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30 July 2012
Justice Department Announces Agreement to Address and Prevent the Sexual Assault of Students in Allentown, Pa., SchoolsRead the Press Release
The Department of Justice and the Allentown, Pa., School District today filed a proposed consent decree addressing multiple complaints of sexual assault of students at Central Elementary School. The comprehensive consent decree resolves allegations that six- and seven-year-old students were sexually assaulted by another student in the boys’ bathrooms at Central Elementary School during the 2003–2004 school year.
In July 2009, the department intervened in a lawsuit filed by several of those students against the district and conducted an extensive investigation. The department alleged that sexual assaults occurred on at least five separate occasions and that the district was made aware of each incident immediately after it occurred. The department alleged that despite this notice, the district did not take appropriate action, and in some circumstances took no action, to prevent the harassment from recurring.
Furthermore, the department alleged that both before and after the sexual harassment of the students, the district failed to adopt and implement adequate and effective sexual harassment policies and procedure as required by federal la w; had the district adopted and implemented such policies and procedures, the district would have prevented the continued sexual assault of students. The department seeks thorough protections for Allentown students as required under Title IX of the Education Amendments of 1972, which prohibits sex-based harassment, including the sexual assault of students, in public and other schoolsthat receive federal financial assistance.
“The sexual assault of students in elementary schools cannot be tolerated. It must be stopped. The impact on the educational experience and life of a young child is devastating.” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Parents are entitled to know that their children will be safe in school every day. We appreciate the steps the Allentown school districthas agreed to take to address this matter and to provide a safe and nurturing learning environment for all students moving forward.”
“Protecting our youngest and most vulnerable citizens from sexual assault will always be a top priority,” said Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania. “We are hopeful that with this consent decree, we can forever close this very sad and disturbing chapter in the history of the Allentown School District.”
The department and the district worked collaboratively to draft the consent decree to ensure the safety and well-being of all students in the district. The consent decree will remain in effect for a minimum of three years. If the consent decree is approved by the court, the district will:
- Develop and implement a comprehensive plan for addressing and preventing sexual harassment in all district schools;
- Retain an expert consultant in the area of student-on-student harassment to draft and implement a sexual harassment policy and procedures;
- Provide training to administrators, faculty, staff, students and parents on sex-based harassment;
- Select qualified district and school-based equity coordinators to ensure proper implementation of the district’s harassment policies and procedures and compliance with Title IX, including prompt investigation, resolution and reporting of sexual harassment complaints and allegations;
- Create procedures for identifying, monitoring, and supervising students with a confirmed history of sexual harassment toward other students;
- Develop and implement policies and procedures for communicating with outside agencies, such as police, hospital and child protection agencies, of allegations of sexual harassment in the district; and
- Submit annual compliance reports to the department.
The enforcement of Title IX is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt .
Related Materials:
Joint Motion for Approval of Consent Decree
Proposed Consent DecreeGerman Subsidiary of TRW Automotive Agrees to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. CarsRead the Press Release
WASHINGTON – TRW Deutschland Holding GmbH, a Koblenz, Germany-based subsidiary of U.S.-based TRW Automotive Holdings Corp., has agreed to plead guilty for its involvement in a conspiracy to fix prices of seatbelts, airbags and steering wheels sold to two German automobile manufacturers, and installed in cars sold in the United States , the Department of Justice announced today. This is the second case filed relating to occupant safety systems sold to auto manufacturers as part of the department’s ongoing antitrust auto parts investigation.TRW Deutschland has agreed to pay a $5.1 million criminal fine and to cooperate with the department’s ongoing investigation. The plea agreement is subject to court approval.
“By agreeing to fix the prices of seatbelts, airbags and steering wheels, the conspirators eliminated competition for occupant safety parts in cars sold to U.S. consumers,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “As a result of the division’s close work with its law enforcement partners, more than $785 million in criminal fines have been imposed in this ongoing investigation.
According to a one-count felony charge filed today in the U.S. District Court in Detroit, TRW Deutschland engaged in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of seatbelts, airbags and steering wheels sold to automakers in the United States and elsewhere.According to court documents, the defendant’s involvement in the conspiracy to fix prices of seatbelts, airbags and steering wheels lasted from January 2008 until at least June 2011. The department said that the TRW Automotive subsidiary and its co-conspirators carried out the conspiracy by agreeing, during meetings and conversations, to allocate the supply of seatbelts, airbags and steering wheels and sold the occupant safety parts at noncompetitive prices to automakers in the United States and elsewhere.
Including TRW Deutschland, seven companies and 10 individuals 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. 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 Aug. 22, 2012.
TRW Deutschland 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 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.
Former Milwaukee Police Officer Sentenced to 24 Years in Prison for Civil Rights Violation and Sexual AssaultRead the Press Release
WASHINGTON – Former Milwaukee Police Officer Ladmarald Cates was sentenced today by U.S. District Judge J.P. Stadtmueller to 24 years in prison, the Justice Department announced. Cates was found guilty by a federal jury on Jan. 11, 2012, of a civil rights charge stemming from his July 16, 2010, sexual assault of a Milwaukee woman.
The evidence at trial established that on July 16, 2010, Cates, while acting as a Milwaukee police officer, responded to a 911 call for police assistance at the victim’s home. The defendant then used a combination of coercion and intimidation to force the victim to commit sexual acts before forcibly raping her.“This officer committed a heinous act by raping a woman who called on the police because she needed help. His outrageous conduct requires the significant prison sentence delivered by the court today,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department remains committed to aggressively prosecuting officers who use their authority to violate civil rights.”
“The 24-year term of imprisonment imposed upon this defendant reflects both the flagrant violation of the fundamental civil rights of a member of our community and the unconscionable conduct of a law enforcement officer sworn to protect our citizens,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “The message to all of our constituents, including the police, is that horrific behaviors of this sort will result in prompt investigation, focused prosecution, and prolonged incarceration.”
Following an internal investigation, the Milwaukee Police Department fired Cates.
The prosecution of this case was based upon the cooperation and support of the Milwaukee Police Department, which worked closely with the FBI in the investigation. The case was prosecuted by Assistant U.S. Attorney Mel. S. Johnson of the Eastern District of Wisconsin and Criminal Section Trial Attorney Saeed A. Mody of the Justice Department’s Civil Rights Division.
Federal Agencies Convene Week-Long Intertribal Youth SummitRead the Press Release
WASHINGTON – More than 200 American Indian and Alaska Native youth and adult leaders from 53 tribal communities across the country have convened at the 2012 National Intertribal Youth Summit. The conference will run through Aug. 2, 2012, at the 4-H Conference Center in Chevy Chase, Md., and at various locations in Washington, D.C. The summit coincides with the second anniversary of President Obama’s signing of the Tribal Law and Order Act (TLOA) into law.
The summit provides a leadership forum where tribal youth can discuss critical issues facing them in Indian Country. It also allows Obama Administration officials to hear directly from the youth. The administration and federal agencies have made a commitment to building healthier and safer communities through enhanced coordination and collaboration with tribal partners.
Participants will develop leadership skills and engage in interactive discussions with tribal elders, leaders and mentors, youth advocates, and field experts on cultural values and community-based solutions to these critical issues. They will also meet with officials from Congress and the administration, as well as the Departments of Justice, Interior, Health and Human Services and Education. During the week-long event they will visit national monuments, the U.S. Capitol and the White House.
The Justice Department launched the Youth Summit initiative to promote long-term improvement in public safety in tribal communities in response to requests from tribal leaders for the development of culturally appropriate prevention, early intervention, treatment, rehabilitation and reentry programs for tribal youth and families.
“This summit is an opportunity for those of us in Washington to hear directly from youth as representatives of their tribes,” said Acting Associate Attorney General Tony West. “The choices that young leaders make will help define the future of their tribal nations. Working together, we can develop solutions to the challenges that they, their families and their peers face each day.”
Related Materials:
Remarks by Acting Associate Attorney General Tony West at the National Intertribal Youth Summit
27 July 2012
Two Former Soldiers Plead Guilty to Conspiracy to Illegally<br /> Obtain Fraudulent Recruiting Referral BonusesRead the Press Release
WASHINGTON –Two former soldiers pleaded guilty to participating in a conspiracy to defraud the U.S. military and its contractor of at least approximately $244,000 in fraudulent recruiting bonuses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Former Army Specialist Paul Escobar, 32, and current Army Specialist Richard Garcia Jr., 28, both of San Antonio, Texas, were indicted on Sept. 13, 2011, in the U.S. District Court for the Western District of Texas in San Antonio. Escobar entered his guilty plea on July 19, 2012, and Garcia entered his plea on July 26, 2012.
Former Specialist Xavier Aves, 40, of San Antonio; Corporal Christopher Castro, 30, of San Antonio; former Staff Sergeant Grant E. Bibb, 40, of Eagle Pass, Texas; and Sergeant First Class Jesus Torres-Alvarez, 31, of El Paso, Texas, were also indicted along with Escobar and Garcia.
According to court documents, between approximately 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. to administer recruiting programs designed to offer monetary incentives to U.S. soldiers who referred civilians to join the Army, the Army Reserves and the Army National Guard. In addition, the Army managed its own recruiting referral programs to offer bonuses to soldiers who referred other individuals to join the Army or the Army Reserves.
Through these recruiting bonus programs, participating soldiers could receive up to $2,000 in bonus payments for civilians whom they referred to join the U.S. military. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payments in the form of direct deposits and pre-paid debit card payments. To participate, soldiers needed to set up online sponsor or recruiting assistant accounts.
According to court documents, Escobar enlisted in the U.S. Army in approximately November 2007, and served until approximately January 2010. Escobar admitted that in approximately July 2008, he and co-conspirator Aves agreed to use a recruiting assistant account in Escobar’s name to claim that Escobar was responsible for referring certain potential soldiers to join the U.S. Army, when in fact Escobar had not referred those soldiers. Through these fraudulent representations, Escobar and Aves received a total of approximately $6,000 in fraudulent recruiting bonuses.
According to court documents, Garcia enlisted in the U.S. Army in approximately November 2005. Garcia admitted that in approximately May 2008, he and co-conspirator Aves agreed to use a recruiting assistant account in Garcia’s name to claim that Garcia was responsible for referring certain potential soldiers to join the U.S. Army, when in fact Escobar had not referred those soldiers. Through these fraudulent representations, Garcia and Aves received a total of approximately $13,000 in fraudulent recruiting bonuses.
According to court documents, Escobar, Garcia, Aves and their co-conspirators collected, in total, approximately $244,000 in fraudulent recruiting bonus payments from the various recruiting programs.
The charge of conspiracy to commit wire fraud carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gain or loss. Sentencing for Escobar and Garcia has been scheduled for Nov. 2, 2012, before Chief U.S. District Judge Fred Biery in San Antonio.
The case against Escobar and Garcia arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against eight people, all of whom have pleaded guilty. The investigation is ongoing.
On May 31, 2012, former Sergeant and National Guard recruiter Rafael L. Acosta, 39, of San Antonio, pleaded guilty to conspiracy to commit bribery and wire fraud for organizing and leading a conspiracy to obtain more than $90,000 in fraudulent recruiting bonuses. He is scheduled to be sentenced on Nov. 2, 2012.
On February 3, 2012, Aves pleaded guilty to one count of conspiracy to commit wire fraud, and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years. On Jan. 30, 2012, Bibb pleaded guilty to one count of conspiracy to commit wire fraud. On Jan. 26, 2012, Torres-Alvarez pleaded guilty to one count of conspiracy to commit wire fraud. According to court documents, Torres-Alvarez, an active duty recruiter, admitted that he sold the names and Social Security numbers of potential soldiers to Aves and others involved in the scheme. Aves, Bibb and Torres-Alvarez are scheduled for sentencing on Nov. 2, 2012.
On Nov. 3, 2011, Castro pleaded guilty to one count of conspiracy to commit wire fraud for his role in the scheme. On June 29, 2012, Castro was sentenced to one year and a day in prison and ordered to pay $244,000 in restitution, jointly and severally.
On Jan. 28, 2010, Sergeant Ernest Gonzales, 50, of San Antonio, pleaded guilty to a one-count criminal information charging him with conspiracy to commit wire fraud for his role in the scheme. Gonzales assisted the government by providing helpful information concerning Aves, Bibb and Castro. On June 29, 2012, Gonzales was sentenced to five years probation and ordered to pay $244,000 in restitution, jointly and severally.
This investigation is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Brian A. Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command.New York Distributor of Prepaid Phone Cards Pleads Guilty to Tax EvasionRead the Press Release
Goher Yaqoob, a resident of Roslyn Heights, N.Y., pleaded guilty today in U.S. District Court in the Eastern District of New York to tax evasion, the Justice Department and Internal Revenue Service (IRS) announced.
According to court records, Yaqoob, who sold prepaid phone cards through a distributorship business he owned, admitted that he filed a false individual income tax return and attempted to evade his income taxes for tax year 2002 by underreporting his income. Yaqoob admitted that his criminal conduct caused a tax loss of at least $147,323 between calendar years 2000 and 2003.
Yaqoob faces a potential maximum sentence of five years in prison and a fine of up to $250,000. U.S. District Judge John Gleeson, who is presiding over the matter, set a sentencing date of Dec. 7, 2012.
The case was investigated by IRS - Criminal Investigation and is being prosecuted by Trial Attorneys Jorge Almonte and Jeffrey B. Bender of the Justice Department’s Tax Division.
Maryland Resident Pleads Guilty to Filing False Tax ReturnsRead the Press Release
Adean Wells, of Silver Spring, Md., pleaded guilty today to filing two false individual income tax returns before Senior U.S. District Judge Thomas Hogan in the U.S. District Court for the District of Columbia, the Justice Department and the Internal Revenue Service (IRS) announced.
Adean Wells pleaded guilty to filing false individual income tax returns (IRS Forms 1040) for tax years 2006 and 2007. According to admissions made in court, Wells, a retired federal employee, failed to report approximately $900,000 in consulting income she earned during the prosecution years. Judge Hogan scheduled the sentencing hearing for Dec. 5, 2012 . Wells faces a maximum potential sentence of three years in prison, a fine of up to $250,000 for each count, and could be ordered to pay restitution to the IRS.
The case was investigated by special agents of IRS-Criminal Investigation and is being prosecuted by Assistant Chief Karen Kelly of the Justice Department’s Tax Division.
Justice Department Settles Housing Discrimination Lawsuit Related to Senior Housing in Santa Rosa, CaliforniaRead the Press Release
The Justice Department today announced an agreement with a California municipality and a homeowners’ association to resolve allegations of discrimination on the basis of familial status in violation of the Fair Housing Act. The settlement, in the form of a consent order, must be approved by the U.S. District Court for the Northern District of California.
The department’s lawsuit, which was filed on Nov. 21, 2011, alleged that the city of Santa Rosa, Calif., and La Esplanada Unit 1 Owners’ Association, a homeowners’ association, unlawfully sought to restrict residency at a housing development to seniors aged 55 and older. While the law allows an exemption for senior housing, the suit alleged that neither the city nor the homeowners’ association took the steps, such as routine age-verification, necessary to qualify for an exemption to the Fair Housing Act .
Under the terms of the consent order, the city of Santa Rosa will not take any enforcement action against the housing development to force it to exclude families with children, and will waive the estimated $12,500 in costs associated with any zoning changes that may be necessary to bring the city’s regulation of the property into compliance with federal law. Further, when the city, through its zoning code, permits or requires a developer or property owner to operate senior housing, it will, among other things, designate the age restriction of the zoned property in its ordinances and zoning maps, and require that property owners for these developments submit biennial age verifications for the city’s review and certification. The city will designate an agency to review and certify the biennial certifications.
The homeowners’ association also is prohibited from excluding families with children from the development unless it affirmatively elects to become an age-restricted community for persons 55 years of age or older and conforms to the requirements of the Fair Housing Act. The Fair Housing Act's requirements include ensuring that at least 80 percent of the occupied units are occupied by at least one person who is 55 years of age or older and ensuring there are proper age verification procedures in place. In addition, the homeowners’ association will provide compensatory damages to the aggrieved persons in an amount of $44,000 by providing a set-off to amounts it has claimed it is owed by the aggrieved persons.
The consent order also requires the homeowners’ association’s officers, agents and employees, as well as city employees and agents with responsibilities related to zoning and land use to receive fair housing training, and requires the homeowners’ association and the city to pay $5,000 each to the United States as a civil penalty.
“It is critical that families with children have opportunities to find housing,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “We are pleased to achieve a resolution in this case that balances the housing rights of families against the ability of a municipality and community to maintain senior housing.”
“The resolution of this action is another step in the United States’ continuing commitment to protect all of its citizens and to provide fair housing opportunities for people of all ages,” said Melinda Haag, U.S. Attorney for the Northern District of California. “We are pleased to come to a just and speedy resolution with the city of Santa Rosa and the Homeowners’ Association.”
This lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD) by the owner and representative of a portion of the condominium development that was the subject of the defendants’ enforcement actions. After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department.
“This settlement gives Santa Rosa a path forward to have senior housing and protect the rights of families with children under the Fair Housing Act,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] , or contact HUD at 1-800-669-9777.
Justice Department Announces Agreement with City of Seattle<br /> <br /> to Implement Reforms of Seattle Police DepartmentRead the Press Release
The United States has entered into a comprehensive, cooperative agreement with the city of Seattle to implement sustainable reforms within the Seattle Police Department (SPD), the Justice Department announced today. The agreement seeks to resolve issues raised by the Justice Department’s investigation into SPD through federal court oversight of reform efforts to ensure effective and constitutional policing in Seattle. The agreement includes a settlement agreement and stipulated order of resolution (settlement agreement), filed in federal court in Seattle today, that is subject to an independent monitor and court oversight, and separately a memorandum of understanding (MOU) to be enforced by the parties with community oversight and the assistance of the monitor.
The settlement agreement will require SPD to revise its use of force policies and enhance its training, reporting, investigations and supervision of uses of force. It also requires revisions to policies, training and supervision relating to both bias-free policing and stops and detentions; improves supervision and accountability mechanisms to ensure implementation of the reforms on the ground; and creates the Community Police Commission, a civilian oversight board with responsibilities regarding particular areas of reform detailed in the settlement agreement and MOU. The settlement agreement is subject to approval of a federal judge and must be court-ordered.
The MOU is an agreement that will be enforced by the parties with community oversight. The MOU specifically provides for the Community Police Commission to assess SPD’s outreach efforts and initiatives; provide input regarding data collection around stops and detention; and ensure transparency and public reporting. As part of the MOU, the Community Police Commission also will lead a review of the structure of the city’s police accountability system.
“This agreement provides a blueprint for reform with innovative methods for ensuring community engagement and sustainability,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We look forward to continuing our partnership with the city, Mayor McGinn, the Seattle Police Department and the community to ensure that effective and constitutional policing takes place in Seattle.”
A court-appointed monitor, to be selected jointly by the city and the Justice Department, will oversee the implementation of the settlement agreement and provide expert assistance to the Community Police Commission in the MOU.
“Today begins a new chapter for policing in Seattle. All of us depend upon the critical bond between the community and police officers who risk their lives to protect public safety. This agreement advances meaningful and measurable reforms that ensure effective policing and build community trust. We must get this right. We owe it to every officer who serves and every resident of this great city,” said U.S. Attorney for the Western District of Washington Jenny A. Durkan.
The department’s investigation of SPD was announced on March 31, 2011, and conducted by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the Western District of Washington. The investigation focused on whether SPD engages in a pattern or practice of unconstitutional or unlawful policing through the use of excessive force or discriminatory policing. On December 16, 2011, the department issued a written report of its findings. The department found reasonable cause to believe that SPD engages in a pattern or practice of excessive force, in violation of the Fourth Amendment of the U.S. Constitution and the Violent Crime Control and Law Enforcement Act of 1994. The department did not make a finding that SPD engages in a pattern or practice of discriminatory policing, but raised concerns about some of SPD’s policies and practices, particularly those related to pedestrian encounters.
The Justice Department’s investigation, conducted in collaboration with and with the full and open cooperation of the city and SPD, involved an in-depth review of thousands of pages of SPD documents and materials, including written policies and procedures, training materials, and internal reports, data, video footage and investigative files. Justice Department attorneys and investigators also conducted interviews with SPD officers, supervisors and command staff, and city officials, in addition to conducting hundreds of interviews with community members and local advocates.
Following the release of the findings in December, the Justice Department received input from a wide range of stakeholders, including city officials and elected leaders, SPD commanders and police officers, police unions, and a broad range of community members and service providers.
Related Materials:
Memorandum of Understanding
Complaint
Settlement AgreementAryan Brotherhood of Texas Gang Member Sentenced to Serve<br /> 10 Years in Prison for Violent Crimes in Aid of RacketeeringRead the Press Release
An Aryan Brotherhood of Texas (ABT) gang member from Houston was sentenced today to serve 10 years in prison for his role in an aggravated assault that took place in Tomball, Texas, in September 2008, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
David Harlow, 43, aka “Bam Bam,” was found guilty at trial on March 21, 2012, of racketeering aggravated assault and conspiracy to commit racketeering aggravated assault for his role in the severe beating of a prospective ABT member. Harlow was convicted on two counts and sentenced to serve 36 months on count one and 120 months on count two, to run concurrently. In addition to the prison term, Harlow was also sentenced to pay a $2,000 fine by senior U.S. District Court Judge Ewing Werlein Jr.
According to court documents, Harlow was a member of the ABT, a powerful race-based, state-wide organization that operated inside and outside of state and federal prisons throughout the United States. The ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to court documents, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT has expanded its criminal enterprise to include illegal activities for profit.
According to court documents, the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to court documents, Harlow, along with 11 fellow ABT gang members, participated in the beating of a prospective ABT member at the home of another ABT gang leader, Steven Walter Cooke, 48, aka “Stainless,” in Tomball, on Sept. 22, 2008. The ABT prospect, who sustained serious bodily injury, was beaten by ABT gang members because he violated ABT rules of conduct.
The remaining 11 co-defendants have pleaded guilty for their roles in the assault.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the FBI; the U.S. Marshals Service; the Texas Ranger Division – Texas Department of Public Safety; the Walker County, Texas, Sheriff’s Office; the Montgomery County, Texas, Sheriff’s Department; the Houston Police Department-Gang Division; the Tomball Police Department; the Texas Department of Criminal Justice – Inspector General; and the Harris County, Texas, Sheriff’s Office.
The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Jay Hileman of the Southern District of Texas.
Alabama Return Preparers Sentenced to Jail for Tax ConspiracyRead the Press Release
James E. Moss and Avada L. Jenkins were both sentenced yesterday to 160 months and 41 months in prison respectively for their involvement in a fraudulent tax return perpetration scheme, the Justice Department and the Internal Revenue Service (IRS) announced. U.S. District Judge Mark E. Fuller of the Middle District of Alabama also ordered Moss and Jenkins to pay over $120,000 in restitution, jointly and severally, to the IRS.
On Nov. 2, 2011, a jury found both Moss and Jenkins guilty of conspiracy and aiding and assisting the preparation of false tax returns relating to a tax preparation business owned by Moss named “Flash Tax” in Montgomery, Ala. The evidence at trial proved that both Moss and Jenkins, an employee of Flash Tax, prepared false tax returns for customers that fraudulently inflated the amount of refunds due to the customers. During the sentencing, Judge Fuller concluded the overall intended tax loss associated with the scheme was in excess of $7 million dollars.
Three other employees of Flash Tax had been sentenced previously for their roles in preparing false income tax returns. Chiquita Broadnax and Lutoyua Thompson were each sentenced to 18 months in prison, and Melinda Lambert was sentenced to 6 months in prison and 6 months home confinement.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Charles M. Edgar, Jr., Thomas J. Krepp and Michelle M. Petersen, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax .
26 July 2012
Portsmouth, Va., Bail Bondsman Pleads Guilty<br /> to Bribing Public OfficialsRead the Press Release
A bail bondsman in Portsmouth, Va., pleaded guilty today in the Eastern District of Virginia for bribing public officials in exchange for receiving favorable treatment, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia announced today.
Ulysses “Tugger” Stephenson, 52, of Portsmouth, pleaded guilty before U.S. Magistrate Judge Bradford Stillman. The sentencing is scheduled in front of U.S. District Judge Rebecca Smith on Nov. 2, 2012.
Stephenson was charged in a criminal information filed on July 9, 2012, with one count of conspiracy to commit federal programs bribery and one count of federal programs bribery. He faces a maximum penalty of five years in prison and a fine of $250,000 for the conspiracy, and a maximum penalty of 10 years in prison and a fine of $250,000 for the bribery.
According to a statement of facts filed with his plea agreement, Stephenson earned money by charging arrestees a percentage of the amount of bond set by a magistrate. Thus, the larger the bond amount set, and the more arrestees that were referred to him as prospective clients, the more money Stephenson would earn. To obtain additional clients and therefore maximize his profits, Stephenson gave cash and gifts to Deborah Clark—a local magistrate who pleaded guilty to federal programs bribery on May 2, 2012—in exchange for her referring arrestees as prospective clients and seeking and accepting Stephenson’s advice on the amount of bond to set in particular cases. During this time period, Stephenson gave up to $150 per month to Clark, as well as expense money for trips and numerous cash payments for gas and meals. Additionally, in exchange for referrals, Stephenson made cash payments to an officer in the Portsmouth Sheriff’s Office. From January 2009 through July 2010, he paid that officer up to $150 per week.
Stephenson is subject to prosecution for bribery under a federal statute because the two people he bribed were agents of an organization or state receiving annual benefits in excess of $10,000 under federal programs involving grants and other forms of assistance.
This case was investigated by the FBI. Trial Attorneys Peter Mason and Monique Abrishami of the Public Integrity Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Alan M. Salsbury and Special Assistant U.S. Attorney Amy E. Cross of the Eastern District of Virginia are prosecuting the case.
Owners and Employees of Houston Mental Health Companyand Patient Recruiters Charged for Alleged Roles in$97 Million Medicare Fraud SchemeRead the Press Release
A superseding indictment was unsealed today charging two owners of a Houston mental health care company, Spectrum Care P.A., some of its employees and the owners of Houston group care homes for their alleged participation in a $97 million Medicare fraud scheme, announced the Department of Justice, the Department of Health and Human Services (HHS) and the FBI.
Mansour Sanjar, 79, Cyrus Sajadi, 64, and Chandra Nunn, 34, were originally charged in December 2011, and are expected to make their initial appearances on the superseding indictment in the coming days. The indictment was originally retuned on July 24, 2012, and was unsealed today.
Adam Main, 31, Shokoufeh Hakimi, 65, Sharonda Holmes, 38, and Shawn Manney, 50, all from the Houston area, were arrested today and are expected to make their initial appearances in U.S. District Court for the Southern District of Texas in Houston either today or tomorrow.
The superseding indictment charges Sanjar, Sajadi, Main, Terry Wade Moore, 51, Hakimi and Nunn each with one count of conspiracy to commit health care fraud; Sanjar, Sajadi, Main and Moore are charged with various counts of health care fraud; Sanjar, Sajadi, Hakimi, Nunn, Holmes and Manney each are charged with one count of conspiracy to defraud the United States and to pay health care kickbacks; and Sanjar, Sajadi, Hakimi, Nunn, Holmes and Manney are charged with various counts of payment and receipt of healthcare kickbacks. The superseding indictment also seeks forfeiture.
According to the indictment, Sanjar and Sajadi orchestrated and executed a scheme to defraud Medicare beginning in 2006 and continuing until their arrest in December 2011. Sanjar and Sajadi owned Spectrum, which purportedly provided partial hospitalization program (PHP) services. A PHP is a form of intensive outpatient treatment for severe mental illness. The Medicare beneficiaries for whom Spectrum billed Medicare for PHP services did not qualify for or need PHP services. Sanjar, Sajadi, Main and Moore signed admission documents and progress notes certifying that patients qualified for PHP services, when in fact, the patients did not qualify for or need PHP services. Sanjar and Sajadi also billed Medicare for PHP services when the beneficiaries were actually watching movies, coloring and playing games – activities that are not covered by Medicare.
Sanjar, Sajadi and Hakimi paid kickbacks to Nunn, Holmes, Manney and other group care home operators and patient recruiters in exchange for delivering ineligible Medicare beneficiaries to Spectrum, according to the indictment. In some cases, the patients received a portion of those kickbacks. The indictment alleges that Spectrum billed Medicare for approximately $97 million in services that were not medically necessary and, in some cases, not provided.
Today’s charges were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU); Joseph J. Del Favero, Special Agent in Charge of the Chicago Field Office of the Railroad Retirement Board, Office of Inspector General (RRB-OIG); and Scott Rezendes, Special Agent in Charge of Field Operations of the Office of Personnel Management, Office of Inspector General (OPM-OIG).
An indictment is merely a formal accusation. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Trial Attorneys Laura M.K. Cordova and Allan J. Medina and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section with assistance from Trial Attorneys Jennifer Ambuehl and Aixa Maldonado-Quinones of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by the FBI, HHS-OIG, MFCU, RRB-OIG and OPM-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 Texas.
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 .
Obama Administration Announces Ground-breaking Public-private Partnership to Prevent Health Care FraudRead the Press Release
Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius today announced the launch of a ground-breaking partnership among the federal government, state officials, several leading private health insurance organizations, and other health care anti-fraud groups to prevent health care fraud. This voluntary, collaborative arrangement uniting public and private organizations is the next step in the Obama administration’s efforts to combat health care fraud and safeguard health care dollars to better protect taxpayers and consumers.
The new partnership is designed to share information and best practices in order to improve detection and prevent payment of fraudulent health care billings. Its goal is to reveal and halt scams that cut across a number of public and private payers. The partnership will enable those on the front lines of industry anti-fraud efforts to share their insights more easily with investigators, prosecutors, policymakers and other stakeholders. It will help law enforcement officials to more effectively identify and prevent suspicious activities, better protect patients’ confidential information and use the full range of tools and authorities provided by the Affordable Care Act and other essential statutes to combat and prosecute illegal actions.
“This partnership is a critical step forward in strengthening our nation’s fight against health care fraud,” said Attorney General Holder. “This administration has established a record of success in combating devastating fraud crimes, but there is more we can and must do to protect patients, consumers, essential health care programs, and precious taxpayer dollars. Bringing additional health care industry leaders and experts into this work will allow us to act more quickly and effectively in identifying and stopping fraud schemes, seeking justice for victims, and safeguarding our health care system.”
“This partnership puts criminals on notice that we will find them and stop them before they steal health care dollars,” Secretary Sebelius said. “Thanks to this initiative today and the anti-fraud tools that were made available by the health care law, we are working to stamp out these crimes and abuse in our health care system.”
One innovative objective of the partnership is to share information on specific schemes, utilized billing codes and geographical fraud hotspots so that action can be taken to prevent losses to both government and private health plans before they occur. Another potential goal of the partnership is the ability to spot and stop payments billed to different insurers for care delivered to the same patient on the same day in two different cities. A potential long-range goal of the partnership is to use sophisticated technology and analytics on industry-wide healthcare data to predict and detect health care fraud schemes.
The Executive Board, the Data Analysis and Review Committee and the Information Sharing Committee will hold their first meeting in September. Until then, several public-private working groups will continue to meet to finalize the operational structure of the partnership and develop its draft initial work plan.
The following organizations and government agencies are among the first to join this partnership: • America’s Health Insurance Plans
• Amerigroup Corporation
• Blue Cross and Blue Shield Association
• Blue Cross and Blue Shield of Louisiana
• Centers for Medicare & Medicaid Services
• Coalition Against Insurance Fraud
• Federal Bureau of Investigations
• Health and Human Services Office of Inspector General
• Humana Inc.
• Independence Blue Cross
• National Association of Insurance Commissioners
• National Association of Medicaid Fraud Control Units
• National Health Care Anti-Fraud Association
• National Insurance Crime Bureau
• New York Office of Medicaid Inspector General
• Travelers
• Tufts Health Plan
• UnitedHealth Group
• U.S. Department of Health and Human Services
• U.S. Department of Justice
• WellPoint, Inc.The partnership builds on existing tools provided by the Affordable Care Act, resulting in:
• Tougher sentences for people convicted of health care fraud. Criminals will receive 20 to 50 percent longer sentences for crimes that involve more than $1 million in losses.
• Enhanced screenings of Medicare and Medicaid providers and suppliers to keep fraudsters out of the program.
• Suspended payments to providers and suppliers engaged in suspected fraudulent activity.The administration’s efforts to date have already resulted in a record-breaking $10.7 billion in recoveries of health care fraud over the last three years. For more information on this partnership and the Obama administration’s work to combat health care fraud, please visit: www.healthcare.gov/news/factsheets/2012/02/medicare-fraud02142012a.html and www.stopmedicarefraud.gov.
Justice Department Requires Divestitures in Order for United Technologies Corporation to Proceed with Its Acquisition of Goodrich CorporationRead the Press Release
WASHINGTON — The Department of Justice announced today that it will require United Technologies Corporation (UTC) to divest certain assets used in the production of electrical power systems and aircraft engine control systems in order to proceed with its acquisition of Goodrich Corporation. At approximately $18.4 billion, the acquisition is the largest merger in the history of the aircraft industry. The department said that the acquisition, as originally proposed, likely would have resulted in higher prices, less favorable contractual terms and less innovation for several critical aircraft components, including generators, engines and engine control systems.The department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.
“The acquisition as originally proposed would have lessened the vigorous competition that currently exists among manufacturers of large main engine generators, aircraft turbine engines and engine control systems for large aircraft turbine engines,” said Jamillia Ferris, Chief of Staff and Counsel at the Department of Justice’s Antitrust Division.
The department’s Antitrust Division, the European Commission and the Canadian Competition Bureau cooperated closely throughout the course of their respective investigations, with frequent contact among the agencies. In addition, the Antitrust Division had discussions with other competition agencies, including the Federal Competition Commission in Mexico and the Administrative Council for Economic Defense in Brazil.
“The Antitrust Division’s dialogue with our international counterparts around the world facilitated our investigation,” said Ferris. “In particular, the division’s close cooperation with the European Commission and Canadian Competition Bureau resulted in a coordinated remedy that will preserve competition in the United States and internationally.”
The department’s complaint alleges that the proposed acquisition would lessen competition substantially in the worldwide markets for the development, manufacture and sale of large main engine generators, aircraft turbine engines and engine control systems for large aircraft turbine engines. The department said that the acquisition, as originally proposed, would combine the only two significant suppliers of large main engine generators for aircraft in the world. UTC also would acquire Goodrich’s engine control systems business, which supplies critical components to several of UTC’s leading competitors for aircraft turbine engines. Finally, UTC, which is currently one of three leading suppliers of engine control systems for large aircraft turbine engines, would acquire Goodrich’s 50 percent share in a joint venture that forms one of the other two producers of such engine control systems.
Aircraft main engine generators produce the electrical power used by communication and navigation equipment, environmental control systems, interior and exterior lighting and other aircraft systems. Large main engine generators are complex mechanical devices that are difficult to produce, and for which there are no substitutes . Turbine engines power virtually all modern commercial, business and military aircraft. UTC is one of the few firms worldwide that produce aircraft turbine engines. Engine control systems, consisting of electronic engine controls, pumps, fuel metering units and related components, control the flow of fuel into an aircraft turbine engine such that the engine performs in a safe and efficient manner. It would be difficult and time-consuming for an engine producer to switch to an alternative supplier of engine control systems.
The proposed settlement requires UTC to divest the following assets:
- Goodrich’s business that designs, develops and manufactures large main engine generators for aircraft, including Goodrich’s shares in TRW-Thales Aerolec SAS (Aerolec);
- Goodrich’s business that designs, develops and manufactures engine control systems; and
- Goodrich’s shares in Aero Engine Controls (AEC), a joint venture to manufacture engine control systems for large aircraft turbine engines.
In addition, the proposed settlement provides:
- UTC must extend the term of certain contracts held by customers of Goodrich’s engine control systems business for a period of 30 days after the divestiture of the engine control systems business;
- UTC must provide various supply and transition services agreements to the acquirers of the assets being divested in order to assist in the transition of the businesses and allow the acquirers to continue to fulfill obligations of the divested businesses; and
- UTC must extend the period for its joint venture partner, Rolls-Royce Group plc (Rolls Royce), to exercise its option to acquire the Goodrich business that provides aftermarket services for Rolls-Royce engines equipped with AEC engine control systems.
The extension of Rolls-Royce’s option to acquire the Goodrich aftermarket business will ensure that Rolls-Royce has sufficient control over the AEC aftermarket business. The extension of the customer contracts for the engine control systems business will ensure that Goodrich’s engine control systems customers have a reliable source of supply during the divestiture period.
UTC is a Delaware-based company that produces a wide range of products for the aerospace industry and other industries, including, among other products, aircraft generators, aircraft engine control systems and components, aircraft engines and helicopters. UTC’s main aerospace divisions are Pratt & Whitney, Hamilton Sundstrand and Sikorsky. In 2010, UTC had revenues of approximately $54 billion.
Goodrich is a New York-based company that produces a variety of products for the aerospace industry, including, among other products, aircraft generators, aircraft engine control systems and components, landing gear and actuation systems. In 2010, Goodrich had revenues of approximately $7.2 billion.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding it is in the public interest.
Justice Department Reaches $12 Million Settlement to Resolve Violations of the Servicemembers Civil Relief Act by Capital OneRead the Press Release
Capital One N.A. and Capital One Bank (USA) N.A. (together Capital One), have agreed to pay approximately $12 million to resolve a lawsuit by the Department of Justice alleging the companies violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced today. The settlement covers a range of conduct that violated the protections guaranteed service members by the SCRA, including wrongful foreclosures, improper repossessions of motor vehicles, wrongful court judgments, improper denials of the 6 percent interest rate the SCRA guarantees to service members on some credit card and car loans and insufficient 6 percent benefits granted on credit cards, car loans and other types of accounts. The proposed consent order, which was filed simultaneously with the complaint, is one of the most comprehensive SCRA settlements ever obtained by a government agency or any private party under the SCRA.
“Today’s action makes clear that the Justice Department will fight for our service members, and use every available tool, resource and authority to hold accountable those who engage in discriminatory practices targeting those who serve,” said Attorney General Eric Holder. “Every day, our brave men and women in uniform make tremendous sacrifices to protect the American people from a range of global threats – and my colleagues and I are determined to ensure that they receive our strongest support here at home.”
The agreement requires Capital One to pay approximately $7 million in damages to service members for SCRA violations, including at least $125,000 in compensation plus compensation for any lost equity (with interest) to each servicemember whose home was unlawfully foreclosed upon, and at least $10,000 in compensation plus compensation for any lost equity (with interest) to each servicemember whose motor vehicle was unlawfully repossessed. In addition, the agreement requires Capital One to provide a $5 million fund to compensate service members who did not receive the appropriate amount of SCRA benefits on their credit card accounts, motor vehicle finance loans and consumer loans. Any portion of the $5 million that remains after payments to service members are made will be donated by Capital One to one or more charitable organizations that assist service members.
“This settlement demonstrates that the Justice Department will take any and all actions to ensure that the rights of service members are protected. We rely on these brave men and women to protect the safety and security of this country and we will be vigilant in protecting their rights at home,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “We commend Capital One for taking steps to develop strong SCRA policies before they knew the full results of our investigation.”
Capital One cooperated fully with the Justice Department’s investigation into its SCRA practices and has also agreed to pay above and beyond the $12 million if ongoing, independent audits required by the settlement turn up violations in accounts that it recently acquired from HSBC or ING Direct USA. Capital One has also, on its own initiative, recently adopted several policies that go beyond the requirements of the SCRA, such as extending a 4 percent interest rate to qualifying service members and giving an additional one-year grace period before de-enrolling service members from the reduced interest rate program.
Service members will be identified and compensated, with no action required on their part, on accounts dating back to July 15, 2006. As a result of the decree, Capital One has agreed to treat a service member’s request for a 6 percent rate relief in one area of its lending, such as credit cards, as a request for a 6 percent rate relief for any loan the servicemember may have with Capital One or its affiliates. This is the first time the Justice Department has obtained this type of enterprise-wide rate reduction relief from a lender under the SCRA. The settlement also requires Capital One to adopt policies and practices to prevent violations of the SCRA in the future.
The settlement was filed in conjunction with the Department’s complaint, which alleges that Capital One violated the SCRA, from at least July 15, 2006 to Nov. 21, 2011, when it: 1) wrongly denied certain written requests made by SCRA-protected service members to have the interest rate on their credit cards and motor vehicle finance loans lowered to 6 percent per year; 2) provided insufficient interest rate benefits on certain accounts that were enrolled after written requests were received from SCRA-protected service members; 3) foreclosed on the mortgages of certain SCRA-protected service members without court orders; 4) repossessed certain SCRA-protected service members’ motor vehicles without court orders; and 5) obtained default judgments on certain debts owed on credit cards, mortgage foreclosures, and/or motor vehicles without filing accurate affidavits of military service
“We rely on the SCRA to guard and protect the rights of our men and women of the armed forces so that they can focus on their service to our country,” said U.S. Attorney for the Eastern District of Virginia Neil MacBride. “This case underscores the need for financial service providers to be aware of the wide-ranging protections and benefits the SCRA provides and to have in place policies and procedures that ensure service members’ SCRA rights are protected.”
The agreement, which is subject to court approval, was filed today in federal court in Alexandria, Va. The lawsuit resulted from a referral to the Justice Department by the Office of the Staff Judge Advocate at Davis-Monthan Air Force Base in Arizona. The referral involved a claim of a single service member’s failure to receive an interest rate reduction on his Capital One credit card account. The settlement comes after a two-year investigation of Capital One by the Department of Justice.
The SCRA provides critical consumer and other protections to the men and women serving our nation in the military. Its enactment was recognition that those who are making great sacrifices to protect us deserve our full support at home.
For more information about SCRA enforcement by the Justice Department, please visit www.servicemembers.gov , email [email protected] or call 1-800-896-7743.
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Capital One Settlement
Justice Department Announces Americans with Disabilities Act Barrier-free Health Care Initiative by Us Attorney’s Offices NationwideRead the Press Release
U.S. Attorney’s offices across the nation are partnering with the Civil Rights Division to target their enforcement efforts on a critical area for individuals with disabilities through a new Barrier-Free Health Care Initiative, the Justice Department announced today. The announcement comes on the 22nd anniversary of the Americans with Disabilities Act (ADA), which was passed on July 26, 1990. Assistant Attorney General Thomas E. Perez announced the new initiative today at an event celebrating the anniversary of the ADA in Washington, D.C.
This new initiative will make sure that people with disabilities, especially those who are deaf or hard of hearing, have access to medical information provided to them in a manner that is understandable to them. The Barrier-Free Health Care Initiative is a multi-phase plan that will also involve other key issues for people with disabilities, including ensuring physical access to medical buildings.
“Access to health care remains an area of critical need for too many people with disabilities, especially those who are deaf or who have hearing loss,” said Assistant Attorney General Perez. “The Barrier-Free Health Care Initiative will make sure people with disabilities are capable of physically accessing medical buildings and facilities and are not discriminated against when it comes to receiving potentially life-saving medical information. I look forward to continuing to work with U.S. Attorneys to advance ADA compliance efforts nationwide.”
The Civil Rights Division and U.S. Attorney’s offices have long enforced the ADA in this area. This nationwide initiative seeks to focus and leverage the department’s resources together and aggregate and echo the collective message that disability discrimination in health care is illegal and unacceptable. Already, 35 U.S. Attorneys have committed to this initiative.
The U.S. Attorney’s Office for the Eastern District of Michigan, in partnership with the Disability Rights Section, recently entered into a large-scale settlement agreement with Henry Ford Health System to ensure effective communication for people who are deaf or who have hearing loss throughout its entire extensive system of hospitals and medical facilities. Additionally, the U.S. Attorney’s Office for the District of New Hampshire continued on its string of successes in achieving compliance in New Hampshire hospitals when it filed a complaint and consent decree against a major hospital in Keene, N.H., for its failures to provide effective communication and for its discriminatory decision to require a deaf patient’s hearing mother to serve an interpreter for her daughter.
“These settlements ensure that deaf and hard of hearing patients can communicate with their doctors and obtain equal access to medical treatment, especially at critical moments in their care,” said Barbara McQuade, U.S. Attorney for the Eastern District of Michigan. “This nationwide initiative emphasizes that disability discrimination in health care is illegal and unacceptable.”
For more than 15 years, U.S. Attorneys have been a critical force multiplier with the Civil Rights Division in enforcing the ADA through the U.S. Attorney Program for ADA Enforcement with the Disability Rights Section. Eighty-four U.S. Attorney’s offices across the nation currently participate in this critical and unique partnership effort and have resolved hundreds of matters involving core issues ranging from accessible voting, access to places of public accommodation and state and local governmental facilities, and discriminatory policies, practices and procedures.
Information about the Barrier-Free Health Care Initiative and the U.S. Attorney Program for ADA Enforcement can be found at www.ada.gov .
Detroit-Area Health Care Clinic Manager Sentenced to Serve40 Months in Prison for Role in $8.5 Million Diagnostic Testing Fraud SchemeRead the Press Release
The manager of a Detroit-area health care clinic was sentenced today to serve 40 months in prison for his leading role in a $7.42 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Miami-area resident Alejandro Haber, 27, was sentenced by U.S. District Judge Patrick Duggan in the Eastern District of Michigan in Detroit. In addition to his prison term, Haber was sentenced to serve three years of supervised release and was ordered to pay $5,333,906 in restitution, joint and several with his co-defendants, and was ordered to forfeit approximately $99,000 seized from bank accounts he controlled.
On Oct. 27, 2012, Haber pleaded guilty to one-count of conspiracy to commit health care fraud. According to plea documents, Haber conceived and oversaw fraud schemes at a clinic called Ritecare LLC. Ritecare later merged with a clinic called CompleteHealth LLC. Haber’s role was limited to the operation of Ritecare alone.
On July 24, 2012, Alejandro Haber’s father, Emilio Haber, was sentenced to serve 60 months in prison for his leading role in an $8.5 million Medicare fraud scheme.
According to court documents, w hile operating Ritecare, Alejandro Haber and his co-conspirators billed Medicare for medically unnecessary tests and services. Haber obtained patients for Ritecare through the payment of kickbacks to patient recruiters and directly to Medicare beneficiaries. The majority of patients were obtained through patient recruiters. Typically, co-conspirators at Ritecare paid patient recruiters $100-$150 per patient obtained, with $50-$75 to go to the patient in exchange for coming to Ritecare and subjecting themselves to medically unnecessary tests.
To justify the medically unnecessary tests, co-conspirators at Ritecare instructed the patient recruiters to have the patients feign certain symptoms. Haber admitted that co-conspirators also directly instructed patients to feign symptoms as well. The kickbacks paid to the recruiters and the patients were contingent upon the Medicare beneficiaries identifying the symptoms necessary to justify medically unnecessary tests. Consequently, the patients’ medical records contained false or fabricated symptoms allowing Ritecare to deceive Medicare as to the legitimacy and medical necessity of the tests it performed. The most expensive tests were nerve conduction studies.
Between approximately August 2007 and approximately October 2009, Haber submitted and/or caused to be submitted approximately $7.42 million in fraudulent claims through Ritecare to the Medicare program for medical and testing services that were procured through the payment of kickbacks, were medically unnecessary, and justified by deception and patient coaching. Medicare actually paid approximately $5.33 million on those claims.
Today’s sentencing 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; Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Assistant Chief Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 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 HEAT team, go to: www.hhs.gov/stopmedicarefraud .
Admitted Associate of New England La Cosa Nostra Sentenced to Prison for Participation in Hobbs Act Extortion ConspiracyRead the Press Release
Albino “Albie” Folcarelli, 54, of Johnston, R.I., an admitted associate of the New England La Cosa Nostra (NELCN), was sentenced in U.S. District Court in Providence, R.I., today to serve 84 months in federal prison for his participation in an extortion conspiracy to extort $25,000 from a Rhode Island individual by using implied threats of violence, including visits to the individual’s place of employment and home.
U.S. District Court Judge William E. Smith also sentenced Folcarelli to serve three years of supervised release upon completion of his prison term and to pay $25,000 in restitution to be paid jointly and severally with co-defendants Raymond R. “Scarface” Jenkins and Edward “Eddy” Lato. Folcarelli pleaded guilty on May 4, 2012, to one count of Hobbs Act extortion.
Folcarelli admitted to participating in an extortion conspiracy with Lato, 65, an admitted NELCN capo, and Jenkins, 47. Lato, who also pleaded guilty to participating in a conspiracy to shakedown Rhode Island adult entertainment business for protection money, is serving a sentence of 108 months in federal prison. Jenkins is serving a sentence of 37 months in prison.
Folcarelli’s sentence was announced by Peter F. Neronha, United States Attorney for the District of Rhode Island; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.
Folcarelli, Lato and Jenkins are among seven Rhode Island men convicted and sentenced for crimes involving racketeering and extortion, which allegedly extorted protection payments from several adult entertainment businesses and individuals in Rhode Island during the past two decades. Admitted NELCN crime boss Luigi “Louie” Manocchio, 85, is currently serving a 66 month sentence in federal prison; Alfred “Chippy” Scivola, 72, an admitted NELCN member, is serving a 46 month sentence in prison; Richard Bonifiglia, 58, an admitted NELCN associate, is serving an 84 month sentence in prison; and Thomas Iafrate, an admitted NELCN associate, is currently serving a 30 month sentence in prison.
An eighth defendant named in a second superseding indictment, Theodore Cardillo, 69, has entered a plea of not guilty to three counts each of RICO conspiracy and extortion conspiracy. He is detained while awaiting trial.
A third superseding indictment returned in this matter returned on April 24, 2012, charges Anthony L. Dinunzio, 53, of East Boston, Mass., the alleged acting leader of the NELCN, with one count each of racketeering and extortion, and five counts of travel in aid of racketeering. A not guilty plea was entered on April 25, 2012. Dinunzio is detained while awaiting trial.
An indictmentis merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland for the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section.
The matter was investigated by the FBI, the Rhode Island State Police and the Providence Police Department.
25 July 2012
Wilcox County, Georgia, Jailer Pleads Guilty in Connection with Assault of Three InmatesRead the Press Release
WASHINGTON – The Justice Department announced today that former Wilcox County, Ga., Jailer Casey Owens pleaded guilty to a misprision of a felony in connection with an incident in which several people, including law enforcement officials, assaulted three inmates inside of the Wilcox County Jail in Abbeville, Ga.
During his plea hearing yesterday and in his factual basis, Owens, 23, of Rhine, Ga., admitted he was present when several people, including then-Wilcox County Sheriff Stacy Bloodsworth and his son, Austin Bloodsworth, assaulted three inmates on July 23, 2009. As a result of the assaults, two of the inmates suffered scratches, bruises and pain, while the third inmate suffered a broken jaw. During the plea hearing, Owens further admitted that he and others were present when Stacy Bloodsworth concocted a false cover story in order to cover up the fact that law enforcement officials and others had used excessive force against the three inmates. Owens admitted that Stacy Bloodsworth instructed Owens and others to prepare reports memorializing the false cover story for Wilcox County Sheriff’s Office officials and to make statements consistent with the false cover story to anyone inquiring about the excessive use of force. Owens also acknowledged that, even though he knew about the assault of the inmates and the false story that Stacy Bloodsworth concocted to cover up the involvement of law enforcement officers, he concealed his knowledge of the assaults by writing a false statement to be included in the Wilcox County Sheriff’s Office report about the incident. Further, Owens did not, as soon as possible, tell a federal judge or a federal agent that law enforcement officials and others had conspired to cover up the assault of the three inmates.
“The vast majority of American law enforcement officers conduct themselves with honor. But when an officer violates his or her oath and breaks the law, the Department of Justice stands ready to enforce the law and protect the civil rights of all Americans,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
“When an officer abuses his authority, he brings shame on the men and women in uniform who honorably protect and serve us all. My office will aggressively defend the civil rights of all people, and will just as vigorously prosecute those who violate them,” said U.S. Attorney for the Middle District of Georgia Michael Moore.
When Owens is sentenced, he faces a maximum penalty of up to three years in prison.
On Feb. 17, 2012, the Justice Department unsealed a 14-count indictment against Stacy Bloodsworth; Austin Bloodsworth; Owens; and former Wilcox County Jail Trustee Willie James Caruthers. The indictment charges the four defendants with civil rights violations in connection with the July 23, 2009, assault of the three inmates and with conspiring to cover up the assaults. In addition, the indictment charges Stacy Bloodsworth, Austin Bloodsworth and Caruthers with lying to the FBI, and it charges Caruthers and Owens with writing false reports. Stacy Bloodsworth was also charged with tampering with one of the victims, as well as with tampering with two witnesses. In May 2012, the grand jury returned a superseding indictment, which, in addition to the civil rights and obstruction of justice charges stemming from the July 23, 2009, assaults, also charges Stacy Bloodsworth with violating the civil rights of individuals on two other occasions. The superseding indictment charges Stacy Bloodsworth with assaulting a Wilcox County Jail inmate in July 2009, causing him to suffer a laceration and pain, and with assaulting another inmate in November 2009, causing him to suffer a concussion, bruising and pain.
On April 4, 2012, Caruthers pleaded guilty to acting with several others, including law enforcement officials, to assault an inmate inside of the Wilcox County Jail on July 23, 2009. Caruthers also pleaded guilty to conspiring to tamper with a witness in connection with the assault. During his plea hearing and in his factual basis, Caruthers admitted that he, along with several other individuals, including then-Sheriff Stacy Bloodsworth, assaulted a Wilcox County inmate, causing the inmate to suffer a broken jaw. Caruthers acknowledged that he was present when several individuals, including Stacy Bloodsworth, assaulted two other inmates, causing both of them to sustain bruises, scratches and pain. During the plea hearing, Caruthers further admitted he conspired with several other people, including Stacy Bloodsworth, to cover up the fact that law enforcement officials and others had used excessive force against the three inmates. Caruthers acknowledged that the plan of the conspiracy was for the co-conspirators to prepare false reports and submit them to Wilcox County Sheriff’s Office officials, and to make statements consistent with those false reports to anyone inquiring about the excessive use of force incident. When Caruthers is sentenced, he faces a maximum penalty of up to 10 years in prison on the civil rights violation, and a maximum penalty of up to five years on the conspiracy charge.
On March 5, 2012, former South Central Georgia Drug Task Force Agent Timothy King Jr., 31, pleaded guilty to an information charging him with conspiring to tamper with a witness in connection with the July 23, 2009, assaults of three inmates. During his plea hearing, King admitted that he conspired with several other people, including a law enforcement official, to cover up the fact that law enforcement officials and others had used excessive force against the three inmates. When King is sentenced, he faces a maximum penalty of five years.
The civil rights charges against Stacy Bloodsworth and Austin Bloodsworth carry a maximum penalty of 10 years for each count, and the conspiracy and false statements charges carry a maximum penalty of up to five years. Additionally, Stacy Bloodsworth faces a maximum penalty of 20 years for each count of witness tampering. An indictment is only an accusation, and the accused are presumed innocent until proven guilty at trial.
This case was investigated by the FBI and is being prosecuted by Trial Attorney Christine M. Siscaretti and Special Litigation Counsel Gerard V. Hogan of the Justice Department’s Civil Rights Division, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia.
Two Southern California Men Each Sentenced to 60 Months in Prison for Their Roles in a Nationwide Breach of Credit andDebit Card Terminals at Michaels Stores Inc.Read the Press Release
WASHINGTON – Two southern California men were sentenced in the U.S. District Court for the Northern District of California in Oakland for their roles in a scheme to defraud nearly 1,000 debit card holders by using stolen bank account information to withdraw money from ATMs, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California and Special Agent in Charge Andrew C. Adelmann of the U.S. Secret Service’s San Francisco Field Office.
Eduard Arakelyan, 21, and Arman Vardanyan, 23, were each sentenced yesterday to serve 36 months in prison on bank fraud and conspiracy charges, and an additional, consecutive 24 months in prison for the identity theft charge. In addition, upon release from prison Arakelyan and Vardanyan were ordered to serve five years of supervised release and to pay $42,043 in restitution.
Arakelyan and Vardanyan were each charged in a criminal information filed on March 5, 2012, in the U.S. District Court in Oakland, with one count of conspiracy to commit bank fraud, one count of bank fraud and one count of aggravated identity theft. On March 20, 2012, Arakelyan and Vardanyan pleaded guilty to these crimes in Oakland and U.S. District Judge Claudia Wilken pronounced the sentences.
“These sentences send a clear message that if you take part in a fraud scheme that cheats consumers out of their hard earned money, you will pay a significant price,” said Assistant Attorney General Breuer. “No matter the sophistication or size of the scheme, we are determined to bring to justice those who engage in these kinds of frauds.”
“By employing an identity theft and bank fraud scheme, the defendants in this case attempted to make a fast buck at the expense of hard-working, law abiding citizens. Instead, they discovered a cold hard truth – crime does not pay,” said U.S. Attorney Haag. “Hopefully, the sentences in this case will serve as a deterrent to individuals who may be considering a similar scheme – you will be caught and you will be prosecuted to the fullest extent of the law.”
“This case represents a clear example of the successful cooperation between federal, state and local law enforcement authorities to aggressively investigate and hold accountable criminal organizations and individuals who target our financial payment systems,” said Special Agent in Charge Adelmann.
Arakelyan and Vardanyan admitted that in or about July 2011, they participated in a scheme to defraud bank account holders and financial institutions by obtaining 952 stolen bank cards and traveling to Northern California to withdraw from ATMs as much money as possible using these stolen bank accounts. According to court documents, Arakelyan and Vardanyan possessed two loaded firearms, a GPS device pre-programmed with ATM locations and eight mobile telephones, all to further their scheme.
The information charged that these stolen cards were linked to a 2011 theft of a reported 94,000 debit and credit card account numbers from customers buying goods at 84 Michaels Stores Inc. stores across the United States. The perpetrators of that security breach replaced about 84 authentic personal identification number pads, used by the stores to process debit and credit card purchases, with fraudulent pads from which they downloaded customers’ banking information. After this breach, financial institutions reported tens of thousands of incidents of fraudulent activity linked to customers who had visited the affected Michaels stores. Arakelyan and Vardanyan are among those who executed one aspect of this scheme.
This case is being prosecuted by Trial Attorney Paul Rosen of the Fraud Section in the Justice Department’s Criminal Division and Special Assistant U.S. Attorney Tamara Weber of the Northern District of California. The investigation was conducted by the U.S. Secret Service San Francisco field office and the Pleasant Hill, Calif., Police Department, with assistance from the U.S. Secret Service Los Angeles and Chicago field offices, as well as the Glendale, Calif. Police Department.
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.
Justice Department Signs Agreement with Kansas City, Missouri, to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced an agreement with Kansas City, Mo., to improve access to all aspects of civic life for people with disabilities. The agreement is the 200th settlement reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“I commend Kansas City officials for their commitment to provide equal access to civic life for all residents and visitors with disabilities in what is the Justice Department’s milestone 200th Project Civic Access agreement,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department has positively impacted the lives of more than four and a half million individuals with disabilities through Project Civic Access, and as a result, the injustice of not being able to enter government buildings or participate in government programs, services and activities is becoming a thing of the past for Americans with disabilities.”
“We are committed to helping every resident fully participate in all Kansas City has to offer,” said Kansas City Mayor Sly James. “Our city has historically been a leader on issues of inclusion and equal access, and I am proud we are once again demonstrating that commitment. This agreement will ensure that the city of Kansas City can be explored and enjoyed, traversed and traveled by everyone.”
“Although not all of us are disabled today, any of us could become disabled tomorrow. The signing of this agreement is not only a commitment to the disabled community, but also an act of conscience that strengthens the entire community,” said David H. Westbrook, Chair of the Kansas City Mayor’s Committee for People with Disabilities. “We talk a lot about being one of the nation’s most livable cities. Accessibility and livability are inseparable. To everyone’s benefit, we will do all we can to support the mayor and city council in fulfilling this promise.”As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. PCA agreements typically include requirements to make physical modifications to facilities so that, among other elements, parking, routes into buildings, entrances, assembly areas, restrooms, service counters and drinking fountains are accessible to people with disabilities. Other common provisions address effective communication (e.g., telephone communications), grievance procedures, polling places, emergency management procedures and policies, sidewalks, domestic violence programs, and ensuring that an entity’s official website and other web-based services are accessible to persons with disabilities.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement requires most actions to be completed within three years. For the required accessibility modifications to sidewalks, pedestrian crossings, transportation stops and curb ramps, the city will work with the disability community to prioritize and complete these modifications within six years. The department will actively monitor compliance with the agreement until it has confirmed that all required actions have been completed.
People interested in finding out more about the ADA, today’s agreement with Kansas City, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA website at www.ada.gov or call the toll-free ADA information line at (800) 514-0301 or (800) 514-0383 (TTY). The agreement with Kansas City is available at www.ada.gov/Kansas_city_pca/kansas_city_pca_sa.htm, and a fact sheet on the agreement is available at www.ada.gov/Kansas_city_pca/kansas_city_pca_fctsht.htm.Co-Owners of Houston-Area Durable Medical Equipment Company Sentenced to Prison for Role in $1.18 Million Medicare FraudRead the Press Release
WASHINGTON – The former co-owners of a Houston-area durable medical equipment (DME) company were sentenced today in Houston to each serve 87 months in prison for their participation in a $1.18 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Clifford Ubani, 54, and Princewill Njoku, 53, the former co-owners of Family Healthcare Services, were sentenced by U.S. District Judge Gray H. Miller in the Southern District of Texas in Houston. In addition to their prison terms, each was sentenced to serve three years of supervised release and ordered to pay $566,451 in restitution jointly and severally with their co-defendants. In September and October 2010, respectively, Ubani and Njoku pleaded guilty to one count of conspiracy to commit health care fraud.
In June 2011, Ubani and Njoku were each sentenced to serve 108 months in prison for their roles in a separate $5.2 million home health care fraud scheme. Today’s sentences and the previously imposed sentences will be served concurrently.
According to court documents and other evidence presented to the court, Family, a Houston DME company, purported to provide medical equipment to Medicare beneficiaries. According to court documents, Ubani paid co-conspirators to recruit Medicare beneficiaries for the purpose of Family filing claims with Medicare for DME that was medically unnecessary or not provided. In particular, Family would bill Medicare for unnecessary medical orthotic braces that were marketed as “arthritis kits” or “ortho kits.” The co-conspirators would then falsify documents to support the fraudulent payments from Medicare.
Ubani and Njoku are the third and fourth defendants sentenced in connection with this scheme. One other defendant, Michelle Turner, awaits sentencing following her February 2012 conviction after a one-week jury trial.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent-In-Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit (OAG-MFCU).
This case is being prosecuted by Trial Attorney Charles D. Reed and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, Texas OAG-MFCU and the Federal Railroad Retirement Board-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 Texas.
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.
$1 Million in Restitution Payments Announced to Preserve North Carolina WetlandsRead the Press Release
WASHINGTON – North Carolina’s Waccamaw River watershed will benefit from a $1 million restitution order from a federal court, funding environmental projects to acquire and preserve wetlands in an area damaged by illegal releases of wastewater from a corporate hog farm, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division; U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker; Director Greg McLeod from the North Carolina State Bureau of Investigation; and Camilla M. Herlevich, Executive Director of the North Carolina Coastal Land Trust.
Freedman Farms Inc. was sentenced in February 2012 to five years of probation and ordered to pay $1.5 million in fines, restitution and community service payments for violating the Clean Water Act when it discharged hog waste into a stream that leads to the Waccamaw River. William B. Freedman, president of Freedman Farms, was sentenced to six months in prison to be followed by six months of home confinement. Freedman Farms also is required to implement a comprehensive environmental compliance program and institute an annual training program.
In an order issued on April 19, 2012, the court ordered that the defendants would be responsible for restitution of $1 million in the form of five annual payments starting in January 2013, which the court will direct to the North Carolina Coastal Land Trust (NCCLT). The NCCLT plans to use the money to acquire and conserve land along streams in the Waccamaw watershed. The court also directed a $75,000 community service payment to the Southern Environmental Enforcement Network, an organization dedicated to environmental law enforcement training and information sharing in the region.
“The resolution of the case against Freedman Farms demonstrates the commitment of the Department of Justice to enforcing the Clean Water Act to ensure the protection of human health and the environment,” said Assistant Attorney General Moreno. “The court-ordered restitution in this case will conserve wetlands for the benefit of the people of North Carolina. By enforcing the nation’s environmental laws, we will continue to ensure that concentrated animal feeding operations (CAFOs) operate without threatening our drinking water, the health of our communities and the environment.”
“This office is committed to doing our part to hold accountable those who commit crimes against our environment, which can cause serious health problems to residents and damage the environment that makes North Carolina such a beautiful place to live and visit,” said U.S. Attorney Walker.
“This case shows what we can accomplish when our SBI agents work closely with their local, state and federal partners to investigate environmental crimes and hold the polluters accountable,” said Director McLeod. “We’ll continue our efforts to fight illegal pollution that damages our water and puts the public’s health at risk.”
“The Waccamaw is unique and wild,” said Director Herlevich of the North Carolina Coastal Land Trust. “Its watershed includes some of the most extensive cypress gum swamps in the state, and its headwaters at Lake Waccamaw contain fish that are found nowhere else on Earth. We appreciate the trust of the court and the U. S. Attorney, and we look forward to using these funds for conservation projects in a river system that is one of our top conservation priorities.”
According to evidence presented in court, in December 2007 Freedman Farms discharged hog waste into Browder’s Branch, a tributary to the Waccamaw River that flows through the White Marsh, a large wetlands complex. Freedman Farms, located in Columbus County, N.C., is in the business of raising hogs for market, and this particular farm had some 4,800 hogs. The hog waste was supposed to be directed to two lagoons for treatment and disposal. Instead, hog waste was discharged from Freedman Farms directly into Browder’s Branch.
The Clean Water Act is a federal law that makes it illegal to knowingly or negligently discharge a pollutant into a water of the United States.
The Freedman case was investigated by the U.S. Environmental Protection Agency (EPA) Criminal Investigation Division, the U.S. Army Corps of Engineers and the North Carolina State Bureau of Investigation, with assistance from the EPA Science and Ecosystem Support Division. The case was prosecuted by Assistant U.S. Attorney J. Gaston B. Williams of the Eastern District of North Carolina and Trial Attorney Mary Dee Carraway of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
The North Carolina Coastal Land Trust is celebrating its 20th anniversary of saving special lands in eastern North Carolina. The organization has protected nearly 50,000 acres of lands with scenic, recreational, historic and ecological values. North Carolina Coastal Land Trust has saved streams and wetlands that provide clean water, forests that are havens for wildlife, working farms that provide local food and nature parks that everyone can enjoy. More information about the Coastal Land Trust is available at www.coastallandtrust.org.
24 July 2012
U.S. Customs and Border Protection Officer Pleads Guilty in Miami to Civil Rights Violations for Sexual Assault of Three WomenRead the Press Release
WASHINGTON – U.S. Customs and Border Protection (CBP) Officer Paulo Morales, 47, of Miami, pleaded guilty today in U.S. District Court in Miami to three civil rights offenses for sexually groping three women in his custody, the Justice Department announced today.
During the plea proceedings, Morales admitted that on various dates in January 2011, while working as an officer with CBP at the Miami International Airport, he groped the breasts of three separate women without their consent and while they were in the custody of CBP.
“Officers who sexually assault individuals in their custody defy the public trust bestowed upon law enforcement officials, and their actions will not be tolerated,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to investigate and prosecute criminal civil rights violations committed by law enforcement officials.”
“This former Customs and Border Protection officer misused his office and his power to sexually assault three women in his custody at Miami International Airport, in violation of their civil rights,” said U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer. “My office and the Department of Justice are fully committed to protecting the civil rights of our citizens from all types of abuses.”
“Immigration and Customs Enforcement’s Office of Professional Responsibility is dedicated to aggressively investigating all allegations of criminal and serious misconduct involving employees within our area of responsibility,” said Southeast Region Special Agent in Charge David P. D’Amato of U.S. Immigration and Customs Enforcement, Office of Professional Responsibility (ICE-OPR). “ICE-OPR takes great pride in protecting the integrity of all ICE and CBP employees. A law enforcement badge is a privilege; we will not tolerate its misuse as a key to assert power or unlawful force over those in one’s custody.”
Sentencing is scheduled for Oct. 26, 2012. Morales faces a maximum sentence of three years in prison and a fine of up to $300,000.
This case is being investigated by ICE-OPR and CBP Internal Affairs, and is being prosecuted by Trial Attorney Henry Leventis of the Civil Rights Division and Assistant U.S. Attorney William White of the U.S. Attorney's Office for the Southern District of Florida.
Texas Return Preparer Sentenced to Jail for Preparing False Tax ReturnsRead the Press Release
Eddye L. Lovely, a tax return preparer from Tomball, Texas, was sentenced today to 57 months in federal prison, the Justice Department and Internal Revenue Service (IRS) announced. Lovely appeared before U.S. District Judge Nancy F. Atlas in Houston.
On April 6, 2011, Lovely was indicted on 14 counts of aiding and assisting in the preparation of false tax returns. On Sept. 28, 2011, Lovely was charged, pursuant to a superseding indictment, with 16 counts of aiding and assisting in the preparation of false tax returns comprising the original 14 counts plus two additional counts. According to the superseding indictment, the court had released Lovely on bond pending trial and ordered him not to prepare any tax returns or commit additional crimes. While on pre-trial release, Lovely aided and assisted in the preparation of materially false 2010 tax returns for two additional clients. He pleaded guilty on Dec. 12, 2011 to three of the 16 counts charged in the superseding indictment. Following a pretrial hearing, the court revoked Lovely’s bond and ordered him detained.
According to the superseding indictment and plea agreement, Lovely owned and operated “The Tax Master,” a tax return business located in Harris County, Texas. Lovely prepared tax returns that contained fabricated Schedule C losses for businesses that the taxpayers did not own or operate, as well as false or inflated Schedule A deductions for charitable contributions and other expenses.
The court found that the tax loss associated with the three charges to which Lovely pleaded guilty as well as all relevant conduct associated with this case was more than $1 million.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the investigative efforts of the IRS agents involved in the case and Tax Division Trial Attorneys Tracy Gostyla and Kathryn Ward, who prosecuted the case.
Missouri Man Sentenced to 42 Months in Prison for Vandalism and Arson of Biracial Man’s HomeRead the Press Release
WASHINGTON – A Missouri man was sentenced today to 42 months in prison for his role in the vandalism and arson of a biracial man’s home in Independence, Mo., the Department of Justice announced.
Charles Wilhelm, 23, of Independence, was sentenced in the Western District of Missouri by U.S. District Judge Dean Whipple.
On March 8, 2012, Wilhelm pleaded guilty to one count of conspiracy and one count of violating the Fair Housing Act. Wilhelm’s co-conspirators, Teresa Witthar and David Martin, pleaded guilty on Feb. 2, 2012, and March 7, 2012, respectively, for their roles in vandalizing and burning down Nathaniel Reed’s home in Independence.
According to the plea agreement filed with the court, Wilhelm, Witthar and Martin conspired to intimidate and scare Reed, a biracial man, into moving out of the Highland Manor Mobile Home Park in Independence, in part because of his race. On or about June 6, 2006, Wilhelm, along with Witthar and Martin, entered Reed’s home, without his permission, and vandalized it by writing at least 15 racially derogatory slurs on the walls of his trailer.
Two days later, on or about June 8, 2006, Witthar drove Wilhelm and Martin to a neighborhood behind Reed’s home so that they could set fire to it without being detected. Witthar waited in her vehicle for Wilhelm and Martin to set the fire and then provided them a ride back to the Highland Manor Mobile Home Park.
“The racially motivated destruction of the victim's home strikes at the heart of the protections afforded by our civil rights laws,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “The Justice Department will continue to act aggressively to ensure that all Americans are able to live in their homes without fear of racial violence.”
“This defendant violated another person’s civil rights and endangered the safety of many nearby residents,” said Acting U.S. Attorney for the Western District of Missouri David M. Ketchmark. “Today’s sentence makes an important statement that race-based crime carries serious punishment. Racially-motivated attacks are offensive to our community and will not be tolerated by our justice system. “
Witthar was sentenced to 63 months in prison on June 18, 2012. Sentencing for Martin is scheduled for Aug. 2, 2012.
These guilty pleas were the result of a cooperative effort between the U.S. Attorney’s Office for the Western District of Missouri and the Justice Department’s Civil Rights Division. This case was investigated by the Kansas City Division of the FBI. It is being prosecuted by Acting U.S. Attorney Ketchmark for the Western District of Missouri and Trial Attorney Sheldon L. Beer of the Civil Rights Division.
Justice Department Signs Agreements in Texas and Georgia to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced agreements with Wills Point, Texas, and Randolph County, Ga., to improve access to all aspects of civic life for individuals with disabilities. The agreements were reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA). The department has now reached 199 agreements under the PCA initiative.
“This week marks the 22nd anniversary of the passage of the ADA as the Justice Department continues to pursue nationwide compliance with this great civil rights law through its vigilant enforcement efforts,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Through Project Civic Access the Justice Department has worked with large metropolitan areas with populations in the millions as well as small rural communities with residents numbering in the thousands in order to ensure that courthouses, parks, community centers, museums, libraries and all other state and local government buildings, programs, services and activities in these communities are accessible to individuals with disabilities. I commend the officials in Wills Point and Randolph County for making this commitment to provide equal access to their residents and visitors with disabilities.”
PCA was initiated to ensure that people with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements.
The agreements are tailored to address the steps each community must take to come into compliance with the ADA. PCA agreements typically include requirements to make physical modifications to public facilities so that, among other elements, parking, routes into buildings, entrances, assembly areas, restrooms, service counters and drinking fountains are accessible to people with disabilities. Other common provisions address effective communication (e.g. telephone communications), grievance procedures, polling places, emergency management procedures and policies, sidewalks, domestic violence programs, and ensuring that an entity’s official website and other web-based services are accessible to persons with disabilities.
According to census data, 23.8 percent of residents in Wills Point and 27.3 percent of residents in Randolph County have a disability.
Today’s agreements were reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement with Wills Point requires most actions to be completed within three years. For the required accessibility modifications to sidewalks, pedestrian crossings, transportation stops and curb ramps, the city will work with the disability community to prioritize and complete these modifications within five years. The Randolph County agreement will remain in effect for three years. The department will actively monitor compliance with the agreements until it has confirmed that all required actions have been completed.
People interested in finding out more about the ADA, today’s agreements, the PCA initiative or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA website at www.ada.gov or call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).
The agreement with Wills Point is available at www.ada.gov/wills-point-pca/wills-point-sa.htm, and a fact sheet on the agreement is available at www.ada.gov/wills-point-pca/wills-point-sa-fact_sheet.htm. The agreement with Randolph County is available at www.ada.gov/randolph-co-pca/randolph-co-sa.htm, and a fact sheet on the agreement is available at www.ada.gov/randolph-co-pca/randolph-co-fact_sheet.htm.
Justice Department Announces Consent Decree with City of New Orleans to Resolve Allegations of Unlawful Misconduct by New Orleans Police DepartmentRead the Press Release
The Department of Justice announced today that the United States has entered into a comprehensive, cooperative consent decree with the city of New Orleans to resolve allegations of unlawful police misconduct by the New Orleans Police Department (NOPD). The filing of the consent decree in federal court in New Orleans continues the process of reforming the NOPD and begins federal court oversight of that reform to ensure effective and constitutional policing in New Orleans.
“ Today’s action represents a critical step forward. It reaffirms the Justice Department’s commitment to the highest standards of fairness and professionalism and underscores our determination to work alongside our law enforcement partners to protect not only the safety – but the essential civil rights – of everyone in this country,” said Attorney General Eric Holder.
The consent decree requires NOPD to make broad changes in policies and practices related to use of force; stops, searches and arrests; custodial interrogations; photographic line-ups; preventing discriminatory policing; community engagement; recruitment; training; officer assistance and support; performance evaluations and promotions; supervision; misconduct investigations; and NOPD’s system of secondary employment, also known as paid details.
The agreement also requires more transparency by NOPD, encourages greater civilian oversight and increases community interaction and partnerships. The agreement requires close and comprehensive oversight by a court appointed monitoring team, which will periodically submit public reports regarding NOPD’s progress. The consent decree will remain in effect until the city demonstrates it has complied with its provisions for two years, or until the monitor’s assessment of the agreement’s outcome measures demonstrates sustained and continuing improvement in constitutional policing.
“The consent decree, which is unprecedented in scope and nature, is designed to ensure that comprehensive, sustainable reforms are made in the New Orleans Police Department,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “We will continue our partnership with Mayor Landrieu, the police department and the community to ensure that the critical reforms are achieved.”
“This groundbreaking agreement represents a critical milestone in the recovery of New Orleans and a victory for our city, its police department and most of all its citizens,” said U.S. Attorney for the Eastern District of Louisiana Jim Letten. “The consent decree will serve as a blueprint for the New Orleans Police Department, so that it may become a world class police department – one which will be more effective in protecting its citizens against all threats and dangers.
The consent decree is the product of the United States’ civil pattern or practice investigation of NOPD, which began in May 2010 and resulted in a comprehensive report in which the department found that NOPD engages in a pattern or practice of misconduct that violates the Constitution and other federal laws. The Justice Department’s investigation found a pattern or practice of excessive force, including stops, searches and arrests in violation of the Fourth Amendment. The investigation also found evidence of discriminatory policing based on race, ethnicity, gender and sexual orientation. This civil pattern or practice investigation was separate from the numerous federal criminal civil rights prosecutions of NOPD officers during this time period.
The Justice Department’s civil pattern or practice investigation was informed by 12 experts on police practices, including a number of current and former police professionals. The investigation included numerous onsite visits and observations of police-community interactions, including interviews with New Orleans officials, NOPD command staff, supervisors and police officers. Additionally, the department’s investigation reviewed more than 36,000 pages of documents and held interviews with residents, community groups and other stakeholders.
The investigation was conducted in accordance with the police misconduct provision (Section 14141) of the Violent Crime Control and Law Enforcement Act of 1994 (VCCLEA) , the anti-discrimination provisions of the Omnibus Crime Control and Safe Streets Act of 1968, and Title VI of the Civil Rights Act of 1964. Under Section 14141 of VCCLEA, the Justice Department has the authority to file civil suits against law enforcement agencies that engage in a pattern or practice of misconduct. The department also has the authority under the Safe Streets Act and Title VI to file suit against law enforcement agencies that engage in discrimination if they receive federal funds.
The city of New Orleans and NOPD cooperated throughout the investigation, from inviting the Justice Department’s Civil Rights Division to conduct the investigation, to agreeing to enter a consent decree at its conclusion. For the past several months, New Orleans and the department have been negotiating this consent decree, designed to serve as a blueprint for reforming NOPD. NOPD’s implementation of the agreement will be overseen by the federal court, including a court-approved monitor to be jointly selected by the city and the United States.
The Civil Rights Division currently has more active police pattern or practice investigations of law enforcement agencies than any other time in the division’s history. Increasingly, these investigations, including the New Orleans Police Department investigation, are initiated at the request of the law enforcement agency itself.
Former North Carolina Builder Arrested and Charged with Tax Obstruction and Conversion of Government PropertyRead the Press Release
William B. Clayton, a residential builder formerly of Corolla, N.C., was arrested yesterday on charges of obstructing the tax laws and converting government property, the Justice Department and Internal Revenue Service (IRS) announced. Clayton had his initial appearance today before U.S. Magistrate Judge William A. Webb in the Eastern District of North Carolina.
Clayton was charged in a two-count indictment returned by a federal grand jury on June 19, 2012, in the Eastern District of North Carolina and unsealed today. The indictment charges Clayton with one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and one count of knowingly converting and disposing of U.S. government property.
According to the indictment, Clayton failed to file federal income tax returns over a six-year period, resulting in the assessment of taxes and penalties and the initiation of collection proceedings by the IRS. Between May 2007 and August 2010, Clayton took steps to obstruct the IRS’s efforts to collect his unpaid tax liabilities, such as concealing property from the IRS and destroying property owned by the IRS but previously built and owned by Clayton. According to the charging instrument, in an effort to pay down Clayton’s tax liabilities, the IRS scheduled a public auction of Clayton’s former property. In the days leading up to the auction, Clayton committed, or caused the commission of, various acts of destruction and demolition at the Corolla property, including destroying an outdoor pool deck and pool house, forcibly removing a guest house from the property and transporting it to a non-consenting neighbor’s property, and forcibly removing cabinets, counter tops, a kitchen island, sinks, toilets and light fixtures.
If convicted, Clayton could face a maximum potential sentence of three years in prison and a fine of $250,000 on the tax obstruction charge, and 10 years in prison and a fine of $250,000 on the conversion of government property charge.
This case was investigated by IRS-Criminal Investigation. It is being prosecuted by Trial Attorney Adam Hulbig of the Justice Department’s Tax Division.
An indictment is merely an accusation. The defendant is presumed innocent unless proven guilty beyond a reasonable doubt.
Detroit-Area Health Care Clinic Owner Sentenced to Serve60 Months in Prison for Role in $8.5 MillionDiagnostic Testing Fraud SchemeRead the Press Release
WASHINGTON – The owner of a Detroit-area health care clinic was sentenced today to serve 60 months in prison for his leading role in an $8.5 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Miami-area resident Emilio Haber, 53, was sentenced by U.S. District Judge Patrick Duggan in the Eastern District of Michigan in Detroit. In addition to his prison term, Haber was sentenced to serve three years of supervised release and was ordered to pay $6,341,000 in restitution, joint and several with his co-defendants, and was ordered to forfeit approximately $99,000 seized from bank accounts he controlled.
On Oct. 26, 2011, Haber pleaded guilty to one count of conspiracy to commit health care fraud. According to plea documents, Haber conceived and oversaw fraud schemes at two clinics, Ritecare LLC and CompleteHealth LLC. Haber incorporated and opened Ritecare and CompleteHealth in the state of Michigan in 2007. CompleteHealth merged into Ritecare in July 2008.
According to court documents, while operating CompleteHealth and Ritecare, Haber and his co-conspirators billed Medicare for medically unnecessary tests and services, including, but not limited to, nerve conduction studies. Haber obtained patients for the clinics through the payment of kickbacks to Medicare beneficiaries and patient recruiters. Haber admitted that he and other co-conspirators paid patient recruiters $100-$150 per patient obtained, with $50-$75 to go to the patient in exchange for visiting Ritecare and subjecting themselves to medically unnecessary tests.
To justify the medically unnecessary tests, Haber admitted that he and other co-conspirators told patient recruiters to instruct the patients to feign certain symptoms. Haber and other co-conspirators also directly instructed patients to feign symptoms. The kickbacks paid to the recruiters and the patients were contingent upon the Medicare beneficiaries identifying the symptoms necessary to justify medically unnecessary tests. Consequently, the patients’ medical records contained false or fabricated symptoms allowing Ritecare to deceive Medicare as to the legitimacy and medical necessity of the tests it performed.
The department said that between approximately August 2007 and approximately October 2009, Haber and his co-conspirators at CompleteHealth and Ritecare submitted and/or caused to be submitted approximately $8.5 million in fraudulent claims to the Medicare program for medical and testing services that were medically unnecessary and procured through the payment of kickbacks. Medicare paid approximately $6.3 million of those claims.
Today’s sentencing 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; Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Assistant Chief Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 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 HEAT team, go to: www.hhs.gov/stopmedicarefraud.
Alabama Real Estate Investor Pleads Guilty to Conspiracies to Rig Bids and Commit Mail Fraud for the Purchase of Real Estate at Public Foreclosure AuctionsRead the Press Release
An Alabama real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced.
Charges were filed on June 25, 2012, in the U.S. District Court for the Southern District of Alabama in Mobile, Ala., against David R. Bradley. Bradley was charged with one count of bid rigging and one count of conspiracy to commit mail fraud. According to the plea agreement, Bradley has agreed to cooperate with the department’s ongoing investigation.
According to court documents, Bradley conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.
Bradley was also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. Bradley participated in the bid-rigging and mail fraud conspiracies from as early as June 2003 until at least September 2008.
“By first rigging the public auctions, then bidding amongst themselves in secret afterwards, the conspirators illegally profited at the expense of distressed homeowners,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “This ongoing investigation into real estate foreclosure auctions underscores the division’s commitment to protecting competition in real estate markets around the country.”
FBI Special Agent in Charge of the Mobile FBI Office Stephen E. Richardson re-affirmed his commitment to pursuing these complex economic investigations, stating, “This investigation has sent a strong message to the community at large, and the real estate community specifically, that abuses within the real estate industry will not be tolerated. Fraud related to home mortgage investments can have financial implications both locally and nationally, and the integrity of the system must be vigilantly maintained.”
Including today’s plea, to date, six individuals—Harold H. Buchman, Allen K. French, Bobby Threlkeld Jr., Steven J. Cox, Lawrence B. Stacy and Bradley—and one company—M & B Builders LLC— have pleaded guilty in the U.S. District Court for the Southern District of Alabama in connection with the investigation. Additionally, on June 28, 2012, real estate investors Robert M. Brannon and Jason R. Brannon, and their company, J & R Properties LLC, were indicted with participating in bid rigging and conspiracy to commit mail fraud at public real estate auctions in southern Alabama.
Each 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 a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.
The investigation into fraud and bid rigging at certain real estate foreclosure auctions in southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.
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.
23 July 2012
U.S. Restrains More Than $3 Million in Corruption Proceeds Related to Former Governor of NigeriaRead the Press Release
WASHINGTON – Through an application to register and enforce two orders from United Kingdom courts, the Department of Justice has secured a restraining order against more than $3 million in corruption proceeds located in the United States related to James Onanefe Ibori, the former governor of Nigeria’s oil-rich Delta State, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
The application, which was filed under seal on May 16, 2012, in U.S. District Court in the District of Columbia, seeks to restrain assets belonging to Governor Ibori and Bhadresh Gohil, Ibori’s former English solicitor, that are proceeds of corruption. Specifically, it seeks to restrain a mansion in Houston and two Merrill Lynch brokerage accounts. U.S. District Judge Lamberth granted the application and issued a restraining order under seal on May 21, 2012. The department was notified today that its application to unseal the restraining order was granted.The United States is working with the United Kingdom’s Crown Prosecution Service and the Metropolitan Police Service to forfeit these corruption proceeds.
According to the application, Governor Ibori served as the governor of Nigeria’s oil-rich Delta State from 1999 to 2007, and misappropriated millions of dollars in Delta State funds. He laundered those proceeds through a myriad of shell companies, intermediaries and nominees in several jurisdictions, including the United Kingdom, with the help of Gohil. Although Nigeria’s Constitution prohibits state governors from maintaining foreign bank accounts and serving as directors of private companies, Governor Ibori and his associates accumulated millions of dollars in assets in the United Kingdom and the United States, according to the application.
Governor Ibori was convicted in the United Kingdom of money laundering and conspiracy to defraud and was sentenced by a British court on April 18, 2012, to 13 years in prison. Gohil was also convicted in November 2010 of money laundering and prejudicing a money laundering investigation and was sentenced by a British court to 10 years in prison.
“Instead of working to benefit the people of the Nigerian Delta, Governor Ibori pilfered state funds and accumulated immense wealth in the process,” said Assistant Attorney General Breuer. “He conspired with Mr. Gohil to funnel millions of dollars in corruption proceeds out of Nigeria and into bank accounts and assets maintained in the names of shell companies and nominees. Through the Criminal Division’s Kleptocracy Asset Recovery Initiative, our message is clear: the United States will not be used as a safe haven for the ill-gotten gains of corrupt foreign officials.”
“This serves as a warning to those corrupt foreign officials who abuse their power for personal financial gain and then attempt to place those funds in the U.S. financial system,” said ICE Director Morton. “ICE’s Homeland Security Investigations (HSI) special agents will continue to work with our law enforcement partners at the Department of Justice Criminal Division’s Asset Forfeiture and Money Laundering Section to investigate and prosecute those involved in such illicit activities and hold corrupt foreign officials accountable by denying them the satisfaction of their illegal earnings.”
The case is being prosecuted by trial attorneys Woo S. Lee and Elizabeth Aloi of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by ICE HSI’s Foreign Corruption Investigations Group, HSI Asset Identification and Removal Group in Miami and HSI Attaché London.
This case is part of the Justice Department’s Kleptocracy Asset Recovery Initiative. This initiative is carried out by a dedicated team of prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and where appropriate return those proceeds to benefit those harmed.
Individuals with information about possible proceeds of foreign corruption located in or laundered through institutions in the United States should contact federal law enforcement or send an email to [email protected].
ICE HSI’s Foreign Corruption Investigations Group in Miami targets corrupt foreign officials around the world that attempt to utilize U.S. financial institutions to launder illicit funds. The group conducts investigations into the laundering of proceeds emanating from foreign public corruption, bribery or embezzlement. The objective is to prevent foreign derived ill-gotten gains from entering the U.S. financial infrastructure, to seize identified assets in the United States and repatriate these funds on behalf of those affected by foreign official corruption.
Three Men Sentenced in Houston for Federal Hate Crimes Related to the Assault of African-American ManRead the Press Release
WASHINGTON – The Justice Department announced that Charles Cannon, 26, Michael McLaughlin, 41, and Brian Kerstetter, 33, were sentenced today by U.S. District Judge Kenneth Hoyt in Houston for their racially motivated assault of a 29-year-old African-American man.
Kerstetter was sentenced to 77 months in prison followed by three years of supervised release. Cannon was sentenced to 37 months in prison followed by three years of supervised release. And McLaughlin was sentenced to 30 months in prison followed by three years of supervised release.
On April 16, 2012, a federal jury found the defendants guilty of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, which was enacted in October 2009. The evidence at trial established that on Aug. 13, 2011, the defendants approached the victim, who was waiting at a bus stop in downtown Houston. All three defendants were shirtless to display their tattoos known to reflect white supremacist beliefs. To further antagonize the victim, at least one defendant referred to the victim using a racial slur, and the defendants then surrounded and attacked the victim by punching and kicking him in the face, head and body. The defendants were arrested at the scene after a passerby called 911.
“James Byrd was murdered 14 years ago not far from Houston because he was African American, and today these defendants have been sentenced under the critical new law enacted in his name for viciously attacking an African-American because of the color of his skin,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “It is a sad reality that violent acts of hate committed because of someone’s race are not a thing of the past, and the department will continue to use every available tool to identify and prosecute hate crimes whenever and wherever they occur.”
“The passage of the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act of 2009 provided a powerful tool to law enforcement,” said Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office. “With today’s sentencing, the message is clear. Our communities will not tolerate hate, and individuals who commit such despicable bias-motivated crimes have been put on notice. They will be brought to justice and prosecuted to the full extent of the law.”
This case was investigated by the Houston Division of the FBI in cooperation with the Houston Police Department. Assistance was also provided by the Harris County, Texas, District Attorney’s Office. The case was prosecuted by Trial Attorney Saeed Mody and Special Litigation Counsel Gerard Hogan of the Civil Rights Division of the Department of Justice.
Las Vegas Lawyer Pleads Guilty to Tax EvasionRead the Press Release
Charles C. LoBello, a Nevada-licensed attorney who practices business and personal injury law in Las Vegas, pleaded guilty in federal court to one count of tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Court Judge James Mahan presided over the plea hearing.
On June 22, 2010, a federal grand jury returned an indictment against LoBello, charging him with five counts of tax evasion and five counts of filing false personal income tax returns, for the tax years 2001 through 2005.
According to court documents, LoBello concealed over $900,000 in income from the United States, intentionally gave incomplete information to his bookkeeper and tax return preparer, and used personal checking accounts to hide large checks he received as legal fees. In the plea agreement, LoBello admitted that for the years 2001 through 2005 he owed an additional $260,625 in income taxes.
Sentencing is scheduled for Oct. 23, 2012. LoBello faces a maximum potential sentence of five years in prison and a fine of up to $250,000. According to the plea agreement, LoBello has agreed to pay restitution in the amount of $260,625 to the IRS, which represents his unpaid personal income tax liability for 2001 through 2005. He also agreed to pay all applicable interest and penalties on that tax liability.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agentsof IRS – Criminal Investigation, who investigated the case, assisting IRS revenue agents, and Tax Division Trial Attorneys Thomas W. Flynn, John P. Scully and Dennis R. Kihm, who prosecuted the case.
Florida Tax Preparer Sentenced to Federal Prison<br /> <br /> for Stolen Identity Refund FraudRead the Press Release
Ernst Pierre, a Port St. Lucie, Fla., tax preparer, was sentenced today to 51 months in federal prison for wire fraud and aggravated identity theft, the Justice Department and Internal Revenue Service – Criminal Investigation (IRS-CI) announced. Pierre was charged with a scheme to file false federal income tax returns using stolen identity information. Pierre was also ordered to pay over $266,000 in restitution to the IRS.
According to the indictment and Pierre’s admissions as part of his guilty plea, from October 2009 through May 2011, Pierre filed false tax returns for clients of Tax Max, a Port St. Lucie tax return preparation business he owned and operated. Pierre obtained the names and Social Security numbers of relatives of clients for whom he had prepared and submitted federal income tax returns and then fraudulently used those names and Social Security numbers as “dependents” on other client tax returns and on his own tax return. Pierre used these dependents to fraudulently inflate tax refunds.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS-CI, who investigated the case, and Tax Division Trial Attorneys Justin K. Gelfand and Thomas J. Krepp, who prosecuted the case.
Attorney General Eric Holder and Philadelphia Mayor Michael Nutter Announce Partnership to Combat Violent CrimeRead the Press Release
Attorney General Eric Holder and Philadelphia Mayor Michael Nutter today announced the Department of Justice (DOJ) and city of Philadelphia’s Violent Crime Reduction Partnership (VCRP), which directs additional federal agents and technological resources to assist local law enforcement in combating violent crime. Attorney General Holder and Mayor Nutter were joined by VCRP participating agency leaders: U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger, Philadelphia Police Commissioner Charles Ramsey, Philadelphia District Attorney Seth Williams, Special Agents-in-Charge for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), FBI, the Drug Enforcement Administration (DEA) and the U.S. Marshal for the Eastern District of Pennsylvania.
The VCRP, which was formed on June 4, 2012, is made up of more than 50 federal law enforcement officials, including agents, investigators and intelligence analysts and representatives of the Justice Department’s Criminal Division. These federal agents are working in close collaboration with the Philadelphia Police Department and Philadelphia District Attorney’s Office to prevent and combat violent and drug-related crime across the Philadelphia metropolitan area. During this four-month “surge” of federal law enforcement resources, these federal agencies are helping to build capacity, enhance training, coordinate community outreach efforts, bolster intelligence analysis capabilities and helping plan and execute sophisticated criminal investigations and prosecutions. Additionally, federal funding for the VCRP initiative provides new, state-of-the-art equipment designed to support ballistics identification in gun-related crimes. One such device is called the Integrated Ballistics Identification System which has the latest automation features and 3-D imaging technology, allowing firearms examiners to capture higher quality images of cartridge cases enhancing the ability of the Philadelphia Police Department and its partners to solve violent gun-related crimes.
In just the past six weeks, the partnership is already producing results. To date, VCRP has seized more than 80 firearms and netted more than 300 arrests for violent crime, drug, firearm and other offenses. As federal agencies are working closely with the Philadelphia Police Department in the target neighborhoods, the majority of those cases are being prosecuted in the local court system. The most recent federal case resulting from the ongoing VCRP arose on July 18, 2012, when ATF agents and Philadelphia police officers arrested eight suspects who were allegedly planning an armed robbery of drug traffickers. Each of the eight defendants in U.S. v. Whitfield was charged by criminal complaint.
“In these times of budgetary challenges - when police departments and other agencies are confronting growing demands with increasingly limited resources – the need for coordination among all relevant authorities has never been more critical,” said Attorney General Holder. “This surge of federal resources in Philadelphia – as well as others going on in certain cities -- will enhance our ability to work with local law enforcement by targeting federal agents and others to the areas where they're most needed so that we can better protect these communities.”
“The Violent Crime Reduction Partnership is the next stage in efforts by the Philadelphia Police Department, federal law enforcement partners like ATF, DEA, FBI and U.S. Marshals, and prosecutorial agencies like the District and U.S. Attorney's Offices, to target the most violent offenders in the City of Philadelphia and bring them to justice,” said Mayor Nutter. “We are grateful for the partnership and support of Attorney General Eric Holder and the entire Department of Justice as we work together to make the streets of our city safer.”
“The Violent Crime Reduction Partnership is already proving to be an effective tool for investigating and prosecuting serious violent offenders in Philadelphia’s highest crime neighborhoods,” said U.S. Attorney Memeger. “As U.S. Attorney, I remain committed to improving the quality of life for the citizens of my district, particularly for those who should not have to live with rampant violence and drug trafficking in their neighborhoods. My office will continue to support Police Commissioner Ramsey and the city of Philadelphia to combat the violence and other crimes that plague the city. I would like to commend the tireless efforts of the agents working for ATF, FBI, DEA and the Marshals Service who are making this initiative a success.”
“ATF, along with the Philadelphia Police Department and our DOJ partners, will focus on those who have no qualms about diminishing the quality of life in Philadelphia,” said ATF Special Agent-in-Charge Sheree L. Mixell. “Those violent career criminals who illegally possess, purchase and use firearms to carry out their criminal activities, will be identified and targeted for federal prosecution through this very important initiative.”
“The FBI, in this joint and coordinated effort to attack violent crime in Philadelphia, will work with our partners to disrupt and dismantle the criminal enterprises and organizations that seek to profit from violent crimes,” said FBI Special Agent-in-Charge of the Philadelphia Division George C. Venizelos. “This joint initiative not only rids our communities of criminal predators, but also sends the clear message that federal, state, county and local law enforcement agencies are working together to aggressively address the violent crime and drug problems that plague our communities.”
“Gun violence in Philadelphia has taken the lives of many people and brought pain and suffering to many families,” said Acting Special Agent-in-Charge of the DEA Philadelphia Division Vito S. Guarino. “Guns are frequently used by drug traffickers and organizations to protect their drugs, cash, territory, and also to intimidate citizens from providing information to police and to deter them from testifying in court. The DEA has committed its investigative resources to the Philadelphia Police Department and is working cooperatively along with other federal partners to confront gun violence and make Philadelphia the safe city that its citizens deserve.”
“The U.S. Marshals Service is committed to supporting the surge and improving the safety of the citizens of Philadelphia by continually targeting and apprehending the most dangerous fugitive felons, particularly those wanted for violent gun crimes,” said U.S. Marshal for the Eastern District of Pennsylvania David B. Webb.
“It is my hope that the Violent Crime Reduction Partnership will help us reduce the senseless acts of violence that currently plague the city of Philadelphia. By continuing to combine our resources and working together locally and nationally, I truly believe we will improve the safety and quality of life for all of our citizens,” said Philadelphia District Attorney Seth Williams.
Earlier this year, ATF personnel completed a similar four-month “surge” in Oakland, Calif., which Oakland Police Department officials have credited with contributing to a significant reduction in crime. The Justice Department is currently examining ways to provide this type of targeted assistance and relief to other metropolitan areas, as needed.
Copies of press releases and related documents can be found at www.justic.gov/usao/pae
A complaint is merely an accusation. All defendants are presumed innocent until and unless proven guilty in a court of law.
20 July 2012
Virginia Man Sentenced to 18 Months in Prisonfor Acting as Unregistered Agent for Syrian GovernmentRead the Press Release
Mohamad Anas Haitham Soueid, 48, a resident of Leesburg, Va., was sentenced today to 18 months in prison, followed by three years of supervised release, for collecting video and audio recordings and other information about individuals in the United States and Syria who were protesting the government of Syria and to providing these materials to Syrian intelligence agencies in order to silence, intimidate and potentially harm the protestors.
Lisa Monaco, Assistant Attorney General for National Security; Neil MacBride, U.S. Attorney for the Eastern District of Virginia; and James McJunkin, Assistant Director in Charge of the FBI Washington Field Office, made the announcement following sentencing by United States District Judge Claude M. Hilton.
Soueid, aka “Alex Soueid” or “Anas Alswaid,” a Syrian-born naturalized U.S. citizen, was charged by a federal grand jury on Oct. 5, 2011, in a six-count indictment in the Eastern District of Virginia. He was convicted of unlawfully acting as an agent of a foreign government on March 26, 2012.
“Mohamad Soueid acted as an unregistered agent of the Syrian government as part of an effort to collect information on people in this country protesting the Syrian government crack-down. I applaud the many agents, analysts and prosecutors who helped bring about this important case,” said Assistant Attorney General Monaco.
“Mr. Soueid betrayed this country to work on behalf of a state sponsor of terror,” said U.S. Attorney MacBride. “While the autocratic Syrian regime killed, kidnapped, intimidated and silenced thousands of its own citizens, Mr. Soueid spearheaded efforts to identify and intimidate those protesting against the Syrian government in the United States.”
“By illegally acting as an agent of Syria, Mr. Souied deceived his adopted country of the United States in support of a violent and repressive despotic government,” said Assistant Director in Charge McJunkin. “Through today’s sentencing, he will now be held accountable for his actions.”
According to court records, from March to October 2011, Soueid acted in the United States as an agent of the Syrian Mukhabarat, which refers to the intelligence agencies for the Government of Syria, including the Syrian Military Intelligence and General Intelligence Directorate. At no time while acting as an agent of the government of Syria in this country did Soueid provide prior notification to the Attorney General as required by law. The U.S. government has designated the Syrian government a state sponsor of terrorism since 1979.
Under the direction and control of Syrian officials, Soueid recruited individuals living in the United States to make dozens of audio and video recordings of protests against the Syrian regime – including recordings of conversations with individual protestors – in the United States and Syria, which he provided to the Syrian government. He also supplied the Syrian government with contact information for key dissident figures in the United States, details about the financiers of the dissident movement, logistics for protests and meetings, internal conflicts within the movement, and the movement’s future plans.
In a handwritten letter to a Syrian official in April 2011, Soueid outlined his support for the Syrian government’s repressions of its citizens, stating that disposing of dissension must be decisive and prompt and that violence, home invasions, and arrests against dissidents is justified.
The Syrian government provided Soueid with a laptop to further their ability to surreptitiously communicate, which he later destroyed. In late June 2011, the Syrian government paid for Soueid to travel to Syria, where he met with intelligence officials and spoke with President Bashar al-Assad in private.
To thwart detection of his activities by U.S. law enforcement, Soueid lied to a Customs and Border Patrol agent upon his return from meeting with President al-Assad in Syria, and he also lied repeatedly to FBI agents when they questioned him in August 2011. Following the FBI interview, Soueid destroyed documents in his backyard and informed the Mukhbarat about his FBI interview.
This investigation is being conducted by the FBI’s Washington Field Office with assistance from the Loudon County, Va., Sheriff’s Office. The prosecution is being handled by Assistant U.S. Attorneys Dennis Fitzpatrick and Neil Hammerstrom of the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Brandon L. Van Grack of the Counterespionage Section of the Justice Department’s National Security Division.
Starr County, Texas, Sheriff’s Deputy Arrested and Detained on Bribery, Extortion and Drug ChargesRead the Press Release
A Deputy Sheriff for the Starr County, Texas, Sheriff’s Office has been ordered detained by a federal magistrate judge in the Southern District of Texas on charges of conspiracy, federal programs bribery, extortion and drug possession with intent to distribute, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Nazario Solis III, 34, of Rio Grande City, Texas, was ordered detained yesterday by U.S. Magistrate Judge Dorina Ramos in McAllen, Texas. Solis was arrested on July 12, 2012, on charges contained in an indictment filed in the Southern District of Texas.
The indictment charges Solis with one count of conspiracy to commit federal programs bribery and extortion, one count of federal programs bribery, one count of extortion, one count of conspiracy to possess with the intent to distribute marijuana, one count of possession with intent to distribute marijuana and one count of attempt to possess with intent to distribute cocaine. The indictment also charges Jason Michael Munsell, a Deputy Sheriff with the Starr County Sheriff’s Office, with conspiracy to commit federal programs bribery and extortion, one count of federal programs bribery and one count of extortion. Munsell, 26, surrendered to the FBI in McAllen on July 17, 2012, and was released on bond the following day.
According to the indictment, from approximately March 2011 to approximately April 2011, Solis and Munsell accepted approximately $1,500 total in cash payments from the operator of a gambling business in Starr County in exchange for providing warning of law enforcement activity involving the gambling business. The indictment further alleges that Solis and Munsell were recorded confirming that they had provided such notice about a law enforcement raid on at least one occasion in March 2011, allowing the business to remove money and employees that might otherwise have been arrested.
Solis is also charged with conspiracy to possess with the intent to distribute and possession with the intent to distribute less than fifty kilograms of marijuana in approximately April 2011.
The indictment also charges Solis with attempting to distribute three kilograms of cocaine and cash in exchange for semi-automatic and fully-automatic firearms. The indictment alleges that Solis engaged in extensive negotiations with another individual to obtain the firearms, which Solis intended to send to his “boss” in Mexico. However, the individual with whom Solis engaged in negotiations was an undercover law enforcement agent, and no actual firearms were sent to Solis. The indictment alleges that Solis was recorded stating, “My boss likes the 308 [rifle] … he likes the M-4s [rifle] and the 223 [rifle].” The indictment further alleges that Solis preferred semi-automatic rifles, complaining that fully-automatic rifles used “too much ammo.” Solis allegedly stated, “We kill one bird and we shoot seven times. That’s not, that’s not very good mathematics.”
Solis faces a maximum penalty of up to five years in prison, a fine of $250,000 and supervised release for each conspiracy charge; 10 years in prison, a fine of $250,000 and supervised release for each charge of extortion and federal programs bribery; five years in prison, a fine of $250,000 and supervised release for the marijuana distribution charge; and five to 40 years in prison, a fine of $250,000 and supervised release for the attempted cocaine distribution charge.
Munsell faces a maximum penalty of five years in prison, a fine of $250,000 and supervised release for the conspiracy charge and 10 years in prison, a fine of $250,000 and supervised release for each charge of extortion and federal programs bribery.
An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.
This case is being prosecuted by Trial Attorneys Peter Mason and Anthony J. Phillips of the Public Integrity Section in the Justice Department’s Criminal Division. The case is being investigated by the FBI’s Public Corruption Task Force in McAllen, which is comprised of U.S. Customs and Border Protection-Internal Affairs, U.S. Immigration and Customs Enforcement-Office of Professional Responsibility, Department of Homeland Security-Office of Inspector General and the Texas Rangers. The Drug Enforcement Administration Houston Division and the Bureau of Alcohol, Tobacco, Firearms and Explosives also participated in the investigation.
Justice Department Settled Claims of Discrimination Against United Natural Foods Inc.Read the Press Release
The Justice Department announced today that it reached a settlement agreement with United Natural Foods Inc. (UNFI), resolving allegations that the company discriminated under the anti-discrimination provision of the Immigration and Nationality Act (INA), when it impermissibly “reverified” the work authority of lawful permanent residents and required some non-citizen workers to provide specific Form I-9 documentation.
In a charge filed with the department, the charging party, a lawful permanent resident, alleged that UNFI improperly terminated him after he failed to produce an unexpired lawful permanent resident card (also known as a “green card”) in connection with an erroneous reverification of his employment eligibility. The charging party had presented proper work authorization documentation at the time of hire, and UNFI had no reason to suspect that his documentation was not genuine. The employee was permanently work-authorized, but lost three weeks’ worth of wages as a result of UNFI’s practice. The department’s investigation revealed that UNFI reverified the documentation of similarly situated lawful permanent residents when their documentation expired but did not reverify expired documentation of U.S. citizens. The anti-discrimination provision prohibits treating employees differently in the employment eligibility verification and reverification processes based on citizenship or national origin.
In response to the department’s investigation, UNFI conducted an internal audit and undertook immediate corrective action to address and rectify its employment eligibility verification policies and practices. As part of its corrective action, UNFI rehired the charging party and gave him full back pay several months before the department had made its finding of discrimination. Under the settlement agreement, the company agrees to pay $3,190 in civil penalties to the United States, to conform all of its actions to ensure compliance with the INA’s anti-discrimination provision and to train its human resources personnel about the company’s responsibility to avoid discrimination in the employment eligibility verification process.
“The Civil Rights Division is pleased that UNFI has prioritized compliance with the Immigration and Nationality Act’s (INA), and we encourage all employers to evaluate their policies and practices to ensure compliance with the INA’s anti-discrimination provision,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
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 process.
For more information about protections against employment discrimination under the immigration law, visit OSC’s website at www.justice.gov/crt/about/osc or email [email protected].
For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), 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.
Former Financial Services Executive Indicted for His Participation in a Far-Reaching Conspiracy and Scheme to Defraud Involving Investment Contracts for the Proceeds of Municipal BondsRead the Press Release
A former financial services executive was indicted yesterday for his participation in a far-reaching conspiracy and scheme to defraud related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced.
The three-count indictment was filed yesterday in the U.S. District Court in Charlotte, N.C. The indictment charges Phillip D. Murphy, a former executive for a financial institution, with participating in a wire fraud scheme and separate fraud conspiracies from as early as 1998 until 2006.
The charged conspiracies and scheme to defraud relate to the provision of a type of contract, known as an investment agreement, to public entities, such as state, county and local governments and agencies throughout the United States. Major financial institutions, including banks, investment banks, insurance companies and financial services companies, are among the providers of investment agreements and other related municipal finance contracts. Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issue to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process among various providers for the award of an investment agreement to invest such money. Competitive bidding for these agreements is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds. The company that employed Murphy marketed financial products and services, including services as a provider of investment agreements.
“The individual charged yesterday allegedly participated in a complex fraud scheme and conspiracies to manipulate what was supposed to be a competitive process,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “The division recently convicted at trial several individuals in this investigation, which is ongoing. We will continue to prosecute those who engage in such illegal and anticompetitive behavior.
The indictment charges that Murphy conspired with Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products (CDR), a broker of municipal finance contracts, and others to increase the number and profitability of investment agreements and other municipal finance contracts awarded to the provider company where Murphy was employed. Murphy won investment agreements through CDR’s manipulation of the bidding process in obtaining losing bids from other providers, which is explicitly prohibited by U.S. Treasury regulations. As a result of the information, various providers won investment agreements and other municipal finance contracts at artificially determined prices. In exchange for this information, Murphy submitted intentionally losing bids for certain investment agreements and other contracts when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.The indictment also alleges that Murphy and co-conspirators misrepresented to municipal issuers or bond counsel that the bidding process was in compliance with U.S. Treasury regulations. This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process. Such conduct placed the tax-exempt status of the underlying bonds in jeopardy.
According to court documents, the efforts by Murphy and his co-conspirators to control and manipulate the bidding for investment contracts, and the execution of a variety of certifications that covered up their scheme, also obstructed the Internal Revenue Service (IRS)’s ability to monitor compliance with U.S. Treasury regulations and impeded the IRS’s ability to determine whether municipal issuers had correctly accounted for any money that was owed to the U.S. Treasury.
In a separate count, the indictment charges that Murphy conspired with others to falsify bank records related to marketing profits so that the co-conspirators could pay the kickbacks to CDR and others.“Yesterday’s charges outline a fraudulent scheme to subvert competition in the marketplace. Those who engage in this type of criminal activity not only stand to defraud public entities, but erode the public’s trust in the competitive bidding process,” said Janice K. Fedarcyk, Assistant Director in Charge of the FBI in New York. “The FBI will continue to work with the Antitrust Division to ensure the integrity of competitive bidding in public finance.”
“This case demonstrates the value of a coordinated approach by multiple agencies and law enforcement authorities,” said Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber. “IRS Criminal Investigation contributed to this joint effort by providing financial investigative expertise to uncover this complex and sophisticated scheme. Professionals, including financial service executives, should know we will devote all resources necessary to bring to justice those who commit financial crimes.”
Murphy is charged with two counts of conspiracy and one count of wire fraud. The fraud conspiracy with which Murphy is charged carries a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine. The false bank records conspiracy carries a maximum penalty of five years in prison and a $250,000 fine. The maximum fines for each of these offenses 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.The charges announced today resulted from an ongoing investigation conducted by the Antitrust Division’s New York and Cleveland Field Offices, the FBI and IRS-CI. The division is coordinating its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
To date, a total of 13 individuals and one company have pleaded guilty to charges stemming from the ongoing investigation. In May 2012, a federal jury in the Southern District of New York convicted Dominick Carollo, Steven Goldberg and Peter Grimm of multiple counts involving similar fraud conspiracies after a four-week trial. Three other former executives of a financial institution were indicted on Dec. 9, 2010, for participating in fraud schemes and conspiracies related to the bidding for investment agreements, and are awaiting trial, which is scheduled to begin in Manhattan on July 30, 2012.
Yesterday’s indictment 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.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-335-8000, the FBI at 212-384-5000 or IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.htm.
Florida Man Pleads Guilty to Transportation <br /> of Child PornographyRead the Press Release
WASHINGTON – Anthony Mangione, 51, of Parkland, Fla., pleaded guilty today to one count of transportation of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Acting Special Agent in Charge Jeffrey C. Mazanec of the FBI’s Miami Field Office and Sheriff Al Lamberti of the Broward County, Fla., Sheriff’s Office.
Mangione pleaded guilty today before U.S. Magistrate Judge James M. Hopkins in U.S. District Court in West Palm Beach, Fla. He was taken into custody pending sentencing.According to court documents, between March 2010 and September 2010, Mangione transported visual depictions of minors engaging in sexually explicit conduct.
Mangione faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison. Mangione also faces a term of supervised release of five years to life following his prison sentence, and will be required to register as a sex offender in any jurisdiction in which he lives, works or attends school. Sentencing has been scheduled for Oct. 5, 2012.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case is being investigated by the Broward County Sheriff’s Office and the FBI’s Miami Field Office. Assistant Deputy Chief Alexandra R. Gelber and Trial Attorney Michael Grant of the Criminal Division’s CEOS are prosecuting the case.
Fishermen and Seafood Wholesaler Convicted of Conspiring to Obstruct Justice, Falsify Food Safety and Oyster Harvest Records, and Traffic in Illegal OystersRead the Press Release
WASHINGTON – After a seven week trial in federal court in Camden, N.J., multiple defendants were convicted on various felony counts of creating false records, trafficking in illegally possessed oysters, obstructing the Food and Drug Administration’s regulation of public health and safety, and conspiring to commit those crimes, announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, and Paul J. Fishman, U.S. Attorney for the District of New Jersey.
Thomas Reeves, Todd Reeves, and Shellrock LLC, all of Port Norris, N.J., were convicted on multiple felony counts of violating the Lacey Act by creating false records for illegally possessed oysters, trafficking in illegally possessed oysters and falsifying records used by the FDA for tracking the movement of oysters in interstate commerce. These same defendants, as well as Renee Reeves, an employee of Shellrock and the wife of Todd Reeves, were also found guilty of conspiring to commit those crimes and obstruct justice.
Kenneth Bailey, of Heislerville, N.J., was convicted on multiple felony counts of violating the Lacey Act by creating false records and trafficking in illegally possessed oysters, as well as falsifying records used by the FDA for tracking the movement of oysters in interstate commerce.
Mark Bryan, of New Market, Md, and the business he co-owns, Harbor House Seafood Inc., of Seaford, Del., were convicted on multiple felony counts of creating false records relating to their purchase of oysters, trafficking in illegally possessed oysters, as well as conspiring to obstruct justice and falsify records used by the FDA for tracking the movement of oysters in interstate commerce.
“The conspiracy to traffic in unreported and illegally possessed oysters from the Delaware Bay violated laws that protect public health and ensure the sustainability of resources that are vital to the region’s economy. In the course of the conspiracy, defendants falsified FDA records that are used to track oysters in the event of an outbreak of oyster-borne disease,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “After an extensive trial, today’s conviction by a federal jury sends the message that we will prosecute those who exploit protected resources, deceive law enforcement and deprive honest fisherman of the full measure of their labor.”
The Lacey Act prohibits creating or submitting false records for fish or wildlife moving in interstate commerce and also prohibits trafficking in fish or wildlife known to be illegally taken or possessed. The FDA and state health agencies require that oyster purchasers and sellers maintain accurate records of the amounts and locations of oyster harvest for all oysters they buy and sell in order to protect the public health and minimize the impact of any oyster-borne outbreak of disease.
Starting in at least 2004 and continuing through 2007, Thomas and Todd Reeves, oyster fishermen who owned Shellrock (dba Reeves Brothers), would take a greater amount of oysters from the Delaware Bay than was allowed by New Jersey. The Reeveses would then falsify the records that New Jersey used to track the number of oysters harvested from Delaware Bay and sell those unreported oysters to Mark Bryan at Harbor House in Delaware. Thomas Reeves, Todd Reeves and Renee Reeves, along with Mark Bryan at Harbor House, would also coordinate to cover up their overharvest by falsifying records required by the FDA, records which were used to protect the public health from outbreaks of oyster-borne disease. In addition, the defendants conspired to obstruct the NOAA investigation into their illegal conduct by providing investigators with false records and making false statements that attempted to hide their conduct.Bryan and Harbor House also purchased unreported oysters from Kenneth W. Bailey Sr., another Port Norris oyster fisherman. Like the Reeveses, Bailey would create false records required by the state and the FDA to hide his overharvest.
The fair market retail value of the unreported oysters during this time was in excess of $750,000, and the defendants over-harvested their quota in some years by nearly 60 percent.
The maximum penalty for conspiring to commit offenses and for violations of the Lacey Act is up to five years in prison and a $250,000 fine. The maximum penalty for obstruction of justice counts is up to 20 years in prison and a $250,000 fine. The maximum penalty for the corporations is up to five years of probation and a fine in an amount that is the greater of $500,000 or twice the gross gain, for each count.
The case was investigated by the National Oceanic and Atmospheric Administration, Office of Law Enforcement, and The New Jersey Department of Environmental Protection, Division of Fish and Wildlife. The case was prosecuted by Wayne D. Hettenbach and Patrick M. Duggan of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division, with assistance from Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office for the District of New Jersey.
$19 Million Stolen Identity Refund Fraud Conspiracy Charged in AlaskaRead the Press Release
A grand jury sitting in Anchorage, Ala., returned a 90-count superseding indictment yesterday against 11 defendants, the Justice Department announced. The superseding indictment included a conspiracy charge to defraud the United States involving a scheme to use stolen Puerto Rican identities to file tax returns and obtain fraudulent income tax refunds. A number of the defendants had previously been charged with conspiracy to distribute cocaine, cocaine distribution and international money laundering.
To accomplish their tax refund scheme, the indictment alleges that the conspirators fabricated individual income tax returns using stolen personal identification information from residents of the Commonwealth of Puerto Rico. The defendants obtained laptop computers that contained over 2,600 stolen identities. The laptops also identified $19 million in fraudulent refund claims. The addresses used on some of the false tax returns were obtained by stealing mail from mailboxes in and around Anchorage. In other cases, it is alleged that one or more of the defendants contacted conspirators in locations such as New Jersey and Puerto Rico and requested that fraudulently obtained tax refund checks be sent to Anchorage using false names. The indictment further alleges that the conspirators negotiated refund checks in Anchorage with the help of corrupt bank employees. In order to negotiate the tax refund checks, the defendants allegedly used false identification documents. They allegedly obtained these documents by using the names, dates of birth and Social Security numbers of other individuals in applications made to the Alaska Department of Motor Vehicles.
The indictment also charges various defendants with submitting false claims for refund, possessing stolen mail, making false claims of U.S. citizenship, committing passport fraud, making false statements to banks and credit unions, passing forged U.S. Treasury checks, aggravated identity theft and drug charges. The fraud charges each carry maximum potential penalties of between two and 30 years of imprisonment, in addition to the five year mandatory minimum prison term required upon conviction on the drug charges.
The case is being jointly prosecuted by Assistant U.S. Attorneys Thomas C. Bradley and James Barkeley of the U.S. Attorney’s Office for the District of Alaska and Trial Attorney Stephanie Carowan Courter of the Justice Department’s Tax Division. The case was investigated by the Internal Revenue Service Criminal Investigation, U.S. Immigration and Customs Enforcement, which oversees Homeland Security Investigations, the U.S. Postal Inspection Service, the U.S. State Department’s Diplomatic Security Service, and the Drug Enforcement Administration. Additional assistance was provided by the U.S. Attorney’s Offices for the District of New Jersey, the Eastern District of Pennsylvania and the Southern District of New York.
An indictment is merely a formal accusation. Defendants are presumed innocent until proven guilty in a court of law.
19 July 2012
Two Foreign Nationals Plead Guilty to Trafficking <br /> the Identities of Puerto Rican U.S. CitizensRead the Press Release
Two foreign nationals have pleaded guilty for their roles in a scheme to traffic the identities of Puerto Rican U.S. citizens and corresponding identity documents.
The guilty pleas were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Rosa E. Rodríguez-Vélez for the District of Puerto Rico; Director John Morton of U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI); Chief Postal Inspector Guy Cottrell of the U.S. Postal Inspection Service (USPIS); Scott P. Bultrowicz, Director of the U.S. State Department’s Diplomatic Security Service (DSS); and Internal Revenue Service-Criminal Investigation (IRS-CI) Chief Richard Weber.
Obdulio Edu Burgos-Dominguez, 35, a Guatemalan national formerly of Seymour, Ind., pleaded guilty today in the District of Puerto Rico to one count of conspiracy to commit identification fraud and one count of conspiracy to commit alien smuggling for profit. Jose Sergio Garcia-Ramirez, 37, a Mexican national formerly of Rockford, Ill., pleaded guilty in the District of Puerto Rico on July 17, 2012, to one count of conspiracy to commit identification fraud and one count of aggravated identity theft. Both pleas took place before U.S. Magistrate Judge Bruce J. McGiverin.
Burgos-Dominguez and Garcia-Ramirez were originally charged in an indictment returned by a federal grand jury in Puerto Rico on Mar. 22, 2012. To date, a total of 53 individuals have been charged for their roles in the identify trafficking scheme.
Court documents allege that individuals located in the Savarona area of Caguas, Puerto Rico (Savarona suppliers) obtained Puerto Rican identities and corresponding identity documents. Other conspirators located in various cities throughout the United States (identity brokers) allegedly solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. The superseding indictment alleges that identity brokers ordered the identity documents from Savarona suppliers, on behalf of the customers, by making coded telephone calls. The conspirators used text mail, money transfer services and express, priority or regular U.S. mail to complete their illicit transactions.
Court documents allege that some identity brokers assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation. Their customers generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses. Some customers allegedly obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.
Burgos-Dominguez admitted that he operated as an identity broker in Seymour, Ind. Garcia-Ramirez admitted that he operated as an identity broker in Rockford, Ill.
According to court documents, various identity brokers were operating in Rockford; Seymour; Indianapolis; DeKalb, Ill.; Columbus, Ind.; Aurora, Ill.; Hartford, Conn.; Clewiston, Fla.; Lilburn and Norcross, Ga.; Salisbury, Md.; Columbus, Ohio; Fairfield, Ohio; Dorchester, Mass.; Lawrence, Mass.; Salem, Mass.; Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington, N.C.; Hickory, N.C.; Hazelton, Pa.; Philadelphia; Houston; Abingdon, Va.; Albertville, Ala.; and Providence, R.I.
Garcia-Ramirez and Burgos-Dominguez are the seventh and eighth defendants to plead guilty in this case.
At sentencing, scheduled for Nov. 30, 2012, Garcia-Ramirez faces a maximum sentence of 15 years in prison for conspiracy to commit identification fraud and a mandatory consecutive sentence of two years in prison for aggravated identity theft. At sentencing, scheduled for Nov. 13, 2012, Burgos-Dominguez faces a maximum sentence of 15 years in prison for conspiracy to commit identification fraud and 10 years in prison for conspiracy to commit alien smuggling for profit. Both defendants are also subject to a maximum fine of $250,000 for each charge.
The charges are the result of Operation Island Express, an ongoing, nationally-coordinated investigation led by the ICE-HSI Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office. The Illinois Secretary of State Police; Elgin, Ill., Police Department; Seymour, Ind., Police Department; and Indiana State Police provided substantial assistance. The ICE-HSI Assistant Attaché office in the Dominican Republic, and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS CI offices around the country provided invaluable assistance.
The case is being prosecuted by the Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of the Criminal Division’s Asset Forfeiture and Money Laundering Section, and the support of the U.S. Attorney’s Office for the District of Puerto Rico. The U.S. Attorneys’ Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, Western District of Virginia, Southern District of Ohio, and District of Nebraska provided substantial assistance.
Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html . Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline . Anyone who may have information about particular crimes in this case should also report it to the ICE tip line or website.
Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft . Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html ; www.ssa.gov/pubs/10064.html ; www.fbi.gov/about-us/investigate/cyber/identity_theft ; and www.irs.gov/privacy/article/0,,id=186436,00.html .
Oklahoma Inmate Sentenced for Conspiring with Jailer to Assault Another InmateRead the Press Release
Phillip Oliver, 46, an inmate at the Muskogee County Jail (MCJ) was sentenced today in U.S. District Court in Muskogee, Okla., to one year and a day followed by one year of supervised release for one count of conspiracy related to the orchestrated beating of a fellow inmate at the behest of a jailer on duty.
“Excessive force by individuals sworn to uphold the law will not be tolerated,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to investigate and prosecute criminal civil rights violations whether committed directly by the hands of law enforcement or by inmates at the behest of law enforcement.”
Oliver pleaded guilty earlier this year and in so doing admitted that on Oct. 6, 2011, he conspired with a jailer on duty to violate the civil rights of the victim, a fellow inmate, by assaulting him. Specifically, Oliver and the jailer agreed to use physical violence to punish the victim because the victim, who was restrained in a separate cell, was making verbal comments. According to court documents, although Oliver was concerned about getting into trouble if he assaulted the victim, the jailer assured Oliver that he would cover for Oliver. Thereafter, the jailer remotely popped open the victim’s locked cell door so that Oliver could gain access. Oliver then punched the victim in the face, all at a time when the victim was not posing a threat to anyone.
This case was investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and was prosecuted by Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice and Assistant U.S. Attorney Ryan M. Roberts for the Eastern District of Oklahoma.
Michigan Man Pleads Guilty in Connection with Detroit-Area Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Michigan resident pleaded guilty today for his role in a $13.8 million Detroit-area home health care fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Nabeel Shaikh, 30, of Wixom, Mich., pleaded guilty today to one count of conspiracy to commit health care fraud before U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan. At sentencing, Shaikh faces a maximum penalty of 10 years in prison and a $250,000 fine.
According to information contained in plea documents, Shaikh purported to be a physical therapy assistant with a limited license who provided physical therapy services to homebound Medicare beneficiaries. In fact, Shaikh had a forged physical therapy assistant’s degree and no medical license. Beginning in approximately January 2009, Shaikh was paid to falsify medical documentation for two home health agencies, known as Physicians Choice Home Health Care LLC and Quantum Home Care Inc., each of which billed and received payments from Medicare for home health care services that were never rendered.
According to court documents, Shaikh paid kickbacks and bribes to Medicare beneficiaries in order to obtain the beneficiaries’ Medicare information, which was then used to bill Medicare for home health services that were never provided. Shaikh created evaluations, therapy revisit notes and other medical documentation memorializing purported physical therapy for patients he did not see or treat. Shaikh and his co-conspirators had Medicare beneficiaries pre-sign forms and visit sheets that were later falsified to make it appear that the beneficiaries had received home health services when, in fact, they had not. Shaikh knew that the documents that he signed would be used to support false claims to Medicare for home health services.
From approximately January 2009 through September 2011, Medicare paid approximately $900,430 to Physicians Choice and Quantum for fraudulent physical therapy claims based on falsified files and notes signed by Shaikh.
Overall, between approximately July 2008 and September 2011, Physicians Choice, Quantum and two other fraudulent home health care agencies involved in the conspiracy, known as First Care Home Health Care LLC and Moonlite Home Care Inc., were paid approximately $13.8 million in fraudulent home health claims by the Medicare program for services that were medically unnecessary and/or never rendered.
Today’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, Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko, and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General, Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section, with assistance from Trial Attorney Niall M. O’Donnell. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 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.
Former President of Texas Company Indicted for Employee Deaths and Environmental ViolationsRead the Press Release
Port Arthur Chemical and Environmental Services LLC (PACES) and its former president Matthew L. Bowman have been charged with conspiracy to illegally transport hazardous materials, resulting in the deaths of two employees, in an indictment handed down by a federal grand jury in Beaumont, Texas, yesterday, announced Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division and John M. Bales, U.S. Attorney for the Eastern District of Texas.
The 13-count indictment describes a scheme in which hazardous materials were transported illegally with false documents and without placards, and where workers were not properly protected from exposure to hazardous gases. The exposure resulted in the deaths of two employees, who were truck drivers, at the PACES facility on Dec. 18, 2008, and April 14, 2009. Both deaths are attributed to exposure to hydrogen sulfide.
The defendants were charged with a conspiracy to violate the Hazardous Materials Transportation Uniform Safety Act (HMTUSA) and two counts of failure to implement appropriate controls to protect employees from exposure to hydrogen sulfide in violation of the Occupational Safety and Health Administration Act. The defendants are also charged with transportation of hazardous materials without placards and with false documents in violation of HMTUSA, violations of the Resource Conservation and Recovery Act and making false statements.
According to the indictment, Bowman was president and owner of PACES, located in Port Arthur, Texas, and CES Environmental Services (CES) located in Houston. PACES was in operation from about November 2008 to November 2010 and was in the business of producing and selling caustic materials to paper mills. The production of caustic materials involved hydrogen sulfide. Hydrogen sulfide is classified as a poisonous gas by HMTUSA. According to the National Institute for Occupational Safety and Health, hydrogen sulfide is an acute toxic substance that is the leading cause of sudden death in the workplace. Employers are required by the Occupational Safety and Health Administration (OSHA) to implement engineering and safety controls to prevent employees from exposure above harmful limits.
According to the indictment, Bowman was responsible for, among other duties, approving and directing PACES production operations, the disposal of hydrogen sulfide wastewater, employee safety precautions, directing the transportation of PACES wastewater, and determining what safety equipment could be purchased or maintained.
Both PACES and CES have filed for bankruptcy.
The conspiracy and substantive counts of the indictment each carry a maximum possible sentence of five years in prison and a fine of $250,000, and a $500,000 maximum fine for the corporation.
The allegations in the indictment are mere accusations and all persons are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by EPA Criminal Investigation Division; the U.S. Department of Transportation Office of Inspector General; the Texas Commission on Environmental Quality - Environmental Crimes Unit; and the Houston Police Department - Major Offenders, Environmental Investigations Unit; with assistance from the Texas Parks & Wildlife Department - Environmental Crimes Unit; the Travis County, Texas, District Attorney’s Office; the Harris County, Texas, District Attorney’s Office; the Houston Fire Department; OSHA; the U.S. Coast Guard; the Port Arthur Police Department; and the Port Arthur Fire Department.
The case is being prosecuted by U.S. Attorney’s Office for the Eastern District of Texas, Beaumont Division, and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Former Employee of Nursing Home Company Operating in North Carolina and Virginia Sentenced to Serve 63 Months in Prison<br /> for Kickback Schemes and Tax EvasionRead the Press Release
WASHINGTON – The former director of corporate maintenance and renovations at Medical Facilities of America Inc. (MFA) was today sentenced to serve 63 months in prison for accepting kickbacks from contractors and evading federal income taxes, the Department of Justice announced. MFA operates health care and nursing home facilities throughout Virginia and North Carolina.
John D. Henderson, of Colonial Heights, Va., was sentenced in U.S. District Court in Roanoke, Va., by Judge Samuel G. Wilson. In addition to his prison sentence, Henderson was ordered to pay a total of $698,088 in restitution and additional taxes, penalties and interest to the Internal Revenue Service for his participation in two separate conspiracies. The conspiracies involved steering contracts for the repair, maintenance and renovation at MFA health care and nursing home facilities. One of the conspiracies took place from about June 1998 until at least December 2006, and the other conspiracy took place from about July 2005 until at least December 2006. Henderson pleaded guilty on March 14, 2012, to two counts of conspiracy to commit mail and honest services fraud for the kickback schemes and to two counts for failing to include the kickbacks and other income he received on his federal income tax returns for years 2005 and 2006.
According to the four-count felony charge, Henderson oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities. To facilitate the conspiracies, Henderson steered contracts to several venders in return for kickbacks; created fictitious competitor bids that were higher than the quotes submitted by the venders who paid him, in order to create the appearance of competition; and directed subordinates to solicit quotes only from vendors who paid him. Henderson received more than $560,000 in kickbacks and had at least $101,000 more paid to a co-conspirator, and in return steered MFA contracts totaling more than $5 million.
“Through this kickback scheme, Henderson and his co-conspirators deprived MFA of competitive pricing to its financial detriment,” said Acting Assistant Attorney General Joseph Wayland in charge of the Antitrust Division. “Today’s sentencing demonstrates the division’s commitment to holding executives accountable for disrupting the competitive bidding process for service contracts.”
Henderson is the fifth individual to plead guilty in the department's fraud investigation into the award of repair, maintenance and renovation contracts at facilities owned by MFA. On Oct. 18, 2011, both Donald R. Holland and Larry R. Sumpter pleaded guilty in U.S. District Court in Roanoke to participating in the scheme. On Jan. 31, 2012, Holland and Sumpter were each sentenced by Judge Samuel G. Wilson to serve two years of probation and were fined $50,000 and $15,000, respectively. On April 4, 2011, Edward T. Fodrey pleaded guilty in U.S. District Court in Norfolk, Va., and was sentenced by Judge Mark S. Davis on Jan. 31, 2012, to serve 37 months in prison and was ordered to pay $326,799 in restitution. Gary L. Johns pleaded guilty on Dec. 12, 2011, in U.S. District Court in Roanoke and was sentenced by Judge Wilson on March 14, 2012 to serve three years of probation and to pay $169,341 in restitution.
The investigation is being conducted by the Antitrust Division’s Philadelphia Field Office, the U.S. Attorney’s Office for the Western District of Virginia, the FBI in Roanoke and the Internal Revenue Service-Criminal Investigation in Roanoke. Anyone with information concerning fraudulent behavior relating to the award of contracts by MFA should contact the Antitrust Division’s Philadelphia Field Office at 215-597-7405 or visit www.justice.gov/atr/contact/newcase.htm .
18 July 2012
Maine Resident Charged and Arrested for Allegedly Engaging in Cyber “Sextortion” of New Hampshire VictimRead the Press Release
WASHINGTON – A Maine resident was charged in a criminal complaint unsealed today in the District of New Hampshire for allegedly engaging in a type of cyber extortion known as “sextortion,” announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire.
John Bryan Villegas, 21, of Kittery, Maine, was arrested yesterday and made his initial appearance today in federal court in New Hampshire. Villegas is charged with one count of engaging in computer intrusion involving extortion and one count of making extortionate interstate threats.
The complaint affidavit alleges that Villegas attempted to extort the victim, a New Hampshire resident, into providing him with sexually explicit photographs and videos of the victim. He sent the victim interstate e-mail messages in which he threatened to publish on the internet, and distribute to the victim’s neighbors and work and social acquaintances, other sexually explicit photographs of the victim that he obtained from a computer without authorization.
If convicted, Villegas faces a maximum sentence of two years in prison on the interstate threats charge and five years in prison on the computer intrusion charge, to be followed by up to three years of supervised release, a fine of up to $500,000 and restitution.
The case was investigated by the U.S. Secret Service and is being prosecuted by Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire. The Department would like to thank the cooperation of the Dover, N.H., and Kittery, Maine, police departments and the Naval Criminal Investigative Service (NCIS).
The details contained in the complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.