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Tuesday 3 August 2010
Founder and Principal Manager of Genesis Fund Sentenced to 70 Months in Prison on Tax ChargesRead the Press Release
WASHINGTON - John S. Lipton, formerly of Mission Viejo and Laguna Hills, Calif., was sentenced by U.S. District Judge Dale S. Fischer in Los Angeles to 70 months in prison, the Justice Department and Internal Revenue Service (IRS) announced today. The court also ordered Lipton to pay restitution of $2,915,427.16 to the IRS.
On April 8, 2010, Lipton pleaded guilty to conspiracy to defraud the United States and tax evasion. Lipton and several co-defendants were indicted on charges stemming from the operation of the Genesis Fund, a bogus foreign currency exchange investment fund that operated as a Ponzi scheme from May 1998 to June 2002 and received investments of millions of dollars. The remaining defendants are scheduled to begin trial in April 2011.
According to the indictment, the defendants falsely claimed that investors received monthly returns of four percent, when investments were actually used to make "profit" distributions to defendants and early investors. Lipton was one of the founding members of the Genesis Fund and its principal manager. The defendants promoted the Genesis Fund as having no reporting obligations to the IRS. Bank accounts in the names of trusts and offshore bank accounts were allegedly used to receive distributions from the Genesis Fund that were not reported to the IRS. Some of the defendants allegedly created "disclosed" and "undisclosed" Genesis Fund accounts for themselves and certain fund investors in order to conceal from the IRS all but a small portion of the fund’s distributions. In addition, some Genesis Fund investors were allegedly advised to create nominee offshore corporations and bank accounts to receive distributions from the fund.
The indictment further alleged that to obscure the operations of the fund and to limit scrutiny of its operations by investors and the government, the defendants caused the Genesis Fund to maintain no financial statements or other statements of operation. Additionally, in or about April 2000, to conceal the true nature of its operations from investors and the government, Genesis Fund’s administrative operations were relocated from Anaheim, Calif., to Costa Rica. At about the same time, paper records were moved to Costa Rica and electronic data on computers was destroyed.
In his plea agreement, Lipton admitted that he used, and conspired with others to use, foreign trusts, corporations, and bank accounts, to receive distributions from the Genesis Fund and did not report these distributions to the IRS. Lipton also admitted that he directed the transfer of approximately 19 boxes of Genesis Fund documents to Costa Rica, rather than turn them over in response to a grand jury subpoena. Lipton acknowledged that he did not file federal individual income tax returns from 1989 through 2005.
Three defendants, Richard B. Leonard, Victor H. Preston and Teresa R. Vogt have entered guilty pleas in this matter. The trial of the remaining four defendants on tax fraud and conspiracy charges is set for April 2011. A separate trial on charges related to the Ponzi scheme is set for September 2011.
"The IRS will continue to aggressively investigate individuals who use offshore bank accounts and abusive trusts arrangements to conceal investment income and evade taxes," said Victor S.O. Song, Chief, IRS Criminal Investigation.
Acting Assistant Attorney General John A. DiCicco commended the special agents from IRS Criminal Investigation who investigated the case, as well as Tax Division trial attorneys Lori A. Hendrickson, Ellen M. Quattrucci, Danny N. Roetzel and Matthew J. Kluge, who are prosecuting the case. Acting Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office in Los Angeles for its valuable support throughout the litigation of this matter.
Monday 2 August 2010
Owners of “Super Soda Center Stores” in Maryland and Delaware Settle Allegations of Underground Storage Tank ViolationsRead the Press Release
PHILADELPHIA The United States has settled alleged violations of federal and state underground storage tank (UST) regulations at 17 gas stations in Delaware and Maryland formerly owned by Duncan Petroleum Corp., the Justice Department, Environmental Protection Agency (EPA) and U.S. Attorney’s Office for the District of Delaware announced today.
The case stems from the alleged failure of Robert M. Duncan and Duncan Petroleum Corp. to comply with the regulations governing underground storage tanks at Duncan’s 17 gas stations in Delaware and Maryland and for failing to perform compliance tasks under a 2006 Consent Agreement. Duncan had agreed to complete the tasks in order to bring five of the Maryland gas stations into compliance with the underground storage tank regulations.
"These defendants violated their obligation to bring several large underground storage tanks into compliance with the law," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The precedent-setting $2 million civil penalty that they will pay in this settlement is appropriate in light of the unacceptable risk created by their misconduct."
"Properly maintaining underground storage tanks is essential to protecting our soil and valuable groundwater resources," said EPA mid-Atlantic Regional Administrator Shawn M. Garvin. "Today’s settlement shows that EPA and DOJ will not hesitate to pursue companies that violate the law."
"By refusing to comply with the terms of the consent decree defendants endangered the lives of citizens of Delaware and Maryland," said David C. Weiss, U.S. Attorney for the District of Delaware. "This settlement holds defendants accountable and demonstrates that such misconduct will not be tolerated."
Robert M. Duncan will pay a $2 million penalty for these violations on or before Dec. 15, 2010, plus interest beginning on August 2, the date the Stipulation and Order was filed with the court.
The civil judicial complaint was filed on Dec. 17, 2008, under the Resource Conservation and Recovery Act alleging violations of Delaware and Maryland UST regulations requiring that owners and operators of petroleum UST systems: 1) provide release detection for underground storage tanks; 2) provide release detection for underground piping; 3) provide and annually test line leak detectors; 4) provide overfill protection; 5) investigate and report suspected releases; 6) provide and test cathodic protection systems; 7) inspect impressed current protection systems; and 8) maintain corrosion protection on out-of-service UST systems. The company failed to comply with one or more of these requirements at each of the facilities.
The eight Delaware gas stations were located in Seaford, Bridgeville, Rehoboth, Dover, and Camden. In Maryland, there were nine locations in Salisbury, Snow Hill, Cambridge, Chestertown, Easton, Federalsburg and Preston.
With millions of gallons of gasoline, oil and other petroleum products stored in underground storage tanks throughout the U.S., leaking tanks are a major source of soil and groundwater contamination. EPA and state UST regulations are designed to reduce the risk of underground leaks and to promptly detect and properly address leaks which do occur, thus minimizing environmental harm and avoiding the costs of major cleanups.
For more information on EPA’s underground storage tank program, visit www.epa.gov/swerust1/.
Department of Justice and USDA Announce Registration for August 27 Livestock Workshop in ColoradoRead the Press Release
WASHINGTON — The Department of Justice and the U.S. Department of Agriculture (USDA) announced today additional details for the August 27, 2010, public workshop in Fort Collins, Colo., which will examine competition in the livestock industry. The workshop will be held at Colorado State University, the main ballroom of the Lory Student Center, 1101 Centre Avenue Mall, Fort Collins.
This is the fourth in a series of five workshops intended to promote dialogue among interested parties and foster learning with respect to competition and regulatory issues in agriculture. The first workshop was held in March in Ankeny, Iowa, with a focus on row crops and hogs. The second workshop focused on issues in the poultry industry and was held in Normal, Ala. The third workshop focused on issues in the dairy industry and was held in Madison, Wis.
The workshops, which were first announced by Attorney General Eric Holder and Agriculture Secretary Tom Vilsack on Aug. 5, 2009, are the first joint Department of Justice/USDA workshops ever to be held to discuss competition and regulatory issues in the agriculture industry.
Attendance at the workshops is free and open to the public. The general public and media interested in attending the Colorado workshop should register at https://regstg.com/Registration/RegForm.aspx?rid=d91b419b-cf8e-43e9-8f20-919ca06562dc&action=addhttp://www.conferences.colostate.edu/LiveStockWorkshop.
The workshop will begin with opening remarks from U.S. Attorney General Eric Holder and U.S. Agriculture Secretary Tom Vilsack. After opening remarks, Attorney General Holder and Secretary Vilsack will participate in a roundtable discussion with Assistant Attorney General for Antitrust Christine Varney. Federal and state officials from Colorado have been invited to participate in the workshop. There will be public testimony from those attending the workshop and panels will feature ranchers, academics, processors and other industry representatives.
Additional details on the schedule and panelists will be provided at a later date. For further information, including submitted public comments and transcripts for past workshops, please visit the Antitrust Division’s agriculture workshop website at www.justice.gov/atr/public/workshops/ag2010/index.htm or contact [email protected].
The Justice Department and USDA will hold the next public workshop on margins in agriculture in Washington in December.
MEDIA CONTACTS:
U.S. Department of Justice
Office of Public Affairs
Gina Talamona
202-514-2007
U.S. Department of Agriculture
Office of Communications
Jim Brownlee
202-720-4623
Department of Justice Releases First National Strategy for Child Exploitation Prevention and InterdictionRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced that the Department of Justice released its first-ever National Strategy for Child Exploitation Prevention and Interdiction. The strategy also provides the first-ever comprehensive threat assessment of the dangers facing children from child pornography, online enticement, child sex tourism, commercial sexual exploitation and sexual exploitation in Indian Country, and outlines a blueprint to strengthen the fight against these crimes. The strategy builds upon the department’s accomplishments in combating child exploitation by establishing specific, aggressive goals and priorities and increasing cooperation and collaboration at all levels of government and the private sector.
As part of the overall strategy, the U.S. Marshals Service is launching a nationwide operation targeting the top 500 most dangerous, non-compliant sex offenders in the nation. Additionally, the department will create a national database to allow federal, state, tribal, local and international law enforcement partners to deconflict their cases with each other, engage in undercover operations from a portal facilitated or hosted by the database, share information and intelligence and conduct analysis on dangerous offenders and future threats and trends. The department also created 38 additional Assistant U.S. Attorney positions to devote to child exploitation cases, and over the coming months will work to fill the vacancies and train the new assistants in this specialized area.
"Although we’ve made meaningful progress in protecting children across the country, and although we’ve brought a record number of offenders to justice in recent years, it is time to renew our commitment to this work. It is time to intensify our efforts," said Attorney General Holder. "This new strategy provides the roadmap necessary to do just that – to streamline our education, prevention and prosecution activities; to improve information sharing and collaboration; and to make the most effective use of limited resources. Together, we are sending an important message – that the U.S. government, and our nation’s Department of Justice, has never been more committed to protecting our children and to bringing offenders to justice."
"Thanks to law enforcement operations like Operation Nest Egg and Operation Achilles, the department and our law enforcement partners have brought thousands of offenders to justice in the last year. But this progress is only a start," said Acting Deputy Attorney General Gary G. Grindler. "Tangible steps outlined in the National Strategy will bring our fight to the next level."
The strategy first analyzed the threat to our nation’s children and described the current efforts at all levels of the government against this threat. Since FY 2006, the Department of Justice has filed 8,464 Project Safe Childhood (PSC) cases against 8,637 defendants. These cases include prosecutions of online enticement of children to engage in sexual activity, interstate transportation of children to engage in sexual activity, production, distribution and possession of child pornography and other offenses.
Despite vigorously fighting all aspects of child exploitation, the department recognized that more work remains to be done. To that end, the department’s strategy lays out goals to increase coordination among the nation’s investigators, better train investigators and prosecutors, advance law enforcement’s technological capabilities and enhance research to inform decisions on deterrence, incarceration and monitoring. The strategy also includes a renewed commitment to public awareness and community outreach.
As part of its public outreach efforts, the department is re-launching ProjectSafeChildhood.gov, PSC’s public website. PSC is a department initiative launched in 2006 that aims to combat the proliferation of technology-facilitated sexual exploitation crimes against children. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, tribal 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 regarding the National Strategy to Combat Child Exploitation, Prevention and Interdiction, please visit: www.projectsafechildhood.gov/docs/natstrategyreport.pdf
Friday 30 July 2010
Virginia Man Pleads Guilty to Child Pornography ChargesRead the Press Release
WASHINGTON – A Virginia man pleaded guilty today to charges related to his possession and distribution of images containing child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Timothy J. Heaphy for the Western District of Virginia.
Gary Lee Rimmer, 55, was indicted in June 2010 and charged with one count of possession of child pornography and one count of distribution of child pornography. The defendant pleaded guilty to both counts in U.S. District Court of the Western District of Virginia.
At the plea hearing, Rimmer admitted that while living in Greene County, Va., in 2006, he started an online relationship with a 13-year-old girl from Florida. Throughout their internet conversations and subsequent cellular phone conversations, Rimmer portrayed himself as a 20-year-old man named "Jason." The defendant posted images of a young man and claimed they were of himself. Rimmer had conversations with the girl, whom he ultimately learned was under the age of 16, about starting a sexual relationship. Rimmer mailed the victim sexual items and sent her sexual images via the Internet. When investigators searched the contents of Rimmer’s computer, they found images of child pornography, including images of the victim from Florida with the items he previously mailed to her. Search terms associated with child pornography were also found on the defendant’s computer. A forensic examination of Rimmer’s computer also revealed that he distributed child pornography to a person outside of Virginia during a chat session using Yahoo Messenger.
At sentencing, scheduled for Nov. 1, 2010, the defendant faces a maximum penalty of 20 years in prison for the distribution count and 10 years in prison for the possession count. Each count carries a maximum fine of up to $250,000.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case is being prosecuted by CEOS Trial Attorney James Silver and Assistant U.S. Attorney Nancy S. Healey of the Western District of Virginia. This case was investigated by the High Tech Investigative Unit of CEOS, the Virginia State Police and the Citrus County Florida Sheriff’s Department.
Two Brothers Plead Guilty in Miami HIV Infusion Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two brothers pleaded guilty today in U.S. District Court in Miami for participating in a $13.7 million HIV infusion Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Rolando Nogueira, 48, and his brother, Jose Nogueira, 52, pleaded guilty before U.S. District Court Judge Adalberto Jordan in the Southern District of Florida to one count of conspiracy to defraud the United States, to cause submission of false claims to Medicare, and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims. Rolando and Jose Nogueira were originally charged in a March 2010 indictment. At sentencing, scheduled for Nov. 5, 2010, the Nogueiras each face a maximum penalty of five years in prison for the conspiracy to defraud the United States count and each false claims count, and 10 years in prison for the health care fraud conspiracy count.
According to plea documents, Rolando Nogueira was an owner and operator of T&R Rehabilitation Professional Corp., a Miami clinic that purported to provide expensive injection and infusion treatments to patients with HIV. Jose Nogueira worked at T&R. Rolando Nogueira admitted at his plea hearing that he agreed with his co-defendants and others to have them enlist patient recruiters and patients, among others, into a scheme to defraud Medicare. Rolando and Jose Nogueira admitted that they knew the patients at T&R did not need and/or did not receive the purported services, and that it would be necessary to pay kickbacks and bribes to the patients so that T&R could bill the Medicare program for the HIV infusion services that were not medically necessary and/or were not provided.
The defendants admitted that from approximately January 2003, through approximately July 2005, they and their co-defendants caused T&R to submit fraudulent claims to the Medicare program in the amount of approximately $13.7 million. Medicare paid approximately $4.1 million of these fraudulent claims.
Co-defendants Modesto and Victoria de la Vega pleaded guilty on July 23, 2010, and are scheduled to be sentenced on Nov. 5, 2010. Co-defendant Gladis Badia is awaiting trial.
Today’s guilty pleas and sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies , Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The cases were prosecuted by attorneys from the Criminal Division’s Fraud Section, including Trial Attorneys N. Nathan Dimock, Joseph Beemsterboer, and former Trial Attorney Michael Padula. The cases were investigated by the FBI and HHS-OIG and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals and organizations that collectively have billed the Medicare program for more than $1.85 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.
Northwest Airlines LLC Agrees to Plead Guilty for Fixing Prices on Air Cargo ShipmentsRead the Press Release
WASHINGTON — Northwest Airlines LLC has agreed to plead guilty and to pay a $38 million criminal fine for its role, through Northwest Airlines Cargo, in a conspiracy to fix prices in the air transportation industry, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the District of Columbia, Northwest Airlines Cargo, which is no longer in operation, engaged in a conspiracy to fix the cargo rates charged to customers in the United States and elsewhere for international air cargo shipments from at least July 2004 until at least February 2006. Under the plea agreement, which is subject to court approval, Northwest Airlines LLC has agreed to cooperate with the department’s ongoing antitrust investigation.
Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights. During the time period covered by the felony charge, Northwest Airlines Cargo earned more than $80 million from its air cargo services between the United States and Japan.
According to the charge, Northwest Airlines Cargo carried out the conspiracy by agreeing during meetings, conversations and communications on certain components of cargo rates for shipments on routes between the United States and Japan and by levying cargo rates in accordance with the agreements reached. As a part of the conspiracy, Northwest Airlines Cargo monitored and enforced adherence to the agreed-upon rates.
Northwest Airlines LLC is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Including today’s charge, as a result of this investigation, a total of 16 airlines have pleaded guilty or have agreed to plead guilty in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1.6 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against a fifth executive.
The airlines that have pleaded guilty as a result of the department’s ongoing investigation into the air transportation industry are: British Airways Plc, Korean Air Lines Co. Ltd., Qantas Airways Limited, Japan Airlines International Co. Ltd., Martinair Holland N.V., Cathay Pacific Airways Limited, SAS Cargo Group A/S, Société Air France, Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), EL AL Israel Airlines Ltd., LAN Cargo S.A., Aerolinhas Brasileiras S.A., Cargolux Airlines International S.A., Nippon Cargo Airlines Co. Ltd. and Asiana Airlines Inc. Airline executives who have pleaded guilty as a result of the investigation are Bruce McCaffrey of Qantas, Keith Packer of British Airways, Franciscus Johannes de Jong of Martinair and Timothy Pfeil of SAS. On Aug. 12, 2009, Jan Lillieborg, a citizen and resident of Sweden and former vice president of global sales for SAS Cargo, was indicted for participating in a conspiracy to suppress and eliminate competition by allocating customers and coordinating surcharge increases for international air shipments to and from the United States.
Today’s charge is the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm or call the FBI’s Washington Field Office, Northern Virginia Resident Agency at 202-278-2000.
Louisiana Vessel Company Pleads Guilty to Dumping Oil on High Seas, Will Pay $2.1 Million in PenaltiesRead the Press Release
WASHINGTON – Offshore Vessels LLC (OSV) has entered a plea of guilty to knowingly discharging waste oil from one of its vessels, in violation of the Act to Prevent Pollution from Ships (APPS), the Justice Department announced today. OSV, based in Louisiana, entered the plea in U.S. District Court in New Orleans.
OSV owned and operated the R/V Laurence M. (L.M.) Gould (R/V Gould). The R/V Gould is a 2,966 gross ton American-flagged vessel that served on a contractual basis as an ice-breaking research vessel for the National Science Foundation on research voyages to and from Antarctica. OSV admitted that on or about Sept. 8, 2005, on the high seas, R/V Gould crew members knowingly discharged oily wastewater from the bilge tank of the ship overboard, in violation APPS. Regulations under APPS require that oily wastewater be discharged only after it has been processed through an oily water separator, to ensure that the concentration of oil in the wastewater is below the legal limit.
OSV’s plea agreement with the Justice Department requires the company to pay a criminal fine of $1.75 million and remit a payment of $350,000 as community service to the National Marine Sanctuary Foundation, to be used for study of polar water pollution and protection of vulnerable marine ecosystems in the Antarctic region. OSV will also serve a period of probation for three years, during which it will be subject to an Environmental Compliance Plan.
"The Department of Justice will vigorously pursue all vessel companies, American and foreign, that deliberately violate the laws enacted to protect the oceans," said Assistant Attorney General Ignacia S. Moreno. "This case is particularly egregious because the defendant is an American company tasked with providing passage for the National Science Foundation in order for it to perform important environmental research in Antarctica."
The case was investigated by the U.S. Coast Guard Investigative Service and was prosecuted by Senior Trial Attorney Daniel Dooher, Environmental Crimes Section, Department of Justice; and Assistant U.S. Attorney Dorothy Manning Taylor, Eastern District of Louisiana.
Freight Forwarder Panalpina Pays U.S. $375,000 to Settle False Claims and Kickbacks AllegationsRead the Press Release
WASHINGTON. – Swiss-based freight forwarder Panalpina Inc. has agreed to pay the United States $375,000 to settle allegations that the company paid kickbacks to employees of Kellogg Brown & Root Inc. (KBR). The kickbacks, which related to shipping orders issued in connection with KBR’s contract with the U.S. Army to provide logistical support to the U.S. military in Iraq and elsewhere, are alleged to violate the False Claims Act and the Anti-Kickback Act.
The settlement resolves allegations that Panalpina provided kickbacks in the form of meals, drinks, tickets to sports events and golf outings to employees in KBR’s transportation department in order to gain favorable treatment on subcontracts under the U.S. military’s Logistics Civil Augmentation Program (LOGCAP III). Under the LOGCAP III contract, KBR was to provide logistical support for U.S. military operations abroad.
Under the terms of the settlement agreement, Panalpina will pay the United States $375,000 to resolve its potential liability under the False Claims Act, the Anti-Kickback Act and common law theories. The United States previously settled claims with Eagle Global Logistics (EGL) (now CEVA) related to the same lawsuit for a total of $5,050,000. The government is continuing to pursue claims against KBR based on its employees taking kickbacks from Panalpina and EGL.
"Kickbacks paid for military subcontracts undermine the integrity of the government contracting process," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will not tolerate wartime profiteering at the expense of taxpayer dollars."
The allegations against Panalpina were originally raised in the course of a lawsuit filed in the U.S. District Court for the Eastern District of Texas by David Vavra and Jerry Hyatt, two individuals active in the air cargo business. Under the qui tam, or whistleblower, provisions of the False Claims Act, private citizens can file suit on behalf of the United States and share in any recovery. Vavra and Hyatt will receive $78,750 as their share of this settlement.
This case is being prosecuted as part of a National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. The Defense Criminal Investigative Service and FBI participated in the investigation of this matter. This case, as well as others brought by members of the task force, demonstrates the Department of Justice’s commitment to ensuring the integrity of the government procurement process.
Florida Businessman Sentenced to 57 Months in Prison for Role in Foreign Bribery SchemeRead the Press Release
WASHINGTON – A Miami businessman was sentenced today to 57 months in prison for his participation in a conspiracy to pay bribes to former officials of the Republic of Haiti, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; and Daniel W. Auer, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI) Miami Field Office.
Juan Diaz, 52, was also ordered by U.S. District Court Judge Jose E. Martinez to serve three years of supervised release following his prison term. Judge Martinez ordered Diaz to pay $73,824 in restitution and to forfeit $1,028,851. Diaz pleaded guilty on May 15, 2009, to a one-count information charging him with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and money laundering.
In his plea, Diaz admitted to conspiring to make corrupt payments to foreign government officials for the purpose of securing business advantages for three different Miami-Dade County telecommunications companies from the Republic of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti. Diaz concealed these payments in part by laundering the funds through his company, J.D. Locator Services. According to court documents, Diaz paid and concealed $1,028,851 in bribes to former Haitian government officials while serving as an intermediary for the three private telecommunications companies. One of these officials, Robert Antoine, admitted his acceptance of bribes, including bribes from Diaz and pleaded guilty on March 12, 2010, to money laundering conspiracy. Antoine was sentenced to four years in prison.
A portion of the J.D. Locator funds was also laundered by Jean Fourcand of Fourcand Enterprises, who pleaded guilty on Feb. 19, 2010, to money laundering, and was sentenced to six months in prison for his involvement in the scheme. Antonio Perez was, at times, the controller of one of the Miami-Dade County telecommunications companies. Perez pleaded guilty on April 27, 2009, to conspiring to commit FCPA violations and money laundering and is awaiting sentencing.
Joel Esquenazi and Carlos Rodriguez, the owners of one of the Miami-Dade County telecommunications companies; Jean Rene Duperval, who was director of international relations of Haiti Teleco from June 2003 to April 2004; and Duperval’s sister, Marguerite Grandison, were indicted along with Antoine on Dec. 4, 2009. Trial for these remaining defendants is scheduled to begin Dec. 6, 2010, in U.S. District Court in Miami. An indictment is merely an accusation, and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The Department of Justice is grateful to the government of Haiti for providing substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers, the Bureau des Affaires Financières et Economiques, 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.
The case was prosecuted by Assistant U.S. Attorney Aurora Fagan of the U.S. Attorney’s Office for the Southern District of Florida, Senior Trial Attorney Nicola J. Mrazek of the Criminal Division’s Fraud Section and Trial Attorney Kevin Gerrity of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The Criminal Division’s Office of International Affairs also provided assistance in this matter. The case was investigated by the IRS-CI Miami Field Office.
Thursday 29 July 2010
United States Files Complaint Against Oracle Alleging Contract FraudRead the Press Release
WASHINGTON – The United States has intervened and filed a complaint under the False Claims Act against Oracle Corporation and Oracle America Inc. The government alleges that Oracle defrauded the United States on a General Services Administration (GSA) software contract that was in effect from 1998 to 2006 and involved hundreds of millions of dollars in sales.
Under the contract, GSA used Oracle’s disclosures about its commercial sales practices to negotiate the minimum discounts for government agencies who bought Oracle software. The contract required Oracle to update GSA when commercial discounts improved and extend the same improved discounts to government customers. The suit contends that Oracle misrepresented its true commercial sales practices, ultimately leading to government customers receiving deals far inferior to those Oracle gave commercial customers.
"We take seriously allegations that a government contractor has dealt dishonestly with the United States," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "When contractors misrepresent their business practices to the government, taxpayers suffer."
The suit was originally filed on by Paul Frascella, Senior Director of Contract Services at Oracle. The False Claims Act allows private citizens with knowledge of fraud to file whistleblower suits on behalf of the United States and share in any recovery. If the United States intervenes in the action and proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of $5,500 to $11,000 per claim.
Assistant Attorney General West acknowledged the investigative efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Virginia, and the General Services Administration’s Office of Inspector General. The Civil Division and the U.S. Attorney’s Office for the Eastern District of Virginia will litigate this matter on the government’s behalf. The suit is United States ex rel. Frascella v. Oracle Corp. et al., No. 1:07cv:529 (E.D. Va.).
This case was investigated as part of a National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, the U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrate the Justice Department’s commitment to helping ensure the integrity of the government procurement process.
Two New Orleans Police Officers Charged in Connection with the Beating Death of a CivilianRead the Press Release
WASHINGTON – Two officers with the New Orleans Police Department (NOPD) have been charged in a three-count indictment with federal crimes in connection with the beating death of civilian Raymond Robair in July 2005.
Today’s indictments were announced by Thomas E. Perez, Assistant Attorney General for the Civil Rights Division; Jim Letten, U.S. Attorney for the Eastern District of Louisiana; and David Welker, Special Agent in Charge of the FBI New Orleans Field Office.
Officer Melvin Williams is charged with violating Robair’s constitutional rights by beating him on July 30, 2005. The indictment alleges that Officer Williams kicked Robair and struck him with a baton, resulting in his death. Robair, who suffered fractured ribs and a ruptured spleen, was pronounced dead at Charity Hospital later on July 30, 2005.
The indictment also charges Williams, along with NOPD Officer Matthew Dean Moore, with obstructing justice by writing and submitting a false and inaccurate incident report regarding their interactions with Robair. Moore also faces one additional felony count, for making false statements to FBI agents in March 2010.
Williams faces a possible maximum sentence of life in prison. Moore faces a possible maximum sentence of 25 years in prison.
This case, which is ongoing, is being investigated by the New Orleans Field Office of the FBI, and is being prosecuted by Trial Attorneys Forrest Christian and Jared Fishman of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Edward Rivera for the Eastern District of Louisiana.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
Three Indicted for Civil Rights Conspiracy, False Statements and Perjury in Connection with Cross-burning in Athens, LouisianaRead the Press Release
WASHINGTON – A federal grand jury in Shreveport, La., returned an indictment yesterday charging Joshua James Moro, 23; Jeremy Matthew Moro, 33; and Sonya Marie Hart, 31, with offenses related to a cross-burning in Athens, La., in October 2008, near the home of an interracial couple. Another man, Daniel Danforth, was previously convicted by a federal jury for participating in the same cross-burning.
Joshua Moro was charged with one count of conspiring to interfere with another person’s civil rights. If convicted, he faces a maximum punishment of 10 years in prison for this charge. Joshua Moro, Jeremy Moro and Sonya Hart were each charged with one count each of making false statements to Special Agents of the FBI, and Joshua Moro and Sonya Hart were each charged with one count of perjury before the grand jury. The defendants face a maximum penalty of five years in prison for each of the false statements and perjury charges.
According to the indictment, between Oct. 23 and 26, 2008, Joshua Moro agreed with his cousin, Daniel Danforth, and another person known to the grand jury, to build, erect and burn a cross near the home of their cousin, the cousin’s African American boyfriend, her 11-year-old son and another relative who was believed to approve of the cousin’s interracial relationship. Specifically, Joshua Moro offered Danforth diesel fuel to use to burn the cross and sent a text message later that evening to see if Danforth and his other co-conspirator still needed the diesel. The indictment further alleges that Joshua Moro falsely denied his involvement in the cross-burning conspiracy to FBI agents and in his testimony before the grand jury. Finally, the indictment alleges that Jeremy Moro, whom Danforth invited to help burn the cross, and Sonya Hart, whose truck was used to help carry-out the cross-burning, falsely denied having any knowledge about the cross-burning.
Danforth was sentenced to 48 months in prison in May 2010 for his role in the cross-burning and attempted cover-up.
This case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney Mary J. Mudrick for the Western District of Louisiana and Trial Attorney Erin Aslan from the Justice Department’s Civil Rights Division.
The charges set forth in an indictment are merely accusations and the defendants are presumed innocent until proven guilty.
Promoters of Sham Tax Elimination Scheme Sentenced for Tax Fraud in FloridaRead the Press Release
WASHINGTON - Four of eight promoters of a fraudulent tax- and debt-elimination scheme have been sentenced to length prison terms for their roles in tax fraud, wire fraud and money laundering, the Justice Department and Internal Revenue Service (IRS) announced today. The remaining four will be sentenced over the next two months.
On March 31, 2010, a federal jury returned guilty verdicts against eight people, following a month-long trial in Pensacola, Fla., involving the promotion of fraudulent schemes through Pinnacle Quest International, also known as PQI and Quest International.
Arnold Ray Manansala of Renton, Wash., was sentenced to 12 years in prison for conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering. Dover Eugene Perry, also of Renton, was sentenced to 10 years in prison for conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering. Michael Guy Leonard of Troy, N.Y., was sentenced to nine years and one month in prison for conspiracy to defraud the United States and to commit wire fraud, and conspiracy to commit money laundering. Mark Daniel Leitner of Fairport, N.Y., was sentenced to five years in prison for conspiracy to defraud the United States and to commit wire fraud.
According to the evidence presented during trial, PQI was an umbrella organization for numerous vendors of tax and credit card debt elimination scams. Some of the PQI vendors, such as Southern Oregon Resource Center for Education (SORCE), sold bogus theories and strategies for tax evasion. For fees starting at $10,000, SORCE assisted its customers in the creation of a series of sham business entities in the United States and Panama. Other tax-related PQI vendors denied the legitimacy of the income tax system on various theories and provided customers with a "reliance defense" that consisted of a paper trail of frivolous correspondence which a client could allegedly use as evidence of good faith if the client were prosecuted.
At trial, the government established that other PQI vendors sold fraudulent schemes for eliminating credit card debt, the most successful of which was called Financial Solutions. Financial Solutions charged its customers thousands of dollars for a series of letters to send to credit card companies disputing the lawfulness of the underlying debt. The product was wholly ineffective, and customers typically were sued by their creditors and often forced into bankruptcy.
According to the evidence, another PQI vendor, MYICIS, operated as a sophisticated, computerized "warehouse bank." MYICIS was a single bank account in which customers pooled their money. MYICIS was promoted to PQI’s clients as a method to hide their assets from the IRS as a result of the pooled nature of the account. MYICIS had 3,000 clients and approximately $100 million in deposits over a three year period.
Evidence introduced at trial showed that PQI purported to sell only CDs and tickets to offshore conferences. However, PQI acted as a gateway to its fraudulent vendors. PQI clients seeking the tax evasion and debt elimination vendors could only access the product if they joined PQI first. The cost of membership ranged from $1,350 to $18,750, depending on the level of access. In May 2008, a federal district court issued a preliminary injunction against the promoters of Pinnacle Quest International.
"Today’s sentences send a powerful and unequivocal message to those who seek to evade and help others evade their taxes," said Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division. "Those who promote tax fraud schemes will be investigated, prosecuted, and convicted, and they also face substantial prison sentences."
"Today’s sentencings serve as a reminder that IRS is committed to ensuring all taxpayers pay their fair share of taxes," said Victor S. O. Song, Chief, IRS Criminal Investigation. "There is no secret formula that can eliminate an individual’s tax obligations, and those who create elaborate schemes that have no purpose other than to mislead others and defraud the Internal Revenue Service will be prosecuted."
Mr. DiCicco thanked Department of Justice Trial Attorneys Michael Watling, Adam Hulbig and Jonathan Marx, as well as paralegal Iris Wright, for their hard work in prosecuting the case. Mr. DiCicco also thanked the team of IRS Special Agents who investigated the case, particularly Stephen Walker and Wendy Kilpatrick, for their efforts.
Miami-area Clinic Owner, Patient Recruiter, Two Nurses and Medicare Beneficiary Plead Guilty in Home Health Care Fraud SchemeRead the Press Release
WASHINGTON – Five South Florida residents pleaded guilty today in U.S. District Court in Miami for participating in a home health care fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Arturo Fonseca, Isis Torres, Francisco Portillo, Eduardo Romero and William Madrigal pleaded guilty before U.S. District Judge Adalberto Jordan to various health care fraud charges. The five individuals were originally charged in an indictment in December 2009.
Arturo Fonseca, 47, pleaded guilty to one count of conspiracy to commit health care fraud and five counts of soliciting and receiving health care kickbacks. At the plea hearing, Fonseca admitted to being an owner and operator of Courtesy Medical Group Inc., a purported medical clinic in Miami. In pleading guilty, Fonseca admitted that Courtesy operated in part to provide prescriptions, plans of care and medical certifications, among other things, to Miami-area home health agencies. According to court documents, Courtesy provided these medical documents so that the home health agencies could bill the Medicare program for expensive home health services and therapy for beneficiaries that did not need and in some cases did not receive the purported treatments. According to the indictment, approximately 344 prescriptions were issued through Courtesy and signed by Fonseca’s co-defendant, Dr. Fred Dweck. As a result, the Medicare program was fraudulently billed approximately $16.6 million for home health services.
Eduardo Romero, 44, pleaded guilty to one count of conspiracy to commit health care fraud, and three counts of soliciting and receiving health care kickbacks. According to plea documents, Romero admitted to being a patient recruiter for ABC Home Health Care Inc. , and Florida Home Health Care Providers Inc., two Miami-area home health care agencies. Romero admitted that in his role as a patient recruiter, he would solicit and receive kickbacks and bribes from the owners of ABC and Florida Home Health in return for providing Medicare beneficiaries that the home health agencies could use to bill the Medicare program for unnecessary home health care services. Romero also admitted to paying kickbacks and bribes to the owners and operators of Courtesy in return for the prescriptions for unnecessary home health care services. Medicare was billed approximately $391,593 for purported home health care services that were not medically necessary or were not rendered for the patients recruited by Romero and one of his co-defendants. The owners and operators of ABC and Florida Home Health pleaded guilty in a separate case and are awaiting sentencing.
Francisco Portillo, 41, and Isis Torres, 37, each pleaded guilty to one count of conspiracy to commit health care fraud and one count of making false statements in patient files. According to plea documents, Portillo and Torres were nurses and falsified patient files for ABC and Florida Home Health to make it appear that the patients qualified for home health care services, when in fact they did not qualify and in some instances never received any treatments. According to court documents, Portillo was responsible for approximately $142,000 in fraudulent Medicare billing and Torres was responsible for approximately $528,400 in fraudulent Medicare billing.
William Madrigal, 56, pleaded guilty to one count of conspiracy to commit health care fraud and one count of soliciting and receiving health care kickbacks. According to plea documents, Madrigal, a Medicare beneficiary, admitted that he solicited and received kickbacks and bribes in return for allowing ABC and Florida Home Health to bill Medicare for home health care services for which he did not qualify. Madrigal admitted that as a result of his role in the scheme, approximately $68,760 was fraudulently billed to Medicare for unnecessary home health care and therapy.
Today’s guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies , Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
These cases are being prosecuted by Trial Attorneys N. Nathan Dimock, Sam Sheldon and Henry Van Dyck, and former Trial Attorney Michael Padula and Special Trial Attorney Martha Talley of the Criminal Division’s Fraud Section. The cases were investigated by the FBI and HHS-OIG, and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals and organizations that collectively have billed the Medicare program for more than $1.85 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.
Georgia Defense Contractor and Its President to Pay $750,000 to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – Quantum Dynamics Inc, located in Macon, Ga., and its president, Audrey Price, have agreed to pay the United States $750,000 to settle claims that they fraudulently obtained contracts from the Army, the Justice Department announced today. The contracts had been set aside for companies that qualified for the Small Business Administration’s Historically Underutilized Business Zone (HUBZone) program. Quantum was allowed to participate in the HUBZone program based on false statements made to the government.
Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and employ 35 percent of their workforce from a HUBZone, among other requirements, can apply to the Small Business Administration (SBA) for certification as a HUBZone small business company. HUBZone companies can then use this certification when bidding on government contracts. In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.
The United States alleged that Quantum did not actually maintain its principal office in a designated HUBZone location in Washington, D.C., as they had represented to the Army and the SBA, but rather set up their office in a Virginia suburb. Additionally, the government alleged that Quantum Dynamics did not employ a sufficient percentage of employees who lived in a HUBZone. Despite not properly qualifying for the HUBZone program, Quantum Dynamics was awarded Army contracts that had been set aside for qualified HUBZone companies based upon the false statements they made to the Army and the SBA.
"The Department of Justice is committed to rooting out fraud in government contracting programs," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will take action against those contractors who seek to gain an unfair advantage over qualified HUBZone small businesses."
"This settlement sends a strong message that the government will not tolerate fraud in the HUBZone or any other SBA program, and that we will pursue civil fraud and all other remedies against those who seek to obtain government contracts through false statements," said SBA Inspector General Peggy E. Gustafson.
"This case represents the cooperative effort of SBA’s Offices of the General Counsel and the Inspector General and the Department of Justice to uncover and remedy fraud in our procurement programs," said SBA General Counsel Sara Lipscomb.
Assistant Attorney General West thanked the Justice Department’s Civil Division, the SBA Office of General Counsel, and the SBA Office of Inspector General for the collaboration that resulted in the settlement announced today.
Former Husband and Wife Sentenced for Their Roles in $5.8 Million Fraudulent HIV Infusion Scheme in MiamiRead the Press Release
WASHINGTON – David Marrero, a founder of and consultant at a fraudulent Miami-area HIV/AIDS infusion clinic known as Tendercare Medical Center Inc., was sentenced today to 10 years in prison for his role in a $5.8 million scheme to defraud the Medicare program, announced the Departments of Justice and Health and Human Services (HHS). Marrero’s ex-wife, Maria Valero Marrero, the owner and operator of Tendercare, was also sentenced today to 70 months in prison.
In addition to the prison terms, David and Maria Marrero each were sentenced by U.S. District Judge Ursula Ungaro in the Southern District of Florida to three years of supervised release. David and Maria Marrero were also ordered to pay restitution jointly and severally with co-defendants in the amount of $2.7 million.
David Marrero was convicted by a federal jury in May 2010 of one count of health care fraud, one count of conspiracy to commit money laundering and one count of money laundering. Maria Marrero pleaded guilty to one count of conspiracy to commit health care fraud in April 2010. According to court documents and evidence presented at trial, David and Maria Marrero participated in a scheme to defraud Medicare by submitting claims for injection and infusion treatments that were medically unnecessary and, in most instances, were not provided. Maria Marrero admitted to conspiring to pay kickbacks to induce Medicare beneficiaries to provide their Medicare numbers and their signatures, which were used by Tendercare to submit fraudulent claims to Medicare for injection and infusion services. According to court documents, David Marrero transferred ownership of the fraudulent HIV clinic to Maria Valero Marrero as part of a divorce settlement.
According to court documents, between January 2005 and December 2007, Tendercare submitted approximately $5.8 million in false and fraudulent claims to Medicare. Medicare paid Tendercare approximately $2.7 million.
Today’s sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The cases were prosecuted by Fraud Section Trial Attorney Charles D. Reed and former Special Trial Attorney Martha Talley, on detail from HHS-OIG.
The cases were brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Florida and the Criminal Division’s Fraud Section. Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals who collectively have fraudulently billed the Medicare program for more than $1.85 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 Deputy Sheriff from Choctaw County, Oklahoma, Sentenced for Civil Rights ViolationsRead the Press Release
WASHINGTON – Former Choctaw County, Okla., deputy sheriff Ben Westley Milner was sentenced today in Muskogee, Okla., to serve 18 months in prison and two years supervised release for violating the civil rights of three men by assaulting them without legal justification.
In one incident, which took place on Oct. 31, 2005, Milner physically abused a truck driver following a traffic stop. In a second incident on Oct. 18, 2007, Milner assaulted two inmates at the Choctaw County Jail with a large axe handle. Milner was convicted on Sept. 24, 2009, on three counts of violating the civil rights of his victims and two counts of falsifying official reports.
"The investigation and prosecution of this case shows that the Department of Justice does not tolerate abuse of authority by the people we entrust to enforce our laws. The sentence imposed today shows the seriousness of these crimes," said Thomas E. Perez , Assistant Attorney General for the Civil Rights Division.
"Law enforcement officers in the Eastern District of Oklahoma are generally well trained in the exercise of reasonable force. We expect that they will survive the dangers inherent in their shifts of work and return home to their families and loved ones. But when those who swear to obey the law, violate that law, a day of reckoning awaits," said U.S. Attorney Sheldon J. Sperling for the Eastern District of Oklahoma.
The convictions resulted from an investigation by the Oklahoma Division of the FBI, and a prosecution by Assistant U.S. Attorney Dean Burris for the Eastern District of Oklahoma, and Trial Attorney Ryan McKinstry for the Civil Rights Division.
Agency Chief FOIA Officers Respond to the President’s and Attorney General’s Call for TransparencyRead the Press Release
WASHINGTON – Responding to the President’s and Attorney General’s call for increased transparency, federal agencies across the government have released more documents, made more information available on websites and decreased backlogs in the past year, the Department of Justice today announced. This year, for the first time ever, 94 agencies were required to submit reports from their Chief FOIA (Freedom of Information Act) Officers detailing their progress in improving transparency as part of the President’s FOIA Memorandum and the Attorney General’s FOIA Guidelines.
“These 94 agencies have taken significant steps forward in providing the American people with the transparency they want and deserve,” said Attorney General Eric Holder. “Much work needs to be done in the effort to open up the government’s FOIA process and improve its efficiency, but these results indicate we have made important strides in the right direction.”
In the Chief FOIA Officers’ Reports, agencies were asked to describe the steps they had taken to improve transparency in accordance with the President’s FOIA Memorandum, www.whitehouse.gov/the_press_office/FreedomofInformationAct/, and the Attorney General’s FOIA Guidelines, www.justice.gov/ag/foia-memo-march2009.pdf. The department’s Office of Information Policy (OIP) analyzed the reports and provided a summary of its findings and guidance for further improvements that can be found at www.justice.gov/oip/foiapost/2010foiapost23.htm. The results are significant. Among other things:
- All agencies reported progress in implementing the presumption of openness, with over half having that progress rated as “remarkable.”
- Almost half of the 94 agencies reported divulging documents in discretionary releases – i.e., the documents were requested under the FOIA and the agency could legally have withheld information, but chose not to. Over half looked for opportunities to do so.
- More information is being released to FOIA requesters. In Fiscal Year 2009, the number of responses with released records, either records released in full or in part, increased overall. The number of partial releases increased by approximately 50,000 documents.
- Eighty-nine percent of agencies reported proactively disclosing material on their websites – i.e., producing material that has not (yet) been requested by the public.
- Ninety-five percent of agencies, including all cabinet agencies, can receive FOIA requests electronically, rather than merely via mail or other non-technological methods. Ninety one percent track the requests electronically as well.
- Sixty percent of agencies either had no backlog in processing FOIA requests or reduced that backlog in Fiscal Year 2009. Eighty-five percent reduced the age of the oldest request or had no backlogged request to close.
President Obama’s Memorandum concerning transparency and open government was issued on Jan. 21, 2009. Attorney General Holder’s FOIA Guidelines were issued on March 19, 2009.
The Office of Information Policy is responsible for encouraging agency compliance with the FOIA and ensuring that the President’s FOIA Memorandum and the Attorney General’s FOIA Guidelines are fully implemented across the government. To carry out these responsibilities OIP develops and provides guidance to agencies relating to the FOIA and regularly conducts training for FOIA personnel. OIP also manages the department’s responsibilities related to the FOIA. Additional information regarding the OIP and FOIA can be found at OIP’s website, www.justice.gov/oip/oip.html.
Wednesday 28 July 2010
Virginia Man Pleads Guilty to Defrauding the U.S. Department of Defense of More Than $450,000Read the Press Release
WASHINGTON - A Virginia man pleaded guilty today to one count of mail fraud for his participation in a scheme to defraud the U.S. Department of Defense, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.
Jonathan Feeney, 28, of Woodbridge, Va., waived his right to an indictment and pleaded guilty to a one-count criminal information in U.S. District Court in the Eastern District of Virginia before U.S. District Court Judge Leonie Brinkema. The information charges Feeney with using the U.S. mails to execute a scheme involving fraudulent invoices to defraud the U. S. Department of Defense.
According to court documents, BAE Systems Training Services Inc. (BAE) maintained a procurement contract with the Defense Department during 2005 and 2006. Under the terms of the contract, BAE would purchase surveillance equipment and subsequently bill the U.S. government for those purchases. According to court documents, Feeney worked as a logistics engineer at BAE and was responsible for purchasing the items needed under the contract.
According to court documents, Feeney started making secret purchases in BAE’s name beginning in August 2005. He admitted that he used his position to authorize the purchase of camera lenses and video equipment, intending to keep the equipment for his personal use but to bill BAE for the purchases. This would in turn cause BAE to use the mail to bill those purchases to the United States. Between Aug. 6, 2005, and June 30, 2006, Feeney admitted he made 15 illicit purchases, totaling $476,424 in fraudulent charges, of which $464,819 was billed to the U.S. government. According to court documents, Feeney subsequently sold many of the purchases on an Internet auction site for profit.
The mail fraud count carries a maximum penalty of 20 years in prison, a $250,000 fine or twice the gross gain or loss, whichever is greater, as well as three years of supervised release. Sentencing is scheduled for Oct. 18, 2010, at 2:00 p.m.
The case is being prosecuted by Fraud Section Trial Attorney Liam Brennan and Special Assistant U.S. Attorney Steve A. Linick, Deputy Chief of the Criminal Division’s Fraud Section. The investigation is being conducted by Defense Criminal Investigative Service and members of the National Procurement Fraud Task Force.
Today’s charges are an example of the Department of Justice’s commitment to protect U.S. taxpayers from procurement fraud through the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
Third Chi Mei Executive Agrees to Plead Guilty and Serve Jail Time for Participating in Global LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A former executive from Chi Mei Optoelectronics Corporation (Chi Mei) has agreed to plead guilty and to serve jail in the United States for participating in a global conspiracy to fix the price of thin-film transistor-liquid crystal display (TFT-LCD) panels, the Department of Justice announced today.
According to a one-count felony charge filed in U.S. District Court in San Francisco, Wen-Hung “Amigo” Huang conspired with others to suppress and eliminate competition by fixing the prices of TFT-LCD panels. Huang, a resident of Taiwan and the former director of sales of Chi Mei, participated in the conspiracy from on or about Sept. 14, 2001, to on or about Dec.1, 2006.
Under his plea agreement which is subject to court approval, Huang, who was charged today, has agreed to serve 9 months in jail, to pay a $25,000 criminal fine and to assist the department in its ongoing TFT-LCD investigation.
TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. By the end of the conspiracy period, the worldwide market for TFT-LCD panels was valued at $70 billion. Companies directly affected by the LCD price-fixing conspiracy are some of the largest computer and television manufacturers in the world, including Apple, Dell and Hewlett Packard.
The department charged that Huang participated in a conspiracy in which the participants met and agreed to charge prices of TFT-LCD panels at predetermined levels. The participants in that conspiracy also issued price quotations in accordance with the agreements reached and exchanged information on the sales of TFT-LCD panels for the purpose of monitoring adherence to the agreed-upon prices, the department said.
As a result of this investigation, more than $890 million in criminal fines have been obtained to date. Including today’s filing, 18 executives and eight companies have been charged in the department’s ongoing investigation into price fixing in the LCD industry.
Huang is charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either of those amounts is greater than the statutory maximum fine.
Today’s charge is the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco Field Office and the FBI in San Francisco.
Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm .
Statement of the Attorney General on Passage of the Fair Sentencing ActRead the Press Release
"I congratulate the House of Representatives on today’s passage of the Fair Sentencing Act. The bill greatly reduces the unwarranted disparity in sentences for crack and powder cocaine offenses, and will go a long way toward ensuring that our sentencing laws are tough, consistent, and fair.
"By sending the bill to the President, the House has taken an important step toward more just sentencing policies while enhancing the ability of law enforcement officials to protect our communities from violent and dangerous drug traffickers.
"This day was long in coming, and I want to express my appreciation to the members of the House and Senate who worked tirelessly to bring about this result. Particular thanks are due to Majority Whip Clyburn, House Judiciary Committee Chairman Conyers and Crime Subcommittee Chairman Scott, and to the bipartisan leadership of the Senate Judiciary Committee, including Chairman Leahy, Ranking Member Sessions and Senators Durbin and Graham.
"I join them in celebrating this achievement, and look forward to working with them to implement the new law."
Spokane, Washington, Man Pleads Guilty to Civil Rights Charges Related to Threats to Reproductive Health Services ClinicRead the Press Release
WASHINGTON – Donald Hertz, 70, of Spokane, Wash., pleaded guilty today in federal court in Spokane to one count of violating the Freedom of Access to Clinic Entrances (FACE) Act and one count of transmitting a threat in interstate commerce. The FACE Act makes it a federal crime to injure, intimidate or interfere with, by force or threat of force, employees of a facility that provides reproductive health services.
During the plea proceedings and in documents filed in court, Hertz admitted that he intentionally intimidated and interfered with employees of the Boulder Abortion Clinic, located in Boulder, Colo., because they were and had been providing reproductive health services. Specifically, on June 23, 2009, approximately three weeks after the murder of Dr. George Tiller, a Kansas physician who provided reproductive health services, Hertz anonymously contacted the Boulder Abortion Clinic and stated that two of his associates were driving to Boulder to kill members of a clinic employee’s family in order to make that employee suffer.
"Threats of violence against facilities that provide reproductive health services are illegal, and they will not be tolerated in this country," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The defendant’s conviction should send a clear message to others who would carry out similar criminal acts that they will be brought to justice and held accountable for their actions."
Sentencing has been scheduled for Oct. 27, 2010. Hertz faces a maximum prison sentence of up to six years and a fine of up to $350,000.
The case was investigated by special agents from the Denver and Spokane Divisions of the FBI and deputies from the U.S. Marshals Service. The case is being prosecuted by the Civil Rights Division of the Justice Department with the assistance of the U.S. Attorney’s Office for the Eastern District of Washington.
Settlement Reached to Expedite Cleanup for Walpole, Massachusetts, Superfund SiteRead the Press Release
BOSTON – A $13 million settlement has been reached between four parties and the United States to expedite cleanup of the contaminated Blackburn and Union Privileges Superfund Site in Walpole, Mass., the Justice Department and Environmental Protection Agency (EPA) announced today. The parties involved in the settlement include W.R. Grace & Co.-Conn., a former owner and operator of the site; Tyco Healthcare Group, also former owner and operator; as well as BIM Investment Corp. and Shaffer Realty Nominee Trust, the current owners.
Under the settlement, the four parties will, among other things:
- Excavate and dredge contaminated soil and sediment;
- Treat contaminated groundwater that poses a risk to surface waters;
- Establish land use restrictions for the site; and
- Perform long-term monitoring of soils, sediment and groundwater.
Under the agreement, the private parties will be required to maintain the cap and culvert, and perform engineering studies needed to ensure the long-term integrity of the structures.
“EPA is pleased that, if approved, this settlement will re-enforce the 'polluter pays' principle that is central to the Superfund program by obtaining a commitment for millions of dollars in cleanup work from the responsible parties at this Site,” said Curt Spalding, regional administrator of EPA’s New England office.
The site, which was listed on the National Priorities List in 1994, includes about 21 parcels of land. The Neponset River runs through the 22-acre site, which has been used for commercial and industrial purposes since the 1700s. From about 1915 to 1936, a predecessor of W.R. Grace manufactured asbestos brake linings and clutch linings on a large portion of the property. From 1946 to about 1983, a predecessor of Tyco Healthcare operated a cotton fabric manufacturing business, which used caustic solutions, on a portion of the property.
As a result of these operations, soils, sediment and groundwater are contaminated with inorganic chemicals, including asbestos and metals, volatile organic compounds (VOCs), polycyclic aromatic hydrocarbons (PAHs), and highly alkaline compounds.
The group will reimburse the federal government for the $1.4 million in response costs associated with the site, as well as for all future oversight costs up to $2 million.
The consent decree, lodged in U.S. District Court for the District of Massachusetts, is subject to a 30-day public comment period and court approval. A copy of the consent decree and instructions about how to submit comments is available on the Department of Justice website at www.usdoj.gov/enrd/Consent_Decrees.html. The consent decree has already been approved by the U.S. Bankruptcy Court for the District of Delaware as part of W.R. Grace’s pending bankruptcy proceeding.
During a cleanup in the early 1990s, Grace consolidated asbestos-contaminated soils and sediments and installed a cap and containment cell at the site. In addition, a culvert was installed along the Neponset River to prevent the erosion of asbestos contaminated soils along the banks of the river.
More information: Blackburn and Union Privileges Superfund Site (www.epa.gov/region1/superfund/sites/blackburn)
Justice Department Files Fair Housing Lawsuit Against Dalton Township, MichiganRead the Press Release
WASHINGTON - The Justice Department today filed a lawsuit against Dalton Township, Mich., alleging violations of the Fair Housing Act and the Americans with Disabilities Act. The lawsuit, filed in U.S. District Court for the Western District of Michigan, charges that the township discriminated against persons with disabilities based on its treatment of a group home for persons recovering from drug and alcohol addiction and its failure to grant a reasonable accommodation or modification to the owner of the group home.
This lawsuit arose as a result of a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by Joel Kruszynski Sr., who, through Cedar Creek Investments Inc., and Serenity Shores Apartments LLC, owns and operates a group home known as "Serenity Shores."
The suit seeks a court order prohibiting future discrimination by the township and requiring the township to make a reasonable accommodation to permit the continued operation of Serenity Shores as a sober home for eight individuals and a resident manager. It also seeks payment of monetary damages to compensate victims and a civil penalty.
"The Fair Housing Act and the Americans with Disabilities Act seek to ensure that individuals with disabilities can live in communities of their choice without facing discrimination," said Thomas E. Perez, Assistant Attorney General for Civil Rights. "We will continue our vigorous enforcement efforts to make certain that persons with disabilities are granted their rights under federal law."
"Under the Fair Housing Act and the Americans with Disabilities Act, persons with disabilities have the right to reside in communities and housing of their choice," said John Trasviña, Assistant Secretary for Fair Housing & Equal Opportunity. "HUD will take legal actions to ensure that they can live in the most integrated setting."
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex familial status, national origin and disability. Title II of the Americans with Disabilities Act requires that State and local governments give people with disabilities an equal opportunity to benefit from all of their programs, services and activities. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination or have information related to this lawsuit can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Founding Member of Abu Sayyaf Group Pleads Guilty to 1995 Hostage Taking Involving U.S. and Philippine CitizensRead the Press Release
WASHINGTON – The Justice Department announced that Madhatta Haipe, a citizen of the Philippines and founding member of Al-Harakat Al-Islamiyyah, also known as the Abu Sayyaf Group (ASG), pleaded guilty today in federal court in the District of Columbia to four counts of hostage taking in connection with the 1995 abduction of 16 people, including four U.S. citizens, in the Philippines. The guilty plea was announced by David Kris, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; and Charlene B. Thornton, Special Agent in Charge of the FBI Honolulu Field Office.
According to the factual proffer in support of the guilty plea, to which Haipe agreed in court, at the time of the hostage taking, Haipe was serving as the General Secretary of the ASG, or second-in-command of the organization, under the Amir. The Amir of the ASG had directed that members of the group engage in kidnappings for ransom in order to raise funds for the group and to raise the public’s awareness of the group’s purpose. The ASG was subsequently designated as a Foreign Terrorist Organization by the U.S. Secretary of State, and remains so designated today.
As admitted by Haipe as part of his guilty plea, on Dec. 27, 1995, several armed members of the ASG kidnapped 16 individuals, including four U.S. citizens, one U.S. permanent resident alien, and 11 Philippine citizens, in the rugged area around Trankini Falls, near Lake Sebu, in southern Mindanao, in the Philippines. The hostages, including six children, were forced to march up a mountainside. Some of the adult hostages had rope tied around their hands or neck.
Haipe informed the hostages that they were being kidnapped for ransom, and he individually questioned some of the hostages to determine the amount of ransom to be demanded. Later that same day, Haipe decided to release four of the 16 hostages to allow them to collect a ransom totaling at least one million Filipino pesos (equivalent to about $38,000 U.S. dollars, at the time). Haipe threatened that if the released hostages told anyone about the kidnapping, then hostages would be killed.
After releasing the four hostages, Haipe and his group forced the remaining hostages to continue marching up the mountainside to evade capture by the Philippine authorities. Four days later, on December 31, 1995, Haipe and his group released the remaining hostages after a ransom was paid.
"For roughly 15 years, FBI agents, Justice Department prosecutors and authorities in the Philippines relentlessly pursued this matter on behalf of the victims, who were held hostage and threatened with death by this Abu Sayyaf leader. With today’s guilty plea, Mr. Haipe is finally being held accountable for his actions," said David Kris, Assistant Attorney General for National Security.
"Today’s guilty plea sends a clear message -- we will never tire in our pursuit of justice for those who seek to harm American citizens, whether at home or abroad," said Ronald C. Machen Jr., United States Attorney for the District of Columbia. "Today’s guilty plea demonstrates that there will be serious consequences for those who commit such crimes."
"The FBI Honolulu Division has investigated this matter in close coordination with the Philippine authorities for approximately 15 years," said Charlene Thornton, Special Agent in Charge of the FBI in Honolulu. "Through this international cooperation, despite the time and distance, we have managed to bring to justice a defendant who had sought to harm our U.S. citizens abroad."
Haipe, who is now 48 years old, was indicted for this crime by a federal grand jury in Washington, D.C. in November 2000. In August 2009, he was extradited from the Philippines to face the charges against him. He is now scheduled to be sentenced before Judge Richard Roberts on Dec. 14, 2010. He faces up to life in prison on each of the four counts to which he pleaded guilty. As part of the plea agreement, the government may advocate for a sentence of up to 25 years in prison.
The Department of Justice and the FBI, working with their partners in the Philippines, have vigorously pursued this case for years. The investigation was conducted by FBI Honolulu Field Office, with substantial assistance from the Philippines Department of Justice, the Philippine National Police, the National Bureau of Investigation and the Philippine Department of Foreign Affairs. The Criminal Division’s Office of International Affairs and, in particular, Robert Courtney, the U.S. Justice Department’s Attaché to the Philippines, also provided substantial assistance in this case.
The prosecution is being handled by Assistant U.S. Attorneys Gregg Maisel and Anthony Asuncion of the U.S. Attorney’s Office for the District of Columbia, as well as Trial Attorney T. J. Reardon, III, of the Counterterrorism Section of the Justice Department’s National Security Division.
Former St. Louis, Missouri, Area Police Officer Pleads Guilty to Civil Rights ViolationsRead the Press Release
WASHINGTON – The Justice Department announced today that Leon Pullen, 32, of Foley, Mo., pleaded guilty to civil rights violations stemming from several incidents where he sexually assaulted and stole money from women. Pullen was a police officer employed by the Uplands Park Police Department in suburban St. Louis.
According to court documents, on July 15, 2009, Officer Pullen responded to an advertisement placed on the Internet by a woman who posted her picture and contact information as a prostitute. Pullen contacted the woman via cell phone and identified himself as “Jimmy,” and without identifying himself as a police officer, arranged to meet her at a specific location in Uplands Park. He agreed to pay $400 for sexual acts, and also asked her to bring a friend. When they arrived, a police vehicle pulled behind her car. Pullen, who was on duty and dressed in full uniform, including a badge and sidearm, approached her, showed her the ad she had posted on the Internet, and demanded to know how much money she had with her. Pullen made her follow him to the police station, where he sexually assaulted her.
In February or March of 2009, Pullen answered another ad from a different woman and arranged to meet her at a hotel room that she had rented in St. Louis. When he arrived, he was wearing a blue jacket over a gray golf shirt that had a police badge embroidered onto the front with the words “Detective Pullen.” Once inside, he identified himself as a police officer and told her that she was under arrest. He displayed his firearm and handcuffs. After he sexually assaulted her, he took $100 in cash and her laptop computer. The victim told the FBI later that she was initially afraid to report the assault when it happened because Pullen identified himself as a police officer.
Pullen sexually assaulted two more women using the same tactics in May and June 2009.
Following his arrest on Sept. 20, 2009, Pullen gave a voluntary statement to the FBI. First, he told the agents that he had never taken money from the victims, and denied to the FBI that he had ever engaged in sexual activity - consensual or otherwise - while on-duty.
“An officer’s badge entrusts him or her with a great deal of power. Officers who abuse that power, as was done in this case, must be prosecuted to the fullest extent of the law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
Pullen pleaded guilty to one felony count of conspiracy to deprive individuals of their rights under color of law, four felony counts of deprivation of rights under color of law, one felony count of conspiracy to commit interference with commerce by color of right, one felony count of interference with commerce by color of right, one felony count of tampering with a witness and one felony count of making false statements.
These charges carry penalty ranges of five years to life in prison. Sentencing has been set for Oct. 15, 2010, before Judge Rodney W. Sippel.
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Howard Marcus and Civil Rights Division Trial Attorney Eric Gibson.
Court Awards Back Pay to Returning Veteran and Injunctive Relief Against Alabama Department of Mental HealthRead the Press Release
WASHINGTON – A U.S. District Court in Montgomery, Ala., granted judgment in favor of the United States yesterday in a lawsuit brought to enforce the Uniformed Services Employment and Reemployment Rights Act (USERRA) against the Alabama Department of Mental Health (ADMH).
After a trial in June, U.S. District Court Chief Judge Mark E. Fuller held that ADMH violated USERRA when it failed to promptly reemploy Roy Hamilton when he returned from active duty military service in Iraq. The court awarded Hamilton $23,350.77 in back pay and retirement contributions; $2,997.96 in annual and sick leave; and restoration of his continuous service date to his original hire date, July 13, 1987. The court also found that the United States is entitled to injunctive relief to ensure ADMH’s future compliance with USERRA. The injunctive relief includes amendments to ADMH’s policies and procedures and mandatory training for all ADMH managers and personnel officials.
USERRA was enacted in 1994 to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Subject to certain limitations, USERRA requires that individuals who leave their jobs to serve in the U. S. armed forces be timely reemployed by their civilian employers in the same or similar position that they would have held had they not left to serve in the military.
The complaint alleged that ADMH violated USERRA by failing or refusing to promptly reemploy Hamilton upon his return from military service. Hamilton was deployed to Iraq in July 2004. Upon his completion of active duty in April 2005, Hamilton received an honorable discharge and contacted ADMH to seek immediate reemployment. ADMH did not offer Hamilton reemployment, nor did ADMH contact Hamilton about reemployment. Hamilton was rehired as a new employee in August 2007.
“Members of our armed forces deserve the comfort of knowing that they will not be sacrificing their civilian careers when they make the choice to serve our nation in the military,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Mr. Hamilton will be made whole, and the Department of Justice will continue to seek relief on behalf of other servicemembers for violations of USERRA.”
The Department of Justice brought this case after a referral from the U.S. Department of Labor (DOL). DOL’s Veterans’ Employment and Training Service investigated Mr. Hamilton’s compliant, found that it had merit, and attempted to resolve it before referring it for litigation by the Department of Justice.
Tuesday 27 July 2010
U.S. Files Suit Against Georgia Medical Center and Physician; Allegedly Submitted Claims for Worthless Services to Federal Health Care ProgramsRead the Press Release
WASHINGTON - The United States has filed a complaint under the False Claims Act against Dr. Najam Azmat and the Satilla Regional Medical Center in Waycross, Ga., the Justice Department announced today. The complaint, filed in U.S. District Court for the Southern District of Georgia, alleges that the defendants submitted false or fraudulent claims to federal health care programs, such as Medicare. Specifically, the United States contends that certain operative procedures performed by Dr. Azmat at Satilla, and hospital services provided by Satilla in connection with those procedures, were not reasonable and necessary, were incompatible with standards of acceptable medical practice, and were of no medical value. The United States further alleges that the defendants’ misconduct endangered the lives of federal health care program beneficiaries.
The government’s complaint alleges that in the Spring of 2005, Satilla recruited Dr. Azmat, a general surgeon by training, to relocate to Waycross and join the hospital’s medical staff. Shortly after Dr. Azmat came aboard, Satilla allowed him to begin performing endovascular procedures – highly specialized operative procedures that require formal training – in Satilla’s Heart Center cath lab. Satilla did so despite the fact that Dr. Azmat lacked training to perform such procedures, was not qualified or competent to perform such procedures, had never performed such procedures before at any of the hospitals where he had been on staff, and did not even have privileges at Satilla to perform such procedures.
The complaint further alleges that it was obvious to the cath lab nursing staff that Dr. Azmat was not qualified or competent to perform endovascular procedures. The nurses repeatedly voiced their concerns to Satilla’s management, but the hospital took no formal action for at least five months, during which patients were seriously injured and one patient died from hemorrhagic shock following an endovascular procedure during which Dr. Azmat perforated her renal artery. The complaint also states that not only did Satilla’s management ignore its nurses’ concerns for several months, but it also performed no formal oversight of Dr. Azmat, categorically excluding all of his endovascular procedures from Satilla’s peer review process.
"When health care providers cut corners by allowing unqualified doctors to perform complicated medical procedures, patients suffer," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Here, we allege individuals were endangered because of these defendants. The seriousness of this case illustrates why we remain committed to protecting patient safety and the integrity of our federal health care programs by aggressively enforcing our health care fraud laws."
"The filing of this complaint is but one example of the willingness of the Department of Justice to take action to protect the health and safety of the American people. The United States Attorney’s Office will take the necessary legal actions to comply with our vigorous enforcement responsibilities under the False Claims Act," said Edward Tarver, U.S. Attorney for the Southern District of Georgia .
This lawsuit was originally filed by Lana Rogers, a nurse who formerly worked in Satilla’s Heart Center. Under the qui tam, or whistleblower, provisions of the False Claims Act, a private citizen can file an action on behalf of the United States and receive a portion of any recovery. In April of this year, the United States intervened in the lawsuit, and today filed its own complaint. Under the False Claims Act, the government may recover up to three times the amount of its losses, plus civil penalties based on the number of false claims filed.
The suit is entitled United States ex rel. Lana Rogers v. Najam Azmat, M.D. and Satilla Health Services Inc., dba Satilla Regional Medical Center.
The United States’ intervention is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $4 billion.
Three Former Financial Services Executives Indicted for Roles in Fraud Schemes and Conspiracies Involving Investment Contracts for the Proceeds of Municipal BondsRead the Press Release
WASHINGTON — Three former financial services executives were indicted today for their participation in fraud schemes and conspiracies related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced.
The 12-count indictment was filed today in U.S. District Court in New York City. The indictment charges Dominick P. Carollo, Steven E. Goldberg and Peter S. Grimm, all former executives at financial service companies or financial institutions, with participating in wire fraud schemes and separate fraud conspiracies at various time periods from as early as 1999 until 2006.
The charged conspiracies and schemes all relate to the provision of a type of contract, known as an investment agreement, to public entities, such as state, county and local governments and agencies throughout the United States. Major financial institutions, including banks, investment banks, insurance companies and financial services companies, are among the providers of investment agreements and other related municipal finance contracts. Public entities seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issued to raise money for, among other things, public projects. Public entities typically hire a broker to conduct a competitive bidding process among various providers for the award of an investment agreement to invest such money. Competitive bidding for these agreements is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds. The companies that employed Carollo, Goldberg and Grimm all marketed financial products and services, including services as a provider of investment agreements.
"The individuals charged today allegedly participated in complex fraud schemes and conspiracies to manipulate what was supposed to be a competitive process," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The Antitrust Division has previously indicted several individuals and their employer in this matter. Our investigation is ongoing and we will continue to prosecute those who engage in such illegal and anticompetitive behavior."
The indictment charges that Carollo, Goldberg and Grimm conspired with various brokers to attempt to increase the number and profitability of investment agreements and other municipal finance contracts awarded to the provider companies where they were employed. According to court documents, Beverly Hills, Calif.-based Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products, was one of the co-conspirator brokers. Carollo, Goldberg and Grimm obtained from CDR and other co-conspirator brokers information about the prices, price levels or conditions in competing providers’ bids, a practice known as a "last look," which is explicitly prohibited by U.S. Treasury regulations. As a result of the information, various providers won investment agreements and other municipal finance contracts at artificially determined price levels. In exchange for this information, Carollo, Goldberg and Grimm submitted intentionally losing bids for certain investment agreements and other contracts when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.
The indictment also alleges that Carollo, Goldberg, Grimm and co-conspirators misrepresented to municipal issuers or bond counsel that the bidding process was in compliance with U.S. Treasury regulations. This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process. Such conduct placed the tax-exempt status of the underlying bonds in jeopardy.
According to court documents, the efforts by Carollo, Goldberg, Grimm and their co-conspirators to control and manipulate the bidding for investment contracts, and the execution of a variety of certifications that covered up their scheme, also obstructed the Internal Revenue Service’s (IRS) ability to monitor compliance with U.S. Treasury regulations and impeded the IRS’s ability to determine whether municipal issuers had correctly accounted for any money that was owed to the U.S. Treasury.
"The elaborate schemes outlined in the indictment boil down to efforts by these defendants to subvert the competitive bidding process for investment agreements. In the process, they defrauded public entities – and therefore, the public – and put bondholders at risk," said FBI Acting Assistant Director-in-Charge George Venizelos. "The FBI will continue to work with the Antitrust Division to ensure the integrity of competitive bidding in public finance."
"This case demonstrates the value of a coordinated approach by multiple agencies and law enforcement authorities," said IRS Special Agent in Charge Charles R. Pine. "IRS Criminal Investigation contributed to this joint effort by providing financial investigative expertise to uncover this complex and sophisticated scheme. Professionals, including financial service executives, should know we will devote all resources necessary to bring to justice those who commit financial crimes."
The fraud conspiracies with which Carollo, Goldberg and Grimm are charged each carry a maximum penalty per count of five years in prison and a $250,000 fine. The wire fraud charges each carry a maximum penalty per count of 20 years in prison and a $1 million fine. Goldberg is charged with eight counts of conspiracy and two counts of wire fraud, Grimm is charged with five counts of conspiracy and one count of wire fraud, and Carollo is charged with four counts of conspiracy and one count of wire fraud. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The charges announced today resulted from an ongoing investigation conducted by the Antitrust Division’s New York Field Office, the FBI and IRS Criminal Investigation. The division is coordinating its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York. To date, four individuals have pleaded guilty in relation to this investigation. In addition, on Oct. 29, 2009, CDR, two of its employees and one former employee were indicted and charged with participating in bid-rigging and fraud conspiracies and related crimes. The CDR trial is scheduled to begin on Sept. 12, 2011.
Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-264-0390 or the FBI at 212-384-5000.
MS-13 Gang Member Sentenced to Death After Conviction on Racketeering Charges Related to Double MurdersRead the Press Release
WASHINGTON – Chief U.S. District Court Judge Robert J. Conrad Jr. today formally imposed the federal death penalty sentence on Alejandro Enrique Ramirez Umana, aka "Wizard," announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Anne M. Tompkins of the Western District of North Carolina. A 12-person federal jury in Charlotte, N.C., voted unanimously on April 28, 2010, to impose the death penalty against Umana after convicting him on April 19, 2010, on charges related to the murders on Dec. 8, 2007, of Ruben Garcia Salinas and his brother, Manuel Garcia Salinas. Umana is the first La Mara Salvatrucha or MS-13 member in the United States to receive the federal death penalty.
Umana, 25, of Charlotte, was convicted by the jury on all charged counts, including conspiracy to participate in racketeering; two counts of murder in aid of the racketeering enterprise known as MS-13; two counts of murder resulting from the use of a gun in a violent crime; possession of a firearm by an illegal alien; one count of extortion; and two criminal counts associated with witness tampering or intimidation. During the sentencing phase, the jury also found that Umana was responsible for other murders. Specifically, the jury found that on July 27, 2005, Umana killed Jose Herrera and Gustavo Porras in Los Angeles, and on Sept. 28, 2005, Umana participated and aided and abetted the killing of Andy Abarca in Los Angeles.
Umana was indicted by a federal grand jury on June 23, 2008. Witnesses testified at his trial that Umana was a veteran member of MS-13 who illegally came to Charlotte to assist in reorganizing the Charlotte MS-13 cell. Witnesses also testified that on Dec. 8, 2007, while in Las Jarochitas, a family-run restaurant in Greensboro, N.C., Umana shot Ruben Garcia Salinas fatally in the chest and Manuel Garcia Salinas in the head. Witnesses testified that the shootings took place after the Garcia Salinas brothers had "disrespected" Umana’s gang signs by calling them "fake." Firing three more shots in the restaurant, according to trial testimony, Umana injured another individual with his gunfire. Trial testimony and evidence showed that Umana later fled back to Charlotte with MS-13 assistance. Umana was arrested five days later in possession of the murder weapon. Additional evidence and testimony from the trial revealed that while Umana was incarcerated pending trial, he coordinated attempts to kill witnesses and informants. During trial, Umana attempted to bring a knife with him to the courtroom, which was discovered by U.S. Marshals prior to Umana being transported to the courthouse.
"Violent gangs like MS-13 terrorize communities across this country," said Assistant Attorney General Breuer. "As the evidence in this case showed, murder and intimidation are a way of life for some members of this gang. Although there is no punishment that will bring back the lives taken by the defendant, this series of prosecutions of MS-13, and the punishments imposed, should make abundantly clear to gang members that we will not let them operate with impunity. As today’s sentence shows, their criminal actions have serious consequences."
"The imposition of the death penalty - the harshest sentence in the criminal justice system - is a sobering event for all involved in the investigation and prosecution," said U.S. Attorney Tompkins. "The death penalty in this case is fair, just, and merited. The U.S. Attorney’s Office, based upon the facts and evidence, advocated for the death penalty, and the jury agreed that Umana deserved nothing less than the death penalty. I commend the investigators and prosecutors for engaging in this critical process with professionalism and integrity."
"While the outcome of today’s hearing does not change that two innocent people are dead, it will hopefully bring closure to the families and loved ones of the men who were killed and the many other victims left in the wake of the MS-13 crime spree. This case has spanned international borders, taken years of investigation and thousands of hours of arduous work. It proves our law enforcement partners are determined to bring those who break the law to justice, regardless of the obstacles that may block the path," said Owen D. Harris, Special Agent in Charge of the Charlotte Division of the FBI.
"Our goals as law enforcement officers are to put an end to gang violence and see that those who are responsible are punished. This sentence serves as a reminder that gang violence has harsh consequences, and those who choose to be involved in gangs need to understand that their actions will not be tolerated. We have the motivation and determination to keep pursuing gang members. That motivation creates a safer Charlotte," said Charlotte-Mecklenburg Police Chief Rodney Monroe.
The investigation of the MS-13 enterprise in Charlotte has led to charges against 26 MS-13 members. In addition to Umana, six defendants were convicted at trial in January 2010, and 18 others have pleaded guilty. One defendant remains in custody in El Salvador. To date, 11 of the 25 defendants convicted have been sentenced to prison terms ranging from two to 20 years.
The case was investigated by the Charlotte Safe Streets Task Force. The case was prosecuted by Chief Criminal Assistant U.S. Attorney Jill Westmoreland Rose of the U.S. Attorney’s Office for the Western District of North Carolina, and Trial Attorney Sam Nazzaro from the Criminal Division’s Gang Unit. Assistant U.S. Attorneys Don Gast and Adam Morris of the U.S. Attorney’s Office for the Western District of North Carolina were also members of the government’s trial team.
Former CEO of the Morgan Crucible Co. Found Guilty of Conspiracy to Obstruct JusticeRead the Press Release
WASHINGTON — A federal jury in Philadelphia today convicted Ian P. Norris, the former CEO of The Morgan Crucible Company plc, a United Kingdom corporation, of conspiring with others to obstruct justice, the Department of Justice announced.
In 2004, a federal grand jury indicted Norris, a citizen of the United Kingdom, on one count of fixing prices of carbon brushes and other carbon products, one count of conspiring to obstruct justice, and two counts of obstructing justice in connection with the Department of Justice’s antitrust investigation of price fixing in the carbon products industry. Norris was extradited to the United States in March 2010 on the three obstruction charges. The jury returned a guilty verdict today on the conspiracy to obstruct justice count and not guilty verdicts on the witness tampering count and the count of corruptly persuading others to destroy or conceal documents. Sentencing has been scheduled for Nov. 2, 2010.
The department said that Norris conspired with his subordinates to obstruct the grand jury’s investigation. Morgan Crucible employees conspired with Norris to create a false script that employees of both Morgan Crucible and a competitor were to follow when questioned in the investigation. Also, a document destruction task force was formed to collect and destroy or conceal documents from the grand jury, the department said.
"The Antitrust Division uncovered this elaborate and egregious obstruction of justice scheme," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "Today’s verdict holds Norris accountable for his actions and sends a message that corporate leaders must promote a culture of law abiding conduct within their companies or be prepared to face stiff prison sentences. The Antitrust Division will remain vigilant in protecting the integrity of its criminal investigations from obstruction in order to effectively carry out its mandate to protect American businesses and consumers from price-fixing cartels."
Carbon products are used to transfer electrical current in automobiles, trains, public transit vehicles and consumer products and are used in pumps and compressors to contain liquids and gases.
Including today’s conviction, more than $11 million in criminal fines have been obtained and four executives and two companies have pleaded guilty or have been convicted as a result of the department’s antitrust investigation of price fixing in the carbon products industry.
The Morgan Crucible Company plc, based in Windsor, England, pleaded guilty in 2002 to one count of tampering with witnesses and one count of document destruction. The company paid a $1 million criminal fine.
A former subsidiary of the company, Morganite Inc., which was based in Dunn, N.C., pleaded guilty in 2002 to fixing prices of carbon brushes and other carbon products and paid a $10 million fine.
In addition, three subordinates of Norris previously pleaded guilty to obstruction charges. Jacobus Johan Anton Kroef, the former Chairman of the Industrial and Traction Division of The Morgan Crucible Company plc, pleaded guilty in 2003 to witness tampering. Robin D. Emerson, former pricing coordinator at Morganite Electrical Carbon Ltd. of Swansea, U.K., pleaded guilty in 2003 to corruptly persuading another person to destroy or conceal documents in connection with the investigation. F. Scott Brown, the former Global President and a member of the Board of Directors of Morgan Advanced Materials and Technology Inc. (MAMAT), now headquartered in Greenville, S.C., pleaded guilty in 2003 to aiding and abetting document destruction in connection with the investigation. Morganite Electrical Carbon Ltd. and MAMAT are subsidiaries of The Morgan Crucible Company plc.
The conspiracy count carries a maximum penalty of five years in prison and a $250,000 fine.
Trial attorneys Lucy McClain, Richard Rosenberg, and Kimberly Justice of the Antitrust Division’s Philadelphia Field Office prosecuted the case.
Former Army Contractor Charged with Involuntary Manslaughter and Assault After Collision in Kuwait Kills One Sailor and Seriously Injures AnotherRead the Press Release
WASHINGTON – A former U.S. Army contractor was arrested today in Newport News, Va., for allegedly killing one sailor and seriously injuring another in a vehicular collision in Kuwait, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Brigadier General Colleen McGuire, Provost General of the Army and Commanding General of the U.S. Army Criminal Investigation Command.
Morgan Hanks, 25, of Newport News, was arrested on charges contained in a two-count indictment returned by a federal grand jury on July 13, 2010, and unsealed today in the Eastern District of Virginia. The indictment charges Hanks with one count of involuntary manslaughter for the death of Brian Patton, and one count of assault resulting in serious bodily injury for injuring David Morgan.
According to the indictment, in November 2009, Hanks was employed in Kuwait as a canine handler by Combat Support Associates and Combat Support Associates Ltd. (CSA). CSA provided site security and force protection at U.S. Army bases in Kuwait. The indictment alleges that on approximately Nov. 19, 2009, Hanks was operating a motor vehicle in excess of the posted speed limit on Alternate Supply Route Aspen in Kuwait. The indictment alleges that Hanks attempted to pass an eight-vehicle convoy on the two-lane road while traveling uphill and caused a collision with another vehicle in which Patton and Morgan were traveling. The collision killed Patton and left Morgan with a serious brain injury and multiple fractures.
Hanks is charged under the Military Extraterritorial Jurisdiction Act (MEJA), a statute that gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, contractors or subcontractors of the Department of Defense. If convicted, Hanks faces up to 10 years in prison.
The case was investigated by the U.S. Army’s Criminal Investigative Division and is being prosecuted by Senior Trial Attorneys Micah D. Pharris and Steven C. Parker of the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP) and Assistant U.S. Attorney Eric Hurt for the Eastern District of Virginia.
The Criminal Division announced the formation of HRSP on March 30, 2010. The new section represents a merger of the Criminal Division’s Domestic Security Section (DSS) and the Office of Special Investigations (OSI).
An indictment is a formal accusation of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless and until convicted through due process of law.
Monday 26 July 2010
Subsidiary of Univision Communications Inc. Pleads Guilty to Conspiracy to Commit Mail Fraud and Agrees to Pay $1 Million to Resolve Related Criminal and Administrative CasesRead the Press Release
WASHINGTON – Univision Services Inc., a wholly-owned subsidiary of Univision Communications Inc., pleaded guilty today to one count of conspiracy to commit mail fraud in connection with a scheme to obtain increased radio broadcast time, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S Attorney André Birotte Jr. of the Central District of California.
According to court documents, Univision Communications formerly owned Univision Music Group, a collection of entities that produced recordings and published music for the Latin music market. Univision Services admitted that executives, employees and agents of Univision Music Group conspired to commit and did commit mail fraud from approximately 2002 to September 2006. According to court documents, the mail fraud was related to a nationwide scheme in which Univision Music Group executives, employees and agents made illegal cash payments to radio station programmers and managers in exchange for increased radio broadcast time for Univision Music Group recordings. The cash payments were made without on-air acknowledgments or payment of broadcast fees to the radio stations, as required by law.
According to court documents, executives, music promoters and agents of Univision Music Group used fraudulent contract invoices and payments to obtain and conceal the nature of the cash that funded the scheme.
"Illegal cash payments never make for a good business model. Listeners have a right to know if someone has paid for increased air time or promotions," said Assistant Attorney General Breuer. "The Department of Justice will continue to work cooperatively with our partners at the FCC to ensure businesses operate within established laws and regulations."
Under its plea agreement, Univision Communications, which is no longer involved in the Latin music recording and publishing business, agreed to plead guilty to one count of conspiracy to commit mail fraud, to pay a fine of $500,000 and to cooperate fully with the department and other law enforcement agencies in related matters.
In a related administrative proceeding, Univision Radio Inc., another wholly-owned subsidiary of Univision Communications, has agreed to pay the U.S. Treasury $500,000 and implement a compliance plan to end a parallel investigation by the Federal Communications Commission’s (FCC) Enforcement Bureau.
The case was prosecuted by Senior Trial Attorney Peter B. Loewenberg of the Criminal Division’s Fraud Section with assistance from Assistant U.S. Attorney for the Central District of California, Richard Robinson. The investigation was conducted by the Department of Justice, the U.S. Postal Inspection Service and the FCC Office of Inspector General.
Friday 23 July 2010
Miami-Area Husband and Wife Plead Guilty in $13.7 Million HIV Infusion Clinic Fraud SchemeRead the Press Release
WASHINGTON – Miami-area husband and wife Modesto and Victoria de la Vega pleaded guilty today in U.S. District Court in Miami for their participation in a $13.7 million HIV infusion Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS). Also today, two Miami-area residents were sentenced to prison for their participation in a separate HIV infusion Medicare fraud scheme.
Modesto de la Vega, 59, and his wife, Victoria de la Vega, 59, pleaded guilty before U.S. District Court Judge Adalberto Jordan to one count of conspiracy to defraud the United States, to cause submission of false claims to Medicare, and to pay health care kickbacks; one count of conspiracy to commit health care fraud; and three counts of submitting false claims, as charged in a March 2010 indictment. At sentencing, scheduled for Nov. 5, 2010, Modesto and Victoria de la Vega each face a maximum penalty of five years in prison for the conspiracy to defraud the United States count and each false claims count, and 10 years in prison for the health care fraud conspiracy count.
According to plea documents, Modesto de la Vega was an owner and operator of T&R Rehabilitation Professional Corp., a Miami clinic that purported to provide expensive injection and infusion treatments to patients with HIV. Victoria de la Vega was an office assistant at T&R. Modesto de la Vega admitted at his plea hearing that he agreed with his co-defendants and others to enlist patient recruiters and patients, among others, into a scheme to defraud Medicare. Modesto and Victoria de la Vega admitted that they knew the patients at T&R did not need and/or did not receive the purported services, and that it would be necessary to pay kickbacks and bribes to the patients so that T&R could bill the Medicare program for the HIV infusion services that were not medically necessary and/or were not provided.
The defendants admitted that from approximately January 2003, through approximately July 2005, they and their co-defendants caused T&R to submit fraudulent claims to the Medicare program in the amount of approximately $13.7 million. Medicare paid approximately $4.1 million of these fraudulent claims.
In a separate and unrelated case, two Miami-area residents were sentenced today by U.S. District Judge Ursulla Ungaro in the Southern District of Florida for their participation in a similar HIV infusion Medicare fraud scheme. Keith Earnest Humes, a patient recruiter for a fraudulent HIV/AIDS infusion clinic known as Tendercare Medical Center Inc., was sentenced to 84 months in prison and three years of supervised release, and was ordered to pay restitution jointly and severally with co-defendants in the amount of $539,485. Lawrence Edward Humes, also a patient recruiter for Tendercare, was sentenced to 33 months in prison and three years of supervised release, and was ordered to pay restitution jointly and severally with co-defendants in the amount of $222,967. In addition, based on the court’s consideration of relevant conduct, Keith Humes was ordered to pay further restitution in the amount of $346,889.
According to court documents, Keith Humes and Lawrence Humes admitted that they conspired with each other and other individuals to defraud Medicare by submitting false claims for injection and infusion treatments that were medically unnecessary and that in most instances were not provided. Keith Humes and Lawrence Humes paid kickbacks to beneficiaries in return for their Medicare numbers and signatures, which Tendercare used to submit the false claims. Between January 2005 and December 2007, Tendercare submitted approximately $5.8 million in false and fraudulent claims to Medicare for treatments that were medically unnecessary or never provided. Medicare paid Tendercare approximately $2.7 million.
Today’s guilty pleas and sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies , Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The cases were prosecuted by attorneys from the Criminal Division’s Fraud Section, including Trial Attorneys N. Nathan Dimock, Joseph Beemsterboer, Charles D. Reed, former Trial Attorney Michael Padula, former Fraud Section Assistant Chief John S. (Jay) Darden and former Fraud Section Special Trial Attorney Martha Talley, on detail from HHS-OIG. The cases were investigated by the FBI and HHS-OIG and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals and organizations that collectively have billed the Medicare program for more than $1.85 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.
Indiana-Based Hoosier Energy Rural Electric Cooperative Reaches Settlement to Resolve Clean Air Act ViolationsRead the Press Release
WASHINGTON - Hoosier Energy Rural Electric Cooperative Inc., an Indiana electric generation and transmission cooperative, has agreed to install state-of-the-art pollution control technology at its two coal-fired power plants in Indiana, the Justice Department and Environmental Protection Agency (EPA) announced today. The settlement, filed in federal court today, will reduce harmful air pollution by more than 24,500 tons per year, and requires Hoosier to pay a civil penalty of $950,000 and spend $5 million on environmental mitigation projects.
The settlement requires Hoosier to reduce air pollution from the cooperative’s Merom and Ratts Stations, located in southwest Indiana. Emissions of sulfur dioxide (SO2) will be reduced by almost 20,000 tons and nitrogen oxides (NOx) by more than 1800 tons. The settlement will also reduce harmful sulfuric acid mist and particulate matter emissions. To achieve these reductions, Hoosier will upgrade existing, and install new, pollution controls at the Merom and Ratts plants, and comply with annual tonnage limitations across its system. Hoosier estimates that it will spend between $250 and $300 million upgrading and installing pollution controls at its coal-fired units through the end of 2015.
The state of Indiana joined in the settlement and will receive $100,000 of the $950,000 civil penalty.
“The large reductions in harmful air pollutants including sulfuric acid mist emissions secured by this settlement will have a significant beneficial impact on air quality in Indiana and downwind states,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The Justice Department is committed to vigorously enforcing our nation’s environmental laws, and we are pleased that Hoosier has agreed to install state-of-the art controls that will significantly reduce harmful emissions.”
“This settlement continues our important enforcement initiative to reduce harmful air pollution from coal-fired power plants and provide the public with cleaner, healthier air to breathe,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Pollution from these sources can cause severe respiratory and cardiovascular impacts, and are significant contributors to acid rain, smog and haze. Coal-fired power plants of all sizes are large sources of air emissions, and EPA is committed to making sure that they all comply with the law.”
Hoosier will spend $5 million on environmental mitigation projects in its service territory to address the impacts of past emissions. Hoosier must direct $200,000 for projects to mitigate the harm caused by Hoosier’s excess emissions at lands owned by the U.S. Forest Service. The remaining $4.8 million will be spent on one or more of the following projects:
- Coal Bed Methane: Hoosier will capture and combust methane from coal beds to generate at least 10 megawatts of electricity. Carbon dioxide emissions resulting from the combustion of methane will be supplied to a greenhouse for use as a fertilizer.
- Wood Appliance Changeout and Retrofits: Hoosier will sponsor a wood-burning appliance changeout and retrofit project. Hoosier will provide incentives through rebates, discounts, and in some instances, actual replacement of old, inefficient, high polluting wood-burning technology.
- Clean Diesel Retrofits: Hoosier will retrofit in-service, public diesel engines with emission control equipment designed to reduce air pollutants.
- Solar Technologies: Hoosier will install solar power systems on public schools or non-profit groups in the company’s service territory.
The settlement marks the federal government’s 20th settlement under its national enforcement initiative to reduce emissions from coal-fired power plants under the Clean Air Act’s New Source Review requirements. SO2 and NOx, two key pollutants emitted from power plants, have numerous adverse effects on human health and the environment. These pollutants are converted in the air to fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. SO2 and NOx are also significant contributors to acid rain, smog and haze. In addition, air pollution from power plants can drift significant distances downwind, thereby effecting not only local communities, but also communities in a much broader area.
The proposed settlement was lodged in the U.S. District Court for the Southern District of Indiana and is subject to a 30-day public comment period and final court approval.
Houston-Area Resident Sentenced to 21 Months in Prison for Medicare Fraud Scheme Involving Claims of Hurricane Damage to Power WheelchairsRead the Press Release
WASHINGTON – Paula Whitfield, a patient recruiter for a Houston durable medical equipment (DME) company, was sentenced today to 21 months in prison in connection with a $3 million power wheelchair fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Whitfield, 43, was also ordered by U.S. District Judge Ewing Werlein Jr. of the Southern District of Texas to pay $807,781 in restitution. In addition, Whitfield was sentenced to three years of supervised release following her prison term.
On April 16, 2010, after a week-long trial, a federal jury convicted Whitfield of one count of conspiracy to commit health care fraud and one count of health care fraud. Helen Etinfoh, the former owner and operator of the DME company, Luant & Odera Inc., was also convicted of one count of conspiracy to commit health care fraud and four counts of health care fraud. Etinfoh is scheduled to be sentenced Aug. 13, 2010.
According to evidence presented at trial, Whitfield was a recruiter for Luant, which was doing business as Tonni Medical Equipment & Supplies. Evidence at trial showed that Whitfield was paid kickbacks in exchange for providing the company with beneficiaries in whose names bills could be submitted to Medicare. Etinfoh and other co-conspirators submitted false and fraudulent claims to Medicare for medically unnecessary DME, including power wheelchairs, wheelchair accessories and motorized scooters.
Evidence at trial showed that, based on representations from Whitfield and other recruiters, Luant would bill Medicare under a special code that designated the power wheelchairs as replacements for wheelchairs lost during hurricanes that hit the Houston area in fall 2008. In fact, the hurricanes did not damage the wheelchairs. Certain beneficiaries testified that they did not even have a power wheelchair before receiving the ones provided to them by Luant. Luant used the hurricane code because it allowed the company to submit claims to Medicare without a doctor’s order.
At trial, beneficiaries in whose names claims were submitted to Medicare testified that recruiters whom they had never met, including Whitfield, came to their homes and offered them free power wheelchairs in exchange for their Medicare information. The beneficiaries, all of whom could walk, testified that they neither needed nor used the power wheelchairs delivered to them by Luant, which were often billed to Medicare at more than $6,000 per chair.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Special Agent-in-charge Richard C. Powers of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of the Inspector General (HHS-OIG), Office of Investigations; and the Texas Attorney General Greg Abbott.
The case was tried by Trial Attorneys Sam S. Sheldon and Joseph S. Beemsterboer, with assistance from Assistant Chief John Neal and Trial Attorney Jennifer L. Saulino of the Criminal Division’s Fraud Section. 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, Strike Force operations in seven districts have obtained indictments of more than 810 individuals who collectively have falsely billed the Medicare program for more than $1.85 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.
Federal Court in Chicago Permanently Bars Mother/Daughter Team from Preparing Tax Returns for OthersRead the Press Release
WASHINGTON – A federal district judge in Chicago has permanently barred Natalie Bradford, individually, and operating as K & N Tax Pros Inc., and Kristine Burkland-Valdez, individually, and operating as K & N Tax Pros Inc. and Tax Pros Inc., from preparing federal tax returns for others, the Justice Department announced today. The court’s orders also prohibit Bradford and Burkland-Valdez from allowing others to use their names to advertise or otherwise promote any tax preparation business. Bradford and Burkland-Valdez consented to the civil injunction orders.
According to the government complaint in the case, the Elmhurst, Ill., company prepared 23,823 federal tax returns for calendar years 2005 through 2009. The Internal Revenue Service (IRS) examined 100 of these returns and found that 94% of the returns contained misstatements. The examinations of these returns resulted in the assessment of additional taxes totaling $830,147.
According to the complaint, the returns that the defendants, a mother-daughter team, prepared for customers contained fabricated or falsified deductions such as employee business expenses, mileage, cash contributions, rental losses and medical expenses. Court papers allege that in January 2009, Burkland-Valdez formed a second entity, Tax Pros Inc., after she learned of the IRS’s investigation of the tax preparation activities of K & N Tax Pros Inc.
Department of Justice Announces Plans to Prepare New ADA RegulationsRead the Press Release
WASHINGTONThe Justice Department announced today that it will publish four new Americans with Disabilities Act (ADA) proposals addressing the accessibility of websites, the provision of captioning and video description in movies shown in theaters, accessible equipment and furniture, and the ability of 9-1-1 centers to take text and video calls from individuals with disabilities. The proposals are in the form of advance notices of proposed rulemaking, or ANPRMs, which provide information on these ADA issues and ask questions seeking comments and information from the public. The four ANPRMs will be published in the Federal Register on July 26, 2010.
“We are working hard to ensure that the ADA keeps up with technological advances that were unimaginable 20 years ago,” said Attorney General Holder. “Just as these quantum leaps can help all of us, they can also set us back – if regulations are not updated or compliance codes become too confusing to implement. To avoid this, the Department will soon publish four advanced notices of proposed rulemaking regarding accessibility requirements for websites, movies, equipment and furniture, and 9-1-1 call-taking technologies.”
Web Accessibility
State and local governments, businesses, educators, and other organizations covered by the ADA are increasingly using the web to provide information, goods, and services to the public. In the web accessibility ANPRM, the department presents for public comment a series of questions seeking input regarding how the department can develop a workable framework for website access that provides individuals with disabilities access to the critical information, programs, and services provided on the web, while respecting the unique characteristics of the internet and its transformative impact on everyday life.
Next Generation (NG) 9-1-1
9-1-1 centers are moving towards an Internet-enabled network to allow the general public to make a 9-1-1 “call” via voice, text, or video over the Internet and directly communicate with personnel at the centers. The NG 9-1-1 ANPRM seeks information on how the centers may be able to provide direct access to 9-1-1 for individuals with disabilities as they implement new communication technologies.
Captioning and Video Description in Movies Shown in Movie Theaters
Recent technologies have been developed to provide closed captions and video description in movies being shown at movie theaters. Movie studios have begun to produce and distribute movies with captioning and video description. However, these features are not generally made available at movie theaters. In the captioning and video description ANPRM, the department asks for suggestions regarding the kind of accessibility requirements for captioning and video description it should consider as proposed rules for public comments, particularly in light of the industry’s conversion to digital technology.
Equipment and Furniture
Full use of the nation’s built environment can only be fully achieved by the use of accessible equipment. There is now improved availability of many different types of accessible equipment and furniture, ranging from accessible medical exam tables, chairs, scales, and radiological equipment and furniture to “talking” ATMs and interactive kiosks. In the equipment and furniture ANPRM, the department poses questions and seeks comments from the public, covered entities, equipment manufacturers, advocacy and trade groups about the nature of accessibility issues and proposed solutions for making equipment and furniture accessible to persons with disabilities.
The four ANPRMs will be available for review today at 3:00 P.M. EDT at http://ada.gov/anprm2010.htm.
Thursday 22 July 2010
U.S. Announces Settlement of Actions to Enforce Payment Obligations for Cleanup of New Jersey Superfund SiteRead the Press Release
WASHINGTON - Champion Chemical Company, Imperial Oil Company Inc. and Imperial’s two former officers have agreed to pay at least $1.4 million to resolve actions to enforce a prior agreement to reimburse cleanup costs incurred by the federal government at the Imperial Oil Company Inc./Champion Chemical Company Superfund Site in Marlboro Township, N.J., the Department of Justice and the Environmental Protection Agency (EPA) announced today.
According to the terms of thesettlement filed today in federal court in Trenton, N.J., Champion and Imperial will pay more than $1 million and Imperial’s two former officers, Scott Stevens and George Kulick, will pay $360,000 to satisfy the companies’ obligations according to a 2001 consent decree. The 2001 consent decree resolved the companies’ liability under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) for past cleanup costs incurred by the United States and the state of New Jersey in connection with the site. According to that decree, the companies committed to make future monthly and annual payments based on Imperial’s gross profits. On March 29, 2007, the United States filed a motion to enforce the 2001 decree, seeking more than $1 million in payments that Champion and Imperial failed to make, as well as stipulated penalties. The United States also filed a claim under the Federal Debt Collection Procedures Act against Stevens and Kulick, alleging that excessive salaries they received beginning in 2001 constituted fraudulent conveyances from Imperial of assets that should have been paid to the federal government.
In addition to the $1.4 million payment, the United States will receive all of the net proceeds from the sale of the site, which is owned by Champion, and proceeds from the companies’ remaining insurance coverage. The settlement ensures that the United States will receive all remaining non-bankruptcy assets of both Imperial, which is in Chapter 7 bankruptcy, and Champion, which is a dormant company with no assets other than the site.
"The United States expects parties to honor their consent decree obligations and any failure to do so is a very serious violation," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division. "This agreement will ensure that Champion, Imperial and their corporate officers live up to their prior obligations."
"Under Superfund, parties responsible for damaging the environment are required to pay for the cost of the toxic cleanup," said EPA Regional Administrator Judith A. Enck. "This New Jersey case is a testament to EPA's hard work to uphold a basic principle of the Superfund law -- the polluter pays."
The ground water at the 15-acre site is contaminated by volatile organic compounds (VOCs), PCBs and metals, among other contaminants. Additionally, the surface soil at the site is contaminated with heavy metals, including chromium, lead and arsenic, as well as PCBs. To date, the site has been addressed by EPA and the New Jersey Department of Environmental Protection. EPA has conducted numerous cleanup activities at the site, including the removal of a waste clay pile and arsenic contaminated soil from adjoining residential properties.
The consent decree, lodged in the U.S. District Court for the District of New Jersey, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department website at www.justice.gov/enrd/Consent_Decrees.html .
Two Individuals Plead Guilty to Participating in International Child Pornography GroupRead the Press Release
WASHINGTON – Two individuals have pleaded guilty to charges related to their participation in an international group of child pornography traffickers who used a social networking site to share thousands of sexually explicit images, announced Assistant Attorney General Lanny A. Breuer for the Criminal Division and Acting U.S. Attorney Robert Cessar for the Western District of Pennsylvania.
Fred Woolum, 58, of Lexington, Va., pleaded guilty today before U.S. District Judge Arthur A. Schwab to one count of engaging in a child exploitation enterprise. Daniel Cox, 54, of Houston, pleaded guilty Wednesday before Judge Schwab to one count of conspiring to distribute and receive child pornography. Information presented at court established that from January 2007 to September 2009, Woolum, Cox and others distributed images and videos of children being sexually abused to other members of an international group that had restricted membership and was formed on a social networking website. Members of the group distributed to one another thousands of sexually explicit images and videos of children, many of which graphically depicted prepubescent, male children, including some infants, being sexually abused and sometimes sodomized or subjected to bondage.
Sentencing has been set for Feb. 18, 2011, for Woolum and March 4, 2011, for Cox. At sentencing, Woolum faces a mandatory minimum sentence of 20 years in prison and a maximum sentence of life in prison, with the possibility of lifetime supervised release. Cox faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, with the possibility of lifetime supervised release. Woolum and Cox both face a fine of up to $250,000.
These cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Immigration and Customs Enforcement and the High Tech Investigative Unit of CEOS conducted the investigation that led to the prosecution of Woolum and Cox. CEOS Trial Attorney Barak Cohen and Assistant U.S. Attorney Craig W. Haller prosecuted the cases.
Three Colombian Nationals Extradited to the United States to Face Alien Smuggling and Visa Fraud ChargesRead the Press Release
WASHINGTON – Three Colombian nationals have been extradited from Colombia to the United States on charges of conspiracy to smuggle aliens for profit, alien smuggling for profit, and conspiracy to commit visa fraud in connection with their alleged roles in an extensive and sophisticated visa fraud scheme through which they fraudulently procured visas from the U.S. Embassy in Bogotá, Colombia. The extraditions were announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Ronald C. Machen Jr. of the District of Columbia; Eric J. Boswell, Assistant Secretary for Diplomatic Security and Director of the Office of Foreign Missions, U.S. State Department; and Director John Morton of U.S. Immigration and Customs Enforcement (ICE).
Heliber Toro Mejia, 52; Humberto Toro Mejia, 60; and Luz Elena Acuna Rios, 52; all of Bogotá, were charged in a three-count indictment returned by a federal grand jury in the District of Columbia on Feb. 4, 2009. The defendants were arrested on June 2, 2009, by Colombian authorities in Bogotá on provisional arrest warrants in response to a U.S. government request for their arrest. The defendants have been in custody in Colombia since their arrest and prior to their extradition to the United States. Humberto Toro Mejia was arraigned in U.S. District Court for the District of Columbia today and ordered detained by U.S. District Judge Ellen S. Huvelle. Heliber Toro Mejia and Luz Elena Acuna Rios were arraigned on July 14, 2010, and ordered detained by U.S. Magistrate Judge Alan Kay.
According to the indictment, the defendants were the leaders of an extensive and sophisticated visa fraud ring that profited by assisting otherwise inadmissible Colombian nationals in fraudulently procuring visas from the U.S. Embassy in Bogotá. To support the visa applications of alien applicants, the defendants and other conspirators allegedly created fictitious backgrounds for the aliens and fraudulent supporting documentation, including paperwork that appeared to be official Colombian government-issued documents such as tax filings and birth and marriage certificates. The indictment alleges that the conspirators coached the aliens on how to pass the visa interview at the U.S. Embassy in Bogotá by answering questions untruthfully. During the course of this conspiracy, which according to the indictment lasted between July 15, 2005, and March 20, 2007, more than 100 aliens are alleged to have fraudulently obtained or attempted to fraudulently obtain a U.S. visa. According to the indictment, many of those aliens who did obtain a fraudulently-procured visa used that visa to enter the United States.
If convicted, each defendant faces a maximum sentence of 10 years in prison for conspiracy to commit alien smuggling for profit, 10 years in prison for alien smuggling for profit, and five years in prison for conspiracy to commit visa fraud. Each defendant is also subject to a maximum fine of $250,000 for each charge.
The charges are the result of “Operation Coffee Country,” a coordinated international investigation by the Diplomatic Security Service - Regional Security Office in Bogotá and the ICE Attaché’s Office in Bogotá. The Diplomatic Security Service - Criminal Investigations Division and the ICE Special Agent in Charge for Homeland Security Investigations in Washington, D.C. provided substantial assistance.
The government of Colombia, including the Colombian Department of Administrative Security and Colombian prosecutors, provided significant assistance and support during the investigation, arrest and extradition of the defendants. The Office of International Affairs in the U.S. Department of Justice’s Criminal Division and the U.S. Embassy in Bogotá worked with their counterparts in Colombia to effect the extradition.
The case is being prosecuted by Trial Attorney James S. Yoon of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Frederick W. Yette of the U.S. Attorney’s Office for the District of Columbia. Significant assistance from the Criminal Division’s Office of International Affairs was provided by Trial Attorney Nicolette Romano.
An indictment is merely a formal accusation. It is not proof of guilt, and a defendant is presumed innocent unless and until proven guilty.
New Health Care Access Guidance Promotes Preventive Medical Care Services for People with Mobility DisabilitiesRead the Press Release
WASHINGTON –The Department of Justice’s Civil Rights Division and the Department of Health and Human Services’ (HHS) Office for Civil Rights today issued new technical assistance guidance for medical providers which will help people with mobility disabilities obtain accessible medical care. Access to Medical Care for Persons with Mobility Disabilities will assist medical care providers in understanding how the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973 apply to them. This 19-page document includes an overview of general ADA requirements, commonly asked questions, and illustrated examples of accessible facilities, examination rooms and medical equipment.
“It is critical that all individuals, including those with disabilities, have access to health care. But far too often, barriers prevent people with disabilities from visiting a doctor’s office or a clinic,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez.
“Due to barriers, people with disabilities are less likely to receive even basic medical treatment that will prevent routine small problems from turning into major and possibly life threatening ones. This guidance promotes the core values of the health care reform legislation championed by this Administration,” said Georgina C. Verdugo, director of HHS’ Office for Civil Rights.
Title III of the ADA prohibits discrimination on the basis of disability by private hospitals, doctors’ offices, clinics and other health care providers. Section 504 of the Rehabilitation Act of 1973, as amended prohibits disability based discrimination by all health care providers that receive federal financial assistance.
For more information about the ADA or to obtain copies of Access to Medical Care for Individuals with Mobility Disabilities visit www.ada.gov or call the ADA Information Line at 1-800-514-0301 (V) or 1-800-514-0383 (TTY). For more information about Section 504, see www.hhs.gov/ocr/.
Former Department of State Employee Charged with Defrauding the United States and Iraq in Connection with a $147,000 Fraud SchemeRead the Press Release
WASHINGTON — A former Department of State employee has been charged for his alleged role in a $147,000 wire fraud scheme involving the conversion of government-owned property for the employee’s use, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Robert D. Hearn, 55, was charged in a five-count indictment in the Southern District of Texas with wire fraud and conversion stemming from a scheme to defraud the United States and Iraq. Hearn was arrested this morning in Temple, Texas, and will make his initial appearance in court today. According to the indictment, from April 2005 to September 2006, Hearn worked for the Department of State’s Iraq Reconstruction Management Office (IRMO) and was responsible for providing advice to the director of the port at Umm Qasr, in Basra, Iraq. The port director was an official with the Iraqi Ministry of Transportation.
The indictment alleges that, in late 2005 and early 2006, Hearn orchestrated the transfer of approximately 60 accommodations caravans and other equipment from the site of a U.S.-funded power plant project in Khor Az Zubair, Iraq, to the port, purportedly on behalf of IRMO. These caravans served as living and office accommodations for government and private personnel, but since construction of the power plant was winding down, the caravans were no longer needed at that location.
According to the indictment, Hearn had no authority or authorization to negotiate the transfer of any equipment or to sign paperwork on behalf of IRMO to accept such equipment, which he allegedly did on Dec. 11, 2005. When U.S. officials notified Hearn that IRMO did not have the necessary property-management structure and therefore could not take control of the equipment, the indictment alleges that Hearn directed an Iraqi employee of the Ministry of Transportation to sign for and accept the equipment on behalf of the Iraqi government.
According to the indictment, the individual who signed for the equipment also was employed by Bawabet Al Amer Company (BAC), a private Iraqi company operating at the port. BAC provided security, through subcontractors, as well as lodging, office space and dining services for government and private personnel. The indictment alleges that from the summer of 2005 to the fall of 2006, Hearn controlled the day-to-day operations of BAC, and on behalf of BAC and a silent investor, negotiated business contracts, provided input in BAC’s hiring decisions and directed the work of BAC employees.
According to the indictment, Hearn signed a three-year lease agreement on Jan. 1, 2006, on behalf of IRMO, permitting BAC to use a portion of the port, which during Hearn’s tenure became known as "Bob’s Camp." Hearn allegedly had no authority to enter into this agreement in his official capacity with IRMO and did not discuss it with his supervisors. A portion of the transferred accommodations caravans was installed by BAC employees in "Bob’s Camp."
On Sept. 14, 2006, the day before Hearn was scheduled to be reassigned to IRMO’s Baghdad office, he allegedly negotiated a rental agreement on behalf of BAC involving several of the transferred accommodations caravans. According to the indictment, Hearn directed that rental payments be wired to a bank account in Conroe, Texas, which he controlled. In this manner, Hearn allegedly received $147,000 from the lessee business, which he used for personal and business expenses.
The indictment alleges Hearn’s planned reassignment was based in part on his failure to carry out his function of advising the port director. Hearn eventually resigned from the State Department.
If convicted, Hearn faces 20 years in prison and a $250,000 fine on each of the four wire fraud counts. If convicted on the conversion charge, he faces a maximum of 10 years in prison and a $250,000 fine.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
The case is being prosecuted by Eric G. Olshan of the Criminal Division’s Public Integrity Section and Trial Attorney Catherine Votaw, who is detailed from the Special Inspector General for Iraq Reconstruction (SIGIR) to the Criminal Division’s Fraud Section as part of a joint Department of Justice and SIGIR prosecutorial initiative.
The case was investigated by SIGIR, the Defense Criminal Investigative Service, the FBI, the U.S. State Department Office of Inspector General , and members of the National Procurement Fraud Task Force (NPFTF) and the International Contract Corruption Task Force (ICCTF).
The NPFTF, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate, and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations worldwide, including in Kuwait, Afghanistan and Iraq.
Wednesday 21 July 2010
Settlement Agreement Will Ensure Greater Accessibility at First President George Washington’s EstateRead the Press Release
WASHINGTON - The Justice Department announced today a settlement agreement with the Mount Vernon Ladies Association of the Union (MVLA), which owns and maintains Mount Vernon Estate & Gardens, the home of the nation’s first president, George Washington. The department and MVLA reached an amicable agreement under which the association will continue to bring Mount Vernon’s structures and facilities into compliance with the Americans with Disabilities Act (ADA) accessible design standards and provide effective communication of the content of its audiovisual presentations, exhibitions, public programs and other offerings for people who are deaf, hard of hearing, blind or have low vision.
"As the nation celebrates the 20th anniversary of the ADA, we commend the Mount Vernon Ladies Association for its cooperation and for its innovative efforts to improve access to this historic estate and to its exhibitions and programs for individuals with disabilities," said Thomas E. Perez, Assistant Attorney General for Civil Rights. "This agreement shows that two lofty goals – providing access for individuals with disabilities, and preserving and understanding our nation’s historic past – are not in conflict. This agreement will ensure equal access for individuals with disabilities who want to participate in the wide range of public offerings of one of the most important historic estates in the United States."
Under the settlement agreement Mount Vernon will:
- Modify and make accessible the primary walkway to the main entrance for visitors to Mount Vernon;
- Complete installation of an accessible surface along the gravel walk connecting the newly constructed facilities with the historic mansion;
- Provide a shallower entry ramp and complete other modifications to the route into and out of the ground floor of the historic mansion;
- Provide an accessible walk to and a level landing at the entrance of the shops, food court and Mount Vernon Inn;
- Modify the controls of interactive exhibits so that they are usable by visitors with mobility disabilities;
- Replace or relocate objects that protrude from walls and exhibits so that they are no longer a hazard to visitors who are blind or have low vision;
- Provide closed captioning for its centerpiece films in the Revolutionary War Theater and the Legacy Theater;
- Provide sign language and oral interpreted tours of George Washington’s mansion for people who are deaf or hard of hearing, on advanced request;
- Provide walk-in audio-described tours for people who are blind or have low vision of the mansion, Estate grounds and outbuildings, and of the exhibitions, computer interactives, and audiovisual presentations in the Ford Orientation Center and the Donald W. Reynolds Museum and Education Center;
- Provide tactile access to selected objects and reproductions for people who blind or have low vision to augment information provided as part of the audio-described tours;
- Provide alternate formats (e.g., audio, large print and Braille) of exhibition label content, general public maps and printed materials; and
- Provided a photographic album containing current views of each of the mansion’s rooms on the basement, second and third floor levels for people who cannot climb stairs to those areas. The photographs are accompanied by printed commentary offered to all visitors by the mansion’s historic interpreters.
The estate is located in Alexandria, Va., on the banks of the Potomac River. It was designated a National Historic Landmark in 1960 and is listed on the National Register of Historic Places. The estate has 20 structures and 50 acres of gardens as they existed in 1799 and includes George Washington’s mansion, a museum, the tombs of George and Martha Washington, and a slave burial ground and memorial.
The agreement resolves a compliance review under the ADA. The department’s review focused on the historic mansion, the Mount Vernon Inn and Shops, the Donald W. Reynolds Museum and Education Center, the Ford Orientation Center and the public walks connecting these structures. People interested in finding out more about the ADA or this agreement can call the Justice Department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY), or access its ADA website at www.ada.gov.
Former Probation Officer in Oregon Charged with Civil Rights ViolationsRead the Press Release
WASHINGTON – A federal grand jury returned an indictment charging Mark John Walker, 51, of Eugene, Ore., in an eight-count indictment stemming from multiple incidents in which Walker allegedly sexually abused female offenders who were under his direct supervision as a probation officer, and then obstructed a later investigation to cover up his misconduct.
Walker is charged with three felonies for allegedly engaging in aggravated sexual abuse against three different women between December 2006 and June 2009. He is charged with two misdemeanors for allegedly engaging in sexual contact with two different women between April 2005 and September 2006. In addition, the indictment charges Walker with making a false statement to the FBI, intimidating and threatening a witness, and falsifying a record in order to obstruct the investigation. Walker appeared today before U.S. Magistrate John Acosta, and entered a plea of not guilty. Magistrate Acosta released the defendant pending a trial date of Sept. 14, 2010, ordering Walker’s release subject to pre-trial release conditions.
The indictment alleges that Walker, in his capacity as a U.S. probation officer, deprived persons under his supervision of their civil rights. Walker supervised offenders who were serving probation or supervised release terms imposed by a federal judge, including offenders with vulnerable backgrounds involving sexual abuse, mental illness and drug addiction. Walker was required to accurately report his contacts with each offender under his supervision, and to report each offender’s conduct to the federal judge who had sentenced her. Walker had the power to recommend that offenders who violated their conditions of probation or supervised release be incarcerated or otherwise sanctioned. Walker was bound by the Code of Conduct for Judicial Employees, and was responsible for complying with the U.S. Constitution, as well as all federal, state and local laws.
Walker is charged with willfully depriving five different female offenders of their constitutional right to bodily integrity, while acting under color of law, by engaging in aggravated sexual abuse or sexual contact. Walker is also charged with making a false statement to the FBI by stating that he recorded all of his contacts with one of the female offenders in a record-keeping system used by the U.S. Probation Office, when he had not done so. He is also charged with intimidating, threatening and corruptly persuading the same female offender not to tell authorities about the sexual activity that was related to the commission of a civil rights violation by telling her "you know what I can do." Finally, he is charged with one count of falsifying and making false entries in records and documents at the U.S. Probation Office with the intent to impede, obstruct or influence the investigation.
"Acts of sexual abuse by an employee of our federal court system against persons committed to his custody will not be tolerated by the U.S. Department of Justice," said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. "The Civil Rights Division will work with our partners in the U.S. Attorney’s Office and the FBI to aggressively investigate and prosecute all such allegations."
"Government service is an honor and a privilege – to use a government position to sexually exploit others is appalling," said U.S. Attorney Dwight Holton. "We stand ready to enforce and defend the civil rights of all Oregonians from such exploitation."
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty. If convicted, each of the three felony civil rights charges carries a maximum penalty of life in prison. Walker also faces one year in prison for each of the misdemeanor civil rights charges, five years in prison for the false statement charge, and 20 years in prison for both the witness tampering and falsification of records charges.
"All persons sworn to serve the public violate a sacred trust when they use their position for personal or criminal ends. Violation of the oath of office is one of the most significant offenses we deal with. We take this kind of crime very seriously," said FBI Special Agent in Charge Arthur Balizan.
The case has been investigated by the FBI in Eugene. Assistant U.S. Attorneys Pamala Holsinger and Hannah Horsley are handling the prosecution, along with Civil Rights Division Criminal Section Trial Attorney Eric L. Gibson.
California Man Indicted in Las Vegas for Filing False Liens Against Federal Employees & Filing False Tax FormsRead the Press Release
WASHINGTON A Las Vegas federal grand jury has indicted Thanh Viet Jeremy Cao, a resident of Orange County, Calif., for filing false liens against federal employees and corruptly obstructing the administration of the federal tax laws, the Justice Department and Internal Revenue Service (IRS) announced today. The court has not yet set a trial date.
According to the indictment, Cao filed 22 false liens in public records in Nevada against federal officials and employees of the Securities and Exchange Commission, the U.S. Attorney’s Office for the Southern District of California, the Secret Service and the IRS, as well as false liens against four federal judges. According to the indictment, the false liens ranged from $25 million to $300 million.
The indictment further alleges that Cao corruptly obstructed the administration of the federal tax laws, by, among other things, filing retaliatory false liens against IRS employees, filing and attempting to file with the IRS false Forms 1099-OID (Original Issue Discount) that claimed fictitious income tax withholdings, filing and attempting to file false tax returns that claim fraudulent refunds totaling approximately $20 billion, and preparing at least five false tax returns for third parties that claimed fraudulent income tax refunds totaling in excess of $1.1 million based upon fictitious income tax withholdings.
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, Cao faces a maximum of 223 years in prison and a maximum fine of $5.75 million.
The case is being investigated by the U.S. Treasury Inspector General for Tax Administration and the IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Christopher S. Strauss and Joseph A. Rillotta.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
Tuesday 20 July 2010
Justice Department Signs Agreement with Wilson County, North Carolina, to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON - The Justice Department today announced an agreement with Wilson County, N.C., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“The ADA is 20 years old this month, and I commend Wilson County officials for making this commitment to take the necessary steps to ensure equal access to civic life for the county’s residents with disabilities,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to vigorous enforcement of the ADA, and the 20th anniversary of the ADA should be a wake-up call to state and local officials across the country where the ADA’s promises of equal access have not yet been realized.”
Under the agreement announced today, Wilson County will take several important steps to improve access for individuals with disabilities, such as:
· Making physical modifications to facilities surveyed by the department so that parking, routes into the buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
· Surveying other facilities and programs and making modifications wherever necessary to achieve full compliance with ADA requirements;
· Ensuring that buildings and outdoor facilities that will be built or altered by or on behalf of the city comply with the ADA’s architectural requirements;
· Officially recognizing North Carolina telephone relay service as a key means of communicating with individuals who are deaf, are hard-of-hearing, or have speech impairments and training staff in using the relay service for telephone communications;
· Undertaking the required planning and modifications to ensure equal, integrated access to emergency management for individuals with disabilities, including emergency preparedness, notification, evacuation, sheltering, response, clean up and recovery;
· Developing a method for providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs; and
· Installing signs at any inaccessible entrance to a facility directing individuals with disabilities to an accessible entrance or to information about accessing programs and services at other accessible facilities.
“We appreciate the commitment to equal access and ADA compliance made by each of the 180 cities, counties and other government entities that have entered into a Project Civic Access agreement with the Justice Department,” said Assistant Attorney General Perez. “This initiative is a priority for the Civil Rights Division, and we will be actively pursuing similar commitments from other government officials in the weeks and months ahead.”
Wilson County is located in Eastern North Carolina. According to census data, the county has approximately 73,814 residents, and more than 27 percent of those residents are individuals with disabilities.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The investigation of Wilson County was initiated in response to a complaint alleging that certain of the county’s facilities were not accessible. The agreement requires most actions to be completed within two years. The department will actively monitor compliance with the agreement, which will remain in effect until the department has confirmed that all required actions have been completed.
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, which is a fundamental part of every day life in America. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. This agreement is the 180th under the PCA initiative.
More information about the Civil Rights Division and the laws it enforces is available at the website www.justice.gov/crt. More information about the ADA, today’s agreement with Wilson County, the Project Civic Access initiative, and the ADA Best Practices Tool Kit for State and Local Governments is available on the ADA home page at www.ada.gov or at the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).
Justice Department Signs Agreement with Town of Pomfret, Connecticut, to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced an agreement with the town of Pomfret, Conn., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“I commend public officials in the town of Pomfret for making this important commitment to ensuring equal access to civic life for individuals with disabilities,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Civic access is a civil right, and the ADA guarantees to individuals with disabilities the same opportunities to participate in, and access, local government that everyone else enjoys.”
Pomfret is a small town located in northeastern Connecticut with an estimated population of 3,798 residents. More than 14 percent of Pomfret’s residents have disabilities and will benefit from the agreement. Under the agreement, the town of Pomfret will take several important steps to improve access for individuals with disabilities, such as:
- Making physical modifications to facilities surveyed by the department so that parking, routes into the buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
- Surveying other facilities and programs and making modifications wherever necessary to achieve full compliance with ADA requirements;
- Ensuring that buildings and outdoor facilities that will be built or altered by or on behalf of the town comply with the ADA’s architectural requirements;
- Posting, publishing, and distributing a notice to inform members of the public of the provisions of Title II of the ADA and their applicability to the town’s programs, services and activities;
- Officially recognizing the Connecticut telephone relay service as a key means of communicating with individuals who are deaf, are hard-of-hearing or have speech impairments and training staff in using the relay service for telephone communications;
- Undertaking the required planning and modifications to ensure equal, integrated access to emergency management for individuals with disabilities, including emergency preparedness, notification, evacuation, sheltering, response, clean up and recovery;
- Developing a method for providing information for interested persons with disabilities concerning the existence and location of the town’s accessible services, activities and programs;
- Installing signs at any inaccessible entrance to a facility directing individuals with disabilities to an accessible entrance or to information about accessing programs and services at other accessible facilities;
- Adopting a grievance procedure to deal with complaints of disability discrimination relating to town programs, services and facilities; and
- Amending its employment policies, as necessary, to comply with the regulations of the U.S. Employment Opportunity Commission implementing title I of the ADA.
“The ADA applies to every state, city, county, town and village throughout the United States, no matter how large or small,” said Assistant Attorney General Perez. “I hope that public officials across this nation will celebrate the 20th anniversary of the ADA by making a renewed commitment to the individuals with disabilities who live in their communities.”
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The department’s investigation of the town of Pomfret was initiated when it received a complaint alleging that the town hall was not accessible to individuals with disabilities. The department will actively monitor the town’s compliance with the agreement, which will remain in effect for three years or until the department has confirmed that all required actions have been completed, whichever is later.
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. This agreement is the 181st under the PCA initiative.
More information about the Civil Rights Division and the laws it enforces is available at the website www.justice.gov/crt . More information about the ADA, today’s agreement with the Town of Pomfret, the Project Civic Access initiative, and the ADA Best Practices Tool Kit for State and Local Governments can be obtained at the ADA Web page at www.ada.gov or by calling the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).
Justice Department Signs Agreement with Pearl River County, Mississippi, to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON - The Justice Department today announced an agreement with Pearl River County, Miss., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns, and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“As we celebrate the 20th anniversary of the Americans with Disabilities Act this month, we applaud Pearl River County for its commitment to bring its facilities and programs into full compliance with the ADA,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Individuals with disabilities will now have improved access to the programs and services offered by the county.”
More than 24 percent of the residents of Pearl River County have disabilities and will benefit from the agreement announced today. Under the agreement, Pearl River County will take several important steps to improve access for individuals with disabilities, such as:
- Making physical modifications to facilities surveyed by the department so that parking, routes into the buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
- Posting, publishing and distributing a notice to inform the public of the provisions of Title II of the ADA and their applicability to the county’s programs, services and activities;
- Adopting a grievance procedure to deal with complaints of disability discrimination relating to county programs and services;
- Officially recognizing the Mississippi telephone relay service as a key means of communicating with individuals who are deaf, are hard-of-hearing, or have speech impairments, and training staff in using the relay service for telephone communications;
- Continuing to ensure that 9-1-1 emergency service calls placed by persons with disabilities who use text telephones (TTYs) are answered as quickly as other calls, that such calls are monitored for timing and accuracy, and that employees are trained and practiced in using a TTY to make and receive calls;
- Amending its employment policies, as necessary, to comply with the regulations of the U.S. Employment Opportunity Commission implementing Title I of the ADA;
- Providing accessible polling places;
- Undertaking the required planning and modifications to ensure equal, integrated access to emergency management for individuals with disabilities, including emergency preparedness, notification, evacuation, sheltering, response, clean up and recovery;
- Maintaining its database that tracks and assists the county in prioritizing and making the repairs needed to eliminate barriers to accessibility in the county’s sidewalks;
- Ensuring that the county’s official website is accessible to people with disabilities; and
- Installing signs at any inaccessible entrance to a facility directing individuals with disabilities to an accessible entrance or to information about accessing programs and services at other accessible facilities.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The department will actively monitor the county’s compliance with the agreement, which will remain in effect for three years or until the department has confirmed that all required actions have been completed, whichever is later.
Following an influx of new residents after Hurricane Katrina, Pearl River County, located in southern Mississippi, was recognized by the Census Bureau as the seventh fastest growing county in the United States. Pearl River County is the fourth largest county in Mississippi.
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with the ADA. The agreements are tailored to address the steps each community must take to improve access. This agreement is the 182nd under the PCA initiative.
More information about the Civil Rights Division and the laws it enforces is available at the website www.justice.gov/crt . More information about the ADA, today’s agreement with Pearl River County, the Project Civic Access initiative, and the ADA Best Practices Tool Kit for State and Local Governments can be accessed at the ADA Web page at www.ada.gov or by calling the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).