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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.
Houston Patient Recruiter Convicted in $1.1 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A patient recruiter for a Houston durable medical equipment (DME) company was convicted today by a federal jury in Houston of health care fraud related to an “arthritis kit” fraud scheme, the Department of Justice, FBI and Department of Health and Human Services (HHS) announced.
After a four-day trial, Michelle Turner, 44, of Spring, Texas, was convicted of one count of conspiracy to commit health care fraud, one count of conspiring to receive illegal kickbacks for referring Medicare beneficiaries and two counts of receiving illegal kickbacks for referring Medicare beneficiaries.
According to evidence presented at trial, Clifford Ubani and Princewill Njoku were the owners of Family Healthcare Services. Family Healthcare maintained a valid Medicare provider number in order to submit Medicare claims for the costs of DME and purported to provide orthotics and other DME to Medicare beneficiaries. Ubani and Njoku hired co-conspirators Turner, Ana Quinteros and others to recruit beneficiaries for the purposes of filing claims with Medicare for DME. Once Ubani and Njoku obtained Medicare beneficiary numbers, Family Healthcare submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or not provided. Co-conspirator Rolondae Mitchell-Straughter was the office manager and was responsible for processing the fraudulent claims. Many of the orthotic devices were components of what was referred to as an “arthritis kit” and were purported to be for the treatment of arthritis-related conditions, but the devices were not medically necessary or appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices, including braces for both sides of the body and related accessories, such as heat pads. Ubani and Njoku paid kickbacks to the recruiters for their referrals. In total, Family Healthcare submitted approximately $1.1 million in fraudulent claims to Medicare.
Evidence at trial showed that Turner operated a “boiler room” and hired teenagers to make unsolicited telephone calls to elderly Medicare beneficiaries asking them if they wanted a free arthritis kit. The arthritis kit was billed to Medicare at more than $3,000. Under Medicare rules, unsolicited telephone calls are prohibited. Additionally, a Medicare beneficiary is responsible for paying a 20 percent co-pay for all DME. Beneficiaries’ doctors further testified at trial that the beneficiaries did not need the arthritis kit.
Ubani and Njoku previously pleaded guilty to conspiracy to commit health care fraud and await sentencing. Mitchell-Straughter pleaded guilty to conspiracy to commit health care fraud and was sentenced to 18 months in prison. Quinteros previously pleaded guilty to conspiracy to commit health care fraud and was sentenced to probation. A sixth defendant, Mary Ellis, was acquitted in this case by a jury in December 2010, but was later convicted of conspiracy to commit health care fraud in May 2011 in a separate case and was sentenced to 63 months in prison.
At sentencing, Turner faces maximum penalties of 10 years in prison for the health care fraud conspiracy count; five years in prison for conspiring to receive illegal kickbacks for referring Medicare beneficiaries; and five years in prison for each count of receiving an illegal kickback for referring a Medicare beneficiary.
Today’s guilty verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Ken 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 the HHS Office of the Inspector General (HHS-OIG), Office of Investigations; and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The case was prosecuted by Trial Attorney Charles D. Reed and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, Texas OAG-MFCU and the Federal Railroad Retirement Board-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Strike Force operations in nine locations have obtained indictments of 1,190 individuals who collectively have falsely billed the Medicare program for more than $3.2 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 .
Former Ohio Wildlife Officer Convicted of Trafficking in White-Tailed DeerRead the Press Release
WASHINGTON – Allan Wright, 45, of Russellville, Ohio, pleaded guilty today in federal court in Cincinnati to violating the Lacey Act by trafficking in and making false records for illegally harvested white-tailed deer, the Department of Justice announced. Wright committed the Lacey Act crimes while he was employed as a wildlife officer for the Ohio Department of Natural Resources. Wright’s employment as a wildlife officer was terminated after he was indicted in August 2011. As part of his plea agreement, Wright has agreed not to appeal his termination.
Among other things, t he Lacey Act makes it a crime for a person to knowingly transport or sell wildlife in interstate commerce when the wildlife was taken or possessed in violation of state law. The Lacey Act also makes it a crime for a person to knowingly make or submit a false record, account or label for wildlife that has been transported in interstate commerce. Wright pleaded guilty to a total of four Lacey Act crimes based on his conduct between 2006 and 2010.
As part his plea, Wright admitted that, using his authority as a wildlife officer, he sold a resident Ohio hunting license to a non-resident hunter in 2006. That hunter used the illegal Ohio resident hunting license to kill three white-tailed deer. As part of his plea, Wright admitted that he “checked in” those deer by providing a false Ohio residence address for the non-resident hunter in order to make it appear that the deer were killed by an Ohio resident. After the deer were checked in, the non-resident hunter transported them in interstate commerce from Ohio to South Carolina.
Also as part of his plea, Wright admitted that, using his authority as a wildlife officer, he seized white-tailed deer antlers from a hunter who had killed a deer illegally in 2009. Wright admitted that, rather than disposing of the antlers through court proceedings, as required by Ohio law, he knowingly supplied them to another individual who transported them from Ohio to Michigan. As part of his plea, Wright admitted that he filed an official state form, which falsely reported that he had personally destroyed those antlers.
Wright faces a maximum penalty of one year in prison and a $100,000 fine per count. A date has not yet been set for Wright’s sentencing.
This case was investigated by the U.S. Fish & Wildlife Service, Office of Law Enforcement. This case was prosecuted by Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section of the Environment and Natural Resources Division.
Former Chairman of Taiwan Aftermarket Auto Lights Manufacturer Agrees to Plead Guilty in Price-Fixing ConspiracyRead the Press Release
WASHINGTON – The former chairman of a Taiwan aftermarket auto lights manufacturer has agreed to plead guilty for his participation in an international conspiracy to fix the prices of aftermarket auto lights, the Department of Justice today announced. Aftermarket auto lights are incorporated into an automobile after its original sale, often as repairs following a collision or as accessories and upgrades.
According to a one-count felony charge filed today in U.S. District Court in San Francisco, Shiu-Min Hsu conspired with others to suppress and eliminate competition by fixing the prices of aftermarket auto lights. The department said that Hsu, former chairman of Depo Auto Parts Industrial Co. Ltd., a Taiwan manufacturer of aftermarket auto lights, participated in the conspiracy from as early as April 2000 until about Sept. 3, 2008. According to the plea agreement, which is subject to court approval, Hsu has agreed to cooperate with the department’s investigation.
“The international price-fixing conspiracy in the aftermarket auto lights industry caused harm to businesses and consumers,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Including today’s filing, five individuals and four corporations have been charged as a result of the Antitrust Division’s efforts to thwart this type of anticompetitive activity.”
According to the charge, Hsu and co-conspirators participated in a conspiracy in which the participants met and agreed to charge prices of aftermarket auto lights at certain predetermined levels. According to the court document, the participants in the conspiracy issued price announcements and price lists in accordance with the agreements reached, and collected and exchanged information on prices and sales of aftermarket auto lights for the purpose of monitoring and enforcing adherence to the agreed-upon prices. The department said that the conspirators met in Taiwan and the United States for their discussions.
On March 29, 2011, Polo Shu-Sheng Hsu, the former president and CEO of Maxzone Vehicle Lighting Corp., a U.S. distributor of aftermarket auto lights, was sentenced to serve 180 days in prison and to pay a $25,000 criminal fine for his role in the conspiracy. Chien Chung Chen, aka Andrew Chen, the former executive vice president of Sabry Lee (U.S.A.) Inc., another U.S. distributor of aftermarket auto lights, pleaded guilty for his participation in the conspiracy on June 7, 2011. He is currently scheduled to be sentenced on Oct. 16, 2012. In addition, two corporations have pleaded guilty. On Oct. 4, 2011, Sabry Lee pleaded guilty and was sentenced to pay a $200,000 criminal fine. On Nov. 15, 2011, Maxzone pleaded guilty and was sentenced to pay a $43 million criminal fine.
On Nov. 29, 2011, a federal grand jury returned a superseding indictment charging Eagle Eyes Traffic Industrial Co. Ltd. and its U.S. subsidiary E-Lite Automotive Inc., as well as Eagle Eyes’s two highest-ranking officers, chairman Yu-Chu Lin, aka David Lin, and vice chairman Homy Hong-Ming Hsu. Trial is set for June 18, 2012, in U.S. District Court in San Francisco.
This case is part of an investigation being conducted by the Department of Justice Antitrust Division’s San Francisco Field Office and the FBI in San Francisco. Anyone with information concerning illegal or anticompetitive conduct in the aftermarket auto lights industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.
23 February 2012
Wife of Former Army Major Sentenced to 72 Months in Prison for Role in Bribery and Money Laundering Scheme Related to Dod ContractsRead the Press Release
WASHINGTON – Eurica Pressley, 39, was sentenced today in Birmingham, Ala., to 72 months in prison for her participation in a bribery and money laundering scheme related to bribes paid for contracts awarded in support of the Iraq war, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
U.S. District Court Judge Virginia Emerson Hopkins for the Northern District of Alabama also ordered Pressley to serve three years of supervised release following the prison term and to forfeit $21 million as well as real estate and several automobiles, jointly with her husband, Eddie Pressley. On Jan. 5, 2012, Eddie Pressley, was sentenced to 144 months in prison. He also was ordered to serve three years of supervised release.
“Eurica Pressley helped her husband and others facilitate a wide-ranging bribery and money laundering scheme by hiding ill-gotten gains and creating phony paperwork to help conceal the conspirators’ crimes,” said Assistant Attorney General Breuer. “Through the determined efforts of our agents and prosecutors, 17 individuals have now been brought to justice for their role in this multi-million dollar bribery scheme.”
“While our military was working to set up government contracts to support U.S. efforts in Iraq, Eurica Pressley and her husband set up shell companies to hide illegal proceeds of a scheme that defrauded the U.S. government,” said James McJunkin, Assistant Director of the FBI’s Washington Field Office. “Today’s sentencing demonstrates that those who commit fraud, no matter where it occurs, will be held accountable for their actions.”
“The American public places special trust and confidence in our service members and those who provide them with vital supplies to carry out their mission,” said Special Agent in Charge Robert E. Craig for the Defense Criminal Investigative Service (DCIS), Mid-Atlantic Field Office. “It is an affront to our hard working military members, civilians and contractors when a member of this department and his associates allow personal gain to criminally subvert the best interests of our troops. DCIS, working with our law enforcement partners, will continue to aggressively seek out such criminal behavior and bring those responsible to justice.”
“This sentencing demonstrates our firm commitment to hold accountable those who commit fraud against our government,” said Major General David E. Quantock, Commanding General of the U.S. Army Criminal Investigation Command (CID). “Special agents from our Major Procurement Fraud Unit, along with those from other federal law enforcement agencies, are unwavering in their commitment to seek out and hold responsible all those who attempt to defraud the U.S. Army and the American taxpayer. During the last 10 years alone, Army CID special agents have been instrumental in recovering and returning $2.1 billion to the U.S. Treasury.”
“Eurica Pressley’s sentencing underscores once again that those who engage in bribery and money laundering involving Iraq reconstruction funds will face severe consequences,” said Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction (SIGIR). “SIGIR and its investigative partners continue to pursue about 90 open cases involving allegations similar to those adjudicated in this case.”
The Pressleys were found guilty on March 1, 2011, of one count of bribery, one count of conspiracy to commit bribery, eight counts of honest services fraud, one count of money laundering conspiracy and 11 counts of engaging in monetary transactions with criminal proceeds.
The case against the Pressleys arose from a corruption probe focusing on Camp Arifjan, a U.S. military base in Kuwait. As a result of this investigation, 17 individuals, including the Pressleys, have pleaded guilty or have been found guilty at trial for their roles in the scheme.
Evidence presented at trial demonstrated that Eddie Pressley took various contracting actions to benefit certain contractors who paid him bribes, including Terry Hall. Pressley served as a U.S. Army contracting official at Camp Arifjan between 2004 and 2005. From spring 2004 through fall 2007, Hall operated and had an interest in several companies, including Freedom Consulting and Catering Co. and Total Government Allegiance. In February 2005, Eddie Pressley arranged for Hall to obtain a blanket purchase agreement (BPA) – a contract that allows the U.S. Department of Defense (DoD) to order supplies on an as-needed basis at a pre-negotiated price – to deliver goods and services to DoD and its components in Kuwait and elsewhere.
According to Hall’s testimony and other evidence presented at trial, Pressley demanded a $50,000 bribe before he would issue bottled water orders or “calls” to Hall. Hall testified that in April 2005, he and his associates arranged for Pressley to receive the money in a bank account established in the name of a shell company, EGP Business Solutions Inc.
Hall’s testimony and other evidence at trial showed that soon after the $50,000 bribe was paid, Pressley and John Cockerham, another U.S. Army contracting official, increased the bribe demand to $1.6 million, which consisted of $800,000 for Pressley and $800,000 for Cockerham. After Hall and others agreed to pay the money, Pressley and Cockerham took various official acts to benefit Hall, including, among other things, issuing calls for bottled water and fencing, arranging for Hall to receive a fence contract and modifying Hall’s BPA to remove the upper limit of the money Hall could receive from the DoD under the bottled water BPA.
Evidence at trial also showed that Eddie Pressley enlisted the help of his wife, Eurica, to receive the bribes. On March 9, 2005, he sent his wife an e-mail in which he told her, among other things, “You will be getting some paperwork with your maiden name on it”; “I need you to sign it and mail to whatevery (sic) address on it”; “I am doing some consulting”; and “Of course I am not going to turn down any money, but I can’t have anyone paying me in my name because I am in the military so I had them put everything in your maiden name.”
According to evidence presented at trial, Eurica Pressley traveled to Dubai in May 2005 and to the Cayman Islands in June 2005 to open bank accounts to receive the bribe money. She also took control of the U.S.-based account in the name of EGP Business Solutions Inc. A law enforcement agent testified at the trial about various false and misleading statements Eurica Pressley made to him during a voluntary interview at her home, including her denial that she had any foreign bank accounts. In addition, the evidence presented at trial demonstrated that Eddie and Eurica Pressley, Hall and others attempted to conceal the true nature of their corrupt scheme by having Eurica Pressley execute bogus “consulting agreements.” They also prepared false invoices that were designed to justify the bribe payments as payment for non-existent “consulting services.”
Bank statements and wire transfer reports demonstrated that, in total, the Pressleys received approximately $2.9 million in bribe payments, approximately $1.6 million of which consisted of payments from other contractors that Hall facilitated for Eddie Pressley. Bank statements, wire transfer reports and other records presented at trial showed that the Pressleys used the money to purchase real estate, expensive automobiles and home decorating services, among other things.
Former U.S. Army Major James Momon also testified at trial that Pressley and Cockerham recruited him to join the bribe scheme and that he took various official acts to receive bribes from some of the same contractors who paid Pressley and Cockerham, including Hall. Additionally, he testified that Pressley told him that if they got caught they would spend “six years in jail” and that Cockerham and Pressley warned him to be careful.
Hall is scheduled to be sentenced on March 20, 2012.
On Aug. 13, 2009, Momon pleaded guilty to receiving approximately $1.6 million in bribes and agreed to pay $5.7 million in restitution. On Jan. 8, 2009, Murray pleaded guilty to charges of bribery and making a false statement. He was sentenced on Dec. 17, 2009, to 57 months in prison and ordered to pay $245,000 in restitution. Momon’s sentencing has not yet been scheduled.
On Jan. 31, 2008, Cockerham pleaded guilty to participating in a bribery and money laundering scheme at Camp Arifjan. He was sentenced on Dec. 2, 2009, to 210 months in prison and ordered to pay $9.6 million in restitution.
The case is being prosecuted by Trial Attorneys Peter C. Sprung and Edward J. Loya Jr. of the Criminal Division’s Public Integrity Section. Assistance was also provided by the Criminal Division’s Office of International Affairs. The cases are being investigated by the Army CID, DCIS, U.S. Immigration and Customs Enforcement, FBI, Internal Revenue Service - Criminal Investigation, SIGIR and the International Contract Corruption Task Force (ICCTF). The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations worldwide, including in Kuwait, Afghanistan and Iraq.
Two Financial Investors Plead Guilty to Bid Rigging at Municipal Tax Lien Auctions in New JerseyRead the Press Release
Two financial investors who purchased municipal tax liens at auctions in New Jersey pleaded guilty today for conspiring to rig bids for the sale of tax liens auctioned by municipalities throughout the state, the Department of Justice announced.
A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, N.J., against Robert W. Stein of Huntington Valley, Pa., and David M. Farber of Cherry Hill, N.J. Under the plea agreements, which are subject to court approval, Stein and Farber have both agreed to cooperate with the department’s ongoing investigation.
According to the felony charge against Stein, from as early as 1998 until approximately spring 2009, Stein participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders on which liens to bid. According to the felony charge against Farber, from as early as the beginning of 2005 through approximately February 2009, Farber also participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey. The department said that both Stein and Farber proceeded to submit bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.
“Today’s guilty pleas demonstrate that the Antitrust Division will not tolerate those who manipulate the competitive process in order to harm home and property owners,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
The department said that the primary purpose of the conspiracies was to suppress and restrain competition to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent homeowners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.
According to the court documents, Stein conspired with others not to bid against one another at municipal tax lien auctions in New Jersey. Farber also agreed not bid against certain bidders at tax lien auctions. Because the conspiracies permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition.
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.
Today’s pleas are the result of an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. On Aug. 24, 2011, Isadore H. May, Richard J. Pisciotta Jr. and William A. Collins each pleaded guilty to one count of bid rigging in connection with their participation in a conspiracy to allocate liens at New Jersey municipal tax lien auctions.
Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
The ongoing investigation is being conducted by the Antitrust Division’s New York Field Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.
Pensacola, Florida, Man Indicted for Arson at American Family Planning ClinicRead the Press Release
WASHINGTON– Bobby Joe Rogers, 41, of Pensacola, Fla., has been indicted by a federal grand jury in connection with the fire that destroyed the American Family Planning Clinic in Pensacola on Jan. 1, 2012, the Justice Department announced today. The two-count indictment charges Rogers with arson and damaging a reproductive health facility.
Rogers remains in federal custody following his arrest on Jan. 5, 2012. If convicted at trial, the defendant faces a sentence of five to twenty years in prison for the arson count and up to one year in prison for damaging a reproductive health clinic.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial, during which it will be the government's burden to prove guilt beyond a reasonable doubt in a court of law.
The indictment is a result of the investigative work of the Bureau of Alcohol, Tobacco and Firearms, the Pensacola Police Department, the Florida State Fire Marshal’s Office and the FBI. The case is being prosecuted by Assistant U.S. Attorney Edwin Knight and Chiraag Bains, Trial Attorney with the Department of Justice’s Civil Rights Division.
Justice Department Settles with Arizona Department of Corrections Resolving Sexual Harassment AllegationsRead the Press Release
WASHINGTON - The Justice Department announced today that it has entered into a consent decree with the Arizona Department of Corrections (ADC) that, if approved by the U.S. District Court for the District of Arizona, will resolve allegations that the ADC discriminated against a female employee, based upon her sex, in violation of Title VII of the Civil Rights Act of 1964, as amended.
The department’s complaint, filed today along with the consent decree, alleges that Susan Peterson, a female correctional officer at the Arizona State Prison Complex in Tucson, Ariz., was regularly subjected to verbal and physical sexual harassment by several of her male supervisors and coworkers from early 2005 through November 2008. That conduct included unwelcome grabbing, touching, hugging and kissing, as well as exposure to sexually explicit comments and pornography. The complaint alleges that despite Peterson’s timely and repeated complaints to ADC management about the harassment over a nearly three year period, ADC did not investigate her complaints or take any corrective action until November 2008. The department’s complaint was based on a charge of discrimination filed by Peterson with the Equal Employment Opportunity Commission (EEOC) that was forwarded to the department by the EEOC’s Phoenix District Office.
Under the terms of the consent decree, which must still be approved by the federal district court, ADC is required to review and revise its sexual harassment policies to protect its employees from sexual harassment and must provide training on equal employment opportunity law and its sexual harassment policies to all employees at its Tucson complex. The consent decree also requires the ADC to pay Peterson a monetary award of $182,500.
“All Americans are guaranteed the right to work in an environment free from unlawful harassment and retaliation,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department is pleased that we were able to work cooperatively with the Arizona Department of Corrections to resolve this matter without the need for contested litigation.”
The enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available at www.justice.gov/crt/ and www.justice.gov/crt/emp/.
Former Chairman and CEO of Kellogg, Brown & Root Inc. Sentenced to 30 Months in Prison for Foreign Bribery and Kickback SchemesRead the Press Release
WASHINGTON – Albert “Jack” Stanley, a former chairman and chief executive officer of Kellogg, Brown & Root Inc. (KBR), was sentenced today to 30 months in prison for conspiring to violate the Foreign Corrupt Practices Act (FCPA) by participating in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts and for conspiring to commit mail and wire fraud as part of a separate kickback scheme, the Justice Department’s Criminal Division today announced.
U.S. District Judge Keith P. Ellison for the Southern District of Texas also ordered Stanley to serve three years of supervised release following the prison term and to pay $10.8 million in restitution to KBR, the victim of the separate kickback scheme. Stanley, 69, pleaded guilty on Sept. 3, 2008, to a two-count criminal information charging him with one count of conspiracy to violate the FCPA and one count of conspiracy to commit mail and wire fraud.
Two of Stanley’s co-conspirators also were sentenced by Judge Ellison. Today, Jeffrey Tesler, 63, a United Kingdom citizen and licensed solicitor, was sentenced to 21 months in prison, followed by two years of supervised release. Tesler also was ordered to pay a $25,000 fine and previously was ordered to forfeit $148,964,568. Yesterday, Wojciech J. Chodan, 74, a United Kingdom citizen and former salesman at KBR’s U.K. subsidiary, was sentenced to one year of probation and ordered to pay a $20,000 fine. Chodan previously was ordered to forfeit $726,885.
Tesler and Chodan were indicted on Feb. 17, 2009, and subsequently extradited to the United States from the United Kingdom. On Dec. 6, 2011, Chodan pleaded guilty to count one of the indictment charging him with conspiring to violate the FCPA. On March 11, 2011, Tesler pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA.
All three defendants fully cooperated with the department’s investigation, which resulted in more than $1.7 billion in penalties, disgorgement and forfeitures. The defendants’ substantial assistance in the investigation and prosecution of other defendants was reflected in the sentences the court imposed.
“Today’s prison sentences for Mr. Stanley and Mr. Tesler mark another important step in our prosecution of those responsible for a massive bribery scheme involving engineering, procurement and construction contracts in Nigeria,” said Mythili Raman, Principal Deputy Assistant Attorney General for the Criminal Division. “These sentences reflect not only the defendants’ illegal acts, but also their substantial cooperation with the government. As a result of this investigation, three individuals have been convicted of FCPA-related crimes, and five companies in four countries have paid substantial penalties and undertaken significant efforts to enhance their compliance programs. This case shows the importance the department places on putting an end to foreign bribery.”
According to court documents, KBR was a member of the TSKJ joint venture (named for the first letters of the names of the companies involved), along with Technip S.A., Snamprogetti Netherlands B.V., and JGC Corporation. Between 1995 and 2004, TSKJ was awarded four EPC contracts, valued at more than $6 billion, by Nigeria Liquefied Natural Gas (LNG) Ltd. to build the LNG facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation was the largest shareholder of NLNG, owning 49 percent of the company.
From approximately 1994 through June 2004, the joint venture companies, Stanley, Tesler, Chodan and others agreed to pay bribes to a wide range of Nigerian government officials in order to obtain and retain the EPC contracts. To pay the bribes, the joint venture hired two agents – Tesler and Marubeni Corporation, a Japanese trading company headquartered in Tokyo. The joint venture hired Tesler as a consultant to pay bribes to high-level Nigerian government officials, including top-level executive branch officials, and hired Marubeni to pay bribes to lower-level Nigerian government officials. At crucial junctures preceding the award of the EPC contracts, Stanley and other co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom TSKJ should negotiate bribes to Nigerian government officials. TSKJ paid approximately $132 million to a Gibraltar corporation controlled by Tesler and $51 million to Marubeni during the course of the bribery scheme for use, in part, to pay bribes to Nigerian government officials.
In a related criminal case, KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to FCPA-related charges for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program.
In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip in June 2010. According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years. In July 2010, the department filed a deferred prosecution agreement and criminal information against Snamprogetti, which also agreed to pay a $240 million criminal penalty. In April 2011, the department filed a deferred prosecution agreement and criminal information against JGC, in which JGC agreed to pay a $218.8 million criminal penalty and to retain an independent compliance consultant for two years. In January 2012, the department filed a deferred prosecution agreement and criminal information against Marubeni, in which Marubeni agreed to pay a $54.6 million criminal penalty and to retain a corporate compliance consultant for two years
The criminal cases were prosecuted by Assistant Chief William J. Stuckwisch and Deputy Chief Patrick F. Stokes of the Criminal Division’s Fraud Section, with investigative assistance from the FBI-Houston Division. The Criminal Division’s Office of International Affairs and the SEC’s Division of Enforcement provided substantial assistance. Significant assistance was provided by authorities in France, Italy, Switzerland and the United Kingdom. Investigative assistance with the prosecution of Stanley was also provided by the Internal Revenue Service’s Criminal Investigations Division in Houston.
Federal Officials Announce Nationwide Crackdown on Black Market Rhino TradeRead the Press Release
WASHINGTON – Seven people have been arrested on charges of trafficking in endangered black rhinoceros horn over the past week in Los Angeles, Newark, N.J., and New York, the Department of Justice and Department of the Interior today announced. Special agents of the U.S. Fish and Wildlife Service (FWS) and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) made the arrests and have executed search warrants in five different states as part of “Operation Crash,” a multi-agency effort to investigate and prosecute those involved in the black market trade of endangered rhinoceros horn.
In Los Angeles, Jin Zhao Feng, a Chinese national who allegedly oversaw the shipment of at least dozens of rhino horns from the United States to China, was arrested last night. Last weekend, members of an alleged U.S.-based trafficking ring that supplied rhino horns to Feng were arrested after being charged with conspiracy and violations of the Lacey Act and the Endangered Species Act for purchasing rhino horns from various suppliers in the U.S. Charges were filed against Jimmy Kha, the owner of Win Lee Corporation; his son Felix Kha; and Mai Nguyen, the owner of a nail salon where packages containing rhinoceros horns were being mailed. One of the alleged suppliers, Wade Steffen, was arrested in Hico, Texas, and charged in Los Angeles. According to a criminal complaint filed in U.S. District Court in Los Angeles, the Khas began receiving packages from Steffen and another supplier in 2010. Seventeen packages were opened under federal search warrants and 37 rhinoceros horns were found.
A search of Steffen’s luggage at the Long Beach Airport in California on Feb. 9, 2012, turned up $337,000 in cash. In additional searches conducted by FWS and ICE, agents found rhinoceros horns, cash, bars of gold, diamonds and Rolex watches. Approximately $1 million in cash was seized and another $1 million seized in gold ingots.
“The rhino is an animal of prehistoric origin that is facing possible extinction because of an illegal trade for its horns on the black market that is driven by greed,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “The rhino is protected under both U.S. and international law, and we are taking aggressive action to protect the rhino by investigating and vigorously prosecuting those who are engaged in this brutal trade.”
In New Jersey, Amir Even-Ezra was arrested Saturday, Feb. 18, 2012, on a felony trafficking charge in violation of the Lacey Act after purchasing rhino horns from an individual from New York at a service station off of the New Jersey Turnpike. Even-Ezra allegedly brought a scale for weighing the horns and envelopes of cash to the meeting, which was brokered by an individual outside of the United States.
In U.S. District Court in Manhattan, antiques expert David Hausman was also charged with illegally trafficking rhinoceros horns and with creating false documents to conceal the illegal nature of the transaction, both in violation of the Lacey Act. Hausman allegedly purchased a black rhinoceros mount (a taxidermied head of a rhinoceros) from an undercover officer in Illinois and was later observed sawing off the horns in a motel parking lot. Rhino horns were found in a search conducted on Saturday, Feb. 18, 2012, following his arrest.
“Rhino horn traffickers continue to fuel the illegal demand for horn, demand that has led to hundreds of rhino deaths and put the white and black rhino in danger of extinction in the wild,” said U.S. Fish and Wildlife Service Director Dan Ashe. “These arrests have dealt a serious blow to rhino horn smuggling, but represent only the beginning of a significant crackdown on this illegal trade.”
“The illegal trade in endangered wildlife robs the world of these magnificent creatures in their natural habitat,” said ICE Director John Morton. “This case is a reflection of our commitment to ensuring that our children and grandchildren are not deprived by criminals whose only goal is to make a quick buck at the expense of these innocent creatures.”
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. All species of rhinoceros are protected under U.S. and international law. All black rhinoceros species are endangered. Rhino horns are composed of keratin, the same type of protein that makes up hair and fingernails. Rhinoceros horn is a highly valued and sought-after commodity despite the fact that international trade has been largely banned since 1976. The demand for rhinoceros horn, which is used by some cultures for ornamental carvings, good luck charms or alleged medicinal purposes, has resulted in a thriving black market – a market that has escalated in recent years in both volume and per-unit profit.
If convicted, maximum penalties under these charges are up to five years in prison and a $250,000 fine for conspiracy; five years in prison and a $250,000 fine for Lacey Act violations; and up to one year in prison and a $100,000 fine for violations of the Endangered Species Act.
Operation Crash (a “crash” is the term for a herd of rhinoceros) is a continuing investigation by the Department of Justice and the Department of the Interior FWS, with assistance from other federal and local law enforcement agencies including ICE and the Internal Revenue Service. The investigation is being led by the Special Investigations Unit of the FWS Office of Law Enforcement and involves a task force of agents focused on rhino trafficking.
A criminal complaint is a charge based on probable cause allegations. A defendant is presumed innocent unless and until convicted.
The criminal prosecution is being handled by the U.S. Attorney’s Office for the Central District of California, the U.S. Attorney’s Office for the District of New Jersey, the U.S. Attorney’s Office for the Southern District of New York and the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division, with assistance from the U.S. Attorney’s Office for the Western District of Missouri.
22 February 2012
Total Companies to Pay U.S. $15 Million to Resolve Allegations of Royalty Underpayments from Federal and Indian LandsRead the Press Release
Total Fina S.A., Total Minatome Corporation, Total Exploration Production USA Inc., Fina Oil and Chemical Company, Elf Exploration Inc., Total E&P USA I nc. and their affiliates have agreed to pay the United States $15 million to resolve claims that the companies violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian leases, the Justice Department announced today.
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 the Total defendants improperly deducted from royalty values the cost of boosting gas up to pipeline pressures, improperly reported processed gas as unprocessed gas to reduce royalty payments, and engaged in a variety of other under-reporting of royalties that had been the subject of a series of outstanding administrative actions.
“ When companies are permitted to remove natural gas and other non-renewable resources from public lands, we must require them to keep their end of the bargain and pay their fair share of royalties,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Through this case and others like it, we are demonstrating our commitment to protect natural resources and support important federal programs from which we all benefit.”
Total, the fifth largest publicly-traded integrated international oil and gas company in the world, has operations in more than 130 countries, and engages in all aspects of the petroleum industry, including oil and gas exploration, development and production, refining, marketing, trading and shipping. The Total and Fina corporate families merged in 1999, and became known as Total Fina. In 2000, the company acquired Elf Aquitaine.
“The Department of the Interior and ONRR remain 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. “We will continue to pursue every dollar due to taxpayers, Indian landowners, and the Federal Government from extracting these precious natural resources from Federal and American Indian lands.”
Today’s settlement arises from a lawsuit filed by Harrold Wright under the False Claims Act, and from a series of administrative actions separately initiated and pursued by the Department of the Interior’s Office of Natural Resources Revenue (and its predecessor, the Minerals Management Service). 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 $23,000 plus interest as their share of the settlement. This represents a 25 percent share of the $92,000 in the settlement that is allocated to claims pursued by Mr. Wright. The United States will intervene against the Total defendants 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 $280 million.
The investigation and settlement of this matter was jointly handled by the Justice Department’s Civil Division, the U.S. Attorney 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.). The allegations contained in the complaint against the Total companies are merely accusations and do not constitute a determination of liability.
Tennessee Couple Plead Guilty to Tax CrimesRead the Press Release
Angela Palmer and her husband, Warren Palmer, both of Knoxville, Tenn., each pleaded guilty today to two counts of willful failure to file tax returns, the Justice Department and Internal Revenue Service (IRS) announced.
According to documents filed as part of their guilty pleas, during tax year 2005, Angela Palmer earned income as a mortgage broker and in tax years 2005 and 2006, she also earned income teaching music lessons. Warren Palmer earned income, during tax years 2004 and 2006, doing construction and other jobs. Additionally, during the years in question, the Palmers maintained funds in an offshore bank account in the name of The Liahona LLC, an entity of which they were the sole members and managers. Due to the income they received during the prosecution years, the Palmers were required to file tax returns, however, they failed to do so.
In accordance with their plea agreements, Angela Palmer has agreed to pay restitution in the amount of $58,646.85, and Warren Palmer has agreed to pay restitution in the amount of $70,887.45, to the IRS.
Sentencing is scheduled for June 14, 2012. The Palmers each face a maximum potential sentence of up to one year in jail and a maximum fine of $100,000 for each of the counts to which they pleaded guilty.
The cases were investigated by the IRS - Criminal Investigation and prosecuted by Trial Attorney Tracy Gostyla of the Justice Department’s Tax Division.
More information about the Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
South Florida Corrections Officer Sentenced on Federal Civil Rights ChargeRead the Press Release
MIAMI – A corrections officer was sentenced to prison today in federal court for a civil rights charge stemming from prisoner abuse that took place at the South Florida Reception Center (SFRC), a state prison in Doral, Fla., the Justice Department announced. Florida Department of Corrections (FDOC) officer Guruba Griffin, 32, was sentenced by District Judge Cecilia Altonaga to serve one year in prison, followed by one year of supervised release.
On Dec. 13, 2011, Griffin entered a guilty plea to one count of deprivation of rights under color of law. Griffin’s plea followed a trial in October 2011 where a jury was unable to reach a verdict as to his involvement in a civil rights conspiracy against inmates at SFRC. Griffin’s co-defendant, Scott Butler, was acquitted by the same jury, while a second jury found Sergeant Alexander McQueen guilty of conspiracy against civil rights and obstruction of justice and convicted Officer Steven Dawkins for obstruction of justice. McQueen and Dawkins were sentenced to twelve months in prison and one month in prison, respectively, in January of this year.
According to evidence presented at trial, on Feb. 25, 2009, SFRC corrections officers physically abused inmates by choking, punching and striking them with wooden broom handles. The officers further forced the inmates to fight one another. Additionally, McQueen and Dawkins falsified reports relating to these incidents.
“Abuse of power by corrections officers who violate the civil rights of those in their custody will not be tolerated,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those who cross the line to engage in acts of criminal violence.”“When individuals sworn to uphold the law instead abuse their power and infringe upon the civil rights of others, the public’s confidence in our system of justice suffers,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “The U.S. Attorney’s Office remains committed to protecting everyone’s civil rights and promoting confidence in our system.”
“Officer Guruba Griffin violated the civil rights of prisoners under his control at a Florida Department of Corrections facility,” said Special Agent in Charge John V. Gillies of FBI Miami Division. “His abusive treatment of these prisoners damaged the public’s trust in law enforcement. The message to corrupt corrections officers is clear; engage in criminal misconduct and the FBI and our partners will bring you to justice.”
This case was investigated by the FBI and the Inspector General’s Office, Florida Department of Corrections, and was prosecuted by Assistant U.S. Attorney Susan Rhee Osborne of the U.S. Attorney’s Office for the Southern District of Florida and Senior Litigation Counsel Gerard Hogan and Trial Attorney Henry Leventis of the Civil Rights Division.
Assistant Administrator of Houston Hospital Pleads Guilty to Participating in $116 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – An assistant administrator of a Houston hospital pleaded guilty today for his role in a $116 million Medicare fraud scheme involving false claims for mental health treatment, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Mohammad Khan, 62, of Houston, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to commit health care fraud, one count of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks, and five counts of paying or offering to pay health care kickbacks. Khan was arrested on Feb. 8, 2012. In his plea, Khan admitted that, from January 2008 until the time of his arrest, he caused the submission of $116 million worth of fraudulent claims to Medicare for partial hospitalization program (PHP) services purportedly provided by the hospital. A PHP is a form of intensive outpatient treatment for severe mental illness.
“As an assistant administrator at a Houston hospital, Mr. Kahn participated in a $116 million fraud against the government,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “For years, he operated a scheme to bill Medicare for partial hospitalization services that were medically unnecessary or never provided. With our Medicare Fraud Strike Force teams in nine cities, we are holding accountable people across the country who have calculated – incorrectly – that they can get away with trying to bilk the Medicare program.”
According to court documents, Khan was the assistant administrator of Riverside General Hospital and controlled the day-to-day operations of Riverside’s PHPs. Riverside maintained a valid Medicare provider number that was used to submit claims to Medicare for PHP services that were not medically necessary, and in some cases, never provided. Many of the beneficiaries for whom Riverside submitted claims to Medicare for PHP services did not have severe mental illness and did not need the treatment provided in a PHP. In his plea, Khan admitted that he paid and caused the payment of kickbacks to patient recruiters and owners of assisted living facilities and group care homes in exchange for the recruiters and owners sending Medicare beneficiaries to Riverside’s PHPs. Khan also paid Medicare beneficiaries in the form of cigarettes, food and coupons redeemable for items available at Riverside’s “country stores,” in exchange for those beneficiaries attending Riverside’s PHPs.
In his plea, Khan admitted that he and his co-conspirators submitted approximately $116 million in claims to Medicare for PHP services purportedly provided by the hospital to the recruited beneficiaries, when in fact, the PHP services were medically unnecessary or never provided.
Khan is scheduled to be sentenced on May 25, 2012. Khan faces a maximum sentence of 10 years in prison for the conspiracy to commit health care fraud count, five years in prison for the conspiracy to defraud the United States count and five years in prison for each health care kickbacks count.
Today’s guilty plea was announced by Assistant Attorney General 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); the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU); Special Agent in Charge Lucy R. Cruz of the IRS Houston Field Office; Joseph J. Del Favero, Special Agent in Charge of the Chicago Field Office of the Railroad Retirement Board, Office of Inspector General (RRB-OIG); and Scott Rezendes, Special Agent in Charge of Field Operations of the Office of Personnel Management, Office of Inspector General (OPM-OIG).
The case is being prosecuted by Trial Attorney Laura M.K. Cordova, Attorney Allan Medina, Assistant Chief William Pericak and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG, MFCU, IRS, RRB-OIG and OPM-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 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 $3.2 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.
21 February 2012
Fort Lauderdale, Florida-Area Halfway House Operator Sentenced to 33 Months in Prison for Participating in Fraud and Kickback SchemeRead the Press Release
WASHINGTON – The manager and operator of a Fort Lauderdale, Fla.-area halfway house was sentenced today to 33 months in prison for his role in a Medicare fraud kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), announced the Department of Justice, FBI and Department of Health and Human Services (HHS).
Butler Moultrie, 46, was sentenced by U.S. District Judge Donald M. Middlebrooks in the Southern District of Florida. In addition to his prison term, Moultrie was sentenced to three years of supervised release and was ordered to pay $801,000 in restitution.
Moultrie pleaded guilty in December 2011 to one count of conspiracy to commit health care fraud.
According to court documents, most of the residents at Moultrie’s halfway house were recovering from drug and/or alcohol addictions. Moultrie agreed to refer Medicare beneficiaries who resided at his halfway house to ATC to purportedly receive intensive mental health services called partial hospitalization program (PHP) treatment in exchange for illegal health care kickbacks. Moultrie admitted that he knew the kickbacks were illegal and that ATC fraudulently billed the Medicare program for the PHP services. Moultrie also knew that no doctor had prescribed PHP treatment for his patient referrals and that his residents required drug and/or alcohol addiction treatment rather than mental health services.
According to court filings, ATC’s owners and operators 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 its related company, the American Sleep Institute (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. The ineligible beneficiaries attended treatment programs that were not legitimate so that ATC and ASI could bill Medicare more than $200 million in medically unnecessary services.
According to the plea agreement, Moultrie’s participation in the fraud resulted in approximately $1.9 million 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 ten 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. In addition to Moultrie, 11 other assisted living facility and halfway house owners and operators and patient recruiters have been convicted for their roles in the fraud scheme. Eight of these defendants, including Moultrie, have been sentenced to prison.
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 $3.2 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.
Florida Physician Pleads Guilty to Conspiracy to Commit Mail and Wire FraudRead the Press Release
Michael Schoenwald of Hollywood, Fla., has pleaded guilty before Judge Herman Weber in Cincinnati to one count of conspiracy to commit mail and wire fraud in connection with a drug diversion scheme in which he was involved, the Justice Department announced.
The government information alleged that Dr. Schoenwald purchased prescription Lupron, an injectable drug used to treat prostate cancer, at discount rates due to his status as a health care provider. Governing law prohibited Schoenwald from re-selling the drugs, and his agreement with the manufacturer provided that he would not do so.
Nevertheless, Schoenwald sold the Lupron to Gregory Pfizenmayer, who, in turn, sold the drugs to legitimate wholesalers in Ohio and elsewhere. Pfizenmayer sold the drugs accompanied by documents, required by law, that contained false information about the source of the drugs. A co-conspirator arranged the transactions between Schoenwald and Pfizenmayer. Pfizenmayer pleaded guilty to one charge of conspiracy to commit mail and wire fraud in February 2011 and awaits sentencing.
Schoenwald received compensation from Pfizenmayer for the prescription drugs through wire transfers, and in turn paid his co-conspirator a share of the profits. All told, Schoenwald, Pfizenm ayer and their co-conspirator sold over $1 million dollars worth of prescription drugs through this scheme.
“Diversion of prescription drugs casts doubt on the safety and quality of the medicines people rely on every day,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “As this criminal prosecution demonstrates, we are committed to fighting these diversion schemes so that our prescription drugs in the United States remain the safest in the world.”
The case is being prosecuted by Assistant U.S. Attorney Anne Porter of the Southern District of Ohio and Assistant Director Mark Josephs of the Justice Department’s Consumer Protection Branch. The investigation was conducted by the Food and Drug Administration, Office of Criminal Investigations and the U.S. Postal Inspection Service.
17 February 2012
Wilcox County, Georgia, Sheriff and Three Men Charged with Federal Civil Rights ViolationsRead the Press Release
WASHINGTON – The Justice Department announced today a 14-count indictment charging Wilcox County, Ga., Sheriff Stacy Bloodsworth; his son, Austin Bloodsworth; former Wilcox County Jailer Casey Owens; and former inmate Willie James Caruthers, for violating the rights of an inmate.
The indictment charges that the Sheriff, Austin Bloodsworth, and Caruthers assaulted two inmates, while they and Owens assaulted a third inmate inside of the Wilcox County Jail on July 23, 2009, therefore violating the inmates’ civil rights. As a result of the assaults, one inmate suffered a broken jaw and two inmates sustained bruises and scratches. The indictment also charges the defendants with conspiring to cover up the assaults. In addition, Sheriff Bloodsworth, Austin Bloodsworth and Caruthers were charged with lying to the FBI, and Caruthers and Owens were charged with obstructing justice by writing false reports. Sheriff Bloodsworth was charged with tampering with one of the victims and with two witnesses.
The civil rights charges carry a maximum penalty of 10 years for each count, and the conspiracy and false statements charges carry a maximum penalty of up to five years. Additionally, Sheriff Bloodsworth faces a maximum penalty of 20 years for each count of witness-tampering, and Caruthers and Owens face maximum penalties of 20 years for their falsification of reports.
This case was investigated by the FBI and is being prosecuted by Trial Attorney Christine M. Siscaretti of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Paul C. McCommon III of the U.S. Attorney’s Office for the Middle District of Georgia.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.
Virginia Man Accused of Attempting to <br /> Bomb U.S. Capitol in Suicide AttackRead the Press Release
WASHINGTON – A 29-year-old man residing in Alexandria, Va., was arrested today for allegedly attempting to detonate a bomb in a suicide attack on the U.S. Capitol Building as part of what he intended to be a terrorist operation.
The charges were announced by Neil MacBride, U.S. Attorney for the Eastern District of Virginia; Lisa Monaco, Assistant Attorney General for National Security; and James W. McJunkin, Assistant Director in Charge of the FBI Washington Field Office.
Amine El Khalifi, an immigrant from Morocco who is illegally present in the United States, was charged today by criminal complaint with attempting to use a weapon of mass destruction against property that is owned and used by the United States. He made his initial appearance today at 4:15 p.m. before Judge T. Rawles Jones Jr. If convicted, El Khalifi faces a maximum penalty of life in prison.
The arrest of El Khalifi was the culmination of an undercover operation during which he was closely monitored by the FBI Washington Field Office’s Joint Terrorism Task Force (JTTF). The explosives and firearm that he allegedly sought and attempted to use had been rendered inoperable by law enforcement and posed no threat to the public.
“The complaint filed today alleges that Amine El Khalifi sought to blow himself up in the U.S. Capitol Building,” said U.S. Attorney MacBride. “El Khalifi allegedly believed he was working with al-Qaeda and devised the plot, the targets and the methods on his own.”
“Today’s case underscores the continuing threat we face from homegrown violent extremists,” said Assistant Attorney General Monaco. “Thanks to a coordinated law enforcement effort, El Khalifi’s alleged plot was thwarted before anyone was harmed.”
“This individual allegedly followed a twisted, radical ideology that is not representative of the Muslim community in the United States,” said FBI Assistant Director in Charge McJunkin. “He became known to the JTTF because of his stated desire to carry out attacks in the U.S., specifically, the U.S. Capitol building. This arrest is the result of dedicated special agents, task force officers and intelligence analysts from the FBI and our partner law enforcement agencies that make up the JTTF.”
According to the criminal complaint affidavit, in January 2011, a confidential human source reported to the FBI that El Khalifi met with other individuals at a residence in Arlington, Va., on Jan. 11, 2011. During this meeting, one individual produced what appeared to be an AK-47, two revolvers and ammunition. El Khalifi allegedly expressed agreement with a statement by this individual that the “war on terrorism” was a “war on Muslims” and said that the group needed to be ready for war.
The affidavit alleges that El Khalifi sought to be associated with an armed extremist group, and on Dec 1, 2011, he was introduced by a man he knew as “Hussien” to an individual named “Yusuf,” who was, in reality, an undercover law enforcement officer. Throughout December 2011 and January 2012, El Khalifi allegedly proposed to carry out a bombing attack. His proposed targets included a building that contained U.S. military offices, as well as a synagogue, U.S. Army generals and a restaurant frequented by military officials.
During meetings with the undercover officer, El Khalifi allegedly handled an AK-47and indicated his desire to conduct an operation in which he would use a gun and kill people face-to-face. He also allegedly selected a restaurant in Washington, D.C., for a bombing attack; handled an explosive as an example of what could be used in the attack; conducted surveillance to determine the best place and time for the bombing and purchased materials as part of the planned operation.
On Jan. 7, 2012, “Hussien” informed El Khalifi that he was an al-Qaeda operative. El Khalifi allegedly discussed the possibility that his planned bombing of the restaurant would be followed by a second attack against a military installation to be conducted by others who El Khalifi believed to be associated with al-Qaeda. The affidavit alleges that El Khalifi understood that his attack on the restaurant would be part of an al-Qaeda operation that would include both his restaurant bombing and the attack against a military installation.
The affidavit alleges that on Jan. 15, 2012, El Khalifi stated that he had modified his plans for his attack. Rather than conduct an attack on a restaurant, he wanted to conduct a suicide attack at the U.S. Capitol Building. That same day at a quarry in West Virginia, as a demonstration of the effects of the proposed suicide bomb operation, El Khalifi dialed a cell phone number that he believed would detonate a bomb placed in the quarry. The test bomb detonated, and El Khalifi expressed a desire for a larger explosion in his attack. He also selected Feb. 17, 2012, as the day of the operation, according to the affidavit.
The affidavit alleges that over the next month, El Khalifi traveled to the U.S. Capitol Building on multiple occasions to conduct surveillance, choosing the spot where he would be dropped off to enter the building for the martyrdom operation, the specific time for the attack and the method he would use to avoid attracting the attention of law enforcement. El Khalifi also asked Hussien to remotely detonate the bomb he would be wearing on the day of the attack if El Khalifi encountered problems with security officers, and to provide El Khalifi with a gun that he could use during the attack to shoot any officers who might attempt to stop him.
On February 17, 2012, El Khalifi allegedly traveled to a parking garage near the U.S. Capitol Building. El Khalifi took possession of a MAC-10 automatic weapon and put on a vest containing what he believed to be a functioning bomb. Unbeknownst to El Khalifi, both the weapon and the bomb had been rendered inoperable by law enforcement. El Khalifi walked alone from the vehicle toward the United States Capitol, where he intended to shoot people and detonate the bomb. El Khalifi was arrested and taken into custody before exiting the parking garage.
This investigation is being conducted by the FBI’s Washington Field Office. The prosecution is being handled by Assistant U.S. Attorneys Gordon Kromberg and Michael Ben’Ary of the U.S. Attorney’s Office for the Eastern District of Virginia, as well as Trial Attorneys Joseph Kaster and Courtney Sullivan from the Counterterrorism Section of the Justice Department’s National Security Division.
The charges contained in the criminal complaint are mere allegations. As in any criminal case, the defendant is presumed innocent until proven guilty in a court of law.
New York Resident and His Company Sentenced for Conspiracy to Export Computer-Related Equipment to IranRead the Press Release
WASHINGTON – Jeng “Jay” Shih, 54, a U.S. citizen, was sentenced today in the District of Columbia to 18 months in prison, while his Queens, N.Y., company, Sunrise Technologies and Trading Corporation, was sentenced to 24 months corporate probation for conspiracy to illegally export U.S.-origin computers from the United States to Iran through the United Arab Emirates (UAE). Both Shih and his company were also sentenced to forfeiture in the amount of $1.25 million, for which they are jointly liable.
The sentences were announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); David W. Mills, Assistant Secretary for Export Enforcement, Department of Commerce; and Adam Szubin, Director of the Office of Foreign Assets Control (OFAC), Department of the Treasury.
On Oct. 7, 2011, Shih and his company each pleaded guilty to conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and to defraud the United States. Under the terms of the plea and related civil settlements with the U.S. Department of Commerce’s Bureau of Industry and Security and OFAC, Shih and his company agreed to forfeiture in the amount of $1.25 million. In addition, Shih and Sunrise are denied export privileges for 10 years; although, this penalty will be suspended provided that neither Shih nor Sunrise commits any export violations.
Shih was arrested on a criminal complaint on April 6, 2011. He and his company were later indicted on April 21, 2011. According to court documents filed in the case, beginning as early as about 2007, Shih conspired with a company operating in Dubai, UAE, and Tehran, Iran, to procure U.S.-origin computers through Sunrise and export those computers from the United States to Iran, through Dubai, without first obtaining a license or authorization from OFAC.
Specifically, in April 2010, the defendants caused the illegal export of 368 units of computer-related goods to Dubai, which were later sent to Iran. Later that month, the defendants caused the illegal export of 158 additional units of computer-related goods to Dubai, which were later sent to Iran. The defendants subsequently caused an additional 185 units of computer-related goods to be illegally exported to Iran via Dubai.
This investigation was conducted by the ICE’s Homeland Security Investigations (HSI) field offices New York and San Diego, and the Department of Commerce Office of Export Enforcement field offices in New York and Los Angeles, with assistance from ICE-HSI offices in Chicago, Newark, N.J., Los Angeles and Orange County, Calif. The Department of Homeland Security’s U.S. Customs and Border Protection and OFAC’s Office of Enforcement also assisted in the investigation.
Chief Counsel Attorney Gregory Michelsen and Attorney-Advisor Elizabeth Abraham from the U.S. Department of Commerce, and Assistant Director of Enforcement Michael Geffroy and Enforcement Officer Elizabeth Fruzynski of the U.S. Department of Treasury handled the civil settlements for their respective agencies.
The prosecution was handled by Assistant U.S. Attorneys T. Patrick Martin and Anthony Asuncion, from the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Jonathan C. Poling from the Counterespionage Section of the Justice Department’s National Security Division.
Moex Offshore Agrees to $90 Million Partial Settlement of Liability in Deepwater Horizon Oil SpillRead the Press Release
WASHINGTON – MOEX Offshore 2007 LLC has agreed to settle its liability in the Deepwater Horizon oil spill in a settlement with the United States valued at $90 million, announced the Department of Justice, the U.S. Coast Guard and the U.S. Environmental Protection Agency (EPA) today. Approximately $45 million of the $90 million settlement is going directly to the Gulf in the form of penalties or expedited environmental projects.
According to the terms of the settlement, MOEX will pay $70 million in civil penalties to resolve alleged violations of the Clean Water Act resulting from the spill and agreed to spend $20 million to facilitate land acquisition projects in several Gulf states that will preserve and protect in perpetuity habitat and resources important to water quality and other environmental features of the Gulf of Mexico region. At the time of the spill, MOEX was a minority investor in the lease for the Macondo well. It no longer owns any share of the lease.
The terms of today’s settlement do not affect the potential liability of – or recoveries from – other parties involved in the Deepwater Horizon oil spill.
Beginning with a well blowout and explosion on April 20, 2010, the owners and operators of the Macondo Well and the drilling rig Deepwater Horizon allowed millions of barrels of oil to escape into the Gulf of Mexico, affecting the entire region. Oil spills can cause both immediate and long-term harm to people’s health and the environment. The Clean Water Act provides for civil penalties for such discharges. This is the largest civil penalty ever recovered under the Clean Water Act.“The Department of Justice has not wavered in its commitment to hold all responsible parties fully accountable for what stands as the largest oil spill in U.S. history,” said Attorney General Eric Holder. “This landmark settlement is an important step – but only a first step – toward achieving accountability and protecting the future of the Gulf ecosystem by funding critical habitat preservation projects.”
“This will move the Gulf Coast along in its recovery as it continues to rebound from the largest spill in U.S. history,” said Coast Guard Commandant Adm. Bob Papp. “The settlement demonstrates our firm commitment to hold accountable those who pollute our environment.”“This is good news for the Gulf Coast communities that are continuing to rebuild their economy and restore their ecosystem. This administration is going to stand with the people here to ensure a full recovery from the Deepwater Horizon oil spill,” said EPA Administrator Lisa P. Jackson. “Dedicating funds to actions that restore the local waters is a vital part of restoring these communities. As someone who grew up on the Gulf Coast, I know how important clean water is to the lives and livelihoods of the people here, and I know we need to take every possible action to get the ecosystem here on a path to long-term restoration.”
As part of the settlement, MOEX Offshore has agreed to pay $70 million in civil penalties, of which, $45 million will go to the United States. The money will go toward replenishing the Oil Spill Liability Trust Fund, where by law it will be available to pay for response actions, cleanup and damages caused by future spills. The remaining penalty will go to Gulf states that participate in the settlement. Those states will receive penalty payments as follows: $6.75 million to Louisiana, $5 million each to Alabama, Florida and Mississippi, and $3.25 million to Texas.
MOEX Offshore has also agreed to secure and protect properties of ecological significance for the Gulf habitats. MOEX Offshore will ensure that properties within the states of Louisiana, Texas, Mississippi and Florida are transferred to – or acquired by – state governments, non-profit groups, land trusts or other appropriate entities, to protect those properties from development. In all, these projects are expected to cost at least $20 million. The negotiation process with MOEX included numerous discussions with the Gulf states, who have been indispensible in reaching this important agreement.
This settlement does not affect the government’s claims against any other defendant in the Deepwater Horizon lawsuit that was filed on Dec. 15, 2010. The trial of the first phase of the case is set to begin in federal district court in New Orleans on Feb. 27, 2012.MOEX Offshore is a wholly-owned subsidiary of the MOEX USA Corporation. Mitsui Oil Exploration Co. Ltd. is the corporate parent of MOEX USA, which in turn is owned by Mitsui & Co. Ltd. of Japan.
The proposed settlement, lodged in the U.S. District Court for the Eastern District of Louisiana, is subject to a 30-day comment period and final court approval. Information on submitting comment is available at www.justice.gov/enrd/Consent_Decrees.html.
For more information on the settlement, visit: www.epa.gov/compliance/resources/cases/civil/caa/moex.html.
Man Pleads Guilty to Illegal Dumping in Upstate New YorkRead the Press Release
WASHINGTON – Julius DeSimone of Rome, N.Y., pleaded guilty today in federal court in Utica, N.Y., for conspiring to violate the Clean Water Act and to defraud the United States, and to making false statements to federal law enforcement, the U.S. Attorney’s Office for the Northern District of New York and the U.S. Department of Justice Environment and Natural Resources Division announced today.
DeSimone pleaded guilty before U.S. District Judge Hurd for the Northern District of New York to two criminal felony counts for conspiring to violate the Clean Water Act’s prohibition on filling wetlands and then lying to federal agents in an attempt to conceal his crimes. According to the charges, DeSimone and other co-conspirators engaged in a multi-year scheme to illegally dump 8,100 tons of pulverized construction and demolition debris that was processed at New York and New Jersey solid waste management facilities and then transported to a farmer’s property in Frankfort, N.Y.
According to court documents, DeSimone and other conspirators concealed the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forging the name of a DEC official on the fraudulent permit. DeSimone admitted in the plea agreement that once DEC and the U.S. Environmental Protection Agency (EPA) learned of the illegal dumping, he lied to federal agents in an effort to conceal the crimes.
DeSimone faces up to five years in prison and a $250,000 fine for each felony count and may be ordered to pay for portions of the cleanup at the site.
Today’s plea is related to the pleas of Eagle Recycling and Jonathan Deck who pleaded guilty to similar conspiracy charges in 2009 and 2011.
This case was investigated by the New York State Environmental Conservation Police, Bureau of Environmental Crimes, EPA’s Criminal Investigation Division and the Internal Revenue Service, investigators from the New Jersey State Police Office of Business Integrity Unit, the New Jersey Department of Environmental Protection and the Ohio Department of Environmental Protection. The case is being prosecuted by Assistant U.S. Attorney Craig A. Benedict, of the Northern District of New York, and Todd W. Gleason of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
16 February 2012
Utah Man Charged with Filing False Claims for Tax RefundsRead the Press Release
Stanley Wardle of Spanish Fork, Utah, was indicted Wednesday by a federal grand jury in Salt Lake City with nine counts of filing false claims for income tax refunds, the Justice Department and Internal Revenue Service (IRS) announced today. According to the indictment, Wardle prepared one such false claim on his own behalf, through an individual income tax return for 2008, and prepared eight other such false claims on behalf of others. In total Wardle sought false federal income tax refunds of $875,218.
If convicted, Wardle faces a maximum of five years in prison and a maximum $250,000 fine for each count.
An indictment is only an allegation of criminal conduct and is not evidence of guilt. A person is presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by IRS Criminal Investigation and is being prosecuted by Trial Attorneys Michael Romano and Stuart Wexler of the Justice Department’s Tax Division. More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Umar Farouk Abdulmutallab Sentenced to Life in Prison for Attempted Bombing of Flight 253 on Christmas Day 2009Read the Press Release
WASHINGTON – Umar Farouk Abdulmutallab, the so-called “underwear bomber,” was sentenced today to life in prison as a result of his guilty plea to all eight counts of a federal indictment charging him for his role in the attempted Christmas Day 2009 bombing of Northwest Airlines flight 253.
The sentence, handed down by U.S. District Court Judge Nancy G. Edmunds in Detroit, was announced by Attorney General Eric Holder; Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan; Andrew G. Arena, Special Agent in Charge of the FBI’s Detroit Field Office; and Brian M. Moskowitz, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Detroit.
Abdulmutallab, 25, of Kaduna, Nigeria, pleaded guilty on Oct. 12, 2011, to conspiracy to commit an act of terrorism transcending national boundaries; attempted murder within the special aircraft jurisdiction of the United States; willfully placing a destructive device on an aircraft, which was likely to have endangered the safety of the aircraft; attempted use of a weapon of mass destruction; willfully attempting to destroy and wreck a civil aircraft; and three counts of possession of a destructive device in furtherance of a crime of violence.
“As this investigation and prosecution have shown, Umar Farouk Abdulmutallab is a remorseless terrorist who believes it is his duty to kill Americans. For attempting to take the lives of 289 innocent people, he has been appropriately sentenced to serve every day of the rest of his life in prison,” said Attorney General Holder. “Today’s sentence once again underscores the effectiveness of the criminal justice system in both incapacitating terrorists and gathering valuable intelligence from them.”
“On behalf of the victims, we are gratified that this al-Qaeda terrorist has been defeated and will spend the rest of his life in prison, where he can never hurt innocent civilians again,” U.S. Attorney McQuade said. “I am very proud of the work of our prosecutors and agents in Detroit. Their work shows that the civilian court system is a valuable mechanism for obtaining intelligence and convicting terrorists with the legal certainty and transparency that instills public confidence in American justice.”
“The case against Abdulmutallab was a combination of the hard work and dedication of FBI personnel as well as multiple federal, state and local agencies. Those individuals who experienced Christmas Day 2009 first hand should be rest assured that justice has been done.” said FBI Special Agent in Charge Arena.
“When it counted most, under pressure and in the heat of the moment, the metro Detroit law enforcement community responded as one and acted decisively,” said HSI Special Agent in Charge Moskowitz. “Their collective actions epitomized the concept of ‘one team, one fight’ and showed the power of collaboration in the protection of our homeland.”
According to the indictment filed in this case, in August 2009, Abdulmutallab traveled to Yemen for the purpose of becoming involved in violent “jihad” on behalf of al-Qaeda. There, he conspired with other al-Qaeda members to bomb a U.S. aircraft over U.S. soil and received an explosive device for that purpose. Abdulmutallab traveled with the bomb concealed in his underwear from Yemen to Africa and then to Amsterdam, the Netherlands, where he boarded Flight 253 on Christmas Day 2009. The bomb contained PETN and TATP, two high explosives, and was designed to be detonated with a syringe containing other chemicals.
Abdulmutallab’s purpose in taking the bomb on board Flight 253 was to detonate it during flight, causing the plane to crash and killing the 290 passengers and crew members on board. As Flight 253 was on descent into Detroit Metropolitan Airport, the defendant detonated the bomb, which resulted in a fire, but otherwise did not fully explode. Passengers and flight attendants tackled the defendant and extinguished the fire.
This investigation was conducted by the Detroit Joint Terrorism Task Force, which is led by the FBI and includes U.S. Customs and Border Protection, HSI, the Federal Air Marshal Service and other law enforcement agencies. Additional assistance has been provided by the Transportation Security Administration, the State Department’s Bureau of Diplomatic Security, the Wayne County Airport police, as well as international law enforcement partners.
This case is being prosecuted by Assistant U.S. Attorneys Jonathan Tukel, Cathleen M. Corken and Michael C. Martin of the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.
To view or download the government video exhibit introduced in court during today’s sentencing hearing, visit: http://www.justice.gov/usvabdulmutallab-200.html .
Maryland Tax Defier Sentenced to 65 Months in PrisonRead the Press Release
Andrew Isaac Chance of Clinton, Md., was sentenced Wednesday to 65 months in prison for filing false claims for tax refunds and for filing a false retaliatory lien against a federal prosecutor. The sentencing was announced today by the Justice Department, Internal Revenue Service Criminal Investigation (IRS-CI) and Treasury Inspector General for Tax Administration (TIGTA).
Chance was convicted by a federal jury in Greenbelt, Md., on Nov. 18, 2011. At the time the defendant filed the false retaliatory lien and false claims for tax refunds, he was on federal supervised release for a 2007 tax conviction.
According to evidence presented at trial, Chance was convicted and sentenced to 27 months in prison in 2007, for filing a false claim for an income tax refund for the tax year 2005. Shortly after he was released from prison for that crime, he filed a UCC Financing Statement with the Maryland Department of Assessments and Taxation, falsely claiming that the federal prosecutor, who prosecuted the 2007 case, owed him $1.313 billion. The evidence showed that Chance filed a similar lien against a Maryland state prosecutor for her role in prosecuting him for crimes relating to his attempts to cash the fraudulently obtained U.S. Treasury check for the 2005 tax return. According to the evidence, when arrested in December 2010, Chance admitted to a federal agent that he had filed the liens because the prosecutors had “done him wrong.”
The evidence at trial established that a year after filing the false lien, Chance filed three false claims for tax refunds for tax years 2007, 2008 and 2009, seeking a total of $900,000. These three false tax returns were almost identical to the 2005 return for which he was previously convicted. On the 2005 tax return, Chance claimed he was the Andrew Chance Trust. On the 2007-2009 returns, he claimed he was the Andrew I Chance Trust.
On each return in the current case, Chance claimed $300,000 in refunds based on completely false income and withholding amounts. The government introduced evidence that, despite having claimed withholdings on the false returns, Chance had no withholdings and, in fact, had demanded that the Washington, D.C., Metropolitan Area Transit Authority, from which he retired as a station manager in 1999, not withhold taxes from his retirement pay.
“ Those who file false tax returns cheat not only the government but also their fellow taxpayers. This sentence shows that filing false tax returns and retaliating against federal prosecutors and other government officials, who are simply doing their jobs, will not be tolerated,” said Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division.
Chance still faces a federal violation of supervised release hearing as well as a state court action for a violation of probation related to his use of false identification in an attempt to cash the fraudulent refund check he received for the 2005 tax return.
The case was prosecuted by Tax Division Trial Attorneys Jen E. Ihlo and Erin Pulice and investigated by the Internal Revenue Service Criminal Investigation and the Treasury Inspector General for Tax Administration (TIGTA).
More information about the Tax Division and its tax defier enforcement efforts can be found at www.justice.gov.tax.
MS-13 Gang Leader in San Francisco Sentenced to Life in PrisonRead the Press Release
WASHINGTON –Danilo Velasquez, aka “Triste,” a local leader of La Mara Salvatrucha, or MS-13, was sentenced yesterday in federal court in San Francisco by U.S. District Judge William H. Alsup to life in prison, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag for the Northern District of California and Director John Morton of U.S. Immigration and Customs Enforcement (ICE). Velasquez was convicted in November 2011 by a federal jury of racketeering-related charges. At sentencing, Judge Alsup described the defendant as a “vicious murderer.”
Velasquez was part of the violent, transnational gang known as MS-13, which claimed part of the Mission District of San Francisco as its territory and operated in the Bay Area since the 1990s. Velasquez joined the “20th Street” clique, or local MS-13 chapter, in 2004. Since its inception, MS-13 members have warred with rival gang members and sought to extort payments from other criminals in its territory. When the federal government indicted the majority of the 20th Street clique members on Oct. 22, 2008, Velasquez assumed leadership on the streets. T he evidence presented at trial showed how Velasquez, with others, conspired to commit a variety of crimes to further the goals of the gang, including attacking and killing rival gang members and others who defied or challenged MS-13.
During Velasquez’s trial, the government presented evidence of multiple murders committed by MS-13 members in 2008. Several of the victims were not involved in gangs or any illegal activity, including a 14-year-old, but were mistaken to be rival gang members by MS-13 members.
The evidence at trial showed that on Feb. 19, 2009, Velasquez and fellow gang members Luis Herrera, aka “Killer” and Jaime Balam, aka “Tweety,” went looking to kill rival gang members in the San Francisco Bay area. In the Excelsior District of San Francisco, they spotted a car of young Latino professionals – two were college graduates of UC Berkeley, one a law student at UC Hastings, one a bank employee and another a student at City College in San Francisco who was working his way through school at the time. According to evidence presented at trial, these victims were targeted because some of the men wore baseball caps in colors associated with rival gang members. None of the victims were gang members themselves.
Herrera, Velasquez and Balam followed the victims’ car into Daly City, Calif., boxed the car in at a red light, whereupon Velasquez and Balam flanked the victims’ car carrying semi-automatic handguns and began shooting. By the time they finished firing, they had severely wounded two of the passengers and murdered a third passenger, Moises Frias Jr. Frias, who was 21-years-old, suffered nine gunshot wounds, including several to the head. He died en route to the hospital.
Herrera pleaded guilty mid-trial to seven racketeering-related counts, including use of a firearm causing the death of Frias. As part of his plea, Herrera admitted that he was part of the MS-13 hunting party that followed the victims’ car and murdered Frias. Herrera was sentenced on Jan. 24, 2012, to 35 years in prison. Balam remains a fugitive.
Velasquez’s trial was the second of three consecutive federal trials of members of the 20th Street clique of MS-13. Six of Velasquez’s fellow MS-13 gang members were convicted in August 2011 after a five-month trial that involved more than 150 witnesses. The six gang members – Marvin Carcamo, aka “Psycho”; Angel Noel Guevara, aka “Peloncito”; Erick Lopez, aka “Spooky”; Moris Flores, aka “Slow Pain”; Jonathan Cruz-Ramirez, aka “Soldado”; and Luis Herrera’s brother Guillermo Herrera, aka “Sparky” – were each sentenced to life in prison in December 2011.
Today, a federal jury convicted the sole defendant in the third trial, Manuel Franco, aka “Dreamer,” on one count of violent crime in aid of racketeering (VICAR) conspiracy.
These cases were prosecuted by Assistant U.S. Attorneys Wilson Leung, Wil Frentzen, Derek Owens, Andrew Scoble and David Hall of the Organized Crime Strike Force of the U.S. Attorney’s Office for the Northern District of California, and Trial Attorney Theryn G. Gibbons of the Criminal Division’s Organized Crime and Gang Section. These cases were investigated by Daly City Police Department, San Francisco Police Department and ICE Homeland Security Investigations.
Former New England La Cosa Nostra Mob Boss, Capo and Associates to Plead Guilty in Rhode Island for Racketeering ActivityRead the Press Release
WASHINGTON – Five Rhode Island men previously identified as leaders or associates of the New England organized crime family of the La Cosa Nostra (NELCN) have agreed to plead guilty to racketeering-related charges, according to documents filed today with the U.S. district court in Providence, R.I.
The announcement was made by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Peter F. Neronha for the District of Rhode Island; Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Steven G. O’DonnellSuperintendent of the Rhode Island State Police; and Providence Public Safety Commissioner Steven M. Pare.
The defendants were charged in a second superseding indictment returned by a federal grand jury in Providence in September 2011, which alleges their participation in an extortion and racketeering conspiracy involving “protection” payments from several Rhode Island businesses. The defendants face sentences of up to 20 years in prison and fines of up to $250,000.
According to plea agreements signed by the defendants and filed with the court, Luigi “Baby Shacks” Manocchio; Edward “Eddy” Lato; Alfred “Chippy” Scivola; and Richard Bonafiglia will plead guilty to one count of conspiracy to participate in a racketeering enterprise. Raymond R. Jenkins will plead guilty to one count of conspiracy to participate in a Hobbs Act extortion.
According to the plea agreements, in addition to admitting to their criminal conduct, Manocchio, Lato and Scivola admit to their membership in the enterprise charged in the second superseding indictment, which is the NELCN. In addition, in their signed plea agreements, Manocchio and Lato admit to being organizers and leaders of the enterprise’s criminal activity. As alleged in the indictment, Manocchio was an underboss and boss of the NELCN and Lato was an NELCN capo, primarily responsible for Rhode Island. Lato also admitted in his plea agreement to related extortion activity charged in the indictment.
Theodore Cardillo and Albino “Albie” Folcarelli, also named in the second superseding indictment and identified as alleged associates of the NELCN, are scheduled for trial on April 23, 2012.
An indictmentis merely an allegation and is not evidence of guilt. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
An eighth defendant named in a previous superseding indictment in this matter, Thomas Iafrate, of Johnston, R.I., pleaded guilty on July 21, 2011, to one count of conspiracy to participate in a racketeering enterprise. He also admitted that he was an associate of the NELCN. Iafrate was sentenced in December 2011 to 30 months in federal prison, to be followed by three years of supervised release.
The cases are being prosecuted by Assistant U.S. Attorney William J. Ferland for the District of Rhode Island and Trial Attorney Sam Nazzaro of the Criminal Division’s Organized Crime and Gang Section. The matter was investigated by the FBI, Rhode Island State Police, Providence Police and Internal Revenue Service – Criminal Investigation.
Federal Court Bars California Woman from Preparing Federal Tax ReturnsRead the Press Release
A federal court has permanently barred Maria Teresita Viray from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Viray consented, was signed by Judge George Wu of the U.S. District Court for the Central District of California.
According to the government complaint in the case, Viray, of Reseda, Los Angeles County, Calif., operates businesses called TVDM Tax Services, MTV Tax Services and New Horizon Tax Services, and has prepared thousands of federal tax returns since 2008. The complaint alleges that Viray reported bogus deductions for charitable contributions and business expenses on her customers’ tax returns and that she fabricated documents to provide to the Internal Revenue Service (IRS) to substantiate the false claims she made on the returns. The complaint states that Viray told one customer that she had a special printer that allowed her to change the dates and amounts on charitable contribution receipts.
According to the complaint, Viray’s tax return preparation resulted in an estimated loss of over $45 million in tax revenue to the United States from 2008 to 2010, in addition to IRS resources devoted to recovering erroneous refunds and collecting unpaid taxes and penalties from her customers. The injunction order requires Viray to provide the government with a list of all persons for whom she prepared federal tax returns for tax years 2007 through 2010.
The Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax-return preparers and tax-fraud promoters in the past decade. Information about these cases is available on the Justice Department www.justice.gov/tax .
Complaint for Permanent Injunction and Other Relief (PDF)
Final Order of Permanent Injunction (PDF)Detroit Man Sentenced for Mailing Noose to Threaten CoupleRead the Press Release
WASHINGTON – Glenn E. Morgan Jr., 41, of Detroit, was sentenced by U.S. District Judge Robert H. Cleland to three months in prison followed by two years supervised release after pleading guilty to sending a threatening communication through the mail to a Detroit couple, the Justice Department announced today.
In November 2008, Morgan mailed a noose, photographs of black men being lynched and a photograph of the murdered body of Nicole Brown Simpson to the couple because of their race. The envelope Morgan sent to the couple also contained threatening written messages indicating that black men who marry white women should be lynched and that white women who marry black men will share Nicole Brown Simpson's fate.
U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade said, "The law protects people from threats and harassment based on their race, and we will prosecute anyone who seeks to racially intimidate members of our community."
“Threats based on race have no place in our country,” Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department will aggressively prosecute those who threaten any person based on the color of their skin.”
Andrew Arena, Special Agent in Charge of the FBI in Detroit said, "This sentencing should send as a strong message that hate crimes will be investigated vigorously and those responsible for these heinous acts will be brought to justice."
The case was investigated by the FBI. The case was prosecuted by Assistant U.S. Attorney Pamela Thompson from the U.S. Attorney's Office the Eastern District of Michigan, and Trial Attorney Sanjay Patel from the Civil Rights Division.
California Resident and Company Plead Guilty to Conspiracy to Export Computer-Related Equipment to IranRead the Press Release
WASHINGTON – Massoud Habibion, 49, aka “Matt Habibion” and “Matt Habi,” a U.S. citizen and co-owner of a Costa Mesa, Calif., company, Online Micro LLC, pleaded guilty today in the District of Columbia to conspiracy to illegally export computers from the United States to Iran through the United Arab Emirates (UAE). Additionally, Mohsen Motamedian, 44, aka “Max Motamedian” and “Max Ehsan,” a U.S. citizen and co-owner of Online Micro, pleaded guilty to obstruction of justice.
The guilty pleas were announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); David W. Mills, Assistant Secretary for Export Enforcement, Department of Commerce; and Adam Szubin, Director of the Office of Foreign Assets Control (OFAC), Department of the Treasury.
At a hearing today before U.S. District Judge Ellen S. Huvelle, Habibion and Online Micro each pleaded guilty to conspiracy to violate the International Emergency Economic Powers Act and to defraud the United States. Motamedian pleaded guilty to obstruction of justice. Judge Huvelle set sentencing for May 16, 2012. The maximum sentence for Habibion and the company is five years in prison and $1 million. The maximum sentence for Motamedian is 20 years in prison.
Under the terms of the plea and related civil settlements with the Department of Commerce’s Bureau of Industry and Security (BIS) and OFAC, Habibion and his company have agreed to forfeiture of a money judgment in the amount of $1.9 million. In addition, Habibion and Online Micro are denied export privileges for 10 years, although the denial order will be suspended provided that neither Habibion nor Online Micro commit any export violations during the 10-year probationary period and comply with the terms of the criminal plea agreements and sentences. Motamedian separately agreed to a $50,000 monetary penalty to settle a civil charge that he solicited a false statement to federal law enforcement agents.
Habibion and Motamedian were arrested on a criminal complaint in California on April 7, 2011. The defendants and their company were later indicted on April 21, 2011.
Habibion and Online Micro today admitted that they willfully conspired with a company operating in Dubai, UAE, and Tehran, Iran, to procure U.S.-origin computers from the United States and export those computers from the United States to Iran through Dubai without first obtaining licenses or authorizations from OFAC.
In or around May 2007, Online Micro purchased 1,000 computer units from Dell Inc. for approximately $500,000. Later that year, Dell began receiving service calls concerning Dell computer units from individuals in Iran, and after conducting an internal investigation, suspended Online Micro from placing further orders with Dell.
Beginning around Nov. 9, 2009, and continuing through December 2010, Habibion and Online Micro conspired with Company X, a firm operating in Dubai and Tehran, to procure U.S.-origin computer-related goods and export those goods to Iran via the UAE. During the scope of the conspiracy, defendants Online Micro and Habibion sold and exported from the United States to Company X numerous shipments of computer-related goods, worth a total of more than $4,904,962, with knowledge that the majority of those goods were destined for Iran.
Online Micro also caused Shipper’s Export Declarations to be filed with U.S. Customs and Border Protection falsely identifying the ultimate destination of the goods as the UAE. During the course of the investigation, Habibion and Motamedian told a government cooperator (Individual A) to lie to U.S. law enforcement officials about the transactions. Specifically, the defendants told Individual A to lie about Iran being the true ultimate destination for the goods and counseled him to tell U.S. law enforcement agents that the computer-related goods remained in Dubai.
Motamedian and Habibion also acknowledged to Individual A that the sanctions “are serious” and “were not a joke.” Yet Motamedian told Individual A to “Say, ‘I sold over there’ and have your guys make up invoices;” and “[d]efinitely delete your communication with [Company X’s agent in Iran] on Yahoo.” Similarly, Habibion stated to Individual A that he should tell U.S. law enforcement agents that the computer-related goods remained in Dubai: “Well, you can say, ‘I kept the goods there.’ How does he know what happened?”
This investigation was conducted by the ICE’s Homeland Security Investigations (HSI) field offices in San Diego and Orange County, Calif. U.S. Customs and Border Protection and the U.S. Department of Commerce’s BIS Los Angeles Field Office also assisted in the investigation.
Senior Attorney Adrienne Frazier from the U.S. Department of Commerce’s BIS, and Assistant Director of Enforcement Michael Geffroy and Enforcement Officer Elizabeth Beam from OFAC handled the civil settlements for their agencies, respectively.
The prosecution is being handled by Assistant U.S. Attorneys T. Patrick Martin and Anthony Asuncion from the U.S. Attorney's Office for the District of Columbia, and Trial Attorney Jonathan C. Poling from the Counterespionage Section of the Justice Department’s National Security Division.
15 February 2012
Pennsylvania Dairy Farmer Operator Found in Violation of Food, Drug and Cosmetic ActRead the Press Release
The U.S. District Court for the Eastern District of Pennsylvania awarded summary judgment to the government on a finding that Daniel Allgyer, dba Rainbow Acres Farm and Rainbow Valley Farms, violated the Food, Drug and Cosmetic Act and the Public Health Services Act, the Justice Department announced today. The court made the ruling on Feb. 3, 2012.
Allgyer is the owner and operator of a dairy farm located in Kinzers, Pa. An investigation conducted by the Food and Drug Administration (FDA) showed that Allgyer was packaging unpasteurized milk (also known as “raw milk”) in unlabeled containers, and was then distributing the milk for human consumption in interstate commerce.
The FDA warned Mr. Allgyer that his conduct violated federal law. Instead of ceasing his illegal operations, Mr. Allgyer attempted to evade federal regulations that prohibit the interstate sale of raw milk by creating a private membership organization that he used to enter into cow-sharing agreements with his customers. In the order granting summary judgment in the government’s favor, the court found that the cow-sharing agreements were “merely a subterfuge” and issued an order enjoining Mr. Allgyer and his associates from distributing unlabeled or unpasteurized milk for human consumption in interstate commerce.
While some states, including Pennsylvania, permit the sale of unpasteurized milk, it is illegal to transport unpasteurized milk across state lines. Unpasteurized milk can contain a wide variety of harmful bacteria, including Listeria, E.coli, Salmonella, Campylobacter, Yersinia and Brucella.
“The FDA has determined that drinking raw milk can cause significant harm,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “Working with our federal partners, we will bring enforcement actions like this one to ensure that the American food supply is safe and consumers are not exposed to such risks. We are pleased that the court has ordered Mr. Allgyer to stop distributing unpasteurized milk across state lines.”
This matter was handled by Department of Justice Trial Attorney Jessica R. Gunder of the Civil Division’s Consumer Protection Branch and Associate Chief Counsel Karen C. Corallo of the FDA’s Office of the General Counsel.
Justice Department Settlement Requires Gunnison Energy and SG Interests to Pay the United States a Total of $550,000 for Antitrust and False Claims Act ViolationsRead the Press Release
WASHINGTON – The Department of Justice today announced that it has reached a settlement with Gunnison Energy Corporation (GEC), SG Interests I Ltd. and SG Interests VII Ltd. (SGI) that requires the companies to pay a total of $550,000 to the United States for antitrust and False Claims Act violations related to an agreement not to compete in bidding for four natural gas leases sold at auction by the U.S. Department of Interior’s Bureau of Land Management (BLM). Today’s action marks the first time the Department of Justice has challenged an anticompetitive bidding agreement for mineral rights leases.
The department’s Antitrust Division today filed a civil antitrust complaint in U.S. District Court for the District of Colorado, and at the same time filed a proposed settlement that, if approved by the court, would resolve the lawsuit. The complaint alleges that the agreement between GEC and SGI restrained trade in violation of Section 1 of the Sherman Act.
“Today’s unprecedented antitrust enforcement action involving illegal bidding at Bureau of Land Management auctions, demonstrates the U.S. government’s resolve to ensure there is vigorous competition for federal oil and gas rights,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “At a time of budgetary constraint, it is crucial that the federal government receive the most competitive prices for these important leases, which ultimately benefits American taxpayers.”
According to the complaint, GEC and SGI were separately developing natural gas resources in Western Colorado. In 2005, GEC and SGI entered into a written agreement under which they agreed that only SGI would bid at the auctions and then assign an interest in the acquired leases to GEC. The department determined that the agreement was not part of any procompetitive or efficiency-enhancing collaboration.
As a result of the agreement between GEC and SGI, the United States received less revenue from the sale of the four leases than it would have had SGI and GEC competed at the auctions. The United States has the legal ability to obtain monetary damages when it has been injured by an antitrust violation. The proposed settlement provides that GEC and SGI each pay $275,000 to the United States to resolve the antitrust violations.
The payments will also resolve civil claims that the United States has under the False Claims Act against GEC and SGI for making false statements to the gover nment in connection with the agreement not to compete. The U.S. Attorney’s Office for the District of Colorado has entered into separate settlement agreements with the companies to resolve these claims.
BLM is responsible for issuing leases for oil and gas exploration and development on lands owned or controlled by the federal government. BLM provides notice of parcels to be leased and then auctions a lease for each parcel. The winning bidder is required to certify that its bid was not the product of collusion with another bidder.
“BLM relies on competition among bidders at onshore oil and gas auctions to ensure that the United States receives a fair and competitive price for its leases,” said BLM Director Bob Abbey. “We are hopeful that the outcome of this case will deter anticompetitive and fraudulent conduct at BLM auctions.”
The United States’ investigation resulted from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. Those provisions allow for private parties to sue on behalf of the United States. They also give the United States time to investigate to decide whether to take over prosecution of the allegations or allow the whistleblower to proceed. The whistleblower is entitled to receive a portion of any recovery.
GEC, an affiliate of Oxbow Corporation, is a Delaware corporation with its principal place of business in Denver. SGI is Texas limited partnerships with their headquarters in Houston. The managing partner of both limited partnerships is Gordy Oil Company, a Texas corporation.
The proposed settlement, along with the department’s competitive impact statement, will be published in The Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to William H. Stallings, chief, Transportation, Energy and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the settlement upon a finding that it serves the public interest.
Justice Department Resolves Sexual Harassment Lawsuit Against the Louisiana Department of Public Safety and CorrectionsRead the Press Release
WASHINGTON – The Department of Justice announced today the filing of a consent decree, filed in the U.S. District Court in the Eastern District of Louisiana, with the Louisiana Department of Public Safety and Corrections (LDPSC) that resolves allegations of sexual harassment of an office administrator in violation of Title VII of the Civil Rights Act of 1964, as amended (Title VII).
According to the department’s complaint, Laura Arceneaux, an office administrator, was subjected to a hostile work environment during the period between May 2002 and December 2008, which culminated in two attempts of sexual assault by her supervisor, District Administrator Farrell Veillion. At least four other LDPSC employees, including a part-time internal affairs investigator, were aware of the harassment and did not report it. The complaint alleges that the LDPSC did not have an effective sexual harassment policy in place at the time of the harassment.
The consent decree, if approved by the court, requires the LDPSC to modify its policy designed to prevent harassment in the workplace and provide annual training of LDPSC supervisors and employees about harassment. The decree also awards monetary damages in the amount of $50,000 to Arceneaux as well as other relief.
“Federal law requires employers to maintain a workplace free of harassment and hostility,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “ The d epartment commends the state for agreeing to put effective policies in place to prevent workplace harassment and to provide appropriate relief to Ms. Arceneaux. ”
The filing of this lawsuit and consent decree reflects the Civil Rights Division’s ongoing commitment to actively enforce federal employment discrimination laws such as Title VII. Additional information about the Civil Rights Division is available at www.justice.gov/crt .
Barrio Azteca Gang Leader Sentenced in Texas to Life in PrisonRead the Press Release
WASHINGTON – A Barrio Azteca (BA) gang leader was sentenced to life in prison without parole for his participation in a racketeering conspiracy, 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).
Roberto Angel Cardona, aka “Little Angelillo,” of El Paso, Texas, was sentenced yesterday by U.S. District Judge Kathleen Cardone in the Western District of Texas, El Paso Division. Cardona pleaded guilty on Aug. 2, 2011.
“This sentence reflects the severity of Roberto Cardona’s crimes as a leader of the brutal Barrio Azteca gang, as well as his individual acts of violence and drug trafficking,” said Assistant Attorney General Breuer. “On both sides of the border, Barrio Azteca gang members use violence, intimidation and fear to further their illegal activities. Lengthy prison sentences are an appropriate consequence and should cause would-be gang members to think twice about participating in such destructive activities.”
“The violent activities of Barrio Azteca members are representative of the dangers of drug trafficking,” said U.S. Attorney Pitman. “This sentence represents our response and our continued dedication to fighting senseless acts of violence and organized drug dealing in our communities.”
“This sentence is a powerful step taken against trans-border violence, one that the FBI’s El Paso Field Office has taken with partners at the federal, state and local levels,” said FBI Assistant Director Perkins. “Gangs like the Barrio Azteca represent threats to both Mexico and the United States, and together we have supported each other to investigate and prosecute criminals who affect us on both sides of the border.”
“The sentencing of Barrio Azteca leader Robert o Cardona is a victory for both U.S. and Mexican law enforcement,” said DEA Administrator Leonhart. “Together, we will relentlessly pursue violent drug organizations, their leaders and gang members who brutally destroy lives on both sides of the border.”
According to court documents and testimony, the BA 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 and testimony, 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 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 are also allegedly reinvested into the organization to purchase drugs, guns and ammunition.
According to testimony presented at sentencing, Cardona was a leader in the Barrio Azteca gang. Specifically, he was the El Paso BA leader in 2010 until he was arrested on drug charges on April 30, 2010. He also participated in the BA’s activities by distributing narcotics, including heroin and cocaine, and collected extortion funds that were sent to the commissary accounts of fellow BA members in prison. One witness testified that Cardona ordered beatings of fellow BA members and personally assaulted a drug dealer who would not pay extortion money. Witnesses testified that BA members used weapons in the course of violence and regularly carried guns at meetings.
At sentencing, a witness testified about personally attending a meeting where Cardona ordered extortions, assaults and kidnappings. The witness testified that Cardona contacted him for the purposes of kidnapping someone in El Paso and delivering him to Juarez. According to testimony, Cardona arranged for the witness and others to meet with the victim, assault him, drug him, bind him and transport him to Juarez. The court also found that Cardona's offense involved more than 30 kilograms of heroin and 150 kilograms of cocaine. Cardona directly imported large quantities of these drugs and sold them to retail drug dealers.
Thirty-five members and associates of the BA gang, including Cardona and 18 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 is set to begin April 6, 2012.
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 investigation in this case was led and conducted by the FBI’s El Paso Field Office. 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.