe dementia or Alzheimer’s disease and would not benefit from group therapy, or had no mental health diagnosis at all. Indeed, some beneficiaries were seeking fraudulent mental health treatment in order to be declared exempt from certain requirements for their applications for U.S. citizenship.
As part of a scheme orchestrated by Antonio Macli, Jorge Macli and Huarte, Biscayne Milieu used fraudulent documents created by Alalu and others and bogus certifications signed by psychiatrists, including Kushner, to bill Medicare for tens of millions of dollars in false and fictitious services. Kushner did not treat patients but rather created and certified false documents to make it appear that ineligible patients were receiving legitimate PHP treatment. In addition, the evidence at trial showed that Alexander and Roberts solicited and received illegal kickbacks in exchange for sending ineligible patients to Biscayne Milieu.
Throughout the course of the fraud conspiracy, beneficiaries who did not qualify for PHP services attended treatment programs that did not provide legitimate PHP services. Biscayne Milieu billed tens of millions of dollars in services to patients who did not need the services and to whom the appropriate services were not provided. According to the evidence, co-conspirators personally altered, and caused the alteration of, patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by Biscayne Milieu were qualified for PHP treatments and that the treatments provided were legitimate PHP treatments. Evidence further revealed that Kushner signed patient files without providing meaningful treatment, and Biscayne Milieu then billed Medicare for millions of dollars in PHP treatment for these patients under his name as the attending physician. Once Biscayne Milieu received reimbursement from Medicare for these fraudulent services, its owners and executives laundered the money through various accounts to launder the proceeds of their illegal scheme.
Kushner and Alalu were remanded into custody. Antonio Macli, Jorge Macli, Huarte, Alexander and Roberts were already in custody.
Today’s verdicts were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent-in-Charge of the FBI Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The criminal case is being prosecuted by Assistant U.S. Attorneys Michael Davis, Marlene Rodriguez, and Alicia Shick of the Southern District of Florida, and Trial Attorney James V. Hayes of the Justice Department Criminal Division’s Fraud Section. The investigation was led by the FBI with assistance from HHS-OIG, and was brought by the Medicare Fraud Strike Force, a joint effort of the U.S. Attorney’s Office for the Southern District of Florida and the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Court Approves Comprehensive Agreement Between US and the Commonwealth of Virginia Regarding the Rights of Individuals with Intellectual and Developmental DisabilitiesRead the Press Release
The U.S. District Court for the Eastern District of Virginia has approved a comprehensive settlement agreement between the United States and the Commonwealth of Virginia, resolving the department’s findings that Virginia’s system for serving people with intellectual and developmental disabilities violated the Americans with Disabilities Act (ADA). The department had found that Virginia was violating the ADA requirement, as interpreted by the Supreme Court’s decision in Olmstead v. L.C., to provide people with intellectual and developmental disabilities the opportunity to live and receive services in the community.
As the court noted in its order approving the settlement agreement, it “addresses pressing needs” and “dramatically changes the way Virginia provides services to” individuals with developmental disabilities. The settlement agreement will provide relief to more than 5,000 people by expanding community services and supports, including Medicaid-funded home and community-based waivers, crisis services, housing and employment supports and by establishing a comprehensive quality management system. The court further found that the agreement “is completely consonant with the principles set forth in the ADA, as interpreted . . . in Olmstead.”
The agreement is court-enforceable, and an independent reviewer with decades of experience will monitor the commonwealth’s compliance with the agreement, meet with the parties and stakeholders, and issue regular reports.
The Justice Department and Virginia submitted the agreement for the court’s approval on Jan. 26, 2012. On March 6, 2012, the court provisionally approved the agreement and solicited public comment on it. After considering hundreds of submittals from a wide range of stakeholders and conducting a day-long hearing on June 8, 2012, the court determined that the agreement was “fair, reasonable, and adequate” with limited modifications. The department and the commonwealth then submitted modifications, and on August 23, 2012, the court formally approved the agreement as modified and entered it as a court order.
“We are pleased that the court, after hearing from thousands of very engaged stakeholders and examining the extensive record, gave final approval to the settlement agreement,” said Thomas E. Perez, Assistant Attorney General for Civil Rights. “We commend the commonwealth of Virginia, and particularly the leadership of Governor McDonnell and Secretary Hazel, on the commitment they are already demonstrating to fully implementing the agreement. We also appreciate the deep interest and involvement of stakeholders, including those who have long fought for these changes as well as those who raised concerns.”
“We are committed to ensuring that the agreement is implemented fairly on behalf of all Virginians with intellectual and developmental disabilities.” said U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
The Civil Rights Division enforces the ADA, which authorizes the Attorney General to investigate whether a state is serving individuals in the most integrated settings appropriate to their needs. Please visit www.ada.gov/olmstead to find the settlement agreement and fact sheet about the agreement, and to learn more about the division’s ADA Olmstead enforcement efforts, and www.justice.gov/crt to learn more about the other laws enforced by the Justice Department’s Civil Rights Division.
23 August 2012
Wisconsin Neurosurgeon Convicted of Filing False Tax Return and Failing to File Report of Foreign Bank AccountsRead the Press Release
A jury convicted Arvind Ahuja yesterday on federal tax charges stemming from his failure to disclose offshore bank accounts maintained in India and the Bailiwick of Jersey, the Justice Department and Internal Revenue Service (IRS) announced. Trial began on Aug. 15, 2012 before U.S. District Judge Charles N. Clevert, Jr., in Milwaukee. Ahuja, a prominent neurosurgeon in Milwaukee, was convicted of one count of filing a false 2009 individual income tax return and one count of failing to file a Report of Foreign Bank and Financial Accounts (FBAR).
According to the evidence presented at trial, Ahuja transferred millions of dollars from bank accounts in the United States to undeclared bank accounts located in India at HSBC bank. Ahuja invested the funds in these accounts in certificates of deposit, which earned more than $2.7 million in interest income during the years 2005 through 2009. Ahuja also maintained an HSBC bank account in the Bailiwick of Jersey, a British Crown dependency located in the Channel Islands off the coast of Normandy, France. Ahuja used credit and debit cards linked to this account to pay personal expenses while on trips to London. Ahuja managed his offshore accounts with the assistance of bankers who worked at an HSBC India representative office in New York.
The evidence established that for tax year 2009, Ahuja filed a false tax return with the IRS that failed to report the interest income earned on his certificates of deposit at HSBC India, and failed to report he had signature authority over bank accounts located in India and Jersey. Ahuja also failed to file an FBAR for 2009 to report his offshore accounts to the IRS. Ahuja?s accountant testified that Ahuja never disclosed the existence of his offshore accounts during the preparation of his tax returns.
United States citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file an FBAR with the United States Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Sentencing is scheduled for Jan. 18, 2013.
?This prosecution reflects the continuing commitment of the United States Department of Justice, including my office and the Tax Division, to identify, investigate and prosecute individuals who fail to abide by well-established obligations to report and pay on their tax indebtedness,? said James L. Santelle, U.S. Attorney for the Eastern District for Wisconsin. ?In combination with the Internal Revenue Service, we are committed to enforcing the tax laws fairly and even-handedly, and the jury?s verdict in this case appropriately reflects the understanding of all law-abiding citizens that underreporting income and failing to report foreign bank accounts will not be tolerated.?
?This case is a warning to individuals who still think they can use offshore bank accounts to commit tax crimes,? said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department?s Tax Division. ?Citizens who honestly report their income and pay their taxes can take comfort that the Department of Justice is committed to the prosecution of tax cheats who use these offshore accounts.?
Principal Deputy Assistant Attorney General DiCicco thanked special agents of IRS - Criminal Investigation, who provided valuable assistance in conducting the investigation, and Senior Litigation Counsel John E. Sullivan, Trial Attorney Melissa S. Siskind, and Assistant U.S. Attorney Tracy M. Johnson, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Two Plead Guilty in Scheme to Defraud ConsumersSeeking Immigration ServicesRead the Press Release
Two Missouri men pleaded guilty today for their roles in a scheme to defraud consumers seeking immigration-related services, the Department of Justice announced.
Thomas Joseph Strawbridge, 49, and Thomas Barret Laurence, 30, pleaded guilty to conspiracy to commit mail fraud and wire fraud in connection with Immigration Forms and Publications (IFP), a Sedalia, Mo., a company that sold immigration forms otherwise available at no charge from the government. According to court documents, IFP sales representatives fraudulently told consumers that the company was affiliated with the government and that fees paid to IFP covered government processing charges. Strawbridge and Laurence each face up to 20 years in prison, three years’ supervised release and a fine of up to $250,000.
“Over a year ago, the Department of Justice announced its commitment to combatting immigration services scams, which often prey upon individuals who are in this country legally and trying to abide by the rules,” said Acting Associate Attorney General Tony West. “Today’s guilty pleas represent an important step in our continued fight to protect vulnerable individuals against fraud.”
“Those who seek to defraud immigrants should heed the message of this case: you cannot take advantage of someone’s unfamiliarity with the immigration process, engage in fraud, and expect to get away with it,” said Stuart Delery, Acting Assistant Attorney General of the Justice Department’s Civil Division.
According to court documents, Strawbridge founded and owned IFP, while Laurence managed the business, which operated in 2009 and 2010. In pleading guilty, Strawbridge and Laurence admitted that IFP representatives falsely told consumers that the company employed paralegals who would help customers correctly fill out immigration forms, that IFP handled excess call volume for U.S. Citizenship and Immigration Services (USCIS), that fees paid to IFP included government processing fees, and that forms purchased through IFP would be processed more quickly than if consumers dealt directly with USCIS.
“This company preyed on legal immigrants who were doing their best to follow the law,” said David M. Ketchmark, Acting U.S. Attorney for the Western District of Missouri. “These defendants operated a busy call center where so-called agents lied to hundreds of customers about the firm’s affiliation with the government. Their victims paid more than $400,000 in total to purchase government forms that anyone can obtain for free.”
U.S. District Judge Nannette K. Laughrey presided over the change of plea hearing.
Elizabeth Lindsey Meredith, 24, was also charged in the scheme.
These cases are being prosecuted by Alan Phelps and Adrienne Fowler, Trial Attorneys for the Civil Division’s Consumer Protection Branch, and Tony Gonzales, Assistant U.S. States Attorney for the Western District of Missouri. They were investigated by the FBI, the U.S. Postal Inspection Service, the Missouri Secretary of State Corporate Division, the Missouri Secretary of State Securities Division and the Missouri Attorney General’s Office. The Justice Department has also been working with the Federal Trade Commission on immigration services fraud cases and thanks the FTC for its assistance in this matter.
For information regarding immigration forms and information concerning the immigration process, go to the U.S. Citizenship and Immigration Services website: www.uscis.gov/avoidscams .
Settlement Requires Boston Water and Sewer Commission to Remedy Sewer and Stormwater DischargesRead the Press Release
WASHINGTON – Under the terms of a consent decree lodged in federal court today, the Boston Water and Sewer Commission (BWSC) will implement extensive remedial measures to minimize the discharge of sewage and other pollutants into the water bodies in and around Boston, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. The BWSC will also pay a civil penalty of $235,000 for violations of the Clean Water Act and will perform a supplemental environmental project worth at least $160,000.
The work required under this consent decree will significantly reduce remaining pollution sources discharging into and degrading water quality in Boston Harbor. The consent decree is the result of a federal enforcement action brought by the Department of Justice on behalf of the EPA, and by the Conservation Law Foundation (CLF), which filed the original complaint in the case and was an active plaintiff in the case.
“This settlement will require BWSC to take specific steps to significantly reduce discharges from its storm drain and sanitary sewer systems that have contributed pollutants to Boston Harbor and its tributaries,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement will produce lasting benefits for the people of Boston, incorporating green infrastructure, low impact development and other controls that will help reduce harmful discharges and protect the environment.”
“Together with our co-plaintiff CLF, we were able to progress from litigation to a settlement that is both comprehensive in its scope and stringent in its requirements and deadlines,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. “I am pleased that the BWSC is prepared to be proactive by taking a broad range of actions to minimize the pollutants in its stormwater discharges to Boston’s rivers, streams and harbor.”
“This settlement represents a critical next-step in the ongoing cleanup of Boston Harbor and its associated urban rivers,” said Curt Spalding, regional administrator of EPA’s New England region. “Over the past decades there’s been a remarkable transformation as Boston Harbor and local waterways have been cleaned up, thanks to work by government at all levels and environmental advocates. Under this settlement, the City of Boston will use green infrastructure and low-impact techniques to control pollutants being discharged in its stormwater to local beaches, rivers and streams, benefiting all residents of Boston who enjoy outdoor recreation in the Hub.”Water sampling conducted by EPA indicated untreated sanitary sewage discharging from numerous BWSC stormwater outfalls. In response, the consent decree establishes an aggressive schedule for BWSC to investigate the sources of sewage being discharged from BWSC’s storm drains. The BWSC will first complete its investigations of drainage areas discharging to Constitution, Tenean and Malibu beaches. BWSC will prioritize the rest of the investigations according to the sensitivity of receiving waters and evidence of sewage. The agreement also requires BWSC to remove all identified sources of sewage as expeditiously as possible. In addition, the settlement requires BWSC to conduct frequent and enhanced monitoring (in both dry and wet weather) of its stormwater outfalls.
The consent decree also requires BWSC to control pollutants other than sewage, such as phosphorus and metals, being discharged from its storm drain system. To accomplish this goal, BWSC will conduct stormwater modeling and implement appropriate Best Management Practices (BMPs) to control stormwater discharges. In evaluating BMPs, the consent decree requires BWSC to implement Green Infrastructure and Low Impact Development (GI/LID) techniques wherever possible. These types of techniques involve the use of natural or engineered systems to direct stormwater to areas where it can be stored, infiltrated, evapotranspirated or reused.
While some of the studies and planning required by the settlement will take several years to complete, the agreement also requires BWSC to initiate GI/LID demonstration projects in East Boston’s Central Square, Audubon Circle in the Kenmore/Fenway area of the city, and at City Hall Plaza on an expedited schedule.
Finally, the settlement requires the establishment of construction and industrial inspection programs necessary to meet the requirements of BWSC’s Municipal Separate Storm Sewer System (MS4) permit.
To settle the case, BWSC has also committed to implement a supplemental environmental project to address leakage from private sewer laterals. BWSC has determined that a number of sewer lines connecting buildings to the BWSC sewage system (laterals) are leaking sewage from cracks in the laterals into the BWSC’s storm drains. BWSC will line a minimum of 25 private sewer laterals that have been identified as sources of sewage to its storm drains.
The complaints filed by CLF and the United States alleged violations of the Clean Water Act involving the discharge of raw sewage and other pollutants to surface waters near heavily used recreation areas, such as Constitution Beach and Tenean Beach in Boston Harbor, as well as to the Charles, Mystic and Neponset Rivers. According to the allegations, these discharges have occurred through both illegal sewer connections to the BWSC storm drain system and sanitary sewer overflows that discharge to the BWSC storm drain system or directly to local surface waters.
The complaints also alleged that BWSC violated conditions of its MS4 permit regarding the implementation of its Illicit Discharge Detection and Elimination Program, discharged pollutants in stormwater that violated water quality standards, and failed to develop and implement a number of programs required by the permit, including a program to inspect stormwater controls at construction sites throughout the city of Boston.
The consent decree, lodged in the U.S. District Court for the District of Massachusetts, is subject to a 30-day public comment period and approval by the federal court. Once it is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html.
Justice and Interior Departments Launch Indian Country Sexual Assault Investigation and Prosecution TrainingRead the Press Release
WASHINGTON – The Justice and Interior Departments this week launched a new training seminar for tribal and federal law enforcement on investigating and prosecuting sexual assault cases on tribal lands. More than 75 participants from throughout the United States participated in the three day training course, which began on Monday, August 20, 2012. They included tribal and federal law enforcement officers, prosecutors and victim specialists from 23 tribal nations and 23 states. Topics included law enforcement response, children as victims and witnesses, forensic examinations with adult victims and developing a coordinated community response to sexual assault.
The course, held at the National Advocacy Center in Columbia, S.C., was taught by the Justice Department’s National Indian Country Training Coordinator and other nationally recognized subject matter experts including Joanne Archambault; FBI Forensic Interviewer Stephanie Knapp; Jennifer Peirce-Week, Past President of the International Association of Forensic Nurses; and Dr. Barbara Knox, Medical Director of the University of Wisconsin Child Protection Program at the American Family Children’s Hospital.
“It will take committed federal and tribal partnerships and a coordinated response to address the high rates of sexual violence in Indian Country today,” said Leslie A. Hagen, National Indian Country Training Coordinator for the Justice Department’s Executive Office for U.S. Attorneys. “This new training series will help build capacity for tribal and federal law enforcement first responders as well as the tribal and federal prosecutors who can help achieve justice for victims of sexual crimes, and who must also take into careful consideration the needs of victims in native communities.”
“The training program we are launching jointly with the Department of Justice to address the high rates of sexual assault on tribal lands builds on our efforts to reduce violent crime in Indian Country,” said Darren Cruzan, Deputy Director of the Bureau of Indian Affairs Office of Justice Services. “I want to thank our federal and tribal partners for working with us to develop this comprehensive training program. It is an important part of OJS’s mission to improve public safety in tribal communities, and underscores our commitment to achieving justice for violent crime victims.”
For more information on the national Indian Country training program, contact Leslie A. Hagen at [email protected].Justice Department Resolves Race Harassment and Discrimination Lawsuit Against Burke County, N.C., Department of Social ServicesRead the Press Release
The Justice Department today concurrently filed a complaint and consent decree against the Burke County, N.C., Department of Social Services, alleging that the county did not have an effective harassment and discrimination policy in place and did not provide sufficient training in race harassment and discrimination for its employees and supervisors, in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute which prohibits employment discrimination on the basis of sex, race, color, national origin or religion.
The consent decree, filed in the U.S. District Court in the Western District of North Carolina, requires Burke County to modify its policy designed to prevent harassment and discrimination in the workplace and provide annual training to Burke County supervisors and employees about discrimination and harassment. The lawsuit was filed with the assistance of the U.S. Attorneys’ office for the Western District of North Carolina.
“Federal law requires employers to maintain a workplace free of racial harassment,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I commend Burke County for working with the Justice Department to put effective policies and training in place to prevent workplace discrimination and harassment.”
The complaint alleges that while investigating a claim of racial discrimination involving the use of a racial epithet by a Burke County supervisor in the presence of subordinates, the division learned that Burke County supervisors and employees had received no training on race harassment and discrimination, and as such, the supervisor claimed to be unaware of potential consequences for use of a racial epithet that was offensive to her employees.
“Racial harassment and discrimination should not be tolerated anywhere, particularly in the workplace, said Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. “The U.S. Attorney’s office is committed to protecting employees from working in hostile work environments, and will continue to enforce Title VII.”
The filing of this lawsuit and consent decree reflects the department’s ongoing commitment to actively enforce federal employment discrimination laws. Additional information about the Justice Department’s Civil Rights Division is available on its website at www.justice.gov/crt .
Related Materials:
Complaint
Consent DecreeJustice Department Obtains Comprehensive Agreement Regarding North Carolina Mental Health SystemRead the Press Release
The Justice Department announced today that it has entered into an agreement with the state of North Carolina to ensure the state is in compliance with the Americans with Disabilities Act (ADA) and the Rehabilitation Act. The agreement will transform the state’s system for serving people with mental illness. Under the settlement agreement, over the next eight years, North Carolina’s system will expand community-based services and supported housing that promote inclusion and independence and enable people with mental illness to participate fully in community life.
Under the ADA, as interpreted by the Supreme Court’s landmark decision in Olmstead v. L.C., people with disabilities have the right to receive services in the most integrated settings appropriate to their needs. The settlement follows an investigation by the Department of North Carolina’s mental health service system that began in 2010. Since the department’s letter of findings was issued one year ago, in July 2011, the state has worked cooperatively with the department to negotiate an agreement..
“As the Supreme Court noted over a decade ago, the unnecessary segregation of people with disabilities is based on the unsupported assumption that they are unworthy of participating in community life,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This agreement will enable North Carolinians with mental illness to live in community-based settings, enriching their lives and the lives of their neighbors, and recognizing their worth and dignity. I commend Governor Bev Perdue and North Carolina’s Department of Health and Human Services Secretary Al Delia for their leadership, which played a crucial role in making this comprehensive agreement a reality.”
Over the next eight years, North Carolina will provide integrated supported housing to 3,000 people, expand Assertive Community Treatment teams to serve 5,000 individuals, and provide a range of crisis services. The agreement will also expand integrated employment opportunities for people with mental illness by providing supported employment services to 2,500 individuals. These services will allow the state to serve people with mental illness effectively in their communities while avoiding costly institutional settings.
“North Carolina has taken an important step towards offering a choice to individuals with mental illness who prefer to live in the community,” said Thomas G. Walker, U.S. Attorney for the Eastern District of North Carolina. “The agreement, made possible by the coordinated and cooperative efforts of the state’s executive and legislative branches of government, will ensure that more North Carolinians with mental illness will be able to enjoy integrated lives in their communities.”
The agreement calls for a person-centered discharge planning process to help people move smoothly and successfully to community-based settings, while a pre-admission screening process will prevent people from unnecessarily entering institutional settings. Provisions of the agreement will ensure that people discharged from adult care homes designated as Institutions for mental disease are discharged in a safe, coordinated manner.
North Carolina will implement a comprehensive and robust quality assurance and performance improvement monitoring system to ensure that people are safe and are receiving integrated housing, services and supports that meet their needs. Compliance with the agreement will be monitored by an independent reviewer with extensive experience in mental health systems.
The Civil Rights Division enforces the ADA, which authorizes the attorney general to investigate whether a state is serving individuals in the most integrated settings appropriate to their needs. Visit www.justice.gov/crt to learn more about the Olmstead decision, the ADA and other laws enforced by the Justice Department’s Civil Rights Division.
This agreement is due to the efforts of the following Civil Rights Division staff: Alison Barkoff, Special Counsel for Olmstead Enforcement; Gregory Friel, Acting Chief; Anne Raish, Deputy Chief; Regan Rush, Joy Levin Welan, Travis England, and Regina Kline, Trial Attorneys; with support and assistance from Lance Simon.
Related Materials:
Settlement Agreement
22 August 2012
US Government Joins False Claims Act Lawsuit<br /> <br /> Against the Gallup OrganizationRead the Press Release
The United States has joined a whistleblower lawsuit against The Gallup Organization, the Justice Department announced today. The lawsuit was filed by Michael Lindley, a former Gallup employee, who alleges that Gallup violated the False Claims Act by making false claims for payment under contracts with the U.S. Mint, the State Department and other federal agencies to provide polling services for various government programs.
According to the whistleblower’s complaint, Gallup violated the False Claims Act by giving the government inflated estimates of the number of hours that it would take to perform its services, even though it had separate and lower internal estimates of the number of hours that would be required. The complaint further alleges that the government paid Gallup based on the inflated estimates, rather than Gallup’s lower internal estimates. The government intervened in the lawsuit with respect to Gallup’s contracts with the Mint and the State Department.
“Contractors must understand that it is unlawful to use inflated estimates to obtain higher contract prices,” said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. “The decision to join this civil lawsuit underscores the commitment of the Department of Justice to recover federal funds that are unlawfully claimed.”
The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, wh ich permit private parties to sue on behalf of the United States for submission of false claims to the government. The private plaintiffs are entitled to receive a share of any funds recovered through the lawsuit. The False Claims Act authorizes the United States to intervene in such a lawsuit and take over primary responsibility for litigating it. The False Claims Act allows for recovery of three times the government’s losses, plus civil penalties.
“Contractors who do business with the federal government must honor their obligations to provide honest services and products,” said U.S. Attorney Ronald C. Machen Jr. “Working with relators and federal investigators, we will do all that we can to act against those who illegitimately bill the American taxpayers.”
In its notice announcing intervention, the United States also indicated that it plans to assert additional claims related to Gallup’s subcontract with the Federal Emergency Management Agency (FEMA). These claims relate to allegations in the whistleblower lawsuit that Gallup negotiated for employment with a FEMA official who was responsible for Gallup’s subcontract while, at the same time, Gallup was seeking to obtain additional funding from FEMA for Gallup’s subcontract.
The lawsuit, which was filed in the District of Columbia, is captioned U.S. ex rel. Lindley v. The Gallup Organization, 09-cv-01985. The claims made in the complaint are only allegati ons and do not constitute a determination of liability.
Two Former Senior Executives of Arthrocare Corp. Arrested in $400 Million Securities Fraud SchemeRead the Press Release
WASHINGTON – Two former senior executives of Austin, Texas-based ArthroCare Corp., a publicly traded medical device company, were arrested this morning in Morristown, N.J. and Orange County, Calif., for their alleged roles in a scheme to defraud the company’s shareholders and members of the investing public by falsely inflating ArthroCare’s earnings by tens of millions of dollars, announced Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division and U.S. Attorney Robert Pitman for the Western District of Texas. The department said that the loss to the company’s shareholders and the investing public was more than $400 million.
A 16-count indictment was unsealed today in the U.S. District Court for the Western District of Texas against John Raffle, the former senior vice president of strategic business units of ArthroCare and David Applegate, the former senior vice president in charge of ArthroCare’s spine division. Raffle was arrested in Morristown and Applegate was arrested in Orange County.
The indictment, which was originally returned on Aug. 21, 2012, charges Raffle and Applegate with one count of conspiracy to commit wire, mail and securities fraud; four counts of wire fraud; eight counts of mail fraud; and three counts of securities fraud. The indictment also seeks forfeiture of assets held by Raffle and Applegate.
“The indictment unsealed today alleges that these senior corporate executives participated in a scheme to artificially inflate their company’s stock prices, cheating shareholders and the investing public out of hundreds of millions of dollars,” said Assistant Attorney General Breuer. “The Criminal Division will continue to vigorously pursue those who defraud American investors.”
According to the indictment, between in or about December 2005 through in or about December 2008, Raffle, Applegate and other senior executives and employees of ArthroCare allegedly inflated falsely ArthroCare’s sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors. According to court documents, Raffle and Applegate determined the type and amount of product to be shipped to distributors based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders. Raffle, Applegate and others then allegedly caused ArthroCare to “park” millions of dollars worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter. ArthroCare would then report these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.
According to the indictment, ArthroCare’s distributors agreed to accept shipment of millions of dollars of product in exchange for substantial, upfront cash commissions, extended payment terms and the ability to return product, as well as other special conditions, allowing ArthroCare to inflate falsely its revenue by tens of millions of dollars. ArthroCare did not disclose the conditions of the purported sales to investors.
The indictment further alleges that Raffle, Applegate and others used DiscoCare, a privately owned Delaware corporation, as one of the distributors to cover shortfalls in ArthroCare’s revenue. According to the indictment, ArthroCare shipped product to DiscoCare that far exceeded DiscoCare’s needs at Raffle and Applegate’s direction.
According to court documents, between the fourth quarter of 2005 and the fourth quarter of 2007, ArthroCare reported more than $37 million in revenue in its publicly filed financial statements based on purported sales to DiscoCare. However, during the same time period, DiscoCare’s actual net cash payments to ArthroCare for the products were less than $50,000. Court documents further allege that, to conceal the fact that DiscoCare owed ArthroCare a substantial amount of money on unused inventory, Raffle and Applegate caused ArthroCare to acquire DiscoCare on Dec. 31, 2007.
According to the indictment, in the third quarter of 2007, Raffle and Applegate began a new program at ArthroCare, called “Son of DRS.” Under the Son of DRS program, ArthroCare allegedly shipped medical devices from its sports division to its customers free of charge and recorded the revenue once DiscoCare had been invoiced for the product. According to court documents, DiscoCare never was required to pay ArthroCare for any of the product DiscoCare purportedly purchased under the Son of DRS program because ArthroCare acquired DiscoCare before any payments came due. The indictment alleges that, between August and November 2007, Raffle and Applegate caused ArthroCare to falsely report more than $7 million in revenue in its publicly filed financial statements based on purported sales to DiscoCare under this program.
According to court documents, between December 2005 and December 2008, ArthroCare’s shareholders held more than 25 million shares of ArthroCare stock. On July 21, 2008, after ArthroCare announced publicly that it would be restating its previously reported financial results from the third quarter 2006 through the first quarter 2008 to reflect the results of an internal investigation, the price of ArthroCare shares dropped from $40.03 to $23.21 per share. The drop in ArthroCare’s share price caused an immediate loss in shareholder value of more than $400 million.
Upon conviction, Raffle and Applegate face a maximum prison sentence of five years for the conspiracy charge and 20 years for each count of mail and wire fraud. Raffle and Applegate also face a maximum sentence of 25 years in prison for each securities fraud count.
An indictment is merely a charge, and the defendants are presumed innocent until proven guilty.
The case is being prosecuted by Assistant Chief Benjamin D. Singer and Trial Attorney Henry P. Van Dyck of the Criminal Division’s Fraud Section. This case was investigated by the FBI’s Austin Field Office.
Justice Department Settles Discrimination Claim Against Illinois CompanyRead the Press Release
The Justice Department announced today that it reached an agreement with MicroLink Devices, a manufacturer of semiconductor structures and advanced solar cells based in Niles, Ill. The agreement resolves allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA), when it placed six online job postings that explicitly stated citizenship status preferences or requirements that excluded certain work-authorized non-citizens from consideration.
Under the INA, employers may not discriminate on the basis of citizenship status unless required to comply with law, regulation, executive order or government contract. Although MicroLink Devices is a party to several federal contracts subject to the International Traffic in Arms Regulations (ITAR), which control the export and import of sensitive technology, ITAR does not require or permit employers to limit job applicants to or prefer U.S. citizens in the hiring process. The job postings therefore impermissibly discriminated against non-citizen workers eligible for the advertised positions, such as lawful permanent residents, refugees and those given asylum in the United States.
Under the settlement agreement, MicroLink Devices will pay $12,000 in civil penalties to the United States. MicroLink Devices further agreed to revise its hiring and recruiting procedures, conform future job postings to the requirements of the law, and to be subject to training, reporting and compliance and monitoring requirements. The case settled prior to the Justice Department filing a complaint in this matter.
“Employers must give all eligible candidates the equal opportunity to compete for employment,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department is committed to ensuring employers do not discriminate against protected individuals based on citizenship status.”
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work-authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process.
For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 or the OSC’s employer hotline at 1-800-255-8155. TDD for hearing impaired is 800-237-2515. You may also sign up for a no-cost webinar at www.justice.gov/crt/osc/webinars.php , email [email protected] or visit the website at www.justice.gov/crt/about/osc .
Detroit-Area Resident Pleads Guilty to Participating in $3.1 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Detroit-area social worker pleaded guilty for his role in a $3.1 million Medicare fraud scheme, the Justice Department, FBI and Department of Health and Human Services (HHS) announced today.
Gregory Lawrence, 54, of Detroit, pleaded guilty yesterday before U.S. District Court Judge Victoria A. Roberts in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.
On July 30, 2012, Lawrence’s co-conspirators Felicia Marsh, 54, and Jamie Moreau, 34, both of Detroit, each pleaded guilty before Judge Roberts in the Eastern District of Michigan to one count of conspiracy to commit health care fraud for their roles in the scheme.
According to plea documents, Lawrence, Marsh and Moreau were employees at New Century Adult Day Program Services LLC, a purported psychotherapy clinic in Flint, Mich. From November 2009 to April 2012, New Century used Medicare beneficiary information to bill Medicare for more than $3.1 million in psychotherapy services that were not medically necessary and/or not provided. Court documents reveal that New Century lured Medicare beneficiaries – many of whom were mentally or developmentally disabled – from adult foster care homes and off the street with the promise of seeing a doctor who would prescribe them prescription pain medication. When they arrived at New Century, beneficiaries were told that they must sign up for its psychotherapy program in order to see the doctor. New Century would use the signatures provided by these beneficiaries as a basis to bill Medicare for group and individual psychotherapy purportedly rendered to them. In fact, no psychotherapy was provided.
Court documents show that Lawrence, Marsh and Moreau played key roles in this scheme. Lawrence was a licensed social worker, who helped direct New Century’s operations and created documents that gave the impression that he had provided psychotherapy, when, in fact, he had not. Lawrence’s provider identification number (PIN) was used by New Century to bill Medicare for group and individual psychotherapy services for approximately $1,247,059, of which Medicare paid approximately $395,060.
Plea documents show that, like Lawrence, Marsh used her training as a social worker to create documents for herself and others to give the impression that New Century had rendered psychotherapy that was not provided. New Century submitted approximately $488,331 in claims using Marsh’s PIN, and Medicare paid New Century approximately $153,333 on these claims.
Court documents show that Moreau collected signatures of Medicare beneficiaries that would be used by New Century to defraud Medicare. Moreau also prepared billing paperwork based upon these signatures. Moreau knew that these signatures were being used at New Century to bill Medicare for psychotherapy services that were not provided. From October 2011 through April 2012, Moreau was responsible for $615,751 of the amount New Century billed Medicare. Medicare paid New Century approximately $192,001 on these claims.
At sentencing, Lawrence, Marsh and Moreau each face a maximum of 10 years in prison and a $250,000 fine. Lawrence’s sentencing hearing is scheduled for Jan. 29, 2013. The sentencing hearings for Marsh and Moreau are scheduled for Jan. 8, 2013.Lawrence’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge of the FBI’s Detroit Field Office Robert D. Foley III, and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General (HHS-OIG), Chicago Regional Office.
The case was prosecuted by Trial Attorney William G. Kanellis of the Justice Department Criminal Division Fraud Section and Fraud Section Assistant Chief Gejaa T. Gobena. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.Clean Water Act Settlement Ensures That Boston Racetrack Addresses Wastewater and Stormwater DischargesRead the Press Release
WASHINGTON – Sterling Suffolk Racecourse LLC will pay a civil penalty of $1.25 million to resolve violations of the Clean Water Act (CWA) at its Suffolk Downs racetrack facility in Revere and East Boston, Mass., the U.S. Department of Justice and U.S. Environmental Protection Agency (EPA) announced today. The company is also spending more than $3 million to prevent polluted water from entering nearby waterways and will perform three environmental projects worth approximately $742,000 that will provide water quality monitoring and protection efforts for more than 123 square miles of watershed. The terms of the settlement are contained in a consent decree lodged in federal court in Boston today.
The federal complaint alleges that Suffolk allowed polluted wastewater, including horse manure, urine and bedding material, to discharge into Sales Creek, a tributary of Belle Isle Inlet and Boston Harbor. In addition, the federal complaint alleges that Suffolk operated its concentrated animal feeding operation (CAFO), which stables race horses from March through November, without a permit under the CWA.
“Today’s agreement will prevent further discharges of wastewater from Suffolk Downs into local waterways and will bring the racetrack into compliance with the Clean Water Act, which protects America’s streams, wetlands and rivers from the impacts of Concentrated Animal Feeding Operations,” said Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice. “The settlement also brings lasting benefits to residents and the environment by requiring water quality monitoring in the Mystic and Saugus river watersheds and a salt marsh habitat protection project near the racetrack.”
“This settlement reduces a major source of pollution into Boston Harbor,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “In addition, the settlement’s environmental projects include monitoring water quality in the harbor’s watershed, helping to protect a valuable urban waterway for the use and enjoyment of Boston area residents and visitors.”
In response to EPA’s enforcement at this facility, Suffolk is completing construction of a wastewater collection system, is making improvements to its stormwater collection system and has applied for a National Pollutant Discharge Elimination System (NPDES) permit. Suffolk will minimize the volume of and properly manage the wastewater it produces, which will now be collected in a detention pond and discharged during non-peak hours to the sanitary sewer system. Suffolk will also implement green infrastructure and low impact development techniques to address stormwater discharges from the racetrack and maintenance areas of the facility. These techniques involve the use of natural or engineered systems to direct stormwater to areas where it can be stored, infiltrated, evapotranspirated or reused.
“This case is yet another reminder of the department’s longstanding commitment to defending the integrity of our precious natural resources through vigorous enforcement of our environmental laws,” said U.S. Attorney for the District of Massachusetts Carmen Ortiz. “Today’s settlement will help safeguard a cleaner environment for the citizens of the commonwealth to preserve and enjoy, and protect sensitive waterways and wetlands from harmful pollution.”
EPA inspections revealed that Suffolk Down’s process wastewater discharged from the facility to Sales Creek during dry and wet weather. EPA inspectors observed stormwater contaminated with manure and turbid, brown runoff being discharged from the facility to Sales Creek. Sampling conducted at various outfalls discharging from the Suffolk Downs facility indicated elevated levels of pollutants, including ammonia, suspended solids and bacteria. Animal wastes contain excessive levels of nutrients and pathogens, which produce adverse environmental impacts including reduction of oxygen in the water, which affects aquatic life.Suffolk will undertake three supplemental environmental projects under this settlement, including two water quality monitoring projects and one habitat protection project. Suffolk will work with the Mystic River Watershed Association (MyRWA) to conduct monthly baseline and targeted water quality sampling throughout the Mystic River watershed and will work with the Saugus River Watershed Council (SRWC) to conduct a Saugus River watershed sampling program. Both the Mystic River watershed and Saugus River watershed data will be available to the public for free on the MyRWA and SRWC websites. Suffolk will also construct a habitat protection boardwalk in the Belle Isle Marsh, which is immediately downstream of the Suffolk Downs facility and represents one of the largest remaining areas of salt marsh in Boston Harbor. The Belle Isle Marsh encompasses 275 acres of salt marsh, salt meadow and tidal flats, and is part of the Rumney Marsh Area of Critical Environmental Concern (ACEC).
Preventing animal waste from contaminating surface and ground waters of the United States is one of EPA’s National Enforcement Initiatives for 2011-2013. The initiative focuses on large and medium sized CAFOs that are discharging pollution without or in violation of a permit.
The consent decree, lodged in the U.S. District Court for the District of Massachusetts, is subject to a 30-day public comment period and approval by the federal court. Once notice is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html.
More information about the case is available at www.epa.gov/compliance/resources/cases/civil/cwa/sterlingsuffolk.html.
21 August 2012
Medical Equipment Company Owner Sentenced in Louisiana to 180 Months in Prison for Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owner of multiple durable medical equipment (DME) companies that operated in Louisiana was sentenced today to serve 180 months in prison for his role in multiple Medicare fraud schemes involving fraudulent claims and illegal kickback payments for unnecessary DME, announced the Department of Justice, the Department of Health and Human Services (HHS), the FBI and the Louisiana State Attorney General’s Office.
Henry Lamont Jones, 37, of Prairieville, La., was sentenced by U.S. District Judge James J. Brady of the Middle District of Louisiana. In addition to his prison term, Jones was sentenced to serve three years of supervised release and ordered to pay $13,397,759 in restitution, jointly and severally with convicted co-defendants.Jones, along with his ex-wife, Chikenna D. Jones, at various times operated McKenzie Healthcare Solutions Inc., and owned and operated Healthcare 1 LLC, Lifeline Healthcare Services Inc., Medical 1 Patient Services Inc. and Rose Medical Equipment Inc., Louisiana-based companies that fraudulently billed medical equipment to the Medicare program from 2004 to 2010. Jones had also worked as a patient recruiter for Unique Health Solution Inc. For his involvement with Unique, Jones, along with co-defendants Nnanta “Felix” Ngari, Sofjan M. Lamid and Ernest Payne, was convicted of conspiracy to commit health care fraud and conspiracy to defraud the United States and to pay or receive health care kickbacks after a jury trial in August 2011. Henry Jones and Chikenna Jones were convicted of conspiracy to commit health care fraud and conspiracy to defraud the United States and to pay or receive health care kickbacks after a jury trial in November 2011 for their role in the operation of McKenzie Healthcare Solutions Inc., and Jones pleaded guilty to Medicare fraud charges against him relating to the remaining companies in advance of a trial scheduled for February 2012.
In operating the various DME companies, Jones fraudulently billed the Medicare program for medical equipment that either was not medically necessary or not provided. Jones hired patient recruiters to obtain Medicare beneficiary information and prescriptions for medical equipment such as leg braces, arm braces, power wheel chairs and wheel chair accessories. These prescriptions were then used to submit fraudulent claims to the Medicare program.
According to court documents, during the period when Jones was operating Healthcare 1, Lifeline Healthcare Services, Medical 1 Patient Services, Rose Medical Equipment and McKenzie Healthcare Solutions, these companies submitted more than $22.5 million in fraudulent claims to the Medicare program. During the period of time when Jones was a patient recruiter for Unique Medical Solution, the company submitted more than $4.5 million in fraudulent claims to the Medicare program.
Today’s sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Donald J. Cazayoux Jr. of the Middle District of Louisiana; Mike Fields, Special Agent-in-Charge of the Dallas Region for the HHS Office of the Inspector General (HHS-OIG); Michael Anderson, Special Agent-in-Charge of the FBI’s New Orleans Division; and James Buddy Caldwell, Louisiana State Attorney General.
The Unique/Ngari matter was prosecuted by Assistant Chief Ben Curtis and Trial Attorney David Maria of the Justice Department Criminal Division’s Fraud Section. The McKenzie matter was prosecuted by Assistant Chief Ben Curtis and Trial Attorneys David Maria and Alex Berlin. And the Jones matter was prosecuted by Assistant Chief Ben Curtis and Trial Attorneys David Maria and Abigail Taylor. The cases were investigated by the FBI, HHS-OIG and the Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office (MFCU), and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana.Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Iraqi National Pleads Guilty to 12-count Terrorism Indictment in KentuckyRead the Press Release
Iraqi citizen Mohanad Shareef Hammadi pleaded guilty to federal terrorism charges today in U.S. District Court for the Western District of Kentucky before Senior Judge Thomas B. Russell, announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Perrye K. Turner, Special Agent in Charge of the FBI Louisville Division.
Hammadi, 24, a former resident of Iraq, pleaded guilty to all counts of a 12-count superseding indictment. The superseding indictment charged him with five counts of attempting to provide material support to terrorists and four counts of attempting to provide material support to al-Qaeda in Iraq (AQI), a designated foreign terrorist organization. The superseding indictment also charged him with one count of conspiracy to transfer, possess and export Stinger missiles and with two counts of making false statements in immigration matters. Hammadi was first indicted on May 26, 2011 and was subsequently charged in a superseding indictment returned on Feb. 15, 2012 by a federal grand jury meeting in Bowling Green, Ky.
Hammadi faces a maximum sentence of life in prison under the sentencing guidelines and a mandatory minimum of 25 years in prison. Hammadi’s sentencing is scheduled for Dec. 5, 2012, in U.S. District Court in Bowling Green before Senior Judge Russell at 11:30 am.
Hammadi’s co-defendant, Waad Ramadan Alwan, pleaded guilty to all counts of the 23-count indictment on Dec. 16, 2011, before Senior Judge Russell in Bowling Green. Alwan was charged with conspiracy to kill U.S. nationals abroad; conspiracy to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of Improvised Explosive Devices (IEDs); attempting to provide material support to terrorists and to AQI; as well as conspiracy to transfer, possess and export Stinger missiles.
Hammadi and Alwan were both arrested on May 25, 2011, in Bowling Green on criminal complaints. Both defendants were closely monitored by federal law enforcement authorities in the months leading up to their arrests. Neither was charged with plotting attacks within the United States.
“Today’s guilty plea is another testament to the effectiveness of the intelligence and law enforcement communities in bringing terrorists to justice and preventing them from harming the American people,” said Lisa Monaco, Assistant Attorney General for National Security. “I applaud all those responsible for this successful outcome.”
“In open court today, Mohanad Hammadi admitted to engaging in terrorist activities here in the United States. He admitted that he tried to send numerous weapons from Kentucky to Iraq to be used against American soldiers,” said U.S. Attorney Hale. “Bringing Hammadi to justice is the result of a comprehensive law enforcement effort. The FBI agents of the Louisville Division, along with the federal and local law enforcement members of the Joint Terrorism Task Forces here in Kentucky, including the Bowling Green Police Department, and our many other partners, are to be commended. Their collaborative law enforcement effort successfully thwarted the ongoing intentions of an experienced terrorist. The guilty plea today sends a strong message to anyone who would attempt similar crimes that they will face the same determined law enforcement and prosecution efforts.”
“Protecting the United States from terrorist attacks remains the FBI's top priority,” said Perrye K. Turner, Special Agent in Charge of the FBI in Kentucky. “Using our growing suite of investigative and intelligence capabilities, FBI Agents and Analysts assigned to our Bowling Green office were able to neutralize a potential threat. Our local Joint Terrorism Task Force, comprised of FBI Agents and other local, state and federal agencies from across the Commonwealth, remains committed to dismantling extremist networks and cutting off financing and other forms of support provided by terrorist sympathizers, whether they are operating in Kentucky or worldwide.”
According to the charging documents, Hammadi entered the United States in July 2009, and after first residing in Las Vegas, moved to Bowling Green. Alwan entered the United States in April 2009, and has lived in Bowling Green since his arrival.
According to court documents in this case, the Bowling Green office of the FBI’s Louisville Division initiated an investigation of Waad Ramadan Alwan, which, beginning in 2010, utilized a confidential human source (CHS). The CHS met with Alwan and recorded their meetings and conversations beginning in August 2010. The CHS represented to Alwan that he was working with a group to ship money and weapons to Mujahadeen in Iraq. Mujahadeen generally refers to Muslim fighters or warriors engaged in jihad. From September 2010 to January 2011, Alwan participated in deliveries of weapons and money that he believed were destined for terrorists in Iraq.
In January 2011, Alwan recruited Hammadi, a fellow Iraqi national living in Bowling Green, to assist in these material support operations. Beginning in January 2011, and continuing until his arrest in late May 2011, Hammadi participated with Alwan in money and weapons deliveries that he believed were destined for terrorists in Iraq, including AQI. Hammadi also detailed to the CHS his prior activities as an insurgent in Iraq, including his prior participation in IED attacks against U.S. troops in Iraq. After his arrest on May 25, 2011, Hammadi admitted to his participation in the purported material support operations involving weapons and money that occurred between January and May, 2011. Hammadi also admitted his involvement in insurgent activities while living in Iraq, including his membership in an insurgent group and his participation in various attacks on U.S. troops in Iraq.
None of the weapons, including Stinger missiles, nor any of the money delivered by Alwan or Hammadi in connection with the CHS in the United States were provided to AQI, but instead were carefully controlled by law enforcement as part of the undercover operation.
This case is being investigated by the Louisville Division of the FBI. Assisting in the investigation were members of the Louisville and Lexington Joint Terrorism Task Forces, U.S. Immigration and Customs Enforcement, U.S. Marshals Service, U.S. Department of Defense, U.S. Citizenship and Immigration Services and the Bowling Green Police Department.
The prosecution is being handled by Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division, and Assistant U.S. Attorneys Michael Bennett and Bryan Calhoun from the U.S. Attorney’s Office for the Western District of Kentucky.
Florida Assisted Living Facility Owner Sentenced to 30 Months in Prison for Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owner of a Miami-area assisted living facility was sentenced today to serve 30 months in prison for his role in a kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), the Department of Justice, the FBI and the Department of Health and Human Services announced today.
Bobby Ramnarine, 36, was sentenced by U.S. District Judge Donald M. Middlebrooks in the Southern District of Florida. In addition to his prison term, Ramnarine was sentenced to serve two years of supervised release and was ordered to pay $165,881 in restitution, jointly and severally with co-defendants. Ramnarine pleaded guilty on May 22, 2012, to one count of conspiracy to commit health care fraud.
Ramnarine was the owner of an assisted living facility called Elmina Inc., located in Lauderhill, Fla. According to court documents, Ramnarine agreed to send Elmina residents to ATC in exchange for illegal health care kickbacks. ATC purported to operate partial hospitalization programs (PHPs), a form of intensive treatment for severe mental illness, in seven different locations throughout South Florida and Orlando, Fla. According to court documents, Ramnarine admitted that he knew ATC falsely billed Medicare for PHP treatment based on his fraudulent referrals. Ramnarine also admitted he referred his residents to ATC because he would receive a cash kickback and because his residents had Medicare and were willing to go to ATC. According to the plea agreement, Ramnarine’s participation in the fraud resulted in more than $445,025 in fraudulent billing to the Medicare program.
ATC, its management company, Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and more than 20 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.
The sentencing was announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
The case was prosecuted by Trial Attorneys Allan J. Medina, Steven Kim and William Parente of the Justice Department Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.Federal Courts Order Seizure of Three Website Domains<br /> Involved in Distributing Pirated Android Cell Phone AppsRead the Press Release
WASHINGTON – Seizure orders have been executed against three website domain names engaged in the illegal distribution of copies of copyrighted Android cell phone apps, Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division, U.S. Attorney Sally Quillian Yates of the Northern District of Georgia and Special Agent in Charge Brian D. Lamkin of the FBI’s Atlanta Field Office announced today. The department said that this is the first time website domains involving cell phone app marketplaces have been seized.
The seizures are the result of a comprehensive enforcement action taken to prevent the infringement of copyrighted mobile device apps. The operation was coordinated with international law enforcement, including Dutch and French law enforcement officials.The three seized domain names – applanet.net, appbucket.net and snappzmarket.com – are in the custody of the federal government. Visitors to the sites will now find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them that willful copyright infringement is a federal crime.
“Cracking down on piracy of copyrighted works – including popular apps – is a top priority of the Criminal Division,” said Assistant Attorney General Breuer. “Software apps have become an increasingly essential part of our nation’s economy and creative culture, and the Criminal Division is committed to working with our law enforcement partners to protect the creators of these apps and other forms of intellectual property from those who seek to steal it.”
“Criminal copyright laws apply to apps for cell phones and tablets, just as they do to other software, music and writings. These laws protect and encourage the hard work and ingenuity of software developers entering this growing and important part of our economy. We will continue to seize and shut down websites that market pirated apps, and to pursue those responsible for criminal charges if appropriate,” said U.S. Attorney Yates.
“The theft of intellectual property, particularly within the cyber arena, is a growing problem and one that cannot be ignored by the U.S government’s law enforcement community. These thefts cost companies millions of dollars and can even inhibit the development and implementation of new ideas and applications. The FBI, in working with its various corporate and government partners, is not only committed to combating such thefts but is well poised to coordinate with the many jurisdictions that are impacted by such activities,” said FBI Special Agent in Charge Lamkin.
During the operation, FBI agents downloaded thousands of copies of popular copyrighted mobile device apps from the alternative online markets suspected of distributing copies of apps without permission from the software developers who would otherwise sell copies of the apps on legitimate online markets for a fee. In most cases, the servers storing the apps sold by these alternative online markets were being hosted in other countries, and our international law enforcement partners assisted in obtaining or seizing evidence stored on these servers. Nine search warrants were also executed in six different districts across the country today as part of the operation.The operation reflects a coordinated effort by the Department of Justice Criminal Division’s Computer Crime and Intellectual Property Section and the Office of International Affairs; the U.S. Attorney’s Office for the Northern District of Georgia; the FBI’s Atlanta Field Office; and six other U.S. Attorney’s Offices, including the Southern District of Mississippi, the Middle District of Florida, the Western District of Michigan, the Southern District of Indiana, the District of Rhode Island and the Northern District of Texas.
The FBI is a full partner at the National Intellectual Property Rights Coordination Center (IPR Center). The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. The IPR Center uses the expertise of its 19 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to intellectual property (IP) theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters. To report IP theft or to learn more about the IPR Center, visit www.IPRCenter.gov.
The enforcement actions announced today are one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.Court Approves Comprehensive Assignment Plan in Longstanding Tennessee Desegregation CaseRead the Press Release
The U.S. District Court for the Western District of Tennessee today approved a comprehensive consent order in McFerren v. County Board of Education of Fayette County, which the Department of Justice negotiated with the Board of Education of Fayette County, Tennessee and the NAACP Legal Defense & Education Fund to desegregate the Fayette County public schools.
The consent order requires the district to implement a controlled choice program by the start of the 2014-15 school year for three of its six elementary schools so that all three schools achieve desegregated enrollments. To further desegregation at the other elementary schools, the district must close two of its elementary schools, construct a new elementary school, revise attendance zone lines and create a magnet program at the elementary school with the highest percentage of African-American enrollment. If the magnet program fails to produce a desegregated school after three years, the consent order requires the district to take additional steps. The district further agreed to provide gifted services at each elementary school, offer additional advanced courses at the high school, and continue certain intra-district student transfers that further desegregation among its schools.
“We are pleased that the parties were willing to work so hard to reach such a substantial and important agreement in this case,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The order shows the type of meaningful progress parties can achieve toward ensuring equal educational opportunities for all students if they are willing to be both steadfast and creative, and we look forward to working with the district over the next few years to implement the order and bring this case to a close.”
The enforcement of Title IV of the Civil Rights Act of 1964 in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt .
Alabama Woman Pleads Guilty in Stolen Identity Refund Fraud SchemeRead the Press Release
Sonya Darrington pleaded guilty in the Middle District of Alabama to conspiracy to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents related to the guilty plea, Darrington had been involved in a stolen identity federal tax refund fraud scheme from April 2006 through June 2011. In April 2006, Darrington opened a bank account that received a total of $129,144 in fraudulently obtained tax refunds.
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
20 August 2012
Sinclair Oil to Pay $3.8 Million Penalty and Install Pollution Controls at Wyoming Refineries to Resolve Violations of 2008 Consent DecreeRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency today announced a settlement with two subsidiaries of Sinclair Oil Corporation to resolve alleged violations of air pollution limits established in a 2008 consent decree at refineries in Casper and Sinclair, Wyo. Sinclair Casper Refining Co. and Sinclair Wyoming Refining Co. will pay stipulated penalties totaling $3,844,000 and spend approximately $10.5 million on additional pollution control equipment and other projects to resolve the allegations. The settlement will require the Sinclair companies to reduce emissions of nitrogen oxides (NOx), sulfur dioxide (SO2) and particulate matter by approximately 24, 385 and 59 tons per year, respectively.
“Parties who enter into consent decrees with the United States must adhere to their obligations, and failure to comply will result in further penalties,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement requires Sinclair to pay a significant $3,844,000 penalty and provide additional emission reductions beyond those required in the original settlement.”
“EPA is committed to ensuring that companies comply with environmental requirements that protect people's health,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “This settlement holds Sinclair accountable for exceeding the emissions limits agreed to in a previous settlement for Clean Air Act violations and ensures that the people of Wyoming have cleaner, healthier air.”
The alleged violations stem from Sinclair’s failure to meet the terms of the 2008 consent decree, including exceeding NOx emissions limits at the Casper and Sinclair refineries and failing to comply with requirements to install ,operate and maintain a flare gas recovery system at the Sinclair refinery, resulting in excess emissions of SO2. The problems will be addressed by installing and operating a selective catalytic reduction system to control NOx emissions and by upgrading the flare gas recovery system to meet SO2 emissions limits. Sinclair will also complete a project to provide road paving at its Casper refinery that will reduce particulate matter emissions by an additional 59 tons per year and reduce fuel oil burning at the Casper refinery from the existing 188 tons per year limit to no more than 95 tons per year.
The settlement is subject to a 30-day public comment period and final court approval. The settlement documents may be viewed at www.justice.gov/enrd/Consent_Decrees.html.
Additional information on the settlement is available at www.epa.gov/compliance/resources/cases/civil/caa/sinclair.html.
More information on EPA’s civil enforcement of the Clean Air Act is available at www.epa.gov/compliance/civil/caa/index.html.
More information on EPA’s refinery initiative is available at www.epa.gov/compliance/resources/cases/civil/caa/oil/.
North Carolina Poultry Processing Plant Convicted for Knowing Violations of Clean Water ActRead the Press Release
WASHINGTON – A federal jury today found House of Raeford Farms Inc., the owner and operator of a poultry slaughtering and processing facility located in Raeford, North Carolina, guilty of 10 counts of knowing violations of the Clean Water Act.
House of Raeford allowed plant employees to bypass the facility’s pretreatment system and send its untreated wastewater directly to the city of Raeford’s wastewater treatment plant, without notifying city officials. In addition, House of Raeford failed to prevent employees from sending thousands of gallons of wastewater into a pretreatment system that did not have the capacity to adequately treat the wastewater before it was discharged to the city plant. The untreated wastewater that was discharged directly to the city plant was contaminated with waste from processing operations, including blood, grease and body parts from slaughtered turkeys. A House of Raeford former employee admitted that the facility would continue to “kill turkeys” despite being warned that the unauthorized bypasses had an adverse impact on the city’s wastewater treatment plant. The city plant was responsible for treating industrial, commercial and residential wastewater before it was discharged to Rockfish Creek in Hoke County.
The bypasses and failure to report them violated House of Raeford’s pretreatment permit as well as the city’s sewer use ordinance. Many of the bypasses took place while House of Raeford was subject to a consent order with the city that required it to construct a new pretreatment system and comply with all requirements of its pretreatment permit. A number of the bypasses were recorded in log books kept by House of Raeford Inc. wastewater operators, and were never revealed to the city.
“The convictions today demonstrate the Justice Department’s commitment to prosecuting those who knowingly violate pretreatment permits and the Clean Water Act by releasing untreated and contaminated wastewater to municipal wastewater treatment plants,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The violations here are especially egregious and will not be tolerated. The evidence showed that House of Raeford allowed overflows of untreated wastewater to bypass a critical part of their pretreatment system. Many of these bypasses were not disclosed to the city of Raeford, and placed an additional burden on the city’s wastewater treatment plant.”
“Publicly owned wastewater treatment plants must be protected from companies that cut corners by discharging wastewater illegally,” said Maureen O’Mara, Special Agent in Charge of of EPA Region 4, which covers the southeast United States including North Carolina. “The defendants in this case deliberately discharged turkey parts, blood and grease into the wastewater plant for over 16 months, bypassing treatment. Today’s conviction sends the message that the American public will not tolerate companies putting profit ahead of compliance.”
“Families and businesses depend on having clean water. Our SBI agents will continue to work closely with their federal partners to protect the safety of our water supply and hold polluters accountable,” said North Carolina Attorney General Roy Cooper.
House of Raeford Inc. faces a maximum fine of $500,000 or twice the gain or loss resulting from the offenses, whichever is greater, per count. Sentencing has been scheduled for Nov. 28, 2012.The case was prosecuted by the Justice Department’s Environmental Crimes Section and was investigated by U.S. Environmental Protection Agency Criminal Investigation Division and North Carolina State Bureau of Investigation.
17 August 2012
Twelve-Year Federal Fugitive Indicted for Fraud and Identity Theft in Nationwide Foreclosure Rescue ScamRead the Press Release
WASHINGTON – Federal authorities have charged a former Los Angeles man with aggravated identity theft and having operated a foreclosure-rescue scam in Southern California and elsewhere that promised to postpone foreclosure sales for more than 800 distressed homeowners.
Glen Alan Ward, 47, of Canada, was indicted today in the Central District of California on two counts of bankruptcy fraud, one count of mail fraud and two counts of aggravated identity theft.In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which stemmed from federal charges in the Central District of California associated with a similar scheme. On April 5, 2012, Ward was arrested in Canada on a U.S. provisional arrest warrant based on the charges in the Central District of California. His extradition to the United States is pending.
Today’s indictment charges the defendant with identity theft and a scheme to defraud that took place from July 2007 to April 5, 2012, while he was a fugitive. According to the indictment, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward allegedly promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. The indictment alleges that Ward also obtained a copy of the debtor’s bankruptcy petition and directed his clients to execute, notarize and record a grant deed transferring a 1/100th fractional interest in their distressed home into the name of the debtor he provided. Then, Ward allegedly faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.
Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money.
As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward collected more than $1 million from his clients who paid for his illegal foreclosure-delay services.
The indictment was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Acting Assistant Director in Charge Timothy Delaney of the FBI’s Los Angeles Field Office, and Christy Romero, Deputy Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
“Today’s charges underscore our commitment to relentlessly pursue those who prey on the vulnerabilities of distressed homeowners to defraud lenders and pad their own pockets,” said Assistant Attorney General Breuer. “As this case illustrates, we will not stop pursuing them, no matter where they are, and no matter how long it takes.
“Con artists who seek to victimize homeowners in distress are truly shameless,” said U.S. Attorney for the Central District of California André Birotte Jr. “The long arm of the law can and will find and reach such financial pirates wherever they hide, and we will be tireless in our pursuit of justice for the people they victimize.”
“Ward was on the lam for 12 years running from earlier charges of bankruptcy fraud, and it’s time he answered for his alleged conduct,” said Christy Romero, Special Inspector General at SIGTARP. “In order to advance his scheme, from at least July 2007 until the time of his arrest in Canada in April, Ward allegedly stole the identities of unsuspecting U.S. taxpayers already in the dire straits of bankruptcy proceedings and exploited civil protections under bankruptcy law to defraud lenders, including multiple TARP recipients, and distressed homeowners facing foreclosure. SIGTARP and our partners in law enforcement will continue to hold accountable those responsible for all fraud related to TARP.”
“Mr. Ward’s fugitive odyssey is over, in large part thanks to our Canadian law enforcement partners,” said Timothy Delaney, Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The charges against Mr. Ward tell a disturbing tale of avarice whereby scores of homeowners facing foreclosure were further victimized. The FBI will continue to work with our partners at SIGTARP and at the U.S. Attorney’s Office to tackle this reprehensible crime problem facing Americans.”
The crime of bankruptcy fraud carries a maximum sentence of five years in prison. Mail fraud carries a maximum sentence of 30 years in prison. Each aggravated identity theft charge carries a two-year mandatory, consecutive sentence.
This case is being prosecuted by Trial Attorney Paul Rosen of the Fraud Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Evan Davis of the U.S. Attorney’s Office for the Central District of California. The investigation was conducted by the SIGTARP and the FBI, which received substantial assistance from the U.S. Trustee’s Office.
This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Owner of Pavement Painting Business Pleads Guilty in Alaska<br /> to Illegally Disposing Hazardous WasteRead the Press Release
WASHINGTON – William Duran Vizzerra Jr. pleaded guilty today to illegally disposing of hazardous waste, a felony criminal offense, at a storage lot in Anchorage, Alaska, announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division, and Karen L. Loeffler, U.S. Attorney for the District of Alaska.
According to the plea agreement filed in U.S. District Court in the District of Alaska, Vizzerra was the president, director and part-owner of Precision Pavement Markings Inc. (PPMI), a road and parking lot painting and striping business that operated from a storage lot in Anchorage from at least 2006 through 2009. Vizzerra used the storage lot to store hazardous waste, including methyl methacrylate paint and toluene that was used to flush the paint lines, nozzles and sprayers used in his business. Having made no attempts to properly dispose of the waste, on approximately Nov. 1, 2009, Vizzerra illegally abandoned approximately 321 55-gallon drums, 179 five-gallon pails and two 200-gallon totes of hazardous waste. The waste, totaling 204,750 pounds, was determined to be hazardous because it was extremely flammable.
In November 2010, a citizen reported the abandoned drums to the U.S. Environmental Protection Agency (EPA). EPA Criminal Investigation Division Agents observed several hundred 55-gallon drums and smaller containers at the storage lot, some of which were stacked two-high on a trailer and some of which were stored directly on the ground. Many of the drums were marked “waste” or held hazardous markings, such as “flammable” or “flammable liquid.” Many were rusted and in decrepit condition or bulging. The investigation revealed that some of the drums were from a prior pavement business of Vizzerra’s that had dissolved several years earlier.
Under the Resource Conservation and Recovery Act, hazardous waste, due to its dangerous qualities, may only be disposed of at a licensed treatment, storage or disposal facility. The storage lot Vizzerra used was neither equipped nor permitted for the disposal of hazardous waste. Yet, knowing this, Vizzerra illegally abandoned and disposed of the waste at the lot, which cost his landlord $380,877.60 to clean up and properly dispose of the waste.“The illegal disposal of hazardous waste puts everyone in our community at risk,” said U.S. Attorney Loeffler. “The defendant in this case knowingly abandoned hundreds of barrels of toluene and other dangerous and highly flammable chemicals. We are fortunate that this dangerous situation was reported, and that the EPA responded to insure that the waste was removed and nobody was hurt. The U.S. Attorney’s Office for the District of Alaska is committed to actively prosecuting environmental crimes for the protection of all Alaskans.”
“By first neglecting and then abandoning hazardous chemicals at his place of business, Vizzera's actions put both people and the environment at risk," said Tyler Amon, Special Agent in Charge of EPA's criminal enforcement program in the Northwest. “Adding insult to injury, he then saddled an innocent property owner and taxpayers with a total cleanup cost approaching half a million dollars. Our message in this matter is clear: if you fail to manage hazardous waste safely and responsibly, you will be investigated and prosecuted.”
The maximum penalties for knowingly disposing of hazardous waste include five years of incarceration and a fine of $50,000 per day of violation. U.S. District Court Judge Ralph R. Beistline set Vizzerra’s sentencing for Nov. 14, 2012.
The investigation was conducted by the EPA’s Criminal Investigation Division. The case was prosecuted by the Environmental Crimes Section of the Justice Department, the U.S. Attorney’s Office for the District of Alaska, and the Regional Criminal Enforcement Counsel for the Environmental Protection Agency’s Region 10 in Seattle.
Georgia Tax Return Preparer Pleads Guilty to Stolen Identity Refund Fraud CrimesRead the Press Release
A tax return preparer from Macon, Ga., pleaded guilty Thursday to filing a false claim for tax refund, theft of government money and aggravated identity theft, the Justice Department and the Internal Revenue (IRS) announced.
According to court documents, Willie C. Grant is a former tax return preparer who used many of his former clients’ names and Social Security numbers to file false federal income returns in their names and without their knowledge. On these tax returns, Grant intentionally claimed false tax refunds and directed the IRS either to electronically deposit the false refunds into his personal or business bank accounts or to issue paper refund Treasury checks which he then cashed or deposited into his personal or business bank accounts. Grant spent the proceeds of his false refund scheme on personal items including expensive cars and personal living expenses.
Court documents further established that from 2003 through 2008, Grant owned and operated a tax return preparation business, Grant Income Tax Bookkeeping and Check Cash (GIT) out of his home in Macon, eventually closing GIT in 2009. During calendar years 2006 through 2009, Grant prepared and filed false tax returns in the names of unsuspecting individuals. Many of the individuals were elderly or disabled former clients of GIT or deceased individuals. Grant admitted that that he abused his position of private trust as a professional paid tax preparer in committing his crimes.
Grant faces a potential maximum sentence of 17 years in prison and a fine of up to $500,000. U.S. District Court Chief Judge C. Ashley Royal, who is presiding over this matter, set a sentencing date of Oct. 30, 2012.
The case was investigated by special agents of IRS – Criminal Investigation, and is being prosecuted by Trial Attorneys Charles M. Edgar, Jr. and Justin K. Gelfand of the Justice Department’s Tax Division.
Department of Justice, Federal Trade Commission to Hold Workshop on “Most-Favored-Nation” ClausesRead the Press Release
WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) announced today that they will hold a joint public workshop on most-favored-nation clauses (MFNs) on Sept.10, 2012, to explore the use of MFN clauses and the implications for antitrust enforcement and policy.
The most commonly used MFN provisions guarantee a customer that it will receive prices that are at least as favorable as those provided to other buyers of the same seller, for the same products or services. Although at times employed for benign purposes, MFNs can under certain circumstances present competitive concerns. This is because they may, especially when used by a dominant buyer of intermediate goods, raise other buyers’ costs or foreclose would-be competitors from accessing the market. Additionally, MFNs can facilitate collusion and stabilize coordinated pricing among sellers.
The workshop will offer an opportunity for businesses, academics, economists, lawyers and other interested parties to consider the use of MFNs and the legal and economic analyses of these provisions. The workshop will consist of a series of panels examining, among other topics, the legal treatment of MFNs, economic theories concerning MFNs and why they are used, and industry experiences with MFNs. Panelists for the workshop will include private attorneys, economists and industry representatives.
The Department of Justice and the FTC are interested in receiving comments on MFNs, and will accept written submissions from the public before the workshop and until Oct.10, 2012, 30 days after the event. Interested parties may submit public comments to [email protected]. Submitted comments will be made publicly available on the Department of Justice and FTC websites.
The all-day workshop is free and open to the public. Individuals are encouraged, but not required, to register in advance for the workshop by sending an email to [email protected]. Please include “RSVP” in the subject line. Seating will be on a first-come, first-serve basis.
The workshop will take place at the FTC's satellite conference center at 601 New Jersey Ave., NW, Washington, DC from 9:00 a.m. to 5:30 p.m. ET on Sept. 10, 2012. It will include the following panels and presentations:Economic Theories of MFNs: Harms and Efficiencies
Presenters
Jonathan Baker, Professor of Law, American University Washington College of Law
Judith A. Chevalier, William S. Beinecke Professor of Finance and Economics, Yale School of ManagementModerators
Robert Majure, Economics Director of Enforcement, Antitrust Division, U.S. Department of Justice
Daniel O’Brien, Senior Economic Policy Advisor, Federal Trade Commission
Empirical Evidence on Effects of MFNs
Presenter
Ramsey Shehadah, Senior Vice President, NERA Consulting
Panel
Jonathan Baker, Professor of Law, American University Washington College of Law
Judith A. Chevalier, William S. Beinecke Professor of Finance and Economics,Yale School of ManagementRamsey Shehadah, Senior Vice President, NERA Economic Consulting
Moderators
Robert Majure, Economics Director of Enforcement, Antitrust Division, U.S. Department of Justice
Daniel O’Brien, Senior Economic Policy Advisor, Federal Trade Commission
Legal Treatment of MFNs
Panel
Doug Anderson, Of Counsel, Bailey Cavalieri LLC
Andrew I. Gavil, Incoming Director, Office of Policy Planning, Federal Trade Commission
Elai Katz, Partner, Cahill, Gordon & Reindel LLP
Janet L. McDavid, Partner, Hogan Lovells
Moderator
Peter J. Levitas, Deputy Director, Bureau of Competition, Federal Trade Commission
Lunchtime Speech: Nelson Jung, Director, Markets and Projects, U.K. Office of Fair Trading
MFNs: From Theory to the Real World
Panel
W. Thomas McGough Jr., Senior Vice President & Chief Legal Officer, University of Pittsburgh Medical Center
Murray N. Ross, Ph.D., Vice President & Director, Institute of Health Policy, Kaiser Permanente
Melissa A. Scanlan, Director, Legal Affairs, T-Mobile USA, Inc
John Thorne, Partner, Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC
Mark D. Whitener, Senior Counsel, General Electric Co.
Moderator
Martha S. Samuelson, President & CEO, Analysis Group Inc.
Moving Forward – How Has Thinking about MFNs Evolved and Where Might It Go?
Panel
David I. Gelfand, Partner, Cleary, Gottlieb, Steen & Hamilton LLP
Jonathan M. Jacobson, Partner, Wilson, Sonsini, Goodrich & Rosati
Joseph Kattan, Partner, Gibson, Dunn & Crutcher LLP
Steven C. Salop, Professor of Law, Georgetown University Law Center
Moderator
Renata Hesse, Deputy Assistant Attorney General for Civil Enforcement, Antitrust Division, U.S. Department of Justice
Directions to the FTC’s Conference Center are available at http://www.ftc.gov/bcp/workshops/transportationguide.shtml.
Reasonable accommodations for people with disabilities are available upon request. Requests should be submitted via email to [email protected] or by calling Samantha Konstandt at 202-326-3348. Requests should be made in advance. Please include a detailed description of the accommodation needed, and provide contact information.
Press contacts:
Department of Justice
Office of Public Affairs
Gina Talamona
202-514-2007
Federal Trade Commission
Office of Public Affairs
Peter Kaplan
202-326-2334
Court Approves Consent Order in Long-Standing LouisianaSchool Desegregation CaseRead the Press Release
The U.S. District Court for the Western District of Louisiana has approved a consent order in United States v. West Carroll Parish School Board , a long-standing school desegregation case, the Justice Department announced. The consent decree comes after an in-depth review by the department of the West Carroll Parish School District's compliance with its outstanding desegregation obligations.
The consent order, which the court approved without modifications, declared the school system unitary in all areas of its operation except for student assignment, which includes issues related to student discipline.
To address the outstanding issues and achieve full unitary status, the school system agreed to immediately close one of its schools. Additionally, they are also required to address racial disparities in student discipline by adopting a revised student discipline policy, conduct a comprehensive training for all of its administrators, teachers and staff who are responsible for student discipline and adopt a process for monitoring student discipline data.
“We are pleased the court approved the consent order and that the West Carroll Parish School Board was willing to reach an agreement on this important case,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We look forward to working closely with the school system as it continues to enact policies and practices that create a safe and inclusive environment for all students.”
The enforcement of Title IV of the Civil Rights Act of 1964 in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Justice Department’s Civil Rights Division is available on its website at www.justice.gov/crt .
16 August 2012
Yazaki Executive Agrees to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. CarsRead the Press Release
WASHINGTON – An executive of Tokyo-based Yazaki Corporation has agreed to plead guilty for his role in a conspiracy to fix prices of instrument panel clusters, also known as meters, installed in cars sold in the United States and elsewhere, the Department of Justice announced today. He is the 11th executive to be charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.
In a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, Toshio Sudo, a Japanese national, was charged with engaging in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of instrument panel clusters sold to customers in the United States and elsewhere. According to the charge, Sudo’s involvement in the conspiracy lasted from at least as early as January 2003 until at least February 2009. The department said that Sudo and his co-conspirators carried out the conspiracy by agreeing, during meetings and conversations, to allocate the supply of instrument panel clusters and sold the parts at noncompetitive prices to automakers in the United States and elsewhere.
According to the plea agreement, which is subject to court approval, Sudo has agreed to serve 14 months in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department’s investigation.
Yazaki manufactures and sells a variety of automotive parts, including instrument panel clusters. Instrument panel clusters are the mounted array of instruments and gauges housed in front of the driver of an automobile. According to the charge, Sudo and his co-conspirators carried out the conspiracy by, among other things, agreeing during meetings and discussions to coordinate bids submitted to, and price adjustments requested by, automobile manufacturers.
“From using code names with one another, to meeting in remote or private locations, the conspirators employed a variety of measures to keep their illegal conduct secret,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The division and its law enforcement partners will continue to do everything in our power to detect these cartels and bring them to justice.”
“The conspiracies to fix prices and rig bids in the automotive industry represent a serious crime against the United States. Car makers and car buyers pay the price for these illegal activities,” said Robert D. Foley III, Special Agent in Charge of the FBI’s Detroit Field Office. “The FBI is committed to vigorously pursuing and stopping those who commit these crimes.
Including Sudo, seven companies and 11 executives have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Furukawa Electric Co. Ltd, DENSO Corp., Yazaki Corp., G.S. Electech Inc., Fujikura Ltd. and Autoliv Inc. pleaded guilty and were sentenced to pay a total of more than $785 million in criminal fines. TRW Deutschland Holding GmbH has agreed to plead guilty. Additionally, seven of the individuals – Junichi Funo, Hirotsugu Nagata, Tetsuya Ukai, Tsuneaki Hanamura, Ryoki Kawai, Shigeru Ogawa and Hisamitsu Takada – have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each. Makoto Hattori and Norihiro Imai have pleaded guilty and await sentencing. Kazuhiko Kashimoto is scheduled to plead guilty on Sept. 26, 2012.
Sudo is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence for individuals of 10 years and a fine of $1 million. The maximum fine for an individual 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 prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information concerning the focus of 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 call the FBI’s Detroit Field Office at 313-965-2323.
Justice Department Settles Race Discrimination Case Against Pennsylvania Country ClubRead the Press Release
The Justice Department announced today that it has reached a settlement agreement with Valley Club, a former swimming facility located in Huntingdon Valley, Pa, resolving allegations that the company discriminated against persons because of race. The Justice Department’s investigation was conducted under Title II of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, national origin and religion in places of public accommodation, such as hotels, restaurants and places of entertainment.
The settlement agreement, which must be approved by the Bankruptcy Court for the Eastern District of Pennsylvania, also resolves A.B., et al. v. The Valley Club of Huntingdon Valley, PA , a private suit filed by the children and their families, as well as discrimination claims filed with the Pennsylvania Human Relations Commission (PHRC) under the Pennsylvania Human Relations Act. The Chief Magistrate Judge of the District Court for the Eastern District of Pennsylvania approved the settlement agreement after formal mediation efforts. The department investigated this matter jointly with the Pennsylvania Human Relations Commission.
In January 2010, the department filed a complaint following an incident at the Valley Club in June 2009. Creative Steps Inc. a Northeast Philadelphia children’s day camp, had paid the club a fee to give its campers access to the club’s swimming pool for the summer. On the first day they swam, the children reported hearing racial slurs while enjoying the pool. On July 3, 2009, the club refunded the day camp’s membership fee and prohibited the children from returning to swim.
“No one may be denied the right to use a swimming pool because of their race or the color of their skin,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to protect vigorously the rights of persons of all races to be free from discrimination in public accommodations across the country.”
Valley Club filed for Chapter 7 Bankruptcy protection in November 2009. The club property was sold in June 2010 for$1,460,000. The settlement agreement stipulates that once the administration of the estate and the bankruptcy case is closed and after paying allowed costs and fees, the remaining assets will be paid to more than 50 children, their camp counselors and to Creative Steps.
“This settlement provides significant opportunity to children who were denied an opportunity based on their skin color,” said JoAnn Edwards, executive director of the Pennsylvania Human Relations Commission. “Our hope is that this case serves as prevention for years to come and a reminder that discrimination is illegal, and has no place in Pennsylvania.”
The settlement also provides that $65,000 will be set aside from the proceeds of the sale of the Valley Club property for the creation of a leadership council that comprises former Valley Club members, Creative Steps counselors, campers and their families. The children and families affected by the Valley Club incident will take leadership roles in planning swimming, educational and recreational opportunities for the community.
More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt . Persons who believe they have experienced or witnessed unlawful discrimination in public accommodations may contact the Housing and Civil Enforcement Section at (202) 514-4713.
Justice Department Requires Changes to Verizon-Cable Company Transactions to Protect Consumers, Allows Procompetitive Spectrum Acquisitions to Go ForwardRead the Press Release
The Department of Justice announced today that it will require Verizon and four of the nation’s largest cable companies—Comcast, Time Warner Cable, Bright House Networks and Cox Communications—to make changes to a series of agreements concerning both the sale of bundled wireless and wireline services, and the formation of a technology research joint venture. The department said that, if left unaltered, the agreements would have harmed competition by diminishing the companies’ incentive to compete, resulting in higher prices and lower quality for consumers. The announcement came after a closely coordinated investigation with the Federal Communications Commission (FCC), with additional assistance provided by the New York State Attorney General’s Office.
The department also said that it would allow both Verizon’s proposed acquisitions of spectrum from the cable companies and T-Mobile USA’s contingent purchase of a significant portion of that spectrum from Verizon to go forward. The department said that the spectrum transactions facilitate active use of an important national resource and thereby promise substantial benefit to wireless consumers. The transactions remain subject to review by the FCC, which is expected to release a separate statement regarding the status of its review of the transactions.
“By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers,” said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice's Antitrust Division. “ The Antitrust Division’s enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape.”
The department’s Antitrust Division, joined by the New York State Attorney General’s Office, filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to prevent Verizon, Comcast, Time Warner Cable, Bright House Networks and Cox Communications from enforcing a series of commercial agreements. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the concerns alleged in the lawsuit.
The department said the proposed settlement protects competition and consumers by removing provisions that would lessen the companies’ incentives to compete aggressively in the areas where Verizon’s FiOS services offer a critical competitive alternative to the cable companies’ video and broadband products. The proposed settlement also limits the duration of the companies’ collaboration to December 2016 in important respects, ensuring that they retain incentives to compete against one another .
In December 2011, Verizon Wireless agreed to acquire a significant portfolio of wireless spectrum licenses from a consortium of cable companies—spectrum that today is unused. In June 2012, Verizon Wireless reached an agreement to transfer a significant amount of that spectrum to T-Mobile USA, the smallest of the four nationwide mobile wireless competitors. Verizon Wireless has also announced a public process to sell other previously unused spectrum.
At the same time they entered into the spectrum transactions, Verizon and the cable companies entered into a series of commercial agreements that require the companies to sell each other’s products and create an exclusive technology research joint venture.
Verizon and the cable companies are direct competitors in many local markets throughout the United States where Verizon offers video, voice and broadband service. The series of commercial agreements between Verizon and the cable companies would have threatened this competition. The series of commercial agreements between Verizon and the cable companies would have threatened this competition. Most notably, the agreements, as originally structured, would have required Verizon Wireless to sell the cable companies’ services on an “equivalent basis” with FiOS where FiOS is available, thereby reducing Verizon’s ability and incentive to sell its own services aggressively.
The agreements also create a new technology research joint venture through which Verizon Wireless, Comcast, Time Warner Cable and Bright House Networks would collaborate to develop new technologies that integrate wireless and wireline products. The department’s complaint alleges that the potentially unlimited duration of this collaboration is unreasonable and could threaten long-term competition, and also alleges that certain restrictions in the agreements unnecessarily hinder the ability of the companies to innovate outside the joint venture.
The proposed settlement forbids Verizon Wireless from selling cable company products in FiOS areas and removes contractual restrictions on Verizon Wireless’s ability to sell FiOS, ensuring that Verizon’s incentives to compete aggressively against the cable companies remain unchanged. In addition, under the proposed settlement, Verizon Wireless’s ability to resell the cable companies’ services to customers in areas where Verizon sells DSL Internet service ends in December of 2016 (subject to potential renewal at the department’s sole discretion), thereby preserving Verizon’s incentives to reconsider its decision to stop building out its FiOS network and otherwise innovate in its DSL territory. Finally, the proposed settlement limits the duration of the technology joint venture and other features of the agreements, ensuring that the agreements will not dampen the companies’ incentives to compete against one another going forward.
The proposed settlement also requires the commercial agreements to be amended so that:
· Verizon retains the ability to sell bundles of services that include DSL, Verizon Wireless and the video services of a direct broadcast satellite company (i.e., DirecTV or Dish Network);
· After five years, the cable companies are no longer barred from selling the wireless services of Verizon Wireless’s competitors, and may partner with other wireless providers;
· The cable companies can elect to resell Verizon Wireless services using their own brand at any time as provided for under the amended agreements; and
· U pon dissolution of the technology joint venture, all members receive a non-exclusive license to all the joint venture’s technology, and each may then choose to sublicense to other competitors.
The settlement also forbids any form of collusion and restricts the exchange of competitively sensitive information. Verizon and the cable companies would also be required to provide regular reports to the department to ensure that the collaboration does not harm competition going forward.
Verizon Communications Inc. is a Delaware corporation headquartered in New York. Verizon’s consumer wireline segment, Verizon Telecom, is one of the nation’s largest providers of wireline telecommunications services. As of the second quarter of 2012, Verizon Telecom had more than 4 million FiOS video subscribers, more than 5 million FiOS broadband subscribers, more than 2.5 million FiOS voice telephony subscribers, and more than 3.5 million DSL broadband subscribers. Verizon Communications owns 55 percent of Cellco Partnership, which does business as Verizon Wireless, a Delaware general partnership headquartered in New Jersey. Vodafone Group Plc owns the remaining 45 percent of Verizon Wireless. Verizon Wireless is one of the nation’s largest wireless services providers, with approximately 108 million connections to its wireless voice and data services and revenues of $59 billion in 2011. Verizon Communications operates and manages Verizon Wireless.
Comcast Corporation is a Pennsylvania corporation headquartered in Philadelphia. It is one of the nation’s largest providers of wireline telecommunications services. As of the second quarter of 2012, Comcast had more than 22 million video subscribers, more than 17.5 million broadband subscribers, and more than 9 million voice telephony subscribers. Comcast had revenues of more than $27 billion from its residential broadband and video businesses in 2011.
Time Warner Cable Inc. is a Delaware corporation headquartered in New York. It is one of the nation’s largest providers of wireline telecommunications services. As of the second quarter of 2012, it had more than 12 million video subscribers, more than 10.5 million broadband subscribers, and more than 4.5 million voice telephony subscribers. Time Warner Cable had revenues of more than $15 billion from its residential broadband and video businesses in 2011.
Bright House Networks LLC is a privately held Delaware limited liability company headquartered in New York. As of March 2012, it was the 10th largest provider of video programming distribution, and also provides broadband and voice services. Bright House Networks derived billions of dollars in revenues from its residential broadband and video businesses in 2011.
Cox Communications Inc. is a privately held Delaware corporation headquartered in Georgia. It is a large multi-state provider of wireline telecommunications services. As of March 2012, it was the fifth largest video programming distributor, and also sells broadband and voice services. Cox derived billions of dollars in revenues from its residential broadband and video businesses in 2011.
T-Mobile USA, is a Delaware corporation headquartered in Bellevue, Wash. T-Mobile is the fourth-largest mobile wireless telecommunications services provider in the United States as measured by subscribers, and serves approximately 33.2 million wireless connections to wireless devices. In 2011, T-Mobile earned mobile wireless telecommunications services revenues of $18.5 billion. T-Mobile is a wholly-owned subsidiary of Deutsche Telekom AG.
As required by the Tunney Act, the proposed 10-year settlement, along with the department's competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Lawrence M. Frankel, Assistant Chief, Telecommunications & Media Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Related Materials:
Competitve Impact Statement
Complaint
Proposed Final Judgment
Stipulation and OrderArizona Man Sentenced to More Than 15 Years in Prison<br /> <br /> in Money Laundering and Tax SchemeRead the Press Release
Gino Carlucci was sentenced to 188 months in prison for his role in conspiracies to commit money laundering and to defraud the Internal Revenue Service (IRS), and for filing a false income tax return, the Justice Department and the IRS announced today. On July 25, 2011, a federal jury in Phoenix convicted Carlucci of both conspiracies and the tax crime after an eight-day trial.
According to the evidence presented at trial, Carlucci and his co-defendant, Wayne Mounts, stole large sums of money and assets from Joseph Flickinger, a tax return preparer in Ohio who had himself defrauded multiple clients of their life savings in a fraudulent investment scheme. Flickinger pleaded guilty to federal charges in a separate case and was sentenced to 70 months in prison. After defrauding Flickinger of the money, Carlucci and Mounts devised a scheme to have Flickinger arrested by federal officials, and then used the money for their own personal benefit. In addition to money, Carlucci and Mounts defrauded Flickinger out of several high-end vehicles and a condo near Lake Erie, Ohio, which they quickly sold for $210,000. Carlucci had some of the funds transferred into bank accounts held in the name of his wife and father-in-law. Carlucci’s wife and Mounts withdrew more than $300,000 in cash over several months in increments of $10,000 or less so that they could avoid having the bank report their withdrawals to authoritiesCarlucci and Mounts spent an additional $150,000 of the funds to buy a 43-foot luxury boat whose existence Carlucci concealed from the government for over two years.
“This sentence demonstrates that those who would hide assets and income from the IRS using phony identifications and bogus documents, all for the purpose of enriching themselves, will be properly punished for their crimes,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division.
“Today, Mr. Carlucci was held accountable for his criminal behavior,” said Richard Weber, Chief IRS Criminal Investigation. “He's nothing more than a con man motivated by greed. His sentencing is a victory for honest taxpaying citizens.”
Chief Judge Kathryn H. Vratil of the U.S. District Court for the District of Kansas, sitting in Phoenix by special designation, ordered Carlucci to pay $893,716 in restitution to the victims in Flickinger’s case and to the IRS. Judge Vratil further entered a forfeiture order against Carlucci for a money judgment in the amount of $722,841.00. Before trial, the government seized over $155,000 of the funds from Carlucci and Mounts, as well as a new truck Carlucci bought with the funds and the 43 foot boat. Carlucci was detained pending sentencing following the guilty verdict in July 2011. After trial, the government seized many of his remaining assets that he was hiding, including another 39 foot boat, a Chevrolet truck, two Sea Doo personal watercraft vehicles, trailers, three all-terrain vehicles and two vitamin encapsulation machines that he used for one of his businesses. Mounts was sentenced in January 2012 to 63 months in prison.
Assistant Attorney General Keneally commended the joint efforts from the special agents from IRS Criminal Investigation in Ohio and Arizona who investigated the case as well as Tax Division Trial Attorneys Richard Rolwing, Hayden Brockett, and Monica Edelstein, who prosecuted the case. Assistant Attorney General Keneally also thanked the U.S. Attorney’s Office for the District of Arizona for their assistance in this matter.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
Alabama Man Indicted in a Stolen Identity Refund Fraud ConspiracyRead the Press Release
A federal grand jury in Montgomery, Ala., returned an indictment charging Quentin Collick for conspiring to file false tax returns using stolen identities, theft of public funds, and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the indictment, between January 2011 and April 2012, Collick conspired with others to file false tax returns using stolen identities. He obtained stolen identities and obtained mailing addresses to which the fraud proceeds would be sent. Collick collected several federal tax refund checks sent to one of those addresses. He then caused those checks to be cashed.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Collick faces maximum potential sentence of 10 years in prison for the conspiracy to file false claims, 10 years for each theft of government funds count, and a mandatory 2-year sentence for the aggravated identity theft counts. He is also subject to fines and mandatory restitution if convicted.
The case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
15 August 2012
Six Indicted in Alabama in Million-dollar Conspiracy<br /> <br /> to Use Stolen Identities to Obtain Tax RefundsRead the Press Release
A federal grand jury in Montgomery, Ala., returned a superseding indictment charging Antoinette Djonret, Angelique Djonret, Tabitha Stinson, Melba Wilson, Chantresa Hayes and Corey Means with conspiring to file false tax returns using stolen identities, the Justice Department and the Internal Revenue Service (IRS) announced today. The 49-count indictment charges Djonret with filing false claims, theft of government funds, access device fraud, aggravated identity theft and possession of unauthorized access devices. Angelique Djonret is also charged with filing false claims, theft of government funds and aggravated identity theft. Corey Means and Chantresa Hayes are charged with theft of government funds.
Antoinette Djonret had earlier been charged with making false claims in a criminal complaint that was filed on February 22, 2012, and in an indictment that was filed on March 28, 2012. According to court documents, Antoinette Djonret obtained stolen identities from state of Alabama databases. Antoinette Djonret and her sister, Angelique Djonret, filed false tax returns using the stolen identities and directed the false tax returns to prepaid debit cards. Many of the tax returns were filed from Antoinette Djonret’s residence. The superseding indictment further alleges that each of the six defendants recruited individuals to purchase prepaid debit cards and to provide the cards to the defendants. They then had the tax refunds deposited onto the cards. In total, the defendants filed over 800 false tax returns and requested over $1.2 million in tax refunds.
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face maximum potential prison terms of 10 years for the conspiracy to file false claims, 5 years for each false claims count, 10 years for each theft of government funds count, 15 years for access device fraud count, 10 years for the possession of unauthorized access devices count, and a mandatory 2-year term for the aggravated identity theft counts. The defendants are also subject to fines and mandatory restitution if convicted.
The case was investigated by special agents of the IRS - Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division, and Assistant United States Attorney Todd Brown are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Second Former Georgia Corrections Officer Pleads Guilty to Conspiring with Other Officers to Assault and Injure InmatesRead the Press Release
Darren Douglass-Griffin, 35, a former member of the Correctional Emergency Response Team (CERT) at Macon State Prison (MSP) in Oglethorpe, Ga., pleaded guilty to a two-count bill of information charging him with conspiracy to violate the civil rights of inmates and falsification of records in a federal investigation, the Justice Department and the U.S. Attorney for the Middle District of Georgia announced today.
In connection with his guilty plea, Douglass-Griffin admitted that he and other correctional officers assaulted and injured inmates in a series of incidents at the prison in 2010. Douglass-Griffin indicated that correctional officers beat three inmates in separate incidents in order to punish them. One inmate was beaten so severely that he had to be transported from the prison in an ambulance.
Douglass-Griffin further acknowledged that he and other correctional officers tried to cover up MSP officers’ involvement in beating and injuring inmates. Douglass-Griffin stated that other MSP officers told him to write false reports and to stick to their cover story when speaking with investigators.
Douglass-Griffin faces a maximum penalty of 25 years in prison.
“The Justice Department will continue to vigorously prosecute correctional officers who violate the constitutional rights of inmates, and use their official position to try to cover up their crimes,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez.
“We expect the men and women who work in our state prisons to exemplify professionalism and integrity – and the vast majority do,” said Michael J. Moore, U.S. Attorney for the Middle District of Georgia. “But when a small group of guards violate the civil rights of inmates in the facility and then actively try to cover that up, my office will have no tolerance for their conduct.”
This case is being investigated by the FBI and is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Tona Boyd of the Civil Rights Division of the U.S. Department of Justice, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia and the Georgia Bureau of Investigation.
Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor has agreed to plead guilty for her role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Danli Liu of Fremont, Calif.
To date, as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California, 25 individuals, including Liu, have agreed to plead or have pleaded guilty.
According to court documents, Liu conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif. Liu was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
The department said Liu conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in Alameda County beginning as early as April 2009 and continuing until about March 2010.
“Liu and her fellow conspirators secretly conspired to purchase foreclosed real estate at suppressed prices, thereby restraining competition at these foreclosure auctions in Northern California,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The conspirators’ actions harmed lenders and distressed homeowners in an already struggling real estate market, and the division is committed to holding investors accountable for such behavior.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“The FBI and the Antitrust Division will continue to bring to justice those who engage in fraudulent anticompetitive practices at foreclosure auctions,” said Stephanie Douglas, FBI Special Agent in Charge of the San Francisco Field Office. “We will hold those individuals accountable for the damage they have done to their victims and the real estate market.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest cases filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Field Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.
Today’s charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
**The fraud charge(s) referenced in this press release were subsequently
dismissed on the government’s motion.**
New Zealand Fishing Company Found Guilty in Washington, D.C., of Environmental Crimes and Obstruction of JusticeRead the Press Release
WASHINGTON –A federal jury in Washington, D.C., today returned guilty verdicts against Sanford Ltd., a New Zealand fishing company, on six counts of conspiracy, obstruction of justice, and violating the Act to Prevent Pollution from Ships (APPS). The jury also found a company employee guilty of two other charges.
The verdicts, following a two-week trial in the U.S. District Court for the District of Columbia, were announced by Assistant Attorney General Ignacia S. Moreno of the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney for the District of Columbia Ronald C. Machen Jr.
Judge Beryl A. Howell scheduled sentencing for Nov. 16, 2012. Sanford faces a maximum fine of up to $500,000 on each count, for a total potential penalty of $3.0 million. Sanford’s primary chief engineer, James Pogue, 52, faces up to up to 20 years for obstruction of justice and six years for knowingly failing to maintain an accurate oil record book.
According to the government’s evidence, in July 2011, the U.S. Coast Guard conducted a Port State Control examination on the Fishing Vessel (F/V) San Nikunau, when the vessel entered port in Pago Pago, American Samoa. The examination revealed that the vessel had been making false entries and omissions in its oil record book that vessels are required to maintain accurately in order to account for their handling of oil waste generated by the vessel.
According to evidence presented at trial, Sanford operates the San Nikunau a vessel that routinely delivers tuna to a cannery in Pago Pago. Over the past five years, Sanford was paid over $24 million for tuna deliveries. Sanford was convicted of numerous charges, including conspiracy and causing the vessel to enter to the port of Pago Pago with a falsified oil record book that failed to accurately account for how the vessel was managing its bilge waste and for obstruction of justice for falsely stating in the oil record book that required pollution prevention equipment had been used when it had not. Sanford was also convicted of discharging machinery space bilge waste into the port of Pago Pago without using required pollution prevention equipment including the oil water separator.
Pogue, of Idaho, served as the chief engineer on the vessel between 2001 and 2010. Pogue was convicted of failing to maintain an oil record book for the vessel that accurately accounted for how the vessel was managing its bilge waste. In addition, Pogue was convicted of obstruction of justice for falsely stating in the oil record book that required pollution prevention equipment had been used when it had not.
Prior to the trial, Rolando Ong Vano, 51, of the Philippines, another chief engineer who worked on the vessel, pleaded guilty to charges in the case. He is to be sentenced Sept. 7, 2012.“These verdicts hold a company and one of its chief engineers accountable for polluting the waters off American Samoa with oily waste, and then trying to cover up their acts,” said U.S. Attorney Machen. “The prosecution demonstrates our commitment to enforcing environmental laws and protecting our precious natural resources.”
This case was investigated by the U.S. Coast Guard and the Coast Guard Investigative Service. The case was prosecuted by Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the Department of Justice and Assistant U.S. Attorney Frederick W. Yette of the U.S. Attorney's Office for the District of Columbia.
Italian Ship Owner and Chief Engineer Sentenced in Alabama for Crimes Related to Illegal Discharges from Cargo ShipRead the Press Release
WASHINGTON – A shipping company headquartered in Italy and the chief engineer of one of its ships were sentenced today in federal court in Mobile, Ala., for deliberately falsifying records to conceal discharges of oily wastewater from the ship directly into the sea. Giusseppe Bottiglieri Shipping Company S.P.A, was sentenced by U.S. District Court Judge Ginny Granade in the Southern District of Alabama to pay a $1 million criminal fine, serve four years of probation, and make a $300,000 community service payment to the National Fish and Wildlife Foundation. The company must also fund and implement a comprehensive environmental compliance plan during the term of probation. Chief Engineer Vito La Forgia was sentenced by Judge Granade to one month in jail.
Giuseppe Bottiglieri Shipping Company S.P.A., the owner and operator of the M/V Bottiglieri Challenger, pleaded guilty on July 11, 2012, to a violation of the Act to Prevent Pollution from Ships for failing to properly maintain an oil record book as required by federal and international law. Vito La Forgia, the ship’s chief engineer, pleaded guilty on July 12, 2012, to violating the Act to Prevent Pollution from Ships.
According to papers filed in court, between Dec. 19, 2011, and Jan. 25, 2012, Vito La Forgia and other senior Bottiglieri Shipping Company employees discharged oily bilge waste from the M/V Bottiglieri Challenger on multiple occasions as the vessel sailed from Singapore to Brazil and then from Brazil to Mobile. The vessel arrived in the Port of Mobile on Jan. 25, 2012, and underwent a Coast Guard inspection. Based on information provided to the Coast Guard by engine department crewmembers and evidence discovered during the Coast Guard’s inspection, it was evident that there were internal transfers and discharges of oily waste into the ocean that were not recorded in the vessel’s oil record book as required. The deliberate overboard discharges of oily waste were accomplished through the use of a “magic pipe” that connected the ship’s purifier sludge tank with the ship’s bilge holding tank, the contents of which were then pumped overboard without first being processed through required pollution prevention control equipment designed to detect and prevent discharges containing more than 15 parts per million oil.
Federal and international law requires that all ships comply with pollution regulations that include proper disposal of oily water and sludge by passing the oily water through a separator aboard the vessel or burning the sludge in the ship’s incinerator. Federal law also requires ships to accurately record each disposal of oily water or sludge in an oil record book and to have the record book available for the U.S. Coast Guard when the vessel is within the waters of the United States.
“This case represents a second tremendous win for our environment in just the past few months,” said Kenyen Brown, U.S. Attorney for the Southern District of Alabama. “The U.S. relies on vessel crews and their management companies to provide accurate logs and records when calling on U.S. ports to ensure oily wastes are discharged properly at sea. The U.S. is fully committed to prosecuting those cases where vessels cover-up improper oily waste discharges at sea through the use of falsified logs. Our aim is twofold, to preserve our natural resources for future generations, and second, to clean up a corrupt corporate culture that would place greed above all else. I am also pleased that my office was able to play a role in securing another $300,000 for waterway preservation and conservation projects in the Mobile Bay and throughout the Southern District of Alabama. This prosecution would not have been possible without the hard work of the U.S. Coast Guard at Sector Mobile and District Eight, Coast Guard Criminal Investigative Service, the Environmental Protection Agency Criminal Investigation Division and Department of Justice, Environmental and Natural Resources Division, Environmental Crimes Section.”
“The government will continue to work tirelessly to ensure companies and employees who do not comply with environmental regulations are held accountable for operating in a manner that harms the marine environment and endangers our nation's resources. I applaud the professionalism and dedication of the members of the Coast Guard, the Environmental Protection Agency and the Department of Justice as they investigated, prepared, and prosecuted these cases,” said Rear Admiral Roy A. Nash, Eighth Coast Guard District Commander.
“The laws are there to protect the oceans and waterways from being used as dumping grounds for waste oil or contaminated waste water,” said Maureen O'Mara, Special Agent-in-Charge of EPA’s criminal enforcement program in Atlanta. “Commercial vessels must operate safely and legally, and this sentencing sends a clear message that those who violate the law and pollute U.S. or international waters will be vigorously prosecuted.”
This investigation was conducted by the U.S. Coast Guard Investigative Service in Mobile and the U.S. Environmental Protection Agency-Criminal Investigation Division in Gulf Breeze, Fla. Additional assistance was provided by U.S. Coast Guard Sector Mobile. The case was prosecuted by Assistant U.S. Attorney Michael Anderson of the U.S. Attorney’s Office for the Southern District of Alabama and Trial Attorneys Todd Mikolop and Gary Donner of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.