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12 March 2012
Federal Court Sets $128 Million Aggregate Back Pay Damages in Employment Discrimination Lawsuit Against the City of New York’s Fire DepartmentRead the Press Release
WASHINGTON – A federal court announced last week that it had determined the aggregate amount of back pay damages owed to African-American and Hispanic applicants who were discriminated against by the city of New York in the hiring of entry-level firefighters for the Fire Department of New York (FDNY). As part of the remedy for the city’s violation of Title VII of the Civil Rights Act of 1964, the court calculated the aggregate amount of gross wage losses at $128,696,803. The city of New York will have an opportunity to reduce the aggregate amount of back pay by proving that discrimination victims mitigated their losses through interim employment.
The United States filed its complaint in May 2007, which alleged that the city’s pass/fail and rank order use of two written examinations, administered in 1999 and 2002, resulted in disparate impact upon African-American and Hispanic applicants and were not job-related and consistent with business necessity, in violation of Title VII. In July 2009, the U.S. District Court for the Eastern District of New York agreed and found that the city’s use of these two written examinations violated Title VII. Title VII’s prohibitions of discrimination in employment on the basis of race, color, sex, national origin or religion proscribe not only intentional discrimination, but also the use of employment practices (e.g., written tests) that result in disparate impact. Unless the employer can prove that such practices are job related and consistent with business necessity, employment practices that disproportionately screen out applicants based upon race and national origin do not identify the best qualified candidates and violate the law. In its July 2009 order, the court found that the city’s pass/fail use of the challenged written examinations did not usefully distinguish between candidates who were qualified to perform the job of firefighter, nor did the rank-order use of the exam meaningfully distinguish between candidates who were more or less qualified to do the job.
“The Department of Justice will not tolerate discrimination in employment on the basis of race or national origin, whether that discrimination is intentional or the result of employment practices that have discriminatory impact,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The court’s order will provide relief to potentially thousands of individuals who were harmed by such discriminatory practices in New York City.”
“FDNY’s hiring practices have deprived many qualified African-Americans and Hispanics of the opportunity to serve the people of New York City as firefighters,” said Loretta E. Lynch, U.S. Attorney for the Eastern District of New York. “The court’s order sends a strong message to FDNY and to all other employers, public and private, that they must comply with the requirements of Title VII.”
According to the court’s order, a process for distributing monetary damages to individuals harmed by the city’s discriminatory practices will be established in a future order. The Department of Justice has established a website with information about the lawsuit for individuals who believe that they may have been victims of the city’s discriminatory practices, which is available at www.usdoj.gov/fdnycase.
Devon Energy to Pay U.S. $3.5 Million to Resolve Allegations of Royalty Underpayments from Federal and Indian LandsRead the Press Release
Devon Energy Corporation and its affiliates have agreed to pay the United States $3,492,463 to resolve claims that PennzEnergy, a predecessor to Devon, violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian lands, the Justice Department announced today. Devon is an independent oil and natural gas exploration and production company with operations focused onshore in the United States and Canada.
PennzEnergy, formerly known as Pennzoil Company, was acquired by Devon in May 1999. Prior to the merger, PennzEnergy was involved in the production of natural gas from federal leases offshore in the Gulf of Mexico and onshore in the Gulf Coast.
Congress has authorized federal and Indian lands to be leased for the production of natural gas in exchange for the payment of royalties on the value of the gas that is produced. Each month companies are required to report and pay to the U.S. Department of the Interior the amount of royalty that is due. This settlement resolves claims by the United States under the False Claims Act that PennzEnergy improperly deducted from royalty values costs associated with boosting gas up to pipeline pressures and failed to report and pay royalties on gas used to fuel boosting compressors.
“Natural gas royalties are an important source of income for the United States, Native Americans, and various states, and they help support critical programs from which we all benefit,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Through cases such as this, we continue to make certain that companies that lease public and Indian lands, and that extract non-renewable resources from those lands, pay their full share of royalties.”
“This settlement demonstrates that the Department remains committed to ensuring that energy companies accurately report production and pay the required royalties,” said Greg Gould, Interior’s Acting Deputy Assistant Secretary for Natural Resources Revenue. Gould added that ONRR “will continue to pursue every dollar due to taxpayers and the Federal Government from extracting these precious natural resources from Federal and American Indian lands.”
The resolution of this matter is one of the last in a series of settlements arising out of qui tam, or whistleblower, litigation that has been pending for over a decade.
Today’s settlement arises from a lawsuit filed by Harrold Wright under the False Claims Act. Under the qui tam, or whistleblower, provisions of the False Claims Act, private citizens may file actions on behalf of the United States and share in any recovery. Because Mr. Wright is deceased, his heirs will receive $908,040.38 or 26 percent of the settlement.
The United States has intervened against Devon for the purpose of completing this settlement. The Department of Justice previously intervened against several other defendants in the Wright lawsuit. Settlements in the case to date exceed $300 million. The claims in the complaint are merely allegations and do not constitute a determination of liability.
The investigation and settlement of this matter was jointly handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Texas and the Department of the Interior’s Office of Natural Resource Revenue, Office of the Solicitor and Office of the Inspector General.
The case is U.S. ex rel. Wright v. Chevron USA, Inc. et al., 5:03-CV-264 (E.D. Tex.) .
Accused Member of Foreign Terrorist Organization Extradited to United States on Hostage Taking ChargesRead the Press Release
WASHINGTON – Alexander Beltran Herrera, 35, aka Jhon Alexander Beltrain Herrera, aka Rodrigo Pirinolo, an accused member of the Revolutionary Armed Forces of Colombia (FARC), has been extradited from Colombia to face hostage taking and terrorism charges in the United States.
The extradition was announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; and Dena Choucair, Acting Special Agent in Charge of the FBI’s Miami Division.
Beltran Herrera was extradited from Colombia to the United States over the weekend to face charges in an indictment returned in the District of Columbia on Feb. 22, 2011. The indictment, which names as defendants 18 members of the FARC, charges Herrera specifically with one count of conspiracy to commit hostage taking; three counts of hostage taking; one count of using and carrying a firearm during a crime of violence; one count of conspiracy to provide material support to terrorists and one count of conspiracy to provide material support to a designated foreign terrorist organization.
Beltran Herrera is scheduled to be arraigned today at 11:15 a.m. before Chief Judge Royce C. Lamberth in federal court in the District of Columbia. If convicted of all the charges against him, he faces a maximum potential sentence of life in prison.
According to the indictment, the FARC is an armed, violent organization in Colombia, which since its inception in 1964, has engaged in an armed conflict to overthrow the Republic of Colombia, South America’s longest-standing democracy. The FARC has consistently used hostage taking as a primary technique in extorting demands from the Republic of Colombia. Hostage taking has been endorsed and commanded by FARC senior leadership. The FARC has characterized American citizens as “military targets” and has engaged in violent acts against Americans in Colombia, including murders and hostage taking. The FARC was designated as a foreign terrorist organization by the U.S. Secretary of State in 1997 and remains so designated.
The indictment alleges that Beltran Herrera was a member of the 27th Front in the FARC’s Southern Block. Beltran Herrera was allegedly involved in the hostage taking of three U.S. citizens, Marc D. Gonsalves, Thomas R. Howes and Keith Stansell. These three individuals, along with Thomas Janis, a U.S. citizen, and Sergeant Luis Alcides Cruz, a Colombian citizen, were seized on Feb. 13, 2003, by the FARC after their single engine aircraft made a crash landing near Florencia, Colombia. Janis and Cruz were murdered at the crash site by members of the FARC.
According to the indictment, Gonsalves, Howes and Stansell were held by the FARC at gunpoint and were advised by FARC leadership that they would be used as hostages to increase international pressure on the government of the Republic of Colombia to agree to the FARC’s demands.
The FARC at various times marched the hostages from one site to another, placing them in the actual custody of various FARC Fronts. At the conclusion of one 40-day march, in or about November 2004, the hostages were delivered to members of the FARC’s 27th Front, commanded by Daniel Tamayo Sanchez, who was responsible for the hostages for nearly two years, after which they were delivered to the FARC’s 1st Front. During part of this two year period with the 27th Front, Beltran Herrera was responsible for moving the hostages and keeping them imprisoned.
Throughout the captivity of these three hostages, FARC jailors and guards, including Beltran Herrera, used choke harnesses, chains, padlocks and wires to restrain the hostages, and used force and threats to continue their detention and prevent their escape. The indictment also accuses Beltran Herrera of using and carrying a military-type machine gun during the hostage taking and providing material support and resources to aid in the hostage taking and to aid the FARC.
“Today’s extradition underscores our resolve to hold accountable all those responsible for this crime and we will not rest until every one of them is brought to justice,” said Assistant Attorney General Monaco.
“This extradition is another step toward justice on behalf of Americans taken hostage and held in chains by a Colombian terrorist organization,” said U.S. Attorney Machen. “We will not hesitate to bring to justice anyone who targets Americans around the world with violence to advance their political agendas.”
“This extradition further disrupts and dismantles the FARC, a foreign terrorist organization that has engaged in violent acts against American and Colombian citizens,” said FBI Acting Special Agent in Charge Choucair. “The outstanding, long term cooperation between the Colombian National Police and U.S. law enforcement has struck another blow to international terrorism.”
This investigation is being led by the FBI’s Miami Field Division. The prosecution is being handled by Assistant U.S. Attorneys Anthony Asuncion and Fernando Campoamor-Sanchez from the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney David Cora from the Counterterrorism Section of the Justice Department’s National Security Division.
Substantial assistance in the case was provided by the Justice Department’s Office of International Affairs, the Department’s Judicial Attachés in Colombia, and the FBI’s Office of the Legal Attaché in Colombia. The Directorate of Intelligence (DIPOL) and the Anti-Kidnapping Unit (GAULA) of the Colombian National Police also provided substantial assistance.
The public is reminded that an indictment contains mere allegations and that defendants are presumed innocent unless and until proven guilty.
$25 Billion Mortgage Servicing Agreement Filed in Federal CourtRead the Press Release
View the court documents.
WASHINGTON – The Justice Department, the Department of Housing and Urban Development (HUD) and 49 state attorneys general announced today the filing of their landmark $25 billion agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses.
The federal government and state attorneys general filed in U.S. District Court in the District of Columbia proposed consent judgments with Bank of America Corporation, J.P. Morgan Chase & Co., Wells Fargo & Company, Citigroup Inc. and Ally Financial Inc., to resolve violations of state and federal law.
The unprecedented joint agreement is the largest federal-state civil settlement ever obtained and is the result of extensive investigations by federal agencies, including the Department of Justice, HUD and the HUD Office of the Inspector General (HUD-OIG), and state attorneys general and state banking regulators across the country.
The consent judgments provide the details of the servicers’ financial obligations under the agreement, which include payments to foreclosed borrowers and more than $20 billion in consumer relief; new standards the servicers will be required to implement regarding mortgage loan servicing and foreclosure practices; and the oversight and enforcement authorities of the independent settlement monitor, Joseph A. Smith Jr.
The consent judgments require the servicers to collectively dedicate $20 billion toward various forms of financial relief to homeowners, including: reducing the principal on loans for borrowers who are delinquent or at imminent risk of default and owe more on their mortgages than their homes are worth; refinancing loans for borrowers who are current on their mortgages but who owe more on their mortgage than their homes are worth; forbearance of principal for unemployed borrowers; anti-blight provisions; short sales; transitional assistance; and benefits for service members.
The consent judgments’ consumer relief requirements include varying amounts of partial credit the servicers will receive for every dollar spent on the required relief activities. Because servicers will receive only partial credit for many of the relief activities, the agreement will result in benefits to borrowers in excess of $20 billion. The servicers are required to complete 75 percent of their consumer relief obligations within two years and 100 percent within three years.
In addition to the $20 billion in financial relief for borrowers, the consent judgments require the servicers to pay $5 billion in cash to the federal and state governments. Approximately $1.5 billion of this payment will be used to establish a Borrower Payment Fund to provide cash payments to borrowers whose homes were sold or taken in foreclosure between Jan. 1, 2008, and Dec. 31, 2011, and who meet other criteria.
The court documents filed today also provide detailed new servicing standards that the mortgage servicers will be required to implement. These standards will prevent foreclosure abuses of the past, such as robo-signing, improper documentation and lost paperwork, and create new consumer protections. The new standards provide for strict oversight of foreclosure processing, including third-party vendors, and new requirements to undertake pre-filing reviews of certain documents filed in bankruptcy court. The new servicing standards make foreclosure a last resort by requiring servicers to evaluate homeowners for other loss mitigation options first. Servicers will be restricted from foreclosing while the homeowner is being considered for a loan modification. The new standards also include procedures and timelines for reviewing loan modification applications and give homeowners the right to appeal denials. Servicers will also be required to create a single point of contact for borrowers seeking information about their loans and maintain adequate staff to handle calls.
The consent judgments provide enhanced protections for service members that go beyond those required by the Servicemembers Civil Relief Act (SCRA). In addition, the servicers have agreed to conduct a full review, overseen by the Justice Department’s Civil Rights Division, to determine whether any service members were foreclosed or improperly charged interest in excess of 6 percent on their mortgage in violation of SCRA.
The oversight and enforcement authorities of the settlement’s independent monitor are detailed in the court documents filed today. The monitor will oversee implementation of the servicing standards and consumer relief activities required by the agreement and publish regular public reports that identify any quarter in which a servicer fell short of the standards imposed in the settlement. The consent judgments require servicers to remediate any harm to borrowers that are identified in quarterly reviews overseen by the monitor and, in some instances, conduct full look-backs to identify any additional borrowers who may have been harmed. If a servicer violates the requirements of the consent judgment it will be subject to penalties of up to $1 million per violation or up to $5 million for certain repeat violations.
The consent judgments filed today resolve certain violations of civil law based on mortgage loan servicing activities. The agreement does not prevent state and federal authorities from pursuing criminal enforcement actions related to this or other conduct by the servicers. The agreement does not prevent the government from punishing wrongful securitization conduct that will be the focus of the new Residential Mortgage-Backed Securities Working Group. In the servicing agreement, the United States also retains its full authority to recover losses and penalties caused to the federal government when a bank failed to satisfy underwriting standards on a government-insured or government-guaranteed loan; the United States also resolved certain Federal Housing Administration (FHA) origination claims with Bank of America as part of this filing and with Citibank in a separate matter. The agreement does not prevent any action by individual borrowers who wish to bring their own lawsuits. State attorneys general also preserved, among other things, all claims against the Mortgage Electronic Registration Systems (MERS), and all claims brought by borrowers.
Investigations were conducted by the U.S. Trustee Program of the Department of Justice, HUD-OIG, HUD’s FHA, state attorneys general offices and state banking regulators from throughout the country, the U.S. Attorney’s Office for the Eastern District of New York, the U.S. Attorney’s Office for the District of Colorado, the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of North Carolina, the U.S. Attorney’s Office for the District of South Carolina, the U.S. Attorney’s Office for the Southern District of New York, the Special Inspector General for the Troubled Asset Relief Program and the Federal Housing Finance Agency-Office of the Inspector General. The Department of the Treasury, the Federal Trade Commission, the Consumer Financial Protection Bureau, the Justice Department’s Civil Rights Division, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Department of Veterans Affairs and the U.S. Department of Agriculture made critical contributions.
For more information about the mortgage servicing settlement, go to www.NationalMortgageSettlement.com. To find your state attorney general’s website, go to www.NAAG.org and click on “The Attorneys General.”
The joint federal-state agreement is part of enforcement efforts by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
9 March 2012
Three Individuals Sentenced to Prison for Participating in International Child Pornography RingRead the Press Release
WASHINGTON – Three men were sentenced to prison today in Los Angeles for their participation in an international child pornography ring announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Steve Martinez of the FBI’s Los Angeles Field Office.
Andrew Neil Scott, 31, of Flint, Mich., was sentenced to 30 years in prison followed by lifetime supervised release. Scott pleaded guilty on Dec. 2, 2010, to participating in a child exploitation enterprise and two counts of production of child pornography.
Woodrow Tracy, 68, of Sun Valley, Calif., was sentenced to 96 months in prison followed by lifetime supervised release. Tracy pleaded guilty on Sept. 21, 2010, to conspiracy to transport child pornography.
Justin Lee, 34, of League City, Texas, was sentenced to 66 months in prison followed by lifetime supervised release. Lee pleaded guilty on Sept. 7, 2010, to conspiracy to advertise, receive, distribute, solicit and possess child pornography.
Tracy, Lee and Scott were all sentenced by U.S. District Judge Virginia A. Phillips.
The sentences are the result of an international investigation into the “Lost Boy” online bulletin board. The Lost Boy bulletin board, according to court documents and proceedings, was dedicated to men who have a sexual interest in young boys and was established to provide a forum to trade child pornography.
Federal authorities, working in conjunction with a coalition of international law enforcement agencies, shut down the Lost Boy bulletin board approximately three years ago. As a result of the investigation, 16 named defendants were charged in the United States and arrested for their roles in the bulletin board. To date, 15 defendants have pleaded guilty or have been convicted at trial and one defendant passed away. Six additional men have been charged with child molestation as a result of the investigation, which also led to the identification of 27 domestic victims of child abuse, some of whom were portrayed in images posted to the Lost Boy bulletin board.
According to court documents and proceedings, law enforcement authorities discovered the Lost Boy bulletin board after receiving information from Eurojust, the judicial cooperation arm of the European Union. Eurojust provided U.S. law enforcement with leads obtained from Norwegian and Italian authorities indicating that a North Hollywood, Calif., man was communicating with an Italian national about child pornography and how to engage in child sex tourism in Romania. Acting on the information from Europe, the FBI executed search warrants that led to the discovery of the Lost Boy network. Further investigation revealed that Lost Boy had 35 members, 16 of whom were U.S. nationals. Other members of the network were located in countries around the world, including Belgium, Brazil, Canada, France, Germany, New Zealand and the United Kingdom.
According to court documents, Lost Boy had a thorough vetting process for new members, who were required to post child pornography to join the organization. Once accepted, members were required to continue posting child pornography to remain in good standing and to avoid removal from the board. According to court documents, Lost Boy members advised each other on techniques to evade detection by law enforcement, which included using screen names to mask identities and encrypting computer data.
International law enforcement efforts involving European law enforcement, the Brazilian Federal Police and other agencies have identified child molestation suspects in South America, Europe and New Zealand. Three suspects in Romania, one in France and another in Brazil have been charged, and offenders have been convicted in Norway and the United Kingdom. Law enforcement efforts have also identified dozens of child victims located in Norway, Romania, Brazil and other nations.
The investigation into the Lost Boy bulletin board was led by the FBI and the U.S. Postal Inspection Service, in conjunction with the Los Angeles-based Sexual Assault Felony Enforcement (SAFE) Team. The High Technology Investigative Unit of the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division, along with Eurojust, provided invaluable assistance during the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Joey L. Blanch and Yvonne Garcia of the Central District of California and CEOS Trial Attorney Andrew McCormack.
Richmond Cell Manager of Sophisticated, Violent Fraudulent Document Ring Sentenced to 84 Months in PrisonRead the Press Release
WASHINGTON – Armando Gonzalez-Medina, 35, of Richmond, Va., was sentenced today to 84 months in prison, after pleading guilty to participating in a racketeering conspiracy and conspiring to possess, produce and transfer fraudulent identification documents. The defendant is illegally within the United States and will be deported following the service of his prison sentence. Gonzalez-Medina was a member of the Richmond cell of a highly sophisticated and violent fraudulent document trafficking organization based in Mexico, with cells in 19 cities within the United States and 11 states, including three cells in Virginia.
Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; and John P. Torres, Special Agent in Charge of the U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) field office in Washington, D.C., made the announcement after the sentencing by Chief U.S. District Judge James R. Spencer in the Eastern District of Virginia.
According to evidence presented during the trial of co-conspirator Edy Oliverez-Jimnez in November 2011, Israel Cruz Millan, aka “El Muerto,” 28, of Raleigh, N.C., managed the organization’s operations in the United States, overseeing 19 cells in 11 states, including three in Virginia, that produced high-quality false identification cards distributed to illegal aliens. In each city where the organization operated, Millan placed a cell manager to supervise a number of “runners,” the lower level members of the organization who distributed business cards advertising the organization’s services and helped facilitate transactions with customers. The cost of fraudulent documents varied depending on the location, with counterfeit Resident Alien and Social Security cards typically selling from $150 to $200. Each cell allegedly maintained detailed sales records and divided the proceeds between the runner, the cell manager and the upper level managers in Mexico. In addition, from January 2008 through November 2010, members of the organization wired more than $1 million to Mexico.
In entering a guilty plea to the racketeering and document distribution conspiracy charges, Gonzalez-Medina admitted to working on behalf of the enterprise in Richmond.
Evidence during the Oliverez-Jiminez trial detailed how members of the organization sought to drive competitors from their territory by posing as customers in search of fraudulent documents and then attacking the competitors when they arrived to make a sale. These attacks allegedly included binding the victims’ hands, feet and mouth; repeatedly beating them; and threatening them with death if they continued to sell false identification documents in the area. The victims were left bound at the scene of the attack, and at least one victim died from one such attack that occurred in Little Rock, Ark., on July 6, 2010.
The government further alleged at trial that Cruz Millan tightly controlled the organization’s activities by keeping in regular contact with cell managers about fraudulent document inventory, bi-weekly sales reports and the presence of any rival document vendors. Members of the organization who violated internal rules imposed by Millan were subject to discipline, including shaving eyebrows, wearing weights, beatings and other violent acts.
Twenty-seven members of the organization were originally arrested on Nov. 18, 2010. To date, 26 of those arrested have pleaded guilty in this case. On Nov. 29, 2010, the remaining charged defendant, Edy Oliverez-Jiminez, was convicted by a jury for racketeering conspiracy; murder, kidnapping and assault in aid of racketeering; conspiracy to possess, produce and transfer false identification documents; and money laundering conspiracy. On March 2, 2012, U.S. District Judge sentenced Oliverez-Jiminez to two consecutive life sentences. In support, Judge Hudson explained from the bench that he imposed the life sentences to send a message of deterrence for Oliverez-Jiminez’s involvement with the violent racketeering organization based out of Mexico. He further stated that the sentences were just, in light of the defendant’s involvement in one of the most violent murders that he has observed in his career.
The investigation was led by the Norfolk office of ICE-HSI, which falls under the Washington, D.C., office. ICE-HSI received assistance from the FBI, Virginia State Police and Chesterfield County Police Department. Assistant U.S. Attorneys Michael Gill and Angela Mastandrea-Miller of the Eastern District of Virginia and Trial Attorney Addison Thompson of the Criminal Division’s Human Rights and Special Prosecutions Section are prosecuting the case on behalf of the United States.
Owner of Houston Health Care Company Sentenced to 30 Months in Prison in Connection with Medicare Fraud SchemeRead the Press Release
WASHINGTON – An owner and operator of a Houston durable medical equipment (DME) company was sentenced today in Houston federal court to 30 months in prison for his role in a Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Akinsunbo Akinbile, 44, of Richmond, Texas, was sentenced by U.S. District Judge Keith P. Ellison in Houston. In addition to his prison term, Akinbile was sentenced to three years of supervised release and was ordered to pay $471,022 in restitution.
Akinbile pleaded guilty on Nov. 29, 2011, to eight counts of health care fraud.
According to court documents, Akinbile was the owner and operator of Hallco Medical Supply, a company that purported to provide orthotics and other DME to Medicare beneficiaries. According to court documents, Hallco submitted claims to Medicare for DME, including orthotic devices that were medically unnecessary and/or not provided. Many of the orthotic devices were components of an “arthritis kit,” and purported to be for the treatment of arthritis-related conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heating pads. From June 2007 through May 2009, Akinbile submitted claims of approximately $737,770 to Medicare and was paid approximately $471,022.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent-In-Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), Office of Investigations; Joseph J. Del Favero, Special Agent-in-Charge of the Chicago Field Office of the Railroad Retirement Board Office of Inspector General; and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
This case was prosecuted by Special Assistant U.S. Attorney Justin S. Blan and Trial Attorney Laura M.K. Cordova 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, Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants who collectively have falsely billed the Medicare program for more than $3.6 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Justice Department Reaches Agreement with Prince William County, Virginia, on Bailout Under the Voting Rights ActRead the Press Release
WASHINGTON – The Justice Department filed a consent decree today in the U.S. District Court for the District of Columbia after reaching an agreement with Prince William County, Va., that will allow for the county’s bailout from its status as a “covered jurisdiction” under the special provisions of the Voting Rights Act. If approved by the court, the bailout will exempt the county from the preclearance requirements of Section 5 of the act.
Covered jurisdictions, as determined according to Section 4 of the Voting Rights Act, are required under Section 5 of the act to seek preclearance from the U.S. District Court in the District of Columbia or from the U.S. attorney general for any changes in voting qualifications, standards, practices or procedures prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bailout,” or remove itself from coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in federal district court. A bailout judgment can only be issued if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the attorney general can consent to entry of a judgment of bailout if, based upon investigation, the attorney general is satisfied that the jurisdiction meets the eligibility requirements.
Prince William County filed its bailout action in U.S. District Court in Washington, D.C., on Jan. 6, 2012. County officials had contacted the attorney general prior to filing its action, indicating that the county was interested in seeking bailout. The county provided the Justice Department with substantial information, and the department conducted an investigation to determine the county’s eligibility. Based on that investigation, the department is satisfied that the county meets the Voting Rights Act’s requirements for bailout.
"The department's investigation was thorough, and evaluated the information provided by the county. Based on that review, the department determined that the county is eligible for a bailout," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The county's cooperation in this investigation has allowed the parties to reach a resolution consistent with the requirements of the Voting Rights Act."
The consent decree details the legal and factual basis for a bailout determination and, if approved, will grant the county’s request. The court will retain jurisdiction for 10 years. The action can be reopened upon motion of the attorney general or any aggrieved person where the party alleges conduct by the county that would have originally precluded the county from bailing out if it had occurred during the 10-year period preceding entry of the consent decree.
Information about bailout, the Voting Rights Act and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting/. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.Broward County, Fla.-Area Halfway House Owner Sentenced to 24 Months in Prison for Participating in Fraud and Kickback SchemeRead the Press Release
WASHINGTON – The owner and operator of a Broward County, Fla.-area halfway house was sentenced today to 24 months in prison for his role in a Medicare fraud kickback scheme that funneled patients through a fraudulent mental health company, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Barry Nash, 69, was also sentenced by U.S. District Judge James Lawrence King in Miami to serve three years of supervised release following his prison term. Nash pleaded guilty on Jan. 9, 2012, to one count of conspiracy to commit health care fraud. Nash was the owner and operator of Starter House, a halfway house operating in Broward County.
Nash admitted that, in exchange for illegal health care kickbacks, he agreed to refer Medicare beneficiaries who resided at Starter House to American Therapeutic Corporation (ATC) and American Sleep Institute (ASI), a company related to ATC. Nash knew that ATC and ASI fraudulently billed Medicare for partial hospitalization program (PHP) services and sleep treatment purportedly provided to his referrals. PHP is a form of intensive mental health treatment.
According to court documents, ATC’s principals paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services. Ultimately, ATC and ASI billed Medicare for more than $200 million in medically unnecessary services.
According to the plea agreement, Nash’s participation in the fraud resulted in more than $959,901 in fraudulent billing to the Medicare program.
ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and nine of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial April 9, 2012, before U.S. District Judge Patricia A. Seitz.
Today’s sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
The case is being prosecuted by Trial Attorneys Steven Kim and Jennifer L. Saulino of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants that collectively have billed the Medicare program for more than $3.6 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.
8 March 2012
Two Missouri Men Plead Guilty for Their Roles in the Vandalism and Arson of a Bi-Racial Man’s Mobile HomeRead the Press Release
WASHINGTON - The Justice Department announced today that Charles Wilhelm, 23, of Independence, Mo., pleaded guilty in U.S. District Court in Kansas City, Mo., to federal hate crime charges in connection with the vandalism and arson of a bi-racial man’s home in 2006. Yesterday, Wilhelm’s co-conspirator, David Martin, 23, of Independence, pleaded guilty to federal hate crime charges for his role in the same incident.
Wilhelm and Martin were each charged with one count of conspiracy to violate the civil rights of the victim and one count of violating the Fair Housing Act, for their roles in vandalizing and burning down Nathaniel Reed’s home. Wilhelm and Martin entered guilty pleas to both counts.
The federal investigation revealed that in the summer of 2006, Wilhelm, Martin and Teresa Witthar conspired to intimidate and scare Reed, a bi-racial man, into moving out of the Highland Manor Mobile Home Park in Independence in part because of his race. On or about June 6, 2006, Wilhelm, along with Martin and Witthar, entered Reed’s home, without his permission, and vandalized it by writing at least 15 racially derogatory slurs on the walls.
Two days later, on or about June 8, 2006, Witthar drove Wilhelm and Martin to a neighbourhood behind Reed’s home so that they could set fire to Reed’s home without being detected. Wilhelm and Martin then set fire to Reed’s home, and Witthar drove them back around to Highland Manor.
In February 2012, Witthar pleaded guilty for her role in the conspiracy.
“The Department of Justice is committed to ensuring that all Americans are able to occupy their homes without fear of racially-motivated reprisals,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “As this case illustrates, the Civil Rights Division will aggressively prosecute anyone who attacks and destroys a home based on the race of the person who lives there.”
“Racially-motivated violence and intimidation will not be tolerated in our community,” said Beth Phillips, U.S. Attorney for the Western District of Missouri. “These conspirators resorted to vandalism, racial slurs and arson to violate another person’s civil rights, and they will be held accountable for their criminal conduct.”
These guilty pleas were the result of a cooperative effort between the U.S. Attorney’s Office for the Western District of Missouri and the Justice Department’s Civil Rights Division. This case was investigated by the Kansas City Division of the FBI. It is being prosecuted by First Assistant U.S. Attorney David Ketchmark for the Western District of Missouri and Trial Attorney Sheldon L. Beer of the Civil Rights Division of the Department of Justice.
Justice Department Reminds Employers of Eligibility Verification Rules for Salvadoran WorkersRead the Press Release
WASHINGTON - The Justice Department announced today the launch of an educational video reminding employers that Salvadorans with Temporary Protected Status (TPS) may continue working beyond the March 9, 2012, expiration date of their Employment Authorization Documents.
This announcement by the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) informs employers that they can continue to employ workers with TPS from El Salvador and at the same time avoid claims of discrimination in the employment eligibility reverification process. TPS is a temporary immigration benefit allowing qualified individuals from designated countries who are in the U.S. to stay here for a limited time period, due to conditions such as on-going armed conflict, environmental disaster or other extraordinary and temporary conditions in the designated country. Individuals with TPS can obtain employment authorization documents to work legally in the United States. Often, when the Department of Homeland Security (DHS) announces an extension to TPS, it also automatically extends TPS workers’ Employment Authorization Documents. Employers may become confused by this automatic extension because it creates an exception to the rule that Employment Eligibility Verification Form I-9 documents must be unexpired. DHS has automatically extended Employment Authorization documents for individuals with TPS from El Salvador until September 9, 2012.
OSC enforces the anti-discrimination provision of the Immigration and Nationality Act (INA), which requires employers to treat all authorized workers in the same manner with respect to hiring, firing or recruitment or referral for a fee, regardless of their citizenship status or national origin. The law also prohibits discrimination during the Form I-9 and E-Verify processes. OSC runs a hotline, which generally receives an uptick in calls from employers and employees concerning TPS near the expiration date on the face of the Employment Authorization Documents that have been automatically extended. The video is an attempt to educate employers and prevent potential claims of discrimination from work-authorized individuals losing their jobs.
The video may be viewed at www.justice.gov/crt/pressroom/videos.php?group=3.
“We hope this video will help employers across the country understand employment eligibility verification rules and will allow work-authorized workers to maintain their employment,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Federal law prohibits discrimination in the employment eligibility verification process, and the Justice Department is committed to enforcing the law.”OSC also offers live webinars on avoiding workplace discrimination. To participate in a webinar, sign up online at www.justice.gov/crt/about/osc/webinars.php. For more information about protections against employment discrimination under the immigration law, call OSC’s worker hotline at: 1-800-255-7688 (1-800-237-2525, TDD for the hearing impaired); call OSC’s employer hotline at: 1-800-255-8155 (1-800-362-2735, TDD for the hearing impaired); send e-mail to: [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Justice Department Officials Raise Awareness of Disaster Fraud HotlineRead the Press Release
WASHINGTON – The Department of Justice, the FBI and the National Center for Disaster Fraud (NCDF) remind the public there is a potential for disaster fraud in the aftermath of a natural disaster. Suspected fraudulent activity pertaining to relief efforts associated with the recent series of tornadoes in the Midwest and South should be reported to the NCDF hotline at 866-720-5721. The hotline is staffed by a live operator 24 hours a day, seven days a week, for the purpose of reporting suspected scams being perpetrated by criminals in the aftermath of disasters.
NCDF was originally established in 2005 by the Department of Justice to investigate, prosecute and deter fraud associated with federal disaster relief programs following Hurricanes Katrina, Rita and Wilma. Its mission has expanded to include suspected fraud related to any natural or man-made disaster. More than 20 federal agencies, including the Justice Department’s Criminal Division, U.S. Attorneys’ Offices and the FBI, participate in the NCDF, allowing the center to act as a centralized clearinghouse of information related to disaster relief fraud.
In the wake of natural disasters, many individuals feel compelled to contribute to victim assistance programs and organizations across the country. The Department of Justice and the FBI remind the public to apply a critical eye and do its due diligence before giving to anyone soliciting donations on behalf of tornado victims. Solicitations can originate from e-mails, websites, door-to-door collections, mailings and telephone calls, and similar methods.
Before making a donation of any kind, consumers should adhere to certain guidelines, including the following:
- Do not respond to any unsolicited (spam) incoming emails, including clicking links contained within those messages, because they may contain computer viruses.
- Be skeptical of individuals representing themselves as surviving victims or officials asking for donations via email or social networking sites.
- Beware of organizations with copycat names similar to but not exactly the same as those of reputable charities.
- Rather than following a purported link to a website, verify the existence and legitimacy of non-profit organizations by utilizing various Internet-based resources.
- Be cautious of emails that claim to show pictures of the disaster areas in attached files, because the files may contain viruses. Only open attachments from known senders.
- To ensure that contributions are received and used for intended purposes, make donations directly to known organizations rather than relying on others to make the donation on your behalf.
- Do not be pressured into making contributions; reputable charities do not use coercive tactics.
- Do not give your personal or financial information to anyone who solicits contributions. Providing such information may compromise your identity and make you vulnerable to identity theft.
- Avoid cash donations if possible. Pay by debit or credit card, or write a check directly to the charity. Do not make checks payable to individuals.
- Legitimate charities do not normally solicit donations via money transfer services.
- Most legitimate charities maintain websites ending in .org rather than .com.
In addition to raising public awareness, the NCDF is the intake center for all disaster relief fraud. Therefore, if you observe that someone has submitted a fraudulent claim for disaster relief, or any other suspected fraudulent activities pertaining to the receipt of government funds as part of disaster relief or clean up, please contact the NCDF.
If you believe that you have been a victim of fraud by a person or organization soliciting relief funds on behalf of tornado victims, or if you discover fraudulent disaster relief claims submitted by a person or organization, contact the NCDF by phone at (866) 720-5721, fax at (225) 334-4707 or email at [email protected].
You can also report suspicious e-mail solicitations or fraudulent websites to the FBI’s Internet Crime Complaint Center at www.ic3.gov.
7 March 2012
U.S. Army Captain Pleads Guilty to Accepting Illegal Gratuities Related to Contracting in Support of Iraq WarRead the Press Release
WASHINGTON – A captain in the U.S. Army pleaded guilty in Alaska today for accepting thousands of dollars in gratuities from a contractor during his deployment to Iraq as a civil affairs officer at a forward operating base in Rustimaya, Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Acting U.S. Attorney Kevin Feldis for the District of Alaska.
Michael George Rutecki, 33, of North Pole, Alaska, pleaded guilty today before U.S. District Judge Ralph R. Beistline in the District of Alaska to a criminal information charging him with one count of accepting illegal gratuities.
According to the court document, Rutecki was a pay agent responsible for directing Commanders Emergency Response Program (CERP) funds to pay contractors to perform work in accordance with civil development objectives set forth by U.S. Army commanders. Pay agents are accorded significant discretion in so doing. It is a violation of federal law for pay agents to accept personal gifts or gratuities from contractors dependent upon pay agents for contracts.
According to court documents, during and after the solicitation of contracts, Rutecki accepted cash and other things of value from an Iraqi contractor, including: $10,000 in cash, two silver rings with diamond stones, 15 gold coins worth more than $10,000 and other valuables from the contractor. Rutecki admitted that he took the valuables and money with the understanding and belief that they were for or because of his assistance to the contractor, who received the contract.
Rutecki faces up to two years in prison and a fine of $250,000. In addition, Rutecki agreed to forfeit all gratuities and pay $10,000 in restitution to the United States. A sentencing date has not yet been scheduled by the court.
This case was prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from SIGIR, with assistance from Assistant U.S. Attorney Craig M. Warner. The case is being investigated by the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command and the Defense Criminal Investigative Service.
Former Department of Veterans Affairs Official Sentenced to Serve 60 Months in Prison for Conspiracy and Wire FraudRead the Press Release
WASHINGTON — The former associate director of the Department of Veterans Affairs (VA) Consolidated Mail Outpatient Pharmacy in Hines, Ill., his wife and their temporary staffing company were sentenced today for their participation in a conspiracy to defraud the VA and the Small Business Administration (SBA), the Department of Justice announced.
William J. Brandt, the associate director of the VA facility from 1996 until April 2007, his wife, Esperanza A. Brandt, and Pronto Staffing Inc. were sentenced today in U.S. District Court in Chicago by Judge Milton I. Shadur. William Brandt was sentenced to serve 60 months in prison and Esperanza Brandt was sentenced to serve 24 months of probation. The Brandts and Pronto Staffing were also sentenced to pay $400,000 in restitution jointly and severally.
On May 9, 2009, the Brandts and Pronto each pleaded guilty to one charge of conspiracy to commit wire fraud. William Brandt also pleaded guilty to one charge of wire fraud, which deprived the VA and the public of his honest services. The Outpatient Pharmacy in Hines, one of seven regional VA mail-out pharmacies, currently processes and sends out more than 90,000 prescriptions each day to veterans.
The Brandts and Pronto admitted to conspiring with others to commit wire fraud in a scheme to fraudulently allow Pronto to provide temporary pharmacists to the Outpatient Pharmacy where William Brandt worked and supervised pharmacists. Pronto was created by the Brandts in 2000 to provide pharmacists to the Hines Outpatient Pharmacy. The company later sought SBA certification as a woman-owned, minority-owned small disadvantaged business and 8(a) Program participant. As part of the conspiracy, the Brandts agreed to allow another company to fraudulently use Pronto’s SBA status to bid on contracts set aside for SBA and 8(a) participants.
William Brandt also pleaded guilty to wire fraud for making materially false misrepresentations to the VA and other government officials and hiding his involvement with Pronto. Brandt claimed that Pronto was solely managed by his wife in order to avoid conflict of interest laws governing federal employees. During the course of the scheme, William Brandt, working with others, secretly agreed that the billing rates charged to the VA for certain pharmacists provided by Pronto should be increased. Between 2000 and 2007, the Brandts and other co-conspirators used Pronto to bill the VA for more than $8 million in services to the Hines Outpatient Pharmacy facility. The department said that this conduct deprived the VA and the public of Brandt’s honest service.
Four individuals and one company have pleaded guilty and have been sentenced in this investigation. On June 30, 2008, Joel M. Gostolmelsky, the former director of the VA facility, pleaded guilty to conspiracy and to accepting illegal gratuities in connection with awarding staffing and supply contracts, including contracts for temporary pharmacists. On Oct. 7, 2010, Gostolmelsky was sentenced to serve five months in prison and to pay $49,484 in restitution. On Aug. 13, 2009, Stephanie D. Blackmon and a temporary staffing company she owned, Patriot Services Inc., pleaded guilty to making a false statement to the SBA. On Sept. 28, 2010, Blackmon was sentenced to pay a $3,000 criminal fine and Patriot was sentenced to pay a $5,000 criminal fine.
The investigation of unlawful conduct concerning the VA’s Consolidated Mail Outpatient Pharmacies was conducted jointly by the Department of Justice Antitrust Division’s Chicago Field Office and the VA’s Office of Inspector General. The SBA’s Office of Inspector General, the Department of Defense Criminal Investigative Service and the U.S. Secret Service assisted in the investigation.
Anyone with information concerning bid rigging, fraud, kickbacks, bribery or other crimes relating to violations of federal procurement laws meant to foster competition concerning any of the VA Consolidated Mail Outpatient Pharmacies should contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or the VA Office of Inspector General at 1-800-488-8244.
6 March 2012
Kansas Refinery to Pay Nearly $1 Million Penalty for Environmental Violations Related to Air EmissionsRead the Press Release
WASHINGTON – Coffeyville Resources Refining & Marketing (CRRM) has agreed to pay a civil penalty of more than $970,000 and invest more than $4.25 million in new pollution controls and $6.5 million in operating costs to resolve alleged violations of air, Superfund and community right-to-know laws at its Coffeyville, Kan., refinery, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA) today.
The settlement will benefit the environment and human health by requiring new and upgraded pollution controls, more stringent emission limits and more aggressive leak-detection and repair practices to reduce emissions from refinery equipment and process units. Sulfur dioxide (SO2) and nitrogen oxide (NOx), two pollutants emitted from refineries, can cause health problems and are significant contributors to acid rain, smog and haze.
“This settlement puts CRRM on a level playing field with the more than 100 petroleum refineries that have agreed to implement aggressive pollution control measures, thereby reducing the threats posed by harmful emissions to area residents,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The agreement reaffirms our commitment to ensure that the petroleum refining industry complies with the nation’s Clean Air Act.”
“The Clean Air Act is designed to protect people’s health from emissions of harmful pollutants,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement will protect residents living near the facility and ensure that the necessary pollution controls are installed to protect the residents of southeastern Kansas in the future.”
The settlement resolves alleged violations of the Clean Air Act (CAA), Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, aka “Superfund”), and Emergency Planning and Community Right-to-Know Act (EPCRA). The government alleged that the company made modifications to its refinery that increased emissions without first obtaining pre-construction permits and installing required pollution control equipment. The CAA requires major sources of air pollution to obtain such permits before making changes that would result in a significant emissions increase of any pollutant. The settlement also resolves alleged violations in which CRRM failed to timely notify state and local emergency responders of releases of hydrogen sulfide and sulfur dioxide from the refinery, as required by the CERCLA and EPCRA.
Once fully implemented, the pollution controls required by the settlement will annually reduce an estimated 200 tons of NOx and more than 110 tons of SO2. The settlement will also reduce emissions of volatile organic compounds, particulate matter, carbon monoxide and other pollutants that affect air quality. CRRM has also agreed to perform a voluntary environmental project at the refinery valued at more than $1.2 million. The project will benefit the environment and surrounding communities by reducing emissions of volatile organic compounds and hydrogen sulfide, reducing the frequency of future acid gas flaring incidents, and conserve 15 million gallons of water each year that would previously have come from the Verdigris River.
The settlement with CRRM is the 30th under an EPA initiative to improve compliance among petroleum refiners and to reduce significant amounts of air pollution from refineries nationwide through comprehensive, company-wide settlements. The first of EPA’s settlements was reached in 2000, and with today’s settlement, 107 refineries operating in 32 states and territories – more than 90 percent of the total refining capacity in the United States – are under judicially enforceable agreements to significantly reduce emissions of pollutants. As a result of the settlement agreements, refiners have agreed to invest more than $6 billion in new pollution controls designed to reduce emissions of sulfur dioxide, nitrogen dioxide and other pollutants by more than 360,000 tons per year.
CRRM’s refinery has the capacity to refine more than 115,000 barrels of crude oil per day, producing gasoline, diesel fuels and propane.
The state of Kansas has joined in the settlement and will receive a portion of the civil penalty.
The consent decree, lodged in the U.S. District Court for the District of Kansas, is subject to a 30-day public comment period and court approval and may be viewed at www.justice.gov/enrd/Consent_Decrees.html.
More information on the CRRM settlement: www.epa.gov/compliance/resources/cases/civil/caa/coffeyville.html.
More information on other petroleum refinery settlements: www.epa.gov/compliance/resources/cases/civil/caa/oil/index.html.
Justice Department to Monitor Elections in OhioRead the Press Release
WASHINGTON – The Justice Department announced today that the Civil Rights Division will monitor elections today in Cuyahoga, Hamilton and Lorain Counties, Ohio. The monitoring will ensure compliance with the Voting Rights Act of 1965 and the Help America Vote Act of 2002. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. The Help America Vote Act includes requirements regarding provisional ballots during elections for federal office.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to jurisdictions that are certified by the attorney general or by a federal court order. Federal observers will be assigned to monitor polling place activities in Cuyahoga and Lorain Counties based on court orders. The observers will watch and record activities during voting hours at polling locations, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, Justice Department personnel will monitor polling place activities in Hamilton County. A Civil Rights Division attorney will coordinate federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit www.justice.gov/crt/voting/index.php for more information about the Voting Rights Act and other federal voting laws.
Federal Court in Illinois Shuts Down Nationwide “Employee Benefit Plan” Tax SchemeRead the Press Release
A federal court has permanently barred Tracy L. Sunderlage, Linda Sunderlage and four companies from operating an alleged scheme to help high-income individuals attempt to avoid income taxes by funneling money through purported employee benefit plans, the Justice Department announced today. Judge John W. Darrah of the U.S. District Court for the Northern District of Illinois entered the permanent injunction orders, to which the defendants consented, against the Sunderlages, SRG International Ltd., of Nevis, West Indies, and three Illinois companies - SRG International U.S. LLC, Maven U.S. LLC and Randall Administration LLC.
According to the government complaint , the defendants claimed to promote and operate plans that provide insurance benefits to participating companies’ employees, when in fact the scheme is simply a mechanism for the companies’ owners to receive purportedly tax-free or tax-deferred income for their personal use. Tracy Sunderlage and the two SRG International companies allegedly marketed the scheme to high-income professionals who own small, closely held companies. In the most recent version of the alleged scheme, each participant’s company made supposedly tax deductible payments to a purported benefit plan operated by Maven U.S. and Randall Administration. The company’s contributions were then allegedly transferred to an account within a company based in the Caribbean island of Anguilla, in which they were allegedly invested until the owner terminated from the program and received the assets for his or her personal use. The complaint alleged that many participants owned these accounts through offshore trusts, which Tracy Sunderlage and SRG International Ltd. often helped to establish. The complaint alleged that participants from across the country have transferred at least $239 million as part of the scheme and that total contributions may exceed $300 million.
The injunction orders bar the defendants from operating or promoting any purported “welfare benefit plans.” The court also ordered the defendants to provide the government with a list of their customers and to send copies of the injunction orders to their customers.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions against promoters of tax schemes and preparers of fraudulent tax returns. Information about these cases is available on the Justice Department website .
Allen Stanford Convicted in Houston for Orchestrating $7 Billion Investment Fraud SchemeRead the Press Release
WASHINGTON – A Houston federal jury today convicted Robert Allen Stanford, the former Board of Directors Chairman of Stanford International Bank (SIB), for orchestrating a 20-year investment fraud scheme in which he misappropriated $7 billion from SIB to finance his personal businesses.
The guilty verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Kevin Perkins of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell; Special Agent in Charge Lucy Cruz of the Internal Revenue Service-Criminal Investigations (IRS-CI).
Following a six-week trial before U.S. District Judge David Hittner, and approximately three days of deliberation, the jury found Stanford guilty on 13 of 14 counts in the indictment.
Stanford, 61, was convicted of one count of conspiracy to commit wire and mail fraud, four counts of wire fraud, five counts of mail fraud, one count of conspiracy to obstruct a U.S. Securities and Exchange Commission (SEC) investigation, one count of obstruction of an SEC investigation and one count of conspiracy to commit money laundering. The jury found Stanford not guilty on one count of wire fraud.
At sentencing, Stanford faces a maximum prison sentence of 20 years for the count of conspiracy to commit wire and mail fraud, each count of wire and mail fraud, and the count of conspiracy to commit money laundering, and five years for the count of conspiracy to obstruct an SEC investigation and the count of obstruction of an SEC investigation.
The investigation was conducted by the FBI’s Houston Field Office, the U.S. Postal Inspection Service, the IRS-CI and the U.S. Department of Labor, Employee Benefits Security Administration. The case was prosecuted by Deputy Chief William Stellmach of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Gregg Costa of the Southern District of Texas and Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section.
5 March 2012
Member of the Aryan Brotherhood Sentenced for Assaulting a Jewish Inmate in TexasRead the Press Release
WASHINGTON – Timothy Lee York, 35, of Fountain Valley, Calif., was sentenced by U.S. District Judge Sam A. Lindsay to 63 months in prison, followed by two years of supervised release, after pleading guilty to violently assaulting a Jewish inmate at a federal correctional facility in Texas, the Justice Department announced today. York was also ordered to pay $5,783 in restitution and a $100 special assessment fee.
According to court documents, York, a self-professed member of the United Aryan Brotherhood, admitted that on Dec. 28, 2007, he attacked his Jewish cellmate while the man was sleeping. York used a dangerous weapon, a ligature that he placed around his cellmate’s neck, to forcibly pull him to the floor where he lost consciousness. Once his cellmate was on the floor, York repeatedly kicked and punched him in the head and body. York acknowledged that he attacked his cellmate because the man was Jewish.
“Attacks based on race or religion have no place in our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Today’s sentence reflects the department’s commitment to aggressively prosecuting those who perpetrate violent acts of hate.”
“This sentencing should send a strong message that hate crimes will be investigated vigorously by the FBI, and those found to be responsible will be brought to justice,” said Robert E. Casey Jr., Special Agent in Charge of the FBI Field Office in Dallas.
This case was investigated by the Dallas Division of the FBI, and was prosecuted by Trial Attorneys Jared Fishman and Ryan Murguía of the Department of Justice’s Civil Rights Division.
Maryland Man Pleads Guilty for Conspiring to Hang a Noose to Intimidate an African-American FamilyRead the Press Release
WASHINGTON – Joshua Wall, 20, pleaded guilty today in federal court in Baltimore for his involvement in hanging a dead raccoon from a noose on the porch of an African-American family.
Wall pleaded guilty to one count of conspiracy to deprive a person of civil rights, and admitted that in April 2010, he and four co-conspirators agreed on a plan to hang a dead raccoon from a noose on the porch of an African-American family to frighten the family and to interfere with their housing rights. Wall claimed that two of his co-conspirators drove around until they found a dead raccoon and made the noose to put around the raccoon’s neck. Wall and two of the co-conspirators hung the raccoon on the porch of the home in the middle of the night.
“Acts of hate to intimidate someone because of their race still occur in this day and will not be tolerated by the Justice Department,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute anyone that violates our nation’s civil rights laws.”
Sentencing for Wall is scheduled for Aug. 17, 2012. He faces up to 10 years in prison and a maximum fine of $250,000.
This investigation, which is continuing, is being handled by the FBI, and prosecuted by the Civil Rights Division and the U.S. Attorney’s Office for the District of Maryland.
Justice Department Recovers More Than $900 Million in Consumer Protection Cases in 2011Read the Press Release
The Justice Department’s Consumer Protection Branch recovered more than $913 million in criminal and civil fines, penalties, and restitution in 2011, Tony West, Assistant Attorney General for the Civil Division, announced today. In addition, the branch secured convictions of 37 defendants, obtained prison sentences totaling more than 125 years against 32 individuals, and recorded a 95 percent conviction rate last year. Since 2009, the consumer protection efforts of the Civil Division, working with U.S. Attorneys’ Offices around the country, have led to recoveries of more than $3.72 billion, over 115 criminal convictions, and total prison sentences exceeding 295 years.
“These unprecedented results reflect the extraordinary determination and effort that this administration, and Attorney General Eric Holder in particular, have put into rooting out consumer fraud and protecting the integrity of the marketplace,” said Assistant Attorney General West. “All of us can be proud of the Consumer Protection Branch’s extraordinary work.”
Since taking office, Assistant Attorney General West has made protecting consumers a top priority. In 2010, the Attorney General and Congress approved his reorganization of the Civil Division to create the Consumer Protection Branch, which became a free-standing office in the Civil Division that reports to its own Deputy Assistant Attorney General. In 2011, the Division implemented that reorganization, empowering the branch to more effectively and comprehensively protect consumers from myriad forms of fraud and abuse. It sharpened its focus in traditional areas, such as ensuring the safety of drugs, medical devices, food and dietary supplements, and maintaining a level playing field for those seeking to purchase small business opportunities. The branch also expanded its footprint to cover areas like mortgage fraud, immigration services fraud, and new forms of telemarketing abuse, thus bringing its criminal and civil enforcement resources to bear against a wide range of practices that harm consumers.
“As scams targeting consumers grow and becomes more sophisticated, those in law enforcement charged with combating such schemes must do the same,” said Assistant Attorney General West.
Health care fraud and food safety cases were the sources of the Consumer Protection Branch’s largest recoveries in 2011. The branch brought enforcement actions in response to a number of violations, including unlawful promotion of pharmaceuticals, misleading statements made to the Food and Drug Administration (FDA) about medical devices, the sale of adulterated food and unsafe food, and drug manufacturing practices. The branch recovered more than $842 million in criminal fines and forfeiture and $40,372 in restitution, secured 12 convictions, and obtained sentences totaling 220 months in prison against 11 individuals. In addition, the branch recovered $35 million in civil penalties and won 14 civil injunctions against defendants that failed to manufacture food or drug products safely.
The Consumer Protection Branch has responded to the financial crisis by aggressively pursuing various forms of financial fraud, including the sale of bogus reverse mortgages to elderly homeowners, the sale of phony business franchises to budding entrepreneurs trying to earn an honest living and telemarketing operations that “cram” false charges on consumers’ telephone bills. In 2011, the branch secured 19 convictions, with prison sentences totaling more than 100 years, and recovered more than $30 million in civil penalties and restitution – including more than $22 million that went back to victims.
Operating largely through the Consumer Protection Branch, the Civil Division has taken a prominent role in the President’s Financial Fraud Enforcement Task Force. Assistant Attorney General West is a co-chair of three of the Task Force’s working groups, all of which bring together the government’s civil and criminal capabilities to enhance enforcement, prevention and outreach efforts.
The Mortgage Fraud Working Group’s work has led to unprecedented levels of cooperation between the federal government and state and local partners to address the housing crisis that has affected so many American families. The recently formed Residential Mortgage-Backed Securities Working Group brings together the Department of Justice, several state Attorneys General, and other federal agencies to investigate those responsible for misconduct contributing to the collapse of the housing market through the pooling and sale of residential mortgage-backed securities. The Civil Division is also a leader of the new Consumer Protection Working Group, which is charged with working with federal law enforcement and regulatory agencies and state and local partners to strengthen and expand existing efforts to combat consumer-related fraud schemes.
In 2011, the Consumer Protection Branch promoted product safety by prosecuting individuals and companies for making false statements concerning safety testing, illegally selling explosives (such as fireworks), and importing products that do not meet the nation’s safety standards. In addition, the branch investigated and prosecuted individuals who deceived used car buyers through odometer rollback scams. In these two areas, the branch won multiple criminal convictions, obtained prison sentences totaling more than 10 years, and recovered more than $5 million.
The Consumer Protection Branch complimented its affirmative criminal and civil enforcement work in 2011 by defending the decisions of government agencies charged with protecting consumers. The branch successfully defended cases involving, for example, the FDA’s rejection of an unsafe drug and approval of a generic drug to increase consumers’ market choices; the Federal Trade Commission’s (FTC) approval of a regulation to shield consumers from unfair business practices; and the Consumer Product Safety Commission’s (CPSC) recall of an unsafe product.
Assistant Attorney General West expressed his gratitude and appreciation for the dedicated public servants who contributed to the investigation and prosecution of these matters. These individuals include attorneys, investigators, auditors and other personnel throughout the Civil Division, the U.S. Attorneys’ Offices, the Department of Health and Human Services, the FDA, the FTC, the CSPC, and other federal and state agencies.
Italian Shipping Company and Chief Engineer Charged with Environmental Crimes and Obstruction of JusticeRead the Press Release
WASHINGTON – Italian-based shipping company Giuseppe Bottiglieri Shipping Company S.P.A., owner and operator of the Motor Vessel Bottiglieri Challenger, and Vito La Forgia, the vessel’s chief engineer, have been charged in a four-count indictment with the illegal dumping of waste oil and oil-contaminated waste water in violation of the Act to Prevent Pollution from Ships (APPS), conspiracy and two counts of obstruction of justice, the Department of Justice announced today.
Engine room operations on board large ocean going vessels such as the Bottiglieri Challenger generate large amounts of waste oil and oil-contaminated waste water. International and U.S. law requires that all overboard discharges of waste oil be recorded in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.
According to the indictment, on or about Jan. 25, 2012, the Bottiglieri Challenger arrived in Mobile, Ala., and was boarded by Coast Guard officials who conducted an inspection to determine the vessel’s compliance with U.S. and international law. The Coast Guard’s inspection uncovered evidence that Giuseppe Bottiglieri Shipping Company, acting through its agents and employees and chief engineer Vito La Forgia, conspired to and failed to maintain an accurate oil record book that reflected all disposals of oil residue and discharges overboard, in violation of federal law.
Giuseppe Bottiglieri Shipping Company and Vito La Forgia are also charged in the indictment with obstructing the Coast Guard’s inspection by ordering that an illegal bypass pipe, also referred to as a “magic pipe,” that was used to transfer oil-contaminated waste overboard, be removed prior the vessel’s arrival in Mobile. The indictment further alleges that the shipping company and La Forgia obstructed the inspection by having one of the waste tanks rinsed out with sea water before reaching the port in Mobile.
If convicted, Giuseppe Bottiglieri Shipping Company faces a fine and other possible penalties. La Forgia faces a maximum penalty of 20 years in prison for the obstruction of justice charge.
An indictment contains only allegations. The defendants are presumed innocent unless and until proven guilty.
This case was investigated by the U.S. Coast Guard Investigative Services and the Environmental Protection Agency, Criminal Investigations Division. The case is being prosecuted by the U.S. Attorney's Office for the Southern District of Alabama and by the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice.
Illinois Man Sentenced to 22 Years in Prison for Conspiracy to Advertise Child PornographyRead the Press Release
WASHINGTON – Jonathon Sudduth of Springfield, Ill., was sentenced today by U.S. District Judge Virginia A. Phillips in Los Angeles to 22 years in prison and lifetime supervised release for conspiracy to advertise child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. for the Central District of California and Assistant Director in Charge Steve Martinez of the FBI’s Los Angeles Field Office.
Sudduth, 22, pleaded guilty in March 2011 to one count of conspiracy to advertise child pornography. Today’s sentencing is the result of an international investigation into the “Lost Boy” online bulletin board. Federal authorities, working in conjunction with a coalition of international law enforcement agencies, shut down the Lost Boy bulletin board approximately three years ago. As a result of the investigation, 16 named defendants have been charged in the United States for their roles in the ring. To date, 15 defendants have pleaded guilty or been found guilty after trial and one defendant died in custody.
According to court documents and proceedings, law enforcement authorities discovered the Lost Boy bulletin board after receiving information from Eurojust, the judicial cooperation arm of the European Union. Eurojust provided U.S. law enforcement with leads obtained from Norwegian and Italian authorities indicating that a North Hollywood, Calif., man was communicating with an Italian national about child pornography and how to engage in child sex tourism in Romania. Acting on the information from Europe, the FBI executed search warrants that led to the discovery of the Lost Boy network. Further investigation revealed that Lost Boy had 35 members, 16 of whom were U.S. nationals. Other members of the network were located in countries around the world, including Belgium, Brazil, Canada, France, Germany, New Zealand and the United Kingdom.
The Lost Boy bulletin board, according to court documents and proceedings, was dedicated to men who have a sexual interest in young boys and was established to provide a forum to trade child pornography. Lost Boy had a thorough vetting process for new members, who had to post child pornography to join the organization. Once accepted, members had to continue to post child pornography to remain in good standing and not be removed from the board. According to court documents, Lost Boy members advised each other on techniques to evade detection by law enforcement, which included using screen names to mask identities and encrypting computer data.
Through the Lost Boy investigation and related investigations, law enforcement authorities in the United States identified and arrested 16 Lost Boy members, as well as approximately six more men who have been charged with child molestation. The investigation also led to the identification of 27 domestic victims of child abuse, some of whom were portrayed in images posted to the Lost Boy bulletin board.
International law enforcement efforts involving European law enforcement, the Brazilian Federal Police and other agencies have identified child molestation suspects in South America, Europe and New Zealand. Three suspects in Romania, one in France and another in Brazil have been charged, and offenders have been convicted in Norway and the United Kingdom. Law enforcement efforts have also identified dozens of child victims located in Norway, Romania, Brazil and other nations.
The investigation into the Lost Boy bulletin board was led by the FBI and the U.S. Postal Inspection Service, in conjunction with the Los Angeles-based Sexual Assault Felony Enforcement (SAFE) Team. The High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), along with Eurojust, have provided invaluable assistance during the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Joey L. Blanch and Yvonne Garcia, and CEOS Trial Attorney Andrew McCormack.
Former FDA Chemist Sentenced to 60 Months in Prison for Insider TradingRead the Press Release
WASHINGTON – Cheng Yi Liang, a former Food and Drug Administration (FDA) chemist from Gaithersburg, Md., was sentenced today to 60 months in prison for engaging in insider trading on multiple occasions based on material, non-public information he obtained in his capacity as an FDA scientist. Liang was previously ordered to forfeit $3.7 million representing the proceeds of the insider trading scheme.
The sentence was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the District of Maryland Rod J. Rosenstein; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Elton Malone, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Specials Investigations Branch.
“Taking advantage of his special access as a chemist at the FDA, Mr. Liang used sensitive inside information to reap illegal profits in the pharmaceutical securities market,” said Assistant Attorney General Breuer. “For years, he exploited his position in the agency to make easy money on the stock market. But today’s sentence shows that easy money has consequences. Investors engage in insider trading at their peril.”
“Cheng Yi Liang bought and sold stocks based on non-public information, and he tried to conceal his crimes by using the names of friends and relatives,” said U.S. Attorney Rosenstein. “Mr. Liang violated his duty of loyalty to the FDA and profited from inside information.”
“Liang brazenly sought to profit based on sensitive, insider information. What he didn’t know is that investigators have been utilizing sophisticated technical tools to identify and track criminal behavior,” said Special Agent in Charge Malone of HHS-OIG. “We will continue to insist that federal government employee conduct be held to the highest of standards.”
“Mr. Liang breached the trust of his employment by obtaining sensitive information and using it for his own profit,” said Assistant Director in Charge McJunkin. “Together with our partner agencies, the FBI will continue to pursue and hold accountable those who perpetrate such financial crimes, as we work to protect American taxpayers and our financial markets.”
Liang, 58, was sentenced by U.S. District Judge Deborah K. Chasanow in the District of Maryland. He pleaded guilty on Oct. 18, 2011, to one count of securities fraud and one count of making false statements.
According to court documents, Liang had been employed as a chemist since 1996 at the FDA’s Office of New Drug Quality Assessment (NDQA). Through his work at NDQA, Liang had access to the FDA’s password protected internal tracking system for new drug applications, known as the Document Archiving, Reporting and Regulatory Tracking (DARRTS) system. FDA uses DARRTS to manage, track, receive and report on new drug applications. Liang reviewed DARRTS for information relating to the progression of experimental drugs through the FDA approval process. Much of the information accessible on the DARRTS system constituted material, non-public information regarding the pharmaceutical companies that had submitted their experimental drugs to the FDA for review.
In his plea, Liang admitted that between in or about July 2006 and in or about March 2011, using material, non-public information from DARRTS and other sources, he traded in the securities of pharmaceutical companies in violation of the duties of trust and confidence he owed the FDA. Liang utilized accounts of relatives and acquaintances, including his son, to execute the trades. When the FDA insider information about a company’s product was positive, Liang purchased securities through the accounts he controlled. When the FDA insider information was negative, Liang would sell short a company’s stock. After the FDA’s action with respect to a drug was made public, Liang executed trades to profit from the change in the company’s share price as a result of the FDA announcement, resulting in total profits gained and losses avoided of $3,776,152.
During the time he was employed by the FDA, Liang was required to file a confidential financial disclosure form, disclosing, among other things, investment assets with a value greater than $1,000 and sources of income greater than $200. During the time period of his insider trading scheme, Liang annually filed these forms and failed to disclose using various brokerage accounts under his control or his income from the illicit securities trading. For example, on Feb. 16, 2010, Liang signed and submitted the 2010 confidential financial disclosure form, failing to disclose that during 2009 he earned approximately $1,040,000 from trading on material, non-public information obtained from the FDA.
In related actions, the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS) filed a civil complaint in the District of Maryland for forfeiture of proceeds related to the insider trading scheme. To date, the government has obtained over $1 million through the civil forfeiture of nine bank and brokerage accounts. The forfeiture of two real properties – a house and a condominium in Montgomery County, Md. – is still pending. Liang previously consented to the entry of final judgment as to the U.S. Securities and Exchange Commission’s (SEC) civil enforcement action against him, also in the District of Maryland.
This case is being prosecuted by Trial Attorneys Kevin Muhlendorf and Thomas Hall of the Criminal Division’s Fraud Section, Assistant U.S. Attorney David Salem for the District of Maryland, and AFMLS Senior Trial Attorney Pamela J. Hicks and Trial Attorney Jennifer Ambuehl. The case was investigated by the FBI’s Washington Field Office and the HHS-OIG. The department acknowledges the substantial assistance of the SEC, in particular its Market Abuse Unit, which referred the matter to the Criminal Division’s Fraud Section.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Departments of Justice and Education Resolve Harassment Allegations in Anoka-Hennepin School District in MinnesotaRead the Press Release
WASHINGTON – The Departments of Justice and Education, together with six private student plaintiffs and the Anoka-Hennepin School District, filed a proposed consent decree today in the U.S. District Court for the District of Minnesota, resolving complaints of sex-based harassment of middle and high school students in the school district. Title IV of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972 each prohibits sex-based harassment, including harassment based on nonconformity with gender stereotypes and sexual harassment.
In November 2010, the Department of Justice received a complaint alleging that students in the school district were being harassed by other students because they didn’t dress or act in ways that conform to gender stereotypes. The Departments of Justice and Education conducted an extensive investigation into sex-based harassment in the district’s middle and high schools. Many students reported that the unsafe and unwelcoming school climate inhibited their ability to learn. The parties worked collaboratively to draft a consent decree addressing and resolving the allegations in the complaints.
If approved by the court, the consent decree will ensure that the school district:
- Retains an expert consultant in the area of sex-based harassment to review the district’s policies and procedures concerning harassment;
- Develops and implements a comprehensive plan for preventing and addressing student-on-student sex-based harassment at the middle and high schools;
- Enhances and improves its training of faculty, staff and students on sex-based harassment;
- Hires or appoints a Title IX coordinator to ensure proper implementation of the district’s sex-based harassment policies and procedures and district compliance with Title IX;
- Retains an expert consultant in the area of mental health to address the needs of students who are victims of harassment;
- Provides for other opportunities for student involvement and input into the district’s ongoing anti-harassment efforts;
- Improves its system for maintaining records of investigations and responding to allegations of harassment;
- Conducts ongoing monitoring and evaluations of its anti-harassment efforts; and
- Submits annual compliance reports to the departments.
The consent decree will remain in place for five years.
“Harassment by or against students in schools is unacceptable, and not a ‘rite of passage’ to be endured by anyone. Parents are entitled to know that their children will be safe in school every day,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We commend the Anoka-Hennepin School District for its willingness to tackle sex-based harassment and for working collaboratively with the federal government to address concerns across the district. We hope the district will become a model for schools nationwide by providing a safe and nurturing learning environment for all students free from bullying and harassment.”
B. Todd Jones, U.S. Attorney for the District of Minnesota, said, “Nearly 40,000 students in the Anoka-Hennepin School District will benefit from this consent decree. Schools must be safe places for all students. Bullying of any kind cannot be tolerated. To that end, the Anoka-Hennepin School District took great strides today.”
As Russlynn Ali, Assistant Secretary for Civil Rights at the Department of Education recognized, “If students aren’t safe, then students aren’t learning. Bullying, sexual harassment and gender stereotyping of any student, including LGBT students, have no place in our nation’s schools. We must work to stop those abusive behaviors when they take place, repair their harmful effects and prevent them from happening in the future. The Department of Education is committed to working with Anoka-Hennepin School District to ensure that the environment in District schools is safe and welcoming for all students and that the measures now being taken by the District are effective in preventing and addressing any future harassment.”
The enforcement of Title IV and Title IX are top priorities of the Justice Department’s Civil Rights Division and U.S. Attorney Offices. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt. Additional information about the U.S. Attorney’s Office for the District of Minnesota is available on its website at www.justice.gov/usao/mn .
The enforcement of Title IX is a also top priority of the Department of Education Office for Civil Rights. Additional information about the Office for Civil Rights is available on its website at www2.ed.gov/ocr.
2 March 2012
U.S. Files False Claims Act Lawsuit Against Florida-based Federal Grant RecipientRead the Press Release
The United States has filed a complaint under the False Claims Act against the Florida-based Technological Research and Development Authority (TRDA), the Justice Department announced today. The suit was filed in the Southern District of Mississippi.
The lawsuit alleges that TRDA made false statements to obtain federal grants from the National Aeronautics and Space Administration (NASA) and the U.S. Department of Commerce, Economic Development Administration (EDA), and knowingly spent grant funds on activities not permitted by the grants. TRDA is a special district of the state of Florida, chartered by the state to aid in the development of opportunities for local small businesses. TRDA is headquartered in Melbourne, Fla.
“Government grant programs intended to encourage the development of small businesses should not be abused by those who receive such funding,” said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. “We remain committed to maintaining a level playing field for those who compete for or receive federal grant monies.”
Assistant Attorney General West thanked the NASA Office of Inspector General, which assisted the Civil Division in its investigation of this matter.
The claims contained in the complaint against TRDA are only allegations and do not constitute a determination of liability.
Readout of Attorney General Eric Holder and Secretary Janet Napolitano’s Trip to Ottawa, CanadaRead the Press Release
U.S. Attorney General Eric Holder and Secretary of Homeland Security Janet Napolitano today visited Ottawa, Canada to participate in the Cross-Border Crime Forum with Canadian Minister of Justice and Attorney General Rob Nicholson, and Canadian Minister of Public Safety Vic Toews. Secretary Napolitano, Attorney General Holder and Minister Toews also signed a memorandum of understanding to better prevent and combat human smuggling and trafficking.
“Our productive discussions today at the Cross Border Crime Forum go a long way toward advancing a key pillar of the Beyond the Border initiative that President Barack Obama and Prime Minister Stephen Harper signed last year: integrated law enforcement that adds value to our relationship by leveraging shared resources, improving information sharing and increasing coordination of efforts, while ensuring the safety of the citizens of both our countries,” said Attorney General Holder. “ I am grateful to our Canadian counterparts for their indispensable work to combat exploitation, abuse, and violence; and to strengthen the critical ties that bind our nations together. With the signing of this important memorandum, we signal a renewed commitment to the goals and values that our nations share to prevent and combat human trafficking.”
“We must stop individuals and transnational criminal organizations that seek to exploit the border shared by the United States and Canada to traffic drugs, arms and other illicit goods,” said Secretary Napolitano. “We will continue to work closely with our Canadian partners through greater operational collaboration and intelligence sharing to strengthen the security of both our nations within, at, and away from our border.”
During the Forum, Secretary Napolitano, Attorney General Holder, Canadian Minister of Justice and Attorney General Nicholson and Minister Toews discussed collaborative efforts to advance President Obama and Prime Minister Harper’s Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness initiative. The Beyond the Border Action Plan outlines the specific steps both countries will take to achieve the security and economic competitiveness goals from the Beyond the Border Declaration. They also focused on efforts to develop the next-generation of integrated cross-border law enforcement operations, and improve information sharing practices to enhance the mutual security of the United States and Canada.
“Our Government is pleased to work with our U.S. counterparts to combat cross-border crime,” said the Honorable Rob Nicholson. “Ongoing cooperation between our countries allows for the most effective investigation and prosecution of crime when criminal activities cross our border.”
“The Forum remains an excellent opportunity for Canada and the U.S. to advance cooperation in the areas of law enforcement, criminal justice and intelligence,” said Minister Toews. “Our government is focused on the economy and creating jobs, and I am particularly pleased with the progress being made on initiatives announced under the Beyond the Border Action Plan.”
While in Ottawa, Attorney General Holder, Secretary Napolitano and Minister Toews signed a memorandum of understanding between the U.S. Human Smuggling and Trafficking Center and the Canadian Human Trafficking National Coordination Center. The agreement between these two centers will facilitate the sharing of critical information on human trafficking to combat and disrupt transnational criminal organizations.
For more information, please visit www.justice.gov or www.dhs.gov .
Oregon Man Convicted for Helping Thousands Steal Internet ServiceRead the Press Release
WASHINGTON – A Redmond, Ore., man was convicted yesterday of seven counts of wire fraud by a federal jury in Boston, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Carmen Ortiz of the District of Massachusetts announced today.
Ryan Harris, 26, was the owner of TCNISO, a company that distributed products enabling users to steal Internet service. From 2003 through 2009, Harris developed and distributed hardware and software tools that allowed his customers to modify their cable modems so that they could disguise themselves as paying subscribers and obtain Internet service without paying. The products included a “packet sniffer,” which Harris dubbed “Coax Thief.” “Coax Thief” surreptitiously intercepted (or “sniffed”) Internet traffic so that the user obtained the media access control addresses and configuration files of surrounding modems. TCNISO and Harris also offered ongoing customer support, primarily through forums that it hosted on the TCNISO website, to assist customers in their cable modem hacking activities.
“Mr. Harris tried to hide behind the banner of freedom of access to the Internet, but the evidence established that he built a million dollar business helping customers steal Internet service,” said Assistant Attorney General Breuer.
U.S. Attorney Carmen M. Ortiz said, “The Internet is an incredible resource that has transformed the way we conduct business. Unfortunately, it has also become a breeding ground for criminals. We will continue to prioritize the prosecution of those who wish to utilize our communication systems to conduct illegal activity and inflict harm on others.”
Each count carries a maximum prison term of 20 years and a fine of up to $250,000. Sentencing has been scheduled for May 23, 2012, at 3 p.m. before Chief District Court Judge Mark Wolf, who presided over the trial.
The case was investigated by the Boston Field Office of the FBI and was prosecuted by Assistant U.S. Attorney Adam Bookbinder of the U.S. Attorney’s Office for the District of Massachusetts’s Cybercrimes Unit and Trial Attorney Mona Sedky from the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.
Ohio Man Pleads Guilty for Cross BurningRead the Press Release
WASHINGTON – Brandon Rhodes, 20, of Marengo, Ohio, pleaded guilty yesterday to a charge related to the burning of a cross in the yard of an African-American juvenile in March 2011, the Justice Department announced today.
Rhodes pleaded guilty to conspiracy to interfere with the housing rights of another in federal court in Columbus, Ohio, before U.S. District Judge Gregory L. Frost. Information presented during the plea hearing established that a cross burning occurred on March 2, 2011, at a residence in Bennington Township, Ohio, that was home to an African-American family with three high school children. The investigation revealed that Rhodes and his co-conspirator agreed to burn a cross in the backyard of the home of one of the children who resided there. After the six-foot wooden cross was constructed, Rhodes and his co-conspirator transported the cross to the back yard of the African-American family. Rhodes and his co-conspirator wrote “KKK will make you pay” and another racial derogatory term on the cross. Rhodes and his co-conspirator poured gasoline on the cross and, using a cigarette lighter, ignited the cross around midnight.
“A burning cross is a symbol of bigotry and hate and, in this case, it was used to threaten a family. These incidents have no place in our country, and they are a reminder of the civil rights challenges we still face today,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We will continue to aggressively prosecute hate crimes of this kind.”
“We are committed to working with federal, state and local law enforcement to investigate and prosecute those who commit crimes driven by intolerance or hatred,” said Carter Stewart, U.S. Attorney for the Southern District of Ohio.
Rhodes faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney Kenneth L. Parker from the U.S. Attorney’s Office for the Southern District of Ohio and Trial Attorney Patricia A. Sumner from the Civil Rights Division of the Department of Justice.
Miami Taxidermist Sentenced for Wildlife SmugglingRead the Press Release
WASHINGTON – Enrique Gomez De Molina, 48, of Miami Beach, Fla., was sentenced in federal court in Miami today to 20 months in prison for illegal trafficking in endangered and protected wildlife, announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; and Luis J. Santiago, Special Agent in Charge, U.S. Fish and Wildlife Service Office of Law Enforcement, Southeast Region. De Molina was also sentenced to one year of supervised release to follow his prison term, a $6,000 fine and was ordered to forfeit all of the smuggled wildlife in his possession.
According to documents filed with the court, the defendant attempted to import wildlife species including skins of a Java kingfisher (Halcyon cyanoventris) and a collared kingfisher (Todiramphus chloris), one mounted lesser bird of paradise (Paradisaea minor), the skin of a juvenile hawk-eagle (Spizaetus sp.), the carcass remnant of a slow loris (Nycticebus coucang) and the carcass remnant of a lesser mouse deer (Tragulus javanicus), without proper declarations when imported into the United States and without the required permits. In some cases, commercial transactions in listed species, such as the slow loris, are not allowed at all.
In order to protect certain species of wildlife against over-exploitation, the United States is a signatory to an international treaty known as the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Appendix I of CITES includes species that are threatened with extinction and for which no trade is allowed for commercial purposes. Appendix II of CITES includes wildlife species which although not necessarily threatened with extinction now, may become so unless trade in specimens of such species is strictly regulated. Before importing a specimen of any animal protected under Appendix I of CITES from any foreign country, a valid foreign CITES export permit from the country of origin, or a CITES re-export certificate from a country of re-export, must be obtained as well as a valid “import permit” from the United States. Before importing a specimen of any animal protected under Appendix II of CITES from any foreign country, a valid foreign export permit or re-export certificate must be obtained. Federal law also prohibits the importation of fish or wildlife into the United States without proper declaration to both U.S. Customs and Border Protection (CBP) and the Fish & Wildlife Service (FWS).
According to the allegations contained in the information and a detailed factual statement in the court record, De Molina’s illegal wildlife trafficking activities extended from late 2009 through February 2011, and included numerous species and shipments, involving contacts in Bali, Indonesia, Thailand, the Philippines, Canada and China. The joint factual statement describes the importation into the U.S. of the parts, skins and remains of species, including a king cobra, a pangolin, hornbills, birds of paradise, and the skulls of babirusa and orangutans. Despite the interception of two shipments in late 2009 that were ultimately forfeited by De Molina and abandoned, he continued to solicit protected wildlife from his suppliers via the Internet, and to select specific animals from photographs to be provided to him. The parts or carcasses of the wildlife he selected would then be shipped to him without the permits or declarations required by law. Some of the endangered and protected wildlife he selected was alive at the time it was photographed, including a wooly stork, a slow loris, and a hornbill, and later sent to him dead.
After receipt, De Molina would incorporate various parts and segments of the wildlife into taxidermy pieces at a studio in downtown Miami. He offered these pieces through galleries and on the Internet for prices ranging up to $80,000. In December 2010, pieces constructed by De Molina were exhibited during Art Basel week at the Scope Art Fair in Miami, resulting in at least one significant sale and the subsequent illegal export of the piece to the Canada.
“Mr. De Molina trafficked in highly endangered species in violation of the law, disguising commercial exploitation of endangered species as artwork,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division. “Today, Mr. De Molina has been held fully accountable for his illegal actions, which are prohibited by both U.S. and international law.”“For years, DeMolina illegally imported parts and remains of endangered and threatened species, including a cobra, a pangolin, hornbills, and the skulls of babirusa and orangutans, and used them to create taxidermy pieces that he sold for as much as $80,000,” said U.S. Attorney Wifredo A. Ferrer. “Trafficking in endangered and threatened species, whether for personal profit or under the guise of art, is illegal. Together with our law enforcement partners, we will strictly enforce the laws that protect our environment and our wildlife.”
“This case is an excellent example of the U.S. Fish & Wildlife Service's commitment to investigate and interdict the commercialization of protected wildlife species,” said Luis J. Santiago, Special Agent in Charge of the FWS Office of Law Enforcement, Southeast Region. “The taxidermy work that Mr. De Molina considered artwork is nothing more than a shameful use of the world’s wildlife resources, by promoting the illegal take, and trafficking of protected species.”
Mr. Ferrer commended the investigative efforts of the FWS, which brought the investigation to a successful conclusion. The case is being prosecuted by Assistant U.S. Attorneys Thomas Watts-FitzGerald and Trial Attorney Shennie Patel with the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
To view court filed documents and photos from court filings, visit: www.fws.gov/miamitaxidermisttrafficking.html.Manager for Violent Fraudulent Document Ring Sentenced to Two Life Sentences for Murdering Rival VendorRead the Press Release
WASHINGTON – Edy Oliverez-Jiminez, aka “Daniel,” Erasmo,” “Ulysses” and “Jesus,” 25, of Virginia Beach, Va., was sentenced today to two consecutive life terms on prison, after having been convicted by a jury for racketeering, murder, kidnapping, conspiracy to commit money laundering and conspiracy to produce and transfer false identification documents.
Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; and John P. Torres, Special Agent in Charge of the U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) field office in Washington, D.C., made the announcement after the life sentences were handed down by U.S. District Judge Henry E. Hudson.
“Edy Oliverez-Jiminez is a calculating murderer who savagely attacked rival vendors to corner the fake document market,” said U.S. Attorney MacBride. “His Mexican-based cartel exported crime, pain and terror into the United States, and today’s sentence appropriately ensures that he will never rejoin society on either side of the border.”
“Edy Oliverez-Jiminez, like his co-conspirators, committed horrific acts of violence to protect the turf of his fraudulent document ring,” said Assistant Attorney General Breuer. “Because of his crimes, he will now spend the rest of his life in prison.”
“The sentence handed down today ensures that a murderer like Edy Oliverez-Jiminez will be locked up for the rest of his life,” said Special Agent in Charge Torres. “This case has demonstrated that fraudulent document vending organizations can be not only complex and highly organized, but also ruthless in the pursuit of profit. ICE-HSI will continue its work with law enforcement partners at all levels to disrupt this type of criminal activity and prosecute the individuals responsible.”
Judge Hudson explained from the bench that he imposed the life sentences to send a message of deterrence for Oliverez-Jiminez’s involvement with a violent racketeering organization based out of Mexico. He further stated that the sentences were just in light of the defendant’s involvement in one of the most violent murders that he has observed in his career. He described the murder as “pure unadulterated torture.”
Oliverez-Jimenez was a long-term supervisor for a highly sophisticated and violent fraudulent document trafficking organization based in Mexico, with cells in 19 cities in 11 states, including three cells in Virginia. Prior to his arrest, he had served as the cell manager for the Virginia Beach and Little Rock, Ark., cells.
On Nov. 29, 2011, a federal jury convicted Oliverez-Jimenez of kidnapping and murdering a rival in Little Rock in July 2010. Posing as a potential client, a conspirator placed a call to the rival and arranged to meet him and an associate at an abandoned trailer house. When the rival entered the home, Oliverez-Jiminez and others attacked him, binding his feet, mouth and eyes with duct tape. The rival’s associate was also brought inside, bound with duct tape and beaten by the attackers. Both men were left bound on the floor, and the rival was later pronounced dead at the scene of the attack. According to the Arkansas deputy chief medical examiner, he died of asphysixia, blunt-enforced trauma and blood loss.
The jury also convicted Oliverez-Jiminez for his role in managing cells in Little Rock and Virginia Beach that produced high-quality false identification cards to illegal aliens. He supervised a number of “runners” who distributed business cards advertising the organization’s services and helped facilitate transactions with customers. The cost of fraudulent documents varied depending on the location, with counterfeit Resident Alien and Social Security cards typically selling from $150 to $200. Each cell maintained detailed sales records and divided the proceeds between the runner, the cell manager and the upper level managers in Mexico. From January 2008 through November 2010, members of the organization wired more than $1 million to Mexico.
By August 2010, Oliverez-Jiminez had relocated to Virginia Beach, where he set up another cell for the organization, which operated until his arrest in November 2010. According to wire intercepts admitted as evidence at trial, he planned another violent attack of a competitor for Sept. 18, 2010.
Throughout the conspiracy, Oliverez-Jiminez worked under Israel Cruz Millan, aka “El Muerto,” 26, of Raleigh, N.C., who led the organization in the United States and reported to leaders in Mexico. Millan pleaded guilty on Nov. 15, 2011, to racketeering conspiracy, conspiracy to produce and transfer false identification documents and conspiracy to commit money laundering. On Feb. 16, 2012, U.S. District Judge James R. Spencer sentenced Cruz Millan to 300 months in prison.
Testimony at the trial of Oliverez-Jiminez showed that in June 2009, members of Cruz Millan’s organization in Richmond, Va., lured two rival sellers to a home, bound them, struck them with a baseball bat and cut them with a knife, and then placed a semi-automatic handgun in a rival’s mouth and warned him about selling false identification documents in Richmond. In November 2010, Cruz Millan and a conspirator complained that a rival seller in Nashville, Tenn., continued to operate on their turf even after they had beat him up. Cruz Millan instructed his subordinate to find an empty house to take care of the rival, cautioning him to wear gloves to avoid leaving fingerprints and to avoid using a gun which would create too much noise when fired.
Cruz Millan tightly controlled the organization’s activities, keeping in regular contact with Oliverez-Jiminez and other cell managers about inventory, bi-weekly sales reports and competition. Members who violated internal rules within the operation were subject to discipline, including shaving eyebrows, wearing weights, beatings and other violent acts. During Oliverez-Jiminez’s trial and Cruz Millan’s sentencing hearing, the United States presented evidence regarding Cruz Millan’s orchestration of the kidnapping, beating and torture of an enterprise member who was suspected of stealing from the organization. The event occurred on Oct. 29, 2010, in Raleigh, N.C. The evidence presented included telephone calls during which Cruz Millan conducted a “conference call” with other cell leaders around the United States so they could hear the torture as it took place and sending a message to other enterprise members about what would happen if they were caught stealing from the criminal organization. The testimony and intercepted calls depicted how the victim was subjected to electric shocks administered by placing his feet in a bucket of water and electrocuting him with jumper cables attached to a car battery.
Twenty-seven members of the organization were originally arrested on Nov. 18, 2010. Following the Oliverez-Jiminez trial, all of those defendants have been convicted. In addition, two other defendants have been convicted in related cases in the Eastern District of Virginia, along with others who have been charged and convicted in other districts across the country.
The investigation was centered in the Norfolk office of ICE-HSI. ICE-HSI received assistance from the Virginia State Police and Chesterfield County Police Department. Assistant U.S. Attorneys Michael Gill and Angela Miller of the Eastern District of Virginia and Trial Attorney Addison Thompson of the Criminal Division’s Human Rights and Special Prosecutions Section, are prosecuting the case on behalf of the United States.
Kazakhstani National Pleads Guilty to Money Laundering for “Hack and Dump” SchemeRead the Press Release
WASHINGTON – Alexey Li, 21, a citizen of Kazakhstan who entered the United States on a student visa, pleaded guilty today before U.S. District Judge Ewing Werlein, Jr. to aiding and abetting money laundering, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Kenneth Magidson for the Southern District of Texas.
Li and three co-conspirators were charged in an indictment filed in the Southern District of Texas and unsealed in December 2011.
According to court documents, Li agreed to launder funds generated in a sophisticated “hack and dump” stock scheme that caused more than $400,000 in losses. The indictment charges that Li’s co-conspirators illegally accessed brokerage accounts to engage in a stock fraud scheme in which the compromised accounts were used to purchase borrowed shares of stock at above-market prices from the defendants’ personal brokerage accounts. Li’s co-conspirators then repurchased the borrowed shares at the considerably lower market price, returned the borrowed shares to the stock lender and claimed as profit the difference between the market price and the inflated price paid by the compromised victim accounts.
At sentencing, Li will face a maximum penalty of 10 years in prison and a $250,000 fine.
This case was investigated by the FBI. The case is being prosecuted by Trial Attorney Ethan Arenson of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Mark McIntyre of the Southern District of Texas.
Criminal indictments are only charges and are not evidence of guilt. All defendants are presumed innocent until and unless proven guilty by proof beyond a reasonable doubt in a court of law.
1 March 2012
Ripley, Tennessee, Police Officer Arrested on Federal Civil Rights and Obstruction Charges Involving Alleged Use of ForceRead the Press Release
WASHINGTON – A Ripley, Tenn., police officer was arrested today on federal civil rights and obstruction of justice charges, the Justice Department announced. Stephen Michael Kirkpatrick, 47, was indicted on two counts of violating the victim’s rights to be free from unreasonable searches and seizures and the use of unreasonable force by a person acting under color of law and one count of obstruction of justice. The indictment was returned by a federal grand jury in the Western District of Tennessee on Tuesday.
The indictment alleges that on May 17, 2011, while acting as a police officer, Kirkpatrick assaulted and choked an unnamed victim, identified only as “C.B.S.,” resulting in the victim suffering bodily injury. The obstruction count alleges that on or about May 24, 2011, Kirkpatrick knowingly attempted to corruptly persuade a person, identified only as “J.I.N.,” in an official proceeding.
If convicted, the defendant faces a maximum penalty of 10 years in prison and a $250,000 fine on the civil rights counts and a maximum penalty of 20 years and a $250,000 fine on the obstruction count.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the Memphis, Tenn., division of the FBI. It is being prosecuted by Assistant U.S. Attorney Jonathan Skrmetti of the Western District of Tennessee and Trial Attorney Ryan Murguía of the Criminal Section of the Civil Rights Division of the Department of Justice.
Justice Department Settles Landlord-Tenant Case Under Servicemembers Civil Relief ActRead the Press Release
WASHINGTON – The Justice Department today announced that it had reached a settlement resolving allegations that Empirian Property Management Inc. refused to terminate residential leases entered into by active duty members of the U.S. Air Force assigned to Offutt Air Force Base in Sarpy County, Neb., after those servicemembers received permanent change of station orders. The lawsuit alleged that Empirian, a Delaware corporation that manages over 30 apartment complexes nationwide, violated the Servicemembers Civil Relief Act (SCRA) by refusing to allow the servicemembers to terminate their leases early in order to comply with their military orders.
The SCRA provides certain protections to active duty servicemembers who must terminate residential leases to comply with military orders for a permanent change of station or for deployment. The complaint, which was filed with the settlement, demonstrates the Justice Department’s ongoing commitment to enforcing the rights of our nation’s servicemembers. Under the terms of the settlement, which must be approved by a federal court in Nebraska, Empirian must pay a total of $12,500 in damages to four identified servicemembers, and up to $20,000 to compensate any additional servicemembers harmed by Empirian’s actions. Empirian is also prohibited from engaging in future violations of the SCRA.
“Our men and women in uniform make great sacrifices in order to protect our nation,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “When servicemembers move as a result of military orders, the law protects them from financial hardship. The Civil Rights Division is strongly committed to protecting the rights of servicemembers through our enforcement of the SCRA.”
U.S. Attorney for the District of Nebraska, Deborah R. Gilg, said, “This settlement sends a strong message that the rights of our service personnel will be protected. No service man or woman engaged in protecting all of us from harm should suffer financial damage from landlords who seek to thwart the protection our laws afford our service personnel.”
The Justice Department’s investigation of this matter originated with a referral to the Civil Rights Division from the Offutt Air Force Base Law Center. Servicemembers who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php. Additional information about the Justice Department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.
Hospice Provider Odyssey Healthcare Agrees to Pay $25 Million to Resolve False Claims Act AllegationsRead the Press Release
Odyssey HealthCare, a subsidiary of Gentiva, has agreed to pay $25 million to resolve civil liability under the federal False Claims Act arising from its billing of claims for certain hospice services, the Justice Department announced today. Odyssey Healthcare currently provides hospice services in approximately 27 states, including Wisconsin. Odyssey was purchased by Gentiva Healthcare in 2010.
The Medicare hospice benefit is available for patients who elect palliative treatment for a terminal illness. Patients are eligible for palliative hospice care if they have a terminal diagnosis of six months or less if their disease runs its normal course. The majority of hospice services are billed at the routine care level. Medicare also pays for higher levels of care, including continuous home care. Continuous care is available when the patient is experiencing an acute crisis and his or her symptoms can only be controlled at home through the provision of skilled nursing services. The reimbursement rate for continuous care services is the highest rate available to a hospice and several hundred dollars a day more than the amount paid for routine services. Today’s settlement resolves allegations that Odyssey submitted false claims to the Medicare program for continuous home care services that were unnecessary or that were not performed in accordance with Medicare requirements between January 2006 and January 2009.
“The resolution of the related cases announced today underscores two, critically important components of our focused and effective work in addressing health care fraud,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “First, it shows our abiding commitment to the legitimate medical and the financial interests of all of our constituents who are rightly interested in the sound, lawful administration of the Medicare Program. Second, it illustrates our strong support of the qui tam or “whistleblower” process through which private individuals–often employees of offending health care providers–courageously come forward to report on waste, fraud, and abuse in the handling of taxpayer monies and beneficial programs.”
“The federal government pays for the hospice care of Medicare patients to make them more comfortable during the last months of their lives. Yet it is alleged that Odyssey used a diagnosis of terminal illness as an opportunity to bill taxpayers for unnecessary services,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “The size of the settlement shows how seriously the government views Odyssey’s unlawful behavior, and the five-year Corporate Integrity Agreement will help assure that such fraud is not repeated.”
Allegations that Odyssey improperly billed for continuous care services were originally raised in three lawsuits filed against Odyssey under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. As a part of today’s resolution, the whistleblowers, all former employees of Odyssey, will receive payments totaling more than $4.6 million.
In addition to the $25 million payment, Odyssey entered a five year corporate integrity agreement with the United States Department of Health and Human Services Office of the Inspector General.
This matter was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Wisconsin, and the Office of the Inspector General for the Department of Health and Human Services.
The cases resolved by today’s settlement are United States ex rel. Rouse et al. v. Odyssey Health Care, Inc. (Case No. 08-C-0383, E.D. Wisc.); U.S. ex rel. Dingus v. Odyssey Health Care, Inc., (Case No. 09-C-0254, E.D. Wisc.); and U.S. ex rel. Smithwick v. Odyssey Health Care, Inc., (Case No. No. 09-C-1851, E.D. Wisc.) (Consolidated cases).
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $6.6 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 are more than $8.8 billion.
The claims contained in the complaints against Odyssey are merely allegations and do not constitute an admission of liability.
Former Puerto Rico Senator and Businessman Each Sentenced to 48 Months in Prison for Their Roles in Bribery SchemeRead the Press Release
WASHINGTON – Hector Martinez Maldonado, a former Puerto Rico Senator, and Juan Bravo Fernandez, the former president of the largest private security firm in Puerto Rico, were each sentenced today to 48 months in prison, respectively, for their roles in a bribery scheme involving the passage of legislation beneficial to Bravo Fernandez’s business, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
The defendants were sentenced by Judge Francisco A. Besosa. Judge Besosa also ordered Bravo Fernandez to pay a $175,000 fine and Martinez Maldonado to pay a $17,500 fine.
On March 7, 2011, a jury convicted former Senator Martinez Maldonado, 43, and Bravo Fernandez, 56, of a bribery scheme in which Bravo Fernandez conspired to secure the passage of two bills favorable to his business interests by bribing Martinez Maldonado and Jorge De Castro Font, a former Puerto Rico Senator, with a first-class, all-expenses paid trip to Las Vegas and ringside seats to see a championship boxing match. Specifically, the jury found Martinez Maldonado and Bravo Fernandez guilty of one count of bribery related to federal funds, and found Bravo Fernandez guilty of conspiracy related to this criminal scheme.
“Today’s prison sentences reflect that corruption has serious consequences,” said Assistant Attorney General Breuer. “Former Senator Martinez and Mr. Fernandez engaged in a scheme to exchange cash and services for legislation favorable to Mr. Fernandez’s business interests. The Justice Department’s Criminal Division is determined to put a stop to such brazenly corrupt conduct wherever we find it.”
“Corruption continues to be a primary threat to the well-being of the people of Puerto Rico. Therefore, the FBI will continue to investigate those elected, and/or appointed public officials, and private citizens engaged in these corrupt schemes that deprive the working citizens of Puerto Rico of an honest, representative government,” said Joseph Campbell, Special Agent in Charge of the FBI’s San Juan Field Office. “In Puerto Rico, corruption and democracy cannot co-exist.”
According to evidence presented at trial, Martinez Maldonado was elected to the Puerto Rico Senate in 2004 and began serving a four-year term in January 2005. He was reelected in 2008. Bravo Fernandez was the president and chief executive officer of Ranger American, the largest private security firm in Puerto Rico. De Castro Font served in the Puerto Rico House of Representatives from 1989 to 2004, and served in the Puerto Rico Senate from 2005 to 2008. Beginning in 2005, De Castro Font served as chair of the Committee on Rules and Calendars, exercising significant control over which bills, confirmations and other matters were brought to a vote on the floor of the Senate and when they were brought to a vote. Beginning in 2005, Martinez Maldonado served as chair of the Public Safety Committee, exercising significant control over legislation related to community safety and the private security industry.
As chair of the Public Safety Committee and chair of the Committee on Rules and Calendars, Martinez Maldonado and De Castro Font, respectively, exercised significant control over the fate of the legislation benefitting Bravo Fernandez’s business interests. Specifically, Martinez Maldonado’s committee had jurisdiction over Bravo Fernandez’s two bills and was required to approve the legislation before De Castro Font could schedule them for a vote before the entire Senate.
In order to secure passage of the two bills, Bravo Fernandez, Martinez Maldonado and De Castro Font agreed that Martinez Maldonado and De Castro Font would take official acts supporting the legislation benefitting Bravo Fernandez’s business interests in exchange for things of value provided by Bravo Fernandez. Evidence at trial established that Bravo Fernandez agreed to provide Martinez Maldonado and De Castro Font with a trip to Las Vegas to watch the May 14, 2005, championship boxing match between Winky Wright and Felix “Tito” Trinidad, a popular Puerto Rican boxer. As part of this agreement, Bravo Fernandez provided, among other things, first-class airfare, hotel rooms at the Mandalay Bay Resort and Casino, tickets to the Trinidad vs. Wright boxing match worth $1,000, hotel rooms in Miami for the return trip, as well as meals and drinks. In addition, from 2004 to 2008, Bravo Fernandez provided numerous cash payments to De Castro Font that were concealed in an envelope and provided through personal assistants.
Evidence at trial established that on March 2, 2005, the day Bravo Fernandez paid for the boxing tickets, Martinez Maldonado submitted one of the bills for consideration by the Puerto Rico Senate. Also, on April 21, 2005, Bravo Fernandez used his personal credit card to reserve a hotel room at the Mandalay Bay Resort and Casino. The deposit for this hotel room was credited to Martinez Maldonado’s hotel room. The reservation was made the day after Martinez Maldonado presided over a Public Safety Committee hearing for one of the two bills at which Bravo Fernandez was the only representative from the private security industry to testify. Immediately after the hearing, Martinez Maldonado authorized a committee report in support of Bravo Fernandez’s bill.
On May 17, 2005, the day after the three men returned from their trip to Las Vegas, Martinez Maldonado and De Castro Font both cast their vote in support of one of Bravo Fernandez’s bills in front of the full Puerto Rico Senate. On May 18, 2005, the other bill was approved out of the Public Safety Committee, chaired by Martinez Maldonado. That bill was passed by the Puerto Rico Senate on May 23, 2005.
De Castro Font pleaded guilty on Jan. 21, 2009, to 20 counts of honest services wire fraud and one count of conspiracy to commit extortion. He was sentenced on May 17, 2011, to 60 months in prison.
This case is being prosecuted by Deputy Chief Peter Koski of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI.
Former Mississippi Office Manager Sentenced to 89 Months in Prison for Bank Fraud and Aggravated Identity TheftRead the Press Release
WASHINGTON – A former Mississippi office manager was sentenced today to 89 months in prison for bank fraud and aggravated identity theft, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Special Agent in Charge Daniel McMullen of the FBI’s Jackson, Miss., Field Office; and Special Agent in Charge Mary Lewis of the U.S. Department of Agriculture Office of Inspector General’s (USDA-OIG) Jackson Field Office.
Cynthia Cooley, of Hattiesburg, Miss., was sentenced by U.S. District Judge Keith Starrett in the Southern District of Mississippi. In addition to her prison term, Cooley was sentenced to serve five years of supervised release and was ordered to pay $507,710 in restitution.
Cooley pleaded guilty on Oct. 6, 2011, to one count of bank fraud and one count of aggravated identity theft.
According to court documents, beginning in at least 2008 and continuing until September 2010, Cooley embezzled funds controlled by the USDA Rural Development program using her employer’s bank accounts. As part of the scheme, Cooley stole her employer’s personal funds and fraudulently opened a credit card using her employer’s personal identifiers. Cooley stole more than $500,000 from the USDA and her employer. Cooley concealed her theft by intercepting the mail and altering bank statements.
This case was prosecuted by Trial Attorney Tracee Plowell of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI’s Jackson Field Office, USDA-OIG’s Jackson Field Office and the Hattiesburg Police Department.
California Youth Counselor Sentenced to 29 Years in Prison for Producing Child PornographyRead the Press Release
WASHINGTON – Thomas Perez Jewell was sentenced yesterday in federal court in Oakland, Calif., to 29 years in prison and was ordered to pay $234,000 in restitution for producing child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California and Special Agent in Charge Stephanie Douglas of the FBI’s San Francisco Field Office.
According to court documents, Jewell first came to the attention of law enforcement authorities when he was suspected of distributing and possessing child pornography. A search of Jewell’s Pleasant Hill, Calif., apartment pursuant to a search warrant revealed evidence that Jewell had sexually molested two minor victims and photographed and videotaped his abuse. A hard drive hidden under the mattress in Jewell’s bedroom contained thousands of images of the minor victims. Prior to his arrest and conviction, Jewell was employed as a youth counselor and therapist in Contra Costa County, Calif.
Jewell, 54, was indicted by a federal grand jury on Dec. 9, 2010. He was charged with production of child pornography, transportation of child pornography and possession of child pornography. He pleaded guilty to one count of production of child pornography on Nov. 23, 2011.
Jewell was sentenced by U.S. District Judge Phyllis J. Hamilton. Judge Hamilton also sentenced the defendant to a lifetime of supervised release . Jewell has been in custody since his arrest on Nov. 18, 2010.
The case was prosecuted by Assistant U.S. Attorney Joshua Hill of the Northern District of California and Trial Attorney Mi Yung Park of the Child Exploitation and Obscenity Section in the Justice Department’s Criminal Division. This case was investigated by the FBI, the Pleasant Hill Police Department, the Martinez, Calif., Police Department and the Walnut Creek, Calif., Police Department.
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 United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Barrio Azteca Gang Members and Associates Plead Guilty in Texas to Racketeering ConspiracyRead the Press Release
WASHINGTON – Two Barrio Azteca (BA) gang members and one BA associate pleaded guilty this week for their participation in a racketeering conspiracy and money laundering, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, FBI Assistant Director of the Criminal Investigative Division Kevin Perkins and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA).
Today, Yolanda Barba Chavira, 42, aka “Yoli,” of El Paso, Texas, pleaded guilty before U.S. District Judge Kathleen Cardone of the Western District of Texas to money laundering conspiracy. Yesterday, her co-defendants, Adam Garcia, 34, aka “Bad Boy,” of El Paso, and Carlos Perez, 38, aka “Bandit,” of El Paso, pleaded guilty before U.S. Magistrate Judge Norbert Garney in the Western District of Texas to racketeering conspiracy.
According to court documents, the Barrio Azteca gang began in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization. The BA is primarily based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico.
According to court documents, members and associates of the BA have engaged in a host of criminal activity committed since Jan. 1, 2003, including drug trafficking, extortion, money laundering, kidnapping and murder, including the March 13, 2010, murders in Juarez of U.S. consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. consulate employee.
The BA profits by importing heroin, cocaine and marijuana into the United States from Mexico. Gang members and associates also allegedly charge a “street tax” or “cuota” on businesses and criminals operating in their turf. These profits are used to support gang members in prison by funneling money into prison commissary accounts of gang leaders and to pay for defense lawyers or fines. The “cuota” profits also are allegedly reinvested into the organization to purchase drugs, guns and ammunition.
According to information presented in court, Chavira was an associate of the Barrio Azteca in El Paso. Chavira admitted that on a regular basis BA members gave her extortion money that they had collected. In turn, she used that money to purchase money orders and would send those money orders to BA leaders in jail. During her plea hearing, she admitted that she had reason to believe that the BA was laundering more than $120,000 of extortion fees.
During their plea hearings, Garcia and Perez admitted that they were BA members and participated in gang affairs in many places, including the El Paso area and New Mexico. They admitted that they helped distribute controlled substances like marijuana, cocaine and heroin. They also admitted that they participated in the collection of extortion fees from drug dealers operating on BA turf, and that this money was sent to jailed BA leaders.
As part of his plea agreement, Perez agreed not to contest the forfeiture an SKS 7.62x39 rifle, a 995 Hi Point rifle and 143 rounds of ammunition that were recovered after the execution of a federal search warrant at his residence on March 9, 2011.
Thirty-five members and associates of the BA gang, including Chavira, Garcia and Perez and 19 others who have pleaded guilty, were charged in a third superseding indictment unsealed in March 2011 with various counts of racketeering, murder, drug offenses, money laundering and obstruction of justice. Trial against defendant Ramon Renteria, aka “Spook,” is set to begin May 18, 2012, before Judge Cardone.
Two of the BA members who previously pleaded guilty were sentenced last week by Judge Cardone in accordance with their plea agreements. On Feb. 23, 2012, Jorge Diaz, aka “Payaso,” was sentenced to 20 years in prison and to pay a $5000 fine. On Feb. 24, 2012, Santiago Lucero, aka “Sonny,” was sentenced to 12 years in prison and to pay a $1000 fine.
Chavira faces a maximum penalty of 20 years in prison and is scheduled to be sentenced on May 24, 2012. If U.S. District Judge Cardone accepts plea agreements of Garcia and Perez, each defendant will be sentenced to 20 years in prison.
The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and the U.S. Attorney’s Office of the Western District of Texas - El Paso Division. The U.S. Attorney’s Office for the District of New Mexico provided significant assistance in this case, including Assistant U.S. Attorney Sarah Davenport. Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations.
The case was investigated by the FBI’s El Paso Field Office and Albuquerque, N.M., Field Office (Las Cruces Resident Agency). Special assistance was provided by the DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility and Otero County Prison Facility New Mexico.
29 February 2012
Three Individuals Charged with 1998 Racially-Motivated Murders of Two Men in Las VegasRead the Press Release
WASHINGTON – The Justice Department announced today that Ross Hack, 40, Leland Jones, 31, and Melissa Hack, 37, have been charged with first degree murder and firearms offenses in relation to the 1998 deaths of Lin Newborn and Daniel Shersty. The murders took place on land owned and managed by the Federal Bureau of Land Management within the Las Vegas northwest valley.
According to the indictment, which was unsealed today, between on or about July 3 and July 4, 1998, Ross Hack, Leland Jones, Melissa Hack and others not named in the indictment, allegedly aided and abetted each other in the premeditated shooting and killing of the two victims. A third man, John Butler, was convicted of the murders of Newborn and Shersty by the Clark County District Attorney’s Office in 2000 and is serving two consecutive life sentences in state prison. Evidence at Butler’s trial indicated that the defendants were affiliated or associated with racist neo-Nazi “skinhead” groups at the time of the murders, and that Newborn, who was African-American, and Shersty, who was white, were members of the Anti-Racist Action Group, which is also known as the Skinheads Against Racial Prejudice (SHARPS). Both victims were in their 20s at the time of their deaths.
“This case demonstrates that the Department of Justice will be vigilant in working to ensure that every perpetrator of racially-motivated violence is brought to justice,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I commend the partnership between federal and local law enforcement agencies that led to the charges in this indictment and for continuing to investigate circumstances surrounding the victims’ deaths.”
“I commend the law enforcement agents and detectives for their persistence and efforts in this investigation,” said Daniel G. Bogden, U.S. Attorney for the District of Nevada. “We will pursue the prosecution of these defendants with equal vigor."
“This week's indictments and arrests in the brutal murders of Daniel Shertsy and Lin Newborn would not have been possible without the extraordinary effort and dedication of the FBI agents, Metro detectives and DOJ prosecutors who have worked on this matter,” said Kevin Favreau, FBI Special Agent in Charge in Las Vegas. “Even though it was difficult, and it took a very long time to fully investigate, the FBI and Metro never gave up on this case. And with the support of outstanding prosecutors from the U.S. Attorney's Office and the DOJ's Civil Rights Division in Washington, D.C., the public can rest assured that all those responsible for the murders of Daniel Shertsy and Lin Newborn will finally face justice.”
Ross Hack and Melissa Hack face potential penalties of life in prison or the death penalty. Jones, who was not yet 18 years old at the time of the murders, faces a potential penalty of life in prison.
This case is being investigated by the Las Vegas Division of the FBI and the Las Vegas Metropolitan Police Department. It is being prosecuted by Assistant U.S. Attorney Kathleen Bliss of the U.S. Attorney’s Office for the District of Nevada and Trial Attorney Patricia Sumner of the Civil Rights Division’s Criminal Section.
An indictment is merely an accusation. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt by the government at trial.
Justice Department Reaches Agreement with King George County, Virginia, on Bailout Under the Voting Rights ActRead the Press Release
WASHINGTON – The Justice Department filed a consent decree today in the U.S. District Court for the District of Columbia after reaching an agreement with King George County, Va., that will allow for the county’s bailout from its status as a “covered jurisdiction” under the special provisions of the Voting Rights Act. If approved by the court, the bailout will exempt the county from the preclearance requirements of Section 5 of the act.
Covered jurisdictions, as determined according to Section 4 of the Voting Rights Act, are required under Section 5 of the act to seek preclearance from the U.S. District Court in the District of Columbia or from the attorney general for any changes in voting qualifications, standards, practices or procedures, prior to their implementation. Section 4 of the act provides that a covered jurisdiction may seek to “bailout,” or remove itself from coverage, and therefore be exempted from the preclearance requirements, by seeking a declaratory judgment before a three-judge panel in federal district court. A bailout judgment can only be issued if the court determines that the jurisdiction meets certain eligibility requirements for bailout contained in the statute, including a 10-year record of nondiscrimination in voting-related actions. The act also provides that the attorney general can consent to entry of a judgment of bailout if, based upon investigation, the attorney general is satisfied that the jurisdiction meets the eligibility requirements.
King George County filed its bailout action in U.S. District Court in Washington, D.C. on Dec. 7, 2011. County officials had contacted the attorney general prior to filing its action, indicating that the county was interested in seeking bailout. The county provided the Justice Department with substantial information, and the department conducted an investigation to determine the county’s eligibility. Based on that investigation, the department is satisfied that the county meets the Voting Rights Act’s requirements for bailout.
“The department conducted its own investigation and reviewed and evaluated the information provided by the county. Following this review, the department determined that the county is eligible for a bailout,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I appreciate the county’s cooperation in all aspects of this investigation. This cooperation has allowed the parties to reach a resolution consistent with the requirements of the Voting Rights Act.”
The consent decree details the legal and factual basis for a bailout determination and, if approved, will grant the county’s request. The court will retain jurisdiction for 10 years. The action can be reopened upon motion of the attorney general or any aggrieved person where the party alleges conduct by the county that would have originally precluded the county from bailing out if it had occurred during the 10 year period preceding entry of the consent decree.
Information about bailout, the Voting Rights Act, and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting/. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Australian Man and His Firm Indicted in Plot to Export Restricted Military and Other U.S. Technology to IranRead the Press Release
WASHINGTON – An Australian man and his company have been indicted today by a federal grand jury in the District of Columbia for conspiring to export sensitive military and other technology from the United States to Iran, including components with applications in missiles, drones, torpedoes and helicopters.
The five-count indictment charges David Levick, 50, an Australian national, and his company, ICM Components Inc., located in Thorleigh, Australia, each with one count of conspiracy to defraud the United States and to violate the International Emergency Economic Powers Act (IEEPA) and the Arms Export Control Act; as well as four counts of illegally exporting goods to an embargoed nation in violation of IEEPA; and forfeiture of at least $199,227.41.
The indictment was announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John J. McKenna, Special Agent in Charge of the Commerce Department’s Office of Export Enforcement Boston Field Office; James W. McJunkin, A ssistant Director in Charge of the FBI’s Washington Field Office; Kathryn Feeney, Resident Agent in Charge of the Defense Criminal Investigative Service (DCIS) Resident Agency in New Haven, Conn.; and Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Boston.
Levick, who is the general manager of ICM Components, remains at large and is believed to be in Australia. If convicted, Levick faces a potential maximum sentence of five years in prison for the conspiracy count and 20 years in prison for each count of violating IEEPA.
According to the indictment, beginning as early as March 2007 and continuing through around March 15, 2009, Levick and ICM solicited purchase orders from a representative of a trading company in Iran for U.S.-origin aircraft parts and other goods. This person in Iran, referenced in the charges as “Iranian A,” also operated and controlled companies in Malaysia that acted as intermediaries for the Iranian trading company.
The indictment alleges that Levick and ICM then placed orders with U.S. companies on behalf of Iranian A for aircraft parts and other goods that Iranian A could not have directly purchased from the United States without U.S. government permission. Among the items the defendants allegedly sought to procure from the United States are the following:
VG-34 Series Miniature Vertical Gyroscopes. These are aerospace products used to measure precisely and/or maintain control of pitch and roll in applications such as helicopter flight systems, target drones, missiles, torpedoes and remotely piloted vehicles. They are classified as defense articles by the U.S. government and may not be exported from the United States without a license from the State Department or exported to Iran without a license from the Treasury Department.
K2000 Series Servo Actuators designed for use on aircraft. The standard Servo Actuator is designed to be used for throttle, nose wheel steering and most flight control surfaces. High-torque Servo Actuators are designed to be used for providing higher torque levels for applications such as flaps and landing gear retraction. These items are classified as defense articles by the U.S. government and may not be exported from the United States without a license from the State Department or exported to Iran without a license from the Treasury Department.
Precision Pressure Transducers. These are sensor devices that have a wide variety of applications in the avionics industry, among others, and can be used for altitude measurements, laboratory testing, measuring instrumentations and recording barometric pressure. These items may not be exported to Iran without a license from the Treasury Department.
Emergency Floatation System Kits. These kits contained a landing gear, float bags, composite cylinder and a complete electrical installation kit. Such float kits were designed for use on Bell 206 helicopters to assist the helicopter when landing in either water or soft desert terrain. These items may not be exported to Iran without a license from the Treasury Department.
Shock Mounted Light Assemblies. These items are packages of lights and mounting equipment designed for high vibration use and which can be used on helicopters and other fixed wing aircraft. These items may not be exported to Iran without a license from the Treasury Department.
According to the charges, Levick and ICM, when necessary, used a broker in Florida to place orders for these goods with U.S. firms to conceal that they were intended for transshipment to Iran. The defendants also concealed the final end-use and end-users of the goods from manufacturers, distributors, shippers and freight forwarders in the United States and elsewhere, as well as from U.S. Customs and Border Protection. To further conceal their efforts, the defendants structured payments between each other for the goods to avoid restrictions on Iranian financial institutions by other countries.
The indictment further alleges that Levick and ICM wired money to companies located in the United States as payment for these restricted goods. Levick, ICM and other members of the conspiracy never obtained the required licenses from the Treasury or State Department for the export of any of these goods to Iran, according to the charges.
In addition to the conspiracy allegations, the indictment charges the defendants with exporting or attempting to export four specific shipments of goods from the United States to Iran in violation of IEEPA. These include a shipment of 10 shock mounted light assemblies on Jan. 27, 2007; a shipment of five precision pressure transducers on Dec. 20, 2007; a shipment of 10 shock mounted light assemblies on March 17, 2008; and a shipment of one emergency floatation system kit on June 24, 2008.
This investigation was jointly conducted by agents of the Department of Commerce Office of Export Enforcement, FBI, DCIS and ICE-HSI. The prosecution is being handled by Assistant U.S. Attorneys John W. Borchert and Ann Petalas of the U.S. Attorney’s Office for the District of Columbia; and Trial Attorney Jonathan C. Poling of the Counterespionage Section of the Justice Department’s National Security Division.
The public is reminded that an indictment contains mere allegations. Defendants are presumed innocent unless and until proven guilty in a court of law.
28 February 2012
United States Intervenes in Suit Against American Commercial College Inc. Alleging False Claims Act ViolationsRead the Press Release
The United States has intervened in a whistleblower suit pending under the False Claims Act against American Commercial College Inc. (ACC), a chain of for-profit colleges located in west Texas.
The government alleges that ACC falsely certified compliance with provisions of federal law that prohibit a college or university from obtaining more than 90 percent of its yearly tuition from federal student aid provided through the U.S. Department of Education. Congress enacted the “90/10 Rule” to ensure that educational institutions are able to attract funding from outside sources.
“Colleges and universities that receive federal funds must be honest with the government and follow the law,” said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. “We will use the False Claims Act and other tools to protect students and taxpayers from for-profit institutions that fail to measure up to that standard.”
The suit was originally filed by Shawn Clark and Anthony Delgado, former ACC employees. The False Claims Act allows for private citizens to file whistleblower suits to provide the government information about wrongdoing. The government then has a period of time to investigate and decide whether to take over the prosecution of the allegations or decline to pursue them and allow the whistleblower to proceed. If the United States 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. When the government intervenes, the whistleblower can collect a share of 15 to 25 percent of the United States’ recovery. The government will file its own complaint shortly.
“Misuses of the federal student aid system must not be tolerated, for the sake of the taxpayers and of the innocent individuals who are seeking a quality education,” Sarah R. Saldaña, the U.S. Attorney for the Northern District of Texas, where ACC is located.
The suit is United States ex rel. Clark et al. v. American Commercial Colleges, Inc., Civil No. 5:10-CV-129-C (N.D. Tex.).
This matter was investigated by the Department of Justice, Commercial Litigation Branch, Civil Division; the U.S. Attorney’s Office for the Northern District of Texas; and the Department of Education, Office of Inspector General.
The claims contained in the complaint against ACC are merely allegations and do not constitute a determination of liability
Justice Department Settles with Georgia School District to Ensure Desegregation of Its Faculty and StaffRead the Press Release
WASHINGTON – The Department of Justice announced today that it has entered into a settlement agreement with the Valdosta City Schools in Georgia to ensure that the school district complies with its obligations to recruit, hire and assign faculty and staff in a nondiscriminatory way in furtherance of its obligations to desegregate its schools.
The consent order, if approved by the court, would modify and extend the terms of a 2008 court order, which required the district, among other things, to eliminate racial disparities in how teachers and staff were assigned to the district’s schools and to engage in efforts to recruit African-American personnel. The Justice Department determined that, although the district had made significant progress in desegregating its faculty and certified staff, it failed to meet fully the goals established in the earlier order and remained in violation of several terms of that order. The agreement requires the district to take additional steps to address and correct the remaining violations, including revising its procedures for hiring and conducting reductions in force, and desegregating the faculty at one of the district’s two middle schools by the start of the 2012-2013 school year.
“We applaud the Valdosta City Schools for agreeing to take prompt voluntary corrective actions to ensure that it fully meets its desegregation obligations by the start of the next school year,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division will continue to work to ensure that Valdosta and all school districts under federal desegregation orders fully eliminate the vestiges of segregation in their schools, including in the hiring and assignment of their faculty and staff.”
The United States will continue to monitor and enforce the court’s order over the next two years.
The enforcement of the Equal Protection Clause and Title IV of the Civil Rights Act of 1964 in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt .
Dallas Doctor Arrested for Alleged Role in Nearly $375 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON - A physician and the office manager of his medical practice, along with five owners of home health agencies, were arrested today on charges related to their alleged participation in a nearly $375 million health care fraud scheme involving fraudulent claims for home health services.
The arrests and charges were announced today by Deputy Attorney General James Cole and Health and Human Services (HHS) Deputy Secretary Bill Corr, along with Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Sarah R. Salda ñ a of the Northern District of Texas; HHS Inspector General Daniel R. Levinson; Special Agent in Charge Robert E. Casey Jr. of the FBI’s Dallas Field Office; Dr. Peter Budetti, Deputy Administrator for Program Integrity for the Centers for Medicare and Medicaid Services (CMS); and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The indictment, filed in the Northern District of Texas and unsealed today, charges Jacques Roy, M.D., 54, of Rockwall, Texas; Cynthia Stiger, 49, of Dallas; Wilbert James Veasey Jr., 60, of Dallas; Cyprian Akamnonu, 63, of Cedar Hill, Texas; Patricia Akamnonu, RN, 48, of Cedar Hill; Teri Sivils, 44, of Midlothian, Texas; and Charity Eleda, RN, 51, of Rowlett, Texas, each with one count of conspiracy to commit health care fraud. Roy also is charged with nine counts of substantive health care fraud, and Veasey, Patricia Akamnonu and Eleda are each charged with three counts of health care fraud. Eleda also is charged with three counts of making false statements related to a Medicare claim . All the defendants are expected to make their initial appearances at 2:00 p.m. CST today in federal court in Dallas.
In addition to the indictment, CMS announced the suspension of an additional 78 home health agencies (HHA) associated with Roy based on credible allegations of fraud against them.
Today’s enforcement actions are the result of the Medicare Fraud Strike Force operations, which are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT). HEAT is a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce anti-fraud laws around the country.
“The conduct charged in this indictment represents the single largest fraud amount orchestrated by one doctor in the history of HEAT and our Medicare Fraud Strike Force operations,” said Deputy Attorney General Cole. “Thanks to the historic partnerships we’ve built to combat health care fraud, we are sending a clear message: If you victimize American taxpayers, we will track you down and prosecute you.”
“Thanks to our new fraud detection tools, we have greater abilities to identify the kind of sophisticated fraud scheme that previously could have escaped scrutiny,” said HHS Deputy Secretary Corr. “Our aggressive Medicare Fraud Strike Force operations have enabled us to break up a significant alleged fraud operation and the fraud-fighting authorities in the Affordable Care Act have allowed us to stop further payments to providers connected to this scheme. This case and our new detection tools are examples of our growing ability to stop Medicare fraud.”
According to the indictment, Dr. Roy owned and operated Medistat Group Associates P.A. in the Dallas area. Medistat was an association of health care providers that primarily provided home health certifications and performed patient home visits. Dr. Roy allegedly certified or directed the certification of more than 11,000 individual patients from more than 500 HHAs for home health services during the past five years. Between January 2006 and November 2011, Medistat certified more Medicare beneficiaries for home health services and had more purported patients than any other medical practice in the United States. These certifications allegedly resulted in more than $350 million being fraudulently billed to Medicare and more than $24 million being fraudulently billed to Medicaid by Medistat and HHAs.
“Today, the Medicare Fraud Strike Force is taking aim at the largest alleged home health fraud scheme ever committed,” said Assistant Attorney General Breuer . “According to the indictment, Dr. Roy and his co-conspirators, for years, ran a well-oiled fraudulent enterprise in the Dallas area, making millions by recruiting thousands of patients for unnecessary services, and billing Medicare for those services. In Dallas, and the eight other Medicare Fraud Strike Force cities, the Criminal Division and our partners in the U.S. Attorneys’ Offices will continue to crack down on Medicare fraud, and hold accountable those stealing from the public fisc.”
“Fraud schemes, like the one we allege Dr. Roy executed, represent the next wave of Medicare and Medicaid crime that we face,” said U.S. Attorney Salda ñ a. “As enforcement actions have ramped up, not only in the Dallas Metroplex, but in several other areas throughout the country, fraudsters are devising new ways to beat the system. Rest assured, however, that with the tools and resources our district’s Medicare Care Fraud Strike Force provides, we will meet this challenge head-on and bring indictments against those who seek to defraud these critical programs, and you, the taxpayer.”
“Using sophisticated data analysis we can now target suspicious billing spikes,” said HHS Inspector General Levinson. “In this case, our analysts discovered that in 2010, while 99 percent of physicians who certified patients for home health signed off on 104 or fewer people – Dr. Roy certified more than 5,000.”
“The FBI views health care fraud as a severe crime problem,” said FBI Special Agent in Charge Casey. “It causes increased costs for consumers, tax payers and health insurance plans, and degrades the integrity of our health care system and legitimate patient care. Today’s arrests by the Dallas Medicare Fraud Strike Force send a clear message to those persons who are not only defrauding our federal Medicare and Medicaid and private health insurance programs, but victimizing the elderly, the disadvantaged, and those who are at a vulnerable time in their lives due to legitimate health issues. The FBI will continue to dedicate a substantial amount of expert resources to investigate these crimes.”
The indictment alleges that Dr. Roy used HHAs as recruiters so that Medistat could bill unnecessary home visits and medical services. Dr. Roy and other Medistat physicians certified and recertified plans of care so that HHAs also were able to bill Medicare for home health services that were not medically necessary and not provided. In addition, Dr. Roy allegedly performed unnecessary home visits and ordered unnecessary medical services.
According to the indictment, Medistat maintained a “485 Department,” named for the number of the Medicare form on which the plan of care was documented. Dr. Roy allegedly instructed Medistat employees to complete the 485s by either signing his name by hand or by using his electronic signature on the document.
Three of the HHAs Dr. Roy used as part of the scheme were Apple of Your Eye Healthcare Services Inc., owned and operated by Stiger and Veasey; Ultimate Care Home Health Services Inc., owned and operated by Cyprian and Patricia Akamnonu; and Charry Home Care Services Inc., owned and operated by Eleda. According to the indictment, Veasey, Akamnonu, Eleda and others recruited beneficiaries to be placed at their HHAs so that they could bill Medicare for the unnecessary and not provided services. As part of her role in the scheme, Eleda allegedly visited The Bridge Homeless Shelter in Dallas to recruit homeless beneficiaries staying at the facility, paying recruiters $50 per beneficiary they found at The Bridge and directed to Eleda’s vehicle parked outside the shelter’s gates.
Apple allegedly submitted claims to Medicare from Jan. 1, 2006, through July 31, 2011, totaling $9,157,646 for home health services to Medicare beneficiaries that were medically unnecessary and not provided. Dr. Roy or another Medistat physician certified the services. From Jan. 1, 2006, to Aug. 31, 2011, Ultimate submitted claims for medically unnecessary home health services totaling $43,184,628. Charry allegedly submitted fraudulent claims from Aug. 1, 2008, to June 30, 2011, totaling $468,858 in medically unnecessary and not provided home health services.
The indictment alleges that Sivils, as Medistat’s office manager, helped facilitate the fraud scheme by, among other actions, supervising the processing of thousands of plans of care that contained Dr. Roy’s electronic signature and other Medistat physicians’ signatures, permitting HHAs to bill Medicare for unnecessary home health services and accepting cash payments from Cyprian Akamnonu in exchange for ensuring plans of care contained Dr. Roy or another Medistat physician’s signature.
As outlined in the government’s request to the court to detain Dr. Roy, in June 2011, CMS suspended provider numbers for Dr. Roy and Medistat based on credible allegations of fraud, thus ensuring Dr. Roy did not receive payment from Medicare. Immediately after the suspension, nearly all of Medistat’s employees started billing Medicare under the provider number for Medcare HouseCalls. The court document alleges that Dr. Roy was in fact in charge of day-to-day operations at Medcare, and that Dr. Roy continued to certify patients for home health despite the suspension.
Each charged count of conspiracy to commit health care fraud and substantive health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine. Each false statement charge carries a maximum penalty of five years in prison and a $250,000 fine. The indictment also seeks forfeiture of numerous items including funds in bank accounts, a sailboat, vehicles and multiple pieces of property.
An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Assistant U.S. Attorneys Michael C. Elliott, Mindy Sauter and John DeLaGarza of the Northern District of Texas and Trial Attorney Ben O’Neil and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG and MFCU and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Northern District of Texas.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,190 defendants who collectively have falsely billed the Medicare program for more than $3.6 billion.
To learn more about the HEAT Strike Force, please visit: www.stopmedicarefraud.gov .
27 February 2012
Los Angeles Church Pastor Sentenced to Serve 36 Months in Prison for $14.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A former Los Angeles church pastor, who owned and operated several fraudulent durable medical equipment (DME) supply companies with her husband, was sentenced today to serve 36 months in prison for her role in a $14.2 million Medicare fraud scheme, the Department of Justice, FBI and Department of Health and Human Services (HHS) announced.
Connie Ikpoh, 49, also was sentenced today by U.S. District Judge Terry J. Hatter for the Central District of California to three years of supervised release and ordered to pay $6.7 million in restitution jointly and severally with her co-conspirators.
In August 2011, a jury found Ikpoh, a nurse who also worked at two Los Angeles-area hospitals, and her husband, Christopher Iruke, 61, and one of their employees, Aura Marroquin, guilty of conspiracy and health care fraud offenses following a two-week trial in Los Angeles.
According to evidence presented at trial, Ikpoh and Iruke were pastors at Arms of Grace Christian Center, a Los Angeles church where Ikpoh and Iruke also operated Pascon Medical Supply, a fraudulent DME supply company. Ikpoh and Iruke hired several church members at Arms of Grace to assist them with running Pascon and three other fraudulent DME supply companies, Horizon Medical Equipment and Supply Inc., Contempo Medical Equipment Inc. and Ladera Medical Equipment Inc. The trial evidence showed that Ikpoh owned and operated Horizon. Ikpoh and Iruke used Iruke’s sister Jummal Joy Ibrahim as a straw owner of Contempo and Ladera.
According to the trial evidence, Ikpoh, Iruke, Marroquin and their co-conspirators used fraudulent prescriptions and documents that Ikpoh and Iruke purchased from a number of illicit sources to bill Medicare for expensive, high-end power wheelchairs and orthotics that were medically unnecessary or never provided. Each power wheelchairs cost approximately $900 per wholesale, but were billed to Medicare at a rate of approximately $6,000 per wheelchair. Witness testimony established that Ikpoh and Iruke hid the money they used to pay for these fraudulent prescriptions by writing checks to a company called “Direct Supply,” a fictitious company that Iruke created in the name of an Arms of Grace church member. Iruke cashed the checks that he and Ikpoh wrote to Direct Supply and used the money to purchase the fraudulent prescriptions.
Witnesses who sold the fraudulent prescriptions and documents that Ikpoh, Iruke and their co-conspirators used to defraud Medicare testified that they and others paid cash kickbacks to street-level marketers to offer Medicare beneficiaries free power wheelchairs and other DME in exchange for the beneficiaries’ Medicare card numbers and personal information. These witnesses testified that they and their associates used this information to create fraudulent prescriptions and medical documents, which they sold to Iruke and the operators of other fraudulent DME supply companies for $1,100 to $1,500 per prescription.
After Iruke purchased the prescriptions, the trial evidence showed that Ikpoh used the prescriptions at Horizon to bill Medicare primarily for power wheelchairs. In fact, the trial evidence showed that approximately 85 percent of Horizon’s business was power wheelchairs, and that Ikpoh submitted more than $3.2 million in claims to Medicare. Medicare paid Ikpoh more than $1.6 million on these claims. Witnesses who worked at Horizon testified that if Medicare refused to pay Horizon for a power wheelchair, Ikpoh required the witnesses to take back the power wheelchairs from the Medicare beneficiaries.
The trial evidence showed that Ikpoh was also involved with operating Contempo and Ladera. Ikpoh represented herself to state inspectors as Contempo’s manager and appeared on Ladera’s corporate filings with the state. Moreover, witness testimony established that Ikpoh ran the companies when Iruke visited Nigeria and that she and one of her co-defendants, Darawn Vasquez, who was also a church member at Arms of Grace, withdrew money from the Contempo bank account to pay for fraudulent prescriptions.
Witness testimony established that in August 2009, law enforcement agents visited Contempo and Ladera and questioned Marroquin and Vasquez about fraud occurring at the companies. Within a few weeks of the agents’ visit, Iruke closed Contempo and Ladera, which prompted agents to serve Iruke and his and Ikpoh’s attorneys with subpoenas for the companies’ files. Instead of producing the files, Iruke directed that the files be brought to an auditorium used by Arms of Grace, where Ikpoh, Iruke, Marroquin and others altered and destroyed documents within the files to remove evidence of the fraud scheme. Law enforcement agents found Marroquin with these files when they arrested her.
Evidence introduced at trial showed that as a result of this fraud scheme, Ikpoh, Iruke, Marroquin and their co-conspirators submitted more than $14.2 million in fraudulent claims to Medicare and received approximately $6.7 million in reimbursement payments from Medicare. The evidence showed that Ikpoh and Iruke diverted most of this money from the bank accounts of the supply companies to pay for the fraudulent prescriptions and documents, which Iruke purchased to further the scheme, and to cover the leases on their Mercedes vehicles, home remodeling expenses and other personal expenses.
Vasquez and Ibrahim pleaded guilty to conspiracy and false statement charges in February 2011 and March 2011, respectively, and are awaiting sentencing. On Dec. 9, 2011, Judge Hatter sentenced Marroquin to time served and three years of supervised release. On Jan. 9, 2012, Judge Hatter sentenced Iruke to serve 180 months in prison and three years of supervised release.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region for the HHS Office of the Inspector General (HHS-OIG); and Assistant Director in Charge Steven Martinez of the FBI’s Los Angeles Field Office.
The case was prosecuted by Trial Attorney Jonathan Baum of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David Kirman of the Central District of California. The case was investigated by the HHS-OIG with assistance from the California Department of Justice. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,190 defendants who collectively have falsely billed the Medicare program for more than $3.6 billion. In addition, 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 .
Justice Department Settles Disability Discrimination Case Involving Disabled Veteran in UtahRead the Press Release
WASHINGTON - The Justice Department today announced a $20,000 consent decree that resolves a lawsuit alleging that a Park City, Utah, condominium association and its management company violated the Fair Housing Act by refusing to grant a resident’s request for a reasonable accommodation.
The lawsuit, filed on Nov. 21, 2011, in U.S. District Court for the District of Utah, alleges that the Fox Point at Redstone Association, Property Management Systems and on-site property manager Derek Peterson refused to grant a reasonable accommodation so that Thomas Burton, a disabled combat veteran of the first Gulf War, could keep a small dog in the condominium he rented to help him cope with the effects of depression and anxiety disorder. The lawsuit further alleges that the defendants refused to waive their pet fees and insurance requirements and issued multiple fines that eventually led to the non-renewal of Burton’s lease.
Under the consent decree, which was entered by the U.S. District Court in Utah, the defendants will pay $20,000 in monetary relief to Burton. Additionally, the defendants will attend fair housing training; implement a new reasonable accommodation policy that does not charge pet fees to owners of service or assistance animals and does not require them to purchase liability insurance; and comply with notice, monitoring and reporting requirements.
“In this case, a combat veteran was denied an assistance animal for his disability,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are pleased that this settlement will compensate Mr. Burton and protect the housing rights of others who need this accommodation.”
“Enforcing the fair housing rights of persons with disabilities in Utah, including disabled veterans, is a priority of this office. We will continue to work to ensure that disabled veterans are not denied accommodations they need to live independently,” said David B. Barlow, U.S. Attorney for the District of Utah.
“No veteran should be denied the right to have a support animal when they return home with mobility impairments or other conditions,” said John Trasviña, Department of Housing and Urban Development (HUD) Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice are committed to enforcing the Fair Housing Act and ensuring that housing providers grant people with disabilities reasonable accommodations.”
The lawsuit arose as a result of a complaint filed by Burton with HUD. After an investigation of the complaint, HUD issued a charge of discrimination, and the Fox Point at Redstone Association elected to have the case heard in federal court.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt . Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
Justice Department Announces Agreement Protecting the Rights of Spanish-speaking Voters in Colfax County, NebraskaRead the Press Release
WASHINGTON – The Justice Department announced today an agreement with Colfax County, Neb., that requires the county to provide election materials and information in Spanish in order to comply with provisions of the Voting Rights Act.
“The right to vote is the foundation of our democracy, and language barriers should never keep citizens from accessing that right,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Today’s agreement ensures that Colfax County’s Spanish-speaking citizens will be able to effectively participate in the electoral process. I commend Colfax County election officials for their earnest cooperation and keen efforts to resolve this matter.”
The consent decree with Colfax County, which must still be approved by the federal District Court in Nebraska, provides for a comprehensive language assistance program for Spanish-speaking limited English proficient voters, including the dissemination of election-related materials and information in Spanish. The consent decree requires the presence of trained bilingual election officials in all polling places in the city of Schuyler, Neb., on Election Day, and that all Spanish-language signage be displayed as prominently as the English-language signage at those polling places. As required under the consent decree, Colfax County has already hired a bilingual elections coordinator to assist the county clerk in implementing the Spanish language elections program. The county must also establish an advisory group of interested community members and organizations to assist the county in determining how to most effectively provide election materials, information and assistance to Spanish-speaking voters. The consent decree further provides that federal observers may monitor Election Day activities in polling places in Schuyler.
The Voting Rights Act requires that jurisdictions determined by the Census Bureau to have a substantial population of minority-language citizens, such as Colfax County, provide voting materials and assistance in the covered minority language as well as in English.
Enforcement of the protections of the Voting Rights Act is a significant priority for the Civil Rights Division. Information about the Voting Rights Act and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting/. Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
Attorney General Appoints Tony West as Acting Associate Attorney General and Stuart Delery as Acting Assistant Attorney General for the Civil DivisionRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today the appointments of Tony West to serve as the Department of Justice’s Acting Associate Attorney General and Stuart Delery as Acting Assistant Attorney General for the Civil Division.
“Tony and Stuart have served the department with professionalism, integrity and dedication, and both bring a wealth of experience to their new positions,” said Attorney General Holder. “I’m confident they will provide invaluable leadership and will play a critical role in furthering the department’s key priorities and fulfilling its traditional missions.”
West will become Acting Associate Attorney General, the third highest official at the Justice Department, upon the departure of Associate Attorney General Thomas Perrelli.
West has served as Assistant Attorney General for the Civil Division since April 2009. In that capacity, West led the Department’s largest litigating division, with a docket including significant national security matters, defending the Affordable Care Act against constitutional challenges, the government’s response to the Deepwater Horizon oil spill in the Gulf of Mexico, and leading the department’s preemption lawsuits against state immigration laws passed in Arizona, Alabama, South Carolina and Utah.
During his time as Assistant Attorney General, West has bolstered the Civil Division’s affirmative civil enforcement efforts in areas such as health care fraud, procurement fraud and mortgage fraud. Since January 2009, the Civil Division has used the False Claims Act to recover over $8.8 billion in taxpayer money lost to fraud and abuse – the largest three-year total in the Department’s history.
West has also emphasized the Civil Division’s primary role in enforcing the nation’s consumer protection laws and oversaw a reorganization of the Division that led to the creation of the Consumer Protection Branch. Since January 2009, the Division’s efforts to protect consumers from harm have resulted in over 115 criminal convictions and the recovery of criminal and civil penalties and restitution of more than $3.5 billion, which is also a three-year record. In addition, West serves a Co-Chair of the Mortgage Fraud Working Group, the Residential Mortgage-Backed Securities Working Group and the Consumer Protection Working Group of the President’s Financial Fraud Enforcement Task Force.
Prior to serving as Assistant Attorney General for the Civil Division, West was a litigation partner at Morrison & Foerster LLP in San Francisco, where he worked from 2001 to 2009.
West was a state Special Assistant Attorney General in California from 1999 to 2001, working on matters including identity theft, high-tech crime, antitrust litigation, civil rights and police officer training.
From 1994 to 1999, West served as an Assistant U.S. Attorney in the Northern District of California, where he prosecuted child sexual exploitation, fraud, narcotics distribution, interstate theft and high-tech crime.
West first served in the Department of Justice as a Special Assistant to the Deputy Attorney General from 1993 to 1994.
West graduated from Harvard College and received his law degree from Stanford Law School.
Delery will assume the role of Acting Assistant Attorney General for the Civil Division following West’s departure from the Division.
Since August 2010, Delery has served as Senior Counselor to the Attorney General, focusing on civil and appellate matters, including national security litigation, as well as legal policy issues. As a senior counselor, Delery has served as a member of the Department’s Affordable Care Act litigation team.
Delery came to the Department in January 2009 and initially served as Chief of Staff and Counselor to the Deputy Attorney General, advising the Deputy Attorney General on significant civil, criminal and national security matters. Later, Delery served as Associate Deputy Attorney General, focusing on civil litigation and appeals, and coordinating the department’s preparation of the federal lawsuit against Arizona’s immigration law.
Before joining the department, Delery was a partner at Wilmer Cutler Pickering Hale and Dorr, LLP in Washington, where he was a member of the Litigation Department and the Appellate and Supreme Court Litigation Practice Group, and a Vice Chair of the firm’s Securities Department. Delery’s practice focused on matters involving securities and other financial frauds, internal corporate investigations and complex litigation in trial courts and on appeal.
Delery clerked for U.S. Supreme Court Justices Sandra Day O’Connor and Byron R. White, and for Chief Judge Gerald B. Tjoflat of the U.S. Court of Appeals for the Eleventh Circuit.
Delery graduated from the University of Virginia and received his law degree from Yale Law School.
24 February 2012
Justice Department Announces Lawsuit to Protect Rights of Military and Overseas Voters in AlabamaRead the Press Release
WASHINGTON – The Justice Department announced today that it has filed a lawsuit against the state of Alabama and its chief election official seeking relief to help ensure that military servicemembers, their family members and U.S. citizens living overseas have the opportunity to participate fully in Alabama’s March 13, 2012, federal primary election.
The lawsuit, brought under the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA), was filed in federal district court in Montgomery, Ala. The suit alleges that the state failed to transmit absentee ballots to many of Alabama’s eligible military and overseas voters for the March 13, 2012, primary election in sufficient time for those voters to receive, cast and return their ballots in time to be counted. It also alleges that state procedures are inadequate to ensure that such voters can participate fully in the state’s April 24, 2012, primary run-off election, should one be necessary. The lawsuit seeks an order requiring the state to take all steps necessary to ensure that all affected UOCAVA voters are afforded a full opportunity to participate in the upcoming federal primary elections and all future federal elections.
“Our uniformed servicemembers and overseas citizens deserve a meaningful opportunity to participate in the elections of our nation’s leaders,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This suit seeks relief to ensure that Alabama’s military and overseas voters, many of whom are members of our armed forces and their families serving our country around the world, will have their votes counted not only in the state’s upcoming primary elections, but all future federal elections as well.”
“Servicemembers make sacrifices for our country day in and day out,” said George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama. “Our office is committed to ensuring that the state of Alabama understands their obligations to comply with UOCAVA and ensure that military voters, as well as U.S. citizens who are overseas, are given the opportunity to vote while serving this country.”
UOCAVA requires states to allow uniformed service voters (serving both overseas and within the United States) and their families and overseas citizens to register to vote and to vote absentee for all elections for federal office. In 2009, Congress enacted the MOVE Act, which made broad amendments to UOCAVA. Among those changes was a requirement that states transmit absentee ballots to voters covered under UOCAVA, by mail or electronically at the voter’s option, no later than 45 days before federal elections.
The action was necessary because Alabama failed to mail ballots to many of its military and overseas citizens until after UOCAVA’s deadline of Jan. 28, 2012, the 45th day before this year’s primary election. The requested relief will help ensure that Alabama’s military and overseas voters have sufficient time to receive, mark and return their ballots in upcoming and future elections.
More information about UOCAVA and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/voting/misc/activ_uoc.htm . Complaints may be reported to the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.