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13 October 2011
Two Charged with Conspiracy and Filing False Tax Returns in a Corporate Scheme Based in South FloridaRead the Press Release
WASHINGTON – Elmo Antonio George and Nasheba Necia Hunte were indicted today by a federal grand jury in the Southern District of Florida on charges of conspiring to defraud the Internal Revenue Service (IRS) and with filing false tax returns for 2005 and 2006 which claimed false refunds totaling more than $1.2 million, the Justice Department and the IRS announced.
According to the indictment, between January 2003 and at least October 2008, George and Hunte conspired to defraud the IRS by, among other acts, incorporating and using Winco Holdings Inc. Winco had no employees and paid no money to employees for wages, and prepared and filed false individual, employment and corporate tax returns, as well as false promissory notes with the IRS. According to the indictment, George and Hunte also transferred ownership of property to each other and to corporate entities to conceal the proceeds of their fraud.
If convicted, George and Hunte each face a maximum of five years in prison for the conspiracy charge and a maximum of three years in prison for each false tax return charge, for a total of 11 years. Each defendant also faces a maximum of $750,000 in fines.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
This case was investigated by the IRS-Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Rebecca Perlmutter and Charles Edgar.
Owners of Fraudulent Lakeland, Florida, Physical Therapy Company Sentenced to 42 and 46 Months in PrisonRead the Press Release
WASHINGTON – Miami-area residents Angel Gonzalez and Jorge Zamora, who were the owners and operators of a fraudulent physical therapy company in Lakeland, Fla., were sentenced yesterday and today to 42 months in prison and 46 months in prison, respectively, for their leading roles in a scheme to defraud Medicare, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
U.S. District Judge James D. Whittemore of the Middle District of Florida also sentenced Gonzalez and Zamora to three years of supervised release following their prison terms and ordered them to pay $82,765.84in restitution, jointly and severally with their co-defendants.
On June 10, 2011, Gonzalez, 43, pleaded guilty before U.S. Magistrate Judge Mark A. Pizzo in Tampa, Fla., to one count of conspiracy to commit health care fraud. Zamora, 48, pleaded guilty before Judge Pizzo on July 14, 2011, to the same charge.
In pleading guilty, Gonzalez and Zamora admitted they were the owners and operators of Dynamic Therapy Inc. According to court documents, Gonzalez, Zamora and their co-conspirators purchased Dynamic from its prior owners and transformed it into a fraudulent enterprise that purported to provide physical therapy services to Medicare beneficiaries.
From fall 2009 to summer 2010, Gonzalez and Zamora submitted and caused the submission of $757,654 in fraudulent claims by Dynamic to the Medicare program. Gonzalez and his co-conspirators paid and caused the payment of kickbacks and bribes to Medicare beneficiaries in order to obtain their Medicare billing information and used it to submit claims to Medicare for physical therapy services that were never provided. According to court documents, Gonzalez, Zamora and others also stole the identities of a physical therapist and Medicare beneficiaries to submit additional false claims to Medicare. In pleading guilty, Gonzalez and Zamora admitted that they knew the Medicare beneficiaries, on whose behalf claims were submitted to Medicare, never received the services billed to Medicare.
All five defendants charged in the Dynamic Therapy fraud scheme have pleaded guilty and have been sentenced to prison terms for their roles in the fraud scheme. On Aug. 29, 2011, Andres Cespedes was sentenced to 21 months in prison; on Sept. 19, 2011, Adrian Chalarca was sentenced to 24 months in prison; on Oct. 11, 2011, Ariel Chong was sentenced to six months in prison.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Robert E. O’Neill of the Middle District of Florida; Steven E. Ibison, Special Agent-in-Charge of the FBI’s Tampa Division; and Christopher Dennis, Special Agent-in-Charge of the HHS Office of Inspector General (HHS-OIG), Office of Investigations’ Miami Office.
This case was prosecuted by Acting Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Christina M. Burden of the Middle District of Florida. The case was investigated by the HHS-OIG, Defense Criminal Investigative Service and FBI, 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 Middle District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 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 .
Justice Department Settles Religious Discrimination Lawsuit Against Berkeley School District in IllinoisRead the Press Release
WASHINGTON — The Department of Justice announced today that it has entered into a consent decree with the Board of Education of Berkeley School District 87 in Berkeley, Ill. that, if approved by the court, will resolve a religious accommodations lawsuit filed in December 2010. In its lawsuit, the United States alleged that the school district violated Title VII of the Civil Rights Act of 1964 by failing to reasonably accommodate the religious practices of Safoorah Khan, a Muslim teacher at McArthur Middle School.
“Employees should not have to choose between practicing their religion and their jobs,” said Thomas Perez, Assistant Attorney General for the Civil Rights Division. “ The facts of this case show the consequences of an employer refusing to engage in any interactive process to understand and work with an employee to find an accommodation of the employee’s religious beliefs that will not cause undue hardship to the employer. We are pleased that Berkeley School District has agreed to implement a training program that puts into place an interactive process to ensure that each request for a religious accommodation will be considered on a case-by-case basis and granted if it poses no undue hardship on the school district.”
The government’s complaint, filed in the U.S. District Court for the Northern District of Illinois in Chicago, alleged that Ms. Khan requested an unpaid leave of absence in December 2008 to perform Hajj, a pilgrimage required by her religion, Islam. According to the complaint, Berkeley School District denied Ms. Khan a reasonable accommodation of her religious practice, compelling Ms. Khan to choose between her job and her religious beliefs, thus forcing her discharge. The United States also alleged that the school district maintains a policy under which it refuses to grant leave to non-tenured teachers as an accommodation for their religious practices if the leave requested is not already provided for in the school district’s leave policy.
The lawsuit was based on a charge of discrimination filed by Ms. Khan with the Chicago District Office of the Equal Employment Opportunity Commission (EEOC). After investigating Ms. Khan’s charge, finding reasonable cause to believe that Berkeley School District had discriminated against Ms. Khan, and unsuccessfully attempting to conciliate the matter, the EEOC referred the charge to the Department of Justice.
Under the terms of the consent decree, Berkeley School District will pay $75,000 to Ms. Khan for lost back pay, compensatory damages and attorneys’ fees. Berkeley School District also is required to develop and distribute a religious accommodation policy consistent with Title VII’s requirement to reasonably accommodate the religious beliefs, practices and/or observances of all employees and prospective employees. In addition, Berkeley School District is required to provide mandatory training on religious accommodation to all board of education members, supervisors, managers, administrators and human resources officials who participate in decisions on religious accommodation requests made by its employees and prospective employees.
This is the first lawsuit brought by the Department of Justice as a result of a pilot project designed to ensure vigorous enforcement of Title VII against state and local governmental employers by enhancing cooperation between the EEOC and the Civil Rights Division.
“As the favorable resolution of this case demonstrates, closer collaboration between the EEOC and the Department of Justice will strengthen the enforcement of this nation’s civil rights laws,” said Jacqueline A. Berrien, Chair of the EEOC. “Our partnership is critical to ensuring that workplaces are free of bias.”
Title VII prohibits discrimination in employment on the basis of gender, race, color, national origin or religion, and prohibits retaliation against an employee who opposes an unlawful employment practice, or because the employee has made a charge or participated in an investigation, proceeding or hearing under the Act. More information about Title VII and other federal employment laws is available on the Department of Justice website at www.usdoj.gov/crt/emp/index.html .
The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its website at www.eeoc.gov.
Georgia Woman Sentenced to 140 Months in Prison for Human Trafficking of Two Young Women from NigeriaRead the Press Release
ATLANTA- Bidemi Bello, 42, formerly of Suwanee, Ga., was sentenced today in Atlanta by U.S. District Judge William S. Duffey Jr. on human trafficking charges including forced labor, trafficking with respect to forced labor, document servitude, harboring for financial gain and procurement of naturalization unlawfully, the Department of Justice announced today. Bello was sentenced to 140 months in prison to be followed by three years of supervised. Bello was also ordered to be deported from the United States upon completion of her federal sentence. Bello was convicted of these charges on June 10, 2011, after a trial.
“Holding other human beings against their will in servitude is a violation of human rights that will not be tolerated in our free society,” stated Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are committed to combating human trafficking in all its forms, vindicating the rights of trafficking victims and bringing human traffickers to justice.”
“This case is nothing short of shocking,” said U.S. Attorney for the Northern District of Georgia Sally Quillian Yates. “Bello enslaved two young women through physical abuse, false promises, and threats of jail made to them and their families. Our office is working aggressively to root out human trafficking and to hold these criminals accountable.”
Brian D. Lamkin, Special Agent in Charge, FBI Atlanta Field Office, said, “This defendant lacked any compassion for her victims in that the defendant in this matter, being an immigrant to the U.S. herself, knew that her victims were particularly vulnerable to exploitation. The FBI is proud of the role that it played in bringing this matter to justice and urges anyone with information regarding Human Trafficking activity to contact its nearest FBI Field Office.”
“This sentencing closes the door on a shocking case of modern day slavery,” said Brock Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) in Atlanta. “Human trafficking deprives victims of their freedom and dignity and it has no place in our world. Cases like this one serve to strengthen our resolve to protect and defend those who may not be able to evade or escape the grip of human trafficking.”
The facts presented at trial showed that on two separate occasions, Bello returned to her home country of Nigeria and recruited two young women to return with her to the United States to work as her nanny and maid. The first victim, identified in court as “Laome,” traveled with Bello in October 2001 when she was 17-years-old, using a fraudulent British passport the defendant had obtained for her. The second victim, identified in court as “Dupe,” traveled with an associate of Bello’s to the United States in November 2004 when she was 20, also using a fraudulent British passport. Each victim testified that she never held her own travel documentation and did not know how the passports had been obtained.
Bello had promised the young women and their families that she would send them to school in the United States. She also promised to pay a salary to one of the young women in exchange for her services. Those promises were not kept. Instead, Bello physically and emotionally abused both young women, controlled their access to the outside world, and routinely treated them inhumanely. Testimony at trial from the victims described the degrading treatment they received at the hands of Bello. If Bello decided the house was not clean enough, she beat them; if Bello decided the victims did not respond fast enough to her crying child, she beat them; if Bello felt that they had been disrespectful, she beat them. Bello used a large wooden spoon, shoes, electric cords and her hands to inflict this physical abuse. One young woman took pictures of her injuries with a disposable camera and the pictures of her cut and bloodied lip were admitted as evidence during Bello’s trial.
The evidence showed that while Bello’s upscale home had multiple bedrooms and bathrooms, she made the young women sleep on the floor or a couch, would not let them use the shower, and did not allow the them to eat the food they cooked, but were instead forced to eat food that had spoiled and was moldy. Laome testified that she often threw up from the food Bello made her eat, and that on at least one occasion, Bello made her eat that vomit.
The evidence also showed that the victims were sleep deprived, and forced to be on call for Bello’s child all night. The women were given ceaseless tasks and forced to use primitive methods for washing and cutting grass because Bello would not let the young women use modern appliances such as the washing machine, dishwasher or the lawn mower.
Several witnesses corroborated the victims’ stories and evidence showed that Bello also hid her crime from a Georgia Department of Family and Children’s Services investigator who came to her home upon hearing allegations of child abuse. Further, Bello never sent the young women to school as she had promised and never gave them any money for their years of work. The young women were totally dependent on Bello for all their basic necessities and she isolated them from others.
The women finally escaped with assistance from community members who were friends of Bello. The first victim, Laome, escaped from Bello, by hiding in the back of a woman’s car, who covered her with blankets and drove her away while Bello attended a party. The second victim, Dupe escaped by saving up $60, that was given to her by friends of Bello, and calling a cab. She was assisted by pastors at a church in Marietta after taking the cab to the church.
Bello became a U.S. citizen while she committed the crime of human trafficking.
Victims of human trafficking, on the other hand, are protected by U.S. laws from such abuse, regardless of where they come from or how they come to be in the United States. Upon being identified as victims of human trafficking, both Laome and Dupe were given T-visas provided by the U.S. government and allowed to remain in the United States to assist in the prosecution of Bello. Anyone who knows of a potential victim of human trafficking should report these offenses to the FBI at 404-679-9000 or at 1-888-373-7888 or to ICE-HSI at 866-DHS-2-ICE (866-347-2423) or online at www.ice.gov .
This case was investigated by Special Agents of the FBI, the Department of Homeland Security, ICE and special agents with the U.S. State Department, Diplomatic Security Services.
Assistant U.S. Attorney Susan Coppedge from the Northern District of Georgia and Civil Rights Division Criminal Section Deputy Chief Karima Maloney prosecuted the case.
Former Department of Defense Employee Pleads Guilty to 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, pleaded guilty today in Washington, D.C., to making more than $485,000 in false travel claims using the Defense Travel System, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
John R. Brock, 52, of Crofton, Md., pleaded guilty today before U.S. District Court Judge Robert L. Wilkins in U.S. District Court for the District of Columbia 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, from September 2008 through April 2011, he submitted 99 false travel vouchers totaling $485,535 for expenses that were never incurred. He admitted that he submitted the claims through the Defense Travel System using the profile of a former AFIP employee.
At sentencing, scheduled for Jan. 3, 2012, Brock faces up to five years in prison and a $250,000 fine, as well as supervised release following any prison term. Brock is also subject to criminal forfeiture totaling $485,535.
This case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, and is being investigated by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the FBI’s Washington Field Office.
El Departamento de Justicia anuncia la Fuerza de Tarea de Defensa de la NiñezRead the Press Release
WASHINGTON - El Subsecretario de Justicia Tom Perrelli anunció hoy el establecimiento de la Fuerza de Tarea Nacional sobre Niños Expuestos a la Violencia del Secretario de Justicia. La fuerza de tarea es parte de la iniciativa de Defensa de la Niñez del Secretario de Justicia, un proyecto que surgió de la necesidad de responder a los niveles epidémicos de exposición a la violencia que enfrentan los niños de nuestra nación.
"Nuestra visión de la justicia debe comenzar con prevenir la delincuencia antes que comience, proteger a nuestros niños y acabar con los ciclos de violencia y victimización. Cada joven merece la oportunidad de crecer y desarrollarse libre del temor a la violencia", señaló el Subsecretario de Justicia Perrelli. "La fuerza de tarea desarrollará conocimientos y creará concientización acerca del problema difundido de la exposición de los niños a la violencia. Esto acabará por mejorar nuestros hogares, ciudades, pueblos y comunidades".
Después de haberse divulgado las conclusiones apremiantes de la primera Encuesta Nacional sobre Niños Expuestos a la Violencia (2009), el Secretario de Justicia de los Estados Unidos Eric Holder lanzó la iniciativa Defensa de la Niñez en septiembre de 2010. Los objetivos de la iniciativa son prevenir la exposición de los niños a la violencia como víctimas y testigos, reducir los efectos negativos vividos por los niños expuestos a la violencia, y desarrollar conocimientos sobre e incrementar la concientización sobre este asunto.
La Fuerza de Tarea de Defensa de la niñez está compuesta por 14 expertos líderes de diversas áreas y perspectivas, incluidos facultativos, defensores de niños y familias, expertos académicos y clínicos habilitados. Joe Torre Vicepresidente Ejecutivo de Operaciones de Béisbol del Béisbol de Liga Nacional, fundador de la Fundación Joe Torre Safe at Home®, y testigo de violencia doméstica cuando niño, será el co-presidente de la fuerza de tarea.
A lo largo del año, la Fuerza de Tarea de Defensa de la Niñez realizará cuatro audiencias públicas en todo el país para aprender de facultativos, formuladores de políticas, académicos y miembros de la comunidad acerca de la extensión y naturaleza del problema de la exposición de los niños a la violencia en los Estados Unidos, como víctimas y como testigos. La fuerza de tarea también identificará prácticas prometedoras y estrategias comunitarias y de programación utilizadas para prevenir y responder a la exposición de los niños a la violencia.
Las audiencias tendrán lugar en Baltimore; Albuquerque, N.M.; Miami y Detroit. La primera audiencia de la fuerza de tarea se realizará en Baltimore el 29 y 30 de noviembre de 2011, en la Escuela de Leyes Francis King Carey de la Universidad de Maryland.
La Fuerza de Tarea de Defensa de la Niñez emitirá un informe final al Secretario de Justicia de los Estados Unidos, en el que presentará sus conclusiones y recomendaciones para una política integral. El informe servirá de guía para prevenir la exposición de los niños a la violencia y para mitigar los efectos negativos vividos por los niños expuestos a la violencia en todos los Estados Unidos.
Los miembros de la fuerza de tarea incluyen los siguientes:
Co-presidente: Joe Torre, Presidente de la Fundación "Safe at Home". El Sr. Torre, Vicepresidente Ejecutivo para Operaciones de Béisbol de la Liga Nacional de Béisbol y ex gerente de los Los Angeles Dodgers y New York Yankees, creó su fundación para educar a estudiantes, padres, maestros y docentes sobre los efectos de la violencia doméstica.
Padre Gregory Boyle, S.J., Fundador de Homeboy Industries. El Padre Boyle se ordenó como cura jesuita en 1984 y es miembro de la Junta Asesora del Centro Nacional Antipandillas [National Gang Center].
Dra. Sharon W. Cooper, Médica y CEO de Pediatría Forense y del Desarrollo, P.A. La Dra. Cooper es consultora y miembro del directorio del Centro Nacional para Niños Desaparecidos y Explotados [National Center for Missing and Exploited Children].
Sarah Deer, Ciudadana de la Nación Muscogee (Creek) de Oklahoma. La Profesora Deer es profesora auxiliar en la Escuela de Leyes William Mitchell y su beca se centra en la intersección de la ley tribal y los derechos de las víctimas.
Deanne Tilton Durfee, Directora Ejecutiva del Consejo Interagencias del Condado de Los Ángeles sobre Abuso y Negligencia Infantiles. La Srta. Tilton Durfee es, también, presidente del Centro Nacional sobre Revisión de Mortalidad Infantil.
Dra. Thea James, Médica, Directora del Programa de Abogacía de Intervención en la Violencia de Massachusetts del Boston Medical Center. La Dra. James es profesora auxiliar de medicina de emergencia en la Escuela de Medicina del Boston Medical Center/Universidad de Boston.
Kevin Jennings, CEO de Be the Change. El Sr. Jennings fundó la Red de Educación Gay, Lesbiana y Heterosexual [Gay, Lesbian and Straight Education Network (GLSEN)].
Alicia Lieberman, Ph.D., Directora de la Red de Tratamiento Temprano del Trauma [Early Trauma Treatment Network]. La Dra. Lieberman es la Presidente de Cátedra Subvencionada Irving B. Harris de Salud Mental Infantil en el Departamento de Psiquiatría de UCSF y directora del Programa de Investigación del Trauma Infantil, San Francisco General Hospital.
Robert Listenbee, J.D., Jefe de la Unidad Juvenil de la Asociación de Defensores de Filadelfia [Defender Association of Philadelphia]. El Sr. Listenbee es, también, miembro del Comité de Justicia Juvenil y Prevención de la Delincuencia de la Comisión de Pensilvania sobre el Delito y la Delincuencia.
Robert Macy, Ph.D., Fundador, Director y Presidente del Centro Internacional de Capacidad de Recuperación de Desastres-Boston [International Center for Disaster Resilience-Boston]. El Sr. Macy también es fundador y director ejecutivo de la Fundación de Niños de Boston y co-director de la División de Recuperación de Desastres en el Beth Israel Deaconess Medical Center.
Steven Marans, Ph.D., Director del Centro Nacional para Niños Expuestos a la Violencia. El Dr. Marans es Profesor de Psiquiatría Infantil, Profesor de Psiquiatría, Escuela de Medicina de Yale University, y también director del Centro de Traumas Violentos en la Niñez de Yale University.
Jim McDonnell, Jefe de Policía, Departamento de Policía de Long Beach, California. El Jefe McDonnell enseña temas de política pública en la Universidad de California, Los Ángeles, y prestó servicios en el Departamento de Policía de Los Ángeles durante 28 años.
Georgina Mendoza, J.D., Abogada Adjunta Senior y Directora de Seguridad Comunitaria de la Ciudad de Salinas, Calif. La Srta. Mendoza ha participado en la Red de Prevención de Pandillas de las Ciudades de California en los últimos cuatro años y es líder de Salinas en el Foro Nacional sobre la Violencia Juvenil de la Casa Blanca.
General Retirado Antonio Taguba, Presidente de TDLS Consulting, LLC, y Presidente de Pan Pacific American Leaders and Mentors (PPALM). El General Taguba estuvo en servicio activo durante 34 años, los que incluyeron su servicio como Comandante General Adjunto del Comando de Componentes de Tierra de las Fuerzas de Coalición [Coalition Forces Land Component Command (CFLCC)/ARCENT/Tercer Ejército de EE.UU., y fue destacado a Kuwait e Irak durante la Operación Libertad Iraquí.
Para obtener más información sobre la iniciativa de Defensa de la Niñez del Secretario de Justicia de los Estados Unidos Holder, la Fuerza de Tarea de Defensa de la Niñez, y las audiencias a realizarse, visite www.justice.gov/defendingchildhood.
Department of Justice Announces the Defending Childhood Task ForceRead the Press Release
WASHINGTON – Associate Attorney General Tom Perrelli today announced the establishment of the Attorney General’s National Task Force on Children Exposed to Violence. The task force is part of the Attorney General’s Defending Childhood initiative, a project arising from the need to respond to the epidemic levels of exposure to violence faced by our nation’s children.
“Our vision of justice must start with preventing crime before it happens, protecting our children, and ending cycles of violence and victimization. Every young person deserves the opportunity to grow and develop free from fear of violence,” said Associate Attorney General Perrelli. “The task force will develop knowledge and spread awareness about the pervasive problem of children’s exposure to violence – this will ultimately improve our homes, cities, towns and communities.”
Following the release of the compelling findings of the first National Survey on Children Exposed to Violence (2009), Attorney General Eric Holder launched the Defending Childhood initiative in September 2010. The goals of the initiative are to prevent children’s exposure to violence as victims and witnesses, reduce the negative effects experienced by children exposed to violence, and develop knowledge about and increase awareness of this issue.
The Defending Childhood Task Force is composed of 14 leading experts from diverse fields and perspectives, including practitioners, child and family advocates, academic experts and licensed clinicians. Joe Torre, Major League Baseball Executive Vice President of Baseball Operations, founder of the Joe Torre Safe at Home® Foundation, and a witness to domestic violence as a child himself, will serve as the co-chair of the task force.
Over the course of the year, the Defending Childhood Task Force will conduct four public hearings around the country to learn from practitioners, policymakers, academics and community members about the extent and nature of the problem of children’s exposure to violence in the United States, both as victims and as witnesses. The task force will also identify promising practices, programming and community strategies used to prevent and respond to children’s exposure to violence.
Hearings will take place in Baltimore; Albuquerque, N.M.; Miami; and Detroit. The first hearing of the task force will be held in Baltimore on Nov. 29, and 30, 2011, at the University of Maryland Francis King Carey School of Law.
The Defending Childhood Task Force will issue a final report to the attorney general presenting its findings and comprehensive policy recommendations. The report will serve as a blueprint for preventing children’s exposure to violence and for mitigating the negative effects experienced by children exposed to violence across the United States.
The members of the task force include the following:
Co-chair: Joe Torre, Chairman of the Joe Torre Safe at Home Foundation. Mr. Torre, Major League Baseball’s Executive Vice President for Baseball Operations and former manager of the Los Angeles Dodgers and the New York Yankees, created his foundation to educate students, parents, teachers and school faculty about the effects of domestic violence.
Father Gregory Boyle, S.J., Founder of Homeboy Industries. Fr. Boyle was ordained as a Jesuit priest in 1984 and serves as a member of the National Gang Center Advisory Board.
Sharon W. Cooper, M.D., CEO of Developmental & Forensic Pediatrics, P.A. Dr. Cooper serves as a consultant and board member of the National Center for Missing and Exploited Children.
Sarah Deer, Citizen of the Muscogee (Creek) Nation of Oklahoma. Professor Deer is an assistant professor at William Mitchell College of Law and her scholarship focuses on the intersection of tribal law and victims’ rights.
Deanne Tilton Durfee, Executive Director of the Los Angeles County Inter-Agency Council on Child Abuse and Neglect. Ms. Tilton Durfee also serves as chairperson of the National Center on Child Fatality Review.
Thea James, M.D., Director of the Boston Medical Center Massachusetts Violence Intervention Advocacy Program. Dr. James is assistant professor of emergency medicine at Boston Medical Center/Boston University School of Medicine.
Kevin Jennings, CEO of Be the Change. Mr. Jennings founded the Gay, Lesbian and Straight Education Network (GLSEN).
Alicia Lieberman, Ph.D., Director of the Early Trauma Treatment Network. Dr. Lieberman is Irving B. Harris Endowed Chair of Infant Mental Health at UCSF Department of Psychiatry and director of the Child Trauma Research Program, San Francisco General Hospital.
Robert Listenbee, J.D., Chief of the Juvenile Unit of the Defender Association of Philadelphia. Mr. Listenbee also serves as a member of the Juvenile Justice and Delinquency Prevention Committee of the Pennsylvania Commission on Crime and Delinquency.
Robert Macy, Ph.D., Founder, Director, and President of the International Center for Disaster Resilience–Boston. Dr. Macy is also the founder and executive director of the Boston Children’s Foundation and serves as co-director of the Division of Disaster Resilience at the Beth Israel Deaconess Medical Center.
Steven Marans, Ph.D., Director of the National Center for Children Exposed to Violence. Dr. Marans is Harris Professor of Child Psychiatry, Professor of Psychiatry, Yale University School of Medicine, and also serves as director of the Childhood Violent Trauma Center at Yale University.
Jim McDonnell, Chief of Police, Long Beach Police Department, California. Chief McDonnell teaches public policy issues at University of California, Los Angeles, and served with the Los Angeles Police Department for 28 years.
Georgina Mendoza, J.D., Senior Deputy Attorney and Community Safety Director for the City of Salinas, Calif. Ms. Mendoza has been involved in the California Cities Gang Prevention Network for the past four years and serves as the Salinas lead in the White House’s National Forum on Youth Violence.
Retired Major General Antonio Taguba, President of TDLS Consulting, LLC, and Chairman of Pan Pacific American Leaders and Mentors (PPALM). General Taguba served 34 years on active duty, including serving as Deputy Commanding General for Support, Coalition Forces Land Component Command (CFLCC)/ARCENT/Third U.S. Army, forward deployed to Kuwait and Iraq during Operation Iraqi Freedom.
For more information about Attorney General Holder’s Defending Childhood initiative, the Defending Childhood Task Force, and the upcoming hearings, please visit www.justice.gov/defendingchildhood.
Attorney General Holder Joins White House in Honoring “Champions of Change”Read the Press Release
WASHINGTON – Attorney General Eric Holder was joined today by Senior Counselor for Access to Justice Mark Childress at a White House “Champions of Change” event to honor and recognize the work of legal leaders from communities large and small who are dedicating their professional lives to closing the justice gap in America. The event, co-sponsored by the White House Office of Public Engagement and the Department of Justice Access to Justice Initiative, featured 16 leaders from across the country who were recognized for their work in public interest law and providing legal services to people throughout the country who cannot afford them.
“It’s a privilege to be among so many remarkable individuals who – because of their commitment to progress and to using their skills and talents to improve the lives of others – have been designated by President Obama as Champions of Change,” said Attorney General Holder. “Across the country, their work is allowing us to address and overcome our most pressing legal challenges and live up to our nation’s highest ideals.”
Students, professors, clinicians, pro bono directors and law librarians from 118 law schools nationwide submitted discussion questions and viewed the event via live-stream on the Internet. The discussion included conversations on issues such as how to pursue a career in public interest law; how best to assist disadvantaged members of society through legal knowledge and skills; and how to help specific segments of the population, such as tribal members, individuals facing foreclosure and those needing legal representation.
Recipients of the White House’s “Champions of Change” honors are:
- Laura K . Abel is acting director of the Justice Program at the Brennan Center for Justice at New York University School of Law. The Justice Program works to ensure that low-income families and people with limited proficiency in English can participate meaningfully in legal proceedings when they are facing criminal charges, domestic violence, eviction from their homes, the loss of subsistence benefits and other life-changing events.
- Todd Belcore is an Equal Justice Works fellow at the Sargent Shriver Center on Poverty Law in Chicago, focusing on litigating, organizing, educating and crafting legislation to ensure that individuals with criminal records are not unjustly denied employment or occupational licenses. Belcore is a graduate of the Northwestern University School of Law, where he served as president of the public service organization SERV and, later, as the student bar association president. In these roles, he was able to significantly increase the amount of exposure law students had to public interest and public service.
- Martha Bergmark is the founding president/CEO of the Mississippi Center for Justice, a nonprofit, public interest law firm created in 2002 to advance racial and economic justice. In the aftermath of Hurricane Katrina, the center mobilized unprecedented volunteer resources to meet the daunting legal needs of low-income hurricane survivors and to ensure an equitable recovery. In 2010, a landmark settlement of center litigation restored $132 million to housing recovery for hurricane survivors previously excluded from Mississippi’s recovery programs. The center currently leads a five-state, 12-program consortium of legal aid providers representing victims of the Deepwater Horizon oil drilling disaster.
- Deb Ellis directs New York University (NYU) School of Law’s Public Interest Law Center (PILC) and its Root-Tilden-Kern Scholarship Program for students committed to public interest careers, and is herself an NYU Law and Root alumna. Prior to leading PILC, Ellis had a distinguished public interest career, including legal director of the NOW Legal Defense and Education Fund, where she argued Bray v. Alexandria Women’s Health Clinic before the U.S. Supreme Court. She also served as legal director of the American Civil Liberties Union (ACLU) of New Jersey and as a staff attorney at the ACLU Women’s Rights Project and at the Southern Poverty Law Center.
- Paula S. Gómez and David G. Hall were recognized for their work in leading the Medico-Legal Partnership Rio Grande Valley, which is helping children and families in Brownsville, Texas, by integrating legal assistance into the medical setting. Gómez has served as the executive director of the Brownsville Community Health Center since 1984, a 17-provider community and migrant health center primarily situated in Brownsville with two school-based clinics and two other satellite clinics as well. These sites served almost 20,000 users and offered almost 90,000 patient visits last year. Hall is currently the executive director of Texas RioGrande Legal Aid. He has held this position since 1975 and, under his leadership, the organization has become the largest legal aid provider in Texas and third largest in the United States.
- Nan Heald has been the executive director of Pine Tree Legal Assistance in Portland, Maine, since 1990. Through the creative use of funding opportunities and other leveraged support, her leadership has enabled Pine Tree to strengthen and expand legal services to diverse client populations and in new areas of law, and to make justice more accessible for all the people of Maine.
- Lillian Johnson serves as the executive director of Community Legal Services, Arizona’s largest nonprofit civil legal aid program. She has held this position since 1982, after relocating from the Chicago area, where she began her career in civil legal aid.
- Addison Parker was co-litigation director of Appalachian Research and Defense Fund of Kentucky Inc. (AppalRed) and director of AppalRed’s Stop Foreclosure Clinic until his retirement in June 2011 after 32 years of service. AppalRed provides free legal assistance to low income persons in 37 counties, located primarily in the Appalachian hill country of Eastern Kentucky.
- Michael Pinard is the director of the Clinical Law Program at the University of Maryland Francis King Carey School of Law, one of the top-rated clinical programs in the country. With his colleague Sherrilyn Ifill, Professor Pinard co-founded the Reentry Clinic. This clinic focuses on identifying and easing the various obstacles that individuals with criminal records – and, by extension, their families and communities – confront during the reentry process and beyond.
- Deborah L. Rhode is the Ernest W. McFarland Professor of Law at Stanford Law School and Director of the Stanford Center on the Legal Profession in Palo Alto, Calif. She is the author of more than 20 books and 200 articles, many focusing on access to justice, pro bono service and reforming the legal profession.
- Thomas A. Saenz is the president and general counsel of MALDEF , where he leads the civil rights organization’s five offices in pursuing litigation, policy advocacy and community education to promote the civil rights of Latinos living in the United States.
- Brad Smith is Microsoft’s general counsel and executive vice president. He leads the company’s Department of Legal and Corporate Affairs. He is being recognized as the co-chair, with actress and humanitarian Angelina Jolie, of the board of directors of Kids in Need of Defense (KIND). KIND is a national organization dedicated to the facilitation of pro bono representation to the thousands of unaccompanied children who enter the United States alone each year to flee violence, human rights abuses, natural disasters, and economic deprivation. Just two and a half years into its operations, KIND has assisted more than 3,000 children and trained 3,200 pro bono attorneys in seven cities.
- David Stern has served for the last 19 years as executive director of Equal Justice Works in Washington, D.C., the nation’s leading creator of public interest opportunities for law students and lawyers to help those in need. During his tenure, Stern has been the main motivator for expanding the organization’s scope of services and has developed innovative programs that enable attorneys and law students to provide pro bono legal services to vulnerable populations, including families facing foreclosure, victims of domestic violence, immigrant communities, those struggling to access public services and targets of civil rights violations.
- Jo-Ann Wallace is the president and CEO of the Washington, D.C.-based National Legal Aid & Defender Association (NLADA). Recognizing the gap between rich and poor is greater than any time in our history, under her leadership NLADA will commemorate its centennial by launching a bold new strategy for changing justice in America: Blueprint for Justice: Rethink. Retool. Rebuild.
- Ron J. Whitener graduated from the University of Washington Law School in 1994, and worked as a tribal attorney for the Squaxin Island Tribe (of which he is a member) representing the tribal government in treaty rights defense, tribal governance, Indian health and tribal economic development. In 2000, he became director of the Northwest Indian Law Clinic at the UW Law School representing low-income Natives in criminal and civil cases. In 2002, he changed the clinic to the Tribal Court Public Defense Clinic, focused solely on training law students to practice public defense in tribal courts.
The White House Champions of Change program works to highlight ordinary Americans doing extraordinary things in their communities. Every week the White House will invite the Champions of Change to the White House to share their ideas to win the future. Beginning on Oct. 17, 2011, the legal leaders’ individual stories will be highlighted at www.whitehouse.gov/champions . In addition, the website will include the Champions’ blogs, as well as entries from each of the 118 participating law schools describing their commitment to public service.
The Access to Justice Initiative was launched by the Department of Justice in March 2010. The initiative seeks to ensure that the justice system is fair and accessible to all, irrespective of wealth and status, and that the justice system delivers fair outcomes efficiently. Its staff works within the department, across federal agencies, and with state, local and tribal justice system stakeholders to increase access to counsel and legal assistance, and for improvements to the justice delivery systems that serve people unable to afford lawyers. Additional information on the initiative is available at: www.justice.gov/atj .
12 October 2011
Virginia Man Accused of Acting as Unregistered Agent of Syrian Government and Spying on Syrian Protestors in AmericaRead the Press Release
WASHINGTON – Mohamad Anas Haitham Soueid, 47, a resident of Leesburg, Va., has been charged for his alleged role in a conspiracy to collect video and audio recordings and other information about individuals in the United States and Syria who were protesting the government of Syria and to provide these materials to Syrian intelligence agencies in order to silence, intimidate and potentially harm the protestors.
The charges were announced by Lisa Monaco, Assistant Attorney General for National Security; Neil MacBride, U.S. Attorney for the Eastern District of Virginia; and James McJunkin, Assistant Director in Charge of the FBI Washington Field Office.
Soueid, aka “Alex Soueid” or “Anas Alswaid,” a Syrian-born naturalized U.S. citizen, was charged by a federal grand jury on Oct. 5, 2011, in a six-count indictment in the Eastern District of Virginia. Soueid is charged with conspiring to act and acting as an agent of the Syrian government in the United States without notifying the Attorney General as required by law; two counts of providing false statements on a firearms purchase form; and two counts of providing false statements to federal law enforcement.
Soueid was arrested on Oct. 11, 2011, and will make an initial appearance before U.S. Magistrate Judge Theresa C. Buchanan today at 2:00 p.m. If convicted, he faces a maximum penalty of 15 years in prison on the conspiracy and foreign agent charges, 15 years in prison on the firearms purchase charges and 10 years in prison on the false statement charges.
“Today’s indictment alleges that the defendant acted as an unregistered agent of the Syrian government as part of an effort to collect information on people in this country protesting the Syrian government crack-down. I applaud the many agents, analysts and prosecutors who helped bring about today’s case,” said Assistant Attorney General Monaco.
“The ability to assemble and protest is a cherished right in the United States, and it’s troubling that a U.S. citizen from Leesburg is accused of working with the Syrian government to identify and intimidate those who exercise that right,” said U.S. Attorney MacBride. “Spying for another country is a serious threat to our national security, especially when it threatens the ability of U.S. citizens to engage in political speech within our own borders.”
“Our national security is threatened when foreign governments use unregistered agents in an attempt to influence and intimidate those who live here lawfully,” said FBI Assistant Director in Charge McJunkin. “Their alleged acts desecrate the values cherished in our fair and open society. The FBI will be counted on to detect and deter unregistered agents who attempt clandestine activities on behalf of a foreign political power and work to bring them swiftly to justice.”
According to the indictment, since March 2011, Soueid has acted in the United States as an agent of the Syrian Mukhabarat, which refers to the intelligence agencies for the Government of Syria, including the Syrian Military Intelligence and General Intelligence Directorate. At no time while acting as an agent of the government of Syria in this country did Soueid provide prior notification to the Attorney General as required by law, the indictment alleges.
Under the direction and control of Syrian officials, Soueid is accused of recruiting individuals living in the United States to collect information on and make audio and video recordings of protests against the Syrian regime – including recordings of conversations with individual protestors – in the United States and Syria. He is also charged with providing the recordings and other information to individuals working for the Mukhabarat. According to the indictment, Soueid and others conspired to use this information to undermine, silence, intimidate and potentially harm those in the United States and Syria who engaged in the protests.
The indictment states that in late June 2011, the Syrian government paid for Soueid to travel to Syria, where he met with intelligence officials and spoke with President Bashar al-Assad in private.
He returned to the United States in early July 2011, and he was searched and questioned at Dulles International Airport upon his arrival. The indictment states that Soueid communicated with his “boss,” an unindicted co-conspirator (or UCC-1) who was working for the Mukhabarat, soon after to alert him of the search and questioning and to assure the individual that the airport encounter would not “stop the project.”
In addition to the recordings, Soueid is accused of providing the Mukhabarat contact information, including phone numbers and email addresses, for protestors in the United States. In a handwritten letter sent to UCC-1, Soueid allegedly expressed his belief that violence against protestors – including raiding their homes – was justified and that any method should be used to deal with the protestors. The indictment also alleges that Soueid provided information regarding U.S. protestors against the Syrian regime to an individual who worked at the Syrian Embassy in Washington, D.C.
On Aug. 3, 2011, FBI agents interviewed Soueid, and the indictment accuses him of lying to the agents when he denied that he had collected information on U.S. persons and transmitted that information to the government of Syria. In addition, Soueid allegedly made further false statements when he denied to FBI agents that he had directed someone to audio or videotape a conversation, meeting, rally or protest, or that he was aware of any individual taking photographs or videotaping people. He also allegedly made false statements when he denied that he had ever been an agent of the Syrian government or a foreign intelligence officer.
The indictment states that the day following the interview, Soueid asked UCC-1 to inform the Mukhabarat about his FBI interview.
In addition, the indictment alleges that, when purchasing a Beretta pistol on July 11, 2011, Soueid listed a false current residence address on a firearms purchase application and in records that were kept by a licensed firearms dealer.
This investigation is being conducted by the FBI’s Washington Field Office with assistance from the Loudon County, Va., Sheriff’s Office. The prosecution is being handled by Assistant U.S. Attorneys Dennis Fitzpatrick and Neil Hammerstrom of the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Brandon L. Van Grack of the Counterespionage Section of the Justice Department’s National Security Division.
The public is reminded that an indictment contains mere allegations and that a defendant is presumed innocent unless and until proven guilty.
Statement of Attorney General Eric Holder on Guilty Plea by Umar Farouk AbdulmutallabRead the Press Release
WASHINGTON – Attorney General Eric Holder today issued the following statement on the guilty plea by Umar Farouk Abdulmutallab in the Eastern District of Michigan:
“Umar Farouk Abdulmutallab pleaded guilty today to all counts of an eight-count criminal indictment charging him for his role in the attempted Christmas Day 2009 bombing of Northwest Airlines flight 253 from Amsterdam to Detroit.
“Contrary to what some have claimed, today’s plea removes any doubt that our courts are one of the most effective tools we have to fight terrorism and keep the American people safe. Our priority in this case was to ensure that we arrested a man who tried to do us harm, that we collected actionable intelligence from him and that we prosecuted him in a way that was consistent with the rule of law. We will continue to be aggressive in our fight against terrorism and those who target us, and we will let results, not rhetoric, guide our actions.”
“Northwest Airlines flight 253 carried 281 passengers and 11 crewmembers, all of whom could have been killed or injured had this plot been successful. Today, Umar Farouk Abdulmutallab is being held accountable for the attempted murder of 291 innocent people and he will face a potential sentence of life in prison at sentencing on Jan. 12, 2012.”
“I want to thank all those who worked on this important investigation, particularly prosecutors from U.S. Attorney’s Office for the Eastern District of Michigan, the Counterterrorism Section of the Justice Department’s National Security Division, as well as the many investigators and analysts from the Detroit Joint Terrorism Task Force, which is led by the FBI and includes U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, the Federal Air Marshal Service, and other law enforcement agencies.”
Owner of Houston Health Care Company Sentenced to 33 Months in Prison for Medicare FraudRead the Press Release
WASHINGTON – The owner and operator of a Houston durable medical equipment (DME) company was sentenced yesterday in Houston federal court to 33 months in prison for his role in a Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Bassey Monday Idiong, 32, of Humble, Texas, was sentenced by U.S. District Judge Vanessa D. Gilmore. In addition to his prison term, Idiong was sentenced to two years of supervised release and was ordered to pay $527,023 in restitution.
Idiong pleaded guilty on March 1, 2010, to one count of conspiracy to commit health care fraud and five counts of health care fraud. Idiong owned and operated B.I. Medical Supply LLC.
According to court documents, Idiong paid patient recruiters kickbacks in exchange for the names of beneficiaries for whom bills could be submitted to Medicare. B.I. Medical billed Medicare for expensive, rigid orthotics and braces that were packaged together and referred to as an “arthritis kit,” at a cost of approximately $4,000 per kit. B.I. Medical then supplied the beneficiaries with different, less expensive products that were not medically necessary. Court documents indicate that in one instance, B.I. Medical billed Medicare for an arthritis kit that included two knee braces for a beneficiary who had only one leg. In total, B.I. Medical submitted approximately $846,000 in fraudulent claims to Medicare.
The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent-In-Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), Office of Investigations; Joseph J. Del Favero, Special Agent-in-Charge of the Chicago Field Office of the Railroad Retirement Board Office of Inspector General; and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The case was prosecuted by Trial Attorneys Laura Cordova, Katherine Houston and Jennifer Saulino of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,140 defendants 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, 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 .
Oil Company Pleads Guilty to Clean Air Act and Obstruction of Justice Crimes in LouisianaRead the Press Release
WASHINGTON – Pelican Refining Company LLC, pleaded guilty today to felony violations of the Clean Air Act and to obstruction of justice charges in federal court in Lafayette, La., announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice, Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana, and Cynthia Giles, Assistant Administrator for the U.S. Environmental Protection Agency’s Office of Enforcement and Compliance Assurance.
If the court sentences according to the terms in today’s plea agreement, Pelican will pay $12 million in criminal penalties, including $2 million in community service payments that will go toward various environmental projects in Louisiana, including air pollution monitoring. Pelican would be banned from future refinery operations unless and until it implements an environmental compliance plan, which includes external auditing by independent firms and oversight by a court appointed monitor. It would mark the largest ever criminal fine in Louisiana for violations of the Clean Air Act.
In pleading guilty, officials of Pelican, headquartered in Houston and operating a refinery in Lake Charles, La., admitted that the company had violated numerous aspects of its permit to operate. The violations were discovered during a March 2006 inspection by the Louisiana Department of Environmental Quality (LDEQ) and the EPA, which identified numerous unsafe operating conditions. Pelican also pleaded guilty to obstruction of justice for submitting materially false deviation reports to LDEQ, the agency that administers the federal Clean Air Act in Louisiana.
Pelican has admitted to the following:
- Pelican had no company budget, no environmental department and no environmental manager;
- In order to comply with a permit issued under the Clean Air Act, the refinery was required to use certain key pollution prevention equipment, but that equipment was either not functioning, poorly maintained, improperly installed, improperly placed into service and/or improperly calibrated;
- It was a routine practice for over a year to use an emergency flare gun to re-light the flare tower at the refinery which was designed to burn off toxic gasses and provide for the safe combustion of potentially explosive chemicals; because the pilot light was not functioning properly, employees would take turns trying to shoot the flare gun to relight the explosive gasses;
- Sour crude oil was stored in a tank that was not properly placed into service and remained in the tank after the roof sank;
- A caustic scrubber designed to remove hydrogen sulfide from emissions was bypassed; and
- A continuous emission monitoring system (CEMS) designed to measure the hydrogen sulfide levels in refinery emissions was not working properly.
“Pelican had demonstrated a manifest disregard for accepted practices that are designed to protect human health and the environment,” said Assistant Attorney General Moreno. “Today, Pelican faces significant penalties for its egregious violations of its Clean Air Act permit and for submitting false information to state officials.”
“Louisiana is the sportsman’s paradise, and this corporation seriously jeopardized our precious environment. The citizens of our community should be appalled by such blatant environmental crimes. Going forward, this refinery will not be able to operate unless it is in full compliance with the law,” said U.S. Attorney Finley.
“Facilities that operate in our backyards have a responsibility to follow our nation's environmental laws, like the Clean Air Act, which is designed to protect the air we breathe and the local environment,” said Assistant Administrator Giles. “Today’s guilty plea shows that businesses that choose to ignore these critical safeguards and put their employees and the public at risk will face serious consequences.”
“Our nation’s environmental laws are designed to protect the air we breathe, the water we drink, and the local environment,” said Ivan Vikin, Special Agent in Charge of EPA’s criminal enforcement program in Louisiana. “Corporations have a responsibility to follow these laws and not cut corners. Today's action shows that if a business chooses to ignore these critical safeguards, putting employees and the public at risk, it can expect to pay a substantial price.”
“It’s unfortunate that an individual or business would skirt the law and put human health and the environment at risk, especially given the progress the state has made in improving air quality,” said Louisiana Department of Environmental Quality Secretary Peggy Hatch. “Hopefully, the efforts of LDEQ and its state, federal and local partners, will demonstrate that it can be very costly to put the people and environment at risk by disregarding state and federal regulations.”
“This case illustrates the level of cooperation between the investigative resources within our state and federal law enforcement partners,” said Colonel Mike Edmonson, Louisiana State Police Superintendent. “Louisiana's Environmental Crimes Task Force, consisting of investigators assigned from state police, LDEQ and EPA, remains committed to investigating and bringing to justice those persons or entities that violate the nation’s environmental laws and regulations.”
Byron Hamilton, the Pelican vice-president who oversaw operations at the Lake Charles refinery since 2005 from an office in Houston pleaded guilty on July 6, 2011, to negligently placing persons in imminent danger of death and serious bodily injury as a result of negligent releases at the refinery. Hamilton faces up to one year in prison and a $200,000 fine for each of the two Clean Air Act counts.
The government’s investigation of the Pelican Refinery is continuing. Under the Crime Victims’ Rights Act, crime victims are afforded certain statutory rights, including the opportunity to attend all public hearings and provide input to the prosecution. Any person adversely impacted is encouraged to visit www.justice.gov/usao/law/vicwit/index.html to learn more about the case and the Crime Victims’ Rights Act or you may contact the Victim Witness Coordinator for the U.S. Attorney’s Office, Western District of Louisiana, Vicki Chance at 318-676-3600.
The criminal investigation is being conducted by the EPA Criminal Investigation Division in Baton Rouge and the Louisiana State Police, with assistance from the Louisiana Department of Environmental Quality. The case is being prosecuted by U.S. Attorney Stephanie Finley, Richard A. Udell, Senior Trial Attorney and Trial Attorney Christopher Hale, both with the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Copies of the Joint Factual Statement and Photographs filed in Court can be obtained by calling the contacts listed above or at the following link: www.epa.gov/compliance/criminal/investigations/pelican-exhibits.pdf
Husband and Wife Indicted for Investment Fraud SchemeRead the Press Release
WASHINGTON – A former FBI special agent and his wife were charged in an indictment unsealed yesterday for their roles in an alleged $1.3 million investment fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Virginia Neil H. MacBride; Special Agent in Charge Michael Morehart of the FBI’s Richmond, Va., Field Office; and Keith A. Fixel, Inspector in Charge of the U.S. Postal Inspection Service (USPIS), Charlotte Division.
John Robert Graves, 52, and Sara Turberville Graves, 44, both of Fredericksburg, Va., are charged in the Eastern District of Virginia with one count of conspiracy to commit mail and wire fraud, one count of mail fraud and four counts of wire fraud. John Graves was also charged with three counts of Investment Adviser Act fraud and one count of making false statements. The Graves made their initial appearance in U.S. District Court in Richmond yesterday.
According to the indictment, John Graves founded Brook Point Management (BPM) in 2003 and served as president of BPM, a corporation through which he sold insurance, performed estate and tax planning services and recruited and advised investment clients. He was a certified financial planner and held numerous securities industry registrations, including the Series 7 and Series 65 registrations. Graves is a former FBI special agent who resigned from the FBI in 1999. The indictment alleges that between approximately June 2008 and July 2011, John Graves, Sara Graves and others devised and executed a scheme to defraud approximately 11 investors located in central Virginia of approximately $1.3 million.
As alleged in the indictment, John and Sara Graves raised investor funds through misrepresentations about the safety and security of the investments, as well as misrepresentations and omissions regarding their use of investor money. According to the indictment, John and Sara Graves used investor funds to, among other things, pay back previous investors who requested access to their money; purchase real estate in Partlow, Va.; and pay personal expenses, including credit card bills and time share dues. John Graves allegedly continued to make misrepresentations even after the scheme was uncovered, through false and misleading statements to the investors and to investigators from the U.S. Securities and Exchange Commission (SEC), FBI and USPIS.
The Graves face a maximum penalty of 20 years in prison for each count of conspiracy, mail and wire fraud, as well as a fine of up to $250,000 or twice the loss to the victims. In addition, John Graves faces a maximum penalty of five years in prison for each count of Investment Adviser Act fraud and a fine of up to $10,000 per count and five years in prison for the false statement count and a fine of up to $250,000.
This case was investigated by the FBI and USPIS. The department thanks these agencies, and the SEC, for their assistance. The case is being prosecuted by Trial Attorney Kevin B. Muhlendorf of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jamie L. Mickelson of the Eastern District of Virginia.
A criminal indictment contains only charges and is not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the 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 .
Florida Couple and Utah Man Indicted for Alleged Roles in Procurement Fraud Scheme Involving Foreign Military MaterialsRead the Press Release
WASHINGTON — Three individuals were charged in an indictment returned today by a federal grand jury in Utah for their alleged roles in a bribery and fraud scheme involving federal procurement contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Barlow for the District of Utah.
The four-count indictment returned today in U.S. District Court in Salt Lake City charges Sylvester Zugrav, 68, and Maria Zugrav, 66, both of Sarasota, Fla., and Jose Mendez, 49, of Farr West, Utah, with conspiracy to commit bribery and procurement fraud. The Zugravs and Mendez also are each charged with bribery. In addition, Mendez is charged with procurement fraud.
According to the indictment, Mendez worked as a program manager for the U.S. Air Force Foreign Materials Acquisition Support Office (FMASO). The mission of FMASO is to purchase foreign military materials on behalf of their customers, which are various U.S. military divisions. The materials are acquired outside of the United States by third party companies, or vendors, and then purchased by FMASO on behalf of its customers. There are a limited number of vendors permitted to contract for the sale of foreign materials to FMASO, one of which is Atlas International Trading Corporation (Atlas). According to the indictment, Sylvester and Maria Zugrav were the principals of Atlas.
According to the indictment, the Zugravs and Mendez conspired to enrich one another by exchanging money and other things of value for non-public information and favorable treatment in the procurement process. The Zugravs allegedly offered Mendez approximately $1,240,500 in payments and other things of value throughout the course of the conspiracy. The Zugravs allegedly made bribe payments to Mendez in three different ways: cash payments via FedEx to Mendez’s home address; in-person payments of cash and other things of value; and electronic wire transfers to a bank account in Mexico opened by and in the name of Mendez’s cousin. According to the indictment, from approximately 2008 to August 2011, the Zugravs gave Mendez and a person close to him more than $185,000 in payments and other things of value, with promises of additional bribe payments if Atlas were to receive future contracts for the sale of foreign materials to FMASO customers.
In return for the bribes offered and paid, Mendez allegedly gave Atlas and the Zugravs favorable treatment during the FMASO procurement process, including disclosing government budget and competitor bid information, which helped Atlas and the Zugravs in winning FMASO contracts.
According to the indictment, Mendez and Sylvester Zugrav allegedly communicated offers and requests for bribes in person and through email, and took steps to conceal their activity, using covert email addresses, password-protected computer documents, code words and false names. Within the encrypted documents, Mendez adopted the name “Chuco” and Sylvester Zugrav used the name “Jugo,” and they referred to cash as “literature.”
The Zugravs and Mendez each are charged with one count of conspiracy to commit bribery and procurement fraud, and one count of bribery. Mendez is also charged with one count of procurement fraud for disclosing non-public information to a separate FMASO vendor other than Atlas.
The maximum penalty for conspiracy is five years in prison and a $250,000 fine. The maximum penalty for procurement fraud is five years in prison and a $250,000 fine, while the maximum penalty for bribery is 15 years in prison and a $250,000 fine, or three times the monetary equivalent of the thing of value, whichever is greater. The indictment also seeks forfeiture from all three defendants, if convicted.
An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI and the Air Force Office of Special Investigations, Office of Special Projects. The case is being prosecuted by Trial Attorneys Marquest J. Meeks and Edward P. Sullivan of the Criminal Division’s Public Integrity Section, and Assistant U.S. Attorney Carlos A. Esqueda for the District of Utah.
11 October 2011
Two Men Charged in Alleged Plot to Assassinate Saudi Arabian Ambassador to the United StatesRead the Press Release
WASHINGTON – Two individuals have been charged in New York for their alleged participation in a plot directed by elements of the Iranian government to murder the Saudi Ambassador to the United States with explosives while the Ambassador was in the United States.
The charges were announced by Attorney General Eric Holder; FBI Director Robert S. Mueller; Lisa Monaco, Assistant Attorney General for National Security; and Preet Bharara, U.S. Attorney for the Southern District of New York.
A criminal complaint filed today in the Southern District of New York charges Manssor Arbabsiar, a 56-year-old naturalized U.S. citizen holding both Iranian and U.S. passports, and Gholam Shakuri, an Iran-based member of Iran’s Qods Force, which is a special operations unit of the Iranian Islamic Revolutionary Guard Corps (IRGC) that is said to sponsor and promote terrorist activities abroad.
Both defendants are charged with conspiracy to murder a foreign official; conspiracy to engage in foreign travel and use of interstate and foreign commerce facilities in the commission of murder-for-hire; conspiracy to use a weapon of mass destruction (explosives); and conspiracy to commit an act of international terrorism transcending national boundaries. Arbabsiar is further charged with an additional count of foreign travel and use of interstate and foreign commerce facilities in the commission of murder-for-hire.
Shakuri remains at large. Arbabsiar was arrested on Sept. 29, 2011, at New York’s John F. Kennedy International Airport and will make his initial appearance today before in federal court in Manhattan. He faces a maximum potential sentence of life in prison if convicted of all the charges.
“ The criminal complaint unsealed today exposes a deadly plot directed by factions of the Iranian government to assassinate a foreign Ambassador on U.S. soil with explosives,” said Attorney General Holder. “Through the diligent and coordinated efforts of our law enforcement and intelligence agencies, we were able to disrupt this plot before anyone was harmed. We will continue to investigate this matter vigorously and bring those who have violated any laws to justice.”
“The investigation leading to today’s charges illustrates both the challenges and complexities of the international threat environment, and our increased ability today to bring together the intelligence and law enforcement resources necessary to better identify and disrupt those threats, regardless of their origin,” said FBI Director Mueller.
“The disruption of this plot is a significant milestone that stems from months of hard work by our law enforcement and intelligence professionals,” said Assistant Attorney General Monaco. “I applaud the many agents, analysts and prosecutors who helped bring about today’s case.”
“As alleged, these defendants were part of a well-funded and pernicious plot that had, as its first priority, the assassination of the Saudi Ambassador to the United States, without care or concern for the mass casualties that would result from their planned attack,” said U.S. Attorney Bharara. “Today’s charges should make crystal clear that we will not let other countries use our soil as their battleground.”
The Alleged Plot
The criminal complaint alleges that, from the spring of 2011 to October 2011, Arbabsiar and his Iran-based co-conspirators, including Shakuri of the Qods Force, have been plotting the murder of the Saudi Ambassador to the United States. In furtherance of this conspiracy, Arbabsiar allegedly met on a number of occasions in Mexico with a DEA confidential source (CS-1) who has posed as an associate of a violent international drug trafficking cartel. According to the complaint, Arbabsiar arranged to hire CS-1 and CS-1’s purported accomplices to murder the Ambassador, and Shakuri and other Iran-based co-conspirators were aware of and approved the plan. With Shakuri’s approval, Arbabsiar has allegedly caused approximately $100,000 to be wired into a bank account in the United States as a down payment to CS-1 for the anticipated killing of the Ambassador, which was to take place in the United States.
According to the criminal complaint, the IRCG is an arm of the Iranian military that is composed of a number of branches, one of which is the Qods Force. The Qods Force conducts sensitive covert operations abroad, including terrorist attacks, assassinations and kidnappings, and is believed to sponsor attacks against Coalition Forces in Iraq. In October 2007, the U.S. Treasury Department designated the Qods Force for providing material support to the Taliban and other terrorist organizations.
The complaint alleges that Arbabsiar met with CS-1 in Mexico on May 24, 2011, where Arbabsiar inquired as to CS-1’s knowledge with respect to explosives and explained that he was interested in, among other things, attacking an embassy of Saudi Arabia. In response, CS-1 allegedly indicated that he was knowledgeable with respect to C-4 explosives. In June and July 2011, the complaint alleges, Arbabsiar returned to Mexico and held additional meetings with CS-1, where Arbabsiar explained that his associates in Iran had discussed a number of violent missions for CS-1 and his associates to perform, including the murder of the Ambassador.
$1.5 Million Fee for Alleged Assassination
In a July 14, 2011, meeting in Mexico, CS-1 allegedly told Arbabsiar that he would need to use four men to carry out the Ambassador’s murder and that his price for carrying out the murder was $1.5 million. Arbabsiar allegedly agreed and stated that the murder of the Ambassador should be handled first, before the execution of other attacks. Arbabsiar also allegedly indicated he and his associates had $100,000 in Iran to pay CS-1 as a first payment toward the assassination and discussed the manner in which that payment would be made.
During the same meeting, Arbabsiar allegedly described to CS-1 his cousin in Iran, who he said had requested that Arbabsiar find someone to carry out the Ambassador’s assassination. According to the complaint, Arbabsiar indicated that his cousin was a “big general” in the Iranian military; that he focuses on matters outside Iran and that he had taken certain unspecified actions related to a bombing in Iraq.
In a July 17, 2011, meeting in Mexico, CS-1 noted to Arbabsiar that one of his workers had already traveled to Washington, D.C., to surveill the Ambassador. CS-1 also raised the possibility of innocent bystander casualties. The complaint alleges that Arbabsiar made it clear that the assassination needed to go forward, despite mass casualties, telling CS-1, “They want that guy [the Ambassador] done [killed], if the hundred go with him f**k ‘em.” CS-1 and Arbabsiar allegedly discussed bombing a restaurant in the United States that the Ambassador frequented. When CS-1 noted that others could be killed in the attack, including U.S. senators who dine at the restaurant, Arbabsiar allegedly dismissed these concerns as “no big deal.”
On Aug. 1, and Aug. 9, 2011, with Shakuri’s approval, Arbabsiar allegedly caused two overseas wire transfers totaling approximately $100,000 to be sent to an FBI undercover account as a down payment for CS-1 to carry out the assassination. Later, Arbabsiar allegedly explained to CS-1 that he would provide the remainder of the $1.5 million after the assassination. On Sept. 20, 2011, CS-1 allegedly told Arbabsiar that the operation was ready and requested that Arbabsiar either pay one half of the agreed upon price ($1.5 million) for the murder or that Arbabsiar personally travel to Mexico as collateral for the final payment of the fee. According to the complaint, Arbabsiar agreed to travel to Mexico to guarantee final payment for the murder.
Arrest and Alleged Confession
On or about Sept. 28, 2011, Arbabsiar flew to Mexico. Arbabsiar was refused entry into Mexico by Mexican authorities and, according to Mexican law and international agreements; he was placed on a return flight destined for his last point of departure. On Sept. 29, 2011, Arbabsiar was arrested by federal agents during a flight layover at JFK International Airport in New York. Several hours after his arrest, Arbabsiar was advised of his Miranda rights and he agreed to waive those rights and speak with law enforcement agents. During a series of Mirandized interviews, Arbabsiar allegedly confessed to his participation in the murder plot.
According to the complaint, Arbabsiar also admitted to agents that, in connection with this plot, he was recruited, funded and directed by men he understood to be senior officials in Iran’s Qods Force. He allegedly said these Iranian officials were aware of and approved of the use of CS-1 in connection with the plot; as well as payments to CS-1; the means by which the Ambassador would be killed in the United States and the casualties that would likely result.
Arbabsiar allegedly told agents that his cousin, who he had long understood to be a senior member of the Qods Force, had approached him in the early spring of 2011 about recruiting narco-traffickers to kidnap the Ambassador. Arbabsiar told agents that he then met with the CS-1 in Mexico and discussed assassinating the Ambassador. According to the complaint, Arbabsiar said that, afterwards, he met several times in Iran with Shakuri and another senior Qods Force official, where he explained that the plan was to blow up a restaurant in the United States frequented by the Ambassador and that numerous bystanders could be killed, according to the complaint. The plan was allegedly approved by these officials.
In October 2011, according to the complaint, Arbabsiar made phone calls at the direction of law enforcement to Shakuri in Iran that were monitored. During these phone calls, Shakuri allegedly confirmed that Arbabsiar should move forward with the plot to murder the Ambassador and that he should accomplish the task as quickly as possible, stating on Oct. 5, 2011, “[j]ust do it quickly, it’s late . . .” The complaint alleges that Shakuri also told Arbabsiar that he would consult with his superiors about whether they would be willing to pay CS-1 additional money.
This investigation is being conducted by the FBI Houston Division and DEA Houston Division, with assistance from the FBI New York Joint Terrorism Task Force. The prosecution is being handled by Assistant U.S. Attorneys Glen Kopp and Edward Kim, of the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office for the Southern District of New York, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. The Office of International Affairs of the Justice Department’s Criminal Division and the U.S. State Department provided substantial assistance. We thank the government of Mexico for its close coordination and collaboration in this matter, and for its role in ensuring that the defendant was safely apprehended.
The charges contained in a criminal complaint are mere allegations and defendants are presumed innocent unless and until proven guilty.
Texas Natural Gas and Oil Drilling Contractor Pleads Guilty to Negligent Violation of Clean Water Act in OklahomaRead the Press Release
WASHINGTON – Integrated Production Services, LLC, (IPS), a Houston-based natural gas and oil drilling contractor, pleaded guilty today to a negligent violation of the Clean Water Act in federal court in Muskogee, Okla., announced Assistant Attorney General Ignacia S. Moreno for the Justice Department’s Environment and Natural Resources Division, and Mark Green, U.S. Attorney for the Eastern District of Oklahoma.
In entering the plea, which is subject to approval by the court, IPS has agreed to pay a $140,000 criminal fine and to make a community service payment of $22,000 to the Oklahoma Department of Wildlife Conservation for ecological studies and remediation of Boggy Creek, located in eastern Oklahoma. IPS will serve a two-year period of probation, during which it will be required to implement and perform an environmental compliance program at a cost of $38,000, to train IPS employees regarding proper hazardous waste handling and spill response procedures.
In May 2007, IPS was performing drilling operations at the Pettigrew natural gas well site in Atoka County, Okla. The company’s operations included hydraulic fracturing, which entails the use of drills and hydrochloric acid to penetrate through bedrock and substrata in order to access natural gas reserves. On May 24, 2007, a tank at the site leaked hydrochloric acid onto the bermed surface of the well, which also was flooded due to recent heavy rainfall. Rather than taking the necessary steps to properly remove the rainwater from the site, Gabriel Henson, an IPS supervisor, drove a company pickup truck through the earthen berm, causing the discharge of the rainwater and an estimated 400-700 gallons of hydrochloric acid into Dry Creek, a tributary of Boggy Creek.
On July 20, 2011, Henson pleaded guilty to a misdemeanor violation of the Clean Water Act. Henson is awaiting sentencing. He faces up to one year in prison and a $100,000 fine.
“As hydraulic fracturing occurs with increasing frequency across the country, companies and individuals involved in those operations must adhere to the laws that protect human health and the environment and level the playing field for responsible businesses,” said Assistant Attorney General Moreno. “We recognize the critical importance of developing domestic sources of energy responsibly, and will continue to vigorously prosecute illegal conduct.”
“This was a case of a corporate employee making a careless decision that caused the release of dangerous hydrochloric acid into our waters,” said U.S. Attorney Green. “Whether to expedite oil production or to save corporate expense, these types of actions cannot be justified nor can they be tolerated. This office will pursue all legal remedies necessary to prevent and/or punish such actions.”
“Hydrochloric acid is a highly corrosive substance. Its release into a tributary of Boggy Creek was a serious threat to the environment,” said Ivan Vikin, Special Agent-in-Charge of the U.S. Environmental Protection Agency’s (EPA) criminal enforcement program in Oklahoma. “Today’s guilty plea demonstrates that companies will be held responsible for environmental crimes.”
This case was investigated by the U.S. EPA Criminal Investigation Division and the Oklahoma Attorney General’s Office of Inspector General. The case is a joint prosecution between the U.S. Attorney’s Office for the Eastern District of Oklahoma and the Environmental Crimes Section of the U.S. Department of Justice, Environment and Natural Resources Division.
Pennsylvania Man Convicted of Tax CrimesRead the Press Release
WASHINGTON – Dennis Glick of Huntington Valley, Penn., was found guilty today by a federal jury in Philadelphia of corruptly endeavoring to obstruct and impede the Internal Revenue laws and willfully preparing false tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. District Judge Petrese Tucker presided over the case.
According to testimony and evidence presented at trial, Glick, a certified public accountant, prepared materially false tax returns for his client Jonathon Felix, previously indicted for the years 1999 through 2002. The evidence showed that Glick did this in 2004, despite knowing that Felix was the owner of an S corporation called United Professional Plans Inc. (UPPI) and that Felix had removed such significant funds from UPPI during these years that he caused UPPI to lose its clients and close down.
Glick falsified Felix’s tax returns by including fabricated management fee figures on these returns to get to a “break even point”—i.e., to yield a small refund in each year. In addition, the testimony and evidence proved that when federal law enforcement agents asked Glick about these management fees, he lied about what he did on two occasions. Glick’s criminal conduct caused a tax loss of over $400,000 to the IRS.
Glick faces a maximum punishment of up to 15 years in prison and a $1.25 million fine. Judge Tucker scheduled sentencing for Jan. 9, 2012.
The case was investigated by IRS-Criminal Investigation and the Department of Labor’s Office of Inspector General and prosecuted by Assistant U.S. Attorney Floyd Miller and Justice Department Tax Division Trial Attorney Patrick J. Murray.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Ohio Man Found Guilty for His Participation in Online Child Pornography Bulletin BoardRead the Press Release
WASHINGTON – Billy Wade Carroll, 51, of Dayton, Ohio, was found guilty today in U.S. District Court in Riverside, Calif., for his participation in an online child pornography bulletin board, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California and Assistant Director in Charge Steve Martinez of the FBI’s Los Angeles Field Office.
A federal jury in the Central District of California found Carroll guilty of one count of conspiracy to advertise, solicit, transport, distribute, receive and possess child pornography and one count of committing a child pornography offense while being required to register as a sex offender in Ohio.
Today’s conviction is the result of an international investigation into the “Lost Boy” online bulletin board. Federal authorities, working in conjunction with a coalition of international law enforcement agencies, shut down the Lost Boy bulletin board more than two years ago. As a result of the investigation, 16 U.S. members of the bulletin board have been identified, charged and arrested for their roles in the bulletin board and to date, 15 of those defendants, including Carroll, have been convicted.Evidence presented at trial established that from at least September 2007 until January 2009, Carroll was an active member of the bulletin board and made more than 100 posts. He supplied images of child pornography for other members to download and also made requests on the board seeking out particular images to help supplement his child pornography collection.
The Lost Boy bulletin board, according to court documents and proceedings, was dedicated to men who have a sexual interest in young boys and was established to provide a forum to trade child pornography. Lost Boy had a thorough vetting process for new members, who were required to post child pornography to join the organization. Once accepted, members had to continue to post child pornography to remain in good standing and not be removed from the board. According to court documents, Lost Boy members advised each other on techniques to evade detection by law enforcement, which included using screen names to mask identities and encrypting computer data.
According to court documents and proceedings, law enforcement authorities discovered the Lost Boy bulletin board after receiving information from Eurojust, a judicial agency of the European Union (EU) facilitating the coordination of investigations and prosecutions among EU member states. Eurojust provided U.S. law enforcement with leads obtained from Norwegian and Italian authorities indicating that a North Hollywood, Calif., man was communicating with an Italian national about child pornography and how to engage in child sex tourism in Romania. Acting on the information from Europe, the FBI executed search warrants that led to the discovery of the Lost Boy network. Further investigation revealed that Lost Boy had 35 members, 16 of whom were U.S. nationals. Other members of the network were located in countries around the world, including Belgium, Brazil, Canada, France, Germany, New Zealand and the United Kingdom.
In addition to the charges against the 16 U.S. members of the bulletin board, the Lost Boy investigation has led to the identification and arrest of six other individuals who allegedly engaged in child molestation. The investigation also led to the identification of 27 U.S. victims of child abuse, some of whom were portrayed in images posted to the Lost Boy bulletin board.
International law enforcement efforts involving European law enforcement, the Brazilian Federal Police and other agencies have identified child molestation suspects in South America, Europe and New Zealand. Three suspects in Romania, one in France and another in Brazil have been charged, and offenders have been convicted in Norway and the United Kingdom. Law enforcement efforts have also identified dozens of child victims located in Norway, Romania, Brazil and other nations.
The investigation into the Lost Boy bulletin board was led by the FBI and the U.S. Postal Inspection Service, in conjunction with the Los Angeles-based Sexual Assault Felony Enforcement (SAFE) Team. The High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), along with Eurojust, have provided invaluable assistance during the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Joey L. Blanch and Yvonne Garcia of the Central District of California and Trial Attorney Andrew McCormack of the Criminal Division’s CEOS.
Justice Department Statement on US Airways/Delta Airlines Acquisition of Slots at Washington's Reagan National and New York's Laguardia AirportsRead the Press Release
WASHINGTON – The Department of Justice issued the following statement today after the Department of Transportation (DOT) issued its order involving US Airways’ and Delta Airlines’ acquisition of slots at Washington’s Ronald Reagan National Airport and New York’s LaGuardia Airport:
“The Antitrust Division has been conducting an investigation of US Airways’ acquisition of Delta Airlines’ slots at Washington’s Ronald Reagan National Airport to determine the transaction’s impact on competition and traveling consumers. The division will continue its investigation with a focus on the increase in US Airways’ share and use of slots at Reagan National and the resulting decrease in Delta’s share of slots at this slot-constrained airport, at which passengers pay among the highest fares in the country. The division will not continue to investigate the acquisition of slots at New York’s LaGuardia Airport because the division has concluded that acquisition does not raise competitive concerns.
“While the Antitrust Division works closely with DOT on airline issues, the two agencies act under substantially different statutory and regulatory frameworks. The role of the Antitrust Division is to protect competition and to ensure that companies do not raise prices to harm consumers in violation of the antitrust laws. Under the antitrust laws, the division can and will take appropriate action, if warranted, at the conclusion of its investigation.”
Fifth Guilty Plea in Connection with Scheme to Fraudulently Control Condominium Homeowners' AssociationsRead the Press Release
WASHINGTON – A Las Vegas woman pleaded guilty today for her role in a scheme to fraudulently gain control of condominium homeowners’ associations (HOA) in the Las Vegas area so that the HOAs would direct business to a certain law firm and construction company, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Special Agent in Charge Kevin Favreau of the FBI Las Vegas Field Office, Sheriff Doug Gillespie of the Las Vegas Metropolitan Police Department and Special Agent in Charge Paul Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Angela Esparza, 24, pleaded guilty before U.S. District Judge Philip M. Pro in the District of Nevada to one count of conspiracy to commit mail and wire fraud. Esparza is the fifth person to plead guilty in connection with the scheme to defraud HOAs in the Las Vegas area.
Esparza admitted that from approximately July 2006 until February 2009, she participated in a scheme to control various HOA boards of directors so that the HOA boards would award the handling of construction-related lawsuits and remedial construction contracts to a law firm and construction company designated by Esparza’s co-conspirators.
According to plea documents, to accomplish the scheme, co-conspirators used straw purchasers to obtain mortgage loans for units within HOA communities. In October 2006, Esparza agreed to act as a straw purchaser at Terrasini, an HOA community. In fact, Esparza’s co-conspirators provided the down payments and monthly payments, including HOA dues and mortgage payments, for this property and were the true owners. Esparza admitted that she signed and submitted a false and fraudulent loan application and closing document to a financial institution to finance and close on this property on behalf of her co-conspirators. Esparza admitted that at the direction of co-conspirators, she used her position at a mortgage company to help process other co-conspirators’ loan applications.
Court documents indicate that the straw purchasers and those who acquired an interest in a unit agreed to run for election to the respective HOA boards. These co-conspirators were paid in cash, check or promised things of value for their participation, all of which resulted in a personal financial benefit to the co-conspirators. Esparza admitted that in November 2007, she ran for election to the Terrasini HOA board, although she was not elected.
Esparza admitted that she and her co-conspirators employed deceitful tactics in their attempts to win the board elections, including creating false phone surveys to gather information about homeowners’ voting intentions, using mailing lists to vote on behalf of out-of-town homeowners unlikely to participate in the elections, and submitting fake and forged ballots. Co-conspirators also hired private investigators to find “dirt” on the bona fide candidates in order to create smear campaigns. Esparza admitted that she created fake ballots and campaign flyers for co-conspirator candidates. Esparza also admitted that she assisted in mailing and tracking forged ballots for out-of-town homeowners.
According to plea documents, c o-conspirators also attempted to create the appearance that the elections were legitimate by hiring independent attorneys, or “special election masters,” to run the HOA board elections. However, these individuals were paid in cash, check and promised things of value, by or on behalf of Esparza’s co-conspirators for their assistance in rigging the elections. Esparza admitted that on several occasions, she was provided access to the special election master’s office to preview the election ballots, and that she also took several ballots that had been mailed by bona fide homeowners so that they were not counted during the election.
Court documents indicate that, once elected, the co-conspirator board members would meet with other co-conspirators to manipulate board votes, including the selection of property managers, contractors and general counsel for the HOA and attorneys to represent the HOA. The co-conspirators created and submitted fake bids for “competitors” to make the process appear to be legitimate while ensuring co-conspirators were awarded contracts.
Esparza admitted that, at the direction of her co-conspirators, she worked at two property management companies. Esparza and other co-conspirator property managers breached their fiduciary duties by receiving and accepting cash, checks or things of value for using their positions to gain inside information and recommend that the HOA board hire a co-conspirator for remediation and construction defect repairs and another co-conspirator for the construction defect litigation.
Esparza’s sentencing is scheduled for Jan. 23, 2011. The maximum sentence for conspiracy to commit mail fraud and wire fraud is 30 years in prison.
The case is being prosecuted by Deputy Chief Charles La Bella and Trial Attorneys Nicole H. Sprinzen and Mary Ann McCarthy of the Criminal Division’s Fraud Section. The case is being investigated by the FBI, IRS-CI and the Las Vegas Metropolitan Police Department, Criminal Intelligence Section.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
7 October 2011
New York Resident and His Company Plead Guilty to Conspiracy to Export Computer-Related Equipment to IranRead the Press Release
WASHINGTON – Jeng “Jay” Shih, 54, a U.S. citizen, and his Queens, N.Y., company, Sunrise Technologies and Trading Corporation, pleaded guilty today in the District of Columbia to conspiracy to illegally export U.S.-origin computers from the United States to Iran through the United Arab Emirates (UAE).
The guilty pleas were announced by Lisa Monaco, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John Morton, Director of U.S. Immigration and Customs Enforcement (ICE); David W. Mills, Assistant Secretary of Export Enforcement, U.S. Department of Commerce; and Adam Szubin, Director of the Office of Foreign Assets Control (OFAC), U.S. Department of the Treasury.
At a hearing today before U.S. District Judge James E. Boasberg, Shih and his company each pleaded guilty to conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and to defraud the United States. The maximum sentence is five years in prison and $1 million in criminal fines. Sentencing has been scheduled for Jan. 13, 2012.
Under the terms of the plea and related civil settlements with the U.S. Department of Commerce’s Bureau of Industry and Security and OFAC, Shih and his company have agreed to forfeiture of a money judgment in the amount of $1.25 million. In addition, Shih and Sunrise are denied export privileges for 10 years, although this penalty will be suspended provided that neither Shih nor Sunrise commits any export violations.
Shih was arrested on a criminal complaint on April 6, 2011. He and his company were later indicted on April 21, 2011. According to court documents filed in the case, beginning as early as about 2007, Shih conspired with a company operating in Dubai, UAE, and Tehran, Iran, to procure U.S.-origin computers through Sunrise and export those computers from the United States to Iran, through Dubai, without first obtaining a license or authorization from OFAC.
Specifically, in April 2010, the defendants caused the illegal export of 368 units of computer-related goods to Dubai, which were later sent to Iran. Later that month, the defendants caused the illegal export of 158 additional units of computer-related goods to Dubai, which were later sent to Iran. The defendants subsequently caused an additional 185 units of computer-related goods to be illegally exported to Iran via Dubai.
This investigation was conducted by the ICE-Homeland Security Investigations (HSI) field offices New York and San Diego and the Department of Commerce Office of Export Enforcement field offices in New York and Los Angeles, with assistance from ICE-HSI offices in Chicago, Newark, N.J., Los Angeles and Orange County, Calif. The Department of Homeland Security’s U.S. Customs and Border Protection and OFAC’s Office of Enforcement also assisted in the investigation.
Chief Counsel Attorney Gregory Michelsen and Attorney-Advisor Elizabeth Abraham from the U.S. Department of Commerce and Assistant Director of Enforcement Michael Geffroy and Enforcement Officer Elizabeth Fruzynski of the U.S. Department of Treasury handled the civil settlements for their respective agencies.
The prosecution is being handled by Assistant U.S. Attorneys T. Patrick Martin and Anthony Asuncion, from the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney Jonathan C. Poling from the Counterespionage Section of the Justice Department’s National Security Division.
Man Pleads Guilty to Civil Rights Violations in Connection with Arson at Planned Parenthood and Vandalism of Mosque in Madera, CaliforniaRead the Press Release
WASHINGTON – Donny Eugene Mower, 38, of Madera, Calif., pleaded guilty in federal court today to one count of arson, one count of damaging religious property and one count of violating the Freedom of Access to Clinic Entrances (FACE) Act, which makes it a federal crime to damage the property of a reproductive health services facility. These charges stem from Mower’s lighting a fire inside a Planned Parenthood clinic and throwing a brick at a mosque in Madera.
During his plea, Mower admitted that in the early morning hours of Sept. 2, 2010, he constructed a Molotov cocktail by stuffing a fuel-soaked cloth into a beer bottle. He then drove to Madera Planned Parenthood Clinic, lit the Molotov cocktail, and threw it through a ground-floor window of the clinic. As a result of the ensuing fire, the clinic sustained more than $26,000 of damage and had to close for two days.
Mower also acknowledged that on Aug. 20, 2010, two days after placing a sign in front of Masjid Madera, a local mosque, that read “No temple for the god of terrorism at ground zero. ANB,” he threw a brick at the front of the mosque and damaged its facade. On Aug. 24, 2010, Mower left additional signs at the mosque, stating “Wake up America, the enemy is here” and “American Nationalist Brotherhood.” Mower admitted that he threw the brick at Masjid Madera because of the race, color or ethnic characteristics of the individuals associated with the mosque.
“Interference with the lawful work of reproductive health clinics will not be tolerated; nor will attacks directed at places of worship because of the perceived ethnicity of those who worship there,” said Thomas E. Perez, Assistant Attorney General for Civil Rights Division. “The Department of Justice will aggressively prosecute those who carry out these acts.”
“We will vigorously safeguard the right of Muslim Americans to practice their religion free from the fear of intimidation, and the right of reproductive health centers to conduct their activities free from violence,” said U.S. Attorney Ben Wagner for the Eastern District of California. “Donny Mower’s campaign of hate and intimidation is over, but the work of the U.S. Justice Department in protecting constitutional rights is unending.”
Sentencing is scheduled for Jan. 6, 2012. Mower faces a prison sentence of five to 20 years and a fine of up to $250,000 on the arson charge. He also faces sentences of up to one year in prison, a fine of up to $100,000, or both, on the damaging religious property and FACE Act charges.
This case was investigated by the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Madera Police Department and the Madera County Sheriff’s Department. The case is being prosecuted by Assistant U.S. Attorney Elana Landau for the Eastern District of California and Trial Attorney Chiraag Bains from the Justice Department’s Civil Rights Division.
Justice Department Announces Agreement with Lorain County, Ohio, on Protecting the Rights of Spanish-Speaking Puerto Rican VotersRead the Press Release
WASHINGTON — The Justice Department announced a settlement today with Lorain County, Ohio, to protect the rights of Spanish-speaking Puerto Rican voters under Section 4(e) of the Voting Rights Act. Today’s agreement is intended to resolve concerns that limited-English proficient Puerto Rican voters were being denied their full voting rights because the county failed to provide language assistance as required by law.
The county has agreed that, starting with the Nov. 8, 2011, election, it will provide county-wide bilingual ballots on the voting machines at the polls, as well as bilingual poll workers in targeted precincts. The agreement includes additional steps that the county will take to achieve full compliance with Section 4(e) by the first election held in 2012.
The parties have also agreed to seek a federal court order authorizing federal observers to monitor Election Day activities in polling places in Lorain County and to create a community-based Spanish-language advisory committee, which will include participation and feedback from the local Puerto Rican community.
“The right to vote is the cornerstone of our democracy,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Today’s agreement will ensure that Spanish-speaking voters have equal access to the ballot box and receive critical language assistance as the law requires so their votes will count. I greatly appreciate the cooperation of county officials in working closely with us to reach this resolution.”
“The citizens of Lorain County should be proud of their Board of Elections. Quietly, competently and collaboratively, they’ve protected the interests of Lorain County citizens,” said Steve Dettelbach, U.S. Attorney for the Northern District of Ohio. “Protecting the rights of all our citizens is at the core of our democracy and the core of the United States Attorney’s Office’s mission.”
Section 4(e) of the Voting Rights Act requires that jurisdictions with significant Puerto Rican populations cannot deny an individual’s voting rights based on their ability to read, write, understand or interpret any election matter in English. The 2000 Census found more than 13,000 Puerto Ricans resided in Lorain County , and that 32.5 percent of the county’s voting-age Puerto Ricans were limited-English proficient. Recently-issued 2010 Census data found that there are now more than 17,000 Puerto Ricans in Lorain County, and that the county’s Puerto Rican population has increased by nearly 60 percent since 1990.
To file complaints about discriminatory voting practices, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931. More information about the Voting Rights Act and other federal voting rights laws is available on the Justice Department website at www.justice.gov/crt/voting/index.php.
Homebuilder Ryland Group Inc. to Pay $625,000 Clean Water Act Penalty and Implement Company-Wide Stormwater ControlsRead the Press Release
WASHINGTON – The Ryland Group Inc., one of the nation’s largest homebuilders, will pay a civil penalty of $625,000 to resolve alleged Clean Water Act violations at its construction sites, including sites located in the Chesapeake Bay Watershed, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. Ryland will also invest in compliance programs to improve employee training and increase management oversight at all current and future construction sites. The company is required to inspect its current and future construction sites routinely to minimize stormwater runoff from sites.
“This settlement will help protect communities in states across the nation from harmful pollutants in stormwater runoff,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Polluted stormwater runoff can contaminate rivers, lakes and sources of drinking water, and it can be easily prevented with the system-wide management controls and training that this settlement now requires Ryland to implement.”
“Protecting America’s water resources, like the Chesapeake Bay, by keeping contaminated stormwater from flowing unchecked into our waterways is one of EPA’s top priorities,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance and Assurance. “Today’s settlement will improve Ryland’s oversight of stormwater runoff at its construction sites nationwide and protect our nation’s water resources.”
EPA estimates the settlement will prevent millions of pounds of sediment from entering U.S. waterways every year, including sediment that would otherwise enter the Chesapeake Bay, North America’s largest and most biologically diverse estuary. The bay and its tidal tributaries are threatened by pollution from a variety of sources and are overburdened with nitrogen, phosphorus and sediment that can be carried by stormwater.
The government complaint, filed simultaneously with the settlement agreement in the U.S. District Court in Charlotte, N.C., alleges a pattern of violations that was discovered through site inspections and by reviewing documentation submitted by Ryland. The alleged violations include failure to obtain permits until after construction began, failing to obtain permits at all, or failing to comply with permit requirements at sites where Ryland did obtain permits. Alleged permit violations include not developing complete stormwater pollution prevention plans, failure to conduct adequate inspections, and failure to install or implement adequate stormwater controls or practices.
The Clean Water Act requires permits for the discharge of stormwater runoff. In general, Ryland’s permits require that construction sites have controls in place to prevent pollution from being discharged with stormwater into nearby waterways. These controls include common-sense safeguards such as silt fences, phased site grading and sediment basins to prevent common construction contaminants from entering the nation’s waterways.
The settlement requires Ryland to obtain all required permits; develop site-specific pollution prevention plans for each construction site; conduct additional site inspections beyond those required by stormwater regulations; and document and promptly correct any problems detected. The company must properly train construction managers and contractors on stormwater requirements and designate trained staff for each site. Ryland must also submit national compliance summary reports to EPA based on its quarterly management oversight inspections and reviews.
This settlement is the latest in a series of enforcement actions to address stormwater violations from residential construction sites around the country. Keeping contaminated stormwater out of America’s waters is one of EPA’s national enforcement initiatives. Construction projects have a high potential for environmental harm because they disturb large areas of land and significantly increase the potential for erosion. Without onsite pollution controls, sediment-laden runoff from construction sites can flow directly to the nearest waterway and degrade water quality. In addition, stormwater can pick up other pollutants, including concrete washout, paint, used oil, solvents and trash. Polluted runoff can harm or kill fish and wildlife, degrade aquatic habitats and affect drinking water quality.
Seven states have joined the settlement. The states of Colorado, Florida, Illinois, Indiana, Maryland, Nevada and the commonwealth of Virginia will receive a portion of the $625,000 penalty. The settlement also includes sites in the states of California, Georgia, Kentucky, Minnesota, North Carolina, South Carolina and Texas.
The consent decree, lodged in the U.S. District Court for the Western District of North Carolina, is subject to a 30-day public comment period and approval by the federal court. Once notice is published in the Federal Register, a copy of the consent decree will be available on the Justice Department website at www.justice.gov/enrd/Consent_Decrees.html.
More information on EPA stormwater enforcement at: www.epa.gov/oecaerth/data/planning/priorities/cwastorm.html
Former Hickman County, Tennessee, Deputy Sheriff Sentenced to 24 Months in Prison for Civil Rights and False Statement ChargesRead the Press Release
WASHINGTON – Former Hickman County Deputy Sheriff Kenneth H. Smith, 43, was sentenced today by Chief U.S. District Judge Todd J. Campbell to 24 months in prison for civil rights and false statement charges, the Justice Department announced today.
On June 21, 2011, Smith pleaded guilty in federal court to violating the civil rights of two women for photographing parts of their unclothed bodies under the false pretense that those photographs were necessary for an official investigation. Smith also pleaded guilty to making material false statements to federal investigators.
While working as a deputy sheriff, Smith was assigned to investigate two domestic violence complaints. During interviews, Smith told the victims that he needed to take photographs of their exposed bodies to document injuries, including intimate areas of their bodies where no injury had occurred. Smith, abusing his power and position, lied to the victims and claimed these photographs were necessary for the police investigation and prosecution, when in fact they were not for legitimate law enforcement purposes, but for his own purposes. The victims, trusting a law enforcement officer to protect them and believing it to be necessary, acquiesced to Smith’s authority.
Smith also lied to federal agents about sending text messages to a former female inmate in which he requested the former inmate send him nude pictures of herself in return for Smith’s help in dismissing or reducing the outstanding criminal charges against her. When Smith was confronted with photographs of the explicit text messages coming from his personal cell phone number, Smith continued to lie to the agents claiming that he had not sent them.
“Law enforcement officers are in a position of authority and power. When an officer abuses his power for his personal gratification as this officer did, it erodes public trust and confidence,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “ His conduct was completely intolerable and has no place in law enforcement.”
“The U.S. Attorney’s office will not stand for such abuse by a law enforcement officer who was sworn to protect the rights of all individuals, but chose instead to victimize them further by his criminal acts when they were in a vulnerable situation,” said U.S. Attorney Jerry E. Martin of the Middle District of Tennessee. “The public should not allow the crime of an individual like this to tarnish the reputation of great law enforcement officers who help to bring these cases to justice.”
The case was investigated by the FBI and the Tennessee Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Hal McDonough and Civil Rights Division Trial Attorney Saeed Mody.
Detroit-Area Clinic Owner Sentenced to 10 Years in Prison for Role in $9.1 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Martin Tasis was sentenced today to 10 years in prison for his leading role in a $9.1 million Detroit-area Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Tasis was sentenced by U.S. District Judge Arthur Tarnow in the Eastern District of Michigan. In addition to his prison term, Tasis was sentenced to three years of supervised release and was ordered to pay $6 million in restitution, jointly and severally with his co-conspirators.
Martin Tasis and co-defendants Joaquin Tasis and Leoncio Alayon were convicted by a jury in May 2011 after a five-day trial. Evidence presented at trial showed that the Tasis brothers and their co-conspirators helped relocate a highly lucrative infusion therapy fraud scheme to Michigan from South Florida after increased law enforcement scrutiny there.
According to evidence presented at trial, Martin and Joaquin Tasis were the owners of a Detroit-area clinic called Dearborn Medical Rehabilitation Center (DMRC). Evidence at trial showed that Medicare beneficiaries were not referred to DMRC by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of cash kickbacks. DMRC then billed Medicare for expensive and exotic medications, purportedly administered to treat HIV and Hepatitis-C. However, the medications were never administered.
Once Medicare started paying the co-conspirators, Martin Tasis enlisted Alayon, a family friend, to help him launder the proceeds of the fraud through a shell corporation in Florida called Infinity Research Corp. Evidence at trial showed that Infinity Research Corp. had no employees, did no research and was based at Alayon’s residence. Alayon, after taking a commission for himself, distributed the laundered proceeds to Martin and Joaquin Tasis and their co-conspirators.
Between November 2005 and March 2007, DMRC billed approximately $9.1 million in claims to Medicare for injection therapy services that were never provided and/or were not medically necessary. Medicare paid approximately $6 million of those claims. Evidence at trial showed that DMRC purchased only $36,000 in medication and medical supplies.
Martin Tasis was convicted of one count of conspiracy to commit health care fraud, one count of conspiracy to pay health care kickbacks, three counts of health care fraud, one count of conspiracy to commit money laundering and one count of money laundering.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the 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 (HHS-OIG) Chicago Regional Office.
The case was prosecuted by Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorney for the Eastern District of Michigan Philip Ross. The FBI and HHS-OIG conducted the investigation.
Since its inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 individuals and organizations 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 October 2011
State Department Employee Indicted on Domestic Battery Charges for Assault with a Dangerous WeaponRead the Press Release
WASHINGTON – Michael Makalou, 40, a State Department employee, was indicted by a federal grand jury on one count of assault with a dangerous weapon with intent to do bodily harm, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
The indictment was returned yesterday in the Eastern District of Virginia. According to court documents, Makalou resided with his wife and children in Dakar, Senegal, and worked as a political officer at the U.S. Embassy in Dakar. A publically filed affidavit alleges that on the morning of Aug. 13, 2011, an argument erupted between Makalou and his wife. According to the affidavit, Makalou then began to physically assault his wife, which included choking her, striking her head with closed fists and stomping on her back with his feet. As a result of the attack, Makalou’s wife suffered a concussion as well as lacerations to her gums, multiple contusions and bruising.
If convicted, Makalou faces a maximum penalty of 10 years in prison.
This case was investigated by the Diplomatic Security Service of the U.S. Department of State. Trial Attorney Sarah Chang of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Rebeca H. Bellows of the Eastern District of Virginia are prosecuting the case on behalf of the United States.
An indictment is merely a charge and defendants are presumed innocent until and unless proven guilty.
Oracle Agrees to Pay U.S. $199.5 Million to Resolve False Claims Act LawsuitRead the Press Release
WASHINGTON – Oracle Corp. and Oracle America Inc. have agreed to pay $199.5 million plus interest for failing to meet their contractual obligations to the General Services Administration (GSA), the Justice Department announced today. This is the largest False Claims Act settlement that the GSA has ever obtained. Oracle, which is based in Redwood City, Calif., develops, manufactures, markets, distributes and services database and middleware software, applications software and hardware systems.
This settlement relates to a contract Oracle entered into in 1998 to sell software licenses and technical support to government entities through GSA’s Multiple Award Schedule (MAS) program. The MAS program provides the government and other GSA-authorized purchasers with a streamlined process for procurement of commonly used commercial goods and services. To be awarded a MAS contract, and thereby gain access to the broad government marketplace and the ease of administration that comes from selling to hundreds of government purchasers under one central contract, contractors must agree to disclose commercial pricing policies and practices, and to abide by the contract terms.
The settlement resolves allegations that, in contract negotiations and over the course of the contract’s administration, Oracle knowingly failed to meet its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, including discounts offered to other customers, and that Oracle knowingly made false statements to GSA about its sales practices and discounts. The settlement further resolves allegations that Oracle knowingly failed to comply with the price reduction clause of its GSA contract by not disclosing to GSA discounts Oracle gave to its commercial customers when they were higher than the discounts that Oracle had disclosed to GSA, and by failing to pass those discounts on to government customers. Because of these allegedly fraudulent dealings, the United States alleges that it accepted lower discounts and ultimately paid far more than it should have for Oracle products.
“Companies that in engage in unlawful or fraudulent practices to secure government business undermine the integrity of the procurement process and create an unfair advantage against the majority of companies that are playing by the rules,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Resolutions like this one – the largest GSA false claims settlement in history – demonstrate our commitment to ensure taxpayers are not overpaying for the products and services they receive.”
“To get access to hundreds of government purchasers, companies participating in the Multiple Award Schedule program must disclose their best prices,” said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. “Today’s agreement shows that we are committed to protecting taxpayer money by ensuring that these companies live up to their end of the bargain.”
“It’s more important now than ever before to make sure that taxpayer dollars are not wasted on higher prices,” said U.S. GSA Inspector General Brian Miller. “We will not let contractors victimize the taxpayers by hiding their best prices.”
The settlement resolves a lawsuit filed on behalf of the U.S. government by former Oracle employee, Paul Frascella, who will receive $40 million as his share of the recovery in the case. Under the whistleblower provisions of the False Claims Act, private citizens can bring lawsuits on behalf of the United States and share in any recovery obtained by the government.
This settlement was the result of a coordinated effort by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Virginia and GSA’s Office of Inspector General in investigating the allegations and litigating the case.
The Justice Department’s total recoveries in False Claims Act cases since January 2009 exceed $7.8 billion.
Member of United Aryan Brotherhood Pleads Guilty to a Hate Motivated Assault of Jewish Inmate in TexasRead the Press Release
WASHINGTON – The Justice Department announced today that Timothy Lee York, a 35 year-old, self-proclaimed member of the United Aryan Brotherhood, pleaded guilty to violently assaulting a Jewish inmate at a federal correctional facility in Texas.
York, of Fountain Valley, Calif., pleaded guilty to assault with a dangerous weapon before U.S. Magistrate Judge Irma C. Ramirez in federal court in Dallas, Texas.
York admitted in court that on Dec. 28, 2007, he attacked Stuart Rosoff, his Jewish cellmate, while Rosoff was sleeping. York admitted that he used a dangerous weapon, a ligature that he placed around Rosoff’s neck, to forcibly pull Rosoff to the floor where he lost consciousness. Once Rosoff was on the floor, York repeatedly kicked Rosoff in the head and punched him in the head and body. York acknowledged that he attacked Rosoff because he was Jewish.
“The Department of Justice will not hesitate to prosecute those who assault others because of their race or religion,” said Thomas E. Perez, Assistant Attorney General for Civil Rights Division.
Sentencing is scheduled for Feb. 6, 2012, before Judge Sam A. Lindsay. The case was investigated by the Dallas Division of the FBI, and is being prosecuted by Trial Attorneys Jared Fishman and Ryan Murguía of the Department of Justice’s Civil Rights Division.
Massachusetts Man Pleads Guilty to Receiving and Possessing Child PornographyRead the Press Release
WASHINGTON – A Springfield, Mass., man pleaded guilty today to receiving and possessing child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Robert Rosenbeck, 48, pleaded guilty before U.S. District Judge Denise J. Casper in Boston to one count of receipt of child pornography and two counts of possession of child pornography. He was indicted on those charges on Dec. 10, 2009.
According to court documents, Rosenbeck possessed two different computers containing child pornography in 2007. Additionally, from approximately July 22, 2007, to July 25, 2007, Rosenbeck received computer files containing child pornography from an Internet website.
At sentencing, scheduled for Dec. 5, 2011, Rosenbeck faces a maximum statutory sentence of 20 years in prison for the receipt of child pornography count and 10 years in prison for each count of possession of child pornography. Rosenbeck also faces a term of supervised release of at least five years and up to life.
The case is being prosecuted by Trial Attorneys Alecia Riewerts Wolak and Michael W. Grant of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The investigation was conducted by the FBI with assistance provided by the Springfield Police Department.
Former Columbus County, N.c., Detention Center Sergeant Pleads Guilty to Civil Rights ViolationRead the Press Release
WASHINGTON – A former Columbus County, N.C., Sherriff’s Office sergeant pleaded guilty today in federal court in Greenville, N.C., to a civil rights charge related to the assault of a detainee, the Justice Department announced.
Danny Ray Duncan, 63, pleaded guilty to willfully depriving a pretrial detainee of his constitutional right not to be deprived of liberty without due process of law by placing a detainee at risk of serious harm from other inmates knowingly and with reckless disregard for his safety.
“When corrections officers knowingly place the people they are charged with protecting at risk of serious harm, they undermine the very fabric of our legal system,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division of the Justice Department. “The Civil Rights Division will aggressively prosecute these violations of our laws.”
“The public has placed a great trust in law enforcement, and we must do everything we can to ensure that trust is not broken,” said Thomas G. Walker, U.S. Attorney for the Eastern District of North Carolina. “Our office remains committed to promoting a high standard of professionalism throughout the law enforcement community in this district.”
During his guilty plea, Duncan admitted that on Aug. 2, 2010, while working the overnight shift as a sergeant in the Columbus County Detention Center in Whiteville, N.C., he placed a pretrial detainee into a cell knowing there was a substantial risk that the inmates in the cell would assault the detainee. Duncan further admitted that he acted with deliberate indifference to the risk of assault, and that the detainee suffered bodily injury as a result of the assault.
Sentencing for Duncan is expected to be scheduled for January 2012. He faces up to 10 years in prison and a maximum fine of $250,000.
On Aug. 24, 2011, a federal grand jury in Wilmington, N.C., returned an indictment, charging former inmate Terry Lashavious McMillian, 26, for his role in assaulting the detainee. The trial of McMillian is set to begin in Greenville on Nov. 8, 2011.
This case was jointly investigated by the Wilmington office of the FBI Charlotte Division and the North Carolina State Bureau of Investigation. The case is being jointly prosecuted by Assistant U.S. Attorney Toby W. Lathan from the U.S. Attorney's Office for the Eastern District of North Carolina and Trial Attorney Ryan R. McKinstry from the Civil Rights Division of the U.S. Department of Justice.
5 October 2011
Superseding Indictment Filed in $670 Million Fraud SchemeRead the Press Release
WASHINGTON –A Costa Rican company, its president and its auditor were charged in a superseding indictment filed yesterday in U.S. District Court in Richmond, Va., for their alleged roles in a $670 million fraud scheme involving victims throughout the United States and abroad. The company allegedly sold reinsurance bonds to life settlement companies.
The charges were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division.
The superseding indictment charges Costa Rican-based Provident Capital Indemnity Ltd. (PCI), Minor Vargas Calvo, 60, and Jorge Castillo, 56, each with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. In addition, Vargas is charged with three counts of money laundering. The superseding indictment also seeks forfeiture of more than $40 million from all three defendants. Vargas was arrested on Jan. 19, 2011, at the John F. Kennedy International Airport in New York, and Castillo was arrested on Jan. 20, 2011, in New Jersey. Vargas and Castillo have been incarcerated pending a scheduled Feb. 13, 2012, trial.
According to the superseding indictment, Vargas, a citizen and resident of Costa Rica, is the president and majority owner of PCI, an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. Castillo, a resident of New Jersey, is the purported independent auditor for PCI. If convicted, Vargas and Castillo face up to 20 years in prison on each fraud count and up to 10 years in prison on each money laundering count.
The defendants allegedly engaged in a scheme to defraud clients and investors by making misrepresentations and omissions designed to mislead PCI’s clients and potential clients regarding its ability to pay claims when due on the financial guarantee bonds that PCI issued. PCI issued these bonds to companies that sold life settlements or securities backed by life settlements to investors. These companies then allegedly used PCI’s bonds to claim that they had eliminated one of the primary risks of investing in life settlements, namely the possibility that the individual insured by the underlying life insurance policy will live beyond his or her life expectancy.
The superseding indictment alleges that from 2004 through 2010, PCI sold approximately $670 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany, Canada and elsewhere. PCI’s clients, in turn, sold investment offerings backed by PCI’s bonds to thousands of investors around the world. Purchasers of PCI’s bonds were allegedly required to pay up-front payments of six to 11 percent of the underlying settlement as “premium” payments to PCI before the company would issue the bonds.
This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and FBI, with assistance from the Virginia State Corporation Commission, the Texas State Securities Board and the New Jersey Bureau of Securities. This case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica Aber Brumberg of the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr. of the Criminal Division’s Fraud Section.
The U.S. Securities and Exchange Commission (SEC) conducted a parallel investigation and in January 2011 filed a parallel civil enforcement action against PCI, Vargas and Castillo. The department thanks the SEC for its assistance in this matter.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia specifically. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the 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.
Repeat Sex Offender Sentenced to Life in Prison in Delaware for Child Exploitation OffensesRead the Press Release
WASHINGTON – A Delaware man was sentenced today to life plus 10 years in prison for child exploitation offenses, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the District of Delaware Charles M. Oberly, III.
Paul Edward Pavulak, 67, of New Castle, Del., was sentenced by U.S. District Judge Sue L. Robinson in Wilmington, Del. On Sept. 27, 2010, Pavulak was convicted by a federal jury of one count of attempted production of child pornography, one count of attempted enticement and coercion of a minor to engage in sexual activity, one count of possession of child pornography, one count of failure to register and update a registration as a sex offender, and one count of committing a felony offense involving a minor while being required to register as a sex offender. Pavulak was indicted on these five counts on April 16, 2009.
According to evidence presented at trial, from September 2008 to January 2009, Pavulak developed an online relationship with a young woman in the Philippines who had a two-year-old daughter. In December 2008, Pavulak traveled to the Philippines and met the woman and her daughter. Using his digital camera, Pavulak produced a sexually explicit movie of himself and the woman, and described the movie as the two-year-old girl’s “training video.” Following his return to the United States in January 2009, Pavulak attempted to produce child pornography of the two-year-old girl via a web camera during an online instant chat message exchange with the woman.
On Jan. 19, 2009, the Delaware State Police executed a search warrant at a concrete company’s office in New Castle, where Pavulak had been living and working. During the search, Delaware State Police seized digital media evidence, including computers, a camera and a mobile phone. Upon review of the seized materials, investigators discovered thousands of images depicting the sexual abuse of minors on the computers. These images included depictions of children ranging in age from infancy to mid-teens engaging in sexual acts with adult males. On a mobile phone and a computer, the investigators also found sexually explicit communications between Pavulak and the woman regarding her daughter, in which they discussed having the woman prepare the child to engage in sexual activity with Pavulak when he returned to the Philippines.
Evidence at trial established that Pavulak was convicted in 1998 and 2005 of second degree unlawful sexual contact with minors. As a result of these convictions, federal and state law required Pavulak to register as a sex offender and to provide the registry with the address of his employer and his residence. Between July 2008 and January 2009, Pavulak consistently reported to the Delaware State Police that he was unemployed and that he lived in a motel. Evidence at trial showed that Pavulak worked for a concrete company owned by his children and also resided in a room at the company’s office.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. 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, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Trial Attorneys Bonnie L. Kane and Andrew McCormack of the Criminal Division’s CEOS and Assistant U.S. Attorney Edward J. McAndrew of the District of Delaware. The case was investigated by the Delaware State Police’s Child Predator Task Force and High Technology Crimes Unit, and U.S. Immigration and Customs Enforcement, Homeland Security Investigations.
New Mexico Man to Receive Life Prison Sentence After Conviction on Kidnapping Charge Related to Death of 16-Year-OldRead the Press Release
WASHINGTON – Larry Lujan, 33, will receive a life prison sentence for a kidnapping that resulted in the death of a 16-year-old, after a federal jury today announced it could not reach a unanimous decision on whether to impose the death penalty, announced U.S. Attorney Kenneth J. Gonzales for the District of New Mexico and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Lujan, originally from Chamberino, N.M., was charged with the capital offense of kidnapping resulting in death. The guilt or innocence phase of the capital trial began on July 18, 2011, and concluded on Aug. 9, 2011, when the jury found Lujan guilty of kidnapping and fatally stabbing Dana Joseph “Joe” Grauke Jr., after deliberating two-and-a-half hours. The “eligibility” stage of the penalty phase of the trial was conducted on Aug. 11, 2011, and the jury found Lujan eligible for a death sentence in less than two hours. The “selection” stage of the penalty phase began on Aug. 29, 2011, and concluded today when the jury said it was unable to reach a unanimous verdict on whether Lujan should be sentenced to death. Because the jury did not unanimously reach a decision on the death penalty, Lujan will receive a sentence of life of prison. The court has not yet scheduled a date for the imposition of the sentence.
According to the evidence and testimony presented at trial, Lujan targeted 16-year-old Grauke for attack because he failed to pay a $600 “tax” to Lujan for selling marijuana in a neighborhood in San Antonio that Lujan considered his “turf.” The evidence established that on March 7, 2005, Lujan led a group of teenagers in breaking into Grauke’s home in San Antonio, where they ransacked the residence; beat and tortured Grauke for several hours; and then transported Grauke, who was bound, gagged and blindfolded, in the luggage compartment of a sport utility vehicle to Anthony, N.M. Approximately 36 hours after kidnapping Grauke, Lujan stabbed the teenager nine times in the back and cut his throat so deeply that his head was almost severed from his body. Grauke’s body was found on March 20, 2005, in an irrigation ditch.
During the penalty phase of the trial, the jury heard testimony about Lujan’s role in the stabbing deaths of a Chamberino couple in 1998. The double homicides also were related to a drug dealing dispute. Lujan faces first degree murder charges for that double homicide in a separate state case.
The case was investigated by the FBI; the Dona Ana County, N.M., Sheriff’s Office and the San Antonio Police Department. It is being prosecuted by Assistant U.S. Attorneys Maria Y. Armijo and Mark A. Saltman for the District of New Mexico, and Trial Attorney Michael S. Warbel of the Criminal Division’s Capital Case Unit.
Justice Department Announces More Than $130 Million in Cost Saving and Efficiency Measures to Utilize Resources More EffectivelyRead the Press Release
WASHINGTON – As part of Attorney General Eric Holder’s call for cost-cutting measures to streamline operations and reduce spending during a time of constrained funding, the Department of Justice today announced that it will realign functions in various offices, lower lease costs by consolidating or reducing office space and continue to look for ways to more effectively utilize the department’s resources. The measures respond to the President’s and the Attorney General’s directives to reduce spending and to develop operational efficiencies. The total cost savings for the actions announced today total more than $130 million.
In January 2011, Attorney General Holder issued a memorandum ordering a department-wide temporary hiring freeze and also instructed all components to limit travel, training and conference spending to only those needs that are essential. The department’s efforts have yielded significant reductions in conference spending in the first three quarters of Fiscal Year 2011, with conference spending down by $14 million over the same period last year. The Attorney General’s order, which is still in place, was designed to keep the department operating effectively within constrained funding levels.
“The Department of Justice is seeking ways to do more with less while we maintain our commitment to our critical law enforcement mission and our most important public safety priorities,” said Attorney General Holder. “These cost-saving and efficiency measures have assisted us in utilizing our limited resources in the most effective way possible. We will continue to identify additional areas where we can achieve savings and efficiencies to streamline our operations.”
Deputy Attorney General James M. Cole provided further guidance to component heads in a February 2011 memorandum seeking operational and programmatic efficiencies in order to ensure sufficient funding for the department’s essential public safety missions, including protecting Americans against terrorism and threats to national security, and protecting against violent crimes.
The department highlighted the success of the Attorney General’s Advisory Council for Savings and Efficiencies (SAVE Council), which thus far, has provided more than $51 million in savings to the department. The SAVE Council, which was created in July 2010, provides a framework to identify and implement best practices for saving taxpayer money, realizing efficiencies, and monitoring the department’s savings progress. The following are examples of additional SAVE Council actions:
Administrative Notices on Forefeiture.gov – An initiative is underway to publish administrative asset forfeiture notices on the Internet instead of in newspapers. This initiative will reduce costs by $4.5 million annually, simplify the noticing process, and increase the availability of information to the public – ensuring that more of the ill-gotten gains from criminal activities will be available to fight crime.
Permanent Change of Station Reform – The department has revised a longstanding policy that provides benefits to employees when they are reassigned from one duty station to another. The new policy limits the number of days an employee may be reimbursed for temporary quarters expenses to 60 days from 120 days. This change will save the department approximately $10.3 million per year.
Debt Collection – The department administers a Nationwide Central Intake Facility where federal agencies can refer delinquent debt in accordance with the Debt Collection Improvement Act, for judgment or enforced collection. The department is the collector of last resort, and most claims referred to the NCIF have undergone multiple collection attempts. The department has negotiated an agreement with the Internal Revenue Service that will increase our efficiency in locating debtors and collecting the money that is owed to the Treasury and various federal agencies.
In addition to the SAVE Council actions, more than $50.4 million in other savings and efficiency measures have been implemented or are proposed:
- Eliminate the Drug Enforcement Administration’s (DEA) Mobile Enforcement Teams and reassign the 145 positions associated with the teams to fill vacancies with the DEA fee-funded Diversion Control Program to better support DEA’s mission. This results in a savings of up to $39 million.
- Consolidate Antitrust Division field office space in Atlanta, Cleveland, Dallas and Philadelphia into the Chicago, New York and San Francisco field offices as well as the division’s Washington, D.C.-based section. Ninety-four positions will be reassigned to the remaining field offices and to the Washington, D.C., section in order to provide additional staffing resources to larger investigations. A savings of nearly $8 million is expected.
- Merge the Justice Management Division’s strategic planning and management functions to increase efficiency and effectiveness. This results in a savings of $1.3 million.
- Reduce the department’s physical footprint by consolidating sub-regional office locations, better use existing workspace and enhance information sharing. The department has been actively reviewing the leasing plans to reduce the scope of both current and prospective projects, and several planned office moves have been cancelled. The department is also reducing office, parking and warehouse facility floor space. Office locations are still to be determined. Actions underway include the following:
· FBI – Twelve sub-regional offices will be reduced or consolidated resulting in a $674,000 savings.
· DEA – Up to seven sub-regional offices will be consolidated resulting in a $395,000 savings.
· U.S. Marshals Service – Sub-regional office space will be reduced or consolidated resulting in a $381,000 savings.
· Bureau of Alcohol, Tobacco, Firearms and Explosives – Five sub-regional offices will be consolidated resulting in a $292,000 savings.
· U.S. Attorneys – Field office space will be reduced and consolidated resulting in a $200,000 savings.
· U.S. Trustee Program – Four sub-regional offices will be reduced or consolidated resulting in an $180,000 savings.
“Consolidating and eliminating unnecessary office space complies with President Obama’s order to dispose of unneeded federal real estate, which saves American taxpayer dollars,” Attorney General Holder added.
The department said that some of these cost savings may be immediate while others may not be realized until future fiscal years.
Johnson & Johnson Subsidiary Scios Pleads Guilty to Misbranding Heart Failure Drug NatrecorRead the Press Release
SAN FRANCISCO – Scios Inc., a subsidiary of pharmaceutical giant Johnson & Johnson, pleaded guilty today to a misdemeanor violation of the Food, Drug and Cosmetic Act (FDCA) for introducing into interstate commerce its heart failure drug, Natrecor, for a use that was not approved by the Food and Drug Administration (FDA), the Justice Department announced. The district court also sentenced Scios, which is based in Fremont, Calif., to pay an $85 million criminal fine in accordance with the plea agreement between Scios and the United States.
Under the FDCA, a company must specify the intended uses of a drug in its new drug application to the FDA. Before approval, the FDA must determine that the drug is safe and effective for the uses proposed by the company in its application. Once the drug is approved, if the manufacturer intends a different use and then introduces the drug into interstate commerce for that unapproved use, the drug becomes misbranded and the introduction into commerce is a criminal violation. The unapproved use is also known as an “off-label” use because it is not included in the drug’s FDA-approved labeling.
In 2001, FDA approved Natrecor for “the intravenous treatment of patients with acutely decompensated congestive heart failure [CHF] who have dyspnea [shortness of breath] at rest or with minimal activity.” The approved labeling for Natrecor did not list any other use, and the drug was not approved by FDA for any other use. Natrecor must be administered intravenously to patients. It is a vasodilator and opens up the blood vessels, which reduces the heart’s workload and may help to improve the acutely decompensated patient’s shortness of breath.
As part of its plea today, Scios admitted that it intended Natrecor to be used off-label for infusing chronic (non-acute) CHF patients on a scheduled, serial basis and that it understood that this was not an approved use of the drug. Scios also admitted that the FDA-approved labeling for Natrecor did not contain any directions for this scheduled, serial use to treat chronic (non-acute) patients.
“Putting misbranded drugs into interstate commerce is serious because it undercuts the FDA’s role in keeping our medicines safe and effective,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “This criminal plea by a major pharmaceutical company and the significant criminal fine imposed demonstrate the Justice Department’s commitment to fighting health care fraud wherever we find it.”
In addition to this criminal matter, the United States has sued Scios and Johnson & Johnson in an on-going related civil case under the False Claims Act in the Northern District of California (U.S. ex rel. Strom v. Scios Inc. and Johnson & Johnson, No. C 05-3004 CRB). In that action, the United States alleges that the companies’ promotion of the scheduled, serial use of Natrecor to treat non-acute heart failure patients caused false claims to be submitted to Medicare and other federal healthcare programs for this unapproved use of Natrecor because it was not a medically accepted and effective use of the drug.
The criminal case was prosecuted by the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Northern District of California, with the assistance of the FDA Office of Chief Counsel. The case was investigated by FDA’s Office of Criminal Investigation, the FBI, the Office of Inspector General of the Department of Health and Human Services, the Department of Veterans Affairs and the Office of Personnel Management.
Former New Orleans Police Officer Sentenced in Danziger Bridge CaseRead the Press Release
WASHINGTON - Former New Orleans Police Department (NOPD) Officer Ignatius Hills was sentenced today by U. S. District Court Judge Martin L.C. Feldman to 78 months in prison. Hills pleaded guilty in federal court on June 4, 2010, to misprision of a felony and to conspiring with fellow officers to obstruct justice by covering up the police shooting that occurred on the Danziger Bridge on Sept. 4, 2005, immediately following Hurricane Katrina.
Hills had previously testified for the United States as a witness in the trial which resulted in convictions of the five NOPD Danziger defendants on civil rights homicide and obstruction-related charges.
On Sept. 4, 2005, just four days after Hurricane Katrina, Hills was one of several officers present during two shooting incidents which left two people dead and four others seriously injured.
In both the factual basis supporting his guilty plea and his testimony at trial, Hills admitted that he signed a sworn statement justifying the arrest of Lance Madison with no first-hand information about any wrongdoing by Madison. Hills also admitted that he conspired with other officers and supervisors to give false statements about the shooting during the investigation of this incident, and he provided false statements to NOPD investigators and to the state grand jury who initially investigated the matter. He additionally admitted and testified that he knew that his fellow officers had knowingly falsified reports and given false statements, in violation of federal law, and failed to report those crimes.
In a separate related matter, U.S. District Court Judge Sarah Vance denied a motion by the government to reduce the eight-year sentence for former NOPD Officer Michael Hunter, who also pleaded guilty and cooperated with the government in the Danziger Bridge case.
The case was investigated by the New Orleans Field Office of the FBI, and was prosecuted by Deputy Chief Bobbi Bernstein and Trial Attorney Forrest Christian of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Theodore Carter for the Eastern District of Louisiana.
Department of Justice Awards More Than $243 Million to Hire New OfficersRead the Press Release
WASHINGTON –Attorney General Eric Holder today joined Cincinnati Mayor Mark Mallory and Director of the Office of Community Oriented Policing (COPS) Bernard Melekian to announce more than $15 million in grant awards to agencies in Ohio through the 2011 COPS Hiring Program. In total, more than $243 million in grants will be awarded nationwide to 238 law enforcement agencies and municipalities to hire new officers and deputies.
The COPS Hiring Program is a competitive grant program that provides funding directly to state, local and tribal law enforcement agencies to hire police officers dedicated to addressing specific crime and disorder challenges confronting communities. The grants provide 100 percent funding for the entry-level salaries and benefits of newly-hired, or rehired, full-time officer positions over a three-year period.
“Block by block – city by city, department by department, the administration is determined – absolutely determined – to help build capacity, to enable our law enforcement partners to make the most of precious resources and to encourage their most promising and effective public safety efforts,” said Attorney General Holder.
For the 2011 COPS Hiring Program, 2,712 applications were received requesting more than $2 billion and 8,999 positions. Funding decisions were based on an agency’s commitment to community policing, crime rates, changes in law enforcement budgets and other local fiscal data (poverty, unemployment, foreclosure rates, etc.).
“Cities across the country are dealing with numerous challenges and we are pleased to be able to assist their public safety efforts,” said Director Melekian. “Creating and maintaining jobs is a key part of this program. This funding helps support local departments in their efforts to increase their ranks, enhance their relationship with the community and directly address their public safety concerns.”
The 2011 COPS Hiring Program awards will create or help preserve 1,021 sworn law enforcement positions. The jobs created, preserved, or refilled with COPS Hiring Program funds will advance community policing at the local level and contribute greatly to the quality of life of the citizens in each community.
The COPS Office is a federal agency responsible for advancing community policing nationwide. For additional information about the COPS Hiring Program, and to view a list of municipalities that received grants, visit the COPS website at www.cops.usdoj.gov.
4 October 2011
Rhode Island Jewelry Store Owner Pleads Guilty to Filing a False Tax ReturnRead the Press Release
WASHINGTON - Karen St. Pierre of Barrington, R.I., pleaded guilty before Judge John J. McConnell Jr. in the District of Rhode Island to one count of willfully filing a false individual tax return, the Department of Justice and the Internal Revenue Service (IRS) announced today.
According to court documents, St. Pierre owned and operated the House of Windsor, a jewelry store in Newport, R.I. In 2004, the House of Windsor generated approximately $632,522 in gross receipts. On April 15, 2005, St. Pierre filed a false individual income tax return that reported, in part, that the gross receipts generated by the store were only $281,780. As a result of this material false statement, St. Pierre failed to pay approximately $64,595 in taxes.
St. Pierre faces a maximum sentence of three years in prison, one year of supervised release and a fine of up to $250,000. The court set sentencing for Jan. 6, 2012.
IRS-Criminal Investigation investigated this case and Tax Division Trial Attorneys Tiwana L. Wright and Andrew P. Young are prosecuting the case.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Niagara Falls, New York, Financial Advisor Sentenced to Prison for Promoting and Using Abusive Tax SheltersRead the Press Release
WASHINGTON – Richard Muto was sentenced to 36 months in prison followed by one year of supervised release for corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, the Justice Department and Internal Revenue Service (IRS) announced today. Muto pleaded guilty to the charge in January 2011 after a two-count indictment was filed against him in December 2005.
According to court documents, including the plea agreement, between February 1996 and March 200, Muto was a financial advisor, owning and operating his own business called Tax and Investment Strategies in Niagara Falls, N.Y. Muto admitted that he sold and promoted multi-layered abusive trust schemes on behalf of American Asset Protection based in Palm Beach County, Fla., and later The Aegis Company, based in Palos Hills, Ill.
The scheme as promoted by Muto required the user to purchase and create a series of domestic and foreign trusts and internal business corporations (IBC). The user would subsequently divert personal income into, and place assets into, the purported independent trusts and IBCs to create the impression that the user was relinquishing control of the income and assets through a series of sham paper transactions. The trusts and IBCs, however, secretly remained under the complete control of the user and thus the income and assets diverted into the trusts remained the income and assets of the user. Muto admitted that he knew that the use of the multi-layered trust schemes would cause his clients to file false federal income tax returns with the IRS. He also admitted that he misrepresented to clients and potential clients that, by using the multi-layered abusive trust scheme the clients could legitimately reduce or eliminate their federal income taxes.
According to the plea agreement, Muto also counseled clients to submit frivolous correspondence to the IRS in response to audit notices as a way to intimidate IRS revenue agents and thwart IRS audits of the trusts he was promoting. In addition to promoting the trusts, Muto used the abusive trusts himself, which resulted in his filing of false individual income tax returns for the tax years 1996, 1997 and 1998.
According to the plea agreement, Muto’s scheme caused a tax loss to the United States of more than $1.7 million.
In May 2008, a federal jury in Chicago convicted the six Aegis principals who ran the nationwide scheme out of Palos Hills, and with whom defendant had a business relationship to promote the trusts.
Principal Deputy Assistant Attorney General John A. DiCicco commended the IRS Special Agents who investigated the case, as well as Tax Division Assistant Chief John Kane and Trial Attorneys Jeffrey Shih and Thomas Flynn who prosecuted the case.
More information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Justice Department Prevails in Three Tax Shelter Cases on Same DayRead the Press Release
WASHINGTON – Three federal courts have issued decisions in favor of the United States in three separate cases involving abusive tax shelters, the Justice Department announced today. All of the court opinions were issued on Sept. 30, 2011.
In Southgate Master Fund LLC v. United States, the U.S. Court of Appeals for the Fifth Circuit, based in New Orleans, affirmed a lower court ruling that a company formed by billionaire Dallas banker D. Andrew Beal and others was a sham partnership that must be disregarded for federal income tax purposes. In an opinion authored by Judge Patrick E. Higginbotham, the court of appeals disallowed the company’s attempt to allocate approximately $200 million in income tax deductions to Beal. The deductions allegedly resulted from Beal’s acquiring (through a company that was treated as a partnership for tax purposes) a portfolio of non-performing Chinese debt for less than $20 million, disposing of the portfolio and generating more than $1 billion in artificial paper losses approximately equivalent to the debt’s face value. The court of appeals also affirmed the lower court’s disallowance of monetary penalties that the Internal Revenue Service (IRS) had sought to impose, while noting that the penalty issue was “a close one.”
In Pritired 1 LLC v. United States, Judge John A. Jarvey of the U.S. District Court for the Southern District of Iowa prohibited Principal Life Insurance Co. from claiming more than $20 million in foreign tax credits that the company had sought based on a complex transaction involving a $300 million payment to two French banks. The court determined that the transaction, which was designed by Citibank, was actually a loan rather than an equity investment, lacked economic substance, lacked a business purpose beyond using foreign tax credits and violated a Treasury Department “anti-abuse” regulation. Throughout its detailed opinion, the court emphasized the inability of Principal or Citibank to articulate any business purpose for the key aspects of the transaction, except to garner tens of millions of dollars in tax credits.
Finally, in WFC Holdings Corporation v. United States, Judge John R. Tunheim of the U.S. District Court for the District of Minnesota disallowed a tax refund claim for more than $80 million filed by a subsidiary of Wells Fargo & Co. The claim was based on an alleged capital loss deduction of more than $420 million stemming from a transaction involving the transfer of “underwater” commercial leases to a Wells Fargo subsidiary and a related sale of stock to Lehman Brothers, Inc. The court concluded that the transaction was actually a sham tax shelter that Wells Fargo had purchased from accounting firm KPMG LLP for $3 million and that it had no business purpose other than tax avoidance.
“These three significant decisions are further evidence that the courts will not countenance abusive tax shelters, no matter who designs them or how complicated they are,” said John A. DiCicco, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division. “Large corporations and wealthy individuals should think twice before pouring money into these sham arrangements.”
Principal Deputy Assistant Attorney General DiCicco thanked all of the Tax Division and IRS attorneys and investigators involved in these cases for their efforts.
More information about the Tax Division’s enforcement efforts can be found on the Division’s website .
Former EPA-CID Special Agent in Texas Pleads Guilty to Perjury and Obstruction of JusticeRead the Press Release
WASHINGTON — A former special agent with the Environmental Protection Agency (EPA), Criminal Investigation Division (CID) in Dallas has pleaded guilty to lying under oath and obstructing justice, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Inspector General Arthur A. Elkins Jr. of the EPA’s Office of the Inspector General (OIG).
Keith Phillips, 61, of Kent, Texas, pleaded guilty yesterday before U.S. District Judge Richard T. Haik Sr. in the Western District of Louisiana to a two-count indictment charging him with obstruction of justice and perjury. The charges stemmed from his sworn testimony in relation to a case that was pending in the Western District of Louisiana.
According to the indictment, from September 1996 to Dec. 14, 1999, Phillips and a special agent from the FBI participated in a criminal investigation that led to the indictment of Hubert Vidrine Jr. and several others. The criminal charges against Vidrine were ultimately dismissed, and Vidrine, in turn, filed a civil lawsuit against the United States for malicious prosecution. In pleading guilty, Phillips admitted that during a deposition taken in the course of Vidrine’s civil suit, Phillips falsely testified that he did not have an affair with the FBI special agent, when, in fact, he did. Phillips admitted that he was aware the proceedings in the civil case were pending on the day he testified and that the existence of the extramarital affair was material to the civil lawsuit. According to a ruling in the civil case on Sept. 30, 2011, the court found that the “inappropriate affair” was highly relevant and material to those proceedings.
In addition, according to court documents, Phillips contacted the FBI special agent on at least three occasions to ensure the special agent knew that Phillips had testified that their relationship was purely professional, when in fact, it was not.
Specifically, Phillips admitted that he testified knowingly and dishonestly about the affair with the specific intent to undermine the due administration of justice. Phillips also admitted that he tried to influence, obstruct and impede the civil suit by testifying falsely that he did not have an extramarital affair with the FBI special agent.
Phillips faces a maximum of 10 years in prison and a fine of $250,000 on the obstruction of justice count, and five years in prison and a fine of $250,000 on the perjury count. A sentencing date has not yet been scheduled by the court.
The case is being prosecuted by Marquest J. Meeks and Richard Evans of the Criminal Division’s Public Integrity Section. The case was investigated by the EPA OIG, Office of Investigations.
Danfoss Group Subsidiary Agrees to Plead Guilty for Role in Price-Fixing Conspiracy Involving Refrigerant CompressorsRead the Press Release
WASHINGTON — Danfoss Flensburg GmbH, formerly Danfoss Compressors GmbH, has agreed to plead guilty and to pay a $3 million criminal fine for its role in an international conspiracy to fix the prices of light commercial compressors, a type of refrigerant compressor used in devices such as water coolers and vending machines, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court in Detroit, Danfoss Flensburg GmbH, a German subsidiary of the Danfoss Group, a Danish corporation, participated in a conspiracy to fix the prices of light commercial compressors sold in the United States and elsewhere from as early as Oct. 14, 2004, and continuing until about Sept. 6, 2007. According to the plea agreement, which is subject to court approval, Danfoss agreed to cooperate with the department’s ongoing refrigerant compressor investigation.
Refrigerant compressors take in low-pressure refrigerant, compress it and then pump out a high-pressure vapor, which condenses and subsequently cools devices such as water coolers and vending machines.
“The department’s investigation into the international conspiracy to fix the prices of refrigerant compressors is ongoing,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “We are committed to ensuring open and fair competition in the refrigerant compressors market.”
According to the charge, Danfoss and co-conspirators carried out the conspiracy by agreeing during meetings and conversations to coordinate prices of light commercial compressors sold in the United States and elsewhere. As a part of the conspiracy, Danfoss and co-conspirators exchanged information on sales of light commercial compressors to monitor and enforce adherence to the agreed-upon prices.
Danfoss is charged with price fixing in violation of the Sherman Act, which carries a maximum $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Danfoss is the third company to be charged in the department’s investigation of the international conspiracy to fix the prices of refrigerant compressors. On Nov. 15, 2010, Panasonic Corporation pleaded guilty and was sentenced to pay a $49.1 million criminal fine and on Dec. 16, 2010, Embraco North America Inc. pleaded guilty and was sentenced to pay a $91.8 million criminal fine. In addition, on Sept. 27, 2011, three former executives – Ernesto Heinzelmann of Empresa Brasileira de Compressores S.A.; Gerson Verissimo of Tecumseh do Brasil Ltda.; and Naoki Adachi of Panasonic – were charged with participating in a conspiracy to coordinate price increases for refrigerant compressors to customers in the United States and elsewhere.
The department’s ongoing investigation into the worldwide refrigerant compressors market is being conducted by the Antitrust Division’s Cleveland Field Office and the FBI’s Detroit Field Office, Ann Arbor, Resident Agency. Anyone with information concerning price fixing in the refrigerant compressor industry should call the Antitrust Division’s Cleveland Field Office at 216-687-8400 or visit www.justice.gov/atr/contact/newcase.htm.
Chicago Lawyer Barred from Promoting Tax Shelters Generating $370 Million in Sham DeductionsRead the Press Release
WASHINGTON – A federal court has permanently barred John E. Rogers and two of his companies, Sugarloaf Fund LLC and Jetstream Business Limited, from promoting tax shelters that allegedly use distressed Brazilian debt to lower customers’ reported income improperly, the Justice Department and Internal Revenue Service (IRS) announced today. Judge Samuel Der-Yeghiayan of the U.S. District Court for the Northern District of Illinois signed the civil injunction order, to which Rogers consented without admitting the allegations against him.
According to the government complaint , Rogers, a Chicago tax lawyer and former partner at Seyfarth Shaw LLP, designed and promoted three similar scams – the Distressed Asset Debt (DAD), Distressed Asset Trust (DAT) and 743(f) tax shelters – that used hundreds of millions of dollars of low-value, “distressed” debt owed to Brazilian retail companies. In all three of the schemes, according to the injunction suit, Rogers falsely told U.S. customers that the distressed Brazilian debt was highly valuable, that the Brazilian retail companies were real “partners” in Sugarloaf, that hundreds of entities Rogers formed and used in the transactions were genuine companies, and that the customers – after paying Rogers – could claim huge purported losses from the Brazilian debt. The losses were allegedly used to offset the customers’ unrelated U.S. income, with the resulting tax savings far exceeding what the customers had paid Rogers.
In fact, the complaint alleges, the debt was virtually worthless when it was purchased; the retail companies were never genuine partners but simply sold Sugarloaf the distressed debt for pennies on the dollar; the hundreds of companies that Rogers formed and controlled were sham entities that performed no business functions; and the supposed tax losses never existed.
The suit alleged that Rogers’s DAD and DAT schemes generated more than $370 million in improper tax deductions. The IRS listed the DAT and similar tax shelters as tax avoidance transactions in 2008, which required all material advisors of such schemes to disclose their activities to the IRS, obtain IRS reportable-transaction numbers for those transactions, and furnish the reportable-transaction numbers to their customers. Customers would then know they were participating in a reportable transaction and that the reportable-transaction number had to be disclosed on their next-filed tax return. Under federal tax law, customers who fail to include a reportable-transaction number with their returns as required are subject to substantial monetary penalties. Under the injunction order, Rogers, whom the complaint alleges failed to comply with the listed-transaction requirements, must now mail copies of the injunction order to all persons who engaged in any of the three transactions described in the complaint during or after 2003.
“The Justice Department is committed to exposing and shutting down fraudulent tax shelters and their promoters, and injunctions are an important tool in that effort,” said D. Patrick Mullarkey, Acting Deputy Assistant Attorney General for Civil Trial Matters at the Justice Department’s Tax Division. “At the same time,” Mullarkey noted, “taxpayers should be keenly aware that if the tax benefits from a transaction seem too good to be true, they almost always are.”
“Today’s injunction sends the clear message that the IRS aggressively pursues those who allegedly invent new ways to cheat the tax system,” said IRS Deputy Commissioner Steve Miller. “Using sham offshore losses to eliminate income and evade taxes is exactly the type of abusive scheme that we’re committed to combat.”
Mullarkey and Miller thanked Justice Department trial attorneys Nathan Clukey, Gregory Seador, and Mark Milton, who handled the case, and praised the IRS Large Business and International Division for its investigative work and assistance, including IRS Revenue Agent Kimberlee Loren.
In the last decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of abusive or fraudulent tax schemes. Information about these cases is available on the Justice Department website .
Australian Man Pleads Guilty to Accepting Payment as Reward for Steering $15 Million in U.S.-Funded Contracts in AfghanistanRead the Press Release
WASHINGTON - A former senior construction manager who worked as an agent for an intergovernmental organization pleaded guilty today to seeking $190,000 in payments as a reward for steering U.S.-funded contracts in Afghanistan, announced U.S. Attorney Ronald C. Machen Jr. of the District of Columbia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Agency for International Development (USAID) Inspector General Donald A. Gambatesa; Acting Special Inspector General for Afghanistan Reconstruction (SIGAR) Steven J Trent; and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
Neil P. Campbell, 61, of Queensland, Australia, pleaded guilty today before Judge Rosemary M. Collyer in U.S. District Court for the District of Columbia to one count of accepting an illegal payment as an agent of an organization receiving federal funds. Campbell was originally charged on Aug. 19, 2010. He was arrested in New Delhi, India, in October 2010, and extradited to the United States in February 2011. Campbell’s sentencing is scheduled for Dec. 14, 2011.
According to court records, starting in January 2009, Campbell worked in Afghanistan as a contractor and acted as an agent for the International Organization on Migration (IOM). The IOM has received more than $260 million from USAID since 2002 to construct hospitals, schools and other facilities.
In his plea, Campbell admitted that in July 2010, while in Afghanistan, he solicited a one-time cash payment of $190,000 from a subcontractor in Afghanistan as a reward for funneling more than $15 million in reconstruction projects to that subcontractor to build a hospital and a provincial teaching college. In August 2010, Campbell met an undercover USAID investigator posing as the subcontractor’s representative and accepted a $10,000 cash payment. Campbell counted the money and requested that the remaining funds come to him in one payment. In October 2010, Campbell traveled to New Delhi, India, where he believed he would be receiving the remaining $180,000. He was arrested at the New Delhi International Airport by agents of the Indian Central Bureau of Investigation.
“This conviction of an Australian citizen who was extradited from India for corruptly steering the use of U.S. federal dollars in Afghanistan shows the seriousness of our commitment to protecting the American taxpayer,” said U.S. Attorney Machen. “We will continue to deploy investigative resources around the world to ensure that criminals who exploit our generosity are held accountable in an American courtroom.”
“Mr. Campbell steered millions of dollars in taxpayer funds to a subcontractor in Afghanistan and sought illegal riches in return,” said Assistant Attorney General Breuer. “In the name of U.S. reconstruction efforts, he decided to try and cash in. The Justice Department will not tolerate this kind of flagrant corruption, and will continue to hold criminals like Mr. Campbell to account.”
“We will continue in our partnership with other law enforcement agencies to bring the full force of the government against those who seek private gain in the midst of such hard economic times,” said Inspector General Gambatesa. “There is zero tolerance for such abuse of federal funds.”
“ Crimes like this divert money from legitimate uses and undermine the U.S. reconstruction effort,” said Acting SIGAR Trent. “SIGAR agents are proud to have participated in this case, which shows that those who defraud the United States in Afghanistan will be found and brought to justice.”
“In this case an overseas contractor thought that fraudulent activity would go unnoticed, permitting an illegal profit from the American people,” said FBI Assistant Director McJunkin. “Today’s plea is a reminder that taking fraudulent payments and misrepresenting U.S. interests has its consequences.”
Campbell faces a maximum penalty of 10 years in prison and a $250,000 fine. Campbell also agreed in his plea to forfeiture of $10,000, which represents the one illegal payment he received.
The case is being prosecuted by Assistant U.S. Attorney Matthew C. Solomon of the District of Columbia and Trial Attorney Ryan S. Faulconer of the Criminal Division’s Fraud Section. Substantial assistance was provided by former Assistant U.S. Attorney Vasu B. Muthyala, the Department of Justice Criminal Division’s Office of International Affairs, the FBI Legal Attaché and the Judicial Attaché Office in Kabul. The case is being investigated by the USAID Office of Inspector General, the Special Inspector General for Afghanistan Reconstruction, the FBI’s Washington Field Office, and members of 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.
3 October 2011
Virginia Man Pleads Guilty to Trafficking in Illegally-Imported Sperm Whale TeethRead the Press Release
WASHINGTON – Richard M. Ertel, of Spotsylvania, Va., pleaded guilty today in U.S. District Court in Richmond, Va., to the illegal importation and illegal trafficking of sperm whale teeth, the Department of Justice announced.
Ertel pleaded guilty to two felony violations of the Lacey Act for trading in endangered marine mammal parts. Sperm whales are classified as “endangered” under the Endangered Species Act (ESA), and are listed on Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora. It is illegal to import parts of sperm whale teeth into the United States without the requisite permits and certifications, and without declaring the merchandise at the time of importation to U.S. Customs and the U.S. Fish and Wildlife Service.
Sperm whale teeth are commonly used for scrimshaw and can fetch large sums of money from collectors and tourists. Scrimshaw, as defined by the ESA, is any art form which involves the substantial etching or engraving of designs upon, or the substantial carving of figures, patterns or designs from, any bone or tooth of any whale, dolphin or porpoise.
As part of the plea, Ertel admitted that from April 2002 to June 2007, he was in the business of buying and selling sperm whale teeth that he purchased from sources in the Ukraine, and then sold to customers in Virginia and elsewhere in the United States. He admitted to conducting much of his business via the Internet.
As a result of the felony conviction, Ertel could be sentenced up to five years in prison and fined up to $250,000 for each count. Sentencing is scheduled for Jan. 9, 2012.
The case was investigated by agents from the Law Enforcement Offices of the National Oceanic and Atmospheric Administration and U.S. Customs and Boarder Protection. The case is being prosecuted by Assistant U.S. Attorney Dave Maguire of the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Gary N. Donner of the Environmental Crimes Section of the Environment and Natural Resources Division at the Department of Justice.
Special Master Sheila L. Birnbaum Announces Opening of September 11th Victim Compensation FundRead the Press Release
NEW YORK – September 11th Victim Compensation Fund (VCF) Special Master Sheila L. Birnbaum today announced that the fund is officially open for claimants. With today’s opening, potential claimants can now register online, receive a checklist of documents and information that they will need to accompany their claim submission, and access newly updated Frequently Asked Questions. Special Master Birnbaum announced that the VCF will begin accepting claims through its website next month and that the fund’s staff will offer a series of seminars on how to submit claims.
“ Over the past several months, we have laid the foundation for a claims process that is fair, transparent and easy to navigate for those whose lives have been most affected by September 11th, and today I’m pleased to announce that the fund is open for business,” said Special Master Birnbaum. “In the weeks ahead, seminars and resources will be available to assist claimants and their families with the process. The fund will begin accepting claims next month.
“We wanted to get the fund up quickly, but we wanted to do it right. We have done that, and the fund has been made stronger as a result of the constructive suggestions and insights of the hundreds of first responders, area residents and workers I have spoken with during this process.”
Special Master Birnbaum noted in an email to potential claimants and interested parties that they are not required to submit claims on the first day that claim forms are available, and that pro bono counsel are volunteering to assist claimants. Claimants who currently suffer from a covered condition have until Oct. 3, 2013, to file a claim, and others will have two years from the date on which they know or should have known of the condition for which they seek compensation, until the VCF stops accepting claims in 2016.
Birnbaum was appointed as special master by Attorney General Eric Holder on May 18, 2011, and has spent several months meeting with, and receiving feedback from, hundreds of New York-area residents, workers and first responders at town hall meetings held in New York and New Jersey.
The James Zadroga 9/11 Health & Compensation Act reactivated the September 11th Victim Compensation Fund that operated from 2001-2004. The act expands the pool of claimants to include first responders and other individuals in the community who experienced latent physical injuries associated with the attacks or with debris removal.
Additional information about the VCF is available at: www.vcf.gov . To learn more about the eligibility criteria, please visit: www.vcf.gov/faq.html#eli1 . Individuals who wish to receive future communications regarding the VCF should register at www.claims.vcf.gov/welcome.aspx or call 855-885-1555.
Montgomery, Alabama, Woman Pleads Guilty to Using Stolen Identities to Obtain Tax RefundsRead the Press Release
WASHINGTON – Melinda Clayton of Montgomery, Ala., pleaded guilty today to charges of conspiring to defraud the United States by filing false claims, wire fraud and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced.
According to the plea agreement, Clayton admitted that between January and April 2011, she conspired with others to defraud the United States by obtaining or aiding to obtain the payment of false, fictitious and fraudulent claims, in particular by filing false tax returns using stolen identities. Clayton admitted that she and others filed at least 155 fraudulent tax returns using stolen identities and sought at least $494,242 in tax refunds.
Clayton further admitted that she unlawfully obtained and stored at her home tens of thousands of unlawfully obtained names and social security numbers of actual persons from HP Enterprise Services (formerly known as EDS), prisons and health clinics and used these means of identification to prepare and file false tax returns. According to the plea agreement, Clayton admitted that the fraud loss is between $400,000 and $1 million and that the offense involved 250 or more victims. She further agreed to pay restitution in the amount of $494,424.
Sentencing has not yet been scheduled. Clayton faces up to 32 years in prison, three years of supervised release, restitution and a maximum fine of $750,000, or twice the loss caused by the offense.
The case was investigated by Special Agents of the IRS - Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.
Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Minnesota Man Charged with Sexual Exploitation of MinorsRead the Press Release
WASHINGTON - A Minnesota man was charged in an indictment unsealed today in Minneapolis with two counts of aggravated sexual abuse and two counts of abusive sexual contact of a child, 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 (ICE).
According to the indictment, which was returned by a federal grand jury on Sept 20, 2011, Joshua Gardner, 29, sexually abused two boys under the age of 12 on the Kadena U.S. Air Force Base in Okinawa, Japan, between September 1997 and May 2002. During that time period, Gardner resided in Okinawa.
Gardner, who currently lives in Minnesota, was arrested on Sept. 30, 2011, and made his initial appearance today in federal court in Minneapolis. A detention hearing has been scheduled for Oct. 4, 2011.
Gardner faces a maximum penalty of life in prison and a $250,000.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov .
This case is being prosecuted by Trial Attorney Mi Yung Park of CEOS. This case is a result of investigative efforts by the U.S. Air Force, Office of Special Investigations at Moody Air Force Base, Ga., and ICE Homeland Security Investigations (HSI) in Minneapolis.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Sues to Shut Down New Jersey Tax PreparerRead the Press Release
WASHINGTON - The United States has filed a lawsuit seeking to stop Luvander Hollaway from preparing federal tax returns for others, the Justice Department announced today. The civil injunction complaint alleges that Hollaway of Newark, N.J., fails to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on their customers’ returns. According to the complaint, Hollaway also falsifies reported income and lists fake dependents on his customers’ returns in order to claim the maximum EITC for them.
For example, the complaint alleges that, on one customer’s tax return, Hollaway claimed three purported dependents: two grandchildren and a brother. But according to the complaint, Hollaway knew that the listed individuals were not the customer’s grandchildren and that the customer had paid for other persons’ Social Security numbers to use in falsely claiming the supposed grandchildren as dependents. The complaint also alleges that the person listed on the return as a brother was actually the customer’s fiancé, who could not be claimed as a dependent.
According to the complaint, the Internal Revenue Service (IRS) assessed penalties against Hollaway in 2006 for failing to comply with due-diligence requirements, and a follow-up IRS investigation in 2011 revealed continuing failures and fraudulent claims. The government now seeks to bar Hollaway permanently from preparing federal tax returns for others.
The IRS listed return-preparer fraud as one of its “Dirty Dozen” tax scams for 2011. In 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 .