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21 May 2012
President of South Carolina-Based Firm Charged with Illegally Exporting Goods to IranRead the Press Release
WASHINGTON – Markos Baghdasarian, the president of Delfin Group USA, was arrested on Saturday, May 19, 2012, at the Hartsfield International Airport in Atlanta, just prior to boarding an international flight to the United Arab Emirates. Baghdasarian was charged by criminal complaint, issued in the District of South Carolina, with exporting goods from the United States to Iran without the required U.S. Department of the Treasury licenses and with making false statements on official government documents. If convicted of these charges, Baghdasarian could face a maximum of 20 years in federal prison. Baghdasarian made his first appearance before a magistrate judge in the Northern District of Georgia earlier today.
The arrest was announced by Lisa O. Monaco, Assistant Attorney General for National Security; William N. Nettles, U.S. Attorney for the District of South Carolina; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); and David W. Mills, Assistant Secretary for Export Enforcement, Bureau of Industry and Security, U.S. Department of Commerce.
According to the affidavit filed in support of the criminal complaint, Baghdasarian served as president of Delfin Group USA, which is a Russian-owned producer of synthetic motor oils, located in North Charleston, S.C. From as early as June 13, 2010, until Oct. 12, 2011, Baghdasarian is alleged to have engaged in prohibited transactions with customers in Iran, including Pars Oil, which is an oil company owned by the government of Iran. U.S. persons and companies are prohibited from engaging in commercial transactions involving Iran unless authorized by the U.S. Department of Treasury.As further detailed in the criminal complaint affidavit, in August 2011, Baghdasarian exported aviation engine oils and polymer valued at $850,000 to Iran. Baghdasarian is alleged to have concealed that Iranian customers were the true recipients of the shipment by falsely asserting in an official document that a business entity in the United Arab Emirates was the ultimate consignee for the goods.
This case was the product of an extensive investigation by ICE’s Homeland Security Investigations and the Department of Commerce, Office of Export Enforcement. The case is being prosecuted by Trial Attorney Ryan Fayhee of the Counterespionage Section in the Justice Department’s National Security Division and Assistant U.S. Attorney Alston Badger of the U.S. Attorney’s Office for the District of South Carolina, Charleston Division.Charges set forth in a criminal complaint are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Justice Department Settles with Home Depot to Enforce the Employment Rights of an Army National Guard SoldierRead the Press Release
The Justice Department announced today that it has reached a settlement with Home Depot U.S.A. Inc., to resolve allegations that the company violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) when it terminated the employment of Army National Guard soldier Brian Bailey.
The department’s complaint alleged that Home Depot willfully violated USERRA by terminating Mr. Bailey’s employment because of his military service obligations. Mr. Bailey, an Iraq War veteran, worked at a Home Depot store in Flagstaff, Ariz., as a department supervisor while at the same time serving in the California Army National Guard. Throughout his employment with Home Depot, Mr. Bailey took periodic leave from work to fulfill his military obligations with the National Guard. According to the Justice Department’s complaint, Mr. Bailey was removed from his position as a department supervisor after Home Depot management officials at the Flagstaff store openly expressed their displeasure with his periodic absences from work due to his military obligations and further indicated their desire to remove him from his position because of those absences.
Under the terms of the settlement, embodied in a consent decree that has been submitted for approval to the federal district court, Home Depot will provide Mr. Bailey with $45,000 in monetary relief and make changes to its Military Leaves of Absence policy. The settlement further mandates that Home Depot review its Military Leaves of Absence policy with managers from the district where Mr. Bailey worked.
“This settlement demonstrates our vigilant protection of the employment opportunities of our service members, and our commitment to vigorous enforcement of the laws that protect them,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “ The department is pleased that we were able to work cooperatively with Home Depot to resolve this matter without the need for contested litigation.”
“This settlement not only compensates Mr. Bailey for employment opportunities he lost because of his military service, but it will also protect other members of our nation’s armed services employed by Home Depot through the required changes to the company’s Military Leaves of Absence policy and review of that policy with managers from the district where Mr. Bailey worked,” said Ann Birmingham Scheel, Acting U.S. Attorney for the District of Arizona.
This case was handled by the Employment Litigation Section of the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the District of Arizona.
Civil rights enforcement is a priority of the Department of Justice. The rights of our service members are protected under USERRA, which prohibits civilian employers from discriminating against members of the military, including National Guard soldiers, with respect to employment opportunities based on their past, current, or future uniformed service obligations. Additional information about USERRA can be found on the Justice Department’s websites, www.usdoj.gov/crt/emp and www.servicemembers.gov , as well as the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm .
Related Materials:
Consent Decree
Justice Department Settles with Flint, Michigan, to Make Voting Accessible to People with DisabilitiesRead the Press Release
The Justice Department today announced a settlement under the Americans with Disabilities Act (ADA) with the city of Flint, Mich., to make all the city’s polling places more accessible for individuals with mobility impairments. The case was commenced based on a complaint from the Michigan Protection and Advocacy Service, and was investigated jointly by the Civil Rights Division and the U.S. Attorney’s Office in the Eastern District of Michigan.
Under the terms of the settlement, the city of Flint recognizes that accessible polling places are the cornerstone of its voting accessibility program and will make all of its polling places accessible to people with disabilities by the November 2012 elections. The settlement also requires that accessibility will be a major factor in the city’s choices of future polling places. To assist Flint to make its elections accessible, the Justice Department will provide technical assistance to the city in deciding whether a polling place location can be made accessible on Election Day.
“Voters with disabilities in the city of Flint will now have the opportunity to exercise their franchise in the same way as other voters in Flint,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We applaud the city’s commitment in ensuring equal access to the polls before the upcoming fall elections.”
“Voting is the foundation of democracy. This agreement will help ensure that people with disabilities have the opportunity to cast their votes at polling places, alongside their neighbors, and have their voices heard.” said Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan.
More information about this settlement and the ADA is available at the Justice Department’s toll-free ADA Information line at (800) 514-0301 or (800) 514-0383 (TTY) and on the ADA website at www.ada.gov or contact the U.S. Attorney’s civil rights hotline at 313-226-9151.
Former Navy Seaman Convicted in Child Pornography CaseRead the Press Release
WASHINGTON – Former U.S. Navy Seaman James Driver, 24, of Midland, Mich., was convicted today by a federal jury in the Eastern District of Michigan on one count of possession of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
According to court documents and testimony presented during the trial, the case originated from a Naval Criminal Investigative Service (NCIS) investigation into an individual, later identified as James Driver, suspected of possessing and distributing child pornography using a peer-to-peer file sharing network. Driver, who at the time was a U.S. Navy seaman stationed in Japan, admitted in an interview to being interested in child pornography for the past five years.
At sentencing, Driver faces a maximum sentence of 10 years in prison, a $250,000 fine and lifetime supervised release. Sentencing is scheduled for Sept. 6, 2012.
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 Child Exploitation and Obscenity Section (CEOS) of the Justice Department’s Criminal Division, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being prosecuted by CEOS Trial Attorneys Thomas Franzinger and Mi Yung Park. The case was investigated by NCIS and CEOS’s High Technology Investigative Unit. Assistance was provided by the FBI’s Innocent Images Unit.
Former Haitian Government Official Sentenced to Nine Years in Prison for Role in Scheme to Launder BribesRead the Press Release
WASHINGTON – Jean Rene Duperval, a former director of international relations for Telecommunications D’Haiti S.A.M. (Haiti Teleco), a Haitian state-owned telecommunications company, was sentenced today to nine years in prison for his role in a scheme to launder bribes paid to him by two Miami-based telecommunications companies.
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer; and Special Agent in Charge Jose A. Gonzalez of Internal Revenue Service-Criminal Investigation (IRS-CI), Miami Field Office.
Duperval, 45, of Miramar, Fla., was sentenced by U.S. District Judge Jose E. Martinez in the Southern District of Florida. Judge Martinez also ordered Duperval to forfeit $497,331.
Duperval was convicted in March 2012 of two counts of conspiracy to commit money laundering and 19 counts of money laundering. He has been in custody since his conviction.
“Mr. Duperval took bribes in exchange for giving companies an unfair and illegal advantage in the marketplace, and then tried to hide these illicit transactions behind the cloak of shell corporations and fake invoices,” said Assistant Attorney General Breuer. “Just as we prosecute corrupt businesspeople under the FCPA, we will hold accountable corrupt foreign officials when they seek to launder the proceeds of that bribery through the U.S. financial system. Today’s nine-year prison sentence sends a strong message to foreign officials and others who would facilitate foreign corruption that they will face serious consequences.”“Duperval’s money laundering scheme was an attempt to conceal the payment of bribes to foreign officials to obtain an unfair business advantage in the marketplace,” said U.S. Attorney Ferrer. “Today’s sentence, however, helps level the playing field for all legitimate businesses that honestly compete in the marketplace for foreign or domestic business.”
“IRS Criminal Investigation continues to expand its international efforts to aggressively investigate those individuals who engage in money laundering and bribery schemes,” said IRS-CI Special Agent in Charge Gonzalez. “Individuals involved in corrupt international endeavors, as uncovered in this case, will get caught and this sentencing should serve as a strong warning to those considering similar conduct.”
Duperval was the director of international relations for Haiti Teleco, the sole provider of land line telephone service in Haiti. According to the evidence presented at trial, two Miami-based telecommunications companies had a series of contracts with Haiti Teleco that allowed the companies’ customers to place telephone calls to Haiti.
Duperval was convicted for participating in a scheme to commit money laundering from 2003 to 2006, during which time the telecommunications companies collectively paid approximately $500,000 to two shell companies to funnel the bribes to Duperval.
The purpose of these bribes, according to the evidence presented at trial, was to obtain various business advantages from Duperval, including the issuance of preferred telecommunications rates, a continued telecommunications connection with Haiti and the continuation of a particularly favorable contract with Haiti Teleco. To conceal the bribe payments, Duperval instructed the companies to forward the payments to the shell companies. To support these payments, the companies and their executives created false documents claiming that the payments were for “consulting services” or for “international minutes from USA to Haiti.” No actual services were performed. The funds were then disbursed from the shell companies for the benefit of Duperval and his family. To conceal the nature of these funds, Duperval falsely characterized these payments as “commissions” and “payroll.”Duperval was the seventh defendant involved in the corruption scheme to be sentenced, which includes the following individuals:
- On April 27, 2009, Antonio Perez, a former controller at one of the Miami-based telecommunications companies, pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and money laundering. On Jan. 12, 2010, he was sentenced to 24 months in prison.
- On May 15, 2009, Juan Diaz, the president of J.D. Locator Services, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. He admitted to receiving more than $1 million in bribe money from telecommunications companies. On July 30, 2010, he was sentenced to 57 months in prison, which he is currently serving.
- On Feb. 19, 2010, Jean Fourcand, the president and director of Fourcand Enterprises Inc., pleaded guilty to one count of money laundering for receiving and transmitting bribe monies in the scheme. On May 5, 2010, he was sentenced to six months in prison, which he is currently serving.
- On March 12, 2010, Robert Antoine, a former director of international affairs for Haiti Teleco, pleaded guilty to one count of conspiracy to commit money laundering. He admitted to receiving more than $1 million in bribes from Miami-based telecommunications companies. On June 2, 2010, he was sentenced to 48 months in prison, which he is currently serving.
- On Aug. 4, 2011, Joel Esquenazi and Carlos Rodriguez, who were the former president and vice-president, respectively, of one of the telecommunications companies, were convicted by a federal jury of one count of conspiracy to violate the FCPA and wire fraud, seven counts of FCPA violations, one count of money laundering conspiracy and 12 counts of money laundering. On Oct. 25, 2011, Esquenazi was sentenced to 15 years in prison, the longest sentence ever imposed in a case involving the FCPA. On the same day, Rodriguez was sentenced to 84 months in prison for his role in the bribery scheme. Both are currently serving their sentences.
In a second superseding indictment, Washington Vasconez Cruz, Amadeus Richers and Cecilia Zurita were charged in a related scheme to commit foreign bribery and money laundering from December 2001 through January 2006. The defendants are fugitives. An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The Department of Justice is grateful to the government of Haiti for continuing to provide substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers (UCREF), the Bureau des Affaires Financières et Economiques (BAFE), which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.
To learn more about the government’s FCPA enforcement efforts, go to www.justice.gov/criminal/fraud/fcpa.
The case is being prosecuted by Assistant Chief James M. Koukios and Trial Attorney Daniel S. Kahn of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs also provided assistance in this matter. These cases were investigated by the IRS-CI Miami Field Office.
Former Alexandria, Virginia, Resident Pleads Guilty to Corruptly Endeavoring to Impede the Internal Revenue ServiceRead the Press Release
Donald R. Megginson, a former resident of Alexandria, Va., pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, the Justice Department and Internal Revenue Service (IRS) announced today. Sentencing is scheduled for Aug. 22, 2012.
According to the plea agreement and statement of facts, Megginson formed D & B Tours Inc. at the suggestion of his longtime friend, Robert Turner. D & B Tours was a tour bus company. Megginson was in charge of the company’s paperwork and finances and Turner drove the tour bus, “Blue Ice.” Megginson, along with Turner and at least one other person, participated in a scheme to file false corporate income tax returns for 2001, 2002 and 2003 for D & B Tours with the IRS in order to get money from the government to which they were not entitled. These corporate returns claimed false refunds of more than $177,000 based upon fraudulently inflated federal fuel tax credits. Megginson received $70,000 as his share of the fraudulent refunds and he distributed the remaining monies to Turner and the other individual.
According to the court documents, Megginson also admitted that he failed to timely file tax returns in 1999 through 2006, despite receiving various notices from the IRS. When Megginson ultimately filed his 1999 through 2006 tax returns, he did not include payment for any taxes due, despite his owing substantial income tax for each of those years. Megginson also omitted from his 2004 tax return his share of the fraudulent proceeds that he had received from his role in the scheme to obtain false tax refunds. Megginson further admitted that, in October 2007, he filed an Offer in Compromise (OIC) with the IRS seeking to settle his individual income tax liability. Megginson admitted that he falsely stated that he had insufficient assets and income to pay his $60,000 tax liability and falsely omitted from the OIC a bank account he had with $600,000 in readily available funds from which he could pay his tax liability.
Megginson faces up to three years in prison, one year of supervised release, restitution and a fine of up to $250,000. Robert Turner previously pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and was sentenced on Aug. 12, 2011 to five years’ probation and $18,200 in restitution to the IRS.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division Trial Attorneys Caryn Finley and Jack Hinton, who are prosecuting the case on behalf of the United States.
More information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
18 May 2012
Ship’s Captain Convicted of Obstructing a Coast Guard InspectionRead the Press Release
WASHINGTON – The former captain of a Panama-flagged cargo ship that discharged hundreds of plastic pipes into the ocean, was convicted yesterday by a jury in Mobile, Ala., for obstructing a U.S. Coast Guard inspection of the vessel in the port of Mobile on Sept. 21, 2011. Prastana Taohim, 38, the captain of the M/V Gaurav Prem, was found guilty of two counts of obstruction of justice, announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division and Kenyen R. Brown, U.S. Attorney for the Southern District of Alabama.
At trial, witnesses testified that Captain 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. The garbage record book is a required log regularly inspected by the U.S. Coast Guard. Taohim then knowingly made the garbage record book available during a Coast Guard inspection of the vessel in the Port of Mobile, Ala., on Sept. 21, 2011. The plastic pipes had previously contained insecticide and were used to fumigate a grain shipment. The discharge of plastic into the sea is prohibited under the International Convention to Prevent Pollution from Ships, known as MARPOL.
Taohim was found guilty in U.S. District Court in the Southern District of Alabama for obstructing the Coast Guard’s inspection of the ship. The jury also found the defendant guilty of one count of obstruction of justice related to covering up the pollution by creating a false and fictitious garbage log.
Sentencing is set for Aug. 15, 2012.
This investigation was conducted by the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division. 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.
North Carolina Department of Corrections Probation Officer Indicted for Civil Rights ViolationsRead the Press Release
The Department of Justice announced that North Carolina Department of Correction’s Division of Community Corrections Probation Officer Willie James Steele Jr., 47, was indicted yesterday on civil rights charges for violating the constitutional rights of a female probationer that he was supervising by coercing her into sexual acts on two separate occasions. Steele was indicted by a federal grand jury on two counts of deprivation of rights under color of law and one count of using and carrying a firearm during and in relation to a crime of violence.
According to the indictment filed in the Western District of North Carolina, the Division of Community Corrections supervised offenders serving state probation in the state of North Carolina and provided courtesy supervision for offenders residing in this state but who had committed criminal offenses in other states. Steele supervised the victim, who had had her probation transferred from another state, and had the authority to recommend to a court or other agency that the victim be incarcerated or otherwise sanctioned if she violated the conditions of her probation.
The indictment alleges that Steele engaged in acts that resulted in bodily injury to the victim and constituted aggravated sexual abuse, and that Steele used and carried a firearm during and in relation to that offense. It also alleges that Steele deprived the victim of her constitutional right to bodily integrity on a second occasion.
This case was investigated by the FBI and the North Carolina State Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Kenny Smith from the Western District of North Carolina and U.S. Department of Justice Civil Rights Division Trial Attorney Shan Patel.
Individuals who have additional information or believe they may have been a victim of Steele’s conduct are encouraged to call the FBI Charlotte Office at 704-672-6100.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Justice Department Files Pregnancy Discrimination Lawsuit Against the Nevada Division of ForestryRead the Press Release
The Department of Justice today announced the filing of a lawsuit against the Nevada Division of Forestry (NDF) alleging that NDF discriminated against Ms. Tawnya Meyer, a former employee, when they fired her soon after she announced her pregnancy. According to the complaint, Ms. Meyer’s termination was in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute which prohibits employment discrimination on the basis of sex, including pregnancy.
The suit, filed in the Reno Division of the U.S. District Court for the District of Nevada, alleges that Ms. Meyer, a former dispatcher with the NDF, was successfully performing her job and that there were no complaints about her work until she announced her pregnancy. The complaint further alleges that NDF did not document any work related problems with Ms. Meyer’s performance, nor did it follow its own policies regarding terminations. Finally, according to the complaint, Ms. Meyer’s pregnancy was discussed as a reason for her termination by NDF managers. The United States’ complaint seeks a court order that would require NDF to develop and implement policies that would prevent its employees from being subjected to discrimination based upon sex. The relief sought would also include monetary relief for Ms. Meyer as compensation for damages that she sustained as a result of the alleged discrimination.
Ms. Meyer initially filed a charge of sex discrimination with the Equal Employment Opportunity Commission (EEOC) whose San Francisco office investigated the matter, determined that there was reasonable cause to believe discrimination occurred and referred the matter to the Department of Justice.
“No woman should have to make a choice between having a job and having a family,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Federal law requires employers to maintain a workplace free of such discrimination.”
EEOC San Francisco District Director Michael Baldonado said, “Due to our agency’s ongoing partnership with the DOJ, this lawsuit has been filed to hold NDF accountable for pregnancy discrimination. Having a new child should be a joyous event, not one that leads to unemployment.”
The EEOC held a public meeting in Washington concerning pregnancy and caregiver discrimination. Material from this commission meeting can be found at www.eeoc.gov/eeoc/meetings/2-15-12/index.cfm .
The continued enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Department of Justice is available on its website at www.usdoj.gov/crt .
Justice Department Extends Compliance Deadline for Existing Pools Under the 2010 ADA StandardsRead the Press Release
The Justice Department announced today an extension for existing swimming pools to comply with the 2010 Americans with Disabilities Act (ADA) Standards for Accessible Design. Existing pools must comply with the standards by Jan. 31, 2013.
On July 26, 2010, the 20th anniversary of the ADA, President Barack Obama announced newly revised ADA regulations. The regulations reflect the fundamental principle that all Americans with disabilities should have equal access and an equal right to participate fully in our society.
Requirements for existing swimming pools were originally extended on March 15, 2012, for 60 days. The department also published a notice of proposed rulemaking with a 15-day comment period on a possible extension in order to allow additional time to address misunderstandings regarding compliance with these ADA requirements. After reviewing the comments, the department determined that a further extension was necessary to provide additional time for compliance and to respond to concerns and misunderstandings about the standards. The department will also release a technical assistance document in the near future to assist pool owners with the requirements. More information on pool requirements can be found at www.ada.gov/pools_2010.htm .
Newly constructed or altered places of public accommodation, commercial facilities and state and local government facilities are required to comply with the ADA standards. Places of public accommodation in existing facilities are required to remove accessibility barriers to the extent it is readily achievable – meaning easy to accomplish without much difficulty or expense. State and local governments using existing facilities are required to ensure their programs, services and activities, when viewed in their entirety, are accessible.
These standards were adopted as part of the revised regulations for Title II and Title III of the ADA of 1990 and will make buildings and facilities accessible to more than 54 million Americans with disabilities. The standards can be found at www.ada.gov/2010ADAstandards_index.htm .
People interested in finding out more about the ADA or the 2010 ADA Standards for Accessible Design can call the toll-free ADA Information Line at 800-514-0301 (Voice) or 800-514-0383 (TTY), or access the ADA website at www.ada.gov .
Dreamboard Member Found Guilty in Louisiana for Participating in International Criminal Network Organized to Sexually Exploit ChildrenRead the Press Release
WASHINGTON – A Wisconsin man was found guilty yesterday in the Western District of Louisiana for his participation in an international criminal network, known as Dreamboard, dedicated to the sexual abuse of children and the creation and dissemination of graphic images and videos of child sexual abuse throughout the world, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Stephanie Finley of the Western District of Louisiana and Director of U.S. Immigration and Customs Enforcement (ICE) John Morton.
John Wyss, aka “Bones,” 55, of Monroe, Wis., was found guilty of one count of engaging in a child exploitation enterprise, one count of conspiracy to advertise child pornography and one count of conspiracy to distribute child pornography. Evidence presented at trial revealed that Wyss had been an active member of Dreamboard, an online child pornography bulletin board, since January 2008 and had made numerous postings revealing that he had produced child pornography by capturing images of minors engaging in sexually explicit activity via webcam, including one video in which adult males were engaged in sexual intercourse with prepubescent girls.
Wyss was charged in an indictment unsealed on Aug. 3, 2011. The charges against Wyss are the result of Operation Delego, an ongoing investigation that was launched in December 2009 that targeted individuals around the world for their participation in Dreamboard. Dreamboard was a private, members-only, online bulletin board that was created and operated to promote pedophilia and encourage the sexual abuse of very young children, in an environment designed to avoid law enforcement detection.A total of 72 individuals, including Wyss, have been charged as a result of Operation Delego. To date, 55 of the 72 charged defendants have been arrested in the United States and abroad. Fourty-one individuals have pleaded guilty and Wyss was convicted after a four-day jury trial. Twenty-five of the 41 individuals who have pleaded guilty for their roles in the conspiracy have been sentenced to prison and have received sentences ranging between 15 and 37 years. Seventeen of the 72 charged individuals remain at large and are known only by their online identities. Efforts to identify and apprehend these individuals continue. Operation Delego represents the largest prosecution to date in the United States of individuals who participated in an online bulletin board conceived and operated for the sole purpose of promoting child sexual abuse, disseminating child pornography and evading law enforcement.
According to court documents and information presented at trial, Wyss and other Dreamboard members traded graphic images and videos of adults molesting children 12 years-old and under, often violently, and collectively created a massive private library of images of child sexual abuse. The international group prized and encouraged the creation of new images and videos of child sexual abuse – numerous Dreamboard members sexually abused children, produced images and videos of the abuse, and shared the images and videos with other members of Dreamboard.
“The jury found Mr. Wyss guilty of participating in a horrifying online community dedicated to the sexual exploitation of young children,” said Assistant Attorney General Breuer. “This community encouraged members throughout the world to produce images of extreme child sexual abuse and to share these images with one another. Mr. Wyss is the 42nd Dreamboard member to be convicted for his participation in the child exploitation enterprise. These convictions send a strong message to other child predators that they cannot hide their criminal acts on the internet.”
“This defendant, and people like him, who advertise, participate, distribute or exploit children to access child pornography work hard to evade law enforcement and disguise what they are doing,” said U.S. Attorney Finley. “Their sole purpose is to view children hurting for their own sexual satisfaction. We want them to know, that like Mr. Wyss, they will face serious consequences for their actions. Our office will continue to vigorously prosecute this type of criminal activity to the fullest extent of the law. We want the community to know that the U.S. Attorney’s Office and the Department of Justice, along with our federal, state and local partners, are committed to protecting children from these vile criminals.”
"Wyss and the other conspirators of the nightmare called Dreamboard mistakenly believed that they could commit heinous crimes against children and hide in the shadows,” said ICE Director Morton. “Criminals with this kind of depravity in mind should know that ICE's Homeland Security Investigations is ever vigilant. For every tactic taken to evade law enforcement, we will adapt our strategies to find them and prosecute them to the fullest extent of the law."
According to court documents and evidence presented at trial, Dreamboard members employed a variety of measures designed to conceal their criminal activity from detection by law enforcement. Members communicated using aliases or “screen names,” rather than their actual names. Links to child pornography posted on Dreamboard were required to be encrypted with a password that was shared only with other members. Members accessed the board via proxy servers, which routed Internet traffic through other computers so as to disguise a user’s actual location and prevent law enforcement from tracing Internet activity. Dreamboard members also encouraged the use of encryption programs on their computers, which password-protect computer files to prevent law enforcement from accessing them in the event of a court-authorized search.
Membership was tightly controlled by the administrators of the bulletin board, who required prospective members to upload child pornography portraying children 12 years of age or younger when applying for membership. Once they were given access, members were required continually to upload images of child sexual abuse in order to maintain membership. Members who failed to follow this rule would be expelled from the group.
According to court documents, Dreamboard members were divided into groups based on status and ranking. The highest level of membership was “Super VIP.”. Individuals who obtained that title had created new images of child pornography by molesting children and shared those images with the board administrators. The next level of membership was “Super VIP,” which was comprised of trusted members of the website. The next level after Super VIP was the VIP rank. Individuals in the lowest level of membership were called Members. Those in the lower ranks could only access a limited quantity of child pornography on the bulletin board. The higher the rank, the more material was available to the member. Individuals advanced to higher levels of membership by providing child abuse images that the individual had produced, providing a large number of images, or providing images that had never been seen before.
The bulletin board included rules of conduct, printed in English, Russian, Japanese and Spanish. The rules required prospective members to upload material depicting children under the age of 12 engaged in sexually explicit activity. Approved members were required to observe strict posting rules designed to encourage members to disseminate large quantities of child pornography, thwart efforts by law enforcement to identify members of the board, and encourage members to sexually abuse children in order to produce new material for the board. The board rules also required members to organize postings based on the type of content. One particular category was entitled “Super Hardcore.” The rules for that category described in graphic language that the only posts permitted were those involving adults having violent sexual intercourse with “very young kids” who were being subjected to both physical and sexual abuse and were obviously “in distress, and or crying.”
Operation Delego involved extensive international cooperation to identify and apprehend Dreamboard members abroad. Through coordination between ICE; the Department of Justice; Eurojust, the European Union’s Judicial Cooperation Unit; and dozens of law enforcement agencies throughout the world, 20 Dreamboard members across five continents and 14 countries have been arrested to date outside the United States, including two of the five lead administrators of the board. Those countries include Canada, Denmark, Ecuador, France, Germany, Guatemala, Hungary, Kenya, the Netherlands, the Philippines, Qatar, Serbia, Sweden and Switzerland. Numerous foreign investigations related to Operation Delego remain ongoing. The location and arrest of Dreamboard members abroad have led to the capture and investigation of other global targets.
Evidence obtained during the operation revealed that at least 38 children across the world were suffering sexual abuse at the hands of the members of the group. Efforts by federal, state, local and international law enforcement to locate and identify the victims of sexual abuse and exploitation by Dreamboard members are ongoing.
Operation Delego is a spinoff investigation from leads developed through “Operation Nest Egg,” the prosecution of another online group dedicated to the sharing and dissemination of child pornography. Operation Nest Egg was a spinoff investigation developed from leads related to another international investigation, “Operation Joint Hammer,” which targeted transnational rings of child pornography trafficking.
The case is being prosecuted by Assistant U.S. Attorney John “Luke” Walker of the Western District of Louisiana and Trial Attorneys Keith Becker and Anitha Ibrahim of the Child Exploitation and Obscenity Section (CEOS) of the Justice Department’s Criminal Division. The Criminal Division’s Office of International Affairs provided substantial assistance. The investigation was conducted by ICE-Homeland Security Investigations, the Child Exploitation Section of ICE’s Cyber Crime Center, CEOS, CEOS’s High Technology Investigative Unit and 35 ICE offices in the United States and 11 ICE attaches offices in 13 countries around the world, with assistance provided by numerous local and international law enforcement agencies across the United States and throughout the world.
The investigation was part of Operation Predator, a nationwide ICE initiative to identify, investigate and arrest those who prey on children, including human traffickers, international sex tourists, Internet pornographers and foreign-national predators whose crimes make them deportable.
ICE encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE. This hotline is staffed around the clock by investigators.
17 May 2012
Owner of Houston Health Care Company Convicted of Defrauding MedicareRead the Press Release
WASHINGTON – An owner of a Houston health care company was convicted yesterday by a jury in the Southern District of Texas in connection with a $750,000 Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Philip Ware, 31, of Houston, was convicted of one count of conspiracy to commit health care fraud and four counts of substantive health care fraud.
The evidence presented at trial showed that Ware was an owner and operator of Preferred Plus Medical Supply. Preferred Plus maintained a valid Medicare provider number in order to submit Medicare claims for the costs of durable medical equipment (DME) and purported to provide orthotics and other DME to Medicare beneficiaries.
Preferred Plus submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or not provided. Many of the orthotic devices were components of “arthritis kits” and purported to be for the treatment of arthritis-related conditions; however, the devices were neither medically necessary nor appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads. In total, from August 2008 through July 2009, Preferred Plus submitted approximately $750,000 in fraudulent claims to Medicare.
At sentencing, scheduled for Sept. 24, 2012, Ware faces a maximum sentence of 50 years in prison.
Ware’s co-owner of Preferred Plus, Simone Ball, previously pleaded guilty to one count of conspiracy to commit health care fraud. Ball’s sentencing is scheduled for Aug. 8, 2012.
The conviction was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Southern District of Texas Kenneth Magidson; Texas Attorney General Greg Abbott; Acting Special Agent-in-Charge Russell D. Robinson of the FBI’s Houston Field Office; and Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations.
This case was prosecuted by Trial Attorneys David Maria, Ben O'Neil and Laura M.K. Cordova of the Fraud Section in the Justice Department’s Criminal Division. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine districts have obtained indictments of more than 1,330 individuals who collectively have falsely 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.Justice Department Seeks to Shut DownSan Antonio Tax Return PreparersRead the Press Release
The United States has sued Pete Gutierrez and Jeanette Gutierrez, who do business as Fast Cash Refund Express and Fast Cash Refund Express Electronic Services, seeking to bar them and their companies from preparing any federal tax returns for others, the Justice Department announced today. In addition to the Gutierrezes, the civil injunction suit also named FCRE Inc., and Fast Cash Refund Express Electronic Tax Service LLC, as defendants.
According to the government complaint, the Gutierrezes, a married couple from San Antonio, use their companies to prepare federal tax returns for customers who claim false and exaggerated personal deductions, business deductions and education and energy tax credits in order to understate the customers’ tax liabilities unlawfully.
According to the complaint, of the tax returns prepared by the Gutierrezes through their companies for 2008 through 2010 that the Internal Revenue Service has audited, over 96 percent resulted in the customers owing additional taxes. The complaint alleges that the understatements of tax on these returns exceeded $2 million.
The government is also seeking a court order requiring the Gutierrezes to provide the government with a list of all persons for whom they have prepared federal tax returns since Jan. 1, 2007.
In the past 10 years, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.
Related Documents: Gutierrez Complaint
United States v. FCRE Inc., et al., Final Complaint for Permanent Injunction and Other Relief (PDF)Justice Department Releases Final Rule to Prevent, Detect and Respond to Prison RapeRead the Press Release
WASHINGTON - The Justice Department today released a final rule to prevent, detect and respond to sexual abuse in confinement facilities, in accordance with the Prison Rape Elimination Act of 2003 (PREA). This landmark rule sets national standards for four categories of facilities: adult prisons and jails, lockups, community confinement facilities and juvenile facilities. Today’s rule is the first-ever federal effort to set standards aimed at protecting inmates in all such facilities at the federal, state and local levels.
“The standards we establish today reflect the fact that sexual assault crimes committed within our correctional facilities can have devastating consequences – for individual victims and for communities far beyond our jails and prisons,” said Attorney General Eric Holder. “These standards are the result of a thoughtful and deliberative process – and represent a critical step forward in protecting the rights and safety of all Americans.”
The standards have three clear goals: to prevent, detect and respond to sexual abuse.
Prevent: To prevent sexual abuse, the standards require, among other things, that facilities:
- Develop and maintain a zero-tolerance policy regarding sexual abuse;
- Designate a PREA point person to coordinate compliance efforts;
- Screen inmates for risk of being sexually abused or sexually abusive, and use screening information to inform housing, bed, work, education and program assignments;
- Develop and document a staffing plan that provides for adequate levels of staffing and, where applicable, video monitoring;
- Train employees on their responsibilities in preventing, recognizing and responding to sexual abuse;
- Perform background checks on prospective employees and not hire abusers;
- Prevent juveniles from being housed with adult inmates or having unsupervised contact with adult inmates in common spaces;
- Ban cross-gender pat-down searches of female inmates in prisons and jails and of both male and female residents of juvenile facilities;
- Incorporate unique vulnerabilities of lesbian, gay, bisexual, transgender, intersex and gender nonconforming inmates into training and screening protocols;
- Enable inmates to shower, perform bodily functions and change clothing without improper viewing by staff of the opposite gender;
- Restrict the use of solitary confinement as a means of protecting vulnerable inmates; and
- Enter into or renew contracts only with outside entities that agree to comply with the standards.
Detect: To detect sexual abuse, the standards require, among other things, that facilities:
- Make inmates aware of facility policies and inform them of how to report sexual abuse;
- Provide multiple channels for inmates to report sexual abuse, including by contacting an outside entity, and allow inmates to report abuse anonymously upon request;
- Provide a method for staff and other third parties to report abuse on behalf of an inmate;
- Develop policies to prevent and detect any retaliation against those who report sexual abuse or cooperate with investigations; and
- Ensure effective communication about facility policies and how to report sexual abuse with inmates with disabilities and inmates who are limited English proficient;
Respond: To respond to sexual abuse, the standards require, among other things, that facilities:
- Provide timely and appropriate medical and mental health care to victims of sexual abuse;
- Where available, provide access to victim advocates from rape crisis centers for emotional support services related to sexual abuse;
- Establish an evidence protocol to preserve evidence following an incident and offer victims no-cost access to forensic medical examinations;
- Investigate all allegations of sexual abuse promptly and thoroughly, and deem allegations substantiated if supported by a preponderance of the evidence;
- Discipline staff and inmate assailants appropriately, with termination as the presumptive disciplinary sanction for staff who commit sexual abuse;
- Allow inmates a full and fair opportunity to file grievances regarding sexual abuse so as to preserve their ability to seek judicial redress after exhausting administrative remedies; and
- Maintain records of incidents of abuse and use those records to inform future prevention planning.
In addition, the standards require that each facility be audited every three years to assess compliance.
The standards set forth in the final rule are binding on the Federal Bureau of Prisons. With regard to states, those that do not comply with the standards are subject to a five percent reduction in funds they would otherwise receive for prison purposes from the department unless the governor certifies that five percent of such funds will be used to enable compliance in future years. No organization responsible for the accreditation of correctional facilities may receive any federal grants unless it adopts accreditation standards consistent with the standards set forth in the final rule.
The administration has also determined that PREA applies to all federal confinement facilities, including those operated by executive departments and agencies other than the Department of Justice. According to a presidential memorandum issued today, other federal departments with confinement facilities will work with the attorney general to issue rules or procedures that will satisfy the requirements of PREA, in recognition of the fact that each federal agency is accountable for the operations of its own facilities and, therefore, is best positioned to determine how to implement federal laws and rules that govern its operations and the safety of persons in its custody. Those agencies will work with the attorney general to propose, within 120 days of the date of the Presidential Memorandum, any rules or procedures necessary to satisfy the requirements of PREA, and to finalize any such rules or procedures within 240 days of their proposal.
Congress unanimously passed the Prison Rape Elimination Act in 2003 and created the National Prison Rape Elimination Commission to recommend a set of standards to the attorney general, after which it disbanded pursuant to the act. After receiving the commission’s recommendations in 2009, the attorney general convened an intradepartmental PREA working group that was tasked with reviewing the commission’s recommendations and collecting public feedback on the commission’s proposal. Last year the department published a draft rule for public comment.
The final rule reflects careful consideration of all public input, including over 1300 public comments on the proposed rule, as well as detailed analysis of anticipated benefits and costs, in light of PREA’s requirement that the standards not “impose substantial additional costs compared to the costs presently expended by federal, state and local prison authorities.” The department also is seeking additional comment on a standard that mandates specified staff-to-resident ratios in secure juvenile facilities.
To assist federal, state and local agencies in their compliance efforts, the department has funded the National Resource Center for the Elimination of Prison Rape to serve as a national resource for online and direct support, training, technical assistance, and research to assist adult and juvenile corrections, detention, and law enforcement professionals in combating sexual abuse in confinement. Focusing on areas such as prevention strategies, improved reporting and detection, investigation, prosecution, and victim-centered responses, it will identify promising programs and practices that have been implemented around the country and demonstrate models for keeping inmates safe from sexual abuse. The center will offer a full library, webinars and other online resources and will provide direct assistance through skilled and experienced training and technical assistance providers. The department also funds the National Center for Youth in Custody to assist facilities in addressing sexual safety for youth.
The department is also continuing grantmaking to support state and local demonstration projects aimed at combating sexual abuse in confinement facilities, through the Bureau of Justice Assistance. In addition, the National Institute of Corrections will develop electronic and web-based resource materials based on the standards set forth in the final rule.
The final rule is being sent to the Federal Register today for publication.
The rule may be read in its entirety at www.ojp.usdoj.gov/programs/pdfs/prea_final_rule.pdf.
The Executive Summary is available at www.ojp.usdoj.gov/programs/pdfs/prea_executive_summary.pdf.
The Regulatory Impact Assessment, which summarizes the costs and benefits of the rule, is available at www.ojp.usdoj.gov/programs/pdfs/prea_ria.pdf.
The Presidential Memorandum is available at www.whitehouse.gov/the-press-office/2012/05/17/presidential-memorandum-implementing-prison-rape-elimination-act.
For more information on the National Resource Center for the Elimination of Prison Rape, visit www.prearesourcecenter.org.
Justice Department Reaches Agreement with Wythe County, Virginia, on Bailout from the Voting Rights ActRead the Press Release
The Justice Department announced that it has reached an agreement with Wythe County, Va., that will allow for the county and its three political subdivisions, the Wythe County School District and the towns of Rural Retreat and Wytheville, to bail out from their status as “covered jurisdictions” under the special provisions of the Voting Rights Act, and thereby exempt these jurisdictions from the preclearance requirements of Section 5 of the Voting Rights Act. The agreement is in the form of a consent decree filed today in the U.S. District Court for the District of Columbia, and must be approved by the court.
Under Section 5 of the Voting Rights Act, certain covered jurisdictions, determined according to Section 4 of the act, are required to seek preclearance for any changes in voting qualifications, standards, practices or procedures from the U.S. District Court for the District of Columbia or from the U.S. Attorney General, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bail out,” or remove itself from such coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in U.S. District Court for the District of Columbia. A bailout judgment can be issued only if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the attorney general can consent to entry of a judgment of bailout only if, based upon investigation, the attorney general is satisfied that the jurisdiction meets the eligibility requirements.
Wythe County filed its bailout action in the U.S. District Court for the District of Columbia on May 3, 2012. Counsel for the county contacted the attorney general prior to filing the action, indicating that the county was interested in seeking a bailout. The county provided the Justice Department with substantial information, and the department conducted an investigation to determine the county’s eligibility. Based on that investigation, the department is satisfied that the county meets the Voting Rights Act’s requirements for bailout.
“After a thorough analysis of the information provided by the county and obtained through the department’s independent investigation, we believe the county has satisfied the bailout requirements,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The collaboration between the county and department assured the resolution of this matter in a manner envisioned by the drafters of the Voting Rights Act.”
The consent decree details the legal and factual basis for a bailout determination and, if approved by the court, will grant the county’s request. The court will retain jurisdiction of the action for 10 years and can reopen the action upon the motion of the attorney general or any aggrieved person alleging conduct by the county that would have originally precluded the county from bailing out if it had occurred during the 10-year period preceding entry of the consent decree.
Information about bailout, the Voting Rights Act, and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting/. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Related Materials:
Joint Motion for Entry of Consent Judgment and Decree
Former U.S. Army Captain Pleads Guilty to Theft of Government Property at Camp Speicher, IraqRead the Press Release
WASHINGTON - A former captain in the U.S. Army pleaded guilty today to one count of theft of government property for stealing $48,000 from a safe at Camp Speicher, Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Nicole E. Luvera, 29, of Newnan, Ga., pleaded guilty today before U.S. District Judge Amy Totenberg in Atlanta to a criminal information charging her with one count of theft of government property.
According to the court documents filed in this case, from July 2007 to September 2008, Luvera was the deputy disbursing officer on Camp Speicher in Iraq. Luvera was responsible for daily financial management and accounting of all money kept at Camp Speicher for the payment of obligations of the United States. In this capacity, Luvera had access to the vault and safes inside the vault in which all the money at Camp Speicher was kept. According to statements made at the plea hearing, Luvera admitted she knowingly and unlawfully stole and converted to her use and the use of others $8,000 not reflected in the official accounting record. Luvera also admitted that on a subsequent occasion, she devised an illegal mechanism to steal and convert another approximately $40,000 from the safe at Camp Speicher by fraudulently creating records to explain the absence of the money.
Luvera faces up to 10 years in prison and a fine of $250,000. In addition, Luvera has agreed to pay $48,000 in restitution to the U.S. Department of Defense. Sentencing is scheduled for Aug. 10, 2012.
The case is being prosecuted by Trial Attorney Mark W. Pletcher of the Justice Department’s Criminal Division and Trial Attorney Richard B. Evans of the Justice Department’s Public Integrity Section. The case is being investigated by the Army Criminal Investigation Division, the Defense Criminal Investigative Service, the Special Inspector General for Iraq Reconstruction and other members of the International Contract Corruption Task Force.
Defendants in Alabama Plead Guilty in Two Separate Stolen Identity Refund Fraud SchemesRead the Press Release
Three defendants in separate cases involving the use of stolen identities to file fraudulent tax returns have pleaded guilty in the Middle District of Alabama, the Justice Department and the Internal Revenue Service (IRS) announced today.
Crystal Sayles, of Montgomery County, Ala., pleaded guilty today to one count each of filing false claims, access device fraud, and aggravated identity theft. She also agreed to the forfeiture of a Mercedes Benz as part of her plea agreement. Sayles was indicted on 36 different counts on Jan. 19, 2012. According to her plea agreement, between January 2010 and July 2011, Sayles and others were involved with the filing of at least 482 fraudulent tax returns using stolen identities. These returns sought at least $2,181,879 in tax refunds. All of the returns had been filed through a tax preparation business called Simmons Financial, which Sayles opened in the name of another individual in order to conceal her own involvement. The indictment alleged that the refunds were often directed to prepaid debit cards and in the plea agreement, Sayles admitted to using a debit card loaded with a fraudulently obtained refund to receive cash.
In a separate case, Chiquanta Davis and Terrence Davis, both of Elmore County, Ala., each pleaded guilty to crimes related to another stolen identity refund fraud scheme. On May 11, 2012, Terrence Davis pleaded guilty to one count of theft of public funds, while on May 14, 2012, Chiquanta Davis pleaded guilty to one count each of conspiracy to defraud the government with respect to claims, theft of public funds, and aggravated identity theft. Chiquanta Davis also agreed to the forfeiture of a Cadillac Escalade as part of her plea agreement. Both had been charged in a superseding indictment filed on Jan. 19, 2012.
According to her plea agreement, Chiquanta Davis had been involved in stolen identity refund fraud since at least December 2009. In January 2010, she opened a bank account that received numerous fraudulently obtained tax refunds. A total of $1,458,600 in refunds were directed to this account in 2010, although many were intercepted and stopped by the IRS. Then in 2011, Chiquanta Davis assisted with the filing of numerous false tax returns using stolen identities. Between January and June of 2011, 192 false returns requesting $769,223 in refunds were filed from her home. These refunds were directed to various bank accounts, including her own account. According to his plea agreement, Terrence Davis’s bank accounts received over $100,000 in false tax refunds and he used a portion of the stolen proceeds for his own use.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division thanked Special Agents of IRS - Criminal Investigation for investigating the cases, Tax Division Trial Attorneys Jason H. Poole and Michael Boteler, who prosecuted the cases, and George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama, and his entire office for their assistance.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Co-Owner of Detroit-Area Physical Therapy Company Sentenced to 48 Months for Medicare Fraud SchemeRead the Press Release
The co-owner of a Detroit-area physical therapy company was sentenced today to 48 months in prison for her leading role in a more than $1.9 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Fatima Hassan, 44, was sentenced by U.S. District Judge Avern Cohn in the Eastern District of Michigan. In addition to her prison term, Hassan was sentenced to three years of supervised release and ordered to pay $ 855,484 in restitution.
Hassan pleaded guilty on Sept. 15, 2011, to one count of conspiracy to commit health care fraud. According to the plea documents, i n 2005, Hassan incorporated a company known as Jos Campau Physical Therapy, which she owned with a co-defendant. Jos Campau Physical Therapy did not have a Medicare provider number and was not entitled to bill Medicare for therapy services.
According to court documents, Hassan paid kickbacks to recruiters who obtained Medicare beneficiary information and signatures needed to create fictitious physical and occupational therapy files. The Medicare beneficiaries pre-signed forms and visit sheets that were later falsified to indicate that they received therapy services that were never provided.
Hassan and the co-owner of Jos Campau Physical Therapy hired and paid an occupational therapist and an uncertified occupational therapy assistant to falsify medical files. The occupational therapist created patient evaluation forms for beneficiaries whom she had never met, seen or evaluated. The uncertified therapy assistant fabricated and signed patient notes for occupational therapy visits. The uncertified therapy assistant did not provide the services reflected in the fictitious patient notes. Additionally, Hassan’s co-owner, a physical therapist, falsified patient evaluation forms and fictitious patient notes for physical therapy services that were never rendered.
Hassan and the co-owner of Jos Campau Physical Therapy sold the fictitious physical and occupational therapy files to multiple fraudulent therapy companies that had obtained Medicare provider numbers. Those companies billed the fictitious files created by Jos Campau Physical Therapy to Medicare and paid kickbacks to Jos Campau Physical Therapy based on these billings. Hassan and her co-owner split the profits from the sale of the falsified files.
Hassan admitted that, between approximately June 2005 and May 2007, she and her co-conspirators at Jos Campau Physical Therapy submitted or caused the submission of approximately $1.9 million in fraudulent claims to the Medicare program for physical and occupational therapy services that were never rendered.
Hassan’s co-owner, Victor Jayasundera, pleaded guilty on Jan. 18, 2012, for his role in the scheme and is scheduled to be sentenced on May 31, 2012.
Tariq Mahmud, the owner of a Medicare provider company that bought and billed Jos Campau Physical Therapy ’s fake files, was convicted at trial on Feb. 2, 2012, for his role in the scheme and is scheduled to be sentenced on June 11, 2012.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick and Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section, with assistance from Trial Attorney Niall M. O’Donnell. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, the Medicare Fraud Strike Force operations in nine districts have charged more than 1,330 individuals who collectively have falsely 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, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov
Bay Area Woman Indicted in San Francisco<br /> <br /> for Tax Evasion and Bank FraudRead the Press Release
A federal grand jury in San Francisco has returned an indictment charging Crystal Ann Poole with evading income taxes for over eight years and for defrauding a federally insured bank in Mississippi, the Justice Department and Internal Revenue Service (IRS) announced today.
The indictment alleges that Poole had failed to file income tax returns and failed to pay income taxes since 1998, despite earning, in later years, as much as $200,000 each year. She allegedly evaded collection of her taxes by using a false Social Security number and by keeping her employers from withholding income taxes from her wages.
The indictment further alleges that, in January 2006, Poole defrauded the Community Bank of Mississippi in order to borrow $335,000 to buy a home in Florence, Miss. In order to get the loan, she allegedly provided the bank with a false Social Security number that masked several disqualifying financial circumstances to include a recently filed bankruptcy, one pending lawsuit, and numerous unpaid debts.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Poole faces a maximum potential sentence of 51 years in prison and a maximum fine of over $2 million.
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 Brian Bailey and Katherine Wong, who prosecuted the case; and Assistant U.S. Attorney Tom Moore for his assistance with the prosecution.
16 May 2012
Two Individuals and Their California Company Sentenced in Connection with Exports of Computer Equipment to IranRead the Press Release
Massoud Habibion, 49, a U.S. citizen, Mohsen Motamedian, 44, a U.S. citizen, and their Costa Mesa, Calif., company, Online Micro LLC, were sentenced today in the District of Columbia in connection with a scheme to illegally export millions of dollars worth of computer-related goods from the United States to Iran through the United Arab Emirates (UAE).
The sentences were announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); David W. Mills, Assistant Secretary for Export Enforcement, Department of Commerce; and Adam Szubin, Director of the Office of Foreign Assets Control (OFAC), Department of the Treasury.
U.S. District Judge Ellen S. Huvelle today sentenced Habibion to 13 months in prison for conspiracy to violate the International Emergency Economic Powers Act and to defraud the United States. Judge Huvelle sentenced Motamedian to three years supervised release for obstruction of justice. Habibion and Motamedian pleaded guilty to these charges on Feb. 16, 2012.
Under the terms of their guilty pleas and related civil settlements with the Department of Commerce’s Bureau of Industry and Security (BIS) and OFAC, Habibion and his company have agreed to forfeiture of $1.9 million seized from Online Micro’s bank accounts by ICE’s Homeland Security Investigations (HSI) during the course of the investigation. In addition, Habibion and Online Micro are denied export privileges for 10 years, although the denial order will be suspended provided that neither Habibion nor Online Micro commit any export violations during the 10-year probationary period and comply with the terms of the criminal plea agreements and sentences. Motamedian separately agreed to a $50,000 monetary penalty to settle a civil charge that he solicited a false statement to federal law enforcement agents.
Habibion and Motamedian were arrested on a criminal complaint in California on April 7, 2011. The defendants and their company were later indicted on April 21, 2011.
Habibion and Online Micro willfully conspired with a company operating in Dubai, UAE, and Tehran, Iran, to procure U.S.-origin computers from the United States and export those computers from the United States to Iran through Dubai without first obtaining licenses or authorizations from OFAC.
In or around May 2007, Online Micro purchased 1,000 computer units from Dell Inc. for approximately $500,000. Later that year, Dell began receiving service calls concerning Dell computer units from individuals in Iran, and after conducting an internal investigation, suspended Online Micro from placing further orders with Dell.
Beginning around Nov. 9, 2009, and continuing through December 2010, Habibion and Online Micro conspired with a company operating in Dubai and Tehran, to procure U.S.-origin computer-related goods and export those goods to Iran via the UAE. During the scope of the conspiracy, Online Micro and Habibion sold to that company and exported from the United States numerous shipments of computer-related goods, worth a total of more than $4,904,962, with knowledge that the majority of those goods were destined for Iran.
Online Micro also caused Shipper's Export Declarations to be filed with U.S. Customs and Border Protection falsely identifying the ultimate destination of the goods as the UAE. During the course of the investigation, Habibion and Motamedian told a government cooperator to lie to U.S. law enforcement officials about the transactions. Specifically, the defendants told the cooperator to lie about Iran being the true ultimate destination for the goods and counseled him to tell U.S. law enforcement agents that the computer-related goods remained in Dubai.
This investigation was conducted by the ICE-HSI offices in San Diego and Orange County, Calif. U.S. Customs and Border Protection and the Department of Commerce’s Office of Export Enforcement Los Angeles Field Office also assisted in the investigation.
Senior Attorney Adrienne Frazier from the U.S. Department of Commerce BIS and Assistant Director of Enforcement Michael Geffroy from OFAC handled the civil settlements for their agencies, respectively.
The prosecution is being handled by Assistant U.S. Attorneys T. Patrick Martin and Anthony Asuncion from the U.S. Attorney's Office for the District of Columbia, and Trial Attorney Jonathan C. Poling from the Counterespionage Section of the Justice Department’s National Security Division.
Houston-Area Nurse Sentenced to 97 Months in Prison for Role in $5.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A Houston-area nurse was sentenced today in Houston for her participation in a $5.2 million Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Service (HHS).
Ezinne Ubani, the former director of nursing at Family Healthcare Group, a Houston home health care company, was sentenced by U.S. District Judge Nancy Atlas in the Southern District of Texas to 97 months in prison, followed by three years supervised release. Ubani was ordered to pay $2.5 million in restitution jointly and severally with her codefendants. Ubani was convicted of one count of conspiracy to commit health care fraud and two counts of making false statements following a May 2011 trial.
According to the evidence presented at trial and in court documents, Family Healthcare Group purported to provide skilled nursing to Medicare beneficiaries. Family Healthcare Group paid co-conspirators to recruit Medicare beneficiaries for the purpose of filing claims with Medicare for skilled nursing that was medically unnecessary and/or not provided. The evidence showed that Ezinne Ubani falsified documents to support the fraudulent payments. After the Medicare beneficiaries were recruited, other co-conspirators fraudulently signed plans of care stating that the beneficiaries needed home health care when in fact they knew the beneficiaries were not home-bound and not in need of skilled nursing.
Ubani is the seventh defendant sentenced in connection with this scheme. Three other defendants, Clifford Ubani, Princewill Njoku and Cynthia Garza Williams, await sentencing in the Southern District of Texas.
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent-In-Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG); and the Texas Attorney General’s Medicaid Fraud Control Unit (OAG-MFCU).
This case is being prosecuted by Trial Attorney Charles D. Reed and Deputy Chief Sam S. Sheldon of the Fraud Section in the Justice Department’s Criminal Division. The case was investigated by the FBI, HHS-OIG, Texas OAG-MFCU and the Federal Railroad Retirement Board-Office of Inspector General. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Fraud Section in the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Southern District of Texas.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS 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.
Former Oklahoma Detention Officer Pleads Guilty to AssaultRead the Press Release
The Department of Justice announced that Jerrod Porter Lane, 26, a former detention officer at the Muskogee, Okla., County Jail (MCJ), pleaded guilty today in federal court to charges related to his assault of an inmate at MCJ and his subsequent attempts to cover up the assault. Lane pleaded guilty to use of excessive force, violating the civil rights of an inmate, falsifying records and making false statements to the FBI.
According to court documents, on Oct. 1, 2011, Lane, while working in his capacity as a jailer, sprayed the victim, an inmate at MCJ, with jail-issued Oleoresin Capsicum spray (OC or pepper spray) while the victim was restrained in a restraint chair and not a physical threat to anyone. Lane deployed the OC spray to punish the victim for bothering Lane, even though he knew it was wrong both to spray a restrained inmate and to use force as a means to punish.
Lane then falsified his report and a fellow corrections officer’s report to try to justify his wrongful conduct and then later lied to FBI agents to cover up his actions. Specifically, Lane falsely wrote in both reports that the victim was physically resisting the officers and that he deployed his OC spray before the victim was restrained. In fact, Lane used the OC spray after the victim was fully restrained and unable to pose a threat. Likewise, on Oct. 7, 2011, Lane falsely told FBI agents that the victim was not restrained when he sprayed the victim with OC spray.
“Our system of justice relies on corrections officers to follow the laws they are sworn to enforce,” said Assistant Attorney General Thomas E. Perez of the Department of Justice’s Civil Rights Division. “The Civil Rights Division will aggressively prosecute corrections officers who use their authority to physically abuse inmates.”
A sentencing date has not yet been set.
This case was investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and is being prosecuted by Trial Attorney Fara Gold of the Civil Rights Division of the U.S. Department of Justice and Assistant U.S. Attorney Ryan M. Roberts for the Eastern District of Oklahoma.
Colorado-Based QEP Field Services Agrees to Pay $4 Million and Install Pollution Controls to Resolve Alleged Violations of the Clean Air ActRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a settlement with QEP Field Services Co. (QEPFS), formerly Questar Gas Management Co., to resolve alleged violations of the Clean Air Act at five natural gas compressor stations on the Uintah and Ouray Reservation in Northeastern Utah. Four members of the Ute Indian Tribe intervened as co-plaintiffs. Under the proposed settlement, QEPFS will pay a $3.65 million civil penalty and pay $350,000 into a Tribal Clean Air Trust Fund to be established by the tribal member intervenors. The settlement also requires QEPFS to reduce its emissions by removing certain equipment, installing additional pollution controls, and replacing the natural gas powered instrument control systems with compressed air control systems.
“This settlement will result in cleaner air for residents living on the Uintah and Ouray Reservation and allow the responsible development of energy resources in accordance with the Clean Air Act,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “It also will establish the Tribal Clean Air Trust Fund to fund environmental projects for the benefit of tribal members.”
“Natural gas extraction projects help to fuel our economy, but also need to follow the nation’s laws,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement will bring cleaner air to the members of the Ute Indian Tribe by ensuring natural gas compressor stations are operated in compliance with the law and by creating a trust to fund environmental projects on the Uintah and Ouray Reservation.”
The Tribal Clean Air Trust Fund will fund beneficial environmental projects on the Uintah and Ouray Reservation, including projects to reduce emissions of air pollution on the reservation, mitigate the impacts of air pollution on tribal members, screen for air pollution related health impacts among tribal members, or educate tribal members about the impacts of air pollution on their health and the environment.
QEPFS’s compressor stations remove water and compress natural gas for transportation through gas pipelines. They are sources of air pollution, emitting hazardous air pollutants (HAPs), volatile organic compounds (VOCs) and nitrogen oxides (NOx), which can increase the risk of asthma attacks and are significant contributors to the formation of ozone. The actions required in the settlement will eliminate approximately 210 tons of NOx, 219 tons of carbon monoxide, 17 tons of HAPs and more than 166 tons of VOCs per year. It will also conserve 3.5 million cubic feet of gas each year, which could heat approximately 50 U.S. households. The reduction in methane emissions (a greenhouse gas that is a component of natural gas) is equivalent to planting more than 300 acres of trees.
QEPFS is a wholly-owned subsidiary of QEP Resources Inc., which is headquartered in Denver. QEPFS provides midstream field services such as natural gas gathering, compression, dehydration and processing to upstream natural gas companies.
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 at www.justice.gov/enrd/Consent_Decrees.html.
For more information about the settlement, visit: www.epa.gov/compliance/resources/cases/civil/caa/qepfs.html.
To learn more about EPA’s civil enforcement of the Clean Air Act, visit: www.epa.gov/compliance/civil/caa/index.html.
Arizona State Representative Charged with Bribery, Fraud, Attempted Extortion and Making False StatementsRead the Press Release
WASHINGTON – A member of the Arizona House of Representatives was charged today by a federal grand jury in the District of Arizona with bribery, fraud, attempted extortion and false statements in connection with receiving more than $6,000 in tickets to sporting and special events while serving as a Tempe, Ariz., City Council councilmember and member-elect of the Arizona House, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Special Agent in Charge James L. Turgal of the FBI’s Phoenix Field Office.
The indictment charges Paul Ben Arredondo, 63, of Tempe, with one count of federal programs bribery, two counts of honest services mail fraud, one count of attempted Hobbs Act extortion and one count of making false statements. Arredondo will be arraigned on May 30, 2012, in U.S. District Court for the District of Arizona before U.S. Magistrate Judge Lawrence O. Anderson.
According to the indictment, Arredondo was a councilmember in Tempe for 16 years, until July 2010. He was elected to the Arizona House of Representatives in November 2010. The indictment alleges that from February 2009 to November 2010, Arredondo accepted, agreed to accept and solicited things of value from representatives of a company whose purported business objective was to acquire city-owned property in Tempe for real estate development purposes. The representatives were, in fact, undercover agents with the FBI. According to the indictment, Arredondo received from the undercover agents more than $6,000 worth of tickets to sporting and other special events. Those tickets included 18 tickets for Arizona Diamondbacks baseball games valued at a total of approximately $2,400, and four tickets to an American League Championship Series baseball game valued at a total of approximately $1,225.
According to the indictment, in return for those tickets, Arredondo took and agreed to take action in his capacity as a Tempe city councilmember and as a member of the Arizona House of Representatives to facilitate the undercover agents’ purported purchase of city-owned property and development project. The indictment alleges that Arredondo brokered meetings between the undercover agents and other public officials, divulged information regarding the city of Tempe’s bidding process, and attempted to persuade other city officials to approve the purported development project.
The indictment further alleges that Arredondo lied to the FBI about his conduct during an interview in January 2012.
The federal programs bribery charge carries a maximum penalty of 10 years in prison and a $250,000 fine. Each count of honest services mail fraud and attempted extortion carries a maximum penalty of 20 years in prison and a $250,000 fine. The false statement charge carries a maximum penalty of 5 years in prison and a $250,000 fine. The indictment also contains a notice of forfeiture.
An indictment is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case is being prosecuted by Trial Attorneys Edward T. Kang and Monique T. Abrishami of the Criminal Division’s Public Integrity Section, and Assistant U.S. Attorney Frederick A. Battista of the District of Arizona. The case is being investigated by the FBI’s Phoenix Field Office.
Related Materials:
Arredondo Indictment
Alabama Sisters Sent to Prison for<br /> <br /> Their Roles in Stolen Identity Refund FraudRead the Press Release
Loretta Fergerson and her sister, Tracey Fergerson, both of Montgomery, Ala., were each sentenced to 115 months prison for their involvement in a conspiracy to file claims for false income tax refunds using stolen identities, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Judge Mark Fuller ordered the Fergerson sisters to pay $504,305 in restitution to the IRS.
According to court documents, Loretta Fergerson owned and operated a tax return preparation business called Fast Tax Cash in Montgomery. From 2005 through 2008, Loretta and Tracey Fergerson filed tax returns using stolen identities in order to claim fraudulent tax refunds. Additionally, Loretta Fergerson and her employees filed tax returns for Fast Tax Cash customers that contained false information in order to obtain higher refunds for customers. Loretta Fergerson also created false driver’s licenses and false Social Security cards to be placed in customer files for returns that were prepared using stolen identities.
Court records established that Tracey Fergerson participated in the scheme by gathering stolen personal information and also by cashing refund checks for tax returns that were filed using the stolen personal information. Tracey Fergerson also recruited customers for Fast Tax Cash and coached them to provide false information in order to fraudulently increase their tax refund amounts. She further admitted that she improperly obtained personal information, including names and social security numbers, and used that personal information to have false tax returns prepared at Fast Tax Cash.
“The stolen identity refund fraud crimes committed by these defendants are an affront to honest, hard-working taxpayers,” said Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division. “The lengthy prison sentences handed down recently by this court, in this and other cases, show the high price that will be paid by identity thieves.”
“These unscrupulous defendants thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers,” said Richard Weber, Chief, IRS Criminal Investigation. “IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system.”
Assistant Attorney General Keneally thanked Tax Division Trial Attorneys Chad Edgar and Michelle Petersen, who prosecuted the case, and special agents of IRS - Criminal Investigation, who provided valuable assistance in conducting the investigation.
15 May 2012
Two Aryan Brotherhood of Texas Gang Members Sentenced for Racketeering AssaultRead the Press Release
WASHINGTON – Two members of the Aryan Brotherhood of Texas (ABT) have been sentenced to federal prison for their role in an aggravated assault that took place in Tomball, Texas, in September 2008, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Benjamin Dillon, aka, “Tuff,” 39, was sentenced on May 11, 2012, to 41 months in prison. Justin Northrup, aka, “Ruthless,” 27, was sentenced to 63 months in prison on April 27, 2012.
The defendants, who are both from the greater Houston-area, pleaded guilty to racketeering aggravated assault for their role in an attack against an ABT prospect member. The defendants were sentenced by U.S. District Court Senior Judge Ewing Werlein Jr. in the Southern District of Texas.
According to court documents, both defendants were members of the Aryan Brotherhood of Texas (ABT), a powerful race-based, state-wide organization that operated inside and outside of state and federal prisons throughout Texas and the United States. The ABT was established in the early 1980s within the Texas prison system. As alleged in the indictment, it modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to court documents, previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, however, the ABT has expanded its criminal enterprise to include illegal activities for profit.
The ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, are required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to court documents, Dillon and Northrup, along with 10 fellow ABT gang members, participated in the beating of an ABT prospect member at the home of another ABT gang leader, Steven Walter Cooke, 48, aka “Stainless,” in Tomball, Texas, on Sept. 22, 2008. The ABT prospect, who sustained serious bodily injury, was beaten by ABT gang members because he violated certain ABT rules of conduct.
Eleven of the 12 co-defendants previously pleaded guilty to violent crimes in aid of racketeering aggravated assault. The 12th ABT gang member, David Harlow, aka, “Bam Bam,” 43, was found guilty at trial by Senior Judge Ewing Werlein Jr. on March 21, 2012.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the FBI; the U.S. Marshals Service; the Texas Rangers; the Texas Department of Public Safety; the Montgomery County, Texas, Sheriff’s Department; the Houston Police Department-Gang Division; Tomball Police Department; Texas Department of Criminal Justice – Inspector General; and the Harris County, Texas, Sheriff’s Office.
The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Jay Hileman of the Southern District of Texas in Houston.
Japanese Citizen Sentenced to 17 Years in Prison for Participating in International Child Pornography RingRead the Press Release
WASHINGTON – A Japanese citizen was sentenced yesterday in Los Angeles to 17 years in prison and lifetime supervised release for conspiracy to advertise child pornography, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Steve Martinez of the FBI’s Los Angeles Field Office announced today.
Futoshi Tachino, a Japanese citizen most recently residing in Winnipeg, Canada, was sentenced by U.S. District Judge Virginia A. Phillips. In March 2011, Tachino, 32, pleaded guilty to one count of conspiracy to advertise child pornography. Tachino was arrested in Chicago in July 2009.
The sentencing is the result of an international investigation into the “Lost Boy” online bulletin board. The Lost Boy bulletin board, according to court documents and proceedings, was dedicated to men who have a sexual interest in young boys and was established to provide a forum to trade child pornography.
Federal authorities, working in conjunction with a coalition of international law enforcement agencies, shut down the Lost Boy bulletin board approximately three years ago. As a result of the investigation, 16 named defendants, including Tachino, were charged in the United States and arrested for their roles in the bulletin board. To date, 15 defendants have pleaded guilty or have been convicted at trial, and one defendant died in custody. Approximately six more men have been charged with child molestation as a result of the investigation. The investigation also led to the identification of 27 domestic victims of child abuse, some of whom were portrayed in images posted to the Lost Boy bulletin board.
According to court documents and proceedings, law enforcement authorities discovered the Lost Boy bulletin board after receiving information from Eurojust, the judicial cooperation arm of the European Union. Eurojust provided U.S. law enforcement with leads obtained from Norwegian and Italian authorities indicating that a North Hollywood, Calif., man was communicating with an Italian national about child pornography and how to engage in child sex tourism in Romania. Acting on the information from Europe, the FBI executed search warrants that led to the discovery of the Lost Boy network. Further investigation revealed that Lost Boy had 35 members, 16 of whom were U.S. nationals. Other members of the network were located in countries around the world, including Belgium, Brazil, Canada, France, Germany, New Zealand and the United Kingdom.
According to court documents, Lost Boy had a thorough vetting process for new members, who were required to post child pornography to join the organization. Once accepted, members were required to continue posting child pornography to remain in good standing and to avoid removal from the board. According to court documents, Lost Boy members advised each other on techniques to evade detection by law enforcement, which included using screen names to mask identities and encrypting computer data.
International law enforcement efforts involving European law enforcement, the Brazilian Federal Police and other agencies have identified child molestation suspects in South America, Europe and New Zealand. Three suspects in Romania, one in France and another in Brazil have been charged, and offenders have been convicted in Norway and the United Kingdom. Law enforcement efforts have also identified dozens of child victims located in Norway, Romania, Brazil and other nations.
The investigation into the Lost Boy bulletin board was led by the FBI and the U.S. Postal Inspection Service, in conjunction with the Los Angeles-based Sexual Assault Felony Enforcement (SAFE) Team. The High Technology Investigative Unit of the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division, along with Eurojust, have provided invaluable assistance during the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Joey L. Blanch and Yvonne Garcia of the Central District of California and CEOS Trial Attorney Andrew McCormack.
14 May 2012
Wilcox County, Georgia, Sheriff, Son and Jailer Face Civil Rights Charges in Superseding IndictmentRead the Press Release
The Justice Department, along with U.S. Attorney Michael J. Moore, Middle District of Georgia, today announced that a grand jury returned a superseding indictment against former Wilcox County Sheriff Stacy Bloodsworth; his son, Austin Bloodsworth; and former Wilcox County Jailer Casey Owens. The superseding indictment charges the defendants with assaulting three different inmates inside of the Wilcox County Jail on July 23, 2009, thereby violating their civil rights. As a result of the assaults, one inmate suffered a broken jaw, and two other inmates sustained bruises and scratches. The indictment also charges the defendants with conspiring to cover up the assaults. In addition, Stacy Bloodsworth and Austin Bloodsworth were charged with lying to the FBI, while Owens was charged with writing a false report about the incident. Stacy Bloodsworth was charged with tampering with one of the victims, as well as two witnesses.
In addition to the civil rights and obstruction of justice charges stemming from the assaults that took place on July 23, 2009, the superseding indictment also charges Stacy Bloodsworth with violating the civil rights of individuals on two other occasions. Former-Sheriff Bloodsworth is charged with assaulting Wilcox County Jail inmate M.A. in July 2009, causing him to suffer a laceration and pain. It also charges the former sheriff with assaulting N.S. in November 2009, causing him to suffer a concussion, bruising, and pain.
The civil rights charges carry a maximum penalty of 10 years for each count, and the conspiracy and false statements charges carry a maximum penalty of up to five years. Additionally, Stacy Bloodsworth faces a maximum penalty of 20 years for each count of witness tampering, while Owens faces a maximum penalty of 20 years for his writing a false report.
A prior indictment, which was unsealed on Feb. 17, 2012, charged Stacy Bloodsworth, Austin Bloodsworth, Owens and former Wilcox County Jail trustee Willie James Caruthers with civil rights violations in connection with the July 23, 2009, assault of the three inmates; with conspiring to cover up the assaults; and with committing various obstruction of justice offenses.
On April 4, 2012, defendant Caruthers pleaded guilty to acting with several others, including law enforcement officials, to assault an inmate in the Wilcox County Jail on July 23, 2009. Caruthers also pleaded guilty to conspiring to tamper with a witness in connection with the assault. During his plea hearing and in his factual basis, Caruthers admitted that he, along with several other individuals, including law enforcement officers, assaulted Wilcox County inmate K.H., causing K.H. to suffer a broken jaw. Caruthers further admitted that he was present when several individuals, including then-Sheriff Bloodsworth, assaulted inmates K.F. and T.O., causing both of them to sustain bruises, scratches and pain. Caruthers further admitted that he conspired with several other people, including Stacy Bloodsworth, to cover up the fact that law enforcement officials and others had used excessive force against inmates K.H., K.F. and T.O. Caruthers acknowledged that the plan of the conspiracy was for the co-conspirators to prepare false reports and submit them to Wilcox County Sheriff’s Office officials, and to make statements consistent with those false reports to anyone inquiring about the excessive use of force incident. When Caruthers is sentenced, he faces a maximum penalty of up to 10 years on the civil rights violation, and a maximum penalty of up to five years on the conspiracy charge.
On March 5, 2012, former South Central Georgia Drug Task Force Agent Timothy King Jr., 31, pleaded guilty to a bill of information charging him with conspiring to tamper with a witness in connection with the July 23, 2009 assaults of inmates K.H., K.F. and T.O. During his plea hearing, King admitted that he conspired with several other people, including a law enforcement official, to cover up the fact that law enforcement officials and others had used excessive force against the three inmates. When King is sentenced, he faces a maximum penalty of up to five years.
This case was investigated by the FBI and is being prosecuted by Senior Litigation Counsel Gerard V. Hogan and Trial Attorney Christine M. Siscaretti of the Justice Department’s Civil Rights Division and Assistant United States Attorney Paul C. McCommon III of the U.S. Attorney’s Office for the Middle District of Georgia.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.
Related Materials:
Superseding Indictment
Nineteen-Year Police Veteran Convicted in Puerto Rico for Role in Providing Armed Security for Drug TransactionRead the Press Release
WASHINGTON – A 19-year veteran of the Police of Puerto Rico was convicted today by a federal jury in San Juan, Puerto Rico, for her role in providing security for a drug transaction, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Field Office.
Yamil Navedo Ramirez, 39, was convicted of one count of attempting to possess with the intent to distribute more than five kilograms of cocaine and one count of possession of a firearm in furtherance of a drug transaction. She was acquitted of one count of conspiracy to possess with intent to distribute more than five kilograms of cocaine.
Navedo Ramirez was charged in a superseding indictment returned on Oct. 28, 2010, along with 88 law enforcement officers in Puerto Rico and 42 other individuals, as part of the FBI undercover operation known as Guard Shack.
According to the evidence presented in court, Navedo Ramirez provided security for what she believed was an illegal drug transaction on April 14, 2010. In fact, the purported drug transaction was part of the undercover FBI operation. According to information presented at trial, Navedo Ramirez acted as a security guard for what she believed was a 12-kilogram cocaine deal by helping to frisk the buyer, providing armed protection for the deal using her Police of Puerto Rico service weapon, and escorting the buyer in and out of the transaction.
In return for the security she provided, Navedo Ramirez received a cash payment of $2,000.
U.S. District Judge Juan Pérez-Giménez scheduled sentencing for Sept. 21, 2012. At sentencing, Navedo Ramirez faces a mandatory minimum sentence of 15 years in prison and a maximum penalty of life in prison.
The case was prosecuted by Trial Attorneys Kevin Driscoll and Monique Abrishami of the Public Integrity Section in the Justice Department’s Criminal Division. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
New Mexico Man Pleads Guilty to Stolen Identity Refund Fraud CrimesRead the Press Release
Douglas Kuester, a tax preparer from Silver City, N.M., pleaded guilty Friday to one count each of filing false claims and aggravated identity theft the Justice Department and the Internal Revenue Service (IRS) announced today. Kuester was indicted on Jan. 18, 2012.
According to the plea agreement, Kuester used stolen identities to file false tax returns which fraudulently claimed refunds. He would direct the fraudulently obtained refunds to various bank accounts and prepaid debit cards, retaining portions of the proceeds for himself.
The case was investigated by Special Agents of IRS - Criminal Investigation and prosecuted by Trial Attorneys Jason H. Poole and Gregory P. Bailey of the Justice Department’s Tax Division. Tax Division Assistant Attorney General Kathryn Keneally thanked U.S. Attorney Kenneth J. Gonzales and his entire office their assistance in the prosecution.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Justice Department to Monitor Elections in NebraskaRead the Press Release
The Justice Department announced today that it will monitor the primary elections on May 15, 2012, in Colfax and Douglas Counties in Nebraska, 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 Colfax County to provide language assistance in Spanish 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 Colfax County based on a federal court order entered in 2012. 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 Douglas County. Civil Rights Division attorneys 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.
Alabama Pharmacist and Wife Plead Guilty to Tax Fraud ConspiracyRead the Press Release
Thomas K. Frye and Kathy M. Frye, husband and wife, and residents of Andalusia, Ala., pleaded guilty to conspiring to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents, beginning in 1999, the Fryes conspired to defraud the United States by submitting IRS forms to their employers that falsely claimed they were exempt from federal income taxes. When the IRS attempted to collect back taxes owed by the Fryes, Thomas Frye submitted false financial instruments to the IRS in purported payment of his and his wife’s tax liability. In one such instrument, Mr. Frye represented to the IRS that the false instrument had a value of $100 billion. Court records also established that, as part of the conspiracy, the Fryes filed false federal income tax returns for the years 2000 through 2007 that substantially understated their incomes.
Sentencing has not yet been scheduled. The Fryes face a potential maximum of five years in prison, three years of supervised release, an order of restitution and a maximum fine of $250,000, or twice the loss caused by the offense.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division thanked the Special Agents of IRS - Criminal Investigation who investigated the case, Tax Division Trial Attorneys Charles M. Edgar, Jr. and Michael C. Boteler, who are prosecuting the case, and United States Attorney George L. Beck, Jr. and his entire office for their assistance with the prosecution.
More information about the Tax Division and its enforcement efforts is available at http://www.justice.gov/tax.
11 May 2012
Virginia Anesthesiologist Pleads Guilty to Filing False Tax ReturnsRead the Press Release
George Anderson, 57, an anesthesiologist from Farmville, Va., pleaded guilty today to two counts of filing a false corporate and false individual income tax return, the Justice Department and Internal Revenue Service (IRS) announced.
Anderson is facing a maximum potential sentence of six years in prison when he is sentenced on Sept. 14, 2012, by Chief United States District Judge James R. Spencer.
According to court records, Anderson was the sole owner of Farmville Anesthesia Associates Inc. He attempted to reduce his business tax liability to zero by diverting income to sham entities, such as trusts; deducting the diverted payments on the business’s tax returns; and not reporting the personal use of the diverted funds on his personal tax returns.
Beginning in 2001, Anderson disbursed hundreds of thousands of dollars worth of bogus expenses out of Farmville Anesthesia’s bank accounts to bank accounts held in the names of trusts and limited liability companies Anderson himself controlled. He then falsely deducted these payments on Farmville Anesthesia’s corporate income tax returns. Later, Anderson spent substantial funds out of the nominee bank accounts for his personal benefit, including for the construction of his personal residence and did not report this income on his personal tax returns. In his guilty plea, Anderson admitted that he filed a false 2007 corporate income tax return on behalf of Farmville Anesthesia Associates. He also admitted to filing a false 2005 personal income tax return.
This case was investigated by agents of IRS-Criminal Investigation. Trial Attorney Jonathan R. Marx of the Justice Department’s Tax Division and Assistant United States Attorney David T. Maguire are prosecuting the case on behalf of the United States.
Three Former Financial Services Executives Convicted for Roles in ConspiraciesInvolving Investment Contracts for the Proceeds of Municipal BondsRead the Press Release
A federal jury in New York City today convicted three former financial services executives for their participation in conspiracies related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts , the Department of Justice announced.
Dominick P. Carollo, Steven E. Goldberg and Peter S. Grimm, all former executives of General Electric Co. (GE) affiliates, were found guilty on all remaining counts of a superseding indictment in the U.S. District Court for the Southern District of New York. Carollo was found guilty on two counts of conspiracy to commit wire fraud and defraud the United States, Goldberg was found guilty on four counts of conspiracy to commit wire fraud and defraud the United States and Grimm was found guilty on three counts of conspiracy to commit wire fraud and to defraud the United States.
The trial began on April 16, 2012. Carollo, Goldberg and Grimm were initially indicted on July 27, 2010.
“The defendants corrupted the competitive bidding process and defrauded municipalities across the country for years,” said Deputy Assistant Attorney General Scott D. Hammond of the Antitrust Division. “Through corruption and fraud, they cheated cities and towns out of money for important public works projects. Today’s convictions reflect our determination to preserve fairness and competition in the financial services market.”
According to evidence presented at trial, while employed at GE affiliates, Carollo, Goldberg and Grimm participated in separate fraud conspiracies with various financial institutions and insurance companies and their representatives at various time periods from as early as 1999 until 2006. These institutions and companies, or “providers,” offered a type of contract, known as an investment agreement, to state, county and local governments and agencies throughout the United States. The public entities were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds that they had issued to raise money for, among other things, public projects. Goldberg also participated in the conspiracies while employed at Financial Security Assurance Capital Management Services LLC (FSA)
According to evidence presented at trial, Carollo, Goldberg and Grimm and their co-conspirators corrupted the bidding process for dozens of investment agreements to increase the number and profitability of investment agreements awarded to the provider companies where they were employed. Carollo, Goldberg and Grimm deprived the municipalities of competitive interest rates for the investment of tax-exempt bond proceeds that were to be used by municipalities for various public works projects, such as for building or repairing schools, hospitals and roads. Evidence at trial established that they cost municipalities around the country millions of dollars.
“Fundamentally, this case is about fraud in the investment of public money,” said Janice K. Fedarcyk, Assistant Director in Charge of the FBI in New York. “The actions of the defendants denied public entities the benefits of true competitive bidding, and artificially depressed the yield on invested public funds.”
“Today’s convictions are an important step forward in the coordinated effort by the IRS and the Department of Justice to aggressively rid the municipal bond industry of unfair and corrupt practices,” said Internal Revenue Service (IRS)-Criminal Investigation (IRS-CI) Special Agent in Charge Victor W. Lessoff. “Moreover, the convictions represent an important victory for America’s taxpayers, especially those who live in the municipalities harmed by the actions of the defendants.”
A total of eighteen individuals have been charged as a result of the department’s ongoing municipal bonds investigation. Including today’s convictions, a total of 15 individuals have been convicted and three await trial. Additionally, one company has pleaded guilty.
Each of the fraud conspiracy charges carries a maximum penalty per count of five years in prison and a $250,000 fine. The maximum fines for the fraud conspiracy offense may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The verdict announced today resulted from an ongoing investigation conducted by the Antitrust Division’s New York Office, the FBI and the IRS-CI. The division is coordinating its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
Today’s convictions are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.StopFraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-335-8000, the FBI at 212-384-5000 or IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.htm.
Rhode Island-based Sellers of Herbal ProductsHeld in ContemptRead the Press Release
A U.S. district court judge has held Daniel Chapter One, an herbal products company located in Portsmouth, R.I., and its officers, James and Patricia Feijo, in civil contempt of court for violating the terms of a preliminary injunction order, the Justice Department announced today.
In 2008, the Federal Trade Commission (FTC) charged Daniel Chapter One and James Feijo with making deceptive claims that shark cartilage and certain other herbal formulations prevent, treat, and cure cancer, and lessen the side effects of chemotherapy and radiation. The lawsuit was part of Operation False Cures, a law enforcement sweep conducted by the FTC, the U.S. Food and Drug Administration, and the Competition Bureau Canada aimed at peddlers of phony cancer remedies.
Following an administrative hearing and appeal, in January 2010 the FTC ordered defendants to send a letter notifying purchasers that the FTC had found the advertising claims for the products deceptive because they were unsubstantiated. The FTC further ordered defendants to stop making health claims about their products unless the claims were substantiated by scientific evidence.
Defendants refused to comply with the FTC’s Order. At the FTC’s request, the Department of Justice’s Consumer Protection Branch sued Daniel Chapter One and James Feijo in federal district court seeking civil penalties for the violations of the FTC’s order and a court order requiring compliance with the FTC order The District Court entered a preliminary injunction requiring defendants to comply with the FTC Order.
Nevertheless, Daniel Chapter One, James Feijo, and his wife, Patricia Feijo, continued to tell consumers that their products could treat and cure cancer, and refused to send the corrective notice to past purchasers. The United States then sought civil contempt sanctions against the defendants.
Following a hearing on May 9, 2012, Judge Emmet G. Sullivan of the U.S. District Court for the District of Columbia found that clear and convincing evidence demonstrated that Daniel Chapter One, James Feijo, and Patricia Feijo were violating the preliminary injunction through statements on their radio show, statements on their websites, and by failing to send the corrective notice.
The court has provided the defendants with two weeks to remove the offending statements from their websites, send the corrective notice, and make a sufficient representation to the court that they will cease making the offending statements on their radio show. If they fail to do so, they will begin accruing fines and face imprisonment for their contempt of court.
“Those who make unsubstantiated claims that their products can cure cancer are taking advantage of extremely vulnerable Americans,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “In today’s online world, it can be hard to identify where the truth ends and the scam begins. The Department of Justice is committed to protecting consumers from bogus cancer cures.”
Marketers of phony cancer treatments tend to use tactics like the following:
• Claiming that the same treatment will work for everybody and every type of cancer;
• Advising customers to avoid surgery, radiotherapy, chemotherapy, and other conventional treatments;
• Using customer testimonials to “prove” the effectiveness of the treatment;
• Offering “miracle” treatments for serious illnesses;
• Discrediting scientific studies, the Food and Drug Administration, and doctors.
Additional information on how to spot a scam or bogus cancer cure is available on the Federal Trade Commission’s website at: www.ftc.gov/bcp/edu/microsites/curious/index.shtml. The corrective notice defendants must send their customers states that it is important for consumers to talk to their doctor or health care provider before deciding to take any herbal product instead of taking cancer treatments that have been scientifically proven to be safe and effective in humans.
Related Materials:
Civil Contempt Order
Principal of Offshore Brokerage Firm Sentenced in Miami to 20 Years in Prison for $7 Million Stock Manipulation ScamRead the Press Release
WASHINGTON – The principal of a Costa Rican brokerage firm was sentenced today in Miami to 20 years in prison for his role in a stock manipulation scheme that defrauded investors in a company called CO2 Technologies, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Chief Postal Inspector Guy Cottrell of the U.S. Postal Inspection Service (USPIS) and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
Jonathan Curshen, 47, the principal of Red Sea Management and Sentry Global Securities, was sentenced by U.S. District Judge Richard W. Goldberg. Red Sea Management and Sentry Global Securities are companies located in San Jose, Costa Rica, that provided offshore accounts and facilitated trading in penny stocks.
In addition to his prison term, Curshen was sentenced to serve three years of supervised release and was ordered to forfeit approximately $7.3 million. Curshen and his co-defendant, Las Vegas stock promoter Nathan Montgomery, were convicted by a jury in January 2012 on all counts. Montgomery, 31, is scheduled to be sentenced by Judge Goldberg later today.
The evidence at trial showed that in January and February 2007, Curshen, of Costa Rica and Sarasota, Fla., and Montgomery, of Las Vegas, were involved in a scheme to illegally manipulate the stock price of CO2 Tech (ticker CTTD).
Evidence at trial showed that Curshen’s and Montgomery’s co-conspirators controlled the outstanding shares of CO2 Tech, which were used in the stock manipulation scheme. Montgomery and his conspirators engaged in coordinated trades in conjunction with the issuance of false and misleading press releases that were designed to artificially inflate the price of CO2 Tech shares to make it appear that it had significant business prospects. According to these press releases, CO2 Tech purported to have a business relationship with Boeing to reduce polluting gases emitted from airplanes, when in fact CO2 Tech never had any business or relationship with Boeing.
According to the evidence at trial, Montgomery and his co-conspirators, Robert Weidenbaum, Timothy Barham Jr., Ryan Reynolds and others fraudulently “pumped” the market price and demand for CO2 Tech stock through these press releases and coordinated trades of shares of CO2 Tech stock in order to create the appearance of legitimate buying interest by legitimate investors. The evidence showed that as Montgomery and his conspirators pumped the price of the stock, Curshen and his conspirators facilitated the “dumping” of shares through the trading desk at Red Sea and Sentry Global Securities by selling the shares to the general investing public. The evidence showed that these shares, which became virtually worthless, were purchased by unsuspecting investors, including investors in the Southern District of Florida. The evidence showed that Montgomery, Weidenbaum, Reynolds and Barham were paid approximately $1 million in cash by their conspirators to participate in sham stock trades of CO2 Tech. The cash was delivered to them in Miami via a private jet from an airport outside New York.
The evidence further showed that, from approximately 2003 through 2008, Curshen operated Red Sea as a money laundering hub in Costa Rica that established bank accounts and brokerage accounts in the United States and Canada under false pretenses and through nominee owners. The evidence further showed that Curshen and his co-conspirators laundered the proceeds of the stock fraud from accounts in the United States to an account in Canada, all in an effort to conceal and disguise the nature and source of the proceeds.
Stock promoters Barham and Weidenbaum were sentenced yesterday to 30 months and 26 months in prison, respectively. Michael Krome, a securities attorney from New York, who participated in the conspiracy and evaded federal securities registration requirements, was sentenced yesterday to 34 months in prison. Reynolds is scheduled to be sentenced at a later date.
The case was investigated by the FBI’s Washington Field Office and the USPIS. The case is being prosecuted by Trial Attorneys N. Nathan Dimock and Rina Tucker Harris of the Fraud Section in the Justice Department’s Criminal Division. The U.S. Attorney’s Office for the Southern District of Florida provided significant assistance in this case. The Department of Justice acknowledges the significant assistance of the Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) in its investigation. The criminal case originated as a referral from the SEC, which has a pending parallel civil case. The Criminal Division’s Office of International Affairs and Costa Rican authorities also provided assistance.
The Department of Justice has established a website for potential victims of the crime, which may be accessed at www.justice.gov/criminal/vns/caseup/, under case numbers 11-cr-20121 and 12-cr-20049. Potential victims are urged to contact the Department of Justice as directed on the website.
This prosecution is part of efforts under way by the 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.
Nebraska Man Sentenced to 18 Months in PrisonRead the Press Release
WASHINGTON – An Omaha, Neb., man was sentenced today in Omaha to 18 months in prison for committing wire fraud while serving a term of supervised release as part of a scheme to obtain corrupt payments from an individual facing criminal charges in return for a promised reduction in the individual’s prison sentence, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Austin Galvan, 30, was sentenced by U.S. District Judge Joseph F. Bataillon for the District of Nebraska. In addition to his prison term, Galvan was ordered to serve three years of supervised release following the prison term and to pay $1,300 in restitution.Galvan pleaded guilty on Feb. 6, 2012. According to court documents, Galvan told an associate who was facing federal criminal charges that Galvan had a law enforcement contact who could secure a substantial reduction in his associate’s prison sentence in exchange for corrupt payments. Galvan, in fact, had no such contact. At the time, Galvan was serving a term of supervised release.
According to his plea agreement, in subsequent conversations, Galvan urged his associate not to cooperate with federal authorities. Galvan admitted that he used the ruse of his fake law enforcement contact to solicit $ 21,300 in corrupt payments. Galvan also admitted that he provided his associate with what Galvan claimed was official material received from his purported law enforcement contact, including an audio recording of a court hearing and the business card of a federal judge who would assist in securing the sentence reduction. In fact, the federal judge was not handling the case and the audio recording was available to the public.
The case was prosecuted by Trial Attorneys Kevin Driscoll and Barak Cohen of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI’s Omaha Division.
Justice Department to Monitor Elections in TexasRead the Press Release
The Justice Department announced today that it will monitor municipal elections on May 12, 2012, in Dallas, Galveston, and Jasper Counties in Texas to ensure compliance with the Voting Rights Act of 1965. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Dallas and Galveston Counties based on the attorney general’s certification. The observers will watch and record activities during voting hours at polling locations in these counties, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Jasper County. Civil Rights Division attorneys 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.
Health Care Providers Settle with Justice Department over Complaints of HIV DiscriminationRead the Press Release
The Justice Department announced that it has reached two settlements today resolving claims that health care providers refused to serve people with HIV in violation of the Americans with Disabilities Act (ADA).
The first complaint was filed by a man with HIV who went to the Mercy Medical Group Midtown Clinic in Sacramento, Calif. After meeting with the patient and examining him, a podiatrist at the clinic informed the patient of his treatment options. Although surgery was one of the treatment options, the podiatrist incorrectly told the patient that he could not perform the surgery because of a risk that he would contract HIV from the patient during surgery. The United States determined that the podiatrist’s actions violated the ADA by denying the patient the full and equal enjoyment of the services offered at the clinic on the basis of his disability.
The second complaint was filed by a man with HIV who went to the Knoxville Chiropractic Clinic North in Knoxville, Tenn., for chiropractic treatment following an automobile accident. After examining him, the doctor determined that the patient required 24 subsequent appointments to treat his injuries. On his third visit to the clinic, however, the receptionist informed him that the doctor would not see him because they could not treat people “like him.” The United States determined that Knoxville Chiropractic Centers had a blanket policy of refusing treatment to persons with HIV in violation of the ADA.
“It is critical that people with disabilities, including HIV, not be denied equal access to goods and services, especially to health care services. The Civil Rights Division takes discrimination based on unfounded fears and stereotypes about HIV very seriously,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We applaud Mercy Medical Group and CHW Medical Foundation, as well as Knoxville Chiropractic Centers, for working cooperatively with the Justice Department to resolve these matters quickly and fairly.”
The settlement agreements require the entities to develop and implement a non-discrimination policy and to train staff on the requirements of the ADA. In addition, Mercy Medical Group and CHW Medical Foundation are required to pay $60,000 to the complainant and $25,000 as a civil penalty, and Knoxville Chiropractic Centers is required to pay $10,000 as a civil penalty.
The ADA requires public accommodations, like doctors’ offices, medical clinics, hospitals and other health care providers, to provide individuals with disabilities, including people with HIV, equal access to goods, services, privileges, accommodations, facilities, advantages and accommodations.
The Department of Justice provides a webpage specifically dedicated to information about the ADA and HIV at www.ada.gov/aids. Those interested in finding out more about these settlements or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected].
Georgia County Commissioner Charged with Attempted Extortion, Bribery and False StatementsRead the Press Release
WASHINGTON – A county commissioner in Sumter County, Ga., was indicted today for his alleged role in soliciting illicit payments in exchange for his official efforts to secure government contracts for a private contractor, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Georgia Michael J. Moore announced.
Al J. Hurley, 54, is charged in a three-count indictment filed in the Middle District of Georgia with attempted extortion, bribery and false statements. According to the indictment, Hurley was an elected member of the five-member Sumter County Board of Commissioners in Sumter County. As the primary governing body for the county, the Board of Commissioners presided over a variety of official matters, including the bidding process for and award of various county contracts.
The indictment alleges that from September to December 2011, Hurley, in his capacity as a county commissioner, solicited and agreed to accept cash payments, including $5,000 on Oct. 23, 2011, and $15,000 on Dec. 19, 2011, from a private contractor, in exchange for Hurley’s use of official action and influence to facilitate the award of county contracting work to the contractor. In addition, according to the indictment, on Dec. 19, 2011, Hurley lied to special agents of the FBI when he falsely claimed that he never solicited money from the contractor.
If convicted of attempted extortion, Hurley faces 20 years in prison and a $250,000 fine. On the bribery charge, Hurley faces 10 years in prison and a $250,000 fine. The false statement charge carries a maximum five year prison sentence and an additional $250,000 fine.
This case is being prosecuted by Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Crawford L. Seals of the Middle District of Georgia. This case was investigated by the FBI.
Former New England Organized Crime Leader and Associate Sentenced for Racketeering and Extortion ActivitiesRead the Press Release
WASHINGTON – Luigi “Louie” Manocchio, an admitted former boss and underboss of the New England La Cosa Nostra (NELCN), was sentenced today to 66 months in federal prison for his leadership of and participation in a racketeering and extortion conspiracy that demanded and received between $800,000 and $1.5 million in “protection” payments from several Rhode Island adult entertainment businesses from 1995-2009.
Raymond R. “Scarface” Jenkins, an admitted associate of the NELCN, was also sentenced today to 37 months in prison for his admitted participation in a conspiracy to extort $25,000 from a Rhode Island individual and his wife by using implied threats of violence, including a visit to the individual’s residence.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Peter F. Neronha, U.S. Attorney for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police; and Providence, R.I., Public Safety Commissioner Steven M. Pare.
Manocchio and Jenkins were sentenced by U.S. District Court Judge William E. Smith in the District of Rhode Island. Manocchio, 84, was also sentenced to serve three years of supervised release following his prison sentence. Jenkins, 47, was sentenced to serve three years of supervised release following his prison sentence.
Manocchio pleaded guilty on Feb. 22, 2012, to one count of racketeering conspiracy and Jenkins pleaded guilty on Feb. 23, 2012, to one count of conspiracy to violate the Hobbs Act by participating in extortion.
Manocchio and Jenkins are among eight Rhode Island men charged in a second superseding indictment returned on Sept. 22, 2011, for crimes involving racketeering and extortion. Edward “Eddy” Lato, an NELCN leader; NELCN member Alfred “Chippy” Scivola; and NELCN associates Albino “Albie” Folcarelli, Thomas Iafrate and Richard Bonafiglia pleaded guilty to participating in racketeering and extortion activities. Iafrate was sentenced on Dec. 12, 2011, to 30 months in prison to be followed by three years of supervised release. The remaining defendants are awaiting sentencing.
An eighth defendant named in the second superseding indictment, Theodore Cardillo, pleaded not guilty to three counts of racketeering conspiracy and three counts of extortion conspiracy. He is awaiting trial.
A third superseding indictment was returned in this matter on April 24, 2012, which charges Anthony L. Dinunzio, 53, of East Boston, Mass., the alleged acting leader of the NELCN, with one count each of racketeering and extortion, and five counts of travel in aid of racketeering. He entered a plea of not guilty on April 25, 2012, and was ordered detained while awaiting trial.
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, Providence Police and Internal Revenue Service – Criminal Investigation.
Department of Justice Seizes More Than $1.5 Million in Proceeds from the Online Sale of Counterfeit Sports Apparel Manufactured in ChinaRead the Press Release
WASHINGTON – The Department of Justice has seized more than $1.5 million in proceeds from the distribution of counterfeit sports apparel and jerseys as the result of an investigation into the sale of counterfeit goods on commercial websites, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the District of Columbia Ronald C. Machen Jr. and John Morton, Director of the Department of Homeland Security’s Immigration and Customs Enforcement (ICE).
The investigation also resulted in the seizure of three domain names used in the sale of counterfeit sports apparel. The funds were seized from interbank accounts and six money service business accounts. The seizure warrants were unsealed in U.S. District Court in the District of Columbia on May 7, 2012.
The developments are the latest result of Operation In Our Sites, a law enforcement initiative targeting online commercial intellectual property crime announced by ICE’s Office of Homeland Security Investigations (HSI) in June 2010. Operation In Our Sites targeted online retailers of a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets. To date, 761 domain names of websites used in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized as a result of Operation In Our Sites.Additionally, last month, the Department of Justice seized more than $896,000 in proceeds from the sale of counterfeit sports apparel on commercial websites as part of Operation In Our Sites.
According to court documents, investigation by federal law enforcement agents revealed that subjects whose domain names had been seized in a November 2010 In Our Sites operation continued to sell counterfeit goods using new domain names. In particular, the individuals, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit sports jerseys. Law enforcement agents made numerous undercover purchases from the websites associated with the new domain names. After the goods were confirmed to be counterfeit or infringing, seizure warrants for three domain names used to sell the infringing goods were obtained from a U.S. Magistrate Judge in U.S. District Court for the District of Columbia.
The individuals conducted sales and processed payments for the counterfeit goods using money service business accounts and then wired their proceeds to bank accounts held at a Chinese bank, the court documents state.
Under warrants issued by a U.S. District Judge, law enforcement agents seized $1,455,438.72 in proceeds that had been transferred from the money service business accounts to various bank accounts in China. The funds were seized from correspondent, or interbank, accounts held by the Chinese bank in the United States. Under additional seizure warrants issued by a U.S. Magistrate Judge, law enforcement agents also seized $94,730.12 in funds remaining in six money service business accounts used by the subjects.
“The seizures we are announcing today are another step forward in our efforts to disrupt and disable those engaged in intellectual property crime,” said Assistant Attorney General Breuer. “By seizing the domain names and profits of online counterfeit goods operations, we are protecting consumers and sending a message to criminals that we will use every tool at our disposal to stop them.”
“Within a matter of weeks, this law enforcement operation has seized more than $2.4 million in proceeds from individuals overseas who are preying on the American economy and consumers with their sales of counterfeit goods,” said U.S. Attorney Machen. “We will continue to work with our law enforcement partners to target these unscrupulous operators where it hurts them the most – at the bank.”
“ICE will continue to target those who traffic in counterfeit goods by attacking the financial profits of counterfeiting sites and shutting them down,” said ICE Director Morton. “Operation In Our Sites and the tireless work of the National Intellectual Property Rights Coordination Center protect consumers from fraud on the Internet and combat intellectual property theft which exacts a toll on our economy and industries.”
The investigation was conducted by the National Intellectual Property Rights Center and ICE-HSI. The case is being prosecuted by Assistant U.S. Attorneys Jonathan Hooks and Diane Lucas of the District of Columbia, Senior Trial Attorney Pamela Hicks and Trial Attorney Katharine Wagner of the Asset Forfeiture and Money Laundering Section and Trial Attorney Thomas Dougherty of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.This enforcement action is one of many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
10 May 2012
Vice Lords Gang Member Who Escaped Prison After Murder Conviction in Tennessee Sentenced to Life in PrisonRead the Press Release
WASHINGTON – Vice Lords gang member Jessie Lobbins was sentenced today in Nashville, Tenn., to life in prison by Chief U.S. District Judge Todd J. Campbell, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Jerry E. Martin for the Middle District of Tennessee.
On Aug. 23, 2011, Lobbins, 26, aka “Jessie Oliver” and “Trap,” of Memphis, Tenn., along with co-defendants Roger Wayne Battle, 30, aka “T-Wayne,” of Nashville, Tenn., and Gary Eugene Chapman, 32, aka “Wheat,” of Morristown, Tenn., were found guilty by a federal jury in Nashville of numerous violent crimes. To date, six other individuals have pleaded guilty to various crimes related to their involvement in the Vice Lords gang.Specifically, Lobbins was found guilty on six counts, including for his role in the murder of Brandon Harris, aka “Chicago”; conspiracy to commit murder in aid of racketeering; carrying and using firearms during and in relation to crimes of violence; assault with a dangerous weapon resulting in serious bodily injury of a federal inmate in aid of racketeering; and tampering with a witness. In addition, on March 21, 2012, Lobbins pleaded guilty to escaping from the custody of the Attorney General on Nov. 30, 2011, while being housed at the Robertson County, Tenn., jail.
According to evidence presented at trial, Battle, leader of the Traveling Vice Lords, holding the rank of Five Star Universal Elite and controlling the Middle and East Tennessee regions, and Lobbins, a member of the Traveling Vice Lords, shot and killed Harris on Feb. 10, 2008. Battle believed that Harris, who was a member of the Mickey Cobras, a gang aligned with the Vice Lords, had made statements regarding Battle having some involvement in the death of Donnell Valentine, aka “Hitman,” the leader of the Conservative Vice Lords in Murfreesboro, Tenn. Subsequently, Battle lured Harris to O’Charley’s, a restaurant on Bell Road in Nashville, under the guise of a drug transaction. Lobbins accompanied Battle to the location. Battle and Lobbins then led Harris to Rice Road in Antioch, Tenn., where Battle and Lobbins shot Harris to death.
Evidence presented at trial also established that on Nov. 21, 2009, Lobbins, while being housed at the Davidson County Criminal Justice Center in Nashville on the current charges, assaulted inmate Maurice Boyd for providing information to federal authorities regarding a homicide involving Lobbins’s fellow gang members. Specifically, Lobbins violently attacked Boyd with a sharp object, cutting Boyd on the face, back and left forearm. Although Boyd survived the attack, he was treated at Vanderbilt University Medical Center in Nashville, where he received more than 200 stitches.
Co-defendants Chapman and Battle are scheduled to be sentenced on June 6, 2012, and June 8, 2012, respectively.
The investigation was a joint operation conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Murfreesboro Police Department; and the Metropolitan Nashville Police Department. The case was prosecuted by Assistant U.S. Attorney Van S. Vincent for the Middle District of Tennessee and Trial Attorney Cody L. Skipper of the Criminal Division’s Organized Crime and Gang Section.Two Stock Promoters, a Stock Trader and a Securities Lawyer Sentenced to Prison for Their Roles in a $7 Million Fraudulent Stock Manipulation SchemeRead the Press Release
WASHINGTON – Two stock promoters, a securities lawyer and a stock trader associated with a Costa Rican brokerage firm were sentenced today in the Southern District of Florida for their participation in a stock manipulation scheme that defrauded investors in a company called CO2 Technologies, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Chief Postal Inspector Guy Cottrell of the U.S. Postal Inspection Service (USPIS) and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
U.S. District Judge Richard W. Goldberg in Miami sentenced Michael Krome, 50, a securities attorney from New York, to 34 months in prison. Stock promoters Timothy Barham Jr., 44, of Tennessee, and Robert Weidenbaum, 46, of Miami, were sentenced by Judge Goldberg to 30 months and 26 months in prison, respectively. Krome, Barham and Weidenbaum previously pleaded guilty to conspiring to commit securities fraud, mail fraud and wire fraud. Krome was ordered to forfeit $17,490; Barham was ordered to forfeit $250,000; and Weidenbaum was ordered to forfeit $360,000.
In a separate but related case, former stock trader David Ricci, 41, was sentenced by Judge Goldberg to 18 months in prison. Ricci previously pleaded guilty to one count of conspiring to commit securities fraud, wire fraud and mail fraud. Ricci had been employed as a stock trader at Sentry Global Securities, part of a company called Red Sea Management, an offshore brokerage firm that was based in San Jose, Costa Rica.
Two codefendants, Jonathan Randall Curshen, 47, the head of Red Sea Management and Sentry Global Securities, and Las Vegas stock promoter Nathan Montgomery, 31, were convicted of all counts after a two-week trial in January of this year. Curshen and Montgomery are scheduled to be sentenced by Judge Goldberg in Miami on May 11, 2012. Another codefendant, Ryan Reynolds, 40, of Dallas, awaits sentencing on his guilty plea to one count of conspiracy to commit securities fraud, wire fraud and mail fraud.
Weidenbaum and Barham admitted that they and others fraudulently “pumped” the market price and demand for CO2 Tech stock through false and misleading press releases. They also admitted to engaging in secret coordinated trades of shares of CO2 Tech stock in order to create the appearance of legitimate buying interest by legitimate investors. Ricci admitted that as the stock promoters pumped the price of the stock, Ricci and his conspirators facilitated the “dumping” of shares through the trading desk at Red Sea Management and Sentry Global Securities by selling the shares to the general investing public. Weidenbaum and Barham also admitted that they and other conspirators were paid approximately $1 million in cash to buy CO2 Tech stock in order to inflate its price. The cash was delivered to them in Miami via a private jet from an airport outside New York. The stock manipulation scheme generated approximately $7 million in illegal proceeds.
Krome admitted that he participated in the conspiracy by evading federal securities registration requirements to facilitate the issuance of millions of unregistered and “free trading” shares of CO2 Tech that were used to execute the stock manipulation. According to the indictment, the plan was orchestrated by two Israeli nationals, Eric “Ariav” Weinbaum and Izahack Zigdon, who are both fugitives. Also charged was Ronny Salazar Morales, another trader at Sentry Global Securities and Red Sea Management. Salazar is also a fugitive.
The case was investigated by the FBI’s Washington Field Office and the USPIS. The case is being prosecuted by Trial Attorneys N. Nathan Dimock and Rina Tucker Harris of the Fraud Section in the Justice Department’s Criminal Division. The U.S. Attorney’s Office for the Southern District of Florida provided significant assistance in this case. The Department of Justice acknowledges the significant assistance of the Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC) in its investigation. The criminal case originated as a referral from the SEC, which has a pending parallel civil case. The Criminal Division’s Office of International Affairs and Costa Rican authorities also provided valuable assistance.
The Department of Justice has established a website for potential victims of the crime, which may be accessed at www.justice.gov/criminal/vns/caseup/, under case numbers 11-cr-20121 and 12-cr-20049. Potential victims are urged to contact the Department of Justice as directed on the website.
This prosecution is part of efforts under way by the 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.
El Departamento de Justicia Entabla Demanda en Arizona contra el Condado de Maricopa, la Oficina del Alguacil y el Alguacil del Condado de Maricopa Joseph ArpaioRead the Press Release
WASHINGTON - El Departamento de Justicia entabló hoy una demanda civil en el tribunal federal contra el Condado de Maricopa, la Oficina del Alguacil del Condado de Maricopa [Maricopa County Sheriff’s Office (MCSO)] y el Alguacil Joseph M. Arpaio, debido a actos inconstitucionales e ilícitos cometidos por los demandados.
La demanda se entabla después de una investigación exhaustiva e independiente iniciada en junio de 2008, de acuerdo con la Sección 14141 de la Ley de Control de Delitos Violentos y Coacción Legal de 1994 y el Título VI de la Ley de Derechos Civiles de 1964. El 15 de diciembre de 2011, el departamento emitió una carta de conclusiones compuesta por 22 páginas, la que encontró causa razonable para creer que la MCSO y el Alguacil Arpaio exhibieron un patrón o práctica de conducta inconstitucional y/o cometieron violaciones a la ley federal. Después de la emisión de la carta de conclusiones, el departamento intentó alcanzar una solución con la MCSO y el Alguacil Arpaio y les proveyó un borrador de acuerdo conciliatorio integral. El acuerdo propuesto contenía una serie de reformas clave que habían sido implementadas con éxito en otros lugares. Sin embargo, las negociaciones no tuvieron éxito, principalmente porque la MCSO y el Alguacil Arpaio se negaron a aceptar cualquier supervisión independiente a ser realizada por un monitor.
La demanda alega que el Condado de Maricopa, la MCSO y el Alguacil Arpaio exhibieron, y siguen exhibiendo, un patrón o una práctica de:
- Acciones de coacción legal discriminatorias y, por otra parte, inconstitucionales, contra hispanos que eran parados, detenidos y arrestados debido a su raza, color u origen nacional;
- Prácticas carcelarias discriminatorias contra reclusos hispanos con conocimientos limitados del idioma inglés; y
- Represalias ilegales contra sus críticos percibidos, sujetándolos a acciones penales sin fundamento, demandas civiles infundadas o acciones administrativas sin mérito.
De acuerdo con la demanda, desde aproximadamente 2006, la MCSO y el Alguacil Arpaio vienen discriminando intencionalmente y sistemáticamente a hispanos. Han logrado esto al parar a hispanos en sus vehículos con una frecuencia de cuatro a nueve veces superior que a conductores no hispanos en situación similar. Además, la MCSO para a hispanos en los caminos del condado sin la justificación legal requerida. Asimismo, la MCSO detiene y registra a hispanos en los caminos, en sus hogares y en sus lugares de trabajo, sin justificación legal para hacerlo. Además, la MSCO maltrata a los detenidos hispanos con conocimientos limitados del inglés al ignorar solicitudes importantes si no se realizan en inglés y castigar a los detenidos si no comprenden órdenes impartidas en inglés. Finalmente, la MSCO entabla acciones administrativas, acciones civiles y casos penales infundados contra sus críticos percibidos, con la intención de limitar la libre expresión.
La conducta de la MCSO se aparta significativamente de las prácticas de coacción legal estándar de muchas maneras. Como describe la demanda, “La MSCO promueve y es indiferente a la conducta discriminatoria de sus agentes de las fuerzas del orden público, según lo demuestran políticas inadecuadas, capacitación inefectiva, medidas de responsabilización prácticamente inexistentes, supervisión deficiente, mecanismos de recolección de datos escasos, priorización de coacción distorsionada, [y] un sistema disciplinario y de quejas ineficaz.
Asimismo, la demanda alega que la conducta es producto de una cultura de indiferencia hacia los hispanos que comienza en la cima y se extiende por la organización. Con frecuencia, los empleados de la MCSO utilizan términos derogatorios para referirse a los hispanos, y el Alguacil Arpaio y supervisores de la MCSO, a través de sus palabras y acciones, sentan las bases y crean una cultura de parcialidad que contribuye a la realización de acciones ilícitas.
En la demanda, el departamento solicita un desagravio judicial y declaratorio que asegure que la MCSO implemente políticas y procedimientos para prevenir el patrón o la práctica de la conducta inconstitucional identificada en la demanda.
“En su esencia, se trata de un caso de abuso de poder contra el Alguacil Arpaio y la oficina del alguacil que ha hecho caso omiso de la Constitución, ignorado prácticas policiales sólidas, y que no hesitó en aplicar represalias contra críticos percibidos en una variedad de maneras ilícitas”, dijo Thomas E. Perez, Secretario de Justicia Auxiliar de la División de Derechos Civiles. “La acción policial constitucional y la acción policial eficaz van de la mano. La demanda detalla cómo las acciones del Alguacil Arpaio no han sido ni constitucionales ni eficaces. Nadie en el Condado de Maricopa está por arriba de la ley y el departamento luchará para asegurar que la promesa de la Constitución sea realizada por todos en el Condado de Maricopa".
Esta demanda fue entablada después de una investigación exhaustiva e independiente de las políticas y prácticas de la MCSO. Abogados, investigadores y expertos del Departamento realizaron entrevistas con más de 400 personas, incluidos 75 supervisores y delegados actuales y anteriores de la MSCO, entre los que se incluyó el Alguacil Arpaio y 150 actuales y anteriores presidiarios de la MCSO. Además, el departamento analizó miles de páginas de documentos. Muchas de estas entrevistas y gran parte de este análisis se demoró cuando la MCSO se negó a proveer los documentos y el acceso requeridos. Finalmente, la MCSO brindó el acceso y los documentos requeridos después de que el departamento entabló una demanda bajo el Título VI en septiembre de 2010.
La Sección 14141 prohíbe a las agencias de las fuerzas del orden público, como la MCSO, realizar actividades que representen un patrón o una práctica de violación de la Constitución o de leyes de los Estados Unidos. El Título VI y las normas que lo implementan disponen que los beneficiarios de asistencia financiera federal, tales como el Condado de Maricopa y la MCSO, no pueden discriminar debido a raza, color u origen nacional.
Desde la divulgación de sus conclusiones en diciembre de 2011, el departamento ha intentado en repetidas oportunidades lograr el cumplimiento voluntario de la Constitución y del Título VI por parte del Condado de Maricopa. La MSCO puso punto final a estos intentos en abril de 2012. Debido a la naturaleza profundamente arraigada de los problemas que enfrenta la MCSO, la demanda solicita una serie de reformas, incluida una orden judicial que exija que los demandados:
- Desarrollen e implementen nuevas políticas y procedimientos, y capaciten a sus agentes en servicios policiales eficaces y constitucionales;
- Implementen sistemas para asegurar la responsabilización y mejoren la calidad de los servicios policiales en todo el condado; y
- Eliminen la parcialidad ilícita en todos los niveles de decisión asociada a la coacción legal.
Además, la experiencia del Departamento de Justicia indica que el camino más eficaz hacia la reforma sostenible incluye la designación de un monitor independiente que trabaje en conjunto con el departamento y la comunidad para asegurar la implementación eficaz de las disposiciones de cualquier orden judicial.
Esta investigación fue conducida por la Sección de Litigios Especiales de la Sección de Coordinación y Cumplimiento Federales de la División de Derechos Civiles con la asistencia de profesionales de las fuerzas del orden público, incluidos ex jefes de la policía, un asesor en prácticas carcelarias y un asesor en análisis estadístico. Actualmente, la investigación de la manera en que la MCSO maneja el abuso sexual sigue en curso. Los miembros de la comunidad del Condado de Maricopa que deseen brindar información al Departamento de Justicia pueden llamar al 1-877-613-2137 o enviar un mensaje de correo electrónico a [email protected].
Para obtener más información sobre la División de Derechos Civiles del Departamento de Justicia, visite www.justice.gov/crt.
Department of Justice Files Lawsuit in Arizona Against Maricopa County, Maricopa County Sheriff’s Office, and Sheriff Joseph ArpaioRead the Press Release
The Department of Justice filed a civil lawsuit in federal court today against Maricopa County, the Maricopa County Sheriff’s Office (MCSO) and Sheriff Joseph M. Arpaio, arising from unconstitutional and unlawful actions by the defendants.
The lawsuit follows a comprehensive and independent investigation initiated, in June 2008, under Section 14141 of the Violent Crime Control and Law Enforcement Act of 1994 and Title VI of the Civil Rights Act of 1964. On Dec. 15, 2011, the department issued a 22 page letter of findings, which found reasonable cause that MCSO and Sheriff Arpaio were engaged in a pattern or practice of unconstitutional conduct and/or violations of federal law. Following the issuance of the letter of findings, the department attempted to reach a resolution with MCSO and Sheriff Arpaio and provided them with a comprehensive draft settlement agreement. The proposed agreement contained a number of key reforms that had been successfully implemented elsewhere. However, negotiations were unsuccessful, primarily because MCSO and Sheriff Arpaio refused to agree to any independent oversight by a monitor.
The complaint alleges that Maricopa County, MCSO and Sheriff Arpaio engaged in and continue to engage in a pattern or practice of:
· Discriminatory and otherwise unconstitutional law enforcement actions against Latinos who are frequently stopped, detained and arrested on the basis of race, color, or national origin;
· Discriminatory jail practices against Latino inmates with limited English skills; and
· Illegal retaliation against their perceived critics, subjecting them to baseless criminal actions, unfounded civil lawsuits, or meritless administrative actions.
According to the complaint, since approximately 2006, MCSO and Sheriff Arpaio have intentionally and systematically discriminated against Latinos. They have accomplished this by stopping Latinos in their vehicles four to nine times more often than similarly situated non-Latino drivers. In addition, MCSO stops Latinos on the county’s roads without the required legal justification. Also, MCSO detains and searches Latinos on the roads, in their homes, and in their workplaces without legal justification for doing so. Further, MCSO mistreats Latino detainees with limited English proficiency by ignoring important requests if they are not made in English and punishing detainees if they fail to understand orders given in English. Finally, MCSO files baseless administrative actions, civil actions and criminal cases against its perceived critics in an attempt to chill free speech.
The conduct of MCSO dramatically departs from standard law enforcement practices in numerous ways. As described in the complaint, “MCSO promotes and is indifferent to the discriminatory conduct of its law enforcement officers, as is demonstrated by inadequate policies, ineffective training, virtually non-existent accountability measures, poor supervision, scant data collection mechanisms, distorted enforcement prioritization [and] an ineffective complaint and disciplinary system.”
Additionally, the complaint alleges that the conduct is the product of a culture of disregard for Latinos that starts at the top and pervades the organization. MCSO employees frequently use derogatory terms to refer to Latinos, and Sheriff Arpaio and MCSO supervisors, through their words and actions, set the tone and create a culture of bias that contributes to unlawful actions.
In the complaint, the department seeks declaratory and injunctive relief that would ensure that MCSO implements policies and procedures to prevent the pattern or practice of unconstitutional conduct identified in the complaint.
“At its core, this is an abuse of power case involving Sheriff Arpaio and a sheriff’s office that disregarded the Constitution, ignored sound police practices, and did not hesitate to retaliate against perceived critics in a variety of unlawful ways,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Constitutional policing and effective policing go hand in hand. The complaint outlines how Sheriff Arpaio’s actions were neither constitutional nor effective. No one in Maricopa County is above the law and the department will fight to ensure that the promise of the Constitution is realized by everyone in Maricopa County.”
This complaint was filed after a thorough and independent investigation of MCSO’s policies and practices. Department attorneys, investigators and experts conducted interviews with more than 400 individuals including, 75 current and former MCSO supervisors and deputies, including Sheriff Arpaio, and 150 former and current MCSO inmates. In addition, the department reviewed thousands of pages of documents. Many of these interviews and much of this review was delayed when MCSO refused to provide required documents and access. MCSO finally provided the required access and documents after the department filed a lawsuit under Title VI in September 2010.
Section 14141 prohibits law enforcement agencies, such as MCSO, from engaging in activities that amount to a pattern or practice of violating the Constitution or laws of the United States. Title VI and its implementing regulations provide that recipients of federal financial assistance, such as Maricopa County and MCSO, may not discriminate on the basis of race, color or national origin.
Since releasing its findings in December 2011, the department has repeatedly reached out to MCSO in an effort to achieve voluntary compliance with the Constitution and Title VI. MCSO ended these efforts in April 2012. In light of the deeply rooted nature of the problems facing MCSO, the complaint seeks a host of reforms, including a court order requiring that the defendants:
· Develop and implement new policies and procedures and train MCSO officers in effective and constitutional policing;
· Implement systems to ensure accountability and improve the quality of policing throughout the county; and
· Eliminate unlawful bias from all levels of law enforcement decision.
In addition, the Justice Department’s experience has shown that the most effective path to sustainable reform includes the appointment of an independent monitor to work collaboratively with the department and the community to ensure the effective implementation of the provisions of any court order.
This investigation was conducted by the Special Litigation Section and the Federal Coordination and Compliance Section of the Civil Rights Division with the assistance of law enforcement professionals, including former police chiefs, a jail practices consultant and a consultant on statistical analysis. The investigation into the handling of sexual assaults by MCSO remains ongoing at this time. Members of the Maricopa County community who may wish to provide information to the Justice Department may call 1-877-613-2137 or email [email protected] .
For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt
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Remarks by Assistant Attorney General Thomas E. Perez at the Maricopa County Press Conference
MCSO ComplaintCompanies Agree to $4.25 Million Natural Resource Damages Settlement at Industri-Plex Superfund Site, Woburn, Mass.Read the Press Release
WASHINGTON – Pharmacia Corporation and Bayer CropScience Inc. have agreed to pay $4.25 million to federal and state natural resource trustees to resolve claims for natural resource damages connected with the Industri-plex Superfund site located in Woburn, Mass., the Department of Justice announced today.
Operations at the Industri-plex Superfund site from the 1850s to the 1960s contaminated the Aberjona River, as well as associated wetlands and the Mystic Lakes, with arsenic, chromium and other hazardous substances. Under the Comprehensive Environmental Response, Compensation, and Liability Act, parties that have disposed of hazardous substances at a site are liable for damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction or loss. In this case, the federal natural resource trustees, which include the U.S. Department of the Interior, through the U.S. Fish and Wildlife Service, and the National Oceanic and Atmospheric Administration, as well as the state natural resource trustee, the Massachusetts Executive Office of Energy and Environmental Affairs, determined that the hazardous substances disposed of by the settling defendants or their predecessors had degraded wetland, river and lake habitat used by a variety of wildlife, including fish, turtles, amphibians and migratory birds, such as great blue herons, black ducks and kingfishers.
In settlement of the trustees' natural resource damages claims, the defendants have agreed to pay $4.25 million. Of this amount, $3,812,127 will be used by the trustees to implement natural resource restoration projects to compensate for injury caused by the hazardous substances disposed of at the site. The trustees have not determined which particular projects will be implemented, but examples of potential projects include the creation of new wetlands and the restoration, enhancement or protection of existing wetlands. The remaining amount of the settlement figure – $437,873 – will reimburse federal and state trustees for damages assessment costs.
“This is good news for the environment and the resources that depend on wetlands for habitat,” said Acting Assistant Secretary of the Interior for Fish and Wildlife and Parks Rachel Jacobson. “After many years and much hard work, this agreement will enable the Department of the Interior to work closely with other co-trustees to restore habitat that was contaminated by industrial activities for decades.”“This settlement will ensure that those responsible for damaging the environment will pay to replace the injured natural resources,” said Massachusetts Attorney General Martha Coakley. “Massachusetts rivers and wetlands deserve our rigorous protection and our environmental laws provide a remedy for harm to natural resources no matter how long ago the violations occurred.”
“The U.S. Fish and Wildlife Service is proud to be one step closer to restoring the Aberjona River area to a cleaner, healthier environment for wildlife and people,” said Wendi Weber, U.S. Fish and Wildlife Service Northeast Regional Director. “We look forward to working with local communities to select and implement restoration projects that will be funded by the responsible parties without cost to the taxpayer.”
“We're proud to join with our federal and municipal partners to hold industry accountable for environmental harm. Protecting our precious environmental resources is important work for our communities, our wildlife and for the benefit of future generations,” said Massachusetts Energy and Environmental Affairs Secretary Rick Sullivan.
“We will ensure that stakeholders active in the Mystic River watershed will be active participants in the process to use these NRD funds to restore the injured natural resources,” said Commissioner Kenneth Kimmell of the Massachusetts Department of Environmental Protection, which will staff the Trustee Council for the Commonwealth.
During the period from the late 1850s to the 1960s, predecessors of Pharmacia Corporation and Bayer CropScience manufactured various products at the site, including sulfuric acid, arsenic insecticides, organic chemicals, munitions, and glue. Those predecessors include the Merrimac Chemical Company and the Stauffer Chemical Company, among others.
The settling defendants have entered into prior consent decrees approved by the U.S. District Court of the District of Massachusetts in 1989 and 2008, under which they have agreed to implement remedies selected for the site by the U.S. Environmental Protection Agency. These prior settlements did not address the trustees' natural resource damages claims.
The Department of Justice will be taking public comments on the settlement for a period of 30 days from publication of a notice of the settlement, which should appear shortly in the Federal Register. The settlement also has a state comment period ending 120 days after lodging of the consent decree in court. Instructions on how to comment during the state period are provided in the consent decree at: www.justice.gov/enrd/Consent_Decrees.html.
California Member of the Internet Piracy Group “IMAGiNE”<br /> Pleads Guilty to Copyright Infringement ConspiracyRead the Press Release
WASHINGTON – A California man pleaded guilty yesterday to conspiring to willfully reproduce and distribute tens of thousands of infringing copies of copyrighted works without permission, including infringing copies of movies before they were commercially released on DVD, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Washington, D.C., announced today.
Sean M. Lovelady, 28, of Pomona, Calif., pleaded guilty to one count of conspiracy to commit criminal copyright infringement. The plea was entered before U.S. District Judge Arenda L. Wright Allen in the Eastern District of Virginia. Lovelady faces up to five years in prison, a fine of $250,000 and three years of supervised release.
Lovelady was indicted on April 18, 2012, along with three other leading members of the IMAGiNE Group, an organized online piracy group seeking to become the premier group to first release Internet copies of new movies only showing in theaters.
According to court documents, Lovelady and his co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters. Lovelady admitted that he went to movie theaters near his California residence and secretly used receivers and recording devices to capture the audio sound tracks of copyrighted movies (referred to as “capping”). After obtaining, editing and filtering audio sound tracks and uploading them to servers utilized by the IMAGiNE Group, Lovelady used software to synchronize the audio file with an illegally obtained video file of a movie to create a completed movie file suitable for sharing over the Internet among members of the IMAGiNE Group and others.
The investigation of the case and the arrests were conducted by agents with ICE-HSI. Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case on behalf of the United States. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Office of International Affairs in the Justice Department’s Criminal Division.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 20 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.
Attorney General Eric Holder Convenes 3rd Federal Reentry Council MeetingRead the Press Release
Attorney General Eric Holder today convened the third meeting of thefederal interagency Reentry Council at the Department of Justice. The council represents 20 federal agencies working to make communities safer by reducing recidivism and victimization; assist those who return from prison and jail in becoming productive citizens; and save taxpayer dollars by lowering the direct and collateral costs of incarceration. The Attorney General chairs the council which he established in January 2011 .
“When reentry fails, the costs—both societal and economic—are high,” said Attorney General Eric Holder. “Our joint commitment is to eliminate barriers to successful reentry by improving employment, housing, treatment and education opportunities for individuals who have been incarcerated so they can support themselves and their families and contribute to their communities.”
Among the topics discussed at today’s meeting were important new efforts to reduce barriers to employment. For example, the Equal Employment Opportunity Commission recentlyupdated enforcement guidance on the use of arrest and conviction records in employment decisions under Title VII of the Civil Rights Act of 1964. The revised guidance clarifies and updates the EEOC’s longstanding policy concerning the use of arrest and conviction records in employment, which will assist job seekers, employees, employers, and many other agency stakeholders. The Department of Labor is working to educate the One-Stop Career Centers’ network on the new guidance and other nondiscrimination obligations under federal law. The centers provide a full range of assistance to job seekers under one roof. Established under the Workforce Investment Act , they offer training referrals, career counseling, job listings, and similar employment-related services. Customers can visit a center in person or connect to the center's information through PC or kiosk remote access.
“The Department of Labor is committed to ensuring that all Americans have access to the help they need in getting the necessary skills to move forward along a sustainable career pathway,” said Secretary of Labor Hilda L. Solis. “That means promoting programs to specifically address the needs of those with traditional barriers to employment, but it also means making sure that the workforce system is able to offer proper guidance regardless of where and how people are looking for employment help.”
The Federal Trade Commission covered their new employer education flyer, “ Using Consumer Reports: What Employers Need to Know ,” which outlines employer obligations when they use reports, including criminal histories, for employment decisions such as hiring, promotion reassignment and retention. Also, the Small Business Administration recently joined the Reentry Council as the 20th agency, providing new linkages to small business networks, entrepreneurship training, and microloan opportunities.
“Ensuring equal employment opportunity is critical to a strong economy and central to the reentry conversation,” said EEOC Chair Jacqueline A. Berrien. “Engaging with a broad range of federal agencies through the federal interagency Reentry Council helps us in our work to eliminate unnecessary barriers to employment.”
Today’s Reentry Council meeting was attended by Department of Labor Secretary Hilda Solis, Department of Health and Human Services Secretary Kathleen Sebelius, Department of Education Secretary Arne Duncan, Office of National Drug Control Policy Director R. Gil Kerlikowske, Equal Employment Opportunity Commission Chair Jacqueline A. Berrien and White House Domestic Policy Council Director Cecilia Muñoz. Participants also included representatives from the following agencies: Departments of Interior, Agriculture, Housing and Urban Development and Veterans Affairs, Office of Management and Budget, Federal Trade Commission, Small Business Administration, Internal Revenue Service, Social Security Administration, Office of Personnel Management, and the U.S. Interagency Council on Homelessness.
For more information about the federal Reentry Council, visit www.nationalreentryresourcecenter.org/reentry-council .
The “Reentry Myth Busters” fact sheets are available at www.nationalreentryresourcecenter.org/documents/0000/1090/REENTRY_MYTHBUSTERS.pdf .
For more information about reentry and the Second Chance Act, visit www.nationalreentryresourcecenter.org .
To access the National Institute of Justice’s reentry research portfolio visit www.nij.gov/nij/topics/corrections/reentry/welcome.htm .
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Alaskan City Agrees to Extensive Sewer System Upgrade in Federal SettlementRead the Press Release
WASHINGTON – The city of Unalaska, Alaska, will undertake a major upgrade of its municipal sewage treatment plant under a settlement of a Clean Water Act enforcement action filed against the city and the state of Alaska by the Department of Justice on behalf of the Environmental Protection Agency (EPA).
Under the proposed settlement, Unalaska will spend at least $18 million to upgrade its treatment plant over the next three years to meet the requirements of its current National Pollution Discharge Elimination System (NPDES) permit, which was issued by EPA under the Clean Water Act. The city has also committed to adhere to fecal coliform limits that are 50 times more stringent than the current permit’s limits.
The Clean Water Act lawsuit, filed in June 2011, alleged that the city continually violated its NPDES permit by discharging pollutants into South Unalaska Bay in excess of discharge permit limits. According to monitoring reports that the city is required to file with EPA, Unalaska’s treatment plant had more than 5,500 violations of permit limits between October 2004 and September 2011, including discharges of harmful fecal coliform bacteria that were often more than double the permit limit.
The treatment plant upgrade will significantly reduce the level of pollution, including fecal coliform bacteria, being discharged into Unalaska Bay, which is part of the Bering Sea. The city will also pay a $340,000 penalty for past NPDES permit violations.
“This agreement will result in cleaner water in Unalaska Bay, which is home to a vital commercial fishery as well as protected wildlife,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Unalaska residents and the fishermen who depend on the bay will be the beneficiaries of this agreement for many years to come.”
Edward Kowalski, director of EPA’s Office of Compliance and Enforcement in Seattle, noted that today’s agreement paves the way for a long-overdue enhancement of the city’s primary wastewater treatment process.
“Today’s settlement represents an investment in Unalaska’s future,” said EPA’s Kowalski. “By agreeing to modernize its wastewater treatment plant, the city of Unalaska will help protect the waters of Unalaska Bay and meet current discharge permit limits.”With a year-round population of approximately 4,400, Unalaska (commonly known as Dutch Harbor), is Alaska’s 11th largest city. Lying roughly 800 miles southwest of Anchorage in the Aleutian Island chain, Dutch Harbor serves as homeport to one of the nation’s most productive commercial fishing fleets, supporting both industrial-scale fishing and fish processing. During the height of the fishing season, Unalaska’s population more than doubles, reaching as high as 10,000.
Unalaska Bay is protected for a number of uses, including boating, recreational and commercial fishing, and shellfish harvest. It also provides habitat for several endangered or threatened species, including northern sea otters and Steller’s eiders, a species of sea duck. However, the bay is currently listed as an impaired water-body, which means it fails to meet state water quality standards.
As required by the Clean Water Act, the state of Alaska must be a party to this action. The Department of Justice will be taking public comment on the settlement for a period of 30-days from publication of a notice of the settlement, which should appear shortly in the Federal Register. After resolution of all comments received, the settlement will be entered in federal court. It will take effect on the day it is entered by the court. A copy of the settlement agreement can be obtained at: www.justice.gov/enrd/Consent_Decrees.html.