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Wednesday 10 November 2010
Former Caesars Palace Nightclub Host Pleads Guilty to Tax CrimeRead the Press Release
WASHINGTON – Richard Chu, a former "VIP host" at Pure Nightclub located in Caesars Palace Hotel and Casino in Las Vegas, pleaded guilty in federal court to one count of filing a false federal income tax return for the 2006 tax year, the Justice Department and Internal Revenue Service, Criminal Investigation (IRS - CI) announced today. U.S. District Court Judge Kent Dawson presided over the plea hearing.
According to information disclosed at Chu’s guilty plea hearing, during the years 2005, 2006 and 2007, Chu’s responsibilities as a VIP host at Pure included promoting the club, booking reservations and seating patrons at tables. In addition to paying an admission fee, Pure patrons typically made payments to Pure door personnel and VIP hosts to bypass the general admission line and to obtain more desirable seating. This money was collected, pooled and distributed on a weekly basis to Pure managers, door personnel and VIP hosts, including Chu. Chu’s distributions from the pool comprised the bulk of his compensation during the time he worked at Pure. Chu concealed large amounts of this income from the IRS.
Chu’s sentencing is set for Feb. 9, 2011 at 9:00 am.
"Tax evasion is not a victimless crime," said Victor Song, Chief, IRS - Criminal Investigation. "We all pay when someone like Mr. Chu pockets his income without paying taxes. Here’s a sure tip from the IRS . . . working with the Department of Justice, we will continue to investigate and prosecute those who ignore our country’s tax laws."
The case is being investigated by IRS Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Christopher J. Maietta and Joseph A. Rillotta.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
Tuesday 9 November 2010
Three Former Executives Indicted in Color Display Tube Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A federal grand jury in San Francisco today returned an indictment against three former executives from two color display tube (CDT) manufacturing companies for their participation in a global conspiracy to fix prices of CDTs, a type of cathode ray tube used in computer monitors and other specialized applications, the Department of Justice announced today.
The indictment, filed today in U.S. District Court in San Francisco, charges Seung-Kyu "Simon" Lee, Yeong-Ug "Albert" Yang and Jae-Sik "J.S." Kim with conspiring with unnamed co-conspirators to suppress and eliminate competition by fixing prices, reducing output and allocating market shares of CDTs to be sold in the United States and elsewhere. Lee, Yang and Kim participated in the conspiracy during various time periods between at least as early as January 2000 and at least March 2006.
According to the indictment, Lee, Yang, Kim and co-conspirators agreed to charge prices of CDTs at certain target levels or ranges, to reduce output of CDTs by shutting down CDT production lines for certain periods of time and to allocate target market shares of CDTs. As part of the conspiracy, Lee, Yang, Kim and co-conspirators exchanged CDT sales, production, market share and pricing information for the purpose of implementing, monitoring and enforcing their agreements. The department charged that the conspirators met in Taiwan, Korea, Malaysia, China and elsewhere for their discussions.
Including today’s charge, six individuals have been indicted in connection with the CDT investigation. On Feb. 10, 2009, Cheng Yuan "C.Y." Lin was indicted for his participation in both the CDT conspiracy and a price-fixing conspiracy in the color picture tube industry. On Aug. 18, 2009, Wen Jun "Tony" Cheng was indicted for his participation in the CDT conspiracy. On March 30, 2010, Chung Cheng "Alex" Yeh was indicted for his participation in the CDT conspiracy.
Lee, Yang and Kim are each charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.
This case is part of an ongoing joint investigation by the of the Department of Justice Antitrust Division’s San Francisco Office and the FBI in San Francisco. Anyone with information concerning illegal or anticompetitive conduct in the cathode ray tube industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.
St. Joseph Medical Center in Maryland to Pay U.S. $22 Million to Resolve False Claims Act AllegationsRead the Press Release
BALTIMORE – St. Joseph Medical Center (SJMC) in Towson, Md., has agreed to pay the United States $22 million to settle allegations under the False Claims Act that it paid unlawful remuneration under the Anti-Kickback Act and violated the Stark Law when it entered into a series of professional services contracts with the Pikesville, Md., based cardiology group, MidAtlantic Cardiovascular Associates (MACVA), the Justice Department announced.
The allegations resolved in the settlement include the payment of kickbacks to MidAtlantic under the guise of professional services agreements, in return for MACVA’s referrals to the medical center of lucrative cardiovascular procedures, including cardiac surgery and interventional cardiology procedures, over the period from Jan. 1, 1996, to Jan. 1, 2006. The settlement agreement resolves issues relating to 11 professional services agreements between MidAtlantic and St. Joseph under which MACVA received payments above fair market value, for services not rendered or that were not commercially reasonable and were entered into for the purpose of inducing referrals by MACVA to SJMC.
Under the settlement the hospital also agrees to settle allegations that it received from federal health benefit programs between Jan. 1, 2008, and May 12, 2009, for medically unnecessary stents performed by Mark Midei, M.D., a one time partner in MACVA who was later employed by SJMC.
The settlement was announced by Tony West, Assistant Attorney General of the Justice Department’s Civil Division; Rod Rosenstein, U.S. Attorney for the District of Maryland; Nicholas DiGiulio, Special Agent in Charge, Office of Inspector General of the Department of Health and Human Services, Office of Investigations; Roger Craig, Special Agent in Charge of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Jill Maroney, Special Agent in Charge of the Office of Personnel Management - Office of Inspector General.
"Kickbacks for medical services undermine the integrity of our health care system," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "When hospitals put their own financial interests ahead of the best interests of patients, we will take action."
The settlement resolves a lawsuit brought by whistleblowers, Stephen D. Lincoln, M.D.; Peter Horneffer, M.D.; and Garth McDonald, M.D., cardiac surgeons who practiced together as members of Cardiac Surgery Associates in Baltimore. The lawsuit, which was filed in the District of Maryland in June 2010, alleges that SJMC violated the Anti-Kickback Act, Stark Law and the False Claims Act by paying various forms of illegal remuneration to MACVA to induce referrals of patients insured by federal health care programs for cardiac procedures.
Drs. Lincoln, Hornefer and McDonald brought their suit under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens with knowledge of false claims against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under the civil settlement announced today, the relators will receive a portion of the federal share of the recovery.
"Kickbacks give doctors an incentive to pursue unnecessary treatments that are costly and sometimes even dangerous to patients," said U.S. Attorney Rosenstein. "Medical care providers are prohibited from giving or receiving kickbacks because of the risk that they will put their own financial interests ahead of their patients’ interests."
Saint Joseph's also signed a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). It requires SJMC to engage in activities that will help ensure accurate billing and appropriate relationships with referral sources. The CIA also addresses patient care issues by requiring the hospital to: appoint physician executives to oversee medical staff quality-of-care matters; hire a Peer Review Consultant to evaluate SJMC’s peer review practices; and engage an Independent Review Organization to perform a Cardiac Catheterization Procedures Review, evaluating and analyzing the medical necessity and appropriateness of interventional procedures performed at SJMC. The hospital is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for major noncompliance with this CIA and subject to stipulated penalties for less significant noncompliance.
"Payoffs to influence health care decision-making too often result in inappropriate, unnecessary and harmful medical practices," said Daniel R. Levinson, Inspector General of the Federal Department of Health and Human Services. "OIG is committed to protecting patients from needless medical procedures, such as the insertion of unnecessary cardiac stents -- as is alleged in this case."
The settlement announced today was the result of an investigation by the U.S. Attorney’s Office for the District of Maryland and the Commercial Litigation Branch of the Justice Department’s Civil Division with assistance from the U.S. Department of Health and Human Services, Office of Inspector General; the Department of Defense Office of the Inspector General, Defense Criminal Investigative Service; and the Office of Personnel Management, Office of Inspector General. The case was handled by Maryland Assistant U.S. Attorney Jamie M. Bennett.
Pharmaceutical Company Lawyer Charged with Obstruction and Making False StatementsRead the Press Release
WASHINGTON – An attorney for a major pharmaceutical company was charged with obstruction and making false statements, the Justice Department announced today. Lauren Stevens of Durham, N.C., was charged with one count of obstructing an official proceeding, one count of concealing and falsifying documents to influence a federal agency, and four counts of making false statements to the Food and Drug Administration (FDA).
The indictment states that in October 2002, the FDA asked for information about the company’s promotion of a prescription drug, as part of an inquiry into whether the drug was being promoted for uses that had not been approved by the FDA. Data demonstrating a drug’s safety and efficacy for a particular use is required for FDA approval. Federal law prohibits the marketing or promotion of drugs for unapproved – or "off-label" – uses.
The indictment alleges that, in response to the FDA’s inquiry, Stevens signed and sent a series of letters from the company to the FDA that falsely denied that the company had promoted the drug for off-label uses, even though she knew, among other things, that the company had sponsored numerous programs where the drug was promoted for unapproved uses. The indictment alleges that Stevens knew that the company had paid numerous physicians to give promotional talks to other physicians that included information about unapproved uses of the drug. According to the indictment, the company paid one such physician to speak at 511 promotional events in 2001-2002 and another physician to speak at 488 such events during that time period.
The indictment also alleges that Stevens did not provide the FDA with slide sets used by the physicians who were paid by the company to promote the drug, even though the FDA had asked for the slide sets and Stevens had previously promised to obtain and provide the FDA with such materials. The indictment alleges that a legal memorandum was prepared for Stevens that set forth the "pros" and "cons" of producing the slide sets to the FDA. According to the indictment, one of the "cons" was that the slide sets would provide "incriminating evidence about potential off-label promotion of [the drug] that may be used against [the company] in this or in a future investigation." Instead of providing the requested slide sets to the government, Stevens represented that the company’s responses to the FDA’s requests was "final" and "complete."
"Where the facts and law allow, the Justice Department will pursue individuals responsible for illegal conduct just as vigorously as we pursue corporations," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Criminal charges are appropriate when false statements such as those alleged here are made to the FDA."
"There is a difference between legal advocacy based on the facts and distorting the facts to cover up the truth," said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. "Federal agencies such as the FDA cannot protect the public health if the entities and individuals they regulate provide false information and conceal the true facts."
The charges were filed in the District of Maryland, where the FDA is located. The case is being prosecuted by the Civil Division’s Office of Consumer Litigation and U.S. Attorney’s Office for the District of Massachusetts. The case is being investigated by agents from the Office of Inspector General of the Department of Health and Human Services, the FBI, the FDA’s Office of Criminal Investigations and the Defense Criminal Investigative Service (DCIS).
"This indictment demonstrates that those who purposely subvert the regulatory functions of the FDA through false statements and misleading information will be held accountable for their deception," stated Dara Corrigan, FDA's Associate Commissioner for Regulatory Affairs. "We commend the efforts of the Department of Justice and the other law enforcement agencies that are vigorously pursuing the prosecution of this matter."
"Lauren Stevens allegedly misled investigators intentionally and failed to comply with our request for documents," said Susan J. Waddell, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General’s Boston region.
"This indictment shows that we will investigate those responsible for unlawful acts done on a company's behalf. When individual employees are identified, they will be held accountable for their illegal activity. Individual employees now know that concealing information from the government, obstructing investigative activity and making false statements to federal investigators will be investigated and prosecuted," said Richard DesLauriers, Special Agent in Charge, FBI, Boston Division.
"This indictment demonstrates that misleading federal officials is a serious offense that will not be tolerated," said Leigh-Alistair Barzey, DCIS Resident Agent in Charge. " DCIS will continue to partner with other federal agencies, such as the FDA, in an effort to protect the DoD's TRICARE health plan, which provides medical care for America's military members and their families."
Each of the obstruction charges carries a maximum penalty of 20 years in prison. Each of the false statement counts carry a maximum penalty of five years in prison. Charges contained in the indictment are simply accusations, and not evidence of guilt.
The pharmaceutical company for whom Stevens worked has not been charged with a crime and was not identified in the indictment.
Líder de la pandilla "Nación Todopoderosa de Reyes y Reinas Latinos" (Latin Kings) se declara culpable de conspiración para cometer delincuencia organizadaRead the Press Release
WASHINGTON - Remy Heath, alias "Remy", "King Remy" y "King Mellow", 26 de Hyattsvile, Md., se declaró culpable hoy de conspirar para participar en una empresa de delincuencia organizada en conexión con sus actividades pandilleras como miembro de la pandilla "Nación Todopoderosa de Reyes y Reinas Latinos" [Almighty Latin King y Queen Nation (Latin Kings)].
La declaración de culpabilidad fue anunciada por el Secretario de Justicia Auxiliar Lanny A. Breuer de la División Criminal; el Fiscal Federal para el Distrito de Maryland Rod J. Rosenstein; la Agente Especial a Cargo Theresa R. Stoop de la División Local en Baltimore del Buró de Control de Bebidas Alcohólicas, Tabaco, Armas de Fuego y Explosivos [Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)]; el Jefe J. Thomas Manger del Departamento de Policía del Condado de Montgomery; el Fiscal Estatal del Condado de Montgomery, Md., John McCarthy; el Jefe Roberto L. Hylton del Departamento de Policía del Condado de Prince George; y el Fiscal Estatal del Condado de Prince George Glenn F. Ivey.
Según el acuerdo de declaración de culpabilidad de Heath, Latin Kings es una pandilla callejera violenta con miles de miembros en todos los Estados Unidos y el extranjero. Los Latin Kings tienen una estructura organizativa detallada y uniforme que se detalla – junto con diversas "oraciones", códigos de conducta y rituales – en un "manifiesto" escrito distribuido comúnmente a miembros de todo el país. Los miembros de los Latin Kings también reciben tradicionalmente "nombres de King" o "nombres de Queen", que son nombres distintos a sus nombres legales por los cuales son conocidos por otros miembros de la pandilla y terceros en la calle. A nivel local, los grupos de Latin Kings se organizan en "tribus", incluidos Royal Lion Tribe, MOG, Sun Tribe y UTL.
Heath era un miembro original de la Tribu Royal Lion en Maryland, la que luego tomó el nombre de MOG, y luego Sun Tribe. Heath se unió al Tribu Royal Lion de los Latin Kings a principios del verano de 2007. Heath participó en reuniones en los que se recaudaban derechos monetarios de los miembros y se discutían negocios de la pandilla, y se comunicaba con los miembros y asociados de los Latin King por teléfono e Internet. Heath viajó de Maryland a Nueva York para actividades de los Latin Kings. De noviembre de 2008 a marzo de 2009, Heath ocupó una posición de liderazgo en la pandilla, donde era Segunda Corona o Cacique de la tribu MOG.
Heath enfrenta una sentencia máxima de prisión perpetua. El Juez Federal de Distrito Alexander Williams Jr. ha programado la lectura de su sentencia para el 27 de mayo de 2011, a las 9:30a.m. Heath permanece detenido.
Hasta la fecha, seis codemandados se han declarado culpables a la conspiración para cometer delincuencia organizada.
La Fuerza de Tarea de Control Antipandillas Regional [Regional Anti-Gang Enforcement (RAGE) Task Force] liderada por el Buró de Control de Bebidas Alcohólicas, Tabaco, Armas de Fuego y Explosivos [ATF - Bureau of Alcohol, Tabaco, Firearms and Explosives], la que incluye al Departamento de Policía de Gaithersburg, Md., el Departamento de Policía del Condado de Montgomery; la Fiscalía Federal del Condado de Montgomery, el Departamento de Policía del Condado de Prince George; la Oficina del Alguacil del Condado de Montgomery; La Policía Estatal de Maryland, así como el Departamento de Policía de Nueva York, el Servicio Secreto de EE.UU. y el Servicio de Impuestos Internos - Investigación Criminal, proporcionaron asistencia en la investigación y la acusación.
Están a cargo de la acusación en el caso los Fiscales Federales Emily Glatfelter y David Salem, y la Abogada Litigante Lara M. Peirce de la Unidad de Pandillas de la División Criminal.
Latin Kings Leader Pleads Guilty to Racketeering ConspiracyRead the Press Release
WASHINGTON - Remy Heath, aka “Remy,” “King Remy,” and “King Mellow,” 26, of Hyattsville, Md., pleaded guilty today to conspiracy to participate in a racketeering enterprise, in connection with his gang activities as a member and leader of the Almighty Latin King and Queen Nation (Latin Kings).
The guilty plea was announced by Assistant Attorney General Lanny A Breuer of the Criminal Division; U.S. Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Theresa R. Stoop of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) - Baltimore Field Division; Chief J. Thomas Manger of the Montgomery County, Md., Police Department; Montgomery County State’s Attorney John McCarthy; Chief Roberto L. Hylton of the Prince George’s County, Md., Police Department; and Prince George’s County State’s Attorney Glenn Ivey.
According to Heath’s plea agreement, the Latin Kings is a violent street gang with thousands of members across the country and overseas. The Latin Kings have a detailed and uniform organizational structure, which is outlined – along with various “prayers,” codes of behavior and rituals – in a written “manifesto” widely distributed to members throughout the country. Members of the Latin Kings are also traditionally given “King Names” or “Queen Names,” which are names other than their legal names, by which they are known to members of the gang and to others on the street. At the local level, groups of Latin Kings are organized into “tribes,” including the Royal Lion Tribe, MOG, Sun Tribe and UTL.
Heath was an original member of the Royal Lion Tribe in Maryland, which later became MOG, and then the Sun Tribe. Heath joined the Royal Lion Tribe of the Latin Kings in early summer of 2007. Heathattended Latin King meetings where dues were collected from members and gang business was discussed, and he communicated with Latin King members and associates by phone and the Internet. Heath traveled from Maryland to New York for Latin King activities. From November 2008 to March 2009, Heath held a leadership position in the gang, serving as the Second Crown or Cacique for the MOG tribe.
Heath faces a maximum sentence of life in prison. U.S. District Judge Alexander Williams Jr. has scheduled sentencing for May 27, 2011, at 9:30 a.m. Heath remains detained.
To date, six co-defendants have pleaded guilty to the racketeering conspiracy.
The ATF-led Regional Anti-Gang Enforcement (RAGE) Task Force, which includes the Gaithersburg, Md., Police Department; the Montgomery County Police Department; the Montgomery County State’s Attorney’s Office; the Prince George’s County Police Department; the Prince George’s County State’s Attorney’s Office; the Montgomery County Sheriff’s Office, the Maryland National Capital Park Police - Prince George’s County Division; and the Maryland State Police; as well as the New York Police Department, the U.S. Secret Service and the Internal Revenue Service - Criminal Investigation provided assistance in the investigation and prosecution.
The case is being prosecuted by Assistant U.S. Attorneys Emily Glatfelter and David Salem, and Trial Attorney Lara M. Peirce of the Criminal Division’s Gang Unit.
Justice Department Resolves Lawsuit Alleging Familial Status Discrimination in Elko, NevadaRead the Press Release
WASHINGTON – The Justice Department today announced a settlement of its lawsuit alleging that Lee Enterprises Inc. and its subsidiary, Lee Publications Inc., violated the Fair Housing Act (FHA) by publishing an advertisement that discriminated on the basis of familial status in the Elko Daily Free Press. The Elko Daily Free Press is a newspaper serving Elko, Nev. Lee Enterprises Inc. is a publisher of 49 daily newspapers and nearly 300 specialty publications across 23 states.
The case began when the Silver State Fair Housing Council (SSFHC) filed a fair housing complaint with the Department of Housing and Urban Development (HUD). SSFHC alleged that in or about November 2008, the defendants published in the Elko Daily Free Press an advertisement for rental housing stating that "no kids" were permitted. After investigating, HUD issued a charge of discrimination and referred the matter to the Justice Department, which filed this lawsuit in November 2009.
Under this nationwide settlement, which must still be approved by the U.S. District Court for the District of Nevada, the defendants will adopt procedures to screen out discriminatory advertisements for housing from all the defendants’ publications that include advertisements for housing. The settlement requires the defendants to screen out discriminatory advertisements for housing that appear in print or that appear both in print and on any associated websites. The settlement also requires the defendants to undergo training on the requirements on the Fair Housing Act, post notices informing readers about the requirements of the FHA, provide monetary compensation to SSFHC, and make periodic reports to the government.
"The Fair Housing Act applies to all those who participate in the housing industry, including those who publish advertisements for dwellings," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This settlement will help eliminate the atmosphere of intolerance created by discriminatory advertisements."
"Families struggling to find suitable housing shouldn’t have their choices limited by discriminatory advertising and unlawful practices," stated John Trasvina, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "HUD is committed to taking swift enforcement action anytime a family’s right to obtain the housing of their choice is illegally denied."
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at [email protected]. Such persons may also contact the HUD at 1-800-669-9777.
Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.
Justice Department Reaches Agreement with Hilton Worldwide Inc. over ADA Violations at Hilton Hotels and Major Hotel Chains Owned by HiltonRead the Press Release
WASHINGTON – The Justice Department and Hilton Worldwide Inc. today announced a comprehensive, precedent-setting agreement under the Americans with Disabilities Act (ADA) that will make state-of-the-art accessibility changes to approximately 900 hotels nationwide. The agreement is in the form of a proposed consent decree filed today in federal court to resolve a simultaneously filed lawsuit under the ADA.
The department’s complaint alleges that Hilton’s hotels designed and constructed after Jan. 26, 1993, fail to comply with the ADA and Department of Justice regulations. Hilton operates a system of hotels throughout the United States under the trade and service names of "Hilton," "Conrad Hotels & Resorts," "Doubletree," "Embassy Suites," "Hampton Inn," "Hilton Garden Inn," "Hilton Grand Vacations," "Homewood Suites," "the Waldorf Astoria" and "Home2Suites." Hilton Worldwide Inc. (HWI), owns, operates, or has entered into and maintains franchise license agreements for each hotel in the HWI system.
"The ADA protects the right of people with disabilities to stay in accessible hotel rooms, and to reserve those hotel rooms through the same convenient systems as everyone else," said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. "Persons with disabilities who travel for pleasure or business must be able to count on getting the accessible room they reserved, and the hotel must provide the choice of amenities that everyone comes to expect from a major national hotel chain like Hilton."
The agreement is the result of a lengthy investigation and negotiation. Hilton officials cooperated with the department throughout the process. Allegations in the department’s complaint include failure to provide the required number of accessible rooms, failure to disperse accessible rooms among the various categories of available accommodations, failure to provide individuals with disabilities the ability to reserve accessible rooms through Hilton’s central reservations system on-line or by telephone, and failure to provide individuals with disabilities with the accessible sleeping accommodations that they reserved.
Today’s settlement represents the first time the Department of Justice has required a franchisor to require all franchised or managed hotels that enter into a new franchise or management agreement, experience a change in ownership, or renew or extend a franchise agreement, to conduct a survey of its facilities and to certify that the hotel complies with the ADA. It is also the first time that an agreement under the ADA has specifically detailed how a hotel reservations system should be made accessible. The agreement also represents the first time that a hotel chain has been required to make its online reservations system accessible and to provide on its website current data about accessible features in guest rooms throughout the chain.
Under the agreement:
- All owned and joint venture hotels built after Jan. 26, 1993 will be surveyed and brought into compliance with Department of Justice ADA title III regulations, including dispersing accessible rooms among the various classes of available accommodations, providing accessible rooms with roll-in showers and tub seats, and providing accessible rooms for guests with hearing impairments;
- For franchised and managed hotels built after Jan. 26, 1993, where Hilton enters into a new franchise or management agreement, renews or extends an agreement for more than six months, or agrees to a change of ownership, Hilton will require the owners to survey their hotels for compliance with specified provisions of the ADA, and where necessary, bring their hotels into compliance;
- Hotels constructed in the future will be required to comply with the ADA;
- Specific ADA training will be provided for staff;
- Hilton’s reservations system will be improved so individuals with disabilities can reserve accessible rooms with specific available options and amenities, and have the same opportunity to guarantee a reservation for an accessible room as that offered for any other reservation;
- Hilton will improve the accessibility of its websites;
- Hilton will appoint a national ADA compliance officer responsible for Hilton’s compliance with the ADA and the consent decree;
- Hilton will appoint ADA on-site contact persons at each hotel responsible for resolving ADA-related complaints at the local level; and
- Hilton will pay a civil penalty of $50,000 to the United States.
People interested in finding out more about the ADA or this consent decree can call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website at www.ada.gov.
El Departamento de Justicia realiza acuerdo con Hilton Worldwide Inc. acerca de violaciones de la ADA y Hoteles Hilton y cadenas hoteleras importantes pertenecientes a HiltonRead the Press Release
WASHINGTON – El Departamento de Justicia y Hilton Worldwide Inc. anunciaron hoy un acuerdo integral que establece precedentes, bajo la Ley de Personas con Discapacidades [Americans with Disabilities Act (ADA)] a través del cual se realizarán cambios de accesibilidad de última generación en aproximadamente 900 hoteles del todo el país. El acuerdo tiene la forma de un decreto por consentimiento propuesto presentado hoy en el tribunal federal para resolver una demanda entablada simultáneamente bajo la ADA.
La demanda del Departamento alega que los hoteles Hilton diseñados y construidos después del 26 de enero de 1993, no cumplen con las normas de la ADA y del Departamento de Justicia. Hilton opera un sistema de hoteles en todos los Estados Unidos bajo los nombres comerciales y de servicio "Hilton," "Conrad Hotels & Resorts," "Doubletree," "Embassy Suites," "Hampton Inn," "Hilton Garden Inn," "Hilton Grand Vacations," "Homewood Suites," "the Waldorf Astoria" y "Home2Suites." Hilton Worldwide Inc. (HWI), es propietaria, opera o ha realizado acuerdo de franquicia que mantiene para cada hotel del sistema HWI.
"La ADA protege los derechos de las personas discapacitadas a quedarse en habitaciones de hotel accesibles, y reservar dichas habitaciones de hotel a través de los mismos sistemas convenientes que cualquier otra persona", dijo Thomas E. Pérez, Secretario de Justicia Auxiliar de la División de Derechos Civiles. "Las personas discapacitadas que viajan por placer o negocios deben poder contar con obtener la habitación accesible que reservaron, y el hotel debe proveer la opción de amenidades que cualquiera podría esperar de una cadena hotelera nacional importante como Hilton".
El acuerdo es el resultado de una larga investigación y negociación. Autoridades del Hilton cooperaron con el Departamento a lo largo del proceso. Los alegatos en la demanda entablada por el Departamento incluyen dejar de proveer la cantidad requerida de habitaciones accesibles, dejar de dispersar las habitaciones accesibles a lo largo de diversas categorías de habitaciones disponibles, dejar de proveer a las personas discapacitadas la capacidad de reservar habitaciones accesibles a través del sistema central de reservas del Hilton, ya sea en Internet o por teléfono, y dejar de brindar a las personas discapacitadas las camas accesibles que reservaron.
El acuerdo conciliatorio de hoy representa la primera vez que el Departamento de Justicia ha exigido a un concesionario de franquicias que exija que todos los hoteles administrados o bajo franquicia que realicen un nuevo acuerdo de franquicia o administración, cambien de propietario, o renuevan o prorroguen un acuerdo de franquicia, realice una inspección de sus inspecciones para certificar que el hotel cumpla con la ADA. También es la primera vez que un acuerdo bajo la ADA detalla específicamente cómo debe hacer accesible un sistema de reserva de hotel. El acuerdo también representa la primera vez que se le exige a una cadena hotelera que haga accesible sus sistema de reservas en Internet provea en su portal en Internet datos actuales sobre características de accesibilidad en las habitaciones a lo largo de la cadena.
Según el acuerdo:
- Todos los hoteles de propiedad exclusiva o participantes en fusiones construidos después del 26 de enero de 1993 será inspeccionados y puestos en conformidad con las normas del título III de la ADA del Departamento de Justicia, incluida la dispersión de habitaciones accesibles entre las diversas clases de habitaciones disponibles, proveer habitaciones con duchas accesibles y asientos en las bañeras, y la provisión de habitaciones accesibles para huéspedes con deficiencias auditivas;
- Para hoteles bajo franquicia y administrados construidos después del 16 de enero de 1993, donde Hilton realice una nueva franquicia o acuerdo de administración, renueve o prorrogue el acuerdo por más de seis meses, o acepte un cambio de titularidad, el Hilton exigirá que los propietarios inspeccionen sus hoteles para asegurar el cumplimiento de las disposiciones especificadas de la ADA, y donde resulte necesario, realizar las reformas correspondientes;
- Los hoteles construidos en el futuro deberán cumplir con la ADA;
- Se proveerá al personal capacitación específica sobre la ADA;
- El sistema de reservas del Hilton se mejorará de modo que personas discapacitadas puedan reservar habitaciones accesibles con opciones y amenidades específicas disponibles, y puedan tener la misma oportunidad de garantizar una reserva para una habitación accesible que la que se ofrece para cualquier otra reserva;
- Hilton mejorará la accesibilidad de sus portales en Internet;
- Hilton designará un funcionario nacional de cumplimiento con la ADA responsable por el cumplimiento del Hilton con la ADA y el decreto por consentimiento;
- Hilton designará personas de contacto en cada hotel responsables por resolver quejas asociadas a la ADA y en el nivel local; y
- Hilton pagará una multa criminal de $50,000 dólares a los Estados Unidos.
Las personas interesadas en obtener más información sobre la ADA o este decreto por consentimiento pueden llamar a la Línea de Información de la ADA sin cargo al (800) 514-0301 ó (800) 514-0383 (TDD), o acceder al portal de Internet de la ADA en www.ada.gov.
Department of Justice Statement on the Investigation into the Destruction of Videotapes by CIA PersonnelRead the Press Release
WASHINGTON – The following statement may be attributed to Matthew Miller, Director, Office of Public Affairs:
"In January 2008, Attorney General Michael Mukasey appointed Assistant United States Attorney John Durham to investigate the destruction by CIA personnel of videotapes of detainee interrogations. Since that time, a team of prosecutors and FBI agents led by Mr. Durham has conducted an exhaustive investigation into the matter. As a result of that investigation, Mr. Durham has concluded that he will not pursue criminal charges for the destruction of the interrogation videotapes."
Monday 8 November 2010
Virginia Man Sentenced to 66 Months in Prison for Child Pornography OffensesRead the Press Release
WASHINGTON – A Virginia man was sentenced today to 66 months in prison for possession and distribution of images containing child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Timothy J. Heaphy for the Western District of Virginia. Senior U.S. District Judge Norman K. Moon also ordered Rimmer to serve 10 years of supervised release following his prison term.
Gary Lee Rimmer, 56, was indicted in June 2010 and charged with one count of possession of child pornography and one count of distribution of child pornography. Rimmer pleaded guilty to both counts on July 30, 2010, in U.S. District Court for the Western District of Virginia.
At his plea hearing, Rimmer admitted that while living in Greene County, Va., in 2006, he started an online relationship with a 13-year-old girl from Florida. Throughout their Internet conversations and subsequent cell phone conversations, Rimmer portrayed himself as a 20-year-old man named "Jason," posting images he claimed to be of himself, but that were in fact images of another young man. According to court documents, Rimmer had conversations with the girl, whom he ultimately learned was under the age of 16, about starting a sexual relationship. Rimmer mailed the victim sexual items and sent her sexual images using the Internet. When investigators searched Rimmer’s computer, they found images of child pornography, including images of the victim with the items he previously mailed to her. Search terms associated with child pornography were also found on his computer. A forensic examination of Rimmer’s computer also revealed that he distributed child pornography to a person outside of Virginia during a chat session using an online message service.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov .
This case was prosecuted by CEOS Trial Attorney James Silver and Assistant U.S. Attorney Nancy S. Healey of the Western District of Virginia. This case was investigated by the High Tech Investigative Unit of CEOS, the Virginia State Police and the Citrus County, Fla., Sheriff’s Department.
Oregon Man Sentenced for Threatening Lima, Ohio, Civil Rights Leader by Mailing NooseRead the Press Release
WASHINGTON - Daniel Lee Jones, a Portland, Ore., white supremacist, was sentenced today to 18 months in prison and three years supervised release for threatening the president of the Lima, Ohio, chapter of the NAACP by mailing him a noose. Jones entered a guilty plea on May 17, 2010, to using the U.S. Postal Service to send a threatening communication.
In the plea agreement, Jones admitted to mailing F.M. Jason Upthegrove a hangman’s noose, which arrived at Mr. Upthegrove’s home on or about Feb. 14, 2008. Jones stated in the plea agreement that he mailed the hangman’s noose in order to convey a threat to Mr. Upthegrove because he was an African-American who publicly advocated for better police services for African-Americans in Lima, Ohio. The indictment indicated that Mr. Upthegrove also spoke out in the media against Jones’s white supremacist group’s mailing of hate flyers related to the shooting of an African American woman by a member of the Lima Police Department.
"A noose, an unmistakable symbol of hatred in this nation, was used by this defendant as a threat of violence aimed at silencing a civil rights advocate," said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. "The Department of Justice will vigorously prosecute those who use threats of violence to attempt to silence proponents of racial equality."
"We will not tolerate those who use threats of violence, such as by mailing a noose, to intimidate individuals who are advocating for racial equality,"said U.S. Attorney for the Northern District of Ohio Steven M. Dettelbach.
The case was investigated by Special Agent Brian Russ of the FBI, and the prosecution was handled by Assistant U.S. Attorney David Bauer from the U.S. Attorney’s Office, and Special Legal Counsel Barry Kowalski and Trial Attorney Shan Patel from the Civil Rights Division of the U.S. Department of Justice.
Imprisoned Spy Pleads Guilty to Conspiracy to Act as an Agent of the Russian Government and Money LaunderingRead the Press Release
WASHINGTON - Harold James Nicholson, 59, appeared before U.S. District Judge Anna J. Brown and pleaded guilty to the crimes of conspiracy to act as an agent of a foreign government and conspiracy to commit international money laundering, David Kris, Assistant Attorney General for National Security, and Dwight C. Holton, U.S. Attorney for the District of Oregon, announced today.
The maximum penalties for those crimes are five years in prison and a fine of $250,000 and 20 years in prison and a fine of $500,000, respectively. The plea agreement states both parties will ask the court at sentencing to impose an eight year prison sentence to be served consecutive to the sentence the defendant is currently serving. Judge Brown has scheduled sentencing on Jan. 18, 2011 at 1:30 p.m.
Harold J. Nicholson, a former CIA employee, is serving a 283-month sentence at the Federal Correctional Institution (FCI) in Sheridan, Ore., for a 1997 conviction of conspiracy to commit espionage. At the plea hearing, Harold J. Nicholson admitted that from 2006 to December 2008, with the assistance of his son Nathaniel, he acted on behalf of the Russian Federation, passed information to the Russian Federation, and received cash proceeds for his past espionage activities.
Harold J. Nicholson admitted that during the course of the conspiracy he met with his son Nathaniel on several occasions at FCI Sheridan and provided Nathaniel information intended for the Russian Federation. Defendant admitted that it was part of the conspiracy that Nathaniel would travel to several locations including San Francisco; Mexico City; Lima, Peru; and Nicosia, Cyprus, to meet with agents of the Russian Federation.
At these meetings, Nathaniel provided the Russian Federation information from the defendant and collected money for defendant’s past espionage activities. Defendant followed the instructions of the Russian Federation and provided information requested by the Russians to Nathaniel to deliver to Russian agents at the overseas locations. Defendant directed Nathaniel on how to covertly travel with the funds from the Russian Federation and how to disperse the funds to family members.
"Harold Nicholson, one of the highest-ranking CIA officials ever convicted of espionage, dispatched his son around the globe to collect on past espionage debts from Russian agents. Today, he admitted using this scheme to continue to profit from his spying activities while in prison. The many agents, analysts and prosecutors who worked on this matter deserve our thanks," said David Kris, Assistant Attorney General for National Security.
U.S. Attorney for Oregon, Dwight C. Holton stated, "Harold Nicholson has admitted not only betraying his country – again -- but also betraying his family by involving his son Nathaniel in his corrupt scheme to get more money for his past espionage activities. We applaud the outstanding work of the FBI on this criminal investigation and the extraordinary cooperation of the Bureau of Prisons."
"When he was hired by the CIA, Harold Nicholson took an oath to protect our nation’s security. He violated this oath," said Sean Joyce, Executive Assistant Director FBI National Security Division. "The FBI will relentlessly pursue those who breach the trust our country places in them."
"During his career with the CIA, this country entrusted Harold ‘Jim’ Nicholson with some of its most sensitive secrets," said Arthur Balizan, Special Agent in Charge of the FBI in Oregon. "Not once - but twice - he betrayed his oath, our nation and his family. Unfortunately, this is a legacy he and his children will live with from now on."
The FBI and the Federal Bureau of Prisons investigated this case. Assistant U.S. Attorneys Pamala Holsinger and Ethan Knight are prosecuting this case. Trial Attorney Patrick Murphy of the Counterespionage Section of the Justice Department’s National Security Division is also assisting.
Federal Court Bars Owner and Employees of Providence, Rhode Island, Firm from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal judge in Providence, R.I., entered a preliminary injunction against Michael Brier, individually, and doing business as Refunds Now Inc., RNTS Inc., FTIRS Inc., POTIRS Inc. and IHIRS Inc. from preparing federal tax returns for others. Also enjoined are Jeffrey Sroufe, Refunds Now’s director of operations and Esther Santiago, RNTS’s president.
The court found that at least 300 returns prepared by Brier and Refunds Now understated customers’ tax liabilities. It further found that Brier and his employees fabricated deductions and tax credits on the returns, for which they had no support. The court noted that with respect to one of Brier’s customers, a Refunds Now employee offered to provide the customer with fake receipts in order to substantiate amounts reported on her federal tax return.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions against tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department’s website.
Espía encarcelado se declara culpable de lavado de dinero y conspiración para actuar como agente del gobierno rusoRead the Press Release
WASHINGTON - Harold James Nicholson, 59, compareció ante la Jueza Federal de Distrito Anna J. Brown y se declaró culpable de los delitos de conspiración para actuar como agente de un gobierno extranjero y conspiración para cometer lavado de dinero internacional, anunciaron hoy David Kris, Secretario de Justicia Auxiliar de Seguridad Nacional, y Dwight C. Holton, Fiscal Federal para el Distrito de Oregón.
Las sentencias máximas para dichos delitos son cinco años en prisión y una multa de $250,000 dólares y 20 años en prisión y una multa de $500,000 dólares, respectivamente. El acuerdo de declaración de culpabilidad indica que ambas partes le pedirán al tribunal en la lectura de la sentencia que imponga una sentencia de prisión de ocho años a ser cumplida consecutivamente con la sentencia que el demandado está cumpliendo actualmente. La Juez Brown ha programado la lectura de la sentencia para el 18 de enero de 2011, a la 1:30pm.
Harold J. Nicholson, un ex empleado de la CIA, está cumpliendo una sentencia de 283 meses en la Institución Federal de Correcciones [Federal Correctional Institution (FCI)] de Sheridan, Ore., por una condena emitida en 1997 por conspiración para cometer espionaje. En la audiencia de declaración de culpabilidad, Harold J. Nicholson admitió que, de 2006 a diciembre de 2008, con la asistencia de su hijo Nathaniel, actuó en nombre de la Federación Rusa, pasó información a la Federación Rusa, y recibió dinero en efectivo por sus actividades de espionaje del pasado.
Harold J. Nicholson admitió que, durante la conspiración, se reunió con su hijo Nathaniel en diversas ocasiones en FCI Sheridan y proporcionó a Nathaniel información para ser entregada a la Federación Rusa. El demandado admitió que, como parte de la conspiración, Nathaniel viajaba a varios lugares, incluidos San Francisco, Ciudad de México; Lima, Perú; y Nicosia, Chipre, para reunirse con agentes de la Federación Rusa.
En estas reuniones, Nathaniel brindó a la Federación Rusa información del demandado y cobró dinero por actividades de espionaje realizadas por el demandado en el pasado. El demandado siguió las instrucciones de la Federación Rusa y brindó información solicitada por los rusos a Nathaniel para brindar a agentes rusos en lugares del exterior. El demandado instruyó a Nathaniel sobre cómo viajar en forma encubierta con los fondos de la Federación Rusa y cómo dispersar los fondos a familiares.
"Harold Nicholson, uno de los agentes de la CIA de más alta jerarquía ya condenado por espionaje, despachó a su hijo alrededor del mundo para cobrar deudas de agentes rusos por actividades de espionaje realizadas en el pasado. Hoy, admitió haber utilizado este ardid para seguir lucrando a partir de sus actividades de espionaje mientras se encuentra en la prisión. Los muchos agentes, analistas y fiscales que trabajaron en este asunto merecen nuestro agradecimiento", dijo David Kris, Secretario de Justicia Auxiliar de Seguridad Nacional.
El Fiscal Federal para Oregón, Dwight C. Holton señaló, "Harold Nicholson ha admitido no solo haber traicionado a su país nuevamente -- sino también haber traicionado a su familia al involucrar a su hijo Nathaniel en este ardid corrupto para obtener más dinero por sus actividades de espionaje del pasado. Aplaudimos la labor sobresaliente del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] en esta investigación criminal y la extraordinaria cooperación del Buró de Prisiones".
"Cuando fue contratado por la CIA, Harold Nicholson juró proteger la seguridad de nuestra nación. Violó su juramento", dijo Sean Joyce, Director Auxiliar Ejecutivo de la División de Seguridad Nacional del FBI. "El FBI buscará incansablemente a quienes violen la confianza que nuestro país les brinda".
"Durante su carrera con la CIA, este país confió a Harold 'Jim' Nicholson alguno de sus secretos más sensibles", dijo Arthur Balizan, Agente Especial a Cargo del FBI en Oregón. "No una, sino dos veces, traicionó su juramento, nuestra nación y su familia. Lamentablemente, este es el legado que él y sus hijos vivirán de ahora en adelante".
El FBI y el Buró Federal de Prisiones investigaron este caso. Están a cargo de la acusación en el caso los Fiscales Federales Pamala Holsinger y Ethan Knight. El Abogado Litigante Patrick Murphy de la Sección de Contraespionaje de la División de Seguridad Nacional del Departamento de Justicia también está asistiendo en el caso.
El Tribunal Federal<br /> prohíbe a propietario y empleados de una empresa de Providence, Rhode<br /> Island, preparar declaraciones de impuestos federalRead the Press Release
WASHINGTON – Un juez federal en Providence, R.I., emitió un interdicto preliminar contra Michael Brier, individualmente, y haciendo negocios como Refunds Now Inc., RNTS Inc., FTIRS Inc., POTIRS Inc. e IHIRS Inc. prohibiéndole preparar declaraciones de impuestos federal para terceros. También se prohibió a Jeffrey Sroufe, director de operaciones de Refunds Now y Esther Santiago, presidente de RNTS.
El tribunal encontró que al menos 300 declaraciones preparadas por Brier y Refunds Now subestimaron las obligaciones tributarias de clientes. Asimismo, encontró que Brier y sus empleados inventaban descuentos y créditos tributarios en sus declaraciones, para los cuales no tenían ningún tipo de respaldo. El tribunal observó que, con respecto a uno de los clientes de Brier, un empleado de Refunds Now ofreció proveerle a la cliente recibos falsos a fin de fundamentar la sumas informadas en su declaración de impuestos federal.
En la última década, la División de Impuestos del Departamento de Justicia ha obtenido centenas de interdictos contra preparadores de declaraciones de impuestos fraudulentos y promotores de fraude tributario deshonestos. Se puede encontrar información sobre estos casos en el portal del Departamento de Justicia.
Clean Water Act Settlement with Indianapolis Will Reduce Pollution at Lower CostsRead the Press Release
WASHINGTON – The Department of Justice, the Environmental Protection Agency (EPA), and the state of Indiana have reached an agreement with the city of Indianapolis on important modifications to a 2006 consent decree that will make Indianapolis’ sewer system more efficient, leading to major reductions in sewage contaminated water at a savings to the city of approximately $444 million.
Prior to 2006, the city of Indianapolis and its 800,000 residents experienced Combined Sewer Overflows (CSO’s) totaling approximately 7.8 billion gallons per year. Combined sewer systems, which have not been constructed for decades in the United States, carry both sanitary wastewater (domestic sewage from homes, as well as industrial and commercial wastewater), and storm water runoff (from rainfall or snowmelt) in a single system of pipes to a publicly owned treatment works.
A consent decree approved by a federal court in 2006 required the city to construct 31 CSO control measures, including a 24-million gallon capacity shallow interceptor sewer, to reduce the city’s overflows to approximately 642 million gallons per year. Those improvements were expected to cost approximately $1.73 billion over a 20-year period.
After the 2006 consent decree was approved, the city undertook additional engineering studies of its system and ultimately proposed a number of changes to its system to make it more efficient and to further reduce the numbers and volumes of overflows. The first change, which was approved in a 2009 amendment to the 2006 consent decree, eliminated the shallow interceptor in favor of a 54-million gallon, 25 mile long Deep Rock Tunnel Connector.
The second set of changes to the system would be achieved through the amendment announced today. With the proposed changes, the city is now expected to reduce the amount of total annual discharge to about 414 million gallons, a significant improvement from the 642 million gallons that were expected under the original consent decree, and reduce the cost of the project by about $444 million.
The project’s modifications would also result in an accelerated construction schedule to capture 7 billion gallons of CSO discharges and their associated disease-causing organisms.
“Only under unique circumstances would we modify the terms of a settlement,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The proposed modifications will benefit the environment and reduce costs for the city of Indianapolis. In my view, this is a classic ‘win-win’”
“EPA is committed to enforcing laws that protect the public from discharges of raw sewage,” said EPA Regional Administrator Susan Hedman. “As a result of the amendment, Indianapolis will further reduce its overflows and save money.”
A copy of the proposed Amendment , which must be approved by a federal court, is available on the Justice Department website at www.justice.gov/enrd/Consent_Decrees.html
Arizona Attorney and Accountant Sentenced to Prison for Abusive Foreign Trust SchemeRead the Press Release
WASHINGTON – Steven W. Allen, a practicing attorney from Mesa, Ariz., and Allen Goodmansen, a certified public accountant, also from Mesa, were sentenced to prison for tax fraud by Phoenix federal district court Judge Roslyn O. Silver, the Justice Department and the Internal Revenue Service (IRS) announced today.
The court sentenced Allen to 46 months in prison and Goodmansen to 18 months in prison. According to court documents, Allen helped his clients evade their taxes by promoting and selling a fraudulent foreign triple-trust scheme. Goodmansen assisted Allen by preparing false foreign trust returns and individual income tax returns for Allen’s clients.
According to court documents, Allen set up three sham foreign trusts designed to conceal his clients’ income and their control of the trusts from the IRS. In fact, his clients never surrendered control of their money, which remained in the United States. Allen instructed his clients to open domestic bank accounts in the names of their trusts, using employer identification numbers that Allen received from the IRS, so that clients’ names and Social Security numbers would not be connected to their money. Allen sold the trust packages for between $10,000 and $30,000 and charged each client additional annual maintenance fees.
To further conceal the clients’ income from the IRS, Goodmansen prepared foreign trust returns that did not include any identifying information that could be used to identify Allen, Goodmansen, or the client. Goodmansen also prepared false individual income tax returns for Allen’s clients, which completely omitted the income that the clients had fraudulently shifted to the false foreign trust returns. Goodmansen used the scheme himself to evade taxes he owed in 2002.
John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, commended the special agents from IRS Criminal Investigation who investigated the
case as well as Tax Division attorneys Monica Edelstein and Michael Romano who prosecuted the case. Acting Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office for the District of Arizona for their assistance in this matter.
Friday 5 November 2010
U.S. Parole Commission Denies Del Raine Application for Mandatory ParoleRead the Press Release
Chevy Chase, MD – The United States Parole Commission has rejected Ronald Del Raine’s application for parole, announced Commission Chairman Isaac Fulwood, Jr.
Del Raine, who has been incarcerated for 43 years on his current 209-year sentence, applied in July 2010 for release under Section 4206(d) of Title 18. That statute generally requires the Commission to release a prisoner who has served two-thirds or 30 years – whichever is less – on each sentence imposed against him, unless the Commission determines that the prisoner has seriously or frequently violated institution rules or that there is a reasonable probability that the prisoner will commit more crimes.
Del Raine was convicted of murder while engaging in a bank robbery in Northlake, Illinois. Two police officers died and two others were wounded during that offense. Del Raine was also convicted of two subsequent escape attempts, one in 1975 and another in 1981.
Chairman Fulwood noted, “Public safety is the Commission’s paramount concern. Mr. Del Raine’s prison record showed that his release would be incompatible with the public safety and that he must be denied parole under the statutory standard.”
For more information, please call Johanna Markind at (301) 492-5821 ext. 238.
State Department Employee Pleads Guilty to Making False Statements About Accessing Confidential Passport FilesRead the Press Release
WASHINGTON A State Department employee pleaded guilty today to lying to State Department officials in connection with an investigation into her alleged illegal access of hundreds of confidential passport application files, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. Brooke E. Reyna, 28, of Barrington, N.H., pleaded guilty before U.S. District Judge Joseph N. Laplante in U.S. District Court for the District of New Hampshire to making false statements.
According to information contained in plea documents, from May 2004 until the present, Reyna worked in various capacities at the National Passport Center in Portsmouth, N.H., including most recently as a passport specialist. Reyna admitted she had access to official State Department computer databases in the regular course of her employment, including the Passport Information Electronic Records System (PIERS), which contains, among other data, all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Reyna admitted that between May 2004 and February 2008, she logged onto the PIERS database and viewed the passport applications of more than 500 celebrities, actors, reality television contestants, television personalities, musicians, models, athletes, and members of these individuals’ families, including their children, and other individuals identified in the press. Reyna admitted that she had no official government reason to access and view these passport applications, but that her sole purpose in accessing and viewing these passport applications was idle curiosity. She also admitted that, upon being sent an e-mail from State Department officials investigating her illegal use of PIERS and being confronted with numerous occasions on which she had viewed the passport applications of celebrities, she lied when she responded that she did not recall any of the occasions.
To date, 10 current or former State Department employees or contractors, including Reyna, have pleaded guilty in this continuing investigation.
This case is being prosecuted by Trial Attorney Timothy J. Kelly of the Criminal Division’s Public Integrity Section. The case is being investigated by the State Department Office of Inspector General.
Ruston, Louisiana, Man Sentenced for Federal Hate CrimeRead the Press Release
WASHINGTON– Robert Jackson, 37, of Ruston, La., was sentenced to 12 months in federal prison for placing a hangman’s noose under the carport of the home of a Honduran immigrant who moved to Ruston from New Orleans in the aftermath of Hurricane Katrina. Jackson was also sentenced to one year of supervised release upon his release from prison. Today’s sentence was handed down by U. S. Magistrate Judge Karen L. Hayes in Monroe, La.
Jackson entered a guilty plea on June 24, 2010, to violating the Fair Housing Act by intimidating and interfering with another’s housing rights because of race. According to court testimony, the victim and her children arrived home on June 13, 2008, and found a hangman’s noose suspended from a bird-feeder underneath the carport of her home. Jackson admitted that he hung the noose in order “to send a message” to African-American males who visited the victim’s home.
“A noose is an unmistakable symbol of hate in our country, and using this symbol to intimidate a family will not be tolerated.” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “The Justice Department will vigorously prosecute those who resort to violent acts motivated by hate.”
“When a noose is used to interfere with federally protected rights, it is a crime which will be prosecuted by this office” said Stephanie Finley, U.S. Attorney for the Western District of Louisiana. “The victim and her family sought nothing more than to live in their home peacefully. Everyone should feel safe in their homes without being subjected to hateful acts.”
The case was investigated by the FBI, Monroe Resident Agency; and was prosecuted by Assistant U.S. Attorney Mary Mudrick and Trial Attorney Myesha Braden of the Civil Right Division of the Department of Justice.
Departments of Justice and Health and Human Services Team up to Crack Down on Health Care FraudRead the Press Release
WASHINGTON – Today, Department of Justice Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius visited Brooklyn, N.Y., where they participated in the third Regional Health Care Fraud Prevention Summit. The summits bring together a wide array of federal, state and local partners, beneficiaries, providers and other interested parties to discuss innovative ways to eliminate fraud within the U.S. health care system. The summits are part of a larger effort on behalf of the Obama Administration to root out waste, fraud and abuse within the U.S. health care system.
“Here in New York and in communities across the country, health-care fraud schemes are being aggressively and permanently shut down. That’s in large part because of the great work being led by the Health Care Fraud Prevention and Enforcement Action Team,” said Attorney General Holder. “Through this initiative, we are working in partnership with government, law enforcement and industry leaders to protect taxpayer dollars, control health-care costs and ensure the strength and integrity of our most essential health-care programs. Simply put, we have taken our fight against health-care fraud to a new level. And I am committed to continued collaboration, vigilance and progress.”
“Today, we continue to work with patients to protect their information, with providers to strengthen screening standards, and with private insurers to share strategies about how to prevent fraud,” said HHS Secretary Kathleen Sebelius. “The Affordable Care Act gives us new resources to eliminate waste and kick criminals out of the health care system. As long as we continue to aggressively put these tools to work preventing and prosecuting fraud, we can continue to protect and strengthen Medicare’s future.”
In addition to remarks by Attorney General Holder and Secretary Sebelius, the summit featured four educational panels aimed at identifying best practices for providers, law enforcement and beneficiaries in preventing health care fraud. The HHS Office of the Inspector General (OIG) also introduced a new tool for medical students called, “A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud Abuse.” The new program will go out to medical school across the country and explains the laws that apply to physicians so they can comply with federal law, avoid liability and spot signs of potential fraud. The “Roadmap” is available at www.oig.hhs.gov/fraud/PhysicianEducation/.
The recently enacted Affordable Care Act provides additional tools and resources to fight fraud in the health care system by providing an additional $350 million over the next 10 years through the Health Care Fraud and Abuse Control Account. The act toughens sentencing for criminal activity, enhances screenings and enrollment requirements, encourages increased sharing of data across government, expands overpayment recovery efforts and provides greater oversight of private insurance abuses. For information on the 2009 Health Care Fraud and Abuse Control Program Report, please visit: www.justice.gov/dag/pubdoc/hcfacreport2009.pdf.
The Affordable Care Act also includes tools and resources to help states reduce improper payments through the establishment of recovery audit contractors (RACs). Today, the Centers for Medicare & Medicaid Services expects to propose regulations outlining steps that states need to take to implement these Affordable Act provisions. Information about the Medicaid RACs can be found at www.cms.gov/apps/media/press_releases.asp and www.stopmedicarefraud.gov.
Investments in fraud detection and enforcement pay for themselves many times over, and the administration’s tough stance against fraud is already yielding results. In FY 2009, anti-fraud efforts put $2.51 billion back in the Medicare Trust Fund, resulting from civil recoveries, fines in criminal matters and administrative recoveries. This was a $569 million, or 29 percent, increase over FY 2008. In FY 2009, more than $441 million in federal Medicaid money was returned to the treasury, a 28 percent increase from FY 2008. Most recently, in FY 2010, the department obtained settlements and judgments of more than $2.5 billion in False Claims Act matters alleging health care fraud. This is more than ever before obtained in a single year and represents a 66 percent increase over FY 2009 in which $1.68 billion was obtained.
New York City is responsible for many of these recoveries. On Oct.13, 2010, more than 70 defendants were indicted in the largest Medicare fraud scheme ever perpetrated by a single criminal enterprise. The defendants are alleged to have participated in various health care fraud-related crimes involving more than $163 million in fraudulent billing. On July 16, 2010, more than 22 defendants were charged in Brooklyn for their alleged participation in schemes to submit fraudulent claims totaling nearly $80 million. These arrests were part of a larger, nationwide takedown that resulted in the indictment of more than 90 individuals.
The summits are part of the overall joint health care fraud fighting effort undertaken jointly by the Department of Justice and the Department of Health and Human Services through the Health Care Fraud Prevention and Enforcement Action Team (HEAT). As one part of HEAT’s efforts, Medicare Fraud Strike Force operations have expanded from South Florida and Los Angeles to a total of seven health care fraud hot spots including Houston; Detroit; Brooklyn; Baton Rouge, La.; and Tampa, Fla. The strike force is a partnership between the Criminal Division’s Fraud Section, U.S. Attorneys’ Offices, HHS-OIG, FBI and other federal, state and local law enforcement partners.
On June 8, 2010, President Obama announced this nationwide series of regional fraud prevention summits as part of a multi-faceted effort to crack down on health care fraud. The New York summit was the third in a series, with additional summits to follow in the coming months in Detroit, Boston, Philadelphia and Las Vegas. Previous summits were held in Miami (July 16, 2010) and Los Angeles (Aug. 26, 2010).
ATF Implements Justice Financial SystemRead the Press Release
WASHINGTON – The Department of Justice announced today that another of its components, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), implemented the Unified Financial Management System (UFMS), a core centralized accounting system that improves internal controls and standardizes data.
ATF is the second department law enforcement organization to convert to UFMS as the financial system of record. The Drug Enforcement Administration (DEA) implemented UFMS in January 2009, following a pilot deployment to the Justice Management Division’s (JMD) Asset Forfeiture Management Staff. UFMS now serves more than 2,500 Department of Justice users worldwide.
The ATF implementation was completed on schedule and on budget, employing a two-phased approach to minimize risk and capitalize on lessons learned from earlier implementations. More than 95 percent of ATF’s requirements were met by the standard processes, interfaces and reports already designed and available in the department’s foundation build of UFMS. As a result, the initial design and development was done on time, and deployed to many users.
The department shares the Office of Management and Budget (OMB)’s goal to reduce the risks and costs of implementing federal financial management systems. The most critical department business need for core accounting functionality is delivered by UFMS, implemented in phases across components with defined milestones, the department said.
The implementation of UFMS, based on CGI Federal’s Momentum 6.3, is a collaborative effort by JMD and ATF with the systems integrator, IBM.
For more information on the department’s UFMS program, visit: www.justice.gov/jmd/ufms/overview.htm
Thursday 4 November 2010
Oil Services Companies and a Freight Forwarding Company Agree to Resolve Foreign Bribery Investigations and to Pay More Than $156 Million in Criminal PenaltiesRead the Press Release
WASHINGTON – A global freight forwarding company, as well as five oil and gas service companies and subsidiaries, have all agreed to resolve investigations of Foreign Corrupt Practices Act (FCPA) violations, the Department of Justice and U.S. Securities and Exchange Commission (SEC) announced today. The companies have agreed to pay a total of $156,565,000 in criminal penalties. Also today, the SEC announced its settlements with these companies, which involve civil disgorgement, interest and penalties totaling approximately $80 million. The matters stem from an investigation that focused on allegations of foreign bribery in the oil field services industry.
In documents filed in U.S. District Court for the Southern District of Texas, Panalpina World Transport (Holding) Ltd., a global freight forwarding and logistics services firm based in Basel, Switzerland, and its U.S.-based subsidiary, Panalpina Inc., admitted that the companies, through subsidiaries and affiliates (collectively "Panalpina"), engaged in a scheme to pay bribes to numerous foreign officials on behalf of many of its customers in the oil and gas industry. They did so in order to circumvent local rules and regulations relating to the import of goods and materials into numerous foreign jurisdictions. Panalpina admitted that between 2002 and 2007, it paid thousands of bribes totaling at least $27 million to foreign officials in at least seven countries, including Angola, Azerbaijan, Brazil, Kazakhstan, Nigeria, Russia and Turkmenistan. Also today, Panalpina’s customers, including Shell Nigeria Exploration and Production Company Ltd. (SNEPCO), Transocean Inc. and Tidewater Marine International Inc., admitted that the companies approved of or condoned the payment of bribes on their behalf in Nigeria and falsely recorded the bribe payments made on their behalf as legitimate business expenses in their corporate books, records and accounts.
As part of the agreed resolution, the department today filed a criminal information charging Panalpina World Transport with conspiring to violate and violating the anti-bribery provisions of the FCPA. The department and Panalpina World Transport agreed to resolve the charges by entering into a deferred prosecution agreement. The department also filed a criminal information charging Panalpina Inc. with conspiring to violate the books and records provisions of the FCPA and with aiding and abetting certain customers in violating the books and records provisions of the FCPA. Panalpina Inc. has agreed to plead guilty to the charges. The agreements require the payment of a $70.56 million criminal penalty.
A criminal information was also filed today charging SNEPCO, a Nigerian subsidiary of Royal Dutch Shell plc (collectively "Shell"), with conspiring to violate the anti-bribery and books and records provisions of the FCPA, and with aiding and abetting a violation of the books and records provisions. Royal Dutch Shell is the owner of a global group of energy and petrochemicals companies. The charges relate to approximately $2 million SNEPCO paid to its subcontractors with the knowledge that some or all of the money would be paid as bribes to Nigerian customs officials by Panalpina to import materials and equipment into Nigeria. To resolve the matter, the department and Shell have entered into a deferred prosecution agreement that requires, among other things, SNEPCO to pay a $30 million criminal penalty.
Transocean Inc., a Caymans Island subsidiary of Transocean Ltd. (collectively "Transocean"), was charged today in a criminal information with conspiring to violate the anti-bribery and books and records provisions of the FCPA; violating the anti-bribery provision of the FCPA; and aiding and abetting the violation of the books and records provisions of the FCPA. Transocean Ltd. is a global provider of offshore oil drilling services and equipment based in Vernier, Switzerland. The charges relate to approximately $90,000 in bribes paid by Transocean Inc.’s freight forwarding agents in Nigeria to Nigerian customs officials to circumvent Nigerian customs regulations regarding the import of goods and materials and the import of Transocean’s deep-water oil rigs into Nigerian waters. The department and Transocean have agreed to enter into a deferred prosecution agreement that requires, among other things, Transocean Inc. to pay a $13.44 million criminal penalty.
The department also filed a criminal information charging Tidewater Marine International Inc., a Cayman Island subsidiary of Tidewater Inc. (collectively "Tidewater"), with conspiring to violate the anti-bribery and books and records provisions of the FCPA, and with violating the books and records provisions of the FCPA. Tidewater Inc. is a global operator of offshore service and supply vessels for energy exploration headquartered in New Orleans. The charges filed against Tidewater Marine relate to approximately $160,000 in bribes paid through its employees and agents to tax inspectors in Azerbaijan to improperly secure favorable tax assessments and approximately $1.6 million in bribes paid through Panalpina to Nigerian customs officials to induce the officials to disregard Nigerian customs regulations relating to the importation of vessels into Nigerian waters. To resolve the matter, the department and Tidewater have entered into a deferred prosecution agreement that requires, among other things, Tidewater Marine to pay a $7.35 million criminal penalty.
Also in documents filed in U.S. District Court for the Southern District of Texas, Pride International Inc., a Houston-based corporation, and Pride Forasol S.A.S., a wholly owned French subsidiary of Pride International (collectively "Pride"), admitted that Pride paid a total of approximately $800,000 in bribes directly and indirectly to government officials in Venezuela, India and Mexico. According to court documents, the bribes were paid to extend drilling contracts for three rigs operating offshore in Venezuela; to secure a favorable administrative judicial decision relating to a customs dispute for a rig imported into India; and to avoid the payment of customs duties and penalties relating to a rig and equipment operating in Mexico. During the course of the investigation, Pride provided information and substantially assisted in the investigation of Panalpina.
Pride International was charged in a criminal information filed today with conspiring to violate the anti-bribery and books and records provisions of the FCPA; violating the anti-bribery provisions of the FCPA; and violating the books and records provisions of the FCPA. The department and Pride International agreed to resolve the charges by entering into a deferred prosecution agreement. The department also filed a criminal information charging Pride Forasol with conspiring to violate the anti-bribery provisions of the FCPA; violating the anti-bribery provisions of the FCPA; and aiding and abetting the violation of the books and records provisions of the FCPA. Pride Forasol has agreed to plead guilty to the charges. The agreements require the payment of a $32.625 million criminal penalty.
Under the terms of the respective three-year deferred prosecution agreements, Panalpina World Transport, Shell, Pride International, Transocean and Tidewater are required to fully cooperate with U.S. and foreign authorities in any ongoing investigations of the companies’ corrupt payments. In addition, each of these companies is required to implement and adhere to a set of enhanced corporate compliance and reporting obligations.
Also announced today, the department and Noble Corporation, a Swiss corporation, reached an agreement in which Noble Corporation admitted that it had paid approximately $74,000 to a Nigerian freight forwarding agent, acknowledged that certain employees knew that some of the payments would be passed on as bribes to Nigerian customs officials, and admitted that the company falsely recorded the bribe payments as legitimate business expenses in its corporate books, records and accounts.
As part of the non-prosecution agreement entered into with the government, Noble will pay a $2.59 million criminal penalty. The non-prosecution agreement recognizes Noble’s early voluntary disclosure, thorough self-investigation of the underlying conduct, full cooperation with the department and extensive remedial measures undertaken by the company. As a result of these factors, among others, the department agreed not to prosecute Noble or its subsidiaries for the bribe payments, provided that Noble satisfies its ongoing obligations under the agreement.
The corporate resolutions announced today not only hold these companies accountable for the criminal conduct set forth in these charging instruments and agreements, but they also reflect the department giving appropriate and meaningful credit to these companies to the extent that they have voluntarily self-disclosed their conduct and commensurate with the quality and extent of their cooperation.
In related civil enforcement actions brought by the SEC today, Panalpina Inc. agreed to pay approximately $11.3 million in disgorgement of profits; Royal Dutch Shell and a U.S. subsidiary, Shell International Exploration and Production Inc., agreed to pay approximately $18.1 million in disgorgement of profits and prejudgment interest; Transocean agreed to disgorge approximately $7.2 million in profits and prejudgment interest; Tidewater Inc. agreed to pay approximately $8.3 million in disgorgement of profits, prejudgment interest and civil penalties; Pride International agreed to pay approximately $23.5 million in disgorgement of profits and prejudgment interest; Noble Corporation agreed to pay approximately $5.5 million in disgorgement of profits and prejudgment interest; and GlobalSantaFe Corp. agreed to pay approximately $5.85 million in disgorgement of profits and prejudgment interest.
These cases were prosecuted by Senior Trial Attorney Stacey K. Luck of the Criminal Division’s Fraud Section. Assistant Chief Adam G. Safwat assisted in the prosecution of the matters. The FBI’s Washington Field Office and Houston Field Office assisted in these investigations.
The department acknowledges and expresses its appreciation for the significant assistance provided by the staff of the SEC during the course of these investigations.
The court documents are available at: www.justice.gov/opa/opa_documents.htm.
Louisiana Vessel Company to Pay $2.1 Million in PenaltiesRead the Press Release
WASHINGTON – A Louisiana ship-operating company was sentenced in U.S. District Court in New Orleans on charges related to the illegal discharge of oil into the oceans, the Justice Department announced today.
Offshore Vessels LLC (OSV) was sentenced to pay a criminal fine of $1,750,000 and remit a payment of $350,000 as community service to the National Marine Sanctuary Foundation. The community service funds are to be used to study polar water pollution and protection of vulnerable marine ecosystems in the Antarctic region. OSV also will serve a period of probation for three years, during which it will be required to operate under an Environmental Compliance Plan. OSV pleaded guilty on July 22, 2010, to knowingly discharging waste oil from one of its vessels, in violation of the Act to Prevent Pollution from Ships (APPS).
"The criminal fine in this case will serve as a strong deterrent to all vessel companies, American and foreign, against deliberately violating the laws enacted to protect oceans," said Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice. "The required payment will provide a means of studying polar water oil pollution and its impact on Antarctica’s fragile marine ecosystem."
OSV owned and operated the R/V Laurence M. Gould (R/V Gould). The R/V Gould was a 2,966 gross ton American-flagged vessel that served as an ice-breaking research vessel for the National Science Foundation on research voyages to and from Antarctica. In its guilty plea earlier this year, OSV admitted that crew members knowingly discharged oily wastewater from the bilge tank of the R/V Gould overboard to the high seas, in violation of APPS. In doing so, they bypassed the ship’s oily-water separator, a pollution-control device. Regulations promulgated under APPS require that oily wastewater be discharged only after it has been sent through an oily water separator.
The case was investigated by the U.S. Coast Guard Criminal Investigative Service. The case is being prosecuted by Senior Trial Attorney Daniel Dooher of the Environment and Natural Resources Division of the Department of Justice and Assistant U.S. Attorney Dorothy Manning Taylor.
Gainesville, Florida, Man Arrested for His Role in a $30 Million Ponzi SchemeRead the Press Release
WASHINGTON – David R. Lewalski, formerly of Gainesville, Fla., was arrested today in Manhattan on a wire fraud charge related to his alleged participation in a $30 million investment fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Robert E. O’Neill of the Middle District of Florida.
According to a criminal complaint filed in U.S. District Court in the Middle District of Florida, Lewalski, 47, and his co-conspirators allegedly solicited money from investors based on false statements that Lewalski could earn the investors up to 10 percent interest per month by trading on the foreign currency (FOREX) market. The complaint alleges that, based on these and other fraudulent representations, Lewalski and his co-conspirators received approximately $30 million from hundreds of investors in Florida and across the country. According to the complaint, Lewalski allegedly invested only a small portion of these investor funds in trading activities and generated little if any profits trading foreign currency. Lewalski allegedly paid “interest payments” totaling approximately $15 million to investors using other investors’ money. Lewalski also spent lavishly on himself, his friends and his family, spending millions of dollars leasing real estate and private jets, and purchasing luxury automobiles, clothing and jewelry.
If convicted, Lewalski faces a maximum penalty of 20 years in prison. A complaint is merely a formal charge and a defendant is presumed innocent unless proven guilty.
This case is being investigated by the U.S. Postal Inspection Service and the Florida Department of Law Enforcement, and is being prosecuted by Assistant U.S. Attorney Mandy Riedel and Trial Attorney Glenn Chernigoff with the Criminal Division’s Fraud Section, on detail from the U.S. Commodity Futures Trading Commission.
Today’s charge is part of efforts being undertaken by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
For more information on the task force, visit StopFraud.gov.
Former Department of Defense Employee Arrested and Charged for Allegedly Stealing Financial Assistance Funds Intended for Service MembersRead the Press Release
WASHINGTON – Tyrone L. Ellis, a former civilian employee of the Department of Defense (DoD), was arrested yesterday and has been charged with conspiracy, conversion and false statements related to his alleged theft of Army Emergency Relief (AER) funds while he was employed at Camp Humphreys in the Republic of Korea, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Ellis, 56, of Columbus, Ga., was charged in an indictment returned on Oct. 28, 2010, in the Middle District of Georgia with one count of conspiracy, 10 counts of conversion and one count of making a false statement. He will make his initial appearance at 10:30 a.m. this morning before U.S. Magistrate Judge Stephen Hyles.
The AER is a private, non-profit organization that serves as the emergency financial assistance organization for the U.S. Army. AER’s operations are financed by voluntary contributions from active and retired soldiers during an annual fund campaign, as well as by unsolicited contributions, repayment of outstanding loans and income from reserve funds.
According to the indictment, Ellis worked as an Assistant Army Emergency Relief Officer at Camp Humphreys in 2005 and 2006. During this time, Ellis was tasked with providing AER loans and grants to service members and their families in financial need. The indictment alleges that Ellis approved grants for at least a dozen soldiers in amounts larger than they needed, and that he requested and received thousands of dollars back from the grant recipients, which he converted to his own use. The indictment also alleges that Ellis conspired with another individual to convert AER funds in the same manner. In addition, Ellis is charged with making false statements to investigators when questioned about the allegations. According to the indictment, Ellis resigned his position as an assistant AER officer in August 2006 and left Camp Humphreys.
Ellis faces up to five years in prison on the conspiracy charge; 10 years in prison for each felony count of conversion; one year in prison for the misdemeanor charges of conversion; and five years in prison on the charge of making a false statement. He also faces a $250,000 fine for each count of conspiracy, felony conversation and making a false statement. He faces a $100,000 fine on the misdemeanor charges of conversion, as well as terms of supervised release following his prison term on all charged counts.
The allegations contained in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being prosecuted by Trial Attorneys John P. Pearson and Richard B. Evans of the Criminal Division’s Public Integrity Section, and is being investigated by the Army Criminal Investigation Division, with assistance from the U.S. Army Audit Agency.
Empresas de servicios petroleros y empresa de transporte de carga aceptan resolver investigaciones de soborno en el extranjero y pagar más de $156 millones de dólares en multas criminalesRead the Press Release
WASHINGTON – Una empresa de transporte de carga global, así como cinco empresas y subsidiarias de servicios de gas y petróleo, han acordado resolver investigaciones de violaciones de la Ley de Prácticas Corruptas en el Extranjero [Foreign Corrupt Practices Act (FCPA)], anunciaron hoy el Departamento de Justicia y la Comisión de Títulos y Valores de EE.UU. [U.S. Securities and Exchange Commission (SEC)]. Las empresas han acordado pagar un total de $156,565,000 en multas criminales. También hoy, la SEC anunció sus acuerdos conciliatorios con estas empresas, las que incluyen devoluciones civiles, intereses y multas por un total de aproximadamente $80 millones de dólares. Estos asuntos surgieron de una investigación concentrada en alegatos de soborno en el extranjero en el ramo de los servicios de campos de petróleo.
En documentos presentados en el Tribunal Federal de Distrito en el Distrito Sur de Texas, Panalpina World Transport (Holding) Ltd., una empresa de servicios de transporte de carga global y logística con sede en Basilea, Suiza, y su subsidiaria estadounidense, Panalpina Inc., admitieron que las compañías, a través de subsidiarias y afiliadas (colectivamente, "Panalpina"), realizaron un ardid para pagar sobornos a numerosos funcionarios extranjeros en nombre de muchos de sus clientes del ramo del petróleo y el gas. Lo hicieron a fin de obviar reglas y normas locales asociadas a la importación de bienes y materiales a numerosas jurisdicciones extranjeras. Panalpina admitió que, entre 2002 y 2007, pagó miles de sobornos por un total de al menos $27 millones de dólares a funcionarios extranjeros en al menos siete países, incluidos Angola, Azerbaiján, Brasil, Kazakhstan, Nigeria, Rusia y Turkmenistán. También hoy, los clientes de Panalpina, incluidos Shell Nigeria Exploration and Production Company Ltd. (SNEPCO), Transocean Inc. y Tidewater Marine International Inc., admitieron que las compañías aprobaron o condonaron el pago de sobornos en su nombre en Nigeria y registraron falsamente los pagos de sobornos realizados en su nombre como gastos comerciales legítimos en sus libros, registros y cuentas contables.
Como parte de la solución acordada, el Departamento presentó hoy una información criminal en la que acusa a Panalpina World Transport de conspiración para violar y violación de las disposiciones contra el soborno de la FCPA. El Departamento y Panalpina World Transport acordaron resolver los cargos a través de la realización de un acuerdo de aplazamiento de enjuiciamiento. El Departamento también presentó una información criminal acusando a Panalpina Inc. de conspirar para violar las provisiones de libros y registros de la FCPA y de ayudar y secundar a ciertos clientes en la violación de las disposiciones sobre libros y registros de la FCPA. Panalpina Inc. ha aceptado declararse culpable de los cargos. Los acuerdos exigen el pago de una multa criminal de $70.56 millones de dólares.
También se presentó un información criminal hoy acusando a SNEPCO, una subsidiaria nigeriana de Royal Dutch Shell plc (conjuntamente, "Shell"), de conspiración para violar las disposiciones anti-soborno y asociadas a libros y registros de la FCPA, y con ayudar y secundar una violación de las disposiciones sobre libros y registros. Royal Dutch Shell es propietaria de un grupo global de empresas de energía y petroquímicas. Los cargos se refieren a aproximadamente $2 millones de dólares que SNEPCO pagó a sus subcontratistas a sabiendas de que parte o todo el dinero se pagaría como sobornos a funcionarios aduaneros de Nigeria por Panalpina para importar materiales y equipos a Nigeria. Para resolver la cuestión, el Departamento y Shell han realizado un acuerdo de aplazamiento de enjuiciamiento que exige, entre otras cosas, que SNEPCO pague una multa criminal de $30 millones de dólares.
Transocean Inc., una subsidiaria de Transocean Ltd (en conjunto, "Transocean") en las Islas Caimanes, fue acusada hoy en una información criminal de conspirar para violar las disposiciones anti-soborno y asociadas a libros y registros de la FCPA; violar la disposición anti-soborno de la FCPA; y ayudar y secundar en la violación de las disposiciones sobre libros y registros de la FCPA. Transocean Ltd. es un proveedor global de servicios de perforación petrolera en la costa y equipos basado en Vernier, Suiza. Los cargos se refieren a aproximadamente $90,000 dólares pagados en sobornos a agentes de transporte de carga de Transocean Inc. en Nigeria a funcionarios aduaneros de Nigeria para obviar normas aduaneras nigerianas asociadas a la importación de bienes y materiales y la importación de plataformas de petróleo de aguas profundas de Transocean a aguas nigerianas. El Departamento y Transocean han acordado realizar un acuerdo de aplazamiento de enjuiciamiento que exige, entre otras cosas, que Transocean Inc. pague una multa criminal de $13.44 millones de dólares.
El Departamento también presentó una información criminal acusando a Tidewater Marine International Inc., una subsidiaria de Tidewater Inc. (en conjunto, "Tidewater") en las Islas Caimanes, de conspirar para violar las disposiciones anti-soborno y de libros y registros de la FCPA, y violar las disposiciones sobre libros y registros de la FCPA. Tidewater Inc. es un operador global de buques de aprovisionamiento y servicio en alta mar para la exploración de energía con sede en Nueva Orleáns. Los cargos presentados contra Tidewater Marine se refieren a aproximadamente $160,000 dólares en sobornos pagados a través de sus empleados y agentes a inspectores tributarios en Azerbaijan para lograr cobros de impuestos favorables indebidos y aproximadamente $1.6 millones de dólares en sobornos pagados a través de Panalpina a funcionarios aduaneros nigerianos para inducir a los oficiales a obviar las normas aduaneras nigerianas asociadas a la importación de buques a aguas nigerianas. Para resolver la cuestión, el Departamento y Tidewater han realizado un acuerdo de aplazamiento de enjuiciamiento que exige, entre otras cosas, que Tidewater Marine pague una multa criminal de $7.35 millones de dólares.
Asimismo, en documentos presentados en el Tribunal Federal de Distrito para el Distrito Sur de Texas, Pride International Inc., una empresa con sede en Houston, y Pride Forasol S.A.S., una subsidiaria totalmente francesa de Price International (en conjunto, "Pride"), admitieron que Pride pagó un total de aproximadamente $800,000 dólares en sobornos directa a indirectamente a funcionarios gubernamentales en Venezuela, India y México. De acuerdo con el expediente judicial, se pagaron los sobornos para prolongar contratos de perforación para tres plataformas que funcionaban en alta mar en Venezuela; para lograr una decisión judicial administrativa favorable asociada a una disputa aduanera por una plataforma importada a la India; y para evitar el pago de impuestos aduaneros y multas asociados a una plataforma y equipos que operaban en México. Durante la investigación, Pride proporcionó información y ayudó significativamente en la investigación de Panalpina.
Pride International fue acusada en una información criminal presentada hoy de conspiración para violar las disposiciones anti-soborno y de disposiciones sobre libros y registros de la FCPA; violar las disposiciones anti-soborno de la FCPA; y violar las disposiciones de libros y registros de la FCPA. El Departamento y Pride International acordaron resolver los cargos a través de la realización de un acuerdo de aplazamiento de enjuiciamiento. El Departamento también presentó una información criminal acusando a Pride Forasol de conspiración para violar las disposiciones anti-soborno de la FCPA; violar las disposiciones anti-soborno de la FCPA; y ayudar y secundar para la violación de las disposiciones de libros y registros de la FCPA. Pride Forasol ha aceptado declararse culpable de los cargos. Los acuerdos exigen el pago de una multa criminal de $32.625 millones de dólares.
Bajo los términos de los respectivos acuerdos de aplazamiento de enjuiciamiento por tres años, Panalpina World Transport, Shell, Pride International, Transocean y Tidewater deben cooperar plenamente con las autoridades estadounidenses y extranjeras en cualquier investigación en curso de los pagos corruptos realizados por las compañías. Además, cada una de estas empresas debe implementar y adherir a un conjunto de obligaciones optimizadas de cumplimiento e informes empresariales.
También se anunció hoy que el Departamento y Noble Corporation, una empresa suiza, realizaron un acuerdo en el que Noble Corporation admitió haber pagado aproximadamente $74,000 dólares a un agente de transporte de carga nigeriano, reconoció que ciertos empleados sabían que algunos de los pagos serían sobornos a funcionarios aduaneros nigerianos, y admitió que la empresa registro los pagos de sobornos falsamente como gastos comerciales legítimos en sus libros empresariales, registros y cuentas.
Como parte del acuerdo de no enjuiciamiento realizado con el gobierno, Noble pagará una multa criminal de $2.59 millones de dólares. El acuerdo de no enjuiciamiento reconoce la revelación voluntaria prematura por parte de Noble, a través de la autoinvestigación de la conducta subyacente, plena cooperación con el Departamento y amplias medidas correctivas llevadas a cabo por la compañía. Como resultado de estos factores, entre otros, el Departamento acordó no enjuiciar a Noble o a sus subsidiarias por los pagos de sobornos, siempre y cuando Noble cumpla con sus obligaciones permanentes bajo el acuerdo.
Las resoluciones empresariales anunciadas hoy no solo responsabilizan a estas empresas por la conducta criminal establecida en estos instrumentos acusatorios y acuerdos, sino que también reflejan la provisión de crédito significativo y apropiado por el Departamento a estas empresas en la medida en que han voluntariamente revelado su conducta y compatible con la calidad y extensión de su cooperación.
En acciones de aplicación civil relacionadas entabladas por la SEC hoy, Panalpina Inc. acordó pagar aproximadamente $11.3 millones de dólares en devolución de ganancias; Royal Dutch Shell y una subsidiaria de EE.UU., Shell International Exploration and Production, Inc., acordaron pagar aproximadamente $18.1 millones de dólares en devolución de ganancias e intereses previos al enjuiciamiento; Transocean acordó devolver aproximadamente $7.2 millones de dólares en ganancias e intereses previos al enjuiciamiento; Tidewater Inc. acordó pagar aproximadamente $8.3 millones de dólares en devolución de ganancias, intereses previos al juicio y multas civiles; Pride International acordó pagar aproximadamente $23.5 millones de dólares en devolución de ganancias e intereses previos al juicio; Noble Corporation acordó pagar aproximadamente $5.5 millones de dólares en devolución de ganancias e intereses previos al juicio; y GlobalSantaFe Corp. acordó pagar aproximadamente $5.85 millones de dólares en devolución de ganancias e intereses previos al juicio.
Estuvo a cargo de la acusación en estos casos el Abogado Litigante Principal Stacey K. Luck de la Sección de Fraude de la División Criminal. El Jefe Auxiliar Adam G. Safwat asistió en la acusación. La Oficina Local de Washington y la Oficina Local de Houston del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] asistieron en estas investigaciones.
El Departamento reconoce y expresa su gratitud por la significativa asistencia brindada por el personal de la SEC en el transcurso de estas investigaciones.
Wednesday 3 November 2010
Westerly, Rhode Island, Man Convicted of Possessing and Distributing Child PornographyRead the Press Release
WASHINGTON – David Chiaradio, 28, of Westerly, R.I., was convicted today by a federal jury in Providence, R.I., of one count of distribution of child pornography and two counts of possession of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Peter F. Neronha of the District of Rhode Island. The jury returned its verdicts after considering testimony and evidence for more than two days.
Evidence presented at trial established that in February 2006, Chiaradio distributed three child pornographic images to an undercover FBI agent using Limewire, a peer-to-peer file sharing program. FBI agents continued their investigation of Chiaradio and obtained a search warrant that was executed at Chiaradio’s home in late August 2006. During the search, agents seized a laptop and a desktop computer. The computers and various hard drives were examined by a computer forensics expert from the FBI and more than 6,000 images and videos of child pornography were discovered.
U.S. District Court Chief Judge Mary M. Lisi, who presided over the trial, scheduled a sentencing hearing to be held on March 3, 2011.
The maximum sentence for distribution of child pornography is 30 years in prison and a fine of $250,000. The maximum sentence for possession of child pornography is 10 years in prison and a fine of $250,000.
This case was prosecuted by Assistant U.S. Attorney Terrence P. Donnelly of the District of Rhode Island and Trial Attorney Andrew McCormack of the Criminal Division’s Child Exploitation and Obscenity Section. The case was investigated by the FBI’s Providence Field Office, with the assistance of FBI agents from the Innocent Images Task Force in Tulsa, Okla.
Miami Contractor Sentenced to Prison for Employment Tax FraudRead the Press Release
WASHINGTON - Victor Manuel Amaya was sentenced to two years in prison for employment tax fraud, the Justice Department and the Internal Revenue Service (IRS) announced today. The court also ordered Amaya to pay $319,585 in restitution to the IRS.
According to court documents, from 2004 through 2007, Amaya, who owns Amaya Contracting and Stucco Inc. (ACS), filed fraudulent employment tax returns with the IRS and caused his company to underpay its federal employment taxes. To avoid having to report all of ACS's employment tax obligations, Amaya regularly cashed checks made out to ACS at a local check cashing store instead of depositing them into the company's account. Amaya then used the cash to pay his workers, which allowed him to report lower wages and lower employment taxes due on ACS's employment tax returns.
Amaya also used the cash for materials and personal expenses. Additionally, Amaya wrote ACS checks to fictitious companies and cashed them at local check cashing stores. Amaya also used this cash to pay his workers. Amaya failed to report to the IRS approximately $2,130,568 in wages, which resulted in a tax loss to the U.S. Treasury of approximately $319,585.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and John A. DiCicco, Acting Assistant Attorney General for the Department of Justice, Tax Division, commended the IRS Special Agents who investigated this case and Tax Division Trial Attorney Matthew J. Mueller, who prosecuted the case.
Maryland Man Sentenced for Sending Threatening Email to Illinois MosqueRead the Press Release
WASHINGTON – Ilya Sobolevskiy, a 25-year-old resident of Maryland, was sentenced today to serve 12 months in prison and to pay a $3,000 fine for violating the civil rights of members of an Urbana, Ill., mosque, announced the Justice Department.
During a guilty plea hearing in August 2010, Sobolevskiy admitted that he sent an email to a member of the Central Illinois Mosque and Islamic Center (CIMIC), in which he threatened, among other things, that he would “do WHATEVER it takes to eradicate Islam.” Officials at CIMIC reported the threat to the FBI, which referred the case to the department’s Civil Rights Division.
“One of our most basic rights is the freedom to practice one’s faith in peace,” said Assistant Attorney General Thomas E. Perez of the Civil Rights Division. “We have no tolerance for threats of violence fueled by bigotry, and we will aggressively prosecute such actions.”
“It is a top priority of the FBI to protect the civil rights of the American people. We encourage members of the community to report all allegations of civil rights violations. The FBI will aggressively investigate these matters to ensure that our society remains free,” said Stuart R. McArthur, Special Agent in Charge of the FBI Springfield Office.
Federal Magistrate Judge David G. Bernthal, referring to the defendant’s crime as “an act of terror,” gave the defendant the maximum sentence permitted by law.
This case was investigated by the Springfield, Ill., division of the FBI, and was prosecuted by department Trial Attorney Patricia Sumner.
Justice Department Sues Chicago Lawyer to Halt Tax Shelters with $370 Million in Alleged Sham DeductionsRead the Press Release
WASHINGTON – The United States has asked a federal court in Chicago to permanently bar John E. Rogers, a Chicago tax lawyer and former partner at Seyfarth Shaw LLP, from promoting tax shelters that allegedly use distressed Brazilian debt to illegally lower customers’ reported income, the Justice Department announced today. The suit names two of Rogers’s companies — Sugarloaf Fund LLC and Jetstream Business Limited — as additional defendants.
According to the civil injunction suit, filed in U.S. District Court in Chicago, Rogers designs and promotes the Distressed Asset Debt (DAD) and Distressed Asset Trust (DAT) tax shelters. These shelters allegedly falsely claim to enable Roger’s U.S. taxpayer-customers to use millions of dollars of purported losses from Brazilian debt to offset the customers’ unrelated U.S. income, even though the customers incur no actual losses in connection with the schemes.
In the DAT scheme, according to the complaint, a foreign business (typically a Brazilian retail company) essentially sells low-value, aged “distressed” debt, such as debt from bad checks, to Sugarloaf Fund, a U.S. entity that Rogers created and controls. In return Sugarloaf Fund allegedly pays the foreign company 1 to 2 percent of the debt’s face value. The complaint states that Sugarloaf Fund takes portions of the distressed debt and contributes them to multiple supposed “trusts,” also created and controlled by Rogers. Rogers then allegedly sells the “trusts” to tax shelter customers for a price pegged to the tax loss to be generated by the shelter.
Rogers allegedly tells customers that the Brazilian companies are partners in Sugarloaf, and that the Brazilian companies made genuine partnership contributions to Sugarloaf, rather than sales of debt to Sugarloaf. These statements are false or fraudulent, the complaint says, because the Brazilian retailers are insulated from any profit or loss, and do not intend to become partners in Sugarloaf. Rogers also allegedly tells customers that the distressed debt has a value for federal tax purposes equal to its original face value, not what Sugarloaf paid for it, and that customers can take bad debt deductions equal to most or all of the debt’s face value, and can use those deductions to offset unrelated U.S. income. These statements also are false or fraudulent, according to the complaint, because the supposed built-in-losses were never preserved and passed on to the tax shelter customers.
In an example detailed in the complaint, Rogers allegedly implemented a DAT shelter for a Louisiana businessman. Rogers allegedly drafted the core transactional documents that created the trusts for the customer’s DAT, and performed all the necessary steps to implement the transaction, including contributing a pool of distressed debt supposedly worth nearly $18 million to the customer’s “trust.” According to the complaint, the customer subsequently claimed a bad-debt deduction of more than $17 million in sham losses on his 2006 federal income tax return.
The complaint indicates that sometime after the Internal Revenue Service (IRS) began investigating Rogers, he told his then law firm, Seyfarth Shaw LLP, that he would stop promoting the DAD and DAT schemes. But Rogers allegedly continued to promote the DAT shelter, and concealed his activities from his firm. According to the complaint, when Seyfarth Shaw LLP later discovered his deception in 2008, it required Rogers to resign.
The IRS listed the DAT and similar transactions as tax avoidance transactions in February 2008. This required all material advisors of DAT and similar schemes to disclose their activities to the IRS, to obtain IRS reportable-transaction numbers for their DAT transactions, and to furnish the reportable-transaction numbers to their customers. Customers would then know they were participating in a reportable transaction and that the reportable-transaction number had to be disclosed on their next-filed tax return. Under federal tax law, customers who fail to include a required reportable-transaction number with their returns are subject to substantial monetary penalties. According to the complaint, Rogers failed to file the necessary disclosures for his DAT scheme, did not obtain a reportable-transaction number and failed to furnish a reportable-transaction number to his customers.
Rogers’s abusive DAD and DAT schemes have generated more than $370 million in improper tax deductions for his more than 100 customers, the complaint alleges.
“It is particularly disturbing when a lawyer, who is supposed to help clients comply with the law, instead helps them break it, as is alleged here,” said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division.
“This action is part of our overall efforts at the IRS to deter the promotion of abusive tax shelters. In fairness to the overwhelming majority of taxpayers who pay what they owe, we will continue to pursue people who use sham transactions to try to avoid paying their fair share,” said IRS Commissioner Doug Shulman.
Since 2001, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of abusive or fraudulent tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website .
Federal Court Bars Texas Man and His Corporations from Pyramiding Employment TaxesRead the Press Release
DALLAS – A federal court Tuesday issued a memorandum opinion and a preliminary injunction against Arthur Piner Grider, III; Asgard Avionics Corp. of Florida; and 14 other corporate defendants who operate as employee leasing companies, from violating the Internal Revenue Code, the Justice Department announced today. Court papers allege that the defendants cumulatively owe more than $100 million in unpaid payroll and unemployment taxes. Under the injunction, the defendants must timely deposit employment taxes with the Internal Revenue Service (IRS), timely file all federal tax forms, and timely pay their federal tax liabilities.
The defendants are a enjoined from paying other creditors or themselves before paying their current federal employment tax liabilities. In addition, they must provide tax deposit information to a IRS revenue officer as set forth in the injunction. The order also requires that the defendants notify the IRS in writing if they begin operating any new business. The injunction is effective immediately.
The government’s complaint alleges that Grider and his entities have a long history of pyramiding employment taxes and details the magnitude of the amounts owed – $76 million for the entities and $25 million for Grider. The complaint further alleges that defendants’ non-compliance with employment tax laws has continued through the first quarter of 2010.
Department of Justice Announces Public Hearings on Proposed Revisions to ADA RegulationsRead the Press Release
WASHINGTON – The Department of Justice has scheduled three public hearings on its regulatory proposals concerning the Americans with Disabilities Act (ADA). These proposals, or Advance Notices of Proposed Rulemaking (ANPRMs), seek public comment on the possibility of revising the ADA regulations to address accessible Web information and services, movie captioning and video description, accessibility of Next Generation 9-1-1, and accessible equipment and furniture. The ANPRMs were published in the Federal Register on July 26, 2010, and the comment period for them closes on Jan. 24, 2011.
The public hearings are scheduled for the following dates and locations:
- Nov. 18, 2010, from 9:30 A.M. to 4:00 P.M., CST,
Access Living, 115 West Chicago Avenue, Chicago
- Dec. 16, 2010, from 9:30 A.M. to 4:00 P.M., EST,
U.S. Access Board, 1331 F Street, N.W., Washington, D.C.
- Jan. 10, 2011, from 9:30 A.M. to 4:00 P.M., PST,
San Francisco Marriott Marquis, 55 Fourth Street, San Francisco
Entities, organizations and individuals who wish to present comments at a particular hearing are encouraged to register in advance by calling the ADA Information Line at 800-514-0301 (Voice) or 800-514-0383 (TTY) at least five business days in advance of the hearing date. Organizations should designate no more than one individual to speak on behalf of the organization. Individuals who are not able to testify in person will have the option to present their comments using a speaker telephone, telephone relay service or video relay service. The department will attempt to provide an approximate time for the receipt of comments from those who register in advance; however, persons who register in advance should report to the registration desk at the hearing at least one-half hour prior to their scheduled time in order to confirm the time and order of their presentations. Those who register to comment via speaker telephone, telephone relay service or video relay service should be available at the number they provided during pre-registration at least one-half hour before their scheduled time. Some time at the hearing will be reserved for those who do not register in advance. These persons may register on-site at the registration desk, which will open one hour before the hearing is scheduled to begin and will operate throughout the day. Time to make their presentations will be assigned when open slots are available.
Comments will be limited to five minutes per person or organization, but individuals who wish to may supplement their testimony with written statements that will be made part of the official hearing record. If the department determines that there is not enough time to hear from all those wishing to present comments, the department will select among those wishing to testify to ensure representation of a range of viewpoints and interests. A laptop computer and projection screen will be available for individuals wishing to use a PowerPoint presentation in conjunction with their testimony.
The hearing sites will be accessible to individuals with disabilities. Sign language interpreters, real-time captioning and assistive listening devices will be provided. Individuals who require other accommodations, auxiliary aids or foreign language translation should contact Linda Garrett at 202-353-0423 (TTY) or by email at [email protected] no later than one week before the date of the hearing they wish to attend. Additional information, including information about accessible public transportation and parking, will be available on the ADA Home Page at www.ada.gov. The ANPRMs are available electronically in accessible formats at www.ada.gov/anprm2010.htm.
- Nov. 18, 2010, from 9:30 A.M. to 4:00 P.M., CST,
Contratista de Miami fue sentenciado a prisión por fraude de impuestos de nómina de empleadosRead the Press Release
WASHINGTON - Víctor Manuel Amaya fue sentenciado a dos años en prisión por fraude de impuestos de nómina de empleados, anunciaron hoy el Departamento de Justicia y el Servicio de Impuestos Internos [Internal Revenue Service (IRS)]. El tribunal también ordenó a Amaya que pagara $319,585 dólares en restitución al IRS.
Según el expediente judicial, entre 2004 y 2007, Amaya, propietario de Amaya Contracting and Stucco Inc. (ACS), presentó declaraciones fraudulentas de impuestos laborales a IRS e hizo que su empresa pagara menos impuestos laborales federales que los que debía. Para evitar tener que declarar todas las obligaciones tributarias laborales de ACS, Amaya habitualmente cobraba cheques a nombre de ACS en una tienda local de cobro de cheques en vez de depositarlos en la cuenta de la empresa. Luego Amaya usaba el efectivo para pagarle a sus empleados, lo que le permitía declarar menores sueldos y tener que pagar menos impuestos laborales en las declaraciones de impuestos laborales de ACS.
Amaya también usaba el efectivo para comprar materiales y cubrir gastos personales. Además, Amaya extendía cheques de ACS a empresas ficticias y los cobraba en tiendas locales de cobro de cheques. Y también usaba este efectivo para pagarle a sus empleados. Amaya dejó de informar al IRS aproximadamente $2,130,568 dólares en sueldos, lo cual resultó en pérdidas tributarias para el Tesoro de EE.UU. de aproximadamente $319,585 dólares.
Wifredo A. Ferrer, Fiscal Federal para el Distrito Sur de Florida, y el Secretario de Justicia Auxiliar Interino John DiCicco, de la División de Impuestos del Departamento de Justicia, felicitaron a los Agentes Especiales de IRS a cargo de la investigación en el caso y al Abogado Litigante de la División de Impuestos Matthew J. Mueller, que estuvo a cargo de la acusación en el caso.
Baltimore Police Department Officer Sentenced to Five Years in PrisonRead the Press Release
WASHINGTON – A federal judge in Baltimore today sentenced a former Baltimore Police Department officer to serve five years in prison for violating the civil rights of a juvenile arrestee, the Justice Department announced today. Gregory Mussmacher was convicted by a jury in May 2010 for physically abusing a juvenile in his custody and for obstructing justice to cover up what he had done.
The abuse incident occurred in April 2004, when the defendant used his police-issued baton to strike a handcuffed and shackled juvenile in the head and face. Following the incident in 2004, Mussmacher was tried for assault and was convicted in state court. However, that conviction was later reversed, and federal authorities assumed responsibility for the case. Prosecutors with the Civil Rights Division of the Department of Justice conducted an independent investigation of the matter and brought charges against three officers, including Mussmacher, for civil rights and obstruction violations. The other two officers, Guy Gerstel and Wayne Thompson, pleaded guilty before trial and testified against Mussmacher.
“The power that accompanies a police officer’s badge does not give the officer the right to violate the civil rights of those in his or her custody,” said Thomas E. Perez, Assistant Attorney General for the Civil rights Division. “The Justice Department will aggressively prosecute any officer who abuses their power and violates the public trust in this way.”
“Any police officer who abuses a suspect, writes false reports and obstructs justice must be held accountable,” said Rod J. Rosenstein, U.S. Attorney for the District of Maryland. “This case is an embarrassment to the many officers who earn our confidence by performing their duties with honor and integrity.”
Gerstel, who pleaded guilty to lying to the FBI during the investigation, will be sentenced on Nov. 18, 2010. Thompson, who pleaded guilty to a misdemeanor obstruction charge, was sentenced on Sept. 30, 2010, to serve 6 months of home detention.
This case was investigated by the Baltimore Division of the FBI, and was prosecuted by Civil Rights Division Attorneys Forrest Christian, Jeff Blumberg and Kevonne Small, with the support of the U.S. Attorney’s Office for the District of Maryland.
Tuesday 2 November 2010
Three Arkansas Men Indicted for Burning Cross to Intimidate African-American ResidentRead the Press Release
WASHINGTON – James Bradley Branscum, Tony Branscum, both of Salado, Ark., and Curtis Coffee of Batesville, Ark., were indicted this week by a federal grand jury on charges related to their roles in burning a cross in the yard of an African-American resident in Salado on Aug. 28, 2010.
In the three-count indictment, the three were charged with one count of conspiracy to interfere with the housing rights of another, one count of interfering with the housing rights of another and one count of using fire in the commission of a felony.
If convicted, the three face a maximum punishment of 30 years in prison and a $750,000 fine.
The case was investigated by the FBI with cooperation from Independence County, Ark., Sheriff Alan Cockrill and the Criminal Investigation Division of the Independence County Sheriff‘s Office. The case will be prosecuted by Trial Attorney Cindy Chung from the Civil Rights Division of the U.S. Department of Justice and Assistant U.S. Attorney John Ray White from the U.S. Attorney ’ s Office for the Eastern District of Arkansas.
The charges set forth in an indictment are merely accusations and the defendants are presumed innocent until proven guilty.
Miami Contractor Pleads Guilty to Employment Tax FraudRead the Press Release
MIAMI – Axel Rafael Mercado pleaded guilty to one count of tax evasion before U.S. District Court Judge Patricia A. Seitz in the Southern District of Florida, the Department of Justice and the Internal Revenue Service (IRS) announced today. The court set sentencing for Jan. 13, 2011.
According to court documents, from 2005 through 2007, Mercado, who owns Mercado Enterprises Inc., attempted to evade a large part of his company’s federal employment taxes. To avoid his employment tax obligations, Mercado would have checks written to shell companies that were supposedly legitimate subcontractors hired to do work for Mercado Enterprises, but which in fact did no work. Mercado would then have those checks cashed at a local check-cashing store that was aware of the scheme and would use the cash to pay his workers.
Additionally, Mercado had checks written to a legitimate construction company, but that company also performed no work. Mercado did not report, withhold or pay the employment taxes on any of these cash wages. Mercado also caused his company to fail to file employment tax returns.
Mercado pleaded guilty to a one-count information charging him with tax evasion. All told, Mercado’s actions resulted in a tax loss of at least $352,605. Mercado faces a maximum of five years in prison and has agreed to pay restitution to the IRS of $352,605.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, commended the IRS Special Agents who investigated this case and Tax Division Trial Attorneys Jason H. Poole and Matthew J. Mueller, who prosecuted the case.
Former President of New Jersey Manufacturer and Distributor of Food Service Equipment Hardware Charged with Conspiracy to Allocate CustomersRead the Press Release
WASHINGTON — An Atlanta grand jury returned an indictment today against the former president and chief executive officer of a Lakewood, N.J.-based manufacturer and distributor of food service equipment hardware, for conspiring to allocate customers for the sale of commercial and institutional food service equipment hardware, including walk-in refrigeration equipment, the Department of Justice announced.
The one-count felony indictment, returned in U.S. District Court in Atlanta, charges Thomas E. Carr with participating in a conspiracy to allocate customers for the sale of food service equipment hardware sold in the United States and elsewhere beginning in or about early 2004 and continuing at least through December 2008. The purpose of the charged conspiracy was to suppress and eliminate competition in the sale of the food service equipment hardware manufactured or sold by Carr and his co-conspirators.
Food service equipment hardware includes fabricated parts, such as cafeteria hardware, equipment legs and casters, and fabrication supplies, and walk-in refrigeration components, such as metal racks, door hinges, handles, latches, closers and panel fasteners.
According to the indictment, Carr and co-conspirators agreed during meetings, telephone and e-mail discussions to allocate customers of food service equipment hardware; not to compete for one another’s protected customers or to submit intentionally high prices or bids to certain customers; and to exchange prices to customers so as not to undercut one another’s prices. As part of the conspiracy, Carr and co-conspirators submitted bids and sold food service equipment hardware at collusive and noncompetitive prices.
Carr is charged with allocating customers in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for an individual. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is the third to arise from an ongoing federal antitrust investigation of customer allocation in the food service equipment hardware industry. On May 19, 2010, Kason Industries Inc. and its former president, Peter A. Katz, pleaded guilty to the same customer allocation conspiracy charge. On Aug. 17, 2010, Kason Industries was sentenced to pay a criminal fine of $3.3 million. Katz is scheduled to be sentenced on Jan. 5, 2011. The investigation is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Atlanta Office.
Anyone with information concerning customer allocation or other anticompetitive conduct in the food service equipment hardware industry should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.
Former Kershaw County, South Carolina, Sheriff’s Department Officer Charged with Civil Rights ViolationRead the Press Release
WASHINGTON - Oddie Tribble, a former police officer with the Kershaw County, S.C., Sherriff’s Office, was charged today with violating the civil rights of an arrestee on Aug. 5, 2010.
The indictment alleges that Tribble was a sergeant with the Kershaw County Sherriff’s Office at the time of the incident and that Tribble willfully deprived the victim of his right to be free from excessive force when he struck the victim with his police issued baton. As a result, the victim suffered a fractured leg.
If convicted, Tribble faces a maximum penalty of 10 years in prison and a $250,000 fine.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendant is presumed innocent unless and until proven guilty.
This case was investigated by the Columbia, S.C., Division of the FBI with assistance from the South Carolina Law Enforcement Division, and is being prosecuted by Assistant U.S. Attorney Tara McGregor and Civil Rights Division Trial Attorney Christopher Lomax.
Contratista de Miami se declara culpable de fraude de impuestos de nómina de empleadosRead the Press Release
MIAMI - Axel Rafael Mercado se ha declarado culpable de un cargo de evasión tributaria ante la Juez Federal de Distrito Patricia A. Seitz en el Distrito Sur de Florida, anunciaron hoy el Departamento de Justicia y el Servicio de Impuestos Internos [Internal Revenue Service (IRS)]. El tribunal programó la lectura de la sentencia para el 13 de enero de 2011.
De acuerdo con el expediente judicial, de 2005 a 2007, Mercado, propietario de Mercado Enterprises Inc., intentó evadir una gran parte de los impuestos federales de nómina de empleados de su compañía. Para evitar sus obligaciones de impuestos de nómina de empleados, Mercado hacía emitir cheques a empresas fantasma que eran supuestos subcontratistas contratados para realizar trabajo para Mercado Enterprises, pero que, en realidad, no realizaban ningún trabajo para la empresa. Luego, Mercado cambiaba los cheques en una tienda local de cambio de cheques que sabía del ardid y que usaba el dinero en efectivo para pagar a sus trabajadores.
Asimismo, Mercado hacía emitir cheques a una empresa de construcciones legítima, pero dicha empresa también no realizaba ningún trabajo. Mercado no informó, retuvo o pagó los impuestos de nómina de empleados sobre cualquiera de estos sueldos en efectivo. Mercado también hizo que su compañía dejara de presentar declaraciones de impuestos al empleo.
Mercado se declaró culpable de una información de un cargo que lo acusaba de evasión tributaria. Como se dijo, las acciones de Mercado resultaron en una pérdida tributaria de al menos $352,605 dólares. Mercado enfrenta un máximo de cinco años en prisión y ha aceptado pagar una restitución de $352,605 dólares al IRS.
Wifredo A. Ferrer, Fiscal Federal para el Distrito Sur de Florida, y el Secretario de Justicia Auxiliar Interino John DiCicco, de la División de Impuestos del Departamento de Justicia, felicitaron a los Agentes Especiales de IRS a cargo de la investigación en el caso y a los Abogados Litigantes de la División de Impuestos Jason H. Poole y Matthew J. Mueller, que estuvo a cargo de la acusación en el caso.
Monday 1 November 2010
Massachusetts Man Sentenced to Federal Prison for Burning African-American ChurchRead the Press Release
WASHINGTON – Benjamin Haskell was sentenced by U.S. District Judge Michael A. Ponsor in Springfield, Mass., to nine years in prison and three years of supervised release for his role in the 2008 burning of the Macedonia Church of God in Christ, a predominately African-American Church, on the morning after President Barack Obama was elected as the first African-American President of the United States. In addition, Haskell will pay more than $1.7 million in restitution including $123,570.25 to the Macedonia Church.
On June 16, 2010, Haskell, 24, of Springfield, pleaded guilty to conspiring to injure, oppress, threaten and intimidate the mostly African-American parishioners of the Macedonia Church in the free exercise of the right to hold and use their new church building, which was under construction, and to damaging the parishioners’ new church building through arson and obstructing their free exercise of religion because of their race, color and ethnic characteristics.
At the earlier plea hearing, a prosecutor told the court that had the case proceeded to trial, the government’s evidence would have proven that in the early morning hours of Nov. 5, 2008, within hours of President Barack Obama being elected, Haskell and his co-conspirators agreed to burn down, and did burn down, the Macedonia Church’s newly constructed building where religious services were to be held. The building was 75 percent completed at the time of the fire, which destroyed nearly the entire structure, leaving only the metal superstructure and a small portion of the front corner intact. Investigators determined that the fire was caused by arsonists who poured and ignited gasoline on the interior and exterior of the building.
Haskell confessed to the crime and admitted that prior to the presidential election, he and his co-conspirators used racial slurs against African-Americans and expressed anger at the possible election of Barack Obama as the first African-American President. Haskell admitted that after Obama was declared the winner of the election, he and his co-conspirators walked through the woods behind the Macedonia Church to scout out burning it down. Then, in the early morning hours of Nov. 5, 2008, Haskell and his co-conspirators went back to the church, poured gasoline inside and outside of the church, and ignited the gasoline.
"The freedom to practice the religion that we choose without discrimination or hateful acts is among our nation’s most cherished rights," said Thomas E. Perez, Assistant Attorney General in charge of the Justice Department’s Civil Rights Division. "As seen here today, the Department will prosecute anyone who violates that right to the fullest extent of the law."
"The burning of the Macedonia Church because of racial hatred and intolerance was a vicious attack on one of our most cherished freedoms - to worship in the religion of our choice safely and without fear of discrimination," said U.S. Attorney for the District of Massachusetts Carmen Ortiz. "The successful investigation, prosecution and punishment of those who committed this hateful act is a clear statement that law enforcement will do all in its power to protect our citizens’ civil rights."
"While the Bureau of Alcohol, Tobacco and Firearms (ATF) is charged with investigating some of the most violent crimes, I consider the arson to be one of the most serious and dangerous offenses. Not only was this case about the burning of a house of worship, it cut to the very heart of our most valued rights, that of religious freedom. I want to acknowledge all of our partners who assisted in bringing the individuals responsible for this fire to justice," said ATF Special Agent in Charge Guy Thomas.
"Today’s sentencing represents just one more step toward closure and healing, not only for the victims of this hate crime, but for the Springfield community as a whole. The FBI, along with its federal, state and local law enforcement partners, remains committed to protecting each and every citizen’s civil rights, and will aggressively investigate any violation of those rights, bringing the perpetrators to justice," said Richard DesLauriers, Special Agent in Charge of the FBI.
The case was prosecuted by Assistant U.S. Attorneys Paul H. Smyth and Kevin O’Regan of the District of Massachusetts and Nicole Lee Ndumele, Trial Attorney in the Department of Justice’s Civil Rights Division.
All Nippon Airways Co. Ltd. Agrees to Plead Guilty to Price Fixing on Air Cargo and Air Passenger ServicesRead the Press Release
WASHINGTON – All Nippon Airways Co. Ltd. (ANA) has agreed to plead guilty and to pay a $73 million criminal fine for its role in two separate conspiracies to fix prices in the air transportation industry, the Department of Justice announced today.
According to a two-count felony charge filed today in U.S. District Court for the District of Columbia, Japan-based ANA engaged in a conspiracy to fix one or more components of cargo rates charged for international air cargo shipments from at least as early as April 1, 2000, until at least Feb. 14, 2006. ANA is also charged with engaging in a conspiracy to fix unpublished passenger fares on tickets purchased in the United States from at least as early as April 1, 2000, until at least April 1, 2004. Under the plea agreement, which is subject to court approval, ANA has also agreed to cooperate with the department’s ongoing antitrust investigation.
ANA transports a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights, including to and from the United States. ANA also transports passengers on scheduled flights within Japan and internationally, including to and from the United States. ANA typically offered unpublished passenger fares to travel agents for purchase by certain consumers.
According to the charges, ANA carried out the conspiracies by agreeing during meetings and other communications on certain components of the cargo rates to be charged for shipments on routes between the United States and Japan, and on unpublished passenger fares to be charged on tickets purchased in the United States. As part of the conspiracies, ANA levied cargo rates and unpublished passenger fares in accordance with the agreements reached, and monitored and enforced adherence to the agreed-upon cargo rates and unpublished passenger fares.
ANA is charged with two counts of price fixing in violation of the Sherman Act, which carries a maximum fine for corporations of $100 million for each violation committed after June 22, 2004, and $10 million for violations committed before that date. The maximum fine for each count 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.
Including today’s charge, as a result of this investigation, a total of 19 airlines and 14 executives have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.6 billion in criminal fines have been obtained and four executives have been sentenced to serve prison time. Charges are pending against the remaining 10 executives.
Today’s charge is the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm, or call the FBI’s Washington Field Office at 202-278-2000.
Friday 29 October 2010
Virginia Information Technology Director Sentenced to 27 Months in Prison for Hacking Former Employer’s WebsiteRead the Press Release
WASHINGTON – A fired information technology director for Transmarx LLC, a Richmond, Va., company, was sentenced today to 27 months in prison for hacking into his former employer’s website, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.
On June 29, 2010, Darnell H. Albert-El, 53, of Richmond, pleaded guilty to one count of intentionally damaging a protected computer without authorization. Albert-El was sentenced today by Senior U.S. District Judge Robert E. Payne in the Eastern District of Virginia. Albert-El was also ordered to pay $6,700 in restitution to Transmarx.
According to court documents, in June 2008, Transmarx terminated Albert-El from his position as their information technology director. During his employment, Albert-El had administrator-level access to the Transmarx computer network, which included the company website that was hosted on a computer system located in Suwanee, Ga. In pleading guilty, Albert-El admitted that on July 25, 2008, he used a personal computer and an administrator account and password to access the computer hosting the Transmarx website. After accessing the computer, Albert-El knowingly caused the transmission of a series of commands that intentionally caused damage without authorization to the computer by deleting approximately 1,000 files related to the Transmarx website. In pleading guilty, Albert-El admitted that he caused the damage because he was angry about being fired. Albert-El’s actions caused more than $6,000 in losses to Transmarx.
This case was prosecuted by Special Assistant U.S. Attorney for the Eastern District of Virginia Thomas Dukes, who is also a Senior Counsel with the U.S. Department of Justice Criminal Division’s Computer Crime and Intellectual Property Section. This case was investigated by the FBI.
Texas Man Who Was Part of Father and Son Team of Pirated Software Sellers Sentenced to 18 Months in PrisonRead the Press Release
WASHINGTON – Todd Alan Cook, 24, of Wichita Falls, Texas, was sentenced today to 18 months in prison by U.S. District Court Judge T.S. Ellis III for selling more than $1 million worth of pirated computer software through the Internet, in violation of criminal copyright infringement laws, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and John Morton, Department of Homeland Security’s Director of U.S. Immigration and Customs Enforcement.
Cook was also sentenced to three years of supervised release and was ordered to pay restitution in the amount of $599,771. Cook pleaded guilty on March 11, 2010, to criminal copyright infringement in the U.S. District Court in Alexandria, Va.
According to court documents, from July 2006 through May 2008, Cook, his father Robert D. Cook and another individual operated several websites that sold large volumes of counterfeit software with a combined retail value of approximately $1 million. Cook admitted that he and his co-conspirators used these websites to sell downloadable counterfeit software without authorization from the copyright owners. Robert Cook pleaded guilty on March 11, 2010, to one count of conspiracy to commit criminal copyright infringement and is scheduled to be sentenced before Judge Ellis on Dec. 3, 2010.
This case is part of the Department of Justice’s ongoing initiative to combat online commercial counterfeiting and piracy. Including Todd Cook’s guilty plea, the department has obtained 46 convictions involving online auction and commercial distribution of counterfeit software.
Today’s sentencing is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
The cases were prosecuted by Trial Attorneys Marc Miller and Tyler G. Newby of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jay V. Prabhu for the Eastern District of Virginia. The cases were investigated by the U.S. Immigration and Customs Enforcement’s National Intellectual Property Rights Coordination Center with substantial assistance provided by the Office of the Special Agent-in-Charge in Dallas. The Wichita Falls Police Department assisted in the investigation.
Securities Attorney and Former Stock Broker Each Sentenced to More Than 12 Years in Prison for $43 Million Pump-and-Dump Stock Manipulation SchemeRead the Press Release
WASHINGTON – A securities attorney and a former stock broker were sentenced today to 188 months and 151 months in prison, respectively, for their roles in an extensive pump-and-dump stock manipulation scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Thomas Scott Woodward of the Northern District of Oklahoma. The two defendants were also ordered to forfeit more than $43 million.
G. David Gordon, a securities attorney, and Richard Clark, a businessman and former stock broker, both of Tulsa, Okla., were convicted by a federal jury in the Northern District of Oklahoma on May 3, 2010. Gordon was found guilty on one count of conspiracy to commit wire fraud, securities fraud and money laundering nine counts of wire fraud; five counts of securities fraud; five counts of money laundering and one count of making a false statement to the U.S. Securities and Exchange Commission (SEC) in connection with the pump-and-dump scheme. Clark was found guilty on one count of conspiracy, seven counts of wire fraud, five counts of securities fraud and one count of money laundering. Gordon, 48, and Clark, 62, were originally charged in a 24-count indictment unsealed on Feb. 10, 2009.
According to evidence presented at trial, between April 2004 and December 2006, Gordon Clark and other conspirators devised and engaged in a scheme to defraud investors known as a "pump and dump," in which they manipulated three publicly traded stocks. The evidence at trial established that the conspirators obtained approximately $43 million in proceeds from the manipulation of the three penny stocks. A penny stock is a common stock that trades for less than $5 per share in the over the counter market, rather than on national exchanges. Two companies based in Tulsa at the time of the scheme were among those whose stock was manipulated: Deep Rock Oil & Gas Inc., and Global Beverage Solutions Inc., formerly known as Pacific Peak Investments. Clark is the former chief executive officer of Global Beverage. The third company, National Storm Management Group Inc., is based in Glen Ellyn, Ill. According to evidence presented at trial, Gordon and Clark executed the scheme by obtaining a majority of the free-trading shares of stock they intended to manipulate, using fraudulent and deceptive means to acquire the stock and/or remove the trading restrictions on the shares they obtained.
Evidence at trial showed that the defendants hid and "parked" their shares with various nominees, such as friends, relatives or other entities that they owned and controlled. Subsequently, they engaged in coordinated trading in order to create the appearance of an emerging market for these stocks, after which they conducted massive promotional campaigns in which unsolicited fax and e-mail "blasts" were sent to millions of recipients. According to evidence at trial, these blasts touted the respective stocks without accurately disclosing who was paying for the promotions, omitted that the defendants intended to sell their shares, and induced unsuspecting investors to purchase stock in the companies. E-mail and fax blasts promoting two companies, National Storm and Deep Rock Oil & Gas, touted investment opportunities purportedly created by Hurricane Katrina. Evidence at trial showed that the defendants and their nominees obtained significant profits by selling large amounts of shares after they had artificially inflated the stock price. For each of the three manipulated stocks, the defendants’ sell-off caused declines of the stock price and left legitimate investors holding stock of significantly reduced value.
"The scheme that sent these two individuals to prison was basic in its goal – to create profits at the expense of unknowing victim investors," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "Not only did the defendants defraud investors, but they also exploited the tragedy of Hurricane Katrina. We will not allow our stock markets to be hijacked by people intent on artificially manipulating them."
"Mr. Gordon used his expertise as a securities lawyer and Mr. Clark used his experience as a former stock broker to exploit unsuspecting investors of millions of dollars," said U.S. Attorney Woodward. "The investing public must depend upon the integrity of our financial markets. Today’s sentence sends a strong message that securities professionals who illegally manipulate our financial markets will be caught and prosecuted to the full extent of the law."
Gordon was also convicted of one count of wire fraud and one count of obstruction of justice in connection with a fourth penny stock, that of International Power Group Ltd., based in New Jersey.
The February 2009 indictment also charged Dean Sheptycki, 43, at the time a resident of Florida and the Bahamas; and Dallas-area resident Joshua Wayne Lankford, 36, for their participation in the scheme. Sheptycki and Lankford remain fugitives. An indictment is merely a charge and defendants are presumed innocent until proven guilty. Four other individuals have pleaded guilty in related cases.
The case is being prosecuted by Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Catherine Depew for the Northern District of Oklahoma, and Special Assistant U.S. Attorney Kevin Muhlendorf, who is detailed to the U.S. Attorney’s Office from the SEC. The case is being investigated by the Internal Revenue Service (IRS) Criminal Investigation Division, the FBI and the U.S. Postal Inspection Service.
Today’s sentences are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
For more information on the task force, visit www.StopFraud.gov.
Rocky Mountain Instrument to Pay U.S. $1 Million to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – The United States has reached a settlement with Rocky Mountain Instrument Company (RMI) to resolve claims that the manufacturer violated the False Claims Act, the Justice Department announced today. The Lafayette, Colo.-based company is alleged to have submitted claims for payment to various Defense Department prime contractors. The contractors, it is alleged, in turn claimed reimbursement from the government for optical and laser products manufactured overseas using sensitive technical data exported by RMI in violation of the Arms Export Control Act and International Traffic in Arms Regulations.
On June 23, 2009, RMI, a manufacturer of optical components used in laser and imaging applications, filed a petition for bankruptcy under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Colorado. To settle the False Claims Act allegations, RMI has agreed to pay the United States $1 million as part of its bankruptcy reorganization. This amount is in addition to a $1 million criminal forfeiture and five year probationary term ordered in connection with RMI’s June 22, 2010, plea of guilty to knowingly and willfully exporting defense articles without a license in United States v. Rocky Mountain Instrument Company, 10-cr-00139-WYD-01 (D. Colo.).
"Some foreign countries and terrorist organizations are actively seeking sensitive U.S. technology and equipment to advance their weapons systems and other programs," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We are committed to vigorous enforcement of our export control laws, all of which are designed to keep America’s critical technology from falling into the wrong hands."
"Rocky Mountain Instrument Company deals in sensitive technology and equipment, some of which is being used in Iraq and Afghanistan," said John Walsh, U.S. Attorney for the District of Colorado. "Companies involved in exporting sensitive technology should take note that if they violate the law there will be financial consequences."
This case was investigated as part of a National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, the U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrate the Justice Department’s commitment to helping ensure the integrity of the government procurement process.
Maryland Contractors and Their President to Pay United States for Falsely Obtaining Hubzone and SBA 8(a) ContractsRead the Press Release
WASHINGTON – Platinum One Contracting, located in Capitol Heights, Md., its president, Anthony Wright, and Capitol Contractors, also located in Capitol Heights, and its president, Vernon J. Smith III, have agreed to pay the United States $200,000 to settle claims that they used false statements to obtain contracts from the Department of Defense, the Justice Department announced today. The contracts had been set aside for companies that qualified for the Small Business Administration’s (SBA) 8(a) business development program, as well as for businesses that qualified for the Historically Underutilized Business Zone (HUBZone) program.
Under the SBA’s 8(a) business development program, a business owned and controlled by socially and economically disadvantaged individuals can apply for certification from the SBA as an 8(a) business. A business certified as an 8(a) contractor can obtain certain preferences during the contracting process, and can bid on contracts that the agency has set aside for qualified 8(a) businesses. A business can remain in the 8(a) program for up to nine years.
Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and employ 35 percent of their workforce from a HUBZone, among other requirements, can apply to the SBA for certification as a HUBZone small business company. A HUBZone company can then use this certification when bidding on government contracts. In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.
The United States alleged that Platinum One and Anthony Wright falsely represented to the SBA, the Navy and the Army that Platinum was controlled by a socially and economically disadvantaged individual. The government’s investigation found that Platinum One was actually controlled by Vernon J. Smith III, who is not socially or economically disadvantaged. The
government alleged that Smith used Platinum’s 8(a) status to continue Capitol Contractor’s business operations after Capitol’s own 8(a) status expired in 2002. As a result of these false representations, Platinum obtained contracts from the Navy and the Army.
The United States also alleged that Platinum One and Anthony Wright falsely represented to the SBA and other government agencies that Platinum maintained its principal office in a designated HUBZone location. In fact, Platinum actually operated out of offices owned by Capitol that were not located in a HUBZone. Platinum One did not qualify for the HUBZone program, yet because of its false statements to the SBA and the Air Force, it obtained contracts that had been set aside by the Air Force for qualified HUBZone companies.
"Those who seek to obtain government contracts intended for businesses run by socially or economically disadvantaged individuals or for companies located in areas that need jobs must play by the rules," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will take action against those who use false statements to cheat both the government and the companies and communities that should have received the valuable benefits."
"This case is one of a series that the government has pursued for false claims made to obtain HUBZone, 8(a), and other set-aside contracts. The SBA Office of Inspector General will continue to aggressively pursue and seek criminal or civil fraud prosecution of false statements made to obtain preferential contracting and other government benefits," said SBA Inspector General Peggy E. Gustafson.
"This case represents the cooperative effort of SBA’s Offices of the General Counsel and the Inspector General and the Department of Justice to uncover and remedy fraud in our procurement programs," said SBA General Counsel Sara Lipscomb.
Assistant Attorney General West thanked the Justice Department’s Civil Division, the SBA Office of General Counsel, and the SBA Office of Inspector General for the collaboration that resulted in the settlement announced today.
Justice Department to Monitor Polls in 18 States on Election DayRead the Press Release
WASHINGTON – The Justice Department announced today that its Civil Rights Division plans to deploy more than 400 federal observers and department personnel to 30 jurisdictions in 18 states for the Nov. 2, 2010, general election.
Although state and local governments have primary responsibility for administering elections, under the federal voting rights laws, the Civil Rights Division is charged with and committed to protecting the rights of all citizens to access the ballot on Election Day.
In the days leading up to and throughout Election Day, Civil Rights Division staff members will be available at a special toll-free number to receive complaints related to ballot access (1-800-253-3931) (TTY line 1-877-267-8971), including allegations of voter intimidation or coercion targeted at voters because of their race, color, national origin or religion. In addition, individuals may also report complaints, problems or concerns related to voting via the Internet. Forms may be submitted through a link on the department web page: www.justice.gov/
Allegations of voter fraud are handled by the 94 U.S. Attorneys’ Offices across the country and the Criminal Division’s Public Integrity Section. Complaints may be directed to any of the local U.S. Attorneys’ Offices, the local FBI offices or the Public Integrity Section at 202-514-1412.
Since the passage of the Voting Rights Act of 1 965, the department has regularly sent observers and monitors around the country to protect voters ’ rights. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. In addition, the act requires certain covered jurisdictions to provide language assistance during the election process. Under the Voting Rights Act, the department is authorized to ask the Office of Personnel Management to send federal observers to areas that have been certified for coverage by a federal court or the Attorney General. The department also may send monitors from its own staff to elections in other jurisdictions.
On Election Day, federal observers will monitor polling place activities in 16 jurisdictions:
- Autauga County Ala.
- Bethel , Alaska
- Apache and Navajo Counties Ariz.
- Riverside County Calif.
- Randolph County G a.
- Kane County Ill.
- Salem County (Penns Grove), N.J.;
- Cibola and Sandoval Counties N.M.
- Cuyahoga County , Ohio
- Shannon County ; S.D.; and
- Dallas , Fort Bend, Galveston and Williamson Counties, Texas.
Justice Department personnel will monitor the election in an additional 14 jurisdictions:
- Maricopa County Ariz.
- Alameda County , Calif.
- Seminole County Fl a.
- Honolulu , Hawaii
- Neshoba County , Miss.;
- Colfax County Neb.
- Passaic County N.J.
- Orange County N.Y.
- Lorain County , Ohio
- Philadelphia Pa.
- Bennett and Todd Counties , S.D.;
- Shelby County Tenn. ; and
- Harris County, Texas.
The observers and department personnel will gather information on whether voters are subject to different voting qualifications or procedures on the basis of race, color, or membership in a language minority group; whether jurisdictions are complying with the minority language provisions of the Voting Rights Act; whether jurisdictions permit voters to receive assistance by a person of his or her choice if the voter is blind, has a disability, or is unable to read or write; whether jurisdictions allow voters with disabilit ies to cast a private and independent ballot; and whether jurisdictions comply with the provisional ballot requirements of the Help America Vote Act. To assist in these inquiries, the department has deployed observers and monitors who speak Spanish and a variety of Asian and Native American languages. Both the federal observers and department personnel will coordinate monitoring activities, and department attorneys maintain contact with local election officials.
More information about the Voting Rights Act and other federal voting and election-related laws is available on the Civil Rights Division ’s web site at www.usdoj.gov/crt/voting
El Departamento de Justicia controlará las elecciones en 18 estados el Día de EleccionesRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que la División de Derechos Civiles planea distribuir más de 400 observadores federales y personal del Departamento a 30 jurisdicciones en 18 estados para la elección general del 2 de noviembre de 2010.
Si bien los gobiernos estatales y locales tienen la principal responsabilidad de administrar las elecciones, bajo las leyes electorales federales, la División de Derechos Civiles tiene la responsabilidad y el compromiso de proteger los derechos de todos los ciudadanos a acceso a la votación el Día de Elecciones.
En los días anteriores al Día de Elecciones a lo largo del mismo, miembros del personal de la División de Derechos Civiles estarán disponibles en un número de teléfono con llamada sin cargo para recibir quejas relacionadas con el acceso a la votación (800) 253-3931, línea TTY (877) 267-8971, incluidos alegatos de intimidación o coerción de electores debido a su raza, color origen nacional o religión. Además, las personas también pueden denunciar quejas, problemas o inquietudes asociadas al voto a través del Internet. Se pueden presentar formularios a través de un enlace en el portal del Departamento: www.justice.gov/
Se ocupan de los alegatos de fraude electoral las 94 Fiscalías Federales de todo el país y la Sección de Integridad Pública de la División Criminal. Se pueden dirigir quejas a cualquiera de las Fiscalías Federales locales, las oficinas locales del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] o la Sección de Integridad Pública al (202) 514-1412.
Desde que se promulgó la Ley de Derechos Electorales en 1 965, el Departamento ha enviado regularmente a observadores y controladores a todo el país para proteger los derechos de los electores. La Ley de Derechos Electorales prohíbe la discriminación en el proceso de elecciones con base en raza, color o pertenencia a un grupo de idioma minoritario. Además, la ley exige que ciertas jurisdicciones cubiertas provean asistencia idiomática durante el proceso de elecciones. Según la Ley de Derechos Electorales, el Departamento está autorizado a solicitar a la Oficina de Administración de Personal que envíe observadores federales a áreas con cobertura certificada por un tribunal federal o por el Secretario de Justicia de los Estados Unidos. El Departamento también puede enviar observadores de su propio personal a elecciones en otras jurisdicciones.
El Día de las Elecciones, los observadores federales observarán las actividades de los lugares de votación en 16 jurisdicciones:
- Condado de Autauga, Ala.
- Bethel, Alaska;
- Condados Apache y Navajo, Ariz.
- Condado de Riverside, Calif.
- Condado de Randolph Ga.;
- Condado de Kane Ill.
- Condado de Salem (Penns Grove), N.J.;
- Condados de Cibola y Sandoval, N.M.
- Condado de Cuyahoga, Ohio;
- Condado de Shannon; S.D.; y
- Condados de Dallas, Fort Bend, Galveston y Williamson, Texas.
Personal del Departamento de Justicia observarà las elecciones en 14 jurisdicciones adicionales:
- Condado de Maricopa, Ariz.;
- Condado de Alameda, Calif.
- Condado de Seminole Fla.;
- Honolulu, Hawai;
- Condado de Neshoba, Miss.;
- Condado de Colfax Neb.
- Condado de Passaic N.J.
- Condado de Orange N.Y.
- Condado de Lorain, Ohio;
- Filadelfia Pa.
- Condados de Bennett y Todd, S.D.;
- Condado de Shelby Tenn.; y
- Condado de Harris, Texas.
Los observadores y el personal del Departamento reunirán información sobre si los electores están sujetos a distintas calificaciones o procedimientos electores con base en raza, color o pertenencia a un grupo de idioma minoritario; si las jurisdicciones están cumpliendo con las disposiciones de idioma minoritario de la Ley de Derechos Electorales; si las jurisdicciones permiten que los electores reciban asistencia de una persona de su elección si el elector es ciego, discapacitado o no sabe o está imposibilitado de leer o escribir; si las jurisdicciones permiten que electores con discapacidades emitan un voto privado e independiente; y si las jurisdicciones cumplen con las exigencias de voto provisional de la Ley Ayude a los Estados Unidos a Votar. Para ayudar con estas consultas, el Departamento ha destacado a observadores y consultores que hablan Español y una variedad de idiomas asiáticos e indígenas estadounidenses. Tanto los observadores federales como el personal del Departamento coordinarán actividades de observación, y abogados del Departamento mantienen contacto con autoridades electorales locales.
Para obtener más información sobre la Ley de Derechos Electorales y otras leyes federales asociadas a elecciones y votación, visite el portal de la División de Derechos Civiles en www.usdoj.gov/crt/voting