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4 June 2012
Former Arizona State Representative Sentenced to 27 Months in Prison for Wire Fraud and Tax Evasion Related to the Misuse of More Than $140,000 in Charity FundsRead the Press Release
WASHINGTON – Former Arizona State Representative Richard David Miranda was sentenced today to 27 months in prison for defrauding a charity of more than $140,000 and evading income tax related to those unlawfully obtained funds, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Special Agent in Charge James L. Turgal of the FBI’s Phoenix Field Office; and Special Agent in Charge Dawn Mertz of the Internal Revenue Service-Criminal Investigation (IRS-CI) Phoenix office.
Miranda, 55, of Tolleson, Ariz., served as a member of the Arizona House of Representatives for the 13th District from 2011 until his resignation, effective Feb. 20, 2012. Miranda previously served as a member of the Arizona State Senate from 2002 until 2011, and the Arizona House of Representatives from 1999 until 2002. Since July 2002, Miranda also served as executive director of Centro Adelante Campesino Inc., a non-profit charitable organization that provided food, clothing and educational assistance to persons in need, including migrant farm workers, in and around Maricopa County, Ariz.
On March 14, 2012, Miranda pleaded guilty to a two-count information charging him with defrauding Centro of more than $140,000 and evading income tax related to those unlawfully obtained funds. As part of his plea agreement, Miranda agreed to resign from office. Miranda was also ordered to pay a total of $230,342 in restitution ($212,220 for funds he unlawfully obtained from Centro, along with an additional $18,122 he unlawfully obtained from the Arizona Latino Caucus Foundation).
During his plea, Miranda admitted that, in May 2005, he initiated a scheme to wind down Centro, sell Centro’s sole remaining asset (a building), and use the proceeds of the sale for personal expenses. To do so, Miranda removed the charity’s longstanding volunteer accountant as an authorized signer on the charity’s bank and credit union accounts, and assumed sole control of the charity’s accounts and financial records. He also told the volunteer accountant that the proceeds of the sale would be used to fund scholarships. In March 2007, the building was sold for $250,000, and on March 7, 2007, a significant portion of the profits of that sale, $144,576, were wired across state lines into Centro’s credit union account.
Miranda also admitted that within one week of the wire transfer, he began to withdraw the proceeds from Centro’s credit union account without the authorization or knowledge of Centro’s board of directors. For example, Miranda obtained two checks payable to himself totaling $37,000 and paid off personal credit card debts totaling more than $60,000. By Dec. 31, 2007, Miranda had withdrawn the remaining proceeds (approximately $46,836) using checks, withdrawals and electronic funds transfers, and used the funds to pay off additional personal debts and make numerous purchases for personal travel, services, clothing, food and household items. Miranda also failed to report the proceeds of the sale as income on his IRS Form 1040 for calendar year 2007.
This case is being prosecuted by Trial Attorneys Monique T. Abrishami and Brian A. Lichter of the Public Integrity Section in the Justice Department’s Criminal Division, and Assistant U.S. Attorney Frederick A. Battista of the District of Arizona. The case is being investigated by agents from the FBI Phoenix Field Office and IRS-CI Phoenix Office.
Former American Samoan Department of Education Employee Sentenced to 25 Months in PrisonRead the Press Release
WASHINGTON – A former official with the American Samoan Department of Education was sentenced to 25 months in prison today for his role in a bribery scheme, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced.
Gustav Nauer, 47, was sentenced by U.S. District Judge David Alan Ezra in the District of Hawaii. Nauer was also ordered to pay $100,000 in restitution to the American Samoa Department of Education (ASDOE) and to serve three years of supervised release following his prison term.
According to court documents, Nauer worked as the head of the School Bus Division for the ASDOE until December 2010. In that position, Nauer was responsible for identifying repairs and parts required by school buses operated by ASDOE.
Nauer admitted that he conspired with another ASDOE official, Paul Solofa, to purchase “phantom” school bus parts that would never be delivered and actual school bus parts at inflated prices, all from a specific company. In exchange for this lucrative business, the bus parts company agreed to pay back most or all of the fraudulently obtained money to Nauer and Solofa in cash bribes to influence and reward Nauer and Solofa. Specifically, Nauer admitted that, from January 2003 until October 2006, he and Solofa received envelopes of cash totaling approximately $300,000.In January 2012, Solofa was convicted by a jury in Washington, D.C., of witness tampering and obstruction of justice. Solofa is scheduled to be sentenced on June 8, 2012.
This case is being prosecuted by Trial Attorney Timothy J. Kelly of the Public Integrity Section in the Justice Department’s Criminal Division. The investigation is being conducted by the FBI, the Department of Interior Inspector General and the Department of Education Inspector General.
El Departamento de Justicia Monitorizará las Elecciones en California, Nuevo México, Dakota del Sur y WisconsinRead the Press Release
WASHINGTON - El Departamento de Justicia anunció hoy que monitorizará las elecciones el 5 de junio de 2012, en las siguientes jurisdicciones para asegurar el cumplimiento de la Ley de Derechos Electorales de 1965 y otras leyes federales de derechos electorales: Condados de Alameda, Fresno y Riverside, Calif.; Condados de Cibola y Sandoval, N.M.; Condado de Shannon, S.D.; y la ciudad de Milwaukee.
La Ley de Derechos Electorales prohíbe la discriminación en el proceso electoral basada en la raza, el color de la piel o pertenencia a un grupo de idioma minoritario. Además, la ley exige que ciertas jurisdicciones cubiertas brinden asistencia idiomática durante el proceso electoral. El Condado de Fresno, Condado de Riverside y la ciudad de Milwaukee deben brindar asistencia en español. Los Condados de Cibola, Sandoval y Shannon deben brindar asistencia idiomática a electores indígenas estadounidenses. El Condado de Alameda debe brindar asistencia idiomática a electores hispanos, chinos, vietnamitas y filipinos.
Bajo la Ley de Derechos Electorales, el Departamento de Justicia está autorizado a pedirle a la Oficina de Administración de Personal de EE.UU. [U.S. Office of Personnel Management (OPM)] que envíe observadores federales a jurisdicciones certificadas por el secretario de justicia o por una orden judicial federal. Se asignarán observadores federales para la monitorización de actividades en los puntos de votación en el Condado de Shannon con base en la certificación del secretario de justicia y en los Condados de Alameda, Riverside y Sandoval en órdenes judiciales. Los observadores vigilarán y registrarán las actividades durante horarios de votación en los lugares de votación en estas jurisdicciones, y abogados de la División de Derechos Civiles coordinarán las actividades federales y mantendrán contacto con funcionarios electorales locales.
Además, personal del Departamento de Justicia monitorizará las actividades en los puntos de votación en el Condado de Fresno, Condado de Cibola y la ciudad de Milwaukee. Abogados de la División de Derechos Civiles coordinarán las actividades federales y se mantendrán en contacto con oficiales electorales locales.
Cada año, el Departamento de Justicia destaca a cientos de observadores federales de la OPM, así como personal del departamento, para que monitoricen las elecciones en todo el país. Para presentar quejas acerca de prácticas electorales discriminatorias, incluidos actos de acoso o intimidación, los electores pueden llamar a la Sección Electoral de la División de Derechos Civiles del Departamento del Justicia al 1-800-253-3931.
Para obtener más información sobre la Ley de Derechos Electorales y otras leyes electorales federales, visite www.justice.gov/crt/voting/index.php.
Arecibo, Puerto Rico, to Upgrade Sewer System to Resolve Clean Water Act ViolationsRead the Press Release
WASHINGTON – A settlement between the United States and the municipality of Arecibo, Puerto Rico, will resolve violations of the Clean Water Act and specifically violations of its Small Municipal Separate Storm Sewer System General Permit, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. This is the first judicial action addressing violations of this type of permit.
Arecibo’s violations include releases of storm water, untreated sewage and sewage sludge and other pollutants into the Rio Grande de Arecibo in violation of its permit and the Clean Water Act. Arecibo will pay a penalty of $305,643 and will invest an estimated $56 million in repairs and upgrades to its existing infrastructure.
Under the settlement, Arecibo is required to comply with its Municipal Separate Sewer System Permit and the Clean Water Act, improve its storm water management program, and build a new pump station and three retention basins. The new pump station and retention basins will enable Arecibo to better manage its storm water flow and prevent flooding in the downtown Arecibo area. Arecibo will further be required to repair, replace or construct storm sewer pipes as necessary and eliminate interconnections with the sanitary sewer systems. Replacing sewer pipe and eliminating interconnections will reduce discharges of sanitary wastes to the Rio Grande de Arecibo and eliminate sewer backups in residential homes.
“This settlement will bring significant improvements to the Arecibo sewer system and cleaner water that the people of Arecibo will enjoy for many years to come,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “It is another example of how the vigorous enforcement of the Clean Water Act protects citizens from the very real health threats posed by discharges of sewage contaminated stormwater.”
“This settlement will benefit public health by dramatically reducing the amount of sewage and other pollutants that get into the Rio Grande de Arecibo,” said Judith A. Enck, Administrator for EPA’s Region 2 Office. “Today’s agreement requires an investment in protecting community residents from exposure to raw sewage and contaminated stormwater, now, and into the future.”
Municipal storm sewer systems collect rain from streets and drain to local rivers and streams. Sewage lines or industrial discharges can be improperly connected to the storm sewer, leading to raw sewage or other pollutants reaching water bodies. Discharges from municipal storm sewer systems can also include infiltration from cracked sanitary systems, spills collected by drain outlets, or paint or used oil dumped directly into a drain. These discharges contribute bacteria, heavy metals, toxics, oil and grease, solvents, nutrients, viruses and bacteria to receiving water bodies.
The consent decree is subject to a 30-day public comment period and final court approval. The consent decree can be viewed at www.justice.gov/enrd/Consent_Decrees.html.
To learn more about EPA’s enforcement of the Clean Water Act, visit: www.epa.gov/compliance/civil/cwa/cwaenfstatreq.html.
1 June 2012
Virginia-based Defense Contractor Calnet to Pay $18.1 Million<br /> to Resolve False Claims Act LawsuitRead the Press Release
Calnet Inc. has agreed to pay the United States $18.1 million to resolve allegations that the company submitted false claims to the Department of Defense, the Justice Department announced today. Calnet Inc., an intelligence analysis, information technology and language services company, is headquartered in Reston, Virginia.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The settlement with Calnet relates to three contracts under which the company supported the United States? war effort by providing translation and linguist services at Guantanamo Bay and several other facilities beginning in 2005.Calnet was a subcontractor on one of the contracts, and the prime contractor on the other two contracts.The United States alleged that Calnet overstated its provisional indirect or overhead rates on each of these contracts and thus submitted inflated claims for payment to the United States.
?Contractors are expected to comply with their statutory obligations and act in good faith when dealing with the United States government,? said Stuart F. Delery, Acting Assistant Attorney General for the Department of Justice?s Civil Division.?We will not tolerate false statements and failure to disclose information that is important to the government?s contracting processes.?
?We?re using every tool available to assure the integrity of government contracting,? said U.S. Attorney MacBride. ?This is one of several cases we have pursued to protect against procurement fraud in the Eastern District of Virginia.?
The settlement with Calnet resolves a lawsuit filed in the U.S. District Court for the Eastern District of Virginia under the False Claims Act by former Calnet employee, Kimthy Chao.Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery obtained by the government.Mr. Chao?s share of the Calnet settlement will be $2,669,724.
This settlement was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney?s Office for the Eastern District of Virginia; the Defense Criminal Investigative Service and the Defense Contract Audit Agency.The claims settled by this agreement are allegations only and there has been no determination of liability.
U.S. Customs and Border Protection Officer Indicted in Miami for Civil Rights and Abusive Sexual Contact OffensesRead the Press Release
WASHINGTON – U.S. Customs and Border Protection Officer Paulo Morales, 47, was arrested today after having been indicted yesterday by a federal grand jury in the Southern District of Florida on charges of deprivation of civil rights and abusive sexual contact, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, and Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida.
The six-count indictment charges Morales with three felony counts of abusive sexual contact and three misdemeanor counts of deprivation of civil rights.
The indictment alleges that on various dates in January 2011, Morales, while working as an officer with U.S. Customs and Border Protection at the Miami International Airport, committed civil rights offenses and abusive sexual contact by the non-consensual groping of the breasts of three separate women, who were in the custody of Customs and Border Protection.
If convicted, Morales faces a maximum sentence of two years in prison for each count of abusive sexual contact and one year in prison for each count of deprivation of civil rights.
This case is being investigated by the Department of Homeland Security Office of Inspector General, and is being prosecuted by Assistant U.S. Attorney William White of the U.S. Attorney's Office for the Southern District of Florida and Trial Attorney Henry Leventis of the Civil Rights Division.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Related Materials:
Indictment (PDF)
New England Organized Crime Associate Sentenced to Seven Years in Federal PrisonRead the Press Release
WASHINGTON – Richard Bonafiglia, 58, of Providence, R.I., an admitted associate of the New England La Cosa Nostra (NELCN) was sentenced in U.S. District Court in Providence today to 84 months in federal prison for his participation in a racketeering conspiracy to shakedown several Rhode Island adult entertainment businesses for protection money.
U.S. District Court Judge William E. Smith also sentenced Bonafiglia to serve three years of supervised release upon completion of his prison term. Bonafiglia pleaded guilty on Feb. 23, 2012, to one count of conspiracy to participate in a racketeering enterprise. Bonafiglia was charged along with eight other admitted or alleged leaders, members or associates of the NELCN with participating in a racketeering and extortion conspiracy and other acts of extortion.
Bonafiglia’s sentence was announced by Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Richard Deslauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.
At the time of his guilty plea, Bonafiglia admitted that he was an associate of the NELCN and that he participated in the charged racketeering and extortion conspiracy. Bonafiglia admitted that since 2005, when he was hired to work at the Cadillac Lounge where he served as the eyes and ears of then admitted NELCN boss Luigi Manocchio, he participated in multiple acts of extortion by assisting other conspirators in their collection and receipt of monthly protection payments of up to $800,000 from the owners and operators of several adult entertainment businesses.
Seven of the nine defendants named in superseding indictments and charged with participating in the racketeering and extortion conspiracy, including admitted longtime former NELCN underboss and boss Luigi Manocchio and admitted capo regime Edward Lato, have pleaded guilty. Manocchio was sentenced on May 11, 2012, to 66 months in federal prison; Edward Lato is awaiting sentencing.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland for the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section.
The matter was investigated by the FBI, Rhode Island State Police and the Providence Police Department.
Maryland Business Owner Sentenced <br /> for Failing to Pay Employment TaxesRead the Press Release
Richard Stewart, a resident of Mitchellville, Md., was sentenced to 24 months in prison and ordered to pay $5,414,647 in restitution to the Internal Revenue Service (IRS) by U.S. District Judge Roger W. Titus for failing to pay over employment taxes in connection with his ownership of Montgomery Mechanical Services, the Justice Department and IRS announced today.
According to the plea agreement and criminal information, from at least 2003 through 2008, Stewart owned and operated Montgomery Mechanical Services, a company that installed plumbing, heating, and air condition in commercial buildings and that had offices in Baltimore and Capitol Heights, Md. From 2003 through at least 2008, Stewart did not collect, truthfully account for and pay over employment taxes of approximately $3,969,337 from his employees’ wages.
“It is wrong for any business owner to get an unfair competitive advantage by committing tax crimes,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “The sentence handed down today shows that those who willfully violate their employment tax obligations will not only be prosecuted, but risk severe punishment for their crimes, and they will still be held responsible for the taxes due, together with interest and civil penalties.”
“Business owners have an inescapable obligation to withhold income taxes for employees and remit those taxes to the Internal Revenue Service,” said Richard Weber, Chief, IRS Criminal Investigation. “IRS Criminal Investigation is committed to vigorously pursuing those who violate employment tax laws.”
The restitution order in the amount of $5,414,647 encompasses both the employment taxes that he failed to withhold from his employees and his obligation, as an employer, to pay over a matching portion of Federal Insurance Contributions Act taxes.
Assistant Attorney General Keneally thanked Special Agents of IRS-Criminal Investigation, who investigated the case, and Tax Division Trial Attorney Tino M. Lisella, who is currently on detail to a U.S. Attorney’s office, and former Tax Division Trial Attorney Jeffrey L. Shih, both of whom prosecuted this case.
Justice Department Settles Lawsuit with Pierce County, Washington, Alleging Employment DiscriminationRead the Press Release
The Justice Department announced today it has entered into a consent decree with Pierce County, Wash., that, if approved by the U.S. District Court for the Western District of Washington, will resolve allegations that the county discriminated against a female employee by retaliating against her in violation of Title VII of the Civil Rights Act of 1964. Title VII is a federal statute which prohibits employment discrimination on the basis of sex, race, color, national origin or religion and protects employees who file complaints under any of those bases.
The department’s complaint, filed today along with the consent decree, alleges that the county, through its agents at the Pierce County Assessor-Treasurer’s Office, discriminated against Administrative Officer Sally Barnes by retaliating against her because she engaged in activity protected under Title VII. The United States alleges in its complaint that Barnes was subjected to multiple adverse employment actions between Jan. 22, 2009 and Nov. 30, 2009, including the loss of her administrative officer and other supervisory duties, exclusion from important meetings and information necessary for the management of her division and an involuntary relocation to an undesirable work location.
“This consent decree sends the important message that discrimination and retaliation will not be tolerated,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I am pleased that we were able to work with the county to arrive at a resolution that will put mechanisms in place to prevent and correct discrimination and retaliation in the workplace.”
Barnes initially filed charges of discrimination and retaliation with the Equal Employment Opportunity Commission (EEOC), which investigated the matter and determined there was reasonable cause to believe discrimination occurred, referring the matter to the Justice Department.
“Retaliation by supervisors, especially elected officials, has no place in the workforce,” said U.S. Attorney Jenny A. Durkan. “This settlement will ensure all Pierce County employees know their rights and can do their jobs without fear of being punished for contacting their human resources department about discrimination.”
Under the terms of the consent decree and settlement agreement, the county has agreed to award $400,000 to Barnes. In addition, the county is required to review and revise its Equal Employment Opportunity (EEO) policies to protect its employees from unlawful retaliation and must provide training on equal employment opportunity law and its anti-retaliation policies to all of its employees and officials at the Assessor-Treasurer’s Office.
The continued enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt/ and www.justice.gov/crt/emp/.
Related Materials:
Pierce County -Complaint
Pierce County - Proposed Consent Decree
Pierce County - Joint MotionFourteen Defendants Plead Guilty for Their Roles in Scheme to Fraudulently Control Home Owners Associations in Las VegasRead the Press Release
WASHINGTON – Fourteen individuals pleaded guilty yesterday in the District of Nevada for their roles in the scheme to fraudulently take control of various home owners’ associations (HOAs) in the Las Vegas area, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, FBI Special Agent in Charge Kevin Favreau of the Las Vegas Field Office, Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department and Richard Weber, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI), announced today.
According to plea documents, the defendants each pleaded guilty to one count of conspiracy to commit mail and wire fraud. The defendants who pleaded guilty today include: Rosalio Alcantar, 60; Patrick Bergsrud, 43; Robert Bolten, 44; Glenn Brown, 52; Paul Citelli, 59; Michelle DeLuca, 51; Charles Hawkins, 51; Sami Robert Hindiyeh, 54; Lisa Kim, 47; Brian Jones, 38; Morris Mattingly, 51; Frank Sutton, 58; Anthony Roy Wilson, 34; and Jeanne Winkler, 44.
According to court documents, the fraud scheme operated from approximately August 2003 through February 2009 with various co-conspirators joining that scheme at different times. The conspirators operated the scheme to direct construction defect litigation and repairs at condominium complexes to a particular law firm and construction company.
In order to accomplish the scheme, certain co-conspirators identified HOAs that could potentially bring construction defect cases. Once identified, the co-conspirators enlisted real estate agents to identify condominium units within the HOA communities for purchase. The co-conspirators then enlisted individuals as straw purchasers to use their names and credit to purchase condominiums in the complexes. The defendants admitted that the co-conspirators provided the down payments and monthly payments to the straw purchasers, including HOA dues and mortgage payments, and that various false and misleading statements were made to secure financing for the properties. Certain co-conspirators operated and managed the payments associated with these properties. The payments were often wired between California and Nevada.
Bergsrud and Wilson admitted in their plea documents that they acted as real estate agents for the purpose of identifying units in HOA communities for use by the co-conspirators and to assist with the property transfer documents. Wilson also assisted the conspiracy by developing ways to increase capital, such as refinancing some of the units to recapture the down payments and other fees, and also in managing the finances for the properties. Bergsrud, Bolten, Citelli, Hawkins, Mattingly and Sutton admitted in their plea documents that they acted as straw purchasers at various condominium complexes.
Alcantar admitted that he opened, operated and managed five bank accounts on behalf of the co-conspirator construction company owner, using names of shell limited liability companies for the purpose of concealing the identity of the individuals funding the conspiracy. Alcantar managed the transfer of more than $8 million during the time period of the conspiracy, including deposits made from the co-conspirator construction defect attorney.
According to plea documents, on several occasions the co-conspirators transferred a partial interest in a particular condominium to another co-conspirator for the purpose of making it appear as if the co-conspirator was a bona fide homeowner in the community and could thereby stand for election to the HOA board of directors. Many of the straw purchasers and those who acquired a transferred interest in an HOA community agreed with co-conspirators to use their ownership interest to run for election to the respective HOA board of directors. It was through the boards of directors that the conspirators controlled the activities at the HOAs.
According to plea documents, Bergsrud, Hawkins, DeLuca, Mattingly and Sutton agreed to become board members at certain condominium complexes and thereafter breached their fiduciary duties to the homeowners, using their positions to vote in furtherance of the conspiracy.
To ensure the co-conspirators won the elections, the co-conspirators at times employed deceitful tactics, such as submitting fake and forged ballots. Some of these ballots were sent through the U.S. mail.
On several occasions, co-conspirators attempted to create the appearance that the elections were legitimate. This was done at times by hiring attorneys to run the HOA board elections as “special election masters,” to preside over the HOA board elections and supervise the counting of ballots. The “special election masters” were complicit and part of the conspiracy. They allowed co-conspirators to access the ballots for the purpose of opening the ballots and influencing the results to ensure certain co-conspirator candidates won the election.
Brown and Hindiyeh admitted in plea documents that they assisted in the HOA election rigging. Jones admitted that he acted as a special election master for certain HOA elections and allowed co-conspirators to access the ballots and alter the votes in favor of co-conspirator candidates. Wilson also admitted that he assisted in promoting the co-conspirator candidates in elections.
Once elected, the co-conspirator board members met with other co-conspirators in order to manipulate board votes and process, including the selection of property managers, contractors, general counsel, and attorneys to represent the HOA. Once hired, co-conspirators, including property managers and general counsel, often recommended that the HOA board hire the co-conspirator construction company for construction defect repairs and the co-conspirator law firm to handle the construction defect litigation.
Kim admitted that she agreed with the co-conspirators to become a property manager at a condominium complex. She knew the co-conspirator controlled board would manipulate their votes to hire her company. Kim used her position as the property manager to help the co-conspirators falsify ballots and retain their positions on the HOA board.
Winkler admitted in plea documents that she agreed to become the general counsel for the Vistana condominium complex. She bid for a position as general counsel knowing that she had a prior attorney-client and financial relationship with the co-conspirator construction company owner who intended to direct the board to award the construction defect repair contract to him. Winkler admitted that she used her position to handle legal matters for the HOA as directed by her co-conspirators and that she violated her fiduciary duties to the bona fide homeowners.
According to court documents, the defendants admitted that they were each given cash or things of value for their assistance in purchasing the properties, obtaining HOA membership status, rigging elections, or using their position to manipulate the HOA’s business to enrich the co-conspirators at the expense of the HOA and the legitimate homeowners.
The maximum prison sentence for conspiracy to commit mail fraud and wire fraud is 30 years.
Ten other individuals pleaded guilty in 2011 as part of the government’s ongoing criminal investigation of activities related to various Las Vegas HOAs.
The case is being prosecuted by Deputy Chief Charles La Bella and Trial Attorney Mary Ann McCarthy of the Criminal Division’s Fraud Section. The case is being investigated by the FBI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section.
This prosecution is 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 about the task force visit: www.stopfraud.gov.
Five Sentenced for Their Roles in Stolen Identity Refund Fraud SchemeRead the Press Release
Fahim Suleiman and Muuad Salem were sentenced to prison today by U.S. District Court Judge James S. Gwin in connection with their roles as co-conspirators in a scheme to defraud the United States by obtaining false and fraudulent U.S. Treasury tax refund checks, the Justice Department and Internal Revenue Service (IRS) announced. According to documents filed with the court, the two participated in a conspiracy with others to file false United States income tax returns using personal identifying information, including names and Social Security numbers, of deceased taxpayers in order to obtain false tax refund checks that were subsequently sold and negotiated. Suleiman was sentenced to 64 months in prison, including a 24 month mandatory minimum sentence for aggravated identity theft. Salem was sentenced to 27 months in prison.
Judge Gwin had previously sentenced three co-conspirators. On May 29, 2012, Najeh Widdi was sentenced to 36 months in prison. Hanan Widdi and Hazem Woodi were sentenced on May 30, 2012, to prison terms of 21 months and 18 months, respectively. Judge Gwin ordered all five defendants to pay, jointly and severally, $177,744 in restitution to the IRS as part of their sentences.
Each of the defendants previously entered guilty pleas on March 13, 2012. Salem, Najeh Widdi and Woodi pleaded guilty to conspiracy to defraud the United States, conspiracy to commit mail fraud and one count of mail fraud; Hanan Widdi pleaded guilty to conspiracy to defraud the United States and conspiracy to commit mail fraud; and Suleiman pleaded guilty to conspiracy to defraud the United States, conspiracy to commit mail fraud, three counts of mail fraud and one count of aggravated identity theft.
Daxesj Patel also pleaded guilty on March 13, 2012 to two counts of submitting false claims for refund and one count of false statements. Patel is scheduled to be sentenced on June 8, 2012 by Judge Gwin.
“The Justice Department is working closely with the IRS to investigate and prosecute stolen identity refund fraud crimes,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “The sentences handed down in this and other cases show that identity thieves will pay a high price for their crimes.”
“The theft of anyone’s identity is a serious offense, but stealing the identities of the recently departed to defraud all the other taxpayers is particularly egregious,” said Steven M. Dettelbach, the U.S. Attorney for the Northern District of Ohio. “These sentences should cause anyone who would engage in this conduct to reconsider.”
“Individuals who commit refund fraud and identity theft of this magnitude deserve to be punished to the fullest extent of the law,” stated Richard Weber, Chief, IRS Criminal Investigation. “We, along with our law enforcement partners and the U.S. Attorney's Office, continue to do our part in protecting the sanctity and integrity of the tax system and those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury.”
According to the indictment, from April 2009 to at least August 2011, Najeh Widdi, Hanan Widdi, Hazem Woodi, Muaad Salem, Fahim Suleiman, Daxesj Patel and other unnamed co-conspirators defrauded the United States by filing false and fraudulent tax returns, many in the names of recently deceased taxpayers. The co-conspirators directed the refunds to controlled locations in Florida. The U.S. Treasury checks generated by the false tax returns were sent by U.S. mail to co-conspirators located in Ohio. The Ohio co-conspirators then sold and distributed those Treasury checks for negotiation at various businesses and banking institutions. The IRS estimated that the scheme involved at least $1.7 million in fraudulently obtained tax returns. As part of their plea agreements, Suleiman, Hanan Widdi, Najeh Widdi, Salem and Woodi admitted that the fraud loss caused by their conduct was between $1 and 2.5 million and that the offenses involved more than ten victims.
The case was prosecuted by Assistant U.S. Attorney Gary D. Arbeznik and Trial Attorney Jessica W. Knight of the Tax Division, presently on detail to a U.S. Attorney’s office in Ohio. The investigation was jointly handled by the Cleveland Division of the FBI, IRS-Criminal Investigation and the U.S. Postal Service.
Doctors, Therapist and Recruiters from Miami-Area Mental Health Care Corporation Convicted for Participating in $205 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A federal jury today convicted two Miami-area doctors, one Miami-area therapist and two others for their participation in a Medicare fraud scheme involving more than $205 million in fraudulent billings by American Therapeutic Corporation (ATC), a mental health care corporation, the Department of Justice, the FBI and the Department of Health and Human Services (HHS) announced today.
Dr. Mark Willner, Dr. Alberto Ayala and therapist Vanja Abreu (Ph.D.) were each found guilty of one count of conspiracy to commit health care fraud. Willner was acquitted of five other counts of health care fraud and Ayala was acquitted of two other counts of health care fraud. Hilario Morris and Curtis Gates were each found guilty of one count of health care kickbacks and were each acquitted of one count of conspiracy.
The jury was unable to reach a unanimous verdict as to a one conspiracy count against another therapist Lydia Ward (Ph.D.). The jury acquitted Nichole Eckert, a licensed mental health counselor (LMHC), of two counts of health care fraud and was unable to reach a unanimous verdict as to one conspiracy count against her.
The defendants were charged in an indictment returned on Feb. 8, 2011. ATC, the management company associated with ATC, and 14 individuals, including the ATC owners, have all previously pleaded guilty or have been convicted at trial.
Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness. The defendants and their co-conspirators also used a related company, American Sleep Institute (ASI), to submit fraudulent Medicare claims.
“The doctors, therapist and patient recruiters convicted today participated in a massive scheme to defraud the Medicare program,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “They altered medical records, robo-signed patient files and recruited ineligible patients – all so that they could file fraudulent claims for reimbursement. We are determined to hold all people – from well educated professionals to common criminals – accountable for committing health care fraud.”
“Today’s verdict is a stark reminder that health care professionals, like any other link in the health care fraud chain, will be held criminally accountable if they engage in Medicare fraud,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “A license to practice medicine is not a license to defraud the Medicare program.”
ATC billed Medicare for hundreds of millions of dollars in false and fictitious services, for thousands of patients who were not qualified, based on fraudulent documents created by Abreu and others and bogus certifications signed by Willner and Ayala. In addition, the evidence at trial showed that Morris paid illegal kickbacks to owners and operators of assisted living facilities, halfway houses, and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. Evidence at trial also showed that Gates solicited and received illegal kickbacks in exchange for sending ineligible patients to ATC.
Throughout the course of the fraud conspiracy, tens of millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, to attend treatment programs that were not legitimate PHP programs. ATC and ASI billed Medicare for more than $205 million in services to patients who did not need the services and to whom the appropriate services were not provided. According to the evidence, co-conspirators personally altered, and caused the alteration of, patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by ATC were qualified for PHP treatments and that the treatments provided were legitimate PHP treatments.
Evidence further revealed that doctors at ATC, including Willner and Ayala, signed patient files without reading them or seeing the patients. Specifically, evidence was presented that Willner and Ayala would “robo-sign” patient files, meaning they would sign patient documents without having seen or treated the patients. The evidence also showed that Ayala signed files for services allegedly rendered during time periods when he was out of the country on vacation. Evidence further revealed that ATC then billed Medicare for more than $100 million in PHP treatment for these patients under the names of Willner and Ayala. Included in these false and fraudulent submissions to Medicare were claims for patients in neuro-vegetative states, along with patients who were in the late stages of diseases causing permanent cognitive memory loss – all of whom were ineligible for PHP treatment.
Willner, Ayala and Morris were remanded into custody.
ATC executives Lawrence Duran, Marianella Valera, Judith Negron, and Margarita Acevado were sentenced to 50 years, 35 years, 35 years, and 91 months in prison, respectively, for their roles in the fraud scheme. Sentencing for Willner, Ayala, Abreu, Morris and Gates has not yet been scheduled. The maximum penalty for each conspiracy count and each count of health care fraud is 10 years in prison. The maximum penalty for each count of health care kickbacks is five years in prison.
Today’s verdict was announced by Assistant Attorney General Breuer of the Criminal Division; U.S. Attorney Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The criminal case is being prosecuted by Trial Attorneys Jennifer L. Saulino, Robert A. Zink, and James V. Hayes of the Fraud Section in the Justice Department’s Criminal Division. A related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
31 May 2012
Woman Convicted of Tax Fraud Conspiracy in South Florida Sentenced to 51 Months in PrisonRead the Press Release
Nasheba Necia Hunte was sentenced today to 51 months in prison for her role in a conspiracy to defraud the Internal Revenue Service (IRS) and for filing false tax returns, the Justice Department and IRS announced. Hunte was also ordered to pay $229,305 in restitution to the IRS.
On March 16, 2012, Hunte and another individual, Elmo Antonio George, were convicted by a jury sitting in Ft. Lauderdale, Fla., for a conspiracy to defraud the IRS that spanned from as early as January 2003 through at least April 2007. Hunte and George were also each convicted of two counts of filing false 2005 and 2006 individual income tax returns, on which they claimed false tax refunds for themselves. George is scheduled to be sentenced on June 29, 2012.
“People who cheat on their taxes are cheating their friends and neighbors and all other law-abiding taxpayers,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “They are committing a crime and, as the sentence today shows, risking serious jail time. And, in the end, they will still owe the taxes, together with interest and possible civil penalties.”
“The use of shell companies, false claims and aliases to perpetuate a fraudulent tax scheme isn't tax planning, it’s criminal activity,” said Richard Weber, Chief, IRS Criminal Investigation. “There is no secret formula that can eliminate a person’s tax obligations. Today’s sentence reinforces our commitment to every American taxpayer that we will identify and prosecute those who evade the payment of taxes.”
The indictment alleged that in February 2005, George incorporated Winco Holdings Inc. (Winco) in Florida. George and Hunte were the only officers of Winco and despite having no employees and paying no wages, the defendants filed employment tax returns on behalf of Winco for quarters in 2005, 2006 and 2007, that falsely claimed substantial quarterly employment tax withholdings for Winco employees. None of the withholding amounts were paid over to the IRS. In February 2007, a fraudulent check for $1,676,991.16 was written from Winco’s bank account to the U.S. Treasury for Winco’s employment tax obligations. The check was signed “contact maker for authority to pay.”
The indictment also alleged that the defendants filed corporate tax returns for Winco for tax years 2005 and 2006 that reported fictitious partnership losses. These fictitious losses then “passed through” to the defendants’ individual income tax returns along with the false Winco wage and withholding amounts. These withholding amounts generated false refunds for both defendants for tax years 2005 and 2006.
The evidence at trial established that the IRS remitted refunds to George and Hunte totaling approximately $241,807 for tax year 2005. George’s refund was deposited into a joint bank account of another entity, Dikingdom Inc. With the false refund, the defendants bought a home for $145,500 for cash in Villa Rica, Ga. To conceal the purchase of this property and the proceeds of the fraud, George deeded the property to an alias named the Overseer of Dikingdom. George also falsely claimed that a church owned the property. According to evidence presented in court, the total intended tax loss was over $1 million.
The evidence also established that less than one week after IRS-Criminal Investigation tried to contact the defendants, Hunte changed her home address in her employment contact documents from Villa Rica, Ga. to a non-existent address. When IRS-Criminal Investigation Special Agents attempted contact with Hunte, she affirmatively denied who she was to the Agents.
Assistant Attorney General Keneally thanked IRS-Criminal Investigation’s Atlanta Field Office, which investigated the case, and Tax Division Trial Attorneys Rebecca Perlmutter and Chad Edgar, who prosecuted the case on behalf of the United States. Assistant Attorney General Keneally also thanked Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and his entire office for their assistance in prosecuting the case.
Plastics Producer SABIC Agrees to Reduce Harmful Air Pollution from Leaking Equipment to Resolve Clean Air Act Violations in Indiana and AlabamaRead the Press Release
SABIC Innovative Plastics US LLC, and its subsidiary, SABIC Innovative Plastics Mt. Vernon LLC, have agreed to pay an approximately $1 million civil penalty and improve leak detection and repair practices to settle alleged violations of the Clean Air Act (CAA) at chemical manufacturing facilities in Mt. Vernon, Ind., and Burkville, Ala., the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. Emissions of hazardous air pollutants (HAPs) from leaking equipment may cause serious health effects including cancer, reproductive issues and birth defects.
“This compliance program continues our efforts to control fugitive emissions and will require SABIC to upgrade its monitoring and maintenance practices to help prevent future violations,” said Robert G. Dreher, Principal Deputy Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice.
“Communities near large industrial facilities depend on EPA to protect public health and the environment by enforcing our nation’s environmental laws,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement with SABIC will reduce the potential for future violations and protect residents in Indiana and Alabama from emissions of hazardous air pollutants.”
In addition to paying a penalty, SABIC will implement a comprehensive program to reduce emissions of HAPs from leaking equipment such as valves and pumps. The emissions, known as “fugitive” emissions because they are not discharged from a stack but rather leak directly from equipment, are generally controlled through work practices, like monitoring and repairing leaks. The settlement requires SABIC to implement enhanced work practices, including more frequent leak monitoring, better repair practices, and innovative new efforts designed to prevent leaks.
The program also requires SABIC to replace valves with new “low emissions” valves or valve packing material, designed to significantly reduce the likelihood of future leaks of HAPs. In response to EPA’s inspection of the Mt. Vernon facility, SABIC engineered HAP emission controls for hundreds of drains and trenches and the settlement further requires SABIC to control similar emissions from an oil/water separator. The estimated cost of these controls is almost $4 million. SABIC will also invest an additional $1.3 million to control HAP emissions from certain process vents as a supplemental environmental project. The compliance program and engineered controls will reduce HAP emissions by up to 136.7 tons per year.
According to the 15-count complaint, filed simultaneously with the settlement today in the Southern District of Indiana, SABIC allegedly violated CAA requirements to monitor and repair leaking equipment, demonstrate compliance with regulations applicable to chemical plants, and report known violations to EPA.
The consent decree is subject to a 30 day comment period and final approval by the court. A copy of the consent decree is available on the Department of Justice web site at www.usdoj.gov/enrd/Consent_Decrees.html .
More information about the settlement: www.epa.gov/compliance/resources/cases/civil/caa/sabic.html.
Minnesota-based St. Jude Medical Pays U.S. $3.65 Million to Settle<br /> <br /> Claims That It Overcharged for Implantable Cardiac DevicesRead the Press Release
St. Jude Medical Inc. has agreed to pay the United States $3.65 million to resolve civil allegations under the False Claims Act that the company inflated the cost of replacement pacemakers and defibrillators purchased by the Departments of Defense and Veterans Affairs, the Justice Department announced today. St. Paul, Minn.-based St. Jude Medical develops, manufactures and distributes cardiovascular and implantable neurostimulation medical devices.The settlement resolves allegations that St. Jude actively marketed its pacemakers and defibrillators by touting the generous credits available should a device need to be replaced while covered under warranty. At the same time, St. Jude allegedly knew that it failed to grant appropriate credits to the purchasers of devices in a large number of cases where a product was replaced while still under warranty. As a result, the United States contended that St. Jude submitted invoices to Department of Veterans Affairs hospitals and Department of Defense military treatment facilities that overstated the cost for replacement pacemakers or defibrillators.
“As medical device use becomes more prevalent, it is essential that device manufactures provide federal health care programs with the warranty discounts they are entitled to receive,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “If medical device manufacturers are actively concealing warranty credits from the government, the department will use all the tools at its disposal to hold them accountable.”
“Like any other customer, the government is entitled to get what it paid for,” said Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “Where a vendor warrants that its products will last a certain amount of time and then does not honor warranty claims when the products fail early, actions like this are appropriate.”
The civil settlement resolves allegations initially brought by two whistleblowers in federal court in the District of Massachusetts under the qui tam, or whistleblower, provisions of the False Claims Act, which allow for private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblowers will receive $730,000 from the settlement amount.
“The Department of Veterans Affairs, Office of Inspector General continues with its partners at the U.S. Attorney’s Office and other federal investigative agencies to combat fraud, waste, and abuse within the health care industry,” said Jeffrey G. Hughes, Special Agent in Charge, Department of Veterans Affairs, Office of Inspector General. “This civil settlement will return funds to VA to benefit our nation’s veterans.”
“The Defense Criminal Investigative Service is committed to working with the U.S. Department of Justice and the U.S. Department of Veterans Affairs, Office of Inspector General, to ensure that taxpayer dollars are properly spent and that the health care needs of our military members and their families are met,” said Edward Bradley, Special Agent-in-Charge, Defense Criminal Investigative Service, Northeast Field Office. “Today’s settlement demonstrates the importance of this collaborative effort to hold companies accountable when they fail to honor warranty discounts to which the U.S. Department of Defense is entitled.”
The settlement was the result of an investigation by the U.S. Attorney’s Office for the District of Massachusetts, the Justice Department’s Civil Division, and the Offices of Inspector General at the U.S. Department of Defense and Veterans Affairs. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Justice Department Reaches $21 Million Settlement to Resolve Allegations of Lending Discrimination by Suntrust MortgageRead the Press Release
WASHINGTON – SunTrust Mortgage Inc., the mortgage lending subsidiary of the nation’s 11th-largest commercial bank, has agreed to pay $21 million to resolve a lawsuit by the Department of Justice that it engaged in a pattern or practice of discrimination that increased loan prices for many of the qualified African-American and Hispanic borrowers who obtained loans between 2005 and 2009 through SunTrust Mortgage’s regional retail offices and national network of mortgage brokers.
The settlement also requires SunTrust Mortgage to continue using policies and practices it adopted to prevent discrimination following the time period at issue in the lawsuit.
The settlement, which is subject to court approval, was filed today in federal court in Richmond, Va., where SunTrust Mortgage is headquartered. The settlement comes after a two-and-a-half-year investigation by the Department of Justice, which included reviewing internal company documents and data on more than 850,000 residential mortgage loans SunTrust Mortgage originated between 2005 and 2009. SunTrust Mortgage cooperated fully with the Justice Department’s investigation into its lending practices and agreed to settle this matter without contested litigation.
“Today’s settlement demonstrates that the Department of Justice takes seriously its responsibility to investigate mortgage lending practices during the mortgage boom years and, when the evidence shows the law was broken, to obtain compensation for victims of illegal conduct,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will, however, work constructively with responsible lenders like SunTrust Mortgage that are willing to take the necessary steps to ensure equal credit opportunity for all borrowers. We commend SunTrust Mortgage for taking action to implement strong fair lending policies even before they knew the full results of our investigation.”The settlement was filed in conjunction with the department’s complaint that alleges SunTrust Mortgage violated the Fair Housing Act and Equal Credit Opportunity Act by charging more than 20,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers, not based on borrower risk, but because of their race or national origin. Specifically, the allegations involve loans made to African-American borrowers between 2005 and 2008 through the more than 200 retail offices directly operated by SunTrust Mortgage in the Southeastern and Mid-Atlantic portions of the United States. The allegations also involve loans made to African-American and Hispanic borrowers between 2005 and 2009 through SunTrust Mortgage’s national network of mortgage brokers.
“Racial and ethnic bias have no place in the lending market,” said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. “We are pleased that SunTrust Mortgage is taking steps to compensate the victims and to ensure fair and equal access to credit in the future.”
SunTrust Mortgage’s business practice during the time periods covered by the lawsuit allowed its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors. This subjective and unguided pricing discretion resulted in African-American and Hispanic borrowers paying more.
Prior to the settlement, SunTrust Mortgage had implemented policies that substantially reduced the discretion of its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors, and that required the reasons for variations to be documented and reviewed by a supervisor. Those policies, operating in concert with rules imposed by the Federal Reserve in April 2011 and incorporated into the settlement, restrict compensating loan officers and mortgage brokers based on the terms or conditions of a particular loan. Today’s settlement requires SunTrust Mortgage to keep its improved policies in place for at least the next three years, as well as continuing to monitor its lending for signs of discrimination and providing monitoring reports to the United States.
The department’s investigation into SunTrust Mortgage’s lending practices began after a referral by the Board of Governors of the Federal Reserve to the Justice Department’s Civil Rights Division in December 2009 for potential patterns or practices of discrimination. SunTrust Mortgage’s parent company, Atlanta-based SunTrust Bank, is a member of the Federal Reserve System, and one of the nation’s largest regional banks with $178 billion in assets and more than 1,600 branches in seven states and the District of Columbia.
“Racial or other illegal discrimination has no place in our credit markets,” said Federal Reserve Board Governor Elizabeth A. Duke. “We are pleased that this settlement is designed to ensure fair access to credit.”
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF 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.
A copy of the complaint and proposed settlement order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.
The proceeds of the settlement will be used to compensate the victims of SunTrust Mortgage’s discrimination, who were located in 34 states and the District of Columbia when the discrimination occurred. The proposed settlement provides for an independent administrator to contact and distribute payments of compensation at no cost to borrowers whom the Justice Department identifies as victims of SunTrust Mortgage’s discrimination. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator. The department will make a public announcement and post contact information on its website once the administrator begins contacting victims. Individuals who believe that they may have been victims of lending discrimination by SunTrust Mortgage and have questions about the settlement may email the department at [email protected].
Related Materials:
Assistant Attorney General for the Civil Rights Division Thomas E. Perez Speaks on the Fair Lending Settlement with SunTrust Mortgage Inc.
Complaint (PDF)
Consent Order (PDF)Justice Department Files Lawsuit Against Las Vegas Casino for Unfair Documentary PracticesRead the Press Release
The Justice Department announced today that it filed a lawsuit against Tuscany Hotel and Casino LLC in Las Vegas, alleging that the company engaged in a pattern or practice of discrimination in the employment eligibility verification and re-verification process. The Immigration and Nationality Act (INA) requires employers to treat all authorized workers equally during the hiring, firing and employment eligibility verification process, regardless of their national origin or citizenship status.
The complaint alleges that Tuscany treated non-citizens differently from U.S. citizens during the employment eligibility verification and reverification process by requesting non-citizen employees to provide more or different documents or information than required during the initial employment eligibility verification process, and demanded specific documents during the reverification process. The complaint further alleges that Tuscany subjected lawful permanent residents to unnecessary reverification based on their citizenship status after requesting and entering into the payroll system the expiration date of their Permanent Resident Cards (green cards) for purposes of reverification.
“Employers must not treat authorized workers differently during the employment eligibility verification process based on their citizenship status or national origin,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department vigorously enforces the anti-discrimination provisions of the INA so that authorized workers are treated fairly in the work place.”
The complaint, which seeks monetary and injunctive relief, was filed before the Office of the Chief Administrative Hearing Officer (OCAHO) of the Department of Justice and served on the company on May 29, 2012.
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals from employment discrimination on the basis of citizenship status or national origin, including discrimination in hiring, firing and the employment eligibility verification (Form I-9) process. For more information about protections against employment discrimination under the immigration law, call the OSC’s worker hotline at 1-800-255-7688 (TDD 1-800-237-2525), the OSC’s employer hotline at 1-800-255-8155 (TDD 1-800-362-2735), sign up for a no-cost webinar at www.justice.gov/crt/about/osc/webinars.php or visit OSC’s website at www.justice.gov/crt/about/osc.
Former Tuscaloosa, Alabama Police Sergeant Charged with Civil Rights ViolationsRead the Press Release
A federal grand jury in Birmingham, Ala., today returned a five-count indictment charging former city of Tuscaloosa Police Sergeant Jason Glenn Thomas with federal civil rights offenses in connection with the aggravated sexual assault of a Tuscaloosa woman in 2011, announced Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, Joyce White Vance, U.S. Attorney for the Northern District of Alabama, and Patrick J. Maley, Special Agent in Charge of the FBI Birmingham Field Office.
Thomas is charged with violating the constitutional rights of a Tuscaloosa woman by sexually assaulting her in March 2011. The indictment also charges Thomas with obstruction of justice based upon misleading statements that he provided to law enforcement officers during the investigation of the sexual assault allegations.
Thomas faces a possible maximum sentence of life in prison and a fine in excess of $1 million.
This case is being investigated by the Tuscaloosa resident agency of the FBI’s Birmingham Field Office, and is being prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney George Martin for the District of Alabama.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Former National Guard Recruiter Pleads Guilty for Leading Role in Bribery <br /> <br /> and Fraud Scheme to Illegally Obtain Military Recruiting BonusesRead the Press Release
A former Army National Guard recruiter pleaded guilty today in the Western District of Texas for his lead role in a bribery and fraud conspiracy that caused more than $90,000 in losses to the National Guard Bureau, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Former Sergeant Rafael L. Acosta Jr., 39, of San Antonio, Texas, pleaded guilty to one count of conspiracy to commit bribery and wire fraud. He was charged in a criminal information filed on May 25, 2012, in U.S. District Court for the Western District of Texas.
The case against Acosta arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio area engaged in a wide-ranging bribery and fraud scheme to illegally obtain recruiting bonuses. To date, the investigation has led to charges against a total of eight individuals, six of whom have pleaded guilty, including Acosta.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc., to administer a recruiting program designed to offer monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard. Through this program, a participating soldier could receive up to $2,000 in bonus payments for every person referred to join the Army National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payments in the form of direct deposits and pre-paid debit card payments. To participate in the program, soldiers were required to have an online recruiting assistant account.
According to court documents, Acosta enlisted in the Army National Guard in approximately May 2007, and he served as a recruiter between approximately August 2007 and November 2009. Acosta admitted that, between approximately January 2008 and February 2010, he and other recruiters obtained the names and Social Security numbers of potential soldiers. Acosta and his co-conspirators used this information to claim that those co-conspirators were responsible for recruiting the potential soldiers, when in fact they were not.
Acosta admitted that he and others used the recruiting assistant accounts of five participating soldiers to receive the fraudulently obtained recruiting bonuses and that the majority of this money was then sent directly to bank accounts controlled by Acosta. Acosta further admitted that he divided the unlawful proceeds among his co-conspirators, including four soldiers who permitted Acosta to use their accounts and two other recruiters who provided information concerning potential soldiers.
The charge of conspiracy to commit bribery and wire fraud carries a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the pecuniary gain or loss. Sentencing has been scheduled for Aug. 24, 2012, before Chief U.S. District Judge Fred Biery in San Antonio.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Brian A. Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.
El Departamento de Justicia Realiza Acuerdo Conciliatorio por 21 Millones de Dólares en Resolución de Alegatos de Discriminación en el Otorgamiento de Préstamos por Parte de SunTrust MortgageRead the Press Release
WASHINGTON - SunTrust Mortgage Inc., la subsidiaria de préstamos hipotecarios del 11º mayor banco comercial de la nación, ha acordado pagar 21 millones de dólares para resolver una demanda presentada por el Departamento de Justicia, por haber exhibido un patrón o práctica de discriminación que incrementó los precios de los préstamos para muchos de los prestatarios afroestadounidenses e hispanos calificados que obtuvieron préstamos entre 2005 y 2009 a través de las oficinas minoristas regionales y la red nacional de corredores hipotecarios de SunTrust Mortgage.
El acuerdo conciliatorio también exige que SunTrust Mortgage siga utilizando políticas y prácticas que adoptó para prevenir la discriminación después del período en cuestión en la demanda.
El acuerdo conciliatorio, el cual está sujeto a aprobación por parte del tribunal, fue presentado hoy en el tribunal federal de Richmond, Va., donde está ubicada la sede de SunTrust Mortgage. El acuerdo conciliatorio surge después de una investigación de dos años y medios por parte del Departamento de Justicia, la que incluyó examinar documentos y datos internos de la compañía asociados a más de 850,000 hipotecas para vivienda que originó SunTrust Mortgage entre 2005 y 2009. SunTrust Mortgage colaboró plenamente con la investigación del Departamento de Justicia de sus prácticas de otorgamiento de préstamos y aceptó realizar un acuerdo sin litigio contencioso.
“El acuerdo conciliatorio de hoy demuestra que el Departamento de Justicia toma en serio su responsabilidad de investigar las prácticas de otorgamiento de préstamos hipotecarios durante los años del auge hipotecario y, cuando las pruebas indican que se ha violado la ley, obtener compensación para las víctimas de conducta ilegal”, señaló Thomas E. Perez, Secretario Auxiliar de la División de Derechos Civiles. “Sin embargo, trabajaremos constructivamente con prestamistas responsables como SunTrust Mortgage que están dispuestos a tomar los pasos necesarios para asegurar igual oportunidad de crédito para todos los prestatarios. Felicitamos a SunTrust Mortgage por actuar para implementar políticas fuertes de otorgamiento justo de préstamos, inclusive antes de conocer los resultados completos de nuestra investigación”.
Se presentó el acuerdo conciliatorio en conjunto con la demanda del Departamento que alega que SunTrust Mortgage violó la Ley de Vivienda Justa y la Ley de Igualdad de Oportunidades de Crédito al cobrarles a más de 20,000 prestatarios afroestadounidenses e hispanos cargos y tasas de interés más altos que a los prestatarios blancos no hispanos, no basándose en el riesgo que presentaban como prestatarios, sino debido a su raza u origen nacional. Específicamente, los alegatos se refieren a préstamos realizados a prestatarios afroestadounidenses entre 2005 y 2008 a través de más de 200 oficinas minoristas directamente operadas por SunTrust Mortgage en las regiones Sudeste y Atlántico Central de los Estados Unidos. Los alegatos también se refieren a préstamos otorgados a prestatarios afroestadounidenses e hispanos entre 2005 y 2009 a través de la red nacional de corredores hipotecarios de SunTrust Mortgage.“La parcialidad racial y étnica no tiene lugar en el mercado de préstamos”, dijo Neil H. MacBride, Fiscal Federal para el Distrito Este de Virginia. “Nos complace que SunTrust Mortgage está tomando medidas para compensar a las víctimas y asegurar el acceso justo y equitativo al crédito en el futuro".
La práctica comercial de SunTrust Mortgage durante los períodos cubiertos por la demanda permitió que sus oficiales de préstamos y corredores hipotecarios variaran la tasa de interés de un préstamo y otros cargos del precio que había sido establecido basado en factores crediticios objetivos del prestatario. Debido a esta libertad subjetiva y sin orientación de establecer precios, los prestatarios afroestadounidenses e hispanos pagaron más.
Antes del acuerdo conciliatorio, SunTrust Mortgage había implementado políticas que reducían sustancialmente la libertad de sus oficiales de préstamos y corredores hipotecarios para variar la tasa de interés de un préstamo y otros cargos del precio que había sido establecido, basado en factores crediticios objetivos del prestatario, y que requerían que un supervisor documentara y examinara los motivos para las variaciones. Dichas políticas, compatibles con las reglas impuestas por la Reserva Federal en abril del 2011 e incorporadas en el acuerdo conciliatorio, restringen la compensación a oficiales de préstamos y corredores hipotecarios según los términos y condiciones de un préstamo específico. El acuerdo conciliatorio de hoy exige que SunTrust Mortgage conserve estas prácticas optimizadas durante, por lo menos, los próximos tres años y que siga monitoreando su otorgamiento de préstamos en busca de señales de discriminación y provea informes del monitoreo a los Estados Unidos.
La investigación por parte del Departamento de las prácticas de otorgamiento de préstamos de SunTrust Mortgage comenzó después que la Junta de Gobernadores de la Reserva Federal refiera los posibles patrones o prácticas discriminatorios a la División de Derechos Civiles del Departamento de Justicia en diciembre del 2009. La compañía madre de SunTrust Mortgage, SunTrust Bank, con sede en Atlanta, es miembro del Sistema de Reserva Federal y uno de los mayores bancos regionales de la nación con 178 billones de dólares en activos y más de 1,600 sucursales en siete estados y el Distrito de Columbia.
“La discriminación racial, u otra discriminación ilegal, no tiene lugar en nuestros mercados de crédito", señaló la Gobernadora de Junta de la Reserva Federal Elizabeth A. Duke. “Nos complace que este acuerdo haya sido diseñado para asegurar el acceso justo al crédito”.
El anuncio del día de hoy es parte de un esfuerzo en marcha de la Fuerza de Tarea Interagencial de Coacción contra el Fraude Financiero (en inglés: Financial Fraud Enforcement Task Force (FFETF)) del Presidente Obama. El Presidente Obama estableció la Fuerza de Tarea Interagencial de Coacción contra el Fraude Financiero para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades regulatorias, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov.
Para obtener una copia de la demanda y de la orden de acuerdo conciliatorio propuesto, así como también información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en www.justice.gov/fairhousing.
Los fondos del acuerdo conciliatorio se utilizarán para compensar a las víctimas de discriminación por parte de SunTrust Mortgage, localizadas en 34 estados y el Distrito de Columbia cuando ocurrió la discriminación. El acuerdo conciliatorio propuesto dispone que un administrador independiente se comunique con prestatarios identificados por el Departamento de Justicia como víctimas de discriminación por parte de SunTrust Mortgage y distribuya a los mismos pagos de compensación sin ningún costo. El administrador se comunicará con los prestatarios que reúnan los requisitos para compensación bajo el acuerdo conciliatorio. El Departamento realizará un anuncio público y publicará información de contacto en su portal en Internet una vez que el administrador comience a comunicarse con las víctimas. Las personas que crean que pueden haber sido víctimas de discriminación crediticia por parte de SunTrust Mortgage y tengan preguntas acerca del acuerdo conciliatorio pueden enviar un correo electrónico a [email protected].
30 May 2012
South Florida Retired Businessman Pleads Guilty<br /> <br /> to Failing to Disclose Assets Held in Swiss BanksRead the Press Release
Wolfgang Roessel of Ft. Lauderdale, Fla., pleaded guilty today in the U.S. District Court in the Southern District of Florida to filing a false tax return for 2007, the Justice Department and Internal Revenue Service (IRS) announced.
According to the court documents, Roessel, a U.S. citizen, maintained bank accounts at UBS AG in Switzerland, which he failed to report on his 2002 through 2007 personal income tax returns. He also failed to file a Report of Foreign Bank and Financial Accounts (FBAR) for these same years. In 2002, Roessel opened a UBS numbered investment account in the nominee name of a foreign entity, Neptune Trust, with an opening balance of approximately $4–5 million. In around 2004, this account and subaccounts were transferred into the nominee name of another foreign entity, Cyan United, and traded in U.S. and foreign securities. The defendant met with a Swiss banker periodically to discuss the performance of his accounts.
Court records also established that, dating back to the 1980s and up through the late 2000s, Roessel held accounts at different times at Bank Wegelin and another Swiss bank (Bank A) into which he deposited foreign proceeds from his business, yet which he neither reported on his tax returns nor on the required FBARs. In the early 2000s, the foreign account at Bank A was put into the nominee name of Cyan United. A Swiss money manager made investments on Roessel’s behalf and met with the defendant periodically to discuss the performance of the account. In 2008 and 2009, during which period the defendant was aware of the government’s grand jury investigation into his foreign UBS accounts, the defendant disclosed only the existence of the UBS accounts on his tax returns for those years and did not report the other Swiss account.
The plea agreement includes a tax loss of $312,802.95 for 2002 through 2007, and an FBAR penalty owing to the U.S. Treasury of $5,750,933.99, which is 50 percent of the 2007 unreported foreign bank accounts year-end balance of over $11 million. Roessel faces a potential maximum prison term of three years and a fine of up to $250,000. A sentencing date has not been set.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, and Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, thanked Special Agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorney Rebecca Perlmutter and Assistant U.S. Attorney Randy Katz, who prosecuted the case.
Singapore Ship Operator and Engineers Plead Guilty to Crimes Related to Pollution from Cargo Ship Traveling to Mobile, AlabamaRead the Press Release
WASHINGTON – A ship management company headquartered in Singapore pleaded guilty and was sentenced today in federal court in Mobile for deliberately falsifying records to conceal pollution discharges from the ship directly into the sea. Target Ship Management Pte. Ltd., the operator of the M/V Gaurav Prem, pleaded guilty to a violation of the Act to Prevent Pollution from Ships for failing to properly maintain an oil record book as required by federal and international law, as well as making material false statements during a U.S. Coast Guard inspection of the ship at the port of Mobile in September 2011.
Payongyut Vongvichinakul, the ship’s chief engineer, and Pakpoom Hanprap, the ship’s second engineer, also pleaded guilty to violations of the Act to Prevent Pollution from Ships and are scheduled to be sentenced on July 19, 2012.
The company was sentenced to pay a $1 million criminal fine along with a $200,000 community service payment to the National Fish & Wildlife Foundation. The community service payment will be earmarked for projects in the Southern District of Alabama, including Mobile Bay. Target was also sentenced to three years probation. As a condition of the probation, ships operated or managed by Target that will or may call on the United States, must be subject to an environmental compliance plan supervised by outside auditors and the court.
“Deliberate pollution and acts to conceal it are serious crimes that we will continue to vigorously prosecute,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This significant criminal fine should send a message to shipping companies worldwide that those who pollute our oceans will be held accountable.”
“This case represents a tremendous win for our environment,” said Kenyen Brown, U.S. Attorney for the Southern District of Alabama. “The U.S. relies on vessel crews and their management companies to provide accurate logs and records when calling on U.S. ports to ensure oily wastes are discharged properly at sea. The U.S. is fully committed to prosecuting those cases where vessels cover-up improper oily waste discharges at sea through the use of falsified logs. This prosecution would not have been possible without the hard work of the U.S. Coast Guard at Sector Mobile and District Eight, Coast Guard Criminal Investigative Service, the Environmental Protection Agency Criminal Investigation Division and Department of Justice, Environmental and Natural Resources Division, Environmental Crimes Section.”
“This plea and sentence reflect the US Coast Guard's steadfast commitment to protecting the marine environment. We will continue to investigate violations of environmental law, working with partners at the Department of Justice, Environmental Protection Agency and others, to ensure the stewardship and health of our oceans," said Rear Admiral Roy A. Nash, Commander, Eighth Coast Guard District.”
“The oceans must be protected from shipping companies that look to cut corners by dumping waste improperly,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in Alabama. “The defendants in this case knowingly discharged oily waste from their vessel into the open water and tried to cover it up. Today’s guilty pleas demonstrate that the U.S. government will not tolerate the flagrant violation of its laws.”
According to papers filed in court, senior Target employees discharged and caused the overboard discharge of oily bilge waste from the M/VGaurav Prem on multiple occasions as the vessel sailed from South Korea to Mobile. The vessel departed South Korea on or about July 29, 2011, and underwent a Coast Guard inspection on Sept. 21, 2011, in Mobile. The discharges were not recorded in the vessel’s oil record book as required. The deliberate overboard discharges of oily waste were accomplished through the ship’s fixed bilge piping system and by using the ship’s general service pump in a manner that intentionally bypassed required pollution prevention equipment, including the ship’s oily water separator and oil content monitor, designed to detect and prevent discharges containing more than 15 parts per million (ppm) oil, the international standard. The bypass system used a “spool pipe” to connect the ship’s bilge system with the ship’s ballast system to make the illegal discharges from the vessel’s bilges and bilge holding tank.
Federal and international law requires that all ships comply with pollution regulations that include the proper disposal of oily water and sludge by passing the oily water through a separator aboard the vessel or burning the sludge in the ship’s incinerator. Federal law also requires ships to accurately record each disposal of oily water or sludge in an oil record book and to have the record book available for the U.S. Coast Guard when the vessel is within the waters of the United States.
The ship’s captain, Prastana Taohim, was convicted at a jury trial on May 17, 2012, for obstructing the Coast Guard’s inspection for similar but unrelated charges. At trial, it was found that Taohim ordered the ship’s chief officer to throw hundreds of plastic pipes into the ocean and not record the discharge in the ship’s garbage record book as required. Taohim then knowingly made the garbage record book available during the Coast Guard inspection on Sept. 21, 2011. The plastic pipes had previously contained insecticide and were used to fumigate a grain shipment. The jury also found the captain guilty of one count of obstruction of justice related to covering up the pollution by creating a false and fictitious garbage log. The captain is scheduled to be sentenced on Aug. 15, 2012.
This investigation was conducted by the U.S. Coast Guard Investigative Service, Mobile, and the U.S. Environmental Protection Agency Criminal Investigation Division, Gulf Breeze, Fla. Additional assistance was provided by the Coast Guard Sector Mobile and U.S. Coast Guard Eighth District Legal Office. The case was prosecuted by Trial Attorney David O’Connell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division and Assistant U.S. Attorney Michael Anderson of the U.S. Attorney’s Office for the Southern District of Alabama.
New York Businessman Pleads Guilty<br /> to Filing False Corporate Tax ReturnRead the Press Release
Sung Soo Shin, of Staten Island, N.Y., president of Mission Design and Management Inc. (MDMI), pleaded guilty in the Eastern District of New York to filing a false corporate income tax return, for the fiscal year 2009, before U.S. District Court Judge Nicholas G. Garaufis, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the information and other documents filed in court, Sung Soo Shin caused MDMI to file false corporate tax returns understating its gross receipts by about $1.77 million for fiscal year 2007, $1.61 million for fiscal year 2008, and $2.35 million for fiscal year 2009. In total, Shin caused a tax loss of approximately $1,945,153.
Shin’s sentencing is set for Sept. 21, 2012. Shin faces a potential maximum sentence of three years in prison, restitution of more than $1 million and a fine of up to $250,000.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Special Agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Mark Kotila and Mark McDonald for prosecuting the case.
National Science Foundation Program Director Pleads Guilty in Connection with Scheme to Conceal Received BenefitsRead the Press Release
WASHINGTON – A former program director at the National Science Foundation (NSF) pleaded guilty today in the Eastern District of Virginia to engaging in a scheme to conceal gifts and fraudulent payments he received, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia announced.
Dr. Shih Chi Liu, 73, of Silver Spring, Md., pleaded guilty before U.S. District Judge James C. Cacheris. Liu was charged in a criminal information filed today.
According to a statement of facts filed with his plea agreement, Liu served in various program director positions in the NSF Engineering Directorate from 1981 until December 2011. The NSF is an independent federal agency whose mission is to fund research and education in science and engineering disciplines. Liu was required in his official position to submit a yearly financial disclosure report detailing travel-related reimbursements and gifts totaling more than a particular amount that he received during the reporting period. In the years 2006, 2007, 2008, 2009 and 2010, Liu filed false reports that failed to report payments and gifts he had received. In doing so, he concealed that he had arranged for an accredited university to pay false invoices for services that the university did not receive, pocketing the fraudulently obtained money himself. He also concealed that he had received money for international travel from an accredited university, at times simultaneously requesting and receiving reimbursements from NSF for that same travel.
Liu faces a maximum penalty of five years in prison and a fine of $250,000 when he is sentenced on Aug. 22, 2012.This case was investigated by the NSF Office of the Inspector General. Deputy Chief Peter Koski and Trial Attorney Monique Abrishami of the Public Integrity Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Jasmine Yoon of the Eastern District of Virginia are prosecuting the case.
Justice Department Settles Religious Discrimination Lawsuit Against New York City Transit AuthorityRead the Press Release
The Justice Department announced today that it has reached a settlement with the New York City Transit Authority (NYCTA) to resolve allegations that the NYCTA is engaged in a pattern or practice of religious discrimination.
The Justice Department filed its complaint in September 2004 in the U.S. District Court for the Eastern District of New York. The complaint alleged that the NYCTA violated Title VII of the Civil Rights Act of 1964 by selectively enforcing its uniform headwear policies against employees who are unable to comply for religious reasons and by failing or refusing to reasonably accommodate those employees whose religious practices require an accommodation from the NYCTA’s uniform headwear policies. Title VII prohibits discrimination in employment on the basis of race, color, sex, national origin and religion.
According to the Justice Department’s complaint, the NYCTA had not enforced its uniform headwear policies prior to Sept. 11, 2001. However, beginning in or about March 2002, the NYCTA began to selectively enforce those policies against Muslim and Sikh employees, moving them or threatening to move them out of public contact positions because the employees, consistent with their sincerely held religious beliefs, refused to attach NYCTA logos to their khimars and turbans, respectively.
Under the terms of the settlement agreement, which must still be approved by the court, the NYCTA must: (1) adopt new uniform headwear policies, which would allow employees working in public contact positions to wear khimars, yarmulkes, turbans, kufis, skullcaps, tams and headscarves without attaching anything to the headwear; (2) implement and distribute a new religious accommodation policy consistent with Title VII’s requirement to reasonably accommodate the religious practices of all employees and prospective workers; and (3) provide guidance to and ensure that training is completed by the NYCTA personnel responsible for implementing the agency’s new religious accommodation policy and procedure. Additionally, the NYCTA will pay $184,500, divided among eight current and former NYCTA employees who were denied religious accommodations related to the NYCTA’s prior uniform headwear policies.
“This settlement agreement sends a clear message that the Department of Justice will not tolerate religious discrimination,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I am pleased that the NYCTA has agreed to end its discriminatory practices that for years have forced employees to choose between practicing their religion and maintaining their jobs.”
The continued enforcement of Title VII has been and remains a priority for the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available at its website at www.usdoj.gov/crt.
Related Materials:
NYCTA Settlement Agreement
Justice Department Settles Lawsuit Against New Jersey Information Technology Company for RetaliationRead the Press Release
WASHINGTON – The Justice Department settled a lawsuit today against Whiz International LLC, an information technology staffing company in Jersey City, N.J., regarding allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA) when it terminated an employee in retaliation for expressing opposition to Whiz’s alleged preference for foreign nationals with temporary work visas.
The complaint, which was filed May 22, 2012, alleged that the company directed an employee that served as a receptionist and a recruiter to prefer certain noncitizens in its recruitment efforts and then terminated the employee when she expressed discomfort with excluding U.S. citizens and lawful permanent residents from consideration. The anti-discrimination provision in the INA prohibits employers from retaliating against workers who oppose a practice that is illegal under the statute or who attempt to assert rights under the statute.
Under the terms of the settlement agreement, the company has agreed to pay $21,780 in monetary relief to the injured party, which included backpay and front pay, along with a $1,000 civil penalty. The company has also agreed to be subject to three years of monitoring and reporting by the Justice Department.
“We are pleased to reach a swift and just resolution of this case,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Retaliation against employees for speaking up against potential civil rights violations will never be tolerated. The Civil Rights Division is committed to ensuring that U.S. citizens and other work-authorized individuals are not discriminatorily denied work opportunities.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provisions of the INA, which protect U.S. citizens and certain work-authorized individuals from citizenship status discrimination. The INA also protects work-authorized individuals from national origin discrimination, over-documentation in the employment eligibility verification process and retaliation.For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected], or visit the website at www.justice.gov/crt/about/osc/.
29 May 2012
Self-proclaimed “Governor” of Alabama Sentenced to Ten Years in Federal Prison for Tax FraudRead the Press Release
Monty Ervin and Patricia Ervin, owners of Southern Realty in Dothan, Ala., were sentenced today to federal prison for conspiring to defraud the United States and tax evasion, the Justice Department and Internal Revenue Service (IRS) announced. After a two-week trial that began Oct. 25, 2011, a federal jury in Montgomery, Ala., convicted the Ervins of one count of conspiracy and three counts of tax evasion. The jury also convicted Patricia Ervin of one count of structuring transactions to avoid bank reporting requirements. Monty Ervin was sentenced to 120 months in prison; Patricia Ervin was sentenced to five years of probation, with the condition that she spend 40 consecutive weekends in jail. In sentencing the Ervins, the court found that Monty Ervin was the leader and organizer of the conspiracy and exercised control over Patricia Ervin.
Based on the evidence introduced at trial, the Ervins amassed hundreds of investment properties over the last decade, receiving more than $9 million in rental income. Despite receiving this income, the couple paid no federal income taxes. When confronted by the IRS in 2006, the Ervins proclaimed that they were not United States citizens, and as “sovereigns,” did not consider themselves subject to federal or state law.
The evidence established that Monty Ervin and Patricia Ervin also filed numerous documents in probate court renouncing their U.S. citizenship. In one such filing, Monty Ervin declared himself the “governor” of Alabama in its “original jurisdiction.” The Ervins had a license plate on their vehicle which law enforcement witnesses testified at trial was associated with a “sovereign citizens” organization.
The Ervins owned and managed Southern Realty, a property management company in Dothan. As the evidence showed at trial, the couple concealed their assets from the IRS by placing investment properties into the names of nominees – “trusts” and “trustees.” The “trustees” named on property deeds testified that they were not involved in the sale or purchase of the properties and that the Ervins “stamped” their signatures onto official property records. Patricia Ervin also structured deposits into Southern Realty’s bank account in an effort to evade federal currency reporting requirements.
In addition to hundreds of real estate investment properties, the evidence also showed that the Ervins had amassed beachfront condominium units in their own names including a $1.3 million unit they paid for in cash and, when investigated by the IRS, transferred those properties into the names of bogus “trusts” and “trustees.” Additionally, the government introduced into evidence $350,000 of gold coins said to have been buried in their yard.
The Ervins were indicted by a federal grand jury in Montgomery in February 2011. In March, Monty Ervin was arrested by a U.S. Marshal’s Service Fugitive Task Force in Naples, Fla., with a notebook containing the latitudinal and longitudinal coordinates of an island off the coast of Honduras.
“Tax defiers who flout the tax laws by concealing assets in bogus trusts risk criminal prosecution and substantial prison terms, as well as having to pay their back taxes, interest, and penalties,” said Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division.
“The legality of our income tax laws has been challenged repeatedly and the courts have consistently upheld these laws,” said Richard Weber, Chief, IRS Criminal Investigation. “Sentencings like the one returned against the Ervins send a loud and clear message that regardless of their opinions, people who defy the tax laws will be fully investigated, prosecuted and subjected to the full punishment of the law for their actions.”
In addition to prison time, U.S. District Judge Myron H. Thompson ordered the Ervins to pay $1,436,508 in restitution to the IRS.
Assistant Attorney General Keneally thanked special agents of IRS-Criminal Investigation for investigating the case, Trial Attorneys Justin Gelfand and Michael Boteler of the Justice Department’s Tax Division, and Assistant U.S. Attorney Todd Brown for prosecuting the case.
Romanian National Extradited to U.S. to Face Charges for Allegedly Participating in Multimillion Dollar Scheme to Hack into and Steal Credit Card Data from U.S. MerchantsRead the Press Release
WASHINGTON – Adrian-Tiberiu Oprea, 28, of Constanta, Romania, was extradited to the United States and appeared in federal court in New Hampshire today, to face federal charges relating to his alleged participation in an international multimillion dollar scheme to remotely hack into and steal payment card data from hundreds of U.S. merchants’ “point of sale” computer systems, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire.
In a four-count indictment unsealed on Dec. 6, 2011, Oprea, along with three other Romanian nationals, Iulian Dolan, Cezar Iulian Butu and Florin Radu, were charged with conspiracy to commit computer fraud, conspiracy to commit wire fraud and conspiracy to commit access device fraud. Oprea was extradited to the United States on May 25, 2012. He was arrested on Dec. 1, 2011, in Romania and remained in custody there prior to his extradition. Dolan and Butu were arrested upon their entry into the United States on Aug. 13 and Aug. 14, 2011, respectively, and remain in United States custody. Radu remains at large.
According to the indictment, from approximately 2008 until May 2011, Oprea, Dolan, Butu and Radu conspired to remotely hack into more than 200 U.S.-based merchants’ point-of-sale (POS) or “checkout” computer systems in order to steal customers’ credit, debit and gift card numbers and associated data (collectively referred to as “credit card data”). A POS system allows merchants to process customer purchases, including those made using credit, debit and gift cards, and typically includes a computer, monitor, integrated credit card processing system, signature capture device and a customer pin pad device. Merchant victims include more than 150 Subway restaurant franchises located throughout the United States, including in the District of New Hampshire, as well as more than 50 other identified retailers. According to the indictment, members of the conspiracy have compromised the credit card data of more than 80,000 customers, and millions of dollars of unauthorized purchases have been made using the compromised data.
If convicted, each defendant faces a maximum sentence of five years in prison for the conspiracy to commit computer fraud charge and for each conspiracy to commit access device fraud charge and 20 years in prison for conspiracy to commit wire fraud charge. They also face up to three years of supervised release, a fine of up to twice the amount of the fraud loss, and restitution.
The case was investigated by the U.S. Secret Service and is being prosecuted by Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire and Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division. The Office of International Affairs in the Justice Department’s Criminal Division provided substantial assistance. The department would like to thank Subway for its cooperation.
The charges contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Owner of Hawaii Car Dealerships and Chief Financial Officer Plead Guilty to Tax CrimesRead the Press Release
Charles Alan Pflueger, owner of Pflueger Inc., Randall Kurata, the company’s chief financial officer, and Julie Kam, Pflueger’s executive assistant, pleaded guilty to filing false federal income tax returns before U.S. District Court Judge Leslie E. Kobayashi in Honolulu, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the indictment and other documents filed in Honolulu federal court, Charles Alan Pflueger, Randall Kurata, Julie Kam and others caused Pflueger Inc. to pay the personal expenses of Charles Alan Pflueger and others. The three defendants then caused Pflueger Inc. to improperly deduct the personal expenses as business expenses on Pflueger Inc.’s corporate tax returns. Pflueger caused another of his companies, Pacific Auto Distributors LLC, to pay additional personal expenses, and he did not report those payments as income on his personal tax returns.
Pflueger pleaded guilty to one count of filing a false individual federal income tax return for tax year 2005. Kam also pleaded guilty to one count of filing a false individual federal income tax return for tax year 2005 because she failed to report as income personal expenses that Pacific Auto Distributors LLC paid on her behalf.
Kurata pleaded guilty to one count of filing a false corporate federal income tax return for Pflueger Inc. for tax year 2003. Kurata admitted that from 2003 through at least 2005, he knew that Pflueger Inc. was paying for various individuals’ personal expenses, including Pflueger’s. Kurata further admitted that during 2003 he personally signed checks from Pflueger Inc. that paid individuals’ personal expenses. Kurata filed Pflueger Inc.’s corporate tax return for 2003 knowing that it was false in that it improperly deducted as business expenses significant personal expenses of Pflueger.
Pflueger and Kam’s sentencing is set for Jan. 31, 2013, and Kurata’s sentencing is scheduled for Dec. 20, 2012.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division thanked Special Agents of IRS - Criminal Investigation, who investigated the case, Assistant U.S. Attorney Leslie E. Osborne, Jr. and Tax Division Trial Attorneys Timothy J. Stockwell and Dennis R. Kihm, who prosecuted the case.
Mid-America Pipeline Company and Enterprise Products Operating to Pay $1 Million for Spills in Iowa, Kansas and NebraskaRead the Press Release
WASHINGTON – Mid-America Pipeline Company LLC (MAPCO), and Enterprise Products Operating LLC, of Houston, have agreed to pay a civil penalty of more than $1 million to the United States to settle violations of the federal Clean Water Act related to three natural gasoline pipeline spills in Iowa, Kansas and Nebraska.
As part of a consent decree lodged today in U.S. District Court in Omaha, Neb., and in addition to paying the $1,042,000 civil penalty, the companies have agreed to undertake various measures aimed at reducing external threats to their pipeline, enhance their reporting of spills, and spend at least $200,000 to identify and prevent external threats to the pipeline involved in the spills.
MAPCO owns and Enterprise operates the 2,769-mile West Red Pipeline, which transports mixed natural gasoline products between Conway, Kan., and Pine Bend, Minn. The settlement resolves Clean Water Act violations related to three spills that occurred along the pipeline:
- A March 29, 2007, rupture near Yutan, Neb., which caused the discharge of approximately 1,669 barrels of natural gasoline directly into an unnamed ditch and Otoe Creek.
- An April 23, 2010, rupture near Niles, Kan., which caused the discharge of approximately 1,760 barrels of natural gasoline directly into an unnamed ditch, Cole Creek, Buckeye Creek and the Solomon River.
- An Aug. 13, 2011, rupture near Onawa, Iowa, which caused the discharge of approximately 818 barrels of natural gasoline directly into the Missouri River.
“Pipeline ruptures and resulting spills can cause significant harm to the environment, so it is essential that pipeline owners and operators abide by federal laws intended to protect our land and waters,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This agreement will put into place important measures to prevent future spills and identify potential safety threats along MAPCO’s West Red Pipeline.”
“More than 20,000 miles of pipeline, carrying oil and petroleum products, cross the states of Iowa, Kansas, Missouri and Nebraska in EPA’s Region 7,” said Environmental Protection Agency Regional Administrator Karl Brooks. “A frequent cause of pipeline breaks is the action of third parties during farming and excavation. This settlement requires the defendants to honor a schedule of pipeline inspections on the ground and from the air, and reach out to local agencies, contractors and excavators to make sure they are more fully aware of pipeline locations and depths.”
“This settlement requires proactive vigilance to ensure that our soil and waterways are protected from contaminants,” said Deborah R. Gilg, U.S. Attorney for the District of Nebraska. “The agreement will result in safer pipeline operations and that will be good for Nebraska’s environment.”
In addition to the proactive inspections and outreach efforts, the settlement also requires MAPCO and Enterprise to spend $200,000 to relocate, cover, lower or replace pipeline segments; install new remote shutoff valves; install new physical protections such as fences or concrete barriers; and install other new equipment, structures or systems to prevent spills from reaching navigable waters.
The consent decree is subject to a 30-day public comment period and court approval. A copy of the consent decree is available on the Department of Justice web site at www.justice.gov/enrd/Consent_Decrees.html.
Learn more about EPA’s enforcement of the Clean Water Act:
www.epa.gov/compliance/civil/cwa/cwaenfstatreq.html.
Justice Department Announces Agreement to Protect Rights of Military and Overseas Voters in CaliforniaRead the Press Release
WASHINGTON – The Justice Department announced today that it has reached an agreement with California state officials to help ensure that military servicemembers, their family members and U.S. citizens living overseas have the opportunity to participate fully in California’s June 5, 2012, federal primary election.
The agreement was filed at the same time as a lawsuit brought under the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA). The Justice Department filed suit in response to the state’s failure to send absentee ballots to thousands of California’s eligible military and overseas voters for the June 5, 2012, federal primary election at least 45 days prior to the election, as required by UOCAVA. The complaint also alleges that the state failed to ensure that ballots were sent by the voters’ preferred method of transmission (by mail or electronically), as required by federal law.The agreement between the Justice Department and the California Secretary of State provides remedial options to afford affected military and overseas voters sufficient opportunity to receive, cast and return their ballots in time to be counted. Under the agreement, affected voters will be notified of their options to receive and return their ballots by electronic or other expedited methods, and they will be offered the option of returning their ballots by express delivery at no cost to the voter. The agreement recognizes the steps some counties already took to utilize express delivery for ballots that were not sent at least 45 days prior to the election.
“Members of our armed forces, their families and overseas citizens are entitled to a complete and meaningful opportunity to vote, and the Justice Department is committed to seeking full access to the ballot box for all voters – regardless of where they are on Election Day,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The California Secretary of State worked cooperatively with the department and agreed to implement measures that will ensure California’s military and overseas voters will have the opportunity to fully participate in June’s primary election and future federal elections.”
“Our fine men and women in uniform make tremendous sacrifices serving our nation every day,” said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California. “This agreement ensures that military voters, as well as U.S. citizens who are overseas, need not sacrifice their right to vote.”
UOCAVA requires states to allow uniformed service voters (serving both overseas and within the United States) and their families and overseas citizens to register to vote and to vote absentee for all elections for federal office. In 2009, Congress enacted the Military and Overseas Voter Empowerment (MOVE) Act, which made broad amendments to UOCAVA. Among those changes was a requirement that states must transmit absentee ballots to voters covered under UOCAVA, by mail or electronically at the voter’s option, no later than 45 days before federal elections.
The agreement, which must be approved by the U.S. District Court in Sacramento, Calif., also commits the California Secretary of State to closely monitor and certify California counties’ transmission of UOCAVA ballots, conduct training of county election officials before the 2012 general election, provide assistance to its counties when necessary, and report back to the United States about its UOCAVA compliance for the 2012 federal general election and the 2014 federal election cycle. In addition, the agreement requires the California Secretary of State to take additional steps to ensure full compliance with UOCAVA in future federal elections, including investigating the cause of the late mailed ballots and then taking the actions necessary to prevent future violations. The California Secretary of State must provide status reports to the Department of Justice on those efforts.
More information about UOCAVA and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/about/vot/misc/activ_uoc.php. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.Related Materials:
Consent Decree (PDF)
Complaint (PDF)Former Head of Worldwide Sales at California Valve <br /> Company Pleads Guilty to Foreign Bribery OffenseRead the Press Release
WASHINGTON – Paul Cosgrove, the former Head of Worldwide Sales at Rancho Santa Margarita, Calif.-based valve company Control Components Inc. (CCI) pleaded guilty today to violating the Foreign Corrupt Practices Act (FCPA), announced the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Central District of California.
Cosgrove, who resides in Laguna Niguel, Calif., pleaded guilty today before U.S. District Judge James V. Selna in Santa Ana, Calif., to a one-count superseding information charging him with making a corrupt payment to a foreign government official in China in violation of the FCPA. According to court documents, CCI designed and manufactured service control valves for use in the nuclear, oil and gas, and power generation industries worldwide. At sentencing, Cosgrove, 65, faces up to 15 months in prison. Sentencing is scheduled for Aug. 27, 2012.
On Apr. 8, 2009, Cosgrove and five other former executives of CCI were charged in a 16-count indictment for their roles in the foreign bribery scheme. The five other former CCI executives charged were Stuart Carson, CCI’s former president; Hong “Rose” Carson, CCI’s former director of sales for China and Taiwan; David Edmonds, CCI’s former vice president of worldwide customer service; Flavio Ricotti, the former CCI vice president of sales for Europe, Africa and the Middle East; and Han Yong Kim, the former president of CCI’s Korean office. On Apr. 28, 2011, Ricotti pleaded guilty to one count of conspiracy to violate the FCPA. On Apr. 17, 2012, Stuart Carson and Hong “Rose” Carson each pleaded guilty to one count of making a corrupt payment to a foreign government official in violation of the FCPA. The trial of Edmonds is scheduled for Jun. 26, 2012. The charges against Kim are pending. An indictment merely contains allegations and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In related cases, two defendants previously pleaded guilty to conspiring to bribe officers and employees of foreign state-owned companies on behalf of CCI. On Jan. 8, 2009, Mario Covino, the former director of worldwide factory sales for CCI, pleaded guilty to one count of conspiracy to violate the FCPA. On Feb. 3, 2009, Richard Morlok, the former CCI finance director, also pleaded guilty to one count of conspiracy to violate the FCPA. Stuart and Rose Carson, Covino, Morlok and Ricotti are scheduled to be sentenced later this year.
On July 31, 2009, CCI pleaded guilty to a three-count criminal information charging the company with conspiracy to violate the FCPA and the Travel Act, and two substantive violations of the FCPA. CCI was ordered to pay an $18.2 million criminal fine, placed on organizational probation for three years, and ordered to create and implement a compliance program and retain an independent compliance monitor for three years. CCI admitted that from 2003 through 2007, it made corrupt payments in more than 30 countries, which resulted in net profits to the company of approximately $46.5 million from sales related to those corrupt payments.
The case is being prosecuted by Deputy Chief Charles G. La Bella and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Douglas McCormick and Gregory Staples of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI’s Washington Field Office and its team of special agents dedicated to the investigation of foreign bribery cases.
25 May 2012
Miami Man Convicted for Obstruction of Justice and False Statements for Certifying Ships Safe for SeaRead the Press Release
WASHINGTON – A federal jury in Miami yesterday convicted a Miami-based ship surveyor for lying to the Coast Guard and for falsely certifying the safety of ships at sea, announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; Rear Admiral William D. Baumgartner, Commander, 7th Coast Guard District; and Jonathan Sall, Special Agent in Charge, U.S. Coast Guard Investigative Service.
Alejandro Gonzalez, 60, of Miami-Dade County, Fla., was convicted by a federal jury in Miami of three counts of making false statements to the U.S. Coast Guard and one count of obstruction of an agency proceeding. The defendant faces a maximum statutory penalty of five years in prison on each count.
The jury found Gonzalez guilty of lying to U.S. Coast Guard inspectors and a criminal investigator during an interview in April 2009 about the dry-docking of the M/V Cala Galdana, a 68-meter cargo vessel, in San Juan, Puerto Rico. Gonzalez repeatedly claimed the vessel was dry-docked in Cartagena, Colombia, in March 2006, while evidence at the trial proved conclusively that the vessel was never in Colombia during 2006.
U.S. Coast Guard inspectors in San Juan discovered the vessel taking on water in August 2008 and requested information concerning the last dry-docking of the vessel. Gonzalez concocted a false story about the vessel being dry-docked in Colombia in 2006 when he knew it was not.
Gonzales was also convicted of falsifying documents in December 2009 for the M/V Cosette, a 92-meter cargo vessel. As the surveyor on behalf of Bolivia, Gonzalez certified the ship as safe for sea while the vessel was docked in Fort Pierce, Fla., in November 2009. When the vessel shortly thereafter arrived in New York City harbor, U.S. Coast Guard inspectors discovered exhaust and fuel pouring into the ship’s engine room, endangering the crew and the ship. For his action, Gonzalez was convicted of making a false statement and obstructing a U.S. Coast Guard Port State Control examination.
Assistant Attorney General Moreno and U.S. Attorney Ferrer commended the investigative efforts of the U.S. Coast Guard and the U.S. Coast Guard Investigative Services. The prosecution was handled by Assistant U.S. Attorney Jaime Raich and Trial Attorney Kenneth Nelson, of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Sentencing is currently scheduled for Aug. 2, 2012, in Miami.
Justice Department to Monitor Elections in TexasRead the Press Release
The Justice Department announced today that it will monitor primary elections on May 29, 2012, in Fort Bend, Harris and Jefferson Counties in Texas, to ensure compliance with the Voting Rights Act of 1965 and other federal voting rights statutes. 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 Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Fort Bend and Jefferson Counties based on the attorney general’s certification. In addition, Fort Bend is subject to a court order entered in 2009, which requires the jurisdiction to comply with the minority language and assistor of choice requirements of the Voting Rights Act, as well as the requirements of the Help America Vote Act. The observers will watch and record activities during voting hours at polling locations in these counties, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Harris County. A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
24 May 2012
U.S. Court Rules That Nation’s Auto Dealers Are Requiredto Provide Complete Data on Car Loan TermsRead the Press Release
WASHINGTON - A federal judge in Washington has ruled that automobile dealers who engage in certain three-party financing transactions must disclose certain information to consumers who take out car loans if they are offered less favorable terms, such as a higher interest rate, than the most favorable terms available to the majority of consumers. When a lender relies on a credit report in setting an unfavorable interest rate, a provision of the Fair Credit Reporting Act requires lenders to provide notice to the consumer and provide instructions on how the consumers can obtain a copy of their credit history report and, if necessary, dispute and correct any false or incomplete data. One of the purposes of the statute is to provide consumers with information that might be helpful in preventing identity theft.
Judge Ellen Huvelle upheld the Federal Trade Commission’s (FTC) determination that auto dealers must comply with this provision even when they engage in “three-party” financing transactions, in which the dealer agrees to extend financing to a consumer and then immediately assigns the loan to a third party, such as a bank or finance company.
In the FTC rulemaking proceeding, the National Automobile Dealers Association (NADA) argued that auto dealers engaging in these transactions should be exempt from providing this notice. NADA argued that, when only this third party, and not the car dealer, actually obtains the credit report, then the car dealer should be exempt from providing any disclosures to the consumers. The FTC rejected this argument and concluded that the auto dealers actually use the credit report even if they do not physically obtain it, and so must provide the notice to consumers. NADA sued the FTC, challenging this interpretation. The court agreed with the FTC’s position in its ruling.
“This ruling will make it easier for consumers to learn about unfavorable information in their credit reports. Not only will this give them an opportunity to correct any inaccuracies, but it also provides a key tool needed to combat identity theft or fraud,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division. “The auto dealer is in the best position to provide this information because the dealer interacts directly with the consumer and establishes the credit terms in the agreement that it enters with the consumer.”
Under NADA’s interpretation, the consumer would never receive this disclosure – not from the dealer nor from the third-party finance company. In addition, all entities that extend credit to consumers could enter similar arrangements and thereby exempt themselves from giving consumers any disclosures relating to adverse information in consumer reports.
The Federal Trade Commission was represented in the case by Drake Cutini of the Consumer Protection Branch of the Justice Department’s Civil Division.
Residential Mortgage-Backed Securities (RMBS) Working Group Announces New Resources to Investigate RMBS MisconductRead the Press Release
WASHINGTON – The Residential Mortgage-Backed Securities (RMBS) Working Group announced new resources today in the ongoing effort to investigate misconduct, including the launch of a RMBS website to report fraud and the creation of a coordination team to facilitate the various investigations underway around the country.
The RMBS Working Group is a collaborative effort led by five co-chairs including Assistant Attorney General for the Criminal Division Lanny Breuer, Acting Assistant Attorney General for the Civil Division Stuart Delery, U.S. Attorney for the District of Colorado John Walsh, Director of Enforcement for the U.S. Securities and Exchange Commission (SEC) Robert Khuzami, and New York State Attorney General Eric Schneiderman. The working group and its members are focused on investigating potential false or misleading statements, deception or other misconduct by market participants in the creation, packaging and sale of mortgage-backed securities. While the working group and its members’ specific efforts are law enforcement sensitive and, therefore, must remain confidential, generally the working group continues to: identify specific RMBS offerings for priority investigation through the use of various forensic tools including risk-based analytics; analyze pending private RMBS litigation throughout the country for important evidentiary connections to existing law enforcement investigations; and convene operational meetings among investigators, attorneys, analysts and RMBS market experts and insiders.
"The RMBS website is a new call to those insiders who know about fraud that occurred in the RMBS market, who know it's time to expose that fraud, and who want to help us hold accountable those individuals and institutions who broke the law in pursuit of bigger paydays," said Acting Associate Attorney General Tony West. "Although the working group and its members have done a tremendous amount of investigative work already – including having issued more than 25 civil subpoenas – we know that hearing from insiders is particularly valuable. There are scores of people who worked in the RMBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy. We want to hear from them."
Acting Associate Attorney General West also noted that whistleblowers enjoy legal rights that protect their ability to speak out without the fear of retaliation. "When whistleblowers summon the courage to come to us, we will do everything we can to maintain their confidence and trust," he said.
Each co-chair agency brings investigative resources and existing RMBS investigations to the working group. To facilitate communication and coordination among the various agencies conducting RMBS investigations nationwide, the five co-chairs and the Task Force’s Executive Director have appointed a coordinating team. Matthew Stegman, a career white-collar prosecutor, is the RMBS Working Group’s Coordinator. In addition to the selection of Mr. Stegman, the coordinating team in Washington includes criminal prosecutors and civil attorneys, analysts and FBI investigators who are coordinating federal and state fraud investigations nationwide.
"The working group's approach to RMBS investigations is systematic and smart – cross-agency teams comprised of experienced prosecutors and investigators utilizing market experts and risk-based criteria to triage transactions for review, and bringing to bear the entire palette range of state and federal legal theories and remedies," said RMBS Working Group Co-Chair Robert Khuzami, Director of the SEC’s Division of Enforcement. “The numbers reveal the working group effort and commitment; the SEC alone brings to the effort more than 40 SEC staff from eight SEC offices trained in securitized products. The SEC teams bring substantial ongoing investigatory work to the effort as well. Since 2010, the SEC has issued over 300 subpoenas or document requests resulting in more than 30 million pages of documents with interviews or sworn testimony taken from over 180 witnesses, all focused on whether firms failed to disclose important information when selling RMBS securities.”
A broad coalition of state and federal officials have dedicated lawyers, investigators, analysts and staff – currently over 100 strong – actively engaged in RMBS investigatory work at the Department of Justice, the U.S. Attorneys’ Offices, the SEC, the New York State Attorney General’s Office, U.S. Department of Housing and Urban Development, U.S. Department of Housing and Urban Development’s Office of Inspector General, FBI, and Federal Housing Finance Agency’s Office of Inspector General, as a result of these focused efforts. Investigating and bringing complex white collar civil and criminal cases can be a time-consuming and challenging process, but the resources, enthusiasm and organization brought by the members of the RMBS Working Group have already resulted in substantial strides toward that goal.
“Over the last 100 days United States Attorneys across the country have responded enthusiastically to the call to address this important enforcement initiative,” said RMBS Working Group Co-Chair John Walsh, U.S. Attorney for the District of Colorado. “Dozens of Assistant U.S. Attorneys and other staff are actively engaged and we expect that the energy and resources for this effort will continue to grow.”
The working group will hold a two-day meeting at the Washington, D.C., headquarters of the SEC from May 31 to June 1, 2012. The group is expecting more than 180 attorneys, agents, investigators and analysts from working group member agencies and offices around the country to attend the event, both in person as well as by video at several SEC regional offices. This will be the third time the full working group has met, though the co-chairs and Executive Director of the Task Force have held formal weekly conference calls and have had more informal discussions on an almost-daily basis. The two-day event will be an opportunity for prosecutors, civil attorneys, regulators, state attorneys general, law enforcement agencies and true experts in the field to discuss and learn from ongoing investigations, identify new potential targets and successful legal theories, and coordinate strategies.
To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html
About the RMBS Working Group:
The Residential Mortgage-Backed Securities (RMBS) Working Group of the Financial Fraud Enforcement Task Force was established by the Attorney General in late January 2012. The working group has been dedicated over the past 3 months to initiating, organizing, and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market that helped precipitate the 2008 financial crisis. The RMBS Working Group is part of the Financial Fraud Enforcement Task Force (FFETF). The Executive Director of the Financial Fraud Enforcement Task Force is Michael J. Bresnick.
Justice Department Settles with Louisiana School District to Ensure Equal Opportunities for All StudentsRead the Press Release
The Department of Justice announced today that it entered into a settlement agreement with the Lincoln Parish School Board in Louisiana to ensure the school district reaches full compliance with its longstanding desegregation obligations. The agreement was approved by a judge today and is in the form of a consent order.
Under the agreement, the board will adopt a pairing plan for the four elementary schools currently serving grades K-5 in the Ruston attendance zone. The department had found significant racial disparities in the student demographics at three of those four schools. The pairing plan, which will be implemented by the start of the 2012-2013 school year, will create two schools serving grades K-2 and two schools serving grades 3-5. The board has also agreed to revise its student transfer policies. Once these measures are implemented, the racial disparities in the Ruston schools will be eliminated and the student bodies at every school in the district will be fully desegregated.
The consent order, if approved, will also dismiss the desegregation case in the areas of faculty and staff assignment, facilities, transportation and extracurricular activities. The department has determined that the board fully and successfully complied with its desegregation obligations in those areas. The board may seek dismissal of the student assignment issue in late 2013 upon successful implementation of the terms of the agreement. The department, board and other defendants are continuing to work to address other issues in the desegregation case, which was originally filed by the United States in 1966.
“The Lincoln Parish School Board is to be commended for taking aggressive steps to address and effectively resolve the remaining issues in this desegregation case,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division looks forward to continuing to work cooperatively with the board to implement this agreement and ensure all Lincoln Parish students have equal educational opportunities.”
The enforcement of the Equal Protection Clause and Title IV in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Justice Department Issues Further Guidance on Accessibility Requirements for Existing Swimming Pools at Hotels and Other Public AccommodationsRead the Press Release
The Justice Department released two technical assistance documents today regarding the application of the Americans with Disabilities Act (ADA) to swimming pools. The documents can be found at www.ada.gov//qa_existingpools_titleIII.htm and www.ada.gov/pools_2010.htm.
Many people with disabilities could benefit from the social, recreational and exercise benefits of swimming. However, until September 2010, there were no accessibility standards for swimming pools under the ADA. In September 2010, the department issued a regulation providing accessibility requirements for swimming pools. The rules were originally set to become effective on March 15, 2012. Newly constructed and altered pools must be fully accessible to people with disabilities as of March 15, 2012, by providing pool lifts, sloped entries, or other specified accessibility features. However, many pool owners had misunderstandings about how to apply the new accessibility requirements to pre-existing pools. Therefore, the department has extended the compliance date for existing pools to Jan. 31, 2013.
In its continuing effort to be responsive to both pool owners and the disability community, the department has now issued a technical assistance document addressing 19 common questions about accessibility requirements for existing pools. The document emphasizes the application of the requirement that pool owners remove accessibility barriers to the extent it is readily achievable to do so. The document explains, “Readily achievable means that it is easily accomplishable without much difficulty or expense. This is a flexible, case-by-case analysis, with the goal of ensuring that ADA requirements are not unduly burdensome, including to small businesses.”
Recognizing that some pool owners who attempted to comply with the rule before the original compliance date mistakenly believed that portable lifts were generally acceptable, the department also provides that it will not enforce the fixed elements of the 2010 standards against those owners of existing pools who purchased otherwise-compliant portable lifts prior to March 15, 2012, as long as those owners keep the lifts in position for use at the pool and operational during all times that the pool is open to guests.
Significant tax credits and deductions are available to help businesses of all sizes offset any costs of ADA compliance. The department is committed to providing technical assistance and education to ensure that covered entities and people with disabilities understand their rights and responsibilities under the ADA. The department has offered two live webinars on pool accessibility. Additional information about the ADA’s requirements, including the 2010 ADA standards, is available on the department’s ADA website at www.ada.gov. ADA specialists are also available on the ADA Information Line at 800-514-0301 (voice); 800-514-0383 (TTY). Specialists are available Monday through Friday from 9:30 a.m. until 5:30 p.m. EDT, except on Thursday, when the hours are 12:30 p.m. until 5:30 p.m.
California Woman Indicted for Allegedly Impersonating a Congressional AideRead the Press Release
WASHINGTON – An Atwater, Calif., woman was charged today in a one-count indictment filed in the Eastern District of California for impersonation of an officer or an employee of the United States, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
The indictment charges Susan Tomsha-Miguel, 51. An initial appearance and arraignment are scheduled for tomorrow at 9:00 a.m. before Magistrate Judge Dennis L. Beck.
According to the indictment, Tomsha-Miguel operated a tax consulting and bookkeeping business in Atwater. A client, who owned a commercial business in Merced, Calif., hired Tomsha-Miguel to resolve a tax dispute with the Internal Revenue Service (IRS). Tomsha-Miguel requested help with the tax problems from the office of U.S. Representative Dennis A. Cardoza, who represents the 18th Congressional District, which includes Merced County, as well as parts of San Joaquin, Stanislaus, Madera and Fresno Counties. According to the indictment, Representative Cardoza’s office agreed to help, and transmitted written material, including a form printed under his official Congressional letterhead, to Tomsha-Miguel. Some time thereafter, Tomsha-Miguel allegedly sent her client a counterfeit letter supposedly written under Representative Cardoza’s official letterhead and purportedly written and signed by an aide to Representative Cardoza. The letter falsely claimed that due to Tomsha-Miguel’s efforts on behalf of her client, Representative Cardoza’s aide had contacted an IRS official. The counterfeit letter claimed that the IRS official had agreed to make resolving the client’s tax dispute his “number one priority” after he returned from “Washington, D.C. for an emergency strategy meeting with the U.S. Treasury Secretary and others for a planning session in the event a budget does not get passed by both the House and Senate.” The indictment alleges that, in reality, the aide did not exist and Tomsha-Miguel had forged the letterhead by copying-and-pasting Representative Cardoza’s official letterhead onto a blank sheet of paper. The indictment further alleges that Tomsha-Miguel had written the letter from the non-existent aide herself and then sent it to her client in order to mislead her client into believing that she had succeeded in alleviating his tax problems.
Tomsha-Miguel faces a maximum sentence of three years in prison, a fine of $250,000, and supervised release.
An indictment is merely a charge, and a defendant is presumed innocent unless and until proven guilty.
The case is being prosecuted by Trial Attorney Barak Cohen of the Public Integrity Section in the Justice Department’s Criminal Division. The case is being investigated by the FBI.
23 May 2012
Statement of the Attorney General on Resignation of <br /> U.S. Attorney for the Northern District of Illinois <br /> Patrick FitzgeraldRead the Press Release
Attorney General Eric Holder issued the following statement today on the resignation of U.S. Attorney for the Northern District of Illinois Patrick Fitzgerald:
“Throughout his distinguished career as a prosecutor, United States Attorney Patrick Fitzgerald has served the American people and the citizens of Illinois with the utmost integrity and a steadfast commitment to the cause of justice.
“From his early consequential years in New York City confronting the terrorist threat to his strong leadership of the U.S. Attorney’s Office for the Northern District of Illinois, Pat has rightly earned a reputation over these last 24 years as a prosecutor’s prosecutor, overseeing significant cases involving public corruption, international terrorism and terrorism financing, corporate fraud, organized crime, and violent crime.
“A hallmark of Pat’s tenure has been his personal commitment to the Department’s mission and his willingness to accept the call of duty – whenever it came and whatever it required. In 2003, he was appointed as special counsel in the investigation into the disclosure of the identity of a covert employee of the Central Intelligence Agency that resulted in the indictment of I. Lewis “Scooter” Libby, then chief of staff and national security advisor to the Vice President. He also served as lead counsel in the trial, which resulted in Mr. Libby’s conviction on charges of perjury and obstruction of justice. In 2010, I appointed Pat as Special Attorney to supervise the investigation that resulted in the pending indictment, in the Eastern District of Virginia, of former CIA officer John Kiriakou for allegedly repeatedly disclosing classified information, including the name of a covert CIA officer and information revealing the role of another CIA employee in classified activities.
“Over the years, he has gained the trust of two presidents and the unwavering confidence of four Attorneys General, and I am deeply grateful to him for his service and his friendship over the years.”
Justice Department Recognizes Efforts to Rescue Children from Abuse and Prosecute PredatorsRead the Press Release
Deputy Attorney General James M. Cole paid tribute to four individuals today during the National Missing Children’s Day ceremony at the Justice Department’s Great Hall. Deputy Attorney General Cole presented awards to a special agent, a detective, a 30-year veteran of the postal service and a prosecutor for their extraordinary efforts to recover missing children, rescue children from abuse and prosecute sexual predators. This annual ceremony honors missing children, their families, child advocates and those dedicated to the well-being and safety of children.
“Protecting children is one of the important jobs we have,” said Deputy Attorney General Cole. “There is no rest for a parent who has lost a child, and there should be no rest for any of us who are in a position to help. There may not be any words we could offer that would ease their pain, but we can and will offer our support – and all the tools at our disposal to help families of missing and exploited children. I am honored to recognize those who work on the front lines to rescue children and bring them home safely.”
Melodee Hanes, Acting Administrator of the Office of Juvenile Justice and Delinquency Prevention, announced the release of AMBER Alert Best Practices a guide to enhance the ability of law enforcement, broadcasters and child protection officials to safely recover missing and abducted children. The guide details effective practices for training law enforcement, activating and broadcasting an AMBER Alert, disseminating information to the public and approaching family members of an abducted child. Acting Administrator Hanes also announced the release of two publications translated into Spanish:
· No estás solo: El camino del secuestro al empoderamiento You're Not Alone: The Journey From Abduction to Empowerment presenting the stories of child abduction survivors and how their lives changed after their traumatic experiences; and
· ¿Y yo? Cómo sobrellevar el secuestro de un hermano o una hermana What About Me? Coping with the Abduction of a Brother or Sister offering insight from siblings of abducted children.
Deputy Attorney General Cole and Acting Assistant Attorney General for the Office of Justice Programs Mary Lou Leary highlighted a number of Justice Department programs to protect children, such as Project Safe Childhood , the Internet Crimes Against Children Task Force Program, the National Center for Missing & Exploited Children and the AMBER Alert Program, which has led to the successful recovery of 584 abducted children since its creation in 1996.
Other speakers included Yvonne Pointer, the mother of an abducted and murdered daughter and an international educator on child abduction and youth violence, and Ernie Allen, President and CEO of the National Center for Missing & Exploited Children. Guests included families of missing children, child advocates and federal, state, local and tribal agency representatives who support programs to recover missing children.
During the ceremony, Deputy Attorney General Cole presented the following awards:
Attorney General’s Special Commendation: Recognizes the extraordinary efforts of an Internet Crimes Against Children (ICAC) task force, an ICAC affiliate agency, or an individual assigned to an ICAC task force or affiliate agency for making significant investigative or program contributions to the ICAC program.
Recipient: Special agent Tim Erickson, North Dakota Bureau of Criminal Investigation, whose investigation of a school technology administrator on child pornography charges resulted in the rescue of eight children from physical and sexual abuse and the arrest six individuals in five states and Canada on charges of sexual abuse and child pornography production.
Missing Children’s Law Enforcement Award: Recognizes the extraordinary efforts of a law enforcement officer who made a significant investigative or program contribution to the safety of children.
Recipient: Detective Randall Abbott, Hartford, Wis., Police Department, whose five-year investigation of a child neglect case led to multiple convictions and the safe recovery of an endangered girl.
Missing Children’s Citizen Award: Honors the extraordinary efforts of private citizens for their unselfish acts to safely recover missing or abducted children.
Recipient: H. Keith Ray, Letter Carrier, U.S. Postal Service, Oakville , Mo., who participated in a search in his community and found a missing child.
Missing Children’s Child Protection Award: Honorsthe extraordinary efforts of a law enforcement officer who made a significant investigative or program contribution to protect children from abuse or victimization.
Recipient Florida Assistant State Attorney Greg Schiller, Palm Beach County Sexual Predator Enforcement Unit, who secured a 25-year prison sentence for a sexual predator and worked to change Florida law to make intentional viewing of child pornography a crime.
Missing Children’s Art Contest Award:
Recipient: Elisa Martinez, a fifth-grader from Walter V. Long Elementary School in Las Vegas, who was selected as the 13th Annual National Missing Children’s Day Art Contest winner.
President Ronald Reagan proclaimed May 25, 1983, the first National Missing Children’s Day to remember Etan Patz, a six-year-old boy who disappeared from a New York City street corner on May 25, 1979. Missing Children’s Day honors his memory and the memories of children still missing.
Investment Club Manager Sentenced in Virginia to 12 Years in Prison for $40 Million FraudRead the Press Release
WASHINGTON – Alan James Watson, 47, of Clinton Township, Mich., was sentenced today to 12 years in prison for fraudulently soliciting and accepting $40 million from more than 900 members of his investment club, Cash Flow Financial LLC (CFF). Watson subsequently lost nearly all of the investors’ money through non-disclosed, high-risk investments. Victims were located in Virginia and nationwide. Watson was also ordered to forfeit $36,615,344.
U.S. District Judge Gerald Bruce Lee in the Eastern District of Virginia also sentenced Watson to three years of supervised release. Watson pleaded guilty to one count of wire fraud on Sept. 22, 2011.
The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Virginia Neil H. MacBride; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Postal Inspector in Charge of Criminal Investigations Gerald O’Farrell of the U.S. Postal Inspection Service (USPIS).“Mr. Watson deceived members of his investment club from early on and drove his scheme deeper and deeper while investors remained none the wiser,” said Assistant Attorney General Breuer. “His lies destroyed lives, and today’s sentence ensures he will pay for his destructive actions. The 12-year prison sentence handed down today is a signal to fraudsters that criminal deception born from greed will not be tolerated.”
“The pitch Mr. Watson made to investors was a big fat lie, and he kept lying until his scheme collapsed and investors lost nearly everything,” said U.S. Attorney MacBride. “Based on these lies, investors recommended Mr. Watson’s club to their friends and family, and the damage to these relationships was just as harmful as the financial devastation itself.”
“More than 900 unwitting victims thought they had done their homework and calculated their investment wisely; instead, they were met with false documentation that yielded no return on their investment,” said FBI Assistant Director in Charge McJunkin. “Investigating white collar crime has been and will continue to be a priority for the FBI and our law enforcement partners, as demonstrated by this case and today’s sentence.”
According to court documents, Watson created CFF in 2004 and served as the club’s chief executive officer. From 2006 to 2009, Watson received almost $40 million from investors. Watson purported that the money would be invested through an equities-trading system developed by an expert consultant, Trade LLC, with a promised return on investment of 10 percent per month. In reality, Watson admitted that only $6 million of the $40 million was ever invested in Trade LLC, while the remaining $34 million was secretly invested in miscellaneous, high-risk ventures without the consent of investment club members. These high-risk investments resulted in a near complete loss of the $34 million.
According to court documents, despite the losses for the investors, Watson continued to create false monthly account statements showing net gains from their investments. In addition, Watson included “bonus” items on the account statements that appeared as trading profits, the result of a Ponzi scheme he orchestrated to use new investor funds to pay off earlier investors.
In March of 2009, Watson ceased investing in Trade LLC and re-deposited those funds in separate unauthorized ventures. In 2010, nearly a year after he had fully withdrawn finances from Trade LLC, Watson informed investment club members that he had not invested their money as promised, and that none of the reported returns had ever materialized. This resulted in a combined $40 million loss for investment club members.
The Commodity Futures Trading Commission (CFTC) has filed a related civil case in the Eastern District of Michigan.
This case was investigated by the FBI’s Washington Field Office, USPIS, the CFTC and the U.S. Securities and Exchange Commission. The department thanks these agencies for their substantial assistance in this matter.
Trial Attorney Kevin B. Muhlendorf of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark D. Lytle of the Eastern District of Virginia are prosecuting the case on behalf of the United States.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national 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 about the task force visit: www.stopfraud.gov.
Georgia Tax Cheats Indicted for Conspiring to Defraud the United StatesRead the Press Release
Tyrone Devon Thompson, Aritha Currie, Julius Thompson, Tronda Thompson and Shonda Sneed were charged in an indictment by a federal grand jury in the Middle District of Georgia on a variety of counts stemming from a tax fraud scheme, the Justice Department and the Internal Revenue Service (IRS) announced today. The 22-count indictment charges all five with conspiring to defraud the United States and filing false claims against the United States. The indictment, which was returned on May 11, 2012, was unsealed following the defendants’ arrests.
According to the indictment, all of the defendants conspired together to file false federal income tax returns that sought fraudulent refunds. The defendants directed the IRS to directly deposit the false refunds into the bank accounts of the defendants. The bank accounts received at least $280,000 in false tax refunds.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, all the defendants face a maximum potential sentence of five years in prison for the conspiracy charge and three years for each false claim count. All the defendants are also subject to fines and mandatory restitution if convicted.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division commended the efforts of Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Charles Edgar and Justin Gelfand, who are prosecuting the case.
Final Defendant Sentenced for His Role in International Conspiracy Involving the Forced Labor of Eastern European Women in Detroit-area Exotic Dance ClubsRead the Press Release
Veniamin Gonikman, 56, a naturalized U.S. citizen originally from Ukraine, was sentenced today in federal court for his role in an international conspiracy to compel Eastern European women to work in exotic dance clubs in the Detroit metropolitan area. U.S. District Court Judge Victoria A. Roberts sentenced Gonikman to 36 months in prison followed by 3 years of supervised release. He is the ninth and final member of the charged conspiracy to be sentenced.
Gonikman became a fugitive in 2005 following the arrests of his co-conspirators, Aleksandr Maksimenko and Michael Aronov. He was apprehended in Ukraine in January 2011 and pleaded guilty to money laundering on Sept. 13, 2011. According to information presented in court filings, between September 2001 and February 2005, Gonikman, together with Maksimenko and Aronov, operated Beauty Search Inc., a business that brokered and managed Eastern European women who performed in exotic dance clubs in the Detroit area. The three men recruited a number of these women in Ukraine, facilitated their illegal entry into the United States, and then harbored them for commercial advantage and private financial gain. Gonikman obtained a share of the proceeds earned by the women and transferred the money to Ukraine in order to promote and carry on the Beauty Search business.
“Human trafficking is the equivalent of modern day slavery. It deprives the victims of their freedom and dignity and it has no place in our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to the aggressive prosecution of those who rob individuals of their freedom.”
“This sentence brings the final member of this human trafficking ring to justice,” Barbara McQuade, U.S. Attorney for the Eastern District of Michigan. “These defendants treated human beings like a commodity, enticing Eastern European women to come to the United States illegally and then exploiting them for commercial advantage.”
"The defendants in this case preyed on young and vulnerable women from a foreign country. These women were brought to America with promises of education and travel, and instead forced to work in seedy strip clubs,” said Brian M. Moskowitz, Special Agent in Charge of Immigration and Customs Enforcement Homeland Security Investigations ( ICE-HSI) in Detroit. "After more than seven years of unyielding resolve on the part of our special agents and prosecutors, we are able to formally end this horrific chapter in the lives of the victims and allow them to now move on knowing that justice has prevailed."
“Justice has been served knowing that Gonikman, Maksimenko and Aronov are behind bars for their reprehensible behaviors,” said Erick Martinez, Special Agent in Charge of Internal Revenue Service Criminal Investigation. “These individuals took advantage of someone’s daughter, sister or granddaughter. The joint work and dedication of the law enforcement community shows that these crimes will not be tolerated.”
“This sentencing comes as the result of the hard work of the FBI and law enforcement partner agencies as well as federal prosecutors,” said FBI Special Agent in Charge Andrew G. Arena. “It sends the message that anyone who seeks to profit from human trafficking will be pursued and prosecuted vigorously. These despicable acts designed to enslave women have no place in our society.”
The lead defendants in this case, Maksimenko and Aronov, pleaded guilty in 2006 to forced labor, immigration, and money laundering charges. Maksimenko was sentenced to 14 years in prison and ordered to pay $1,570,450 in restitution to the victims. Aronov was sentenced to seven-and-a-half years in prison and ordered to pay $1 million in restitution.
Six other defendants were also convicted in 2006 for their respective roles in the conspiracy, including: Duay Jado, a Greek national, who was sentenced to four years in prison for setting a victim’s car on fire to retaliate for her escape and to intimidate the other victims; two Ukrainian nationals, Eygeniy Propenko and Alexander Bondarenko, who were convicted of visa fraud to facilitate victims’ illegal entry into the United States; and Anna Gonikman-Starchenko, a Ukrainian national formerly married to Gonikman, Niki Papoutsaki, a Greek national formerly married to Aleksandr Maksimenko, and Valentina Maksimenko, a naturalized U.S. citizen also formerly married to Veniamin Gonikman, all three of whom pleaded guilty to obstruction-related charges.
The case was investigated by ICE, the FBI, the IRS and the State Department. The case was prosecuted by Assistant U.S. Attorney Mark Chutkow and Trial Attorney Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit. Assistant U.S. Attorney Peter Ziedas is handling the asset forfeiture part of the case.
Delaware Company Pleads Guilty to Unlawful Discharges of Oil in Jefferson Parish, LouisianaRead the Press Release
A Delaware company pleaded guilty today in federal court in the Eastern District of Louisiana to negligently discharging oil into the bayous of Jefferson Parish, Louisiana, the Department of Justice announced.
Cedyco Corporation, headquartered in Houston, pleaded guilty to three counts of violating the Federal Water Pollution Control Act (Clean Water Act). The Clean Water Act makes it a misdemeanor to negligently discharge harmful quantities of oil into navigable waters of the United States.
According to the plea agreement, Cedyco agreed to pay a criminal fine of $557,000. All of the fine money will be directed to the Oil Spill Liability Trust Fund to aid the U.S. Coast Guard in responding to future oil spills. Additionally, Cedyco also agreed to cease operations and divest itself of all hydrocarbon business interests in the state of Louisiana.
“Cedyco is being held accountable for its neglectful operations and poor management, which repeatedly resulted in illegal discharges of oil into the sensitive Louisiana bayou,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “Those who are permitted to develop energy resources in proximity to delicate ecosystems must do so in a sound and responsible manner or they will be held accountable for violations of the law.”
“The protection of our precious environment is a critical mission which we take very seriously,” said Jim Letten, U.S. Attorney for the Eastern District of Louisiana. “Simply stated, we will not tolerate negligence by the companies which are required by law to operate facilities carefully in order to protect our people and environment.”
“It’s important that we hold polluters accountable for their actions, and the successful prosecution of Cedyco does this,” said Captain Peter Gautier, Commander of Coast Guard Sector New Orleans. “I applaud the efforts of our partner agencies and internal investigators for their tireless efforts in prosecuting this case. The Coast Guard, EPA, LDEQ and Department of Justice will continue to hold polluters responsible for their actions.”
“Our nation’s environmental laws are designed to protect oceans and inland waterways from illegal and harmful pollutant discharges,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Louisiana. “Today’s guilty plea sends a clear message that companies that refuse to operate lawfully and pollute our waters, threatening people's health and the environment, will be vigorously prosecuted.”
Cedyco owned and operated several hydrocarbon facilities, including fixed barges, platforms and wells, in the brackish bayous of South Louisiana. As a general matter, Cedyco’s facilities were poorly maintained and operated without plans and permits required by regulations issued by the Louisiana Department of Environmental Quality (LDEQ) as administrator of the federal Clean Water Act. Cedyco’s negligent operation and poor maintenance of three of its facilities in Jefferson Parish led to harmful discharges of oil into the navigable waters of the United States. The three facilities are the tank battery known as the “Bayou St. Denis facility,” the production and storage facility known as the “Bayou Dupont facility,” and the production well adjacent to the Bayou Dupont facility known as “Well #10.” Each facility will be addressed in turn.
“DEQ and its partners are dedicated to policing and enforcing environmental laws. Today’s actions further illustrate that commitment,” said LDEQ Secretary Peggy Hatch.
Cedyco’s Bayou St. Denis facility was a tank battery located south of the Barataria Waterway. A May 29, 2008, joint inspection by the U.S. Coast Guard (USCG) and LDEQ revealed that the facility was storing oil without the required Facility Response Plan, Spill Prevention and Control Plan, and LDEQ permit as required under Clean Water Act regulations. The condition of the facility was extremely poor with corroded pipes and spilled oil on the deck.
On June 15, 2008, enough oil was leaking from the facility that a sheen was visible on the surface of the water. A fisherman reported this sheen to the USCG, and a subsequent site visit by LDEQ on June 20, 2008, confirmed that oil was leaking into the adjacent waterway from the facility’s outfalls.
Cedyco’s Bayou Dupont facility is an oil storage and production platform located to the northeast of Bayou St. Denis, close to the Plaquemines Parish line. From Feb. 18, 2008, to May 19, 2008, Cedyco operated this facility without a Facility Response Plan, Spill Prevention and Control Plan, and LDEQ permit. A joint USCG and LDEQ inspection on Feb. 19, 2008, revealed that the facility was in extremely poor condition with pools of oily water and emulsified oil on the deck, as well as ample evidence of extensive corrosion and leaks. The required spill response equipment was either missing or defective. For example, an absorbent boom meant to soak up oil spills had a plant growing out of it. During rain events that took place from Feb. 19, 2008, through May 18, 2008, the deck oil made its way unimpeded into the bayou through unfiltered outfalls and cracks in the deck and containment structures. The sources of this oil were not only chronic leaks and occasional spills, but at times resulted from acute events such as the leak from the slop oil tank that occurred on May 18, 2008. The May 18 slop oil tank spill was observed by an LDEQ inspector who took photographs at the scene. During the charged period, the quantity of oil that was present on the deck of Bayou Dupont facility was sufficient to cause a sheen when rain caused the oil to wash into the adjacent waterway.
Cedyco’s Well #10 is located in an area of bayou adjacent to the Bayou Dupont facility. Cedyco did not properly maintain Well #10, and as a result of that negligence, the well began to leak on or about May 17, 2008. The leak continued for at least two days. Before it was contained with boom, the leak resulted in an oily sheen that was detected as far as two miles downstream from the well. The leaking oil also resulted in an emulsion being deposited on the adjacent shoreline.
The court set a sentencing date for Cedyco on Aug. 15, 2012.
The case was investigated by agents of CGIS and EPA-CID and by USCG and LDEQ inspectors. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section and Dorothy “Dee” Taylor of the U.S. Attorney’s Office in New Orleans.
Filed photo exhibits are available at the U.S Coast Guard website: http://cgvi.uscg.mil/media/main.php?g2_itemId=1627304 .
BP Agrees to Add More Than $400 Million in Pollution Controls at Indiana Refinery and Pay $8 Million Clean Air Act PenaltyRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency (EPA) announced that BP North America Inc. has agreed to pay an $8 million penalty and invest more than $400 million to install state-of-the-art pollution controls and cut emissions from BP’s petroleum refinery in Whiting, Ind. When fully implemented, the agreement is expected to reduce harmful air pollution that can cause respiratory problems such as asthma and are significant contributors to acid rain, smog and haze, by more than 4,000 tons per year.
The complaint alleges violations of Clean Air Act requirements at the Whiting refinery in connection with construction and expansion of the refinery, as well as violations of a 2001 consent decree with the company that covered all of BP’s refineries and was entered into as part of EPA’s Petroleum Refinery Initiative.
Today’s settlement will lead to the installation of innovative pollution controls on the largest sources of emissions at the Whiting refinery, including extensive new controls on the refinery’s flaring devices. Flaring devices are used to burn off waste gases. The more waste gases sent to a flare, and the less efficient the flare is when burning those gases, the more pollution that will occur. Under the settlement, BP will install new equipment that will limit the amount of waste gas sent to flaring devices in the first place, as well as implement innovative, cutting-edge controls to ensure proper combustion efficiency for any gases that are burned in a flaring device. These requirements, similar to those included in a recent settlement with Marathon Petroleum Corp., are part of EPA’s national effort to reduce emissions from flares at refineries, petrochemical and chemical plants.
In addition to the controls on the refinery’s flares, this settlement will also result in reduced emissions by imposing some of the lowest emission limits in refinery settlements to date, enhancing controls on wastewater containing benzene, and providing for an enhanced leak detection and repair program. Today’s settlement also requires the Whiting refinery to spend $9.5 million on projects at the refinery to reduce the emissions of green house gases.
BP will perform a supplemental environmental project in which they will install, operate and maintain a $2 million fence line emission monitoring system at the Whiting refinery and will make the data collected available to the public by posting the information on a publicly-accessible website. Fenceline monitors will continuously monitor benzene, toluene, pentane, hexane, sulfur dioxide, hydrogen sulfide and all compounds containing reduced sulfur.
“In this case, BP North America has not lived up to all of its obligations under an earlier settlement agreement and has committed new violations of the Clean Air Act at its Whiting refinery in Indiana,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement secures a significant penalty, requires state-of-the-art controls, and is a fair and just resolution that will address BP’s violations. We will continue to hold BP accountable and ensure that it complies with the nation’s environmental laws.”
“Today's settlement will protect the residents of northwestern Indiana from harmful air pollution by requiring state-of-the-art pollution controls,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “BP's agreement to install fenceline monitoring will also ensure that residents have access to critical information about pollution that may be affecting their community.”
“This settlement was the product of both federal and state environmental enforcement entities and was enhanced by having environmental advocacy groups involved in the negotiations, including Save the Dunes, the Hoosier Chapter of the Sierra Club, the Hoosier Environmental Council, the Natural Resources Defense Council and the Environmental Law and Policy Center. Respect for our nation’s laws including the Clean Air Act is at the heart of this effort,” said Indiana Attorney General Greg Zoeller, whose office represented the state of Indiana and Indiana Department of Environmental Management in settlement negotiations.
BP Products North America Inc., headquartered in Warrenville Ill., engages in the exploration, development, production and marketing of oil and natural gas, and additionally operates petroleum refineries in California, Indiana, Ohio, Texas and Washington. BP North America Inc. is a subsidiary of BP p.l.c., headquartered in London, England. The Whiting Refinery has a refining capacity of approximately 405,000 barrels per day and is the 6th largest refinery in the United States.
The state of Indiana, the Sierra Club, Save the Dunes, the Natural Resources Defense Council, the Hoosier Environmental Council, the Environmental Law and Policy Center, the Environmental Integrity Project, Susan Eleuterio and Tom Tsourlis also joined in this settlement.
The consent decree is subject to a 30-day public comment period and final court approval. The consent decree may be viewed on the Department of Justice website www.justice.gov/enrd/Consent_Decrees.html.
Learn more about EPA’s civil enforcement of the Clean Air Act: www.epa.gov/compliance/civil/caa/index.html
22 May 2012
Ohio Insurance Salesman Guilty of Tax ChargesRead the Press Release
A jury convicted William A. Herder of Richland County, Ohio, yesterday on federal tax charges, the Justice Department and Internal Revenue Service (IRS) announced. Trial began on May 11, 2012, before U.S. District Judge Sara Lioi, sitting in Akron, Ohio. Herder was charged with corruptly endeavoring to impair and impede the due administration of the Internal Revenue laws, tax evasion and five counts of failure to file tax returns. He was convicted of all counts.
According to the evidence at trial, Herder sold insurance for Aflac Inc, a nationwide supplemental insurance provider, from an office in Mansfield, Ohio. Herder had not filed a timely or valid tax return in more than a decade. For the 2000 tax year, Herder filed a tax return on which he falsely claimed that he had not earned any income. Subsequently, Herder failed to file any tax returns for the 2001-2009 tax years, despite earning income and receiving numerous warnings and notices from the IRS. The evidence at trial showed that, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2003, Herder transferred title to his house to a bogus foundation he established in Utah called the “Mentor Foundation.” Herder also cashed out an Individual Retirement Account and a life insurance policy, converted large amounts of cash to silver coins, and paid expenses with cash and money orders, all in an effort to prevent the IRS from collecting his unpaid taxes.
In addition to failing to file valid tax returns and hiding his assets from the IRS, trial evidence showed Herder submitted numerous obstructive letters and documents to the IRS and the insurance companies he represented in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him. The evidence at trial showed that Herder obtained some of these materials from Joseph Flickinger, who was previously convicted and sentenced for a tax fraud conspiracy and later enjoined from preparing tax returns for others.
Following the jury verdict, Herder was taken into custody. Sentencing is scheduled for Aug. 23, 2012.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division thanked special agents of IRS - Criminal Investigation, who provided valuable assistance in conducting the investigation, Tax Division Trial Attorneys Melissa S. Siskind and Jeffrey McLellan, who prosecuted the case, and Tax Division Trial Attorney Sean R. Delaney, currently on detail to a U.S. Attorney’s office, who assisted with the investigation.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Massachusetts Man Sentenced to 64 Months in Prison on Child Pornography ChargesRead the Press Release
WASHINGTON – A Massachusetts man was sentenced today to 64 months in prison and five years of supervised release for transportation, receipt and possession of child pornography, announced Assistant Attorney General for the Justice Department’s Criminal Division Lanny A. Breuer, U.S. Attorney for the District of Massachusetts Carmen M. Ortiz and Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Boston Bruce M. Foucart.
Chris Allen Oake, 61, of Acton, Mass., was sentenced by U.S. District Judge Nathaniel M. Gorton in Boston. On Feb. 16, 2012, Oake pleaded guilty to one count of transportation of child pornography, two counts of receipt of child pornography, and one count of possession of child pornography.The charges against Oake were a result of “Operation Nest Egg,” a joint investigation led by the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division, the U.S. Attorney’s Office for the Southern District of Indiana, ICE-HSI and the U.S. Postal Inspection Service. Operation Nest Egg, launched in February 2008, targeted approximately 500 individuals located throughout the world for their involvement in an online group dedicated to trading images of child pornography.
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, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.The case was prosecuted by Assistant U.S. Attorney Michael I. Yoon of the District of Massachusetts and CEOS Trial Attorney Bonnie L. Kane. The case against Oake was investigated by ICE-HSI, CEOS’s High Technology Investigative Unit, Massachusetts State Police and the Acton Police Department.
Justice Department Files Lawsuit Against New Jersey Information Technology Company for RetaliationRead the Press Release
The Justice Department filed a lawsuit today against Whiz International LLC, an information technology staffing company in Jersey City, N.J., regarding allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA) when it terminated an employee in retaliation for expressing opposition to Whiz’s alleged preference for foreign nationals with temporary work visas.
The complaint alleges that the company directed an employee that served as a receptionist and a recruiter, to prefer certain noncitizens in its recruitment efforts and then terminated the employee when she expressed discomfort with excluding U.S. citizens and lawful permanent residents from consideration. The anti-discrimination provision prohibits employers from retaliating against workers who oppose a practice that is illegal under the statute or who attempt to assert rights under the statute.
“Employers cannot punish employees who try to do the right thing and take reasonable measures to shed light on a practice they believe may be discriminatory,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Employers must ensure that their practices conform to the anti-discrimination provision of the INA, and retaliation will not be tolerated.”The complaint seeks a court order prohibiting future discrimination by the respondent, monetary damages to the employee, as well as civil penalties.
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provisions of the INA, which protect U.S. citizens and certain work-authorized individuals from citizenship status discrimination. The INA also protects work-authorized individuals from national origin discrimination, over-documentation in the employment eligibility verification process and retaliation.
For more information about protections against employment discrimination under the immigration laws, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired), 1-800-255-8155 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected], or visit the website at www.justice.gov/crt/about/osc/. Civil Rights Division Trial Attorney Liza Zamd represents the department in this matter.Former Pennsylvania Businessman Convicted of Filing False ReturnsRead the Press Release
Jonathon Felix, formerly of Villanova, Pa., was found guilty by a federal jury of willfully signing and filing false income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Court Judge for the Eastern District of Pennsylvania Petrese Tucker presided over the trial in Philadelphia.
According to testimony and evidence presented to the jury at trial, Felix operated a corporation called United Professional Plans Inc. (UPPI), located in Philadelphia, which he co-owned with his father until he passed away in 2000. The evidence showed that while operating UPPI, Felix removed significant funds from the company in various ways from 1999 through 2002, causing the failure of UPPI. Felix deposited these business funds into his personal accounts or used them for personal expenditures. Felix willfully signed and filed false individual income tax returns for those years that substantially under-reported his income and did not include the funds he appropriated from UPPI. Felix’s criminal conduct caused a tax loss to the IRS of about $390,000.
Felix faces a maximum potential sentence of 12 years in prison and a $1 million fine. Judge Tucker scheduled sentencing for Aug. 23, 2012.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division and Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania, thanked special agents of IRS - Criminal Investigation and the Labor Department’s Office of Inspector General, who provided valuable assistance in conducting the investigation, and Tax Division Trial Attorney Patrick J. Murray and Assistant U.S. Attorney Floyd Miller, who prosecuted the case.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .