Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
9 January 2012
Broward County, Fla.-Area Halfway House Owner Pleads Guilty to Fraud and Kickback SchemeRead the Press Release
WASHINGTON – The owner and operator of a Broward County, Fla.-area halfway house pleaded guilty today for his role in a Medicare fraud kickback scheme that funneled patients through a fraudulent mental health company, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Barry Nash, 69, pleaded guilty before U.S. Magistrate Judge Barry L. Garber in Miami to one count of conspiracy to commit health care fraud. Nash was the owner and operator of Starter House, a halfway house operating in Broward County.
Nash admitted that, in exchange for illegal health care kickbacks, he agreed to refer Medicare beneficiaries who resided at Starter House to American Therapeutic Corporation (ATC) for purported intensive mental health treatment called partial hospitalization program (PHP) services, and to the American Sleep Institute (ASI), a company related to ATC, for purported sleep treatment. Nash knew that ATC and ASI would fraudulently bill Medicare for the PHP treatment and sleep studies that his referrals would purportedly receive.
According to court documents, ATC’s principals paid kickbacks to owners and operators of assisted living facilities and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services. Ultimately, ATC and ASI billed Medicare for more than $200 million in medically unnecessary services.
According to the plea agreement, Nash’s participation in the fraud resulted in more than $959,901 in fraudulent billing to the Medicare program. At sentencing, scheduled for March 8, 2012, Nash faces a maximum of 10 years in prison and a $250,000 fine.
ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and nine of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled for trial April 9, 2012, before U.S. District Judge Patricia A. Seitz.
Today’s guilty plea 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 1,160 defendants that collectively have billed the Medicare program for more than $2.9 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 .
6 January 2012
Two Former Alabama Sheriff’s Office DeputiesSentenced to Prison for Assaulting Handcuffed Man in CustodyRead the Press Release
WASHINGTON – The Justice Department announced today that Kirby Dollar and Timothy Watford, former deputies with the Russell County, Ala., Sheriff’s Office, were sentenced in federal court in Montgomery, Ala., for their participation in the beating of a handcuffed man who had been taken into official custody. U.S. District Court Judge Mark E. Fuller sentenced Dollar, 37, to 46 months in prison and Watford, 42, to 34 months in prison.
Dollar pleaded guilty on Aug.11, 2011, to willfully depriving the victim of his constitutional right to be free from the use of excessive force. Watford was convicted of the same charge by a federal jury sitting in Opelika, Ala., on Sept, 1, 2011, following a three day trial.
Evidence presented during the court proceedings established that Dollar and Watford, while acting in their capacity as law enforcement officers, punched, kicked and slapped the victim, who was lying on the ground in handcuffs and offering no resistance. The victim suffered multiple lacerations, facial fractures and a ruptured eardrum. Dollar admitted, and witnesses during Watford’s trial confirmed, that the attack was entirely unprovoked.
“These convictions and sentences demonstrate that the use of excessive force cannot be tolerated,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The vast majority of police officers do an outstanding job in protecting both the community and the rights of the accused, even in stressful situations. But when police officers use excessive force to punish arrestees, they will be held accountable.”
“As well intended as some officers may be, police activity must remain within constitutional bounds,” said George L. Beck Jr., U.S. Attorney for the Middle District of Alabama. “Let these two convictions and sentences serve as examples of bad conduct that will be prosecuted by this office. Emotions cannot overcome good judgment. Zealousness cannot overcome good training. And brutality can never be a substitute for effective law enforcement.”
FBI’s Special Agent in Charge Lewis M. Chapman stated, “Today’s sentencing of former Russell County Deputies Kirby Dollar and Tim Watford brings some closure to a breach of trust by law enforcement officers. Law enforcement officers must always act within the bounds of the law under any circumstance and particularly while safeguarding our communities and citizens. The investigation of Civil Rights violations continues to be one of the FBI’s top priorities; and, these sentences reaffirm our commitment to enforcing those standards on ourselves and the law enforcement community.”
The case was investigated by the Mobile Division of the FBI- Montgomery Office and the Alabama Bureau of Investigation, with assistance from the Russell County Sheriff’s Office, the Lee County Alabama Sheriff’s Office and the Columbus, Ga., Police Department. The case was prosecuted by Assistant U.S. Attorneys Nathan D. Stump and Jared H. Morris and Trial Attorney Benjamin J. Hawk of the Justice Department’s Civil Rights Division.
Three Tennessee Men Plead Guilty toLaunching Mortar-Style Fireworks at African-AmericansRead the Press Release
CHATTANOOGA, Tenn. – James Smiley, 27, Colton Partin, 21, and Kyle Montgomery, 21, all of Chattanooga, Tenn., pleaded guilty today in U.S. District Court in Chattanooga for launching fireworks at African-Americans who were congregated outside their apartment building.
In the early morning hours of July 9, 2011, at least four African-American residents of East Lake Courts Public Housing Authority in Chattanooga were on the porch of one of the units. As they conversed, Smiley, Partin and Montgomery drove by several times yelling racial slurs and launched mortar-type fireworks, from a cylinder, directly toward these individuals. The individuals on the porch dove and scattered to avoid the explosions, one of which was captured on video by the Chattanooga Housing Authority. Another explosion shattered a window pane in an apartment of an African-American resident of the East Lake Courts. This individual was asleep inside with her infant child and her boyfriend's adolescent siblings.
Based on a 911 call, the Chattanooga Police Department swiftly apprehended and arrested Smiley, Partin and Montgomery. Fireworks, like the ones fired at the individuals on the porch, were photographed and observed in the bed of the truck. Smiley, Partin and Montgomery admitted their involvement to the officers. They have further admitted that the explosives were fired toward the individuals in order to intimidate them because they were African-American.
"Hate crimes victimize not only individuals but entire communities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Department of Justice is committed to protecting our communities from attempted violence and intimidation motivated by bigotry and prejudice, and ensuring that justice is served."
U.S. Attorney Bill Killian stated, "On behalf of the federal law enforcement community, and in conjunction with state and local law enforcement agencies and the district attorney general, we want the public to know that violations of the civil rights of all persons will not be tolerated. We will aggressively address and prosecute civil rights matters, regardless of the source or nature of the circumstances, or the race, religion, ethnicity, sexual orientation, or any other classification of the victims."
Each faces 10 years in federal prison as well as a $250,000 fine, three years supervised release and a $100 special assessment. Sentencing hearings were set for April 12, 2012, in U.S. District Court, Chattanooga, before the Honorable Curtis L. Collier, Chief U.S. District Court Judge.
Investigative agencies involved in the investigation of this case included the Chattanooga Police Department, Chattanooga Housing Authority Police and the Federal Bureau of Investigation. Assistant U.S. Attorney Chris Poole and Civil Rights Division Trial Attorney Myesha Braden represented the United States.
Three Philippine Nationals Arrested<br /> in International Arms Trafficking CaseRead the Press Release
WASHINGTON – Three Philippine nationals have been arrested on charges of violating the Arms Export Control Act, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Steven M. Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
Sergio Santiago de Leon Syjuco, aka “Yogi,” 25, of Muntinlupa City, Philippines; Cesar Paolo Inciong Ubaldo, aka “Arvi,” 26, of Paranaque City, Philippines; and Arjyl Revereza, 25, of Manila, Philippines, were charged in criminal complaint unsealed yesterday in the Central District of California with importing defense articles into the United States without a license, in violation of the Arms Export Control Act. Syjuco, Ubaldo and Revereza were arrested upon their entry into the United States on Jan. 5, 2012. They will make their initial appearances today in U.S. District Court in Los Angeles before U.S. Magistrate Judge Alicia G. Rosenberg. According to the complaint, the case is part of an FBI investigation of transnational Asian organized crime groups involved in the illicit trafficking of firearms.
The complaint alleges that on June 7, 2011, Syjuco, Ubaldo and Revereza imported various defense articles – items specifically designed, developed, configured, adapted or modified for military application – into the United States from the Republic of the Philippines, including 12 fully automatic Bushmaster M-4 .223 caliber rifles, a .50 caliber sniper rifle, an M14 7.62mm assault rifle, a single-shot grenade launcher, a rocket propelled grenade (RPG-7) launcher, a mortar launcher, an AK-47 rifle and ballistic vests. None of the defendants had a license to import these items into the United States. Law enforcement officers took possession of the items when they entered the United States.
If convicted, the defendants face a maximum of 20 years in prison.
The case was investigated by the FBI. The Philippines National Bureau of Investigations also provided significant assistance in this matter. The case is being prosecuted by Trial Attorneys Margaret Honrath and Margaret Vierbuchen of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Ariel Neuman of the Central District of California.
The details contained in the complaint are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Miami-Area Patient Recruiter Sentenced to 57 Months in Prison for Participating in Medicare Fraud Kickback SchemeRead the Press Release
WASHINGTON – The owner and president of a Miami-area transportation company was sentenced yesterday to 57 months in prison for her role in a Medicare fraud kickback scheme that funneled patients through a fraudulent mental health company, American Therapeutic Corporation (ATC), announced the Department of Justice, FBI and Department of Health and Human Services (HHS).
Isabel Roque was sentenced by U.S. District Judge Michael K. Moore in the Southern District of Florida. In addition to her prison term, Roque was sentenced to three years of supervised release and was ordered to pay $3.8 million in restitution jointly and severally with co-conspirators.
Roque, 55, pleaded guilty in November 2011 to one count of conspiracy to commit health care fraud. Roque was the president of Isa & Yami Inc., which purported to provide patient transportation services in Miami.
According to court documents, Roque agreed to provide Medicare beneficiaries to ATC for partial hospitalization program (PHP) services in exchange for kickbacks. PHP services are used as a form of intensive treatment for patients with severe mental illness. ATC purported to operate PHPs in seven different locations throughout south Florida and Orlando. According to court documents, Roque provided Medicare beneficiaries to four of ATC’s locations, including facilities in Boca Raton, Broward, Homestead and Miami.
Roque admitted that she knew the beneficiaries whom she referred to ATC did not need PHP treatment. Roque also knew that ATC fraudulently billed the Medicare program for the PHP services provided to the beneficiaries she referred. According to court documents, Roque also paid kickbacks to the beneficiaries whom she referred to ATC in exchange for those beneficiaries agreeing to attend ATC.
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, Roque’s participation in the fraud resulted in more than $3.8 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 nine of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled to begin trial on April 9, 2012, before U.S. District Judge Patricia A. Seitz.
Today’s sentence 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 1,160 defendants that collectively have billed the Medicare program for more than $2.9 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 .
Leader of NinjaVideo.Net Website Sentenced <br /> to 22 Months in Prison for Criminal Copyright ConspiracyRead the Press Release
WASHINGTON – A founder of NinjaVideo.net, a website that provided millions of users with the ability to illegally download high-quality copies of copyright-protected movies and television programs, was sentenced today to 22 months in prison, announced U.S. Attorney Neil H. MacBride for the Eastern District of Virginia, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
Hana Amal Beshara, 30, of North Brunswick, N.J., was sentenced by U.S. District Judge Anthony J. Trenga in the Eastern District of Virginia. Judge Trenga ordered Beshara to serve two years of supervised release, complete 500 hours of community service, repay $209,826.95 that she personally obtained from her work at NinjaVideo.net and forfeit to the United States several financial accounts and computer equipment involved in the crimes.
On Sept. 9, 2011, Beshara was indicted along with four of the other top administrators of NinjaVideo.net. Beshara pleaded guilty on Sept. 29, 2011, to conspiracy and criminal copyright infringement. Three of Beshara’s co-defendants have pleaded guilty and await sentencing. An arrest warrant remains outstanding for the fourth co-defendant, Zoi Mertzanis of Greece. Another co-founder of NinjaVideo.net who was charged separately has also pleaded guilty.
According to court documents, Beshara was one of the founders of the NinjaVideo.net website, which operated from February 2008 until it was shut down by law enforcement in June 2010. NinjaVideo.net offered visitors the ability to view, without charge, many movies still in theaters as well as some movies that had not yet been released in theaters, and many television programs immediately after they aired. Beshara, who was known as “Queen Phara” on the Internet, served as the public face of NinjaVideo.net. She supervised the uploading and placement of infringing television programs and motion pictures on the website and served as the lead moderator of the website’s forum boards. At one point Beshara managed the conspiracy’s finances, including receiving advertising revenue generated by traffic to NinjaVideo.net. In total, advertising revenue and visitor donations generated more than $505,000 in income for the conspiracy, with Beshara personally receiving nearly $210,000.
The case was prosecuted by Assistant U.S. Attorneys Jay V. Prabhu and Lindsay A. Kelly and Trial Attorney Glenn Alexander of the Computer Crime & Intellectual Property Section in the Justice Department’s Criminal Division.
The investigation was conducted by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center). The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 19 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters.
To report IP theft or to learn more about the IPR Center, visit www.IPRCenter.gov.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
Former Army Major Sentenced to Prison in Bribery and Money Laundering Scheme<br /> Related to DOD Contracts in Support of Iraq WarRead the Press Release
WASHINGTON – Eddie Pressley, 41, a former U.S. Army contracting official, was sentenced in Birmingham, Ala., for his 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 Judge Virginia Emerson Hopkins sentenced Eddie Pressley late yesterday to 144 months in prison and ordered him to serve three years of supervised release following the prison term. The court said it would also require Pressley to forfeit $21 million as well as real estate and several automobiles.
“Mr. Pressley participated in a wide-ranging scheme to steer U.S. Army contracts to particular providers in exchange for personal, illegal profit,” said Assistant Attorney General Breuer. “Taking in nearly $3 million, he enlisted his wife to help him conceal the nature of his bribes and created phony paperwork to keep the scheme going. This sentence sends the message loud and clear that we will not tolerate corruption of any kind, and are determined to hold corrupt officials accountable.”
“This contracting scheme was driven by greed and is in no way representative of the vast majority of public officials and government contractors who work hard to serve our military,” said James McJunkin, Assistant Director of the FBI’s Washington Field Office. “The FBI will continue to investigate contracting fraud which deprives the U.S. government of taxpayer dollars, regardless of where it occurs.”
“I am pleased to see a perpetrator of criminal activity in Iraq justly sentenced,” said Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction (SIGIR). “This individual sought to enrich himself at the expense of U.S. taxpayers. SIGIR’s investigations team will continue to pursue criminals operating in Iraq and bring them to justice.”
“This sentence sends a clear message of deterrence to anyone contemplating such an egregious breach of public trust. It is not a matter of if you will be caught, but a matter of when,” said James K. Podolak, director of Army CID’s Major Procurement Fraud Unit (MPFU). “The outcome of this investigation is yet another testament to the teamwork among the special agents of the U.S. Army Criminal Investigation Command's MPFU and our fellow federal law enforcement agencies.”
“This sentencing represents the seriousness with which the government will pursue corruption among its ranks,” said Special Agent in Charge Robert E. Craig for the Defense Criminal Investigative Service. “The Defense Criminal Investigative Service stands with our service members as they deploy throughout the world and will root out shameless bribery schemes such as this one perpetrated by Mr. Pressley. DCIS continues to work alongside our investigative partners at Army CID, SIGIR, FBI, IRS-CI, and Public Integrity to jointly bring these matters to justice.”
Eddie Pressley, and his wife Eurica Pressley, were found guilty at trial 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. A sentencing date for Eurica Pressley has not yet been scheduled by the court.
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 been found guilty at trial for their roles in the scheme.
Evidence presented at trial showed that Eddie Pressley took various 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) to deliver goods and services to the U.S. Department of Defense (DoD) and its components in Kuwait and elsewhere.
A BPA is a type of contract by which the DoD agrees to pay a contractor a specified price for a particular good or service. Based on a BPA, the DoD orders the supplies on an as-needed basis. The contractor is then obligated to deliver the supplies ordered at the price agreed upon in the BPA. The term for such an order by the DoD is a “call.”
According to Hall’s testimony and other evidence presented at trial, Pressley demanded a $50,000 bribe before he would issue bottled water 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 to receive the bribes. On March 9, 2005, he sent his wife an email 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 the Pressleys, 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. Evidence 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 Eddie 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.
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.
On Feb. 18, 2010, Hall pleaded guilty to bribery conspiracy and money laundering conspiracy and agreed to forfeit $15.7 million to the U.S. government in connection with his payment of more than $3 million in bribes to Cockerham, Eddie Pressley, Momon and Christopher Murray. He is scheduled to be sentenced on Feb. 23, 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. Momon’s sentencing has not yet been scheduled. 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.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, ICE, FBI, IRS-CI, 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.
Federal Court Bars Missouri Man from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court in St. Louis has permanently barred Richard Gray Sr. from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Gray consented, was signed by Judge Rodney Sippel of the U.S. District Court for the Eastern District of Missouri.
According to the government complaint, Gray, who works periodically at a Chrysler plant in Kokomo, Ind., and resides the remainder of the year in St. Louis, prepared over 130 tax returns in 2009. His customers allegedly included family, friends, neighbors and co-workers. The complaint states that Gray listed fictitious businesses, fake deductions and bogus dependents on his customers’ returns in order to understate their tax liabilities or claim refunds to which they were not entitled.
The suit alleges that Gray has no formal training in tax law or return preparation. The complaint also alleges that Gray fails to report the income he receives from preparing returns on his own income tax returns.
Over the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website.
Related Documents:
United States v. Richard Gray, Sr.
Complaint
Stipulated Final Judgment of Permanent Injunction Against Richard Gray, Sr.
(PDF document)Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader
Accessibility InformationDepartment of Justice and Other Administration Officials to Hold Press Conference Call on Revisions to the Uniform Crime Report’s Definition of RapeRead the Press Release
Department of Justice and other administration officials will hold a press conference call on revisions to the Uniform Crime Reporting (UCR) definition of rape TODAY, FRIDAY, JAN. 6, 2012, at 10:30 a.m. EST.
WHO: Senior Advisor to the President Valerie Jarrett
White House Advisor on Violence Against Women Lynn Rosenthal
Department of Justice Director of the Office on Violence Against
Women Susan B. Carbon
FBI Assistant Director of the Criminal Justice Information Services
Division David Cuthbertson
WHAT: Press conference call
WHEN: TODAY, FRIDAY, JAN. 6, 2012
10:30 a.m. EST
Reporters who wish to participate in the conference call should contact [email protected] or call 202-514-2007 for call-in information.
Austin, Texas, Man Pleads Guilty to Bankruptcy Fraud and Identity Theft<br /> in Connection with Nationwide Foreclosure-rescue SchemeRead the Press Release
WASHINGTON – An Austin, Texas, man pleaded guilty today in the Western District of Texas for his role in operating a foreclosure-rescue scam in Southern California and elsewhere that charged distressed homeowners fees in exchange for fraudulently postponing foreclosure sales.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Andre Birotte Jr. of the Central District of California, U.S. Attorney Robert Pitman of the Western District of Texas, Assistant Director in Charge Steven Martinez of the FBI’s Los Angeles Field Office and Christy Romero, Deputy Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
Frederic Alan Gladle, 53, was charged on Dec. 9, 2011, in U.S. District Court in Los Angeles with one count of bankruptcy fraud and one count of aggravated identity theft.
Today, Gladle admitted that beginning in October 2007 and continuing until October 2011, he operated a foreclosure-rescue fraud scheme that netted him more than $1.6 million in fees from distressed homeowners. According to court documents, Gladle used five aliases to avoid detection, including stealing the identity of at least one person and setting up a mobile phone account in that victim’s name.
Gladle admitted that he recruited homeowners whose properties were in danger of imminent foreclosure and falsely promised to delay the foreclosures for up to six months, in exchange for a fee of approximately $750 per month. Gladle, directly or through salespersons, directed homeowners to sign deeds granting fractional interest in their properties to debtors in bankruptcy proceedings whose names Gladle found by searching bankruptcy records. The debtors were unaware that their names and bankruptcy cases were being used by Gladle in his scheme. Gladle then sent the unsuspecting debtors’ bankruptcy petitions, and the deeds that transferred fractional interests to the debtors, to the homeowners’ lenders to stop foreclosure proceedings.
Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks who received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money. When homeowners wanted to void the deeds to the unsuspecting debtors, Gladle would forge the debtors’ signatures on papers voiding the deeds.
The crime of bankruptcy fraud carries a statutory maximum sentence of five years in federal prison. The aggravated identity theft charge carries a mandatory sentence of two years.
This case is being prosecuted by Trial Attorney Paul Rosen of the Fraud Section in the Justice Department’s Criminal Division, Assistant U.S. Attorney Evan Davis for the Central District of California, with substantial assistance provided by Assistant U.S. Attorneys Chris Peele and Mark Lane of the Western District of Texas. The investigation was conducted by the FBI and SIGTARP, which received substantial assistance from the U.S. Trustee’s Office.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit www.stopfraud.gov .
Attorney General Eric Holder Announces Revisions to the Uniform Crime Report’s Definition of RapeRead the Press Release
Attorney General Eric Holder today announced revisions to the Uniform Crime Report’s (UCR) definition of rape, which will lead to a more comprehensive statistical reporting of rape nationwide. The new definition is more inclusive, better reflects state criminal codes and focuses on the various forms of sexual penetration understood to be rape. The new definition of rape is: “The penetration, no matter how slight, of the vagina or anus with any body part or object, or oral penetration by a sex organ of another person, without the consent of the victim.” The definition is used by the FBI to collect information from local law enforcement agencies about reported rapes.
“Rape is a devastating crime and we can’t solve it unless we know the full extent of it,” said Vice President Biden, a leader in the effort to end violence against women for over 20 years and author of the landmark Violence Against Women Act. “This long-awaited change to the definition of rape is a victory for women and men across the country whose suffering has gone unaccounted for over 80 years.”
“These long overdue updates to the definition of rape will help ensure justice for those whose lives have been devastated by sexual violence and reflect the Department of Justice’s commitment to standing with rape victims,” Attorney General Holder said. “This new, more inclusive definition will provide us with a more accurate understanding of the scope and volume of these crimes.”
“The FBI’s Criminal Justice Information Services (CJIS) Advisory Policy Board recently recommended the adoption of a revised definition of rape within the Summary Reporting System of the Uniform Crime Reporting Program,” said David Cuthbertson, FBI Assistant Director, CJIS Division. “This definitional change was recently approved by FBI Director Robert S. Mueller. This change will give law enforcement the ability to report more complete rape offense data, as the new definition reflects the vast majority of state rape statutes. As we implement this change, the FBI is confident that the number of victims of this heinous crime will be more accurately reflected in national crime statistics.”
The revised definition includes any gender of victim or perpetrator, and includes instances in which the victim is incapable of giving consent because of temporary or permanent mental or physical incapacity, including due to the influence of drugs or alcohol or because of age. The ability of the victim to give consent must be determined in accordance with state statute. Physical resistance from the victim is not required to demonstrate lack of consent. The new definition does not change federal or state criminal codes or impact charging and prosecution on the local level.
“The revised definition of rape sends an important message to the broad range of rape victims that they are supported and to perpetrators that they will be held accountable,” said Justice Department Director of the Office on Violence Against Women Susan B. Carbon. “We are grateful for the dedicated work of all those involved in making and implementing the changes that reflect more accurately the devastating crime of rape.”
T he longstanding, narrow definition of forcible rape, first established in 1927, is “the carnal knowledge of a female, forcibly and against her will.” It thus included only forcible male penile penetration of a female vagina and excluded oral and anal penetration; rape of males; penetration of the vagina and anus with an object or body part other than the penis; rape of females by females; and, non-forcible rape.
Police departments submit data on reported crimes and arrests to the UCR. The UCR data are reported nationally and used to measure and understand crime trends. In addition, the UCR program will also collect data based on the historical definition of rape, enabling law enforcement to track consistent trend data until the statistical differences between the old and new definitions are more fully understood.
The revised definition of rape is within FBI’s UCR Summary Reporting System Program. The new definition is supported by leading law enforcement agencies and advocates and reflects the work of the FBI’s CJIS Advisory Policy Board.
Click here to read a blog post from Director Carbon on the importance of the new definition of rape to our nation’s law enforcement, and for survivors of rape and their advocates. Click here to listen to the FBI’s podcast .
Arizona Man Sentenced to More Than 5 Years in Prison<br /> in Money Laundering and Tax SchemeRead the Press Release
Wayne A. Mounts, a resident of Mesa, Ariz., was sentenced yesterday to 63 months in prison for his role in conspiracies to commit money laundering and to defraud the Internal Revenue Service (IRS), announced the Justice Department and the IRS today. On July 25, 2011, a federal jury in Phoenix convicted Mounts and his co-defendant, Gino Carlucci, of both conspiracies after an eight-day trial.
According to the evidence presented at trial, Mounts and Carlucci, stole large sums of money from Joseph Flickinger and Flickinger’s clients and associates. Flickinger was a tax return preparer who had himself been sentenced in 2007 to 70 months in prison following a guilty plea to tax fraud conspiracy, as well as mail and wire fraud charges. Flickinger’s mail and wire fraud convictions related to a Ponzi-style investment scheme through which he had defrauded his clients.
After defrauding Flickinger of the money he obtained by fraud, Mounts and Carlucci used the money for their own personal benefit. Mounts withdrew more than $250,000 in cash from a bank account over a two-month period. He withdrew the money in amounts just under $10,000 to avoid having the bank report his withdrawals to authorities. Mounts and Carlucci spent an additional $150,000 of the funds to buy a 43-foot luxury boat which Carlucci concealed from the government for over two years.
Judge Kathryn H. Vratil, Chief Judge of the District of Kansas, sitting in Phoenix by special designation, ordered Mounts to pay $686,841 in restitution to the victims in Flickinger’s case and $80,787.80 in restitution to the IRS. Judge Vratil further entered a forfeiture order against Mounts for a money judgment in the amount of $722,841.00.
Sentencing for Gino Carlucci is set for Feb. 28, 2012, before Judge Vratil in Phoenix. Carlucci faces a maximum sentence of 20 years in prison for conspiracy to commit money laundering; five years in prison for conspiracy to defraud the United States; and three years in prison for filing a false tax return.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
John A. DiCicco, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division, commended the special agents from IRS-Criminal Investigation who investigated the case as well as Tax Division attorneys Richard Rolwing, Hayden Brockett and Monica Edelstein who prosecuted the case. Principal Deputy Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office for the District of Arizona for their assistance in this matter.
Alabama Woman Pleads Guilty to Identity Theft and Tax ChargesRead the Press Release
The Justice Department and the Internal Revenue Service (IRS) announced that Loretta Fergerson pleaded guilty today before Magistrate Judge Charles S. Coody in Montgomery, Ala., to conspiring to defraud the United States government, wire fraud and aggravated identity theft. Fergerson and a co-defendant were charged by a grand jury in a 22-count indictment that was unsealed on March 30, 2011.
According to the plea agreement, Fergerson owned and operated a tax return preparation business called Fast Tax Cash in Montgomery. From 2005 through 2008, Fergerson and her employees filed tax returns using stolen identities in order to claim fraudulent tax refunds. Additionally, Fergerson admitted that she and her employees filed tax returns for Fast Tax Cash clients that contained false information on the tax return in order to obtain higher refunds for customers to which they were not entitled. Fergerson further admitted that she created false driver’s licenses and false Social Security cards to be placed in customer files for returns that were prepared using stolen identities.
A sentencing date has not yet been set. Fergerson faces a maximum potential sentence of 32 years in prison and fines of up to $750,000.
The case was investigated by the IRS-Criminal Investigation and is being prosecuted by trial attorneys Charles M. Edgar, Jr. and Michelle M. Petersen of the Justice Department's Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.
Alabama Tax Preparers Sentenced to Prison<br /> for Preparing False Tax ReturnsRead the Press Release
Judge Mark Fuller of the U.S. District Court for the Middle District of Alabama sentenced Lutoyua N. Thompson and Melinda M. Lambert to prison today for their involvement in a fraudulent tax return preparation scheme, the Justice Department and Internal Revenue Service (IRS) announced. Thompson was sentenced to 18 months in prison. Lambert was sentenced to six months in prison and six months of home confinement. Both had previously pleaded guilty to aiding and assisting the preparation of a false tax return.
According to the court documents, both Thompson and Lambert were employed by James E. Moss as tax return preparers at a tax return preparation business known as Flash Tax, located in Montgomery, Ala. Thompson was employed at Flash Tax from December 2003 through June 2005 and prepared approximately 600 tax returns. Lambert was employed at Flash Tax from December 2004 through January 2007 and prepared approximately 900 tax returns. The majority of the returns prepared by Lambert and Thompson contained false information designed to illegally obtain higher refunds to which clients were not entitled. Lambert and Thompson admitted that Moss trained them to prepare false tax returns in order to obtain higher tax refunds for Flash Tax customers by inflating or deflating specific numbers and/or by adding totally fictitious numbers to the returns.
On Nov. 2, 2011, Moss was convicted by an Alabama jury of conspiring to defraud the United States and of aiding and assisting the preparation of false tax returns. His sentencing is currently set for March 13, 2012.
John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division commended the IRS special agents who investigated this case and Tax Division trial attorneys Charles M. Edgar, Jr., Thomas J. Krepp, and Michelle M. Petersen who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax.
5 January 2012
Pakistani Citizen Sentenced to 50 Months in Prison for Conspiracy to Provide Material Support to the Pakistani TalibanRead the Press Release
WASHINGTON – A Pakistani citizen was sentenced today in the District of Columbia to 50 months in prison for conspiracy to provide material support to the Tehrik-e Taliban Pakistan (TTP), often referred to as the Pakistani Taliban, a designated foreign terrorist organization. Two co-defendants were sentenced for the same charge in December 2011 to 40 and 36 months in prison.
The sentences were announced by Assistant Attorney General for National Security Lisa Monaco; Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Ronald C. Machen Jr. for the District of Columbia; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); and John V. Gillies, Special Agent in Charge of the FBI Miami Division.
Irfan Ul Haq, 37, was sentenced today by U.S. District Judge John D. Bates. On Dec. 21, 2011, Judge Bates sentenced Qasim Ali, 32, to 40 months in prison, and Zahid Yousaf, 43, to 36 months in prison. On Sept. 12, 2011, each defendant pleaded guilty to one count of conspiracy to provide material support to a designated foreign terrorist organization. As part of their plea agreements, the defendants agreed to a stipulated order of removal to Pakistan upon the completion of their criminal sentences.
“This case underscores our continuing commitment to dismantle networks that facilitate terrorist travel,” said Assistant Attorney General Monaco. “I thank the many agents, analysts and prosecutors who were responsible for this successful prosecution.”
“Mr. Haq conspired with others to smuggle into the United States an individual who was believed to be a member of a foreign terrorist organization,” said Assistant Attorney General Breuer. “Such conduct presents a serious threat to our national security, and we will continue to work closely with our domestic and international law enforcement partners to prevent human smugglers from operating at home or abroad, and to punish them for their crimes.”
“Today’s sentence successfully brings to a close our prosecution of three criminals who aimed to use their human smuggling network to help a person who they believed to be a terrorist infiltrate our homeland,” said U.S. Attorney Machen. “By convicting three Pakistani nationals who were operating out of Ecuador, we have demonstrated our ability to dismantle human smuggling operations throughout the world when they threaten our national security.”
“ICE Homeland Security Investigations agents will continue to use every available resource to protect the American public from terrorist organizations and individuals who support them,” said ICE Director Morton. “Today’s sentence demonstrates our international resolve to ensuring that our nation is safer and more secure. I applaud the outstanding work conducted by our HSI attaché office in Ecuador who led this extensive investigation. I would also like to commend our HSI office in Atlanta, along with our law enforcement partners in the United States and Ecuador, who assisted us in this case.”
“Today’s sentence sends a clear message: Individuals such as Ul Haq, who operate outside the law to support terror represent a threat to our safety. Ul Haq and his co-conspirators sought to smuggle men into the U.S. and did not care if they came here to ‘blow up’ something as long as they got paid. Ul Haq in turn provided material support to the TTP. Such would-be supporters of terror will be dealt with severely under our system of laws. I commend the FBI and everyone involved in the prosecution of this case for bringing him to justice,” said FBI Special Agent in Charge Gillies.
Ul Haq, Ali and Yousaf were arrested in Miami on March 13, 2011, on an indictment filed in the District of Columbia charging them with one count of conspiracy to commit alien smuggling. Based on the defendants’ guilty pleas to terrorism conspiracy charges, the government dismissed at the sentencing hearing today the charges of conspiracy to commit alien smuggling against the defendants.
Ul Haq, Ali and Yousaf admitted that between Jan. 3, 2011, and March 10, 2011, they conspired to provide material support to the TTP in the form of false documentation and identification, knowing that the TTP engages in terrorist activity and terrorism. According to court documents, Ul Haq, Ali and Yousaf conducted a human smuggling operation in Quito, Ecuador, that attempted to smuggle an individual they believed to be a member of the TTP from Pakistan into the United States. The TTP was designated as a foreign terrorist organization by the State Department on Sept. 1, 2010.
Court documents indicate that law enforcement agents directed confidential sources to ask the defendants, who were residing in Ecuador at the time, for their assistance in smuggling a fictitious person from Pakistan to the United States. Over the course of the ensuing negotiations, the defendants were made aware that the person to be smuggled was a member of the TTP who was blacklisted in Pakistan.
According to the court documents, the defendants agreed to move this person from Pakistan into the United States, despite his purported affiliation with the TTP. Ul Haq, according to the court documents, told the confidential sources that it was “not their concern” what the men “want to do in the United States – hard labor, sweep floor, wash dishes in a hotel, or blow up. That will be up to them.” The defendants accepted payment from the confidential sources for the smuggling operation and procured a false Pakistani passport for the purported TTP member.
The investigation was conducted by the HSI attaché office in Quito, Ecuador, with the HSI office in Atlanta, the Miami Division of the FBI and the Ecuadorian National Police.
The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
The Criminal Division’s Office of International Affairs, the U.S. National Central Bureau of INTERPOL, the U.S. Customs and Border Protection, the U.S. Embassy in Quito and the government of Ecuador provided invaluable support.
The case was prosecuted jointly by prosecutors from the Human Rights and Special Prosecutions Section of the Criminal Division, the Counterterrorism Section of the National Security Division and the U.S. Attorney’s Office for the District of Columbia.
Office Manager for Miami Home Health Company Sentenced to 78 Months in Prison for Role in $25 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – An office manager for a Miami home health care agency was sentenced today to 78 months in prison for her participation in a $25 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS). Two of her co-defendants were also sentenced to prison today for their roles in the fraud scheme.
The defendants were sentenced by U.S. District Judge Joan A. Lenard in the Southern District of Florida.
- Lisandra Alonso, 34, was sentenced to 78 months in prison and two years of supervised release and was ordered to pay $15.3 million in restitution.
- Jose Ros, 72, was sentenced to 12 months in prison and three years of supervised release and was ordered to pay $395,000 in restitution.
- Farah Maria Perez, 40, was sentenced to six months in prison and two years of supervised release and was ordered to pay $118,000 in restitution.
Alonso, Ros and Perez each pleaded guilty earlier this year to one count of conspiracy to commit health care fraud. They were each ordered to pay their restitution jointly and severally with co-conspirators and defendants in a related case.
According to court documents, Alonso was an office manager and patient recruiter for ABC Home Health Care Inc., a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. Ros was a patient recruiter for both ABC and Florida Home Health Care Providers Inc., another related home health care agency. Perez was a registered nurse and a patient recruiter for Florida Home Health. According to court documents, ABC and Florida Home Health only existed to defraud Medicare.
Alonso, Ros and Perez admitted that beginning in approximately January 2006 and continuing until approximately March 2009, they recruited Medicare beneficiaries who would allow ABC and Florida Home Health to bill Medicare for home health care and therapy services that were medically unnecessary and/or never provided. Alonso, Ros and Perez solicited and received kickbacks and bribes from the owners and operators of ABC and Florida Home Health in return for the recruited patients. Alonso, Ros and Perez knew that the patients they recruited did not qualify for the services billed to Medicare and that the files for the recruited patients were falsified to make it appear that the patients qualified for the services.
According to court documents, Perez and her co-defendant nurses falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services. Perez admitted that she knew the beneficiaries did not qualify for and did not receive the services. The files were falsified so that Medicare could be billed for medically unnecessary therapy and home health related services.
According to plea documents, as office manager, Alonso taught the owners and operators of ABC how to operate a fraudulent home health agency. Alonso explained the importance of recruiters, kickbacks, doctors, beneficiaries and Medicare billing. In this role, Alonso negotiated the kickback payment rates between the patient recruiters and the owners and operators of ABC. Alonso distributed the kickback payments to the patient recruiters on behalf of the owners and operators of ABC.
As office manager, Alonso also taught nurses at ABC how to falsify patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services when, in fact, she knew that the beneficiaries did not qualify for and did not receive such services.
As a result of the participation of Alonso, Ros and Perez in the illegal scheme, the Medicare program was billed approximately $17 million, $395,000 and $118,000, respectively, for purported home health care services that were not medically necessary and/or were not provided.
The sentences were 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 Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer 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 their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,160 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
New York Return Preparer Pleads Guilty to Preparing False Tax ReturnsRead the Press Release
WASHINGTON – The owner of a Dix Hill, N.Y., tax preparation business pleaded guilty today in U.S. District Court in the Eastern District of New York in Central Islip, N.Y., to endeavoring to obstruct the internal revenue laws and aiding in the preparation of false income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.
According to court documents, Howard Levine owned and operated Milaur Associates, also known as Milaur Inc. Many of the tax returns prepared by Levine for 2004 through 2009 were false and contained fictitious deductions, business expenses and corporate losses created by Levine. Levine admitted to preparing no fewer than 56 false returns, resulting in a tax loss of $620,844.
In order to obstruct and impede the IRS from determining his role in preparing the returns, Levine included false information in the paid preparer section of the return he prepared. Despite the U.S. District Court for the Eastern District of New York issuing an injunction in 2009 that barred Levine from preparing federal tax returns for anyone other than himself, Levine violated the injunction by continuing to prepare false returns.
Levine faces a potential maximum sentence of six years in prison and a fine of up to $500,000. U.S. District Judge Joseph F. Bianco, who is presiding over the matter, set a sentencing date of April 26, 2012.
The case was investigated by IRS - Criminal Investigation and is being prosecuted by Trial Attorneys Mark Kotila and Jeffrey B. Bender of the Justice Department’s Tax Division.
Minnesota Man Pleads Guilty to Sexual Abuse of MinorsRead the Press Release
WASHINGTON – A Minnesota man pleaded guilty today in federal court in Minneapolis to abusive sexual contact of two minor boys, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; Brig. Gen. Kevin Jacobsen of the U.S. Air Force, Office of Special Investigations; and John Morton, Director of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
In pleading guilty before U.S. District Judge Ann D. Montgomery, Joshua Gardner, 29, admitted that sometime between September 1997 and May 2002, he sexually abused two boys under the age of 12 on Kadena Air Force Base, Okinawa, Japan, which as a U.S. Air Force base was in the special maritime and territorial jurisdiction of the United States. At the time of the offenses, Garner resided in Okinawa. According to his plea agreement, Gardner admitted to engaging in sexual acts with both boys.
At sentencing, Gardner faces a maximum penalty of 10 years in prison and a $250,000 fine. A sentencing date has not yet been scheduled by the court.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case is being prosecuted by Trial Attorney Mi Yung Park of CEOS. This case is a result of investigative efforts the U.S. Air Force Office of Special Investigations in Moody Air Force Base, Ga., and ICE-HSI in Minneapolis.
Man Pleads Guilty in $3.4 Million Las Vegas Mortgage Fraud SchemeRead the Press Release
WASHINGTON – The secretary of Las Vegas-based CPT Real Estate Investments pleaded guilty yesterday for his role in a $3.4 million mortgage fraud scheme involving victims in the Las Vegas area, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bodgen for the District of Nevada.
Hugo Patrick Coutelin, 62, a resident of Santa Fe, N.M., pleaded guilty before U.S. District Judge Kent J. Dawson in the District of Nevada to conspiring to commit wire fraud, mail fraud and bank fraud. The conspiracy charge carries a maximum penalty of 30 years in prison. Coutelin is scheduled to be sentenced on April 18, 2012.
Coutelin was charged in an indictment on June 16, 2010, along with Michael Perry, 59, director of CPT; Jeff Thomas, 32, president of CPT; and Linda Marie Kot, 58, a real estate agent.
According to court documents, from April 2006 through November 2006, Coutelin and his co-defendants conspired to execute a fraudulent scheme in which they recruited and caused to be recruited straw buyers and bailout buyers, acted as straw buyers themselves and falsified mortgage loan applications with federally insured financial institutions. Coutelin caused false information to be included on straw buyers’ loan applications regarding the borrowers’ place of employment, income, assets and intent to occupy the properties so that straw buyers would qualify for loans for which they would not otherwise qualify. Coutelin knew that false information was included on straw buyers’ loan applications and also knew that material facts were concealed from the lender.
According to the indictment, Coutelin caused material misstatements to be made on loan applications for seven properties, leading to the disbursement of loans in the amount of approximately $3.4 million.
Coutelin was arrested on June 17, 2010, in New Mexico and was released pending trial.
On Dec. 28, 2011, Perry pleaded guilty to one count of conspiracy to commit wire fraud, mail fraud and bank fraud, and is scheduled to be sentenced on March 28, 2012. On Feb. 1, 2011, Thomas pleaded guilty to one count of bank fraud, and is scheduled to be sentenced on Feb. 22, 2012. Kot is scheduled to begin her trial on Feb. 6, 2012.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted.
This continuing investigation is being conducted by the FBI. This case is being prosecuted by Fred Medick of the Fraud Section in the Justice Department’s Criminal Division and Matt Klecka of the Asset Forfeiture and Money Laundering Section in the Justice Department’s Criminal Division.
Home Health Agency Owner Pleads Guilty in Connection with Detroit Fraud SchemeRead the Press Release
WASHINGTON - Detroit-area resident Tausif Rahman pleaded guilty today for his role in organizing a $14 million Detroit-area home health care fraud and money laundering scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Rahman, 37, pleaded guilty today to one count of conspiracy to commit health care fraud and one count of money laundering before U.S. District Judge Gerald E. Rosen of the Eastern District of Michigan. At sentencing on April 30, 2012, Rahman faces a maximum penalty of 30 years in prison and a $750,000 fine.
According to court documents, beginning in July 2008, Rahman and his co-conspirators acquired ownership and control of three Detroit-area home health agencies: Physicians Choice Home Health Care LLC, First Care Home Health Care LLC and Quantum Home Care Inc. Rahman admitted that these home health agencies billed Medicare for visits that never occurred. Between July 2008 and September 2011, Rahman and his co-conspirators submitted or caused the submission of more than $14 million in fraudulent home health claims to the Medicare program by Physicians Choice, First Care, Quantum and a fourth home health agency owned by co-conspirators: Moonlite Home Care Inc. Medicare paid more than $13.4 million to Physicians Choice, First Care and Quantum, the companies that Rahman beneficially owned in whole or in part.
Rahman admitted that he paid and directed the payment of kickbacks to doctors for home health care services that were never rendered. He also directed the payment of non-licensed individuals who represented themselves as doctors to Medicare beneficiaries. In addition, Rahman admitted to paying and directing various medical professionals, including nurses, physical therapists and physical therapy assistants, to create fictitious patient files to document purported home health services that were never rendered.
Rahman also admitted that he paid and directed the payment of kickbacks to beneficiary recruiters who obtained Medicare beneficiaries’ information needed to bill Medicare for home health services, including physical therapy and skilled nursing, which were never rendered. The Medicare beneficiaries sometimes pre-signed forms and visit sheets that were later falsified to indicate that they received home health services that they had never received. Other times, the Medicare beneficiaries’ signatures were forged on forms and visit sheets to indicate that they received home health services that they never received.
Additionally, Rahman admitted that he incorporated a shell company known as Geo Rehab LLC for the purpose of laundering the proceeds of health care fraud. More than 97 percent of the Medicare payments received by Physicians Choice were transferred into Geo Rehab’s account, over which Rahman had sole control. Rahman admitted that his co-conspirators similarly created shell companies for the purpose of receiving the proceeds of health care fraud from Rahman’s shell company.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Catherine K. Dick of the Criminal Division’s Fraud Section. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, the strike force operations in nine districts have charged more than 1,140 individuals who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Florida Man Pleads Guilty to Transportation of Child PornographyRead the Press Release
WASHINGTON – A Largo, Fla., resident pleaded guilty today in the Middle District of Florida to one count of transportation of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the Middle District of Florida Robert E. O’Neill and Special Agent in Charge Steven E. Ibison of the FBI’s Tampa Field Office.
James Charles Cafferty, 45, pleaded guilty before U.S. Magistrate Judge Thomas G. Wilson.
According to court documents and proceedings, Cafferty, who was a special agent for the Department of State’s Bureau of Diplomatic Security, purchased memberships in several child pornography websites. A subsequent search warrant executed at Cafferty’s home revealed hard drives containing thousands of child pornography files. Cafferty admitted during an interview that he had shipped these hard drives from London to his home in Largo.
Cafferty faces a mandatory minimum sentence of five years in prison and a maximum sentence of 20 years in prison, as well as the possibility of lifetime supervised release. Cafferty also faces a fine of $250,000.
This case was investigated by the FBI, the Department of State’s Bureau of Diplomatic Security and the Largo Police Department. The case is being prosecuted by Assistant U.S. Attorney Colleen Murphy Davis for the Middle District of Florida and Trial Attorney Andrew M. McCormack of the Child Exploitation and Obscenity Section (CEOS) in the Justice Department’s Criminal Division.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Delaware Man Sentenced to 30 Years in Prison<br /> for Production and Transportation of Child PornographyRead the Press Release
WASHINGTON – A Wilmington, Del., man was sentenced yesterday to 30 years in prison for production and transportation of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Charles M. Oberly III for the District of Delaware and John P. Kelleghan, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Philadelphia.
Leonard Wasylyk, 49, was also sentenced to lifetime supervised release and will be required to register as a sex offender in any jurisdiction in which he lives, works or attends school. Wasylyk pleaded guilty in September 2011.
According to statements made and documents filed in court, an undercover agent from the Wilmington office of the Department of Homeland Security identified Wasylyk during an online undercover investigation into a private peer-to-peer network being used to trade images of child pornography. After downloading computer files containing child pornography from Wasylyk’s home computer, federal agents arrested him and executed a search warrant at his residence on Dec. 9, 2010. Law enforcement agents recovered a computer from Wasylyk’s bedroom that contained more than 60,000 images and more than 700 movies of child pornography, mostly featuring prepubescent and teenage boys engaged in sexual acts with each other or with adult males. Data recovered from Wasylyk’s computer revealed that he established an elaborate private online network of more than 150 child sex offenders with whom he traded images of child pornography and bragged about his multiple molestations of victims.
During the forensic review of Wasylyk’s computer, agents discovered more than 60 images of a young boy engaged in sexually explicit conduct with Wasylyk in the bedroom of his Wilmington residence. Agents subsequently identified the child and located him. The child reported that when the child was 12 and 13 years old, Wasylyk sexually abused him and produced the sexually explicit images while babysitting him. The forensic analysis also revealed that Wasylyk distributed the sexually explicit images of the child that he produced to other child sex offenders while bragging about having molested the boy.
The investigation revealed that Wasylyk also sexually abused, or assisted another sex offender in abusing, at least three other young boys. In March of 2009, Wasylyk was placed on the Pennsylvania Statewide Central Register of Child Abuse stemming from his abuse of two young boys he babysat in January 2009. Forensic data from Wasylyk’s seized computer revealed that a digital camera seized from Wasylyk’s bedroom had been used, in May 2004, to photograph another prepubescent child engaged in sexually explicit conduct with another child sex offender.
This case is being investigated by the ICE-HSI. This case is being prosecuted by Assistant U.S. Attorney Edward J. McAndrew of the District of Delaware and Trial Attorney Thomas Franzinger of the Child Exploitation and Obscenity Section in the Justice Department’s Criminal Division.
4 January 2012
Justice Department Settles with University of California San Diego Medical CenterRead the Press Release
WASHINGTON – The Justice Department today reached agreement with the University of California San Diego Medical Center, resolving a complaint filed on Dec. 6, 2011, alleging that the medical center failed to comply with proper employment eligibility verification processes for non-citizens who are authorized to work in the United States.
Specifically, the department’s complaint alleged that the medical center subjected newly hired non-U.S. citizens to excessive demands for documents issued by the Department of Homeland Security in order to verify their employment eligibility, but did not require the same of U.S. citizens. T he Immigration and Nationality Act’s (INA) anti-discrimination provision prohibits employers from placing unfair documentary burdens on work-authorized employees during the hiring and employment eligibility verification process based on their citizenship status or national origin.
The medical center has taken appropriate action to ensure compliance with INA’s anti-discrimination provision and has received Department of Homeland Security/U.S. Immigration & Customs Enforcement (ICE) training on the proper use of work authorization documents.
Under the terms of the settlement agreement, the medical center agrees to implement new employment eligibility verification policies and procedures that treat all employees equally regardless of citizenship status. In addition, the medical center has agreed to pay a civil penalty of $115,000, conduct supplemental training of its human resources personnel on their responsibilities to avoid discrimination in the employment eligibility verification process and work with the department to ensure compliance with proper employment eligibility verification processes across all University of California campuses, medical centers and facilities.
“Federal law protects people who are authorized to work in the United States from facing barriers and discrimination when they are seeking employment,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I commend medical center officials on their cooperation in working with us to reach this resolution. We look forward to working with the University of California to ensure best practices in the employment eligibility verification process across the University of California system.”
The Civil Rights Division’s Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.
The United States was represented in this matter by Luz V. Lopez-Ortiz and Ronald Lee, OSC Trial Attorneys.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired), or 202-616-5594; email [email protected] ; or visit OSC’s website at www.justice.gov/crt/about/osc .
Former Employee of Government Contractor Pleads Guilty<br /> in Oklahoma to Child Pornography ChargeRead the Press Release
WASHINGTON – A former employee of a government contractor pleaded guilty today to a child exploitation charge under the Military Extraterritorial Jurisdiction Act (MEJA), announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Northern District of Oklahoma Thomas Scott Woodward.
Keith Strimple, 57, of Tulsa, Okla., pleaded guilty before U.S. District Judge Gregory Frizzell in the Northern District of Oklahoma to one count of attempted possession of a visual depiction of a minor engaging in sexually explicit conduct.
According to court documents and proceedings, Strimple worked as an employee of a government contractor between April and September 2007 at a U.S. military facility at Camp Fallujah, Iraq. During that time period, Strimple admitted that he searched for and downloaded videos of minors that he believed to be as young as 12 years old engaging in sexually explicit conduct and downloaded such images using the contractor’s computer system.
MEJA gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, employees of a government contractor whose work supports a military mission.
At sentencing, scheduled for April 11, 2012, Strimple faces a maximum penalty of 10 years in prison.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov .
The case was investigated by the Naval Criminal Investigative Service and CEOS’ High Tech Investigations Unit, with assistance from the FBI in Tulsa.
The case is being prosecuted by CEOS Trial Attorney Keith Becker and Assistant U.S. Attorney Matthew Cyran of the Northern District of Oklahoma.
3 January 2012
US Files Complaint Against National Chain of Hospice Providers Alleging False Claims on the Medicare ProgramRead the Press Release
WASHINGTON – The United States has intervened and filed a complaint in a whistleblower suit against AseraCare Hospice, the Justice Department announced today. Golden Gate Ancillary LLC, dba AseraCare Hospice, is a for-profit business with approximately 65 hospice providers in 19 states, including Alabama, Georgia, Pennsylvania and Wisconsin. In its complaint, filed in U.S. District Court for the Northern District of Alabama, the government alleges that AseraCare violated the False Claims Act when it misspent millions of taxpayer dollars intended for Medicare recipients who have a prognosis of six months or less to live and need hospice care.
While elderly patients may qualify for a variety of other medical services paid by Medicare, for-profit hospice companies like AseraCare are entitled to receive Medicare dollars only for Medicare recipients who are terminally ill. When a business admits a Medicare recipient to hospice care, that individual is no longer entitled to receive services that would help to cure his or her illness. Instead, the individual receives what is called palliative care, or care that is aimed at relieving pain, symptoms or stress of terminal illness, which includes a comprehensive set of medical, social, psychological, emotional and spiritual services. In this lawsuit, the government contends that AseraCare Hospice knowingly submitted false claims to Medicare for hospice care for patients who were not terminally ill.
“Medicare benefits, including the hospice benefits, are intended only for those individuals who are appropriately qualified,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama. “We must protect the public welfare and tax-funded benefits programs.”
The whistleblower suit was originally filed by Dawn Richardson and Marsha Brown, former employees of AseraCare Hospice, and named United States ex rel. Richardson and Brown v. Golden Gate National Senior Care LLC dba Golden Living et al., No. 2:09-cv-00627 (N.D. Ala.). The False Claims Act allows private citizens with knowledge of fraud to file whistleblower suits on behalf of the United States and to share in any recovery. If the United States intervenes in an action and proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of $5,500 to $11,000 per claim.
“Congress intended that the hospice care benefit be used during the last several months of an individual’s life,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “We will continue to recover misspent Medicare funds from companies that abuse the hospice benefit."
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Alabama, the U.S. Attorney’s Office for the Eastern District of Wisconsin and the Department of Health and Human Services’ Office of Inspector General.
Maersk Line to Pay Us $31.9 Million to Resolve False Claims Allegations for Inflated Shipping Costs to Military in Afghanistan and IraqRead the Press Release
WASHINGTON– Maersk Line Limited has agreed to pay the government $31.9 million to resolve allegations that it submitted false claims to the United States in connection with contracts to transport cargo in shipping containers to support U.S. troops in Afghanistan and Iraq, the Justice Department announced today. The government alleges that Maersk, a wholly-owned American subsidiary of Denmark-based A.P. Moller Maersk, knowingly overcharged the Department of Defense to transport thousands of containers from ports to inland delivery destinations in Iraq and Afghanistan.
The government contends that Maersk inflated its invoices in various ways. For example, Maersk allegedly billed in excess of the contractual rate to maintain the operation of refrigerated containers holding perishable cargo at a port in Karachi, Pakistan, and at U.S. military bases in Afghanistan; allegedly billed excessive detention charges (or late fees) by failing to account for cargo transit times and a contractual grace period; allegedly billed for container delivery delays improperly attributed to the U.S. government; allegedly billed for container GPS-tracking and security services that were not provided or only partially provided; and allegedly failed to credit the government for rebates of container storage fees received by Maersk’s subcontractor at a Kuwaiti port.
“Our men and women in uniform overseas deserve the highest level of support provided by fair and honest contractors,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “As the Justice Department’s continuing efforts to fight procurement fraud demonstrate, those who put profits over the welfare of members of our military will pay a hefty price.”
The settlement resolves allegations against Maersk that were filed in San Francisco by Jerry H. Brown II, a former industry insider. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals called “relators” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. The relator in this action will receive $3.6 million as his statutory share of the proceeds of this settlement. In 2009, the United States resolved the relator’s allegations against shipping company APL Limited and its parent company for $26.3 million.
“Contractors that submit false claims for monies they are not owed cost the government millions of dollars every year,” said Melinda Haag, U.S. Attorney for the Northern District of California. “This settlement should send a strong signal that the government is committed to safeguarding taxpayer funds by ensuring that contractors operate ethically and responsibly.”
The settlement with Maersk was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Northern District of California; the Defense Criminal Investigative Service of the Department of Defense; the Army’s Criminal Investigation Command; and the Defense Contract Audit Agency of the Department of Defense.
“Aggressively investigating any allegation of fraudulent practices, such as those taken by Maersk Line Limited in order to profit at the expense of the safety and welfare of America’s Warfighters – especially those serving in dangerous locations such as Iraq and Afghanistan – as well as the security of the United States, is the Department of Defense Inspector General’s and the Defense Criminal Investigative Service’s highest priority,” said James Burch, Deputy Inspector General for Investigations, Department of Defense Office of Inspector General. “The settlement with Maersk was only made possible through our partnership with the Army Criminal Investigation Command and the hard work by attorneys from the Department of Justice and auditors from the Defense Contract Audit Agency.”
“We are fully committed to tirelessly pursuing all those who knowingly submit false claims with respect to military contracts, particularly while our nation’s finest are at war,” said Major General David Quantock, the Provost Marshal General of the U.S. Army and Commanding General of the U.S. Army Criminal Investigation Command. “Our commitment is to ensure taxpayer dollars are not wasted or stolen. During the last 10 years alone, Army CID Special Agents have been instrumental in recovering and returning $2.1 billion dollars to the Treasury and the Army from fraudulent practices involving contractors.”
Former Department of Defense Employee Sentenced to 30 Months in Prison for Submitting False Travel Claims Totaling Nearly $500,000Read the Press Release
WASHINGTON – A former civilian employee of the Armed Forces Institute of Pathology (AFIP), a component of the Department of Defense, was sentenced today to 30 months in prison for making more than $485,000 in false travel claims using the defense travel system, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
John R. Brock, 52, of Crofton, Md., was sentenced by U.S. District Judge Robert L. Wilkins in the District of Columbia. In addition to his prison term, Brock was sentenced to three years of supervised release, ordered to pay $485,535 in restitution and ordered to forfeit three sail boats and two residential properties.
Brock pleaded guilty in October 2011 to a criminal information charging him with one count of making a false claim against the United States. According to court documents, Brock worked as a budget analyst within the Resources Management Department of the AFIP from 2007 through 2011. As part of his guilty plea, Brock admitted that in 2008 he used the profile of a former AFIP employee to submit a false travel voucher for $5,525 in expenses that were never incurred. Brock also admitted that from September 2008 through April 2011, he submitted 99 false travel vouchers through the defense travel system totaling $485,535.
This case was prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and was investigated by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the FBI’s Washington Field Office.
Former Assisted Living Facility Chain CEO Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
WASHINGTON - Ronald E. Burrell, former chief executive officer of Caremerica Inc., pleaded guilty today to conspiring to defraud the Internal Revenue Service (IRS), the Justice Department announced. His sentencing hearing is scheduled for April 9, 2012. Burrell is a resident of Wilmington, N.C.
According to the charging document, Burrell co-owned and operated a chain of assisted living facilities (ALFs) in North and South Carolina. The ALFs were managed by Caremerica Inc., a company based in Leland, N.C., that Burrell also partly owned and operated. Burrell was the president and CEO for Caremerica, the Caremerica ALFs and other related companies. As a corporate officer, Burrell was responsible for ensuring that the Caremerica companies collected, reported and paid over federal employment taxes to the IRS. However, with Burrell at the helm, the Caremerica companies accrued more than $4.5 million in employment tax liabilities between approximately 2003 and 2006. Among other things, Burrell filed, or caused to be filed, false IRS forms that reported full payment of the employment taxes due, when in fact only a small fraction of the taxes, or none at all, were paid.
The charging document further alleges that in 2003, Burrell acquired partial ownership of Partners Pharmacy Services Inc. (PPS), which provided prescription drug and related services to the Caremerica ALFs. In April 2005, Burrell sold PPS to a subsidiary of Omnicare Inc. At the closing, Burrell received $1.6 million. The PPS sale proceeds were disbursed at a time when the IRS was attempting to collect unpaid employment taxes from the Caremerica companies, as well as from Burrell personally. To prevent the IRS from discovering the PPS proceeds, Burrell took active steps to conceal them.
At his hearing before Judge James C. Fox, sitting in Wilmington, Burrell agreed that he should be ordered to pay restitution of $4.8 million.
This case was investigated by IRS-Criminal Investigation. It is being prosecuted by Trial Attorneys Adam Hulbig, Todd Ellinwood and Kevin Lombardi of the Justice Department’s Tax Division.
Assistant Attorney General Laurie Robinson Announces Departure from Office of Justice ProgramsRead the Press Release
The Assistant Attorney General for the Office of Justice Programs (OJP), Laurie Robinson, announced today that she would be leaving her position at the end of February. Assistant Attorney General Robinson was confirmed by the Senate in November, 2009. She previously served for nearly seven years as assistant a general for OJP during the 1990s, making her the longest-serving head in the agency's 44-year history.
Principal Deputy Assistant Attorney General Mary Lou Leary will serve as acting assistant attorney general following Robinson's departure.
“Laurie Robinson has helped transform OJP’s role in the criminal and juvenile justice field, bringing scientific rigor, a true sense of partnership, transparency, and accountability to the agency,” said Attorney General Eric Holder. “I am proud of her service to OJP’s constituents, the Department of Justice and the Obama Administration and personally grateful for her friendship and her many contributions to ensuring true justice for all Americans. The United States is a safer and fairer nation due to her efforts.”
“One of the reasons I can think about leaving now is that we have made substantial progress towards goals I set in 2009,” Assistant Attorney General Robinson said. “With the attorney general's support, we have made real progress in building strong partnerships with law enforcement and other parts of the state, local and tribal criminal and juvenile justice field. We have put science front and center and focused on evidence-based approaches. And we've made it a priority to ensure OJP's grant process is fair, accessible to our stakeholders, and accountable to Congress and the public in terms of managing scarce federal dollars.”
Science has been a primary focus during Robinson's tenure. In 2009 she launched an Evidence Integration Initiative (E2I) to better integrate evidence into OJP's programs and policy decisions and improve translation of evidence into practice. Assistant Attorney General Robinson was responsible, as part of E2I, for OJP's launching last June a “what works” clearinghouse, crimesolutions.gov, and the appointment of a Science Advisory Board for OJP, chaired by leading criminologist Alfred Blumstein. Congress has also provided support for OJP's evidence-based programs, including a 2 percent set-aside in OJP's 2012 appropriation for research and statistics spending.
Under Assistant Attorney General Robinson's leadership, OJP has also spearheaded new initiatives in a number of important areas, emphasizing innovative partnerships with the agency’s federal, state, local and tribal stakeholders. In law enforcement, OJP’s Bureau of Justice Assistance created the attorney general’s VALOR program, which provides critical nationwide training to prevent and respond to the ambush-style violence against law enforcement officers. In juvenile justice, Assistant Attorney General Robinson played a leading role in developing the White House’s National Forum on Youth Violence Prevention, the attorney general’s Defending Childhood program, and along with the Department of Education, the Supportive School Discipline Initiative. In corrections, she supported the creation of the attorney general’s federal interagency Reentry Council, a cabinet-level effort to ensure those returning from prison become productive, law-abiding citizens. For crime victims, OJP’s Office for Victims of Crime is spearheading the Vision 21 Initiative to expand the vision and impact of the victim services field. In consultation with tribal leaders, OJP also partnered with the Office of Community Oriented Policing Services and the Office on Violence Against Women to streamline the grant application and awards process for American Indian and Alaska native communities, creating a single application for multiple purpose areas and facilitating comprehensive planning.
In the area of grant management, Assistant Attorney General Robinson made improving oversight in this area a top priority, with a focus on transparency and rigorous supervision of the grants process. She required for the first time, for example, that all OJP funding decisions be posted on the agency's website, oversaw the introduction of a new high risk grantee monitoring program, and drove a focus on competition in the grants award process. During her tenure, OJP was able to ensure that 100 percent of its $2.7 billion under the Recovery Act was obligated in a timely manner without the addition of any new staff.
Assistant Attorney General Robinson has spent her professional career as a leader in the criminal justice field. Immediately prior to coming back to the Department of Justice, she was director of the Master of Science program at the University of Pennsylvania's Department of Criminology.
Additional information about the Office of Justice Programs is available at www.ojp.gov .
30 December 2011
Justice Department Settles Allegations of Citizenship Status Discrimination and Retaliation Against Georgia Rug ManufacturerRead the Press Release
WASHINGTON – The Justice Department announced a settlement today with Garland Sales Inc., a Georgia rug manufacturer, resolving allegations that it engaged in discrimination by imposing unnecessary documentary requirements on individuals of Hispanic origin when establishing their eligibility to work in the United States, and that it retaliated against a worker for protesting his discriminatory treatment. According to the settlement, Garland has agreed to pay $10,000 in back pay and civil penalties, and to undergo training on proper employment eligibility verification practices.
In its complaint, the department alleged that the charging party, a naturalized U.S. citizen of Hispanic descent, applied for a job with Garland in May 2009. At the time of hire, he presented his unexpired driver’s license and an unrestricted Social Security card—a combination of documents sufficient to prove his identity and his authorization to work in the United States. The complaint alleged that Garland demanded that the he provide his “green card,” even though U.S. citizens do not have green cards. After Garland made further requests for documents, the worker objected to the company’s demands, and Garland then rescinded the job offer. The worker, along with another individual who was denied employment with Garland when the company rejected the individual’s valid documentation, will receive full back pay out of the $10,000 settlement.
The department’s complaint also alleged that Garland required newly hired non-U.S. citizens and foreign-born U.S. citizens to present specific and additional work authorization documents beyond those required by federal law. The Immigration and Nationality Act (INA) requires employers to treat all authorized workers in the same manner during the hiring process, regardless of their national origin or citizenship status.
“Employers may not treat authorized workers differently during the hiring process based on their national origin or citizenship status,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “It is also illegal when employers take action against workers for asserting their federally protected rights, and that type of behavior will be vigorously investigated and prosecuted.”
The Office of Special Counsel (OSC) for Immigration Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process. For more information about protections against employment discrimination under the immigration law, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired), 1-800-255-8155 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; [email protected], or visit OSC’s website at www.justice.gov/crt/about/osc
CDR Financial Products and Its Owner Plead Guilty to Bid-Rigging and Fraud Conspiracies Related to Municipal Bond InvestmentsRead the Press Release
A Beverly Hills, Calif.,-based financial products and services firm, and its founder and owner pleaded guilty today in the Southern District of New York for their participation in bid-rigging and fraud conspiracies related to contracts for the investment of municipal bond proceeds and other related municipal finance contracts, the Department of Justice announced.
Rubin/Chambers, Dunhill Insurance Services, also known as CDR Financial Products, and David Rubin, CDR founder and owner, pleaded guilty before U.S. District Judge Victor Marrero in the Southern District of New York. Rubin and CDR, along with Zevi Wolmark, also known as Stewart Wolmark, the former chief financial officer and managing director of CDR, and Evan Andrew Zarefsky, a vice president of CDR, were indicted on Oct. 29, 2009. The trial for Wolmark and Zarefsky is scheduled to begin on Jan. 3, 2012, in the Southern District of New York.
Rubin and CDR each pleaded guilty to participating in separate bid-rigging and fraud conspiracies with various financial institutions and insurance companies and their representatives. These institutions and companies, or “providers,” offered a type of contract, known as an investment agreement, to state, county and local governments and agencies throughout the United States. The public entities were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds that they had issued to raise money for, among other things, public projects. Rubin and CDR also pleaded guilty to one count of wire fraud in connection with those schemes.
“Mr. Rubin and his company engaged in fraudulent and anticompetitive conduct that harmed municipalities and other public entities,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “Today’s guilty pleas are an important development in our continued efforts to hold accountable those who violate the antitrust laws and subvert the competitive process in our financial markets.”
According to court documents, CDR was hired by public entities that issue municipal bonds to act as their broker and conduct what was supposed to be a competitive bidding process for contracts for the investment of municipal bond proceeds. Competitive bidding for those contracts is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds.
During his plea hearing, Rubin admitted that, from 1998 until 2006, he and other co-conspirators supplied information to providers to help them win bids, solicited intentionally losing bids, and signed certifications that contained false statements regarding whether the bidding process for certain investment agreements complied with relevant Treasury Regulations. Additionally, Rubin admitted that he and other co-conspirators solicited fees from providers, which were in fact payments to CDR for rigging or manipulating bids for certain investment agreements so that a particular provider would win that agreement at an artificially determined price.
“Mr. Rubin and his firm were trusted with public money and confidence to assist municipalities with issuing bonds,” said FBI Assistant Director in Charge Janice K. Fedarcyk. “Contrary to his agreement and the law, Mr. Rubin shirked his responsibilities while defrauding taxpayers. Thankfully, this bid-rigging scheme, where Mr. Rubin decided the winners and losers, is over.”
“IRS is the federal agency responsible for compliance with tax laws applicable to the issuance of tax-exempt municipal bonds,” said Special Agent in Charge Charles R. Pine of the Internal Revenue Service-Criminal Investigation (IRS-CI) New York Field Office . “Today’s guilty pleas by David Rubin and CDR are the result of a coordinated effort by the Department of Justice and IRS-Criminal Investigation. Depriving municipalities of investment earnings and diverting arbitrage via illegal agreements and kickbacks will not be tolerated. IRS-Criminal Investigation agents will continue to investigate fraud in the municipal bond market and recommend prosecution against those who have participated in the fraudulent scheme.”
The bid–rigging conspiracy with which Rubin is charged carries a maximum penalty of 10 years in prison and a $1 million criminal fine. The fraud conspiracy with which Rubin is charged carries a maximum penalty of five years in prison and a $250,000 criminal fine. The wire fraud charge with which Rubin is charged carries a maximum penalty of 20 years in prison and a $250,000 criminal fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
CDR faces a maximum criminal fine on the bid-rigging charge of $100 million. The fraud conspiracy and wire fraud offenses with which CDR is charged each carry a maximum criminal fine of $500,000. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Rubin is the tenth individual to plead guilty in an ongoing federal investigation into the municipal bonds industry, which is being conducted by the Antitrust Division’s New York Field Office, the FBI and IRS-CI.
In addition, Dominick Carollo and Peter S. Grimm, formerly of GE Funding Capital Market Services, and Steven E. Goldberg, formerly of GE Funding Capital Market Services and FSA, were indicted on July 27, 2010, and are scheduled to begin trial in April 2012. Three former UBS employees, Peter Ghavami, Gary Heinz and Michael Welty, were indicted on Dec. 9, 2010.
Today’s guilty pleas are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.stopfraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-335-8000, the FBI at 212-384-5000, or IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.htm.
29 December 2011
Magyar Telekom and Deutsche Telekom Resolve Foreign Corrupt Practices Act Investigation and Agree to Pay Nearly $64 Million in Combined Criminal PenaltiesRead the Press Release
WASHINGTON – Magyar Telekom Plc., a Hungarian telecommunications company, and Deutsche Telekom AG, a German telecommunications company and majority owner of Magyar Telekom, have agreed to pay a combined $63.9 million criminal penalty to resolve a Foreign Corrupt Practices Act (FCPA) investigation into activities by Magyar Telekom and its subsidiaries in Macedonia and Montenegro, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
The department filed a criminal information against Magyar Telekom and a two-year deferred prosecution agreement in U.S. District Court for the Eastern District of Virginia today. The three-count information charges Magyar Telekom with one count of violating the anti-bribery provision of the FCPA and two counts of violating the books and records provisions of the FCPA. At the time of the charged conduct, Magyar Telekom’s American Depository Receipts (ADRs) traded on the New York Stock Exchange (NYSE). As part of the deferred prosecution agreement, Magyar Telekom agreed to pay a $59.6 million penalty for its illegal activity, implement an enhanced compliance program and submit annual reports regarding its efforts in implementing the enhanced compliance measures and remediating past problems.
According to court documents, Magyar Telekom’s scheme in Macedonia stemmed from potential legal changes being made to the telecommunications market in that country. In early 2005, the Macedonian government tried to liberalize the Macedonian telecommunications market in a way that Magyar Telekom deemed detrimental to its Macedonian subsidiary, Makedonski Telekommunikacii AD Skopje (MakTel). Throughout the late winter and spring of 2005, Magyar Telekom executives, with the help of Greek intermediaries, lobbied Macedonian government officials to prevent the implementation of the new telecommunications laws and regulations.
Magyar Telekom eventually entered into an agreement with certain high-ranking Macedonian government officials to resolve its concerns about the legal changes. In the secret agreement, a so-called “protocol of cooperation,” Macedonian government officials agreed to delay the entrance of a third mobile license into the Macedonian telecommunications market, as well as other regulatory benefits. Magyar Telekom executives signed two copies of the protocol of cooperation, each with high-ranking officials of the different ruling parties of Macedonia. The Magyar Telekom executives then kept the only executed copies outside of Magyar Telekom’s company records.
According to court documents, in order to secure the benefits in the protocol of cooperation, the Magyar Telekom executives engaged in a course of conduct with consultants, intermediaries and other third parties, including through sham consultancy contracts with entities owned and controlled by a Greek intermediary, to pay €4.875 (approximately $6 million) under circumstances in which they knew, or were aware of a high probability that circumstances existed in which, all or part of such payment would be passed on to Macedonian officials. The sham contracts were recorded as legitimate on MakTel’s books and records, which were consolidated into Magyar Telekom’s financials. Deustche Telekom, which owned approximately 60 percent of Magyar Telekom, reported the results of Magyar Telekom’s operations in its consolidated financial statements.
Additionally, the criminal information charges Magyar Telekom with falsifying its books and records in regard to its activity in Montenegro. According to the court filing, Magyar Telekom made improper payments in connection with its acquisition of a state-owned telecommunications company in Montenegro. These payments were documented on Magyar Telekom’s books and records through the execution of four bogus contracts. For example, two of the contracts were backdated and concealed the true counterparties, and no legitimate services were provided under the contracts even though the contracts were for €4.47 million.
The department today also entered into a two-year non-prosecution agreement with Magyar Telekom’s parent company, Deutsche Telekom, for its failure to keep books and records that accurately detailed the activities of Magyar Telekom. Deutsche Telekom, which is headquartered in Germany, agreed to pay a $4.36 million penalty in connection with the inaccurate books and records and to enhance its compliance program. At the time of the conduct, Deutsche Telekom’s ADRs traded on the NYSE.
Both agreements acknowledge Magyar Telekom and Deutsche Telekom’s voluntary disclosure of the FCPA violations to the department and the leadership of Magyar Telekom’s audit committee in pursuing a “thorough global internal investigation concerning bribery and related misconduct.” In addition, the agreements highlight that the companies have already undertaken remedial measures and have committed to further remedial steps through the implementation of an enhanced compliance program.
In a related matter, the U.S. Securities and Exchange Commission (SEC) announced civil charges against Magyar Telekom and Deutsche Telekom as well as three former Magyar Telecom executives. Magyar Telekom and Deutsche Telekom consented to the entry of a permanent injunction against FCPA violations. Magyar Telecom agreed to pay $31.2 million in disgorgement and prejudgment interest.
The case is being prosecuted by Trial Attorney Liam Brennan of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Robert Wiechering of the U.S. Attorney’s Office for the Eastern District of Virginia. The department also acknowledges the significant contributions to this investigation by Assistant U.S. Attorney Jerrob Duffy, formerly of the Fraud Section. Significant assistance was provided by the FBI Washington Field Office’s dedicated FCPA squad, the SEC Division of Enforcement, the Criminal Division’s Office of International Affairs and international legal partners in Switzerland, Germany, Greece, Hungary and the Republic of Macedonia.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .
GE Healthcare Inc. Pays U.S. $30 Million to Resolve False Claims Act AllegationsRead the Press Release
GE Healthcare Inc. has paid the United States $30 million, plus interest, to settle allegations that a company it acquired in 2004, Amersham Health Inc., had violated the False Claims Act by causing Medicare to overpay for Myoview, a radiopharmaceutical used in certain cardiac diagnostic imaging procedures, the Justice Department announced.
Myoview is distributed in multi-dose vials of powder. In a process known as reconstitution, nuclear pharmacies mix the powder with a radioactive agent to prepare individual doses that are injected into patients as part of the cardiac imaging procedures. Certain Medicare payment rates for Myoview were based, in part, on the number of doses available from vials of Myoview. The government alleges that Amersham Health provided false or misleading information to Medicare regarding the number of doses available from vials, causing Medicare to pay for Myoview at artificially inflated rates.
“It’s important for drug manufacturers to provide accurate pricing information to Medicare so that taxpayers aren't overcharged for medicines purchased with their dollars,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “As this case demonstrates, we remain committed to ensuring that Medicare funds are expended efficiently and appropriately.”
The allegations arise from a lawsuit that was brought under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery. The whistleblower in this suit, James Wagel, will receive $5.1 million from the government’s recovery.
Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan, said, “Drug companies should be aware that we are scrutinizing records to detect all forms of health care fraud. We hope that vigorous civil and criminal enforcement will deter companies from defrauding taxpayers in the future.”
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 over $8.6 billion.
Essroc Cement Company to Pay $1.7 Million Penalty to Resolve Clean Air Act ViolationsRead the Press Release
WASHINGTON – The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced that Essroc Cement Company has agreed to pay a $1.7 million penalty and invest approximately $33 million in pollution control technology to resolve alleged violations of the Clean Air Act (CAA) at six of its portland cement manufacturing plants. The settlement will protect Americans’ health by reducing more than 7,000 tons of harmful nitrogen oxides (NOx) and sulfur dioxide (SO2) pollution each year that can lead to childhood asthma, acid rain and smog. Essroc has also agreed to spend $745,000 to mitigate the effects of past excess emissions from its facilities.
“These comprehensive measures at multiple Essroc facilities will achieve substantial reductions in harmful air pollution and result in cleaner, healthier air for many people across the country,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This will bring Essroc into compliance with the nation’s Clean Air Act and marks significant progress in addressing the nation’s largest sources of air pollution and protecting the most vulnerable among us, especially children and the elderly, from respiratory and other health problems.”
“EPA is committed to cutting illegal air pollution from the largest sources of emissions,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “The pollution controls required by today’s settlement will reduce harmful air pollutants, protecting communities across the nation.”
Under the settlement, Essroc will install state of the art pollution control technology to control SO2 and NOx at five of its plants and demonstrate a selective catalytic reduction system (SCR) system at two long wet kilns in its Logansport, Ind., plant. If successful, these will be the first SCRs used on long wet kilns anywhere in the world. Essroc will also permanently retire its sixth plant, located in Bessemer, Pa. This plant is currently out of operation and its permanent retirement will ensure that the facility does not restart without proper permitting under the CAA.
The settlement also requires Essroc to spend $745,000 on a mitigation project to replace old engines in several off-road vehicles at its plant sites. The replacement engines are estimated to achieve approximately a 50-80% reduction in nitrogen oxides in each engine.
Reducing air pollution from cement plants is one of EPA’s National Enforcement Initiatives for 2011-2013. SO2 and NOx, two key pollutants emitted from cement plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. These pollutants are converted in the air into fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. Reducing these harmful air pollutants will benefit the communities located near the Essroc plants, particularly communities disproportionately impacted by environmental risks and vulnerable populations, including children.
The states of Indiana and West Virginia, and the Commonwealths of Pennsylvania and Puerto Rico, are also signatories to this consent decree.
The settlement was lodged today in the U.S. District Court for the Western District of Pennsylvania and is subject to a 30-day public comment period and final court approval. A copy of the consent decree will be available on the Justice Department website: www.justice.gov/enrd/Consent_Decrees.html.
More information on the settlement: www.epa.gov/compliance/resources/cases/civil/caa/essroc.html.Learn more about EPA’s National Enforcement Initiatives: http://www.epa.gov/compliance/data/planning/initiatives/index.html.
Accused Killer of Mexican Toddler Extradited to Tijuana, MexicoRead the Press Release
WASHINGTON – Joshua Moses Morales, 36, of San Diego, was extradited to Mexico today, where he is wanted to stand trial for the alleged 2009 killing of a toddler in Tijuana, Baja California, announced U.S. Attorney Benjamin B. Wagner of the Eastern District of California and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
According to the extradition request submitted by Mexico, Morales is charged with aggravated homicide after allegedly sexually abusing and killing the two-year old daughter of his girlfriend on Feb. 6, 2009. The alleged killing occurred when the girlfriend was at work and had left her daughter with Morales at their Tijuana apartment. Later that evening, the toddler was taken to a local hospital where she was pronounced dead due to alleged severe bodily trauma. Morales, who is a U.S. citizen, then allegedly fled to the United States.
The U.S. Marshals Service arrested Morales in Corcoran, Calif., in February 2010. In April 2011, following an extradition hearing in federal court in Fresno, Calif., the court certified his extraditability to Mexico. Morales then filed a writ of habeas corpus challenging the court’s findings and his continued detention, and the court denied that writ in December 2011.
“Continued cooperation with Mexican law enforcement agencies to improve public safety in both countries has been a priority for the U.S. Department of Justice,” said U.S. Attorney Wagner. “This case exemplifies that kind of cooperation. By working together, we ensure that fugitives cannot evade justice simply by crossing the border.”
“We will continue to work with Mexican authorities to ensure that dangerous criminals are not allowed to seek safe haven in Mexico or the United States,” said Assistant Attorney General Breuer. “The extradition of Mr. Morales reflects the Justice Department’s steadfast commitment to our law enforcement partnership with Mexico.”
This case was handled by Assistant U.S. Attorney Ian Garriques of the Eastern District of California and Senior Trial Attorney Valinda Jones of the Office of International Affairs in the Justice Department’s Criminal Division. Assistance was also provided by the U.S. Marshals Service.
28 December 2011
Statement of Attorney General Holder on Increase in Law Enforcement Officer FatalitiesRead the Press Release
WASHINGTON – The National Law Enforcement Officers Memorial Fund today released preliminary fatality statistics for 2011, which show a 13 percent increase in the number of federal, state and local officers who died in the line of duty, from 153 in 2010 to 173 in 2011. The data shows that 68 officers lost their lives in firearms-related incidents, 64 officers were killed in traffic-related incidents and 41 deaths were attributed to other causes.
“This is a devastating and unacceptable trend. Each of these deaths is a tragic reminder of the threats that law enforcement officers face each day – and the fact that too many guns have fallen into the hands of those who are not legally permitted to possess them,” said Attorney General Eric Holder. “Departments across the country have mourned the loss of too many dedicated colleagues and friends, but my colleagues and I at the Justice Department are determined to turn back this rising tide. I want to assure the family members and loved ones who have mourned the loss of these heroes that we are responding to this year’s increased violence with renewed vigilance and will do everything within our power – and use every tool at our disposal – to keep our police officers safe.”
The Department of Justice is advancing officer safety with critical new programs including the Officer Safety Initiative, which provides training programs and information-sharing platforms. In addition, in partnership with the Justice Department’s Community Oriented Policing Services (COPS) Office, the Justice Department’s Bureau of Justice Assistance (BJA) has established the Officer Safety & Wellness Working Group. This forum gains and shares information and insight to help enhance programs, policies and initiatives related to officer safety and wellness.
The department also is standing behind its commitment to police officers with significant strategic investments to numerous officer safety programs, including BJA’s Bulletproof Vest Partnership program. Since January 2011, 16 officers have been saved due to protective vests purchased in part with funding from this program . In FY 2011, the BJA reimbursed jurisdictions across the United States more than $23 million for 79,684 bullet- and stab-resistant vests.
In addition to this life-saving program, the department also is supporting officer safety through programs such as the Preventing Violence Against Law Enforcement and Ensuring Officer Resilience and Survivability ( VALOR) program. VALOR is designed to prevent violence against law enforcement officers and ensure officer resilience and survivability following violent encounters during the course of their duties. VALOR provides training and technical assistance to state, local and tribal law enforcement in a variety of ways, and will conduct and disseminate analysis of violent encounters in various forms, including after-action reviews and lessons learned publications.To date, 538 officers have been trained through the program, and more than 100 incidents where officers were forced to use their firearm have been analyzed. VALOR also includes funding that has been allocated to develop training and technical assistance programs – and resources like the Officer Safety Toolkit, which the department released this year to help officers learn how to anticipate and survive violent encounters. Since its release, approximately 5,000 print and electronic copies of the toolkit have been distributed nationwide.
The Justice Department also has made significant investments to help launch the Center for the Prevention of Violence Against the Police and to provide additional support for the families of law enforcement officers, especially in times of tragedy. The department also has expanded its Smart Policing Initiative, which fights crime with innovative and evidence-based strategies, granting 16 new awards in FY2011 and bringing the total number of agencies participating to 31.
For more information on BJA, including the Officer Safety Initiative, the Bulletproof Vest Partnership program, the VALOR program and the Center for the Prevention of Violence Against the Police and the Smart Policing Initiative go to www.ojp.usdoj.gov/BJA . For more information on COPS, go to www.cops.usdoj.gov
Justice Department Reaches Settlement with Virginia-Based BAE Systems Ship Repair Inc.Read the Press Release
WASHINGTON – The Justice Department announced today that it reached a settlement with BAE Systems Ship Repair Inc., a leading provider of ship repair services, to settle allegations that its subsidiary, BAE Systems Southeast Shipyards Alabama LLC, engaged in a pattern or practice of discrimination by imposing unnecessary and additional documentary requirements on work-authorized non-U.S. citizens when establishing their eligibility to work in the United States.
The department alleges, based on an extensive investigation, that since at least Jan. 1, 2009, BAE Southeast Alabama imposed different and greater requirements in the Form I-9 employment eligibility verification process on lawful permanent residents as compared to U.S. citizen employees by requiring all newly hired lawful permanent residents to present Permanent Resident Cards, commonly known as “green cards,” as a condition of employment. The investigation was initiated after BAE Southeast Alabama suspended a lawful permanent resident even though he had presented valid documents sufficient under the Immigration and Nationality Act (INA) to establish his work authorization on three separate occasions. The INA requires employers to treat all authorized workers in the same manner during the employment eligibility verification process, regardless of their national origin or citizenship status.
“Employers may not treat authorized workers differently during the employment eligibility verification process based on their citizenship status,” said Thomas E. Perez, Assistant Attorney General in charge of the Civil Rights Division. “Federal law prohibits discrimination in the employment eligibility verification process, and the Justice Department is committed to enforcing the law.”
According to the settlement agreement, BAE agreed to ensure that the employment eligibility verification policies and procedures of all its subsidiaries comply with the law, to train its human resources personnel about employers’ responsibilities to avoid discrimination in the employment eligibility verification process, and to produce Forms I-9 for inspection for three years. BAE also agreed to pay $53,900 to the United States. The lawful permanent resident who was suspended was previously reinstated and fully compensated by BAE.
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process. OSC was represented in this matter by Equal Opportunity Specialist Joann Sazama and Trial Attorney Ronald Lee. For more information about protections against employment discrimination under the immigration law, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired), 1-800-255-8155 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email [email protected] ; or visit OSC’s website at www.justice.gov/crt/about/osc .
Former Navajo Police Department Officer Indicted in New Mexico on Civil Rights ChargesRead the Press Release
WASHINGTON – A federal grand jury in Albuquerque, N.M., today indicted a former police officer with the Navajo Police Department on charges related to the sexual abuse of a woman who was in his custody on Jan. 25, 2009, announced the Department of Justice.
Lawrence Etsitty Jr., 30, was charged in count one of the indictment with violating the civil rights of the victim when he groped, touched and kissed her against her will, while she was restrained in handcuffs. Count two of the indictment charges Etsitty, with making false statements to the FBI.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Anyone with information regarding this matter is encouraged to call the FBI at 505-889-1300.
This case is being investigated by the Albuquerque Division of the FBI and is being prosecuted by Fara Gold of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice.
California Federal Court Blocks Bogus Tax Credit SchemeRead the Press Release
WASHINGTON– A federal court in Los Angeles has permanently barred Lamar Ellis of Brea, Calif., from promoting a scheme involving sales of bogus federal tax credits, the Justice Department announced today. According to the government’s complaint , Ellis fraudulently claimed to have billions of dollars in federal research tax credits that the United States supposedly granted him for purported scientific breakthroughs.
The suit alleged that Ellis advertised the sale of these bogus credits on the Internet and issued phony documents to people purporting to give them credits that could reduce their tax obligations. The government also alleged that Ellis partnered with the Southwest Louisiana Business Development Center, a nonprofit organization in Jennings, La., to try to sell $24 billion of the fictitious credits.
The civil injunction order entered against Ellis bars him from telling prospective customers that he can transfer tax credits to them. He is also required to give the government a list of the names, addresses and social security or tax identification numbers of everyone to whom he purported to distribute tax credits.
In the last decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website .
23 December 2011
Private Security Guard Convicted for Role in Providing Security for Drug TransactionRead the Press Release
WASHINGTON – A former private security guard was convicted by a federal jury yesterday in San Juan, Puerto Rico, for his role in providing security for a drug transaction, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico and Special Agent in Charge Joseph S. Campbell of the FBI’s San Juan Field Office.
Ricardo Amaro-Santiago, 39, was convicted of conspiracy to possess with intent to distribute more than five kilograms of cocaine, attempting to possess with the intent to distribute more than five kilograms of cocaine and possession of a firearm in furtherance of a drug transaction. Amaro-Santiago was charged in an indictment unsealed on Oct. 6, 2010, along with 89 law enforcement officers in Puerto Rico and 44 other individuals, as part of the FBI undercover operation known as Guard Shack.
According to the indictment and information presented in court, in May 2010, Amaro-Santiago provided security for what he believed was an illegal drug deal, but which in fact was part of the undercover FBI operation. According to information presented at trial, Amaro-Santiago was employed as a private security guard, but posed as a Puerto Rico police officer during the transaction. Information presented at trial also revealed that Amaro-Santiago was brought into the scheme by a co-defendant who was a police officer of Puerto Rico.
In return for the security he provided, Amaro-Santiago received a cash payment of $1,000.
U.S. District Judge Gustavo A. Gelpi scheduled sentencing for April 2012. At sentencing, Diaz faces a mandatory minimum sentence of 15 years in prison and a maximum penalty of life in prison.
The case was prosecuted by Trial Attorneys Marquest J. Meeks and Tracee Plowell of the Public Integrity Section in the Justice Department’s Criminal Division. The case was investigated by the FBI. The U.S. Attorney’s Office for the District of Puerto Rico also participated in the investigation and prosecution of this case.
Pennsylvania Husband and Wife Sentenced to Prison for Fraudulent Commercial Driver’s Licenses SchemeRead the Press Release
WASHINGTON – A Pennsylvania husband and wife were sentenced yesterday to 30 months and 24 months in prison, respectively, for their participation in a scheme to provide out-of-state residents with Pennsylvania driver’s licenses and Pennsylvania commercial driver’s licenses (CDL), Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania announced today.
Vitaliy Kroshnev, 49, and his wife Tatyana, 46, of Richboro, Penn., were sentenced by U.S. District Judge Norma L. Shapiro. In addition to the prison terms, Judge Shapiro ordered three years of supervised release for each defendant and a forfeiture money judgment of $445,450.
Vitaliy and Tatyana Kroshnev owned and operated the International Training Academy (ITA). From 2007 to 2010, they arranged for hundreds of non-residents of Pennsylvania to fraudulently obtain Pennsylvania commercial driver’s licenses through the ITA. The Kroshnevs paid other members of the conspiracy, who lived in Pennsylvania, to allow out-of-state ITA clients to use the in-state home addresses as proof of Pennsylvania residency. They also employed corrupt translators to ensure Russian-speaking applicants passed the written portion of the CDL test, regardless of the applicants’ actual knowledge.
The couple pleaded guilty to conspiracy to produce and aiding and abetting the production of an identification document without lawful authority. Vitaliy Kroshnev also pleaded guilty to making a material false statement and conspiracy to commit immigration fraud.
The case was investigated by the FBI and the U.S. Department of Transportation Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Frank Labor and Michelle Morgan of the Eastern District of Pennsylvania and Trial Attorney Margaret Vierbuchen of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.
GE Funding Capital Market Services Inc. Admits to Anticompetitive Conduct by Former Traders in the Municipal Bond Investments Market and Agrees to Pay $70 Million to Federal and State AgenciesRead the Press Release
GE Funding Capital Market Services Inc. entered into an agreement with the Department of Justice to resolve the company’s role in anticompetitive activity in the municipal bond investments market and agreed to pay a total of $70 million in restitution, penalties and disgorgement to federal and state agencies, the Department of Justice announced today.
As part of its agreement with the department, GE Funding admits, acknowledges and accepts responsibility for illegal, anticompetitive conduct by its former traders. According to the non-prosecution agreement, from 1999 through 2004, certain former GE Funding traders entered into unlawful agreements to manipulate the bidding process on municipal investment and related contracts, and caused GE Funding to make payments and engage in other related activities in connection with those agreements through at least 2006. These contracts were used to invest the proceeds of, or manage the risks associated with, bond issuances by municipalities and other public entities.
“GE Funding’s former traders entered into illegal agreements to manipulate the bidding process on municipal investment contracts,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “This anticompetitive conduct harmed municipalities, as well as taxpayers. Today’s resolution requires GE Funding to pay penalties, disgorgement and restitution to the victims of its illegal activity. We will continue to use all the tools at our disposal to uphold our nation’s antitrust laws and ensure competition in the financial markets.”
Under the terms of the agreement, GE Funding agreed to pay restitution to victims of the anticompetitive conduct and to cooperate fully with the Justice Department’s Antitrust Division in its ongoing investigation into anticompetitive conduct in the municipal bond derivatives industry. To date, the ongoing investigation has resulted in criminal charges against 18 former executives of various financial services companies and one corporation. Nine of the 18 executives charged have pleaded guilty.
The Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS) and 25 state attorneys general also entered into agreements with GE Funding requiring the payment of penalties, disgorgement of profits from the illegal conduct and payment of restitution to the victims harmed by the bid manipulation by GE Funding employees, as well as other remedial measures.
As a result of GE Funding’s admission of conduct; its cooperation with the Department of Justice and other enforcement and regulatory agencies; its monetary and non-monetary commitments to the SEC, IRS and state attorneys general; and its remedial efforts to address the anticompetitive conduct, the department agreed not to prosecute GE Funding for the manipulation of bidding for municipal investment and related contracts, provided that GE Funding satisfies its ongoing obligations under the agreement.
JPMorgan Chase & Co., UBS AG and Wachovia Bank N.A. also reached agreements with the Department of Justice and other federal and state agencies to resolve anticompetitive conduct in the municipal bond derivatives market. On May 4, 2011, UBS AG agreed to pay a total of $160 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct. On July 7, 2011, JPMorgan agreed to pay a total of $228 million in restitution, penalties and disgorgement to federal and state agencies for its role in the conduct. On Dec. 8, 2011, Wachovia Bank agreed to pay a total of $148 million in restitution, penalties and disgorgement to federal and state agencies for its participation in the anticompetitive conduct.
The department’s ongoing investigation into the municipal bonds industry is being conducted by the Antitrust Division, the FBI and the IRS-Criminal Investigation. The department is coordinating its investigation with the SEC, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York. The department thanks the SEC, IRS and state attorneys general for their cooperation and assistance in this matter.
The Antitrust Division, SEC, IRS, FBI and state attorneys general are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force, visit www.stopfraud.gov.
Bloods Gang Member Pleads Guilty to Federal Racketeering ChargesRead the Press Release
WASHINGTON – Kerry Pettus, aka “Lil Kerry,” 23, of Nashville, Tenn., pleaded guilty to charges related to his membership in the Bloods gang criminal enterprise , Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Tennessee Jerry E. Martin announced today.
Pettus pleaded guilty on Dec. 21, 2011, before U.S. District Judge Aleta Trauger in the Middle District of Tennessee to one count of conspiracy to participate in racketeering activity and one count of possessing a firearm in furtherance of a crime of violence.
According to court documents, Pettus and other Bloods gang members and associates agreed to commit multiple acts of murder, robbery, narcotics trafficking and bribery on behalf of the Bloods gang. Pettus and numerous Bloods gang members met on a regular basis at various locations throughout the Middle District of Tennessee, including Shelby Park, Cedar Hill Park and the Galaxy Star Drug Awareness and Gang Prevention Center in Nashville, to report on gang-related business, collect dues, commit disciplinary actions against fellow gang members, discuss acts of violence against rival gang members and initiate or “jump in” new members by beating them for a period of time, among other things.
Pettus admitted to being a Bloods member and to engaging in multiple acts in support of the criminal enterprise, including: possessing firearms, shooting rival gang members, possessing crack cocaine with the intent to sell it and receiving fraudulent documentation of court-ordered community service hours from Lonnie Greenlee, co-founder of the Galaxy Star Drug Awareness and Gang Prevention Center, in exchange for money. These acts occurred at various times from March until May 2010.
Twenty-four co-defendants have pleaded guilty for their participation in the criminal enterprise. Pettus is scheduled to be sentenced on March 16, 2012. The plea agreement states that the appropriate sentence is a term of 20 years in prison.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Metropolitan Nashville Police Department; the Gallatin, Tenn., Police Department; with assistance from the U.S. Marshals Service and the Davidson County, Tenn., District Attorney’s Office.
The case is being prosecuted by Assistant U.S. Attorney Scarlett Singleton of the Middle District of Tennessee and Trial Attorney Cody L. Skipper of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.
22 December 2011
US Obtains Injunction Against Chicago Food Processing Firm After Alleging Unsafe Food Production PracticesRead the Press Release
CHICAGO — The United States today obtained an agreed permanent injunction against a Chicago food processing firm, Triple A Services Inc., and three of its executives after filing a federal lawsuit alleging that Triple A’s ready-to-eat sandwiches and produce were not being prepared in compliance with federal regulations to protect food against contamination. A consent decree approved today by U.S. District Judge William J. Hibbler prevents the company from distributing any food products, except those that are pre-packaged when they enter its facility and leave in the same unwrapped condition, until it obtains approval from the Food and Drug Administration (FDA), which initiated the enforcement action.
Triple A Services prepares, processes, packs and distributes ready-to-eat food products that are sold to the public, including through mobile catering services. Also named as defendants were Triple A executives Thomas J. Whennen, chief executive officer; Scott C. Whennen, president; and David A. Frisco, general manager.
The lawsuit and decree were announced by Tony West, Assistant Attorney General for the Civil Division and Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois.
The FDA is not aware of any illnesses that have occurred as a result of the allegedly contaminated food products.
The lawsuit, also filed today, alleges violations of the Federal Food, Drug and Cosmetic Act and was brought on behalf of the FDA after its investigators found evidence of violations over the course of inspections between July 6 and Aug. 24, 2011, as well as during previous inspections since 2001. At the conclusion of the August 2011 inspection, FDA provided the firm with notice of deficiencies which needed correction. The most recent inspection revealed the presence of Listeria monocytogenes (L. Monocytogenes or L. mono) in the facility. Inspections in 2001 and 2002 also revealed the presence of L. mono in the facility. L. mono is of particular concern with respect to ready-to-eat products such as those produced by Triple A. It can cause the disease listeriosis, which is serious and even fatal in high-risk groups such as infants, the elderly and persons with impaired immune systems.
The company and its officials have agreed, without further litigation, to cease distribution of certain products until FDA approval is obtained and for agreeing to take other measures such as hiring sanitation and food processing experts to remedy certain deficiencies in its manufacturing process before resuming food processing operations.
“The violations FDA uncovered in this case posed health and safety risks to consumers,” said Assistant Attorney General West. “Companies that process the food we eat must comply with the rules that keep us safe or face being shut down.”
According to the lawsuit, Triple A was in violation of the FDA’s current “good manufacturing practice” regulations, which specify methods and controls that food processors like Triple A must follow to ensure that their products do not present a potential threat to public health. During inspections over a 10-year period, the FDA found, among other things, that Triple A did not have a written plan for handling seafood products, stored food improperly, failed to eradicate a pest problem, did not fix water leakage problems, and did not address employee cleanliness issues. Both the presence of L. mono in Triple A’s facility and the company’s failure to comply with the regulations renders all food products produced under those conditions in the facility adulterated under the Federal Food, Drug, and Cosmetic Act.
To obtain FDA approval to resume food processing operations, Triple A and its sanitation and food processing experts must demonstrate to FDA’s satisfaction that it has corrected the L. Mono and other problems in its facility and has instituted procedures to ensure that there will be no recurrence of those or any other problems that could present a threat to public health. If the defendants fail to comply with the consent decree, the FDA may order them to stop manufacturing and distributing food, recall products, or take other corrective action. The defendants could also be ordered to pay $2,500 per day if they fail to comply with the decree.
Consumers with food safety questions may call the FDA’s toll-free Food Safety Hotline at 888-SAFEFOOD (888-723-2366), and any problems may be reported to the FDA consumer complaint coordinator in their geographic area. Contact numbers may be found at www.fda.gov/opacom/backgrounders/complain.html .
The government is being represented by Assistant U.S. Attorney Donald Lorenzen in the Northern District of Illinois and Trial Attorney Carol Wallack of the Department of Justice’s Consumer Protection Branch.
Principal and Co-Owner of North Carolina Company Pleads Guilty to Defrauding Commodities Trading InvestorsRead the Press Release
WASHINGTON – The principal and co-owner of Integra Capital Management LLC, a North Carolina company, pleaded guilty today for his role in a commodities trading investment scheme that allegedly raised more than $3.2 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Anne M. Tompkins of the Western District of North Carolina.
Nicholas Cox, 34, a North Carolina resident, pleaded guilty before U.S. Magistrate Judge David Keesler in Charlotte, N.C., to one count of conspiracy to commit mail fraud, five counts of mail fraud and one count of conspiracy to commit money laundering. Cox was charged in an indictment returned on May 17, 2011, by a federal grand jury in the Western District of North Carolina.
According to plea documents, between September 2006 and January 2009, Cox and his co-conspirator, Rodney Whitney, who was also a principal and co-owner of Integra, engaged in a scheme to defraud investors in commodity trading pools operated by Cox and Whitney through Integra. According to the indictment, Integra was established for the purpose of pooling investors’ funds in commodity pools, and investing in commodity futures and foreign currency exchange (forex) trading.
Whitney pleaded guilty on March 21, 2011, before U.S. Magistrate Judge David S. Cayer to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering.
The case is being prosecuted by Trial Attorneys Nicole H. Sprinzen and Luke B. Marsh of the Criminal Division’s Fraud Section and Benjamin Bain-Creed of the U.S. Attorney’s Office for the Western District of North Carolina. The case is being investigated by the U.S. Postal Inspection Service.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Pittsburgh Crips Gang Members Sentenced to Prison for Racketeering ChargesRead the Press Release
WASHINGTON – Two members of the Pittsburgh Crips criminal enterprise were sentenced yesterday in federal court to 154 and 120 months in prison, respectively, on charges of conspiring to conduct a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Terrance Clark, 22, aka “Doo Wop,” was sentenced to 154 months in prison and three years of supervised release and Lamon Street, 20, aka “M-Dot,” was sentenced to 120 months in prison and three years of supervised release. Clark and Street each pleaded guilty to one count of conspiracy to engage in a racketeering conspiracy earlier this year.
According to the guilty plea, Clark, Street and others participated in a pattern of racketeering activity that included multiple acts involving gun point robberies; attempted murders; drug distribution, including cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Clark was a member of the Northview Heights/ Fineview Crips, a criminal street gang operating out of the Northview Heights public housing facility in the Northside neighborhood, and in the nearby Fineview neighborhood. The gang had been operating in Northside since 2002, when in 2003 it formed an alliance with the Brighton Place Crips to expand the gang’s drug trafficking territory and increase the gang’s capability for violence. Street was a member of the Brighton Place Crips, a criminal street gang that controlled an area of Brighton Place and Morrison Street, also known as the Mad Cave, and Federal Street in the Northside area of Pittsburgh.
The Brighton Place/Northview Heights Crips gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees, bond, jail commissary accounts and support of incarcerated members’ families.
In addition, the Brighton Place/Northview Heights Crips gang maintains an ongoing feud with the Manchester Original Gangsters, a criminal street gang located in the Manchester area of the Northside Section of Pittsburgh. Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, using Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc,” and “G.K.” Members and associates of the enterprise obtained greater authority and prestige within the enterprise based upon their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs.
According to court documents, Clark and Street each acted as a “hustler” or distributor of heroin, cocaine and crack cocaine for the gang. Clark also acted as a “soldier” or enforcer for the gang, providing protection for the enterprise through the commission of violent crimes.
Also yesterday, co-defendant Hosea Ghafoor was sentenced to 18 months in prison.
Clark, Street and Ghafoor are among 26 defendants charged in February 2010 with being members of, and conducting racketeering activity through, the Brighton Place/Northview Heights Crips gang. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2005. To date, all members of the Brighton Place/ Northview Heights Crips who were charged in this indictment have pleaded guilty to racketeering charges.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rivetti of the Western District of Pennsylvania and Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the City of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
Massachusetts Man Sentenced to 166 Months in Prison for Arson of African-American ChurchRead the Press Release
BOSTON – A Springfield, Mass., man was sentenced to prison today in federal court for civil rights charges stemming from the arson of a predominantly African-American church in retaliation for the election of Barack Obama as the first African-American president of the United States, announced the Department of Justice. Michael Jacques, 27, was sentenced in Boston by U.S. District Judge Michael A. Ponsor to 166 months in prison, followed by four years of supervised release. Jacques was also ordered to pay more than $1.5 million in restitution.
The sentencing was announced by Thomas E. Perez, Assistant Attorney General of the Justice Department’s Civil Rights Division; U.S. Attorney for the District of Massachusetts Carmen M. Ortiz; Guy Thomas, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) – Boston Field Division; Richard DesLauriers, Special Agent in Charge of the FBI Boston Field Office; Colonel Marian J. McGovern, Superintendent of the Massachusetts State Police; Hampden County District Attorney Mark Mastroianni; and Springfield Police Commissioner William J. Fitchet.
On April 14, 2011, following a jury trial, Jacques was found guilty of conspiracy against civil rights, damage or destruction of religious property and use of fire to commit a felony for his involvement in the church arson.
According to evidence presented at Jacques’s trial, in the early morning hours of Nov. 5, 2008, within hours of President Barack Obama being elected, Jacquesand his co-conspirators agreed to burn down, and did burn down, the Macedonia Church of God in Christ’s newly constructed building where religious services were to be held for its predominantly African-American congregation. The building was approximately 75 percent completed at the time of the fire, which destroyed nearly the entire structure, leaving only the metal superstructure and a small portion of the front corner intact.
“This sentence sends a powerful message that racial violence and intimidation have no place in our society,” said Assistant Attorney General Perez. “The department will continue to use every tool in its law enforcement arsenal to prosecute acts of hate like this one.”
“As evidenced in this case, hate crimes victimize not only individuals but entire communities,” said U.S. Attorney Ortiz. “We remain committed to protecting our communities from violence motivated by bigotry and prejudice, and ensuring that justice is served to victims. I hope that today’s sentence sends a strong message that we will bring all of our resources to bear in order to protect the civil liberties of every citizen.”
Jacques’s co-conspirators, Benjamin Haskell and Thomas Gleason, pleaded guilty to civil rights charges on June 16, and June 22, 2010, respectively. Haskell was sentenced to nine years in prison on Nov. 1, 2010. Gleason is scheduled to be sentenced on Jan. 18, 2012.
The case was investigated by the ATF in Springfield; the FBI in Springfield; the Massachusetts State Police; the Springfield Police Department and the Hampden County District Attorney’s Office. It was prosecuted by Assistant U.S. Attorneys Paul H. Smyth and Kevin O’Regan of U.S. Attorney’s Office in Springfield and Nicole Lee Ndumele, Trial Attorney in the Civil Rights Division.
Justice Department Requires Deutsche Börse to Divest Its Interest in Direct Edge in Order to Merge with NYSE EuronextRead the Press Release
WASHINGTON – The Department of Justice announced today that it will require Deutsche Börse AG to direct its subsidiary International Securities Exchange Holdings Inc. (ISE) to sell its 31.5 percent stake in Direct Edge Holdings LLC and agree to other restrictions in order for Deutsche Börse to proceed with its planned $9 billion merger with NYSE Euronext, one of the two largest and most prestigious stock exchange operators in the United States. Direct Edge is the fourth largest stock exchange operator in the country. The department said that the transaction, as originally proposed, would have substantially lessened competition for displayed equities trading services, listing services for exchange-traded products, including exchange-traded funds, and real-time proprietary equity data products in the United States.
The department’s Antitrust Division filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., to block the proposed acquisition. At the same time, the division filed a proposed settlement that, if approved by the court, would resolve the lawsuit and the department’s competitive concerns. In addition to the required divestiture of the ownership stake in Direct Edge held by Deutsche Börse ’s subsidiary, the proposed settlement prohibits immediately NYSE and Deutsche Börse from participating in the governance or business of Direct Edge.
“Without the divestiture and other restrictions obtained by the Justice Department, a combined NYSE and Deutsche B örse entity could influence the actions of Direct Edge, and thereby lessen the zeal of an aggressive and innovative exchange competitor,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The remedy ensures that participants in the markets for U.S. equities exchange products and services will continue to receive the full benefits of robust competition in the form of competitive prices and increased innovation.”
According to court documents, Deutsche Börse’s subsidiary, ISE, owns 31.5 percent of Direct Edge and has significant governance rights, including certain key voting and special veto rights and the right to appoint three members to Direct Edge’s board of managers, and one member to each of the corporate boards of Direct Edge’s two exchanges.
Under the terms of the proposed settlement, Deutsche Börse’s subsidiary, ISE, will divest its interest in Direct Edge within two years. NYSE and Deutsche Börse are also required to provide a written plan, prior to closing their transaction, explaining the steps they will take to remove any Deutsche Börse affiliate from governance of Direct Edge until the divestiture occurs. Within two calendar days of closing the transaction, any Deutsche Börse-affiliated officer, director, manager, employee, affiliate or agent must resign from the board of all Direct Edge entities.
The merging parties are also prohibited from suggesting or nominating any candidate for election to the board of any Direct Edge entities or having any officer, director, manager, employee or agent serve as an officer, director, manager or employee with or for any Direct Edge entities. Under the proposed settlement’s terms, the merging parties cannot vote, exert or attempt to exert any influence, or even participate in nonpublic Direct Edge meetings or receive any nonpublic information from Direct Edge, except to the extent necessary to fulfill the requirements of the proposed settlement or financial reporting obligations. The merging parties must also continue to provide certain contractual services to Direct Edge, subject to a firewall.
The divestiture of the interest in Direct Edge and related restrictions resolve the department’s concerns about the merger’s effects on the markets for U.S. equities exchange products and services. The department’s Antitrust Division and the European Commission communicated extensively throughout the course of their respective investigations, with frequent contact between the investigative staffs, aided by waivers provided by the merging parties.
“The open dialogue between the Antitrust Division and the European Commission was very effective and allowed each agency to conduct its respective investigation while mindful of ongoing work and developments in the other jurisdiction,” said Acting Assistant Attorney General Pozen.
Deutsche Börse is organized under the laws of the Federal Republic of Germany with its principal place of business located in Eschborn, Germany. Deutsche Börse, through a series of subsidiaries, owns ISE, a Delaware corporation with its principal place of business in New York which holds a 31.5 percent equity interest in Direct Edge Holdings LLC.
NYSE is a publicly traded Delaware corporation with its principal place of business located in New York. NYSE was created by the merger between NYSE Group Inc. and Euronext N.V. in 2007. In the United States, it operates the New York Stock Exchange, NYSE Arca and NYSE Amex. NYSE also generates revenue from a wide variety of exchange-related businesses, including securities listings, trading, data licensing and technology licensing. In 2010, NYSE earned more than $3 billion in total revenues from sales within the United States.
Direct Edge Holdings LLC, which is not a party to the United States’s lawsuit, is a Delaware limited liability company with its principal place of business in Jersey City, New Jersey. Direct Edge is the fourth largest stock exchange operator in the United States and owns the leading EDGA and EDGX electronic stock exchanges.
As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to James Tierney, Chief, Networks and Technology Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Innospec Agent Sentenced to 30 Months in Prison for Bribing Iraqi Officials and Paying Kickbacks Under the U.N. Oil for Food ProgramRead the Press Release
WASHINGTON – A former agent for Innospec Inc., a U.S. company, was sentenced today to 30 months in prison and ordered to pay a $250,000 fine for his participation in a conspiracy to defraud the United Nations Oil for Food Program (OFFP) and to bribe former Iraqi government officials in connection with the sale of a chemical additive used in the refining of leaded fuel, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Ousama Naaman, 62, of Abu Dhabi, United Arab Emirates, was indicted on Aug. 7, 2008, in U.S. District Court for the District of Columbia. Superseding charges were filed on June 24, 2010. Naaman was arrested on July 30, 2009, in Frankfurt, Germany, and extradited to the United States. He pleaded guilty on June 25, 2010, to one count of conspiracy to commit wire fraud, violate the Foreign Corrupt Practices Act (FCPA) and falsify the books and records of a U.S. issuer, and one count of violating the FCPA.Naaman and his companies were the Iraqi agents of Innospec Inc. On March 18, 2010, Innospec pleaded guilty to a 12-count indictment charging wire fraud in connection with its payment of kickbacks to the Iraqi government under the OFFP, as well as FCPA violations in connection with bribe payments it made to officials in the Iraqi Ministry of Oil.
F rom 2001 to 2003, acting on behalf of Innospec, Naaman offered and paid 10 percent kickbacks to the then-Iraqi government in exchange for five contracts under the OFFP. Naaman negotiated the contracts, including a 10 percent increase in the price to cover the kickbacks, and routed the funds to Iraqi government accounts in the Middle East.
In addition, Naaman admitted to paying and promising to pay more than $6.8 million in bribes from 2004 to 2008, in the form of cash, travel and entertainment, to officials of the Iraqi Ministry of Oil and the Trade Bank of Iraq to secure sales of tetraethyl lead in Iraq, as well as to secure more favorable exchange rates on the contracts. Naaman provided Innospec with false invoices to support the payments, and those invoices were incorporated into the books and records of Innospec. Naaman earned $2.7 million in commissions on the contracts and would have earned an additional $5.3 million had the final contract not been halted as a result of the investigation.
In addition to bribes actually offered and paid to Iraqi officials, Naaman convinced Innospec to pay him $750,000 for additional bribes that Naaman never paid, instead keeping the money for himself.
Naaman separately settled civil charges on Aug. 5, 2010, with the U.S. Securities and Exchange Commission (SEC) for the same misconduct. Naaman disgorged $877,096 in profits and prejudgment interest in connection with the settlement. The SEC civil penalty of $438,038 will be satisfied in part by his criminal fine.
The case was prosecuted by Trial Attorney Kathleen M. Hamann and Assistant Chief Nathaniel B. Edmonds of the Criminal Division’s Fraud Section. The case was investigated by the dedicated FCPA squad at FBI’s Washington Field Office and the Counter Proliferation Investigations Unit of the Washington Field Office of U.S. Immigration and Customs Enforcement. Significant assistance was provided by the Criminal Division’s Office of International Affairs and the SEC’s FCPA Unit.
The Innospec matter has been investigated with assistance from the SEC and in cooperation with the Department of the Treasury’s Office of Foreign Assets Control and the United Kingdom’s Serious Fraud Office.
Former Grant Administrator and Legal Assistant of American Samoa Non-Profit Legal Aid Corporation Plead Guilty to Stealing More Than $150,000 in Federal Grant FundsRead the Press Release
WASHINGTON – A former grant administrator and her daughter pleaded guilty yesterday to stealing more than $150,000 in federal grant funds awarded to a non-profit corporation in the U.S. territory of American Samoa, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Julie Matau, 49, of San Francisco, pleaded guilty to one count of wire fraud before U.S. District Judge Claudia Wilken. Andrea Matau, 28, also of San Francisco, pleaded guilty to one misdemeanor count of theft of federal funds before Judge Wilken. A federal grand jury in the Northern District of California returned an indictment against Julie and Andrea Matau on Dec. 16, 2010. A third defendant, David Wagner, pleaded guilty on March 11, 2011, in the Eastern District of Missouri.
According to court documents, U’una’i Legal Services Corporation (ULSC) was a nonprofit corporation operating in American Samoa from approximately 1998 to 2007. During this period, ULSC was the only nonprofit organization in American Samoa that was dedicated to providing free legal services to victims of domestic violence, dating violence, stalking and sexual abuse. Between approximately August 2005 and September 2007, ULSC received more than $1.2 million in federal grant funds from the U.S. Department of Justice’s Office of Violence Against Women and the Legal Services Corporation.
According to court documents, David Wagner served as ULSC’s acting executive director, and Julie Matau served as ULSC’s grant administrator, from May 2005 and September 2007. Julie Matau, with Wagner, was responsible for submitting applications for federal grant funding, managing the federal grant funds awarded to ULSC and arranging for employee payroll checks to be issued. Andrea Matau worked as one of ULSC’s legal assistants and reported directly to Julie Matau.
According to their guilty pleas, between September 2005 and September 2007, Julie Matau and Wagner arranged for themselves, Andrea Matau, and relatives of Julie and Andrea Matau to receive federal grant funds to which they were not legally entitled. According to court documents, Julie Matau unlawfully received $65,649 in federal grant funds; Andrea Matau unlawfully received $24,634 in federal grant funds; Wagner unlawfully received $31,292 in federal grant funds; and the Mataus relatives received $38,188.
Julie Matau admitted that she knew that she and others had no legal entitlement to receive these federal grant funds and that their receipt of the federal funds violated the terms and conditions of the grants. Julie Matau also admitted that she had no intention of repaying the money to ULSC or the federal government, or of requiring others to repay the money. Andrea Matau admitted that she participated in the theft by receiving money to which she was not lawfully entitled and by permitting Julie Matau to deposit her unlawful payments in Andrea’s personal bank account and their joint bank accounts. In his guilty plea, Wagner admitted to receiving “salary advances” and other payments to which he was not lawfully entitled, and to signing blank checks for Julie Matau. Wagner is awaiting sentencing.
The charge of wire fraud carries a maximum prison sentence of 20 years and a maximum fine of $250,000. The misdemeanor charge of theft of federal funds carries a maximum prison sentence of one year and a maximum fine of $100,000. Sentencing has been scheduled for March 27, 2012, before Judge Wilken.
The case is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Monique T. Abrishami of the Criminal Division’s Public Integrity Section. Senior Trial Attorney Mary K. Butler and Trial Attorney Maria N. Lerner, also of the Public Integrity Section, participated in the investigation of this matter. The case is being investigated by special agents of the Department of Justice’s Office of Inspector General and the Legal Services Corporation’s Office of Inspector General, with assistance from special agents of the FBI-Honolulu Division, American Samoa Resident Agency.