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Monday 11 January 2010
U.S. Army Major Charged with Smuggling Cash from Iraq and Making False StatementsRead the Press Release
U.S. Army Major Charles E. Sublett, 46, of Huntsville, Ala., was arrested today on charges of bulk cash smuggling and making false statements to a federal agency.
Major Sublett was charged in an indictment, returned by a federal grand jury in Memphis, Tenn., on Jan. 5, 2010, and unsealed today following his arrest in Huntsville. According to the indictment, Major Sublett smuggled more than $100,000 in currency, concealed in a shipping package, into the United States from Iraq in January 2005. Major Sublett also allegedly failed to declare that he imported the money.
As alleged in the indictment, from August 2004 through February 2005, Major Sublett was deployed to Balad Regional Contracting Center on Logistical Support Area (LSA) Anaconda in Iraq. LSA Anaconda is a U.S. military installation that was established in approximately 2003 to support U.S. military operations in Iraq. According to the indictment, Major Sublett served as a contracting officer while deployed to LSA Anaconda. As a contracting officer, Major Sublett was responsible for, among other things, evaluating and supervising contracts with companies that provide goods and services to the U.S. Army.
According to the indictment, on approximately Jan. 11, 2005, Major Sublett sent a package from Balad, Iraq, to Killeen, Texas, which was seized by Customs and Border Protection officers in Memphis. The international air waybill for the package said it contained books, papers, a jewelry box and clothes with a total declared customs value of $140 but did not disclose the currency allegedly also contained in the package. According to the indictment, the package also contained $107,900 in U.S. currency and 17,120,000 in Iraqi dinar. Major Sublett allegedly failed to file a Currency or Monetary Instruments Transaction Report (CMIR) as required by federal law when transporting currency in amounts of more than $10,000 into or out of the United States.
The maximum penalty for each of the two charges contained in the indictment – bulk cash smuggling and false statements to a government agency – is five years in prison, and a $250,000 fine, to be followed by a term of up to three years of supervised release.
The indictment also contains a criminal forfeiture allegation. Specifically, if convicted of the bulk cash smuggling charge, Sublett would be ordered to forfeit the $107,900 and 17,120,000 Iraqi dinar he is alleged to have concealed in the package.
An indictment is merely an accusation, and the defendant is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
This case is being prosecuted by Trial Attorneys Daniel A. Petalas and Justin V. Shur of the Criminal Division’s Public Integrity Section. This case is being investigated by Army Criminal Investigation Command; Defense Criminal Investigative Service; the FBI; Internal Revenue Service - Criminal Investigation; the Special Inspector General for Iraq Reconstruction; and U.S. Immigration and Customs Enforcement.
Indictment
Justice Department to Participate in Zoning Disability Casein Richmond Township, MichiganRead the Press Release
WASHINGTON – The Justice Department today filed a brief as a friend of the court in Sacred Heart Rehabilitation Center Inc. v. Richmond Township and Richmond Township Planning Commission, a civil rights case regarding the expansion of an addictive disorders treatment facility in Macomb County, Mich. The government’s brief supports a lawsuit filed by Sacred Heart Rehabilitation Center, which runs a nondenominational charitable services organization to serve indigent individuals with a range of addictive disorders, including alcoholism. The matter is being handled jointly by the Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of Michigan.
In 2007, Sacred Heart applied for a building permit to renovate and expand its existing facility, and to erect a new building. The expansion would allow Sacred Heart to centralize its admission process and to house the Clearview Specialty Women and Children Program, which provides specialized rehabilitative residential care for women who need to bring their children with them into treatment, and pregnant women who have addiction problems and require specialized treatment. Richmond Township, Mich., denied Sacred Heart’s requested zoning permit on Sept. 19, 2007.
Sacred Heart and the United States argue that this denial is the result of unlawful discrimination against persons with disabilities. The township is seeking to have the case dismissed – arguing that the center has no right to seek protection of its civil rights in the federal courts. The United States’ brief argues that because the Americans with Disabilities Act (ADA), the Rehabilitation Act and the Fair Housing Amendments Act are all federal civil rights statutes, plaintiffs in such cases have a clear right to redress in the federal courts.
"The Americans with Disabilities Act ensures that zoning laws cannot be used to discriminate against individuals with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Sacred Heart Rehabilitation Center should have access to the federal courts to make its case that Richmond Township’s actions inappropriately reinforces false stereotypes, myths and fears about persons with addiction disorders."
"Municipalities certainly have the right to enforce their zoning laws, but not in a way that illegally discriminates against people with disabilities," said Barbara McQuade, U.S. Attorney for the Eastern District of Michigan. "We will not hesitate to insure that the civil rights of persons with disabilities are protected, and we have weighed in on this case to assist the Court in interpreting key anti-discrimination statutes."
The full and fair enforcement of the ADA and its mandate to integrate individuals with disabilities is a major priority of the Civil Rights Division and the U.S. Attorney’s Office in the Eastern District of Michigan. The ADA protects individuals with disabilities from discrimination by public entities. People interested in finding out more about the ADA can call the Justice Department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY), or access its ADA Web site at http://www.ada.gov.
Florida Man Sentenced to 90 Months in Prison for Extortion, Making Interstate Threats, Computer Fraud and Identity TheftRead the Press Release
A Florida man has been sentenced to 90 months in prison for making e-mail and telephone threats, including threats intended to cause a candidate for statewide office in Florida to drop out of an election, as well as hacking into e-mail accounts of individuals and companies, and using stolen identity information to commit computer crimes, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Southern District of Ohio Carter M. Stewart.
Kyle J. Tschiegg, 39, of Sarasota, Fla., was sentenced on Jan. 7, 2010, in U.S. District Court in Columbus, Ohio, by Senior U.S. District Judge James L. Graham. Tschiegg was also sentenced to three years of supervised release following his prison term, and was ordered to pay restitution to victims who incurred financial losses responding to Tschiegg’s threats and computer intrusions. Tschiegg pleaded guilty on Sept. 4, 2009, to one count each of interstate transmission of threatening communications, interstate extortion, computer fraud and identity theft.
According to court documents, Tschiegg sent threats via e-mail and cell phone to a group of approximately 40 individuals and businesses in Ohio, Florida and elsewhere, from October 2007 until his arrest in February 2009. At one point, approximately 3,500 e-mail accounts were being copied on the threatening e-mails. Tschiegg admitted he used several methods to conceal his identity, including using his laptop computer to access the Internet through the unsecured wireless networks of his neighbors in Sarasota.
Also according to court documents, Tschiegg hacked into a Florida state legislator’s e-mail account in October 2008. According to court records, Tschiegg used personal information he found about the legislator on the Internet to reset the legislator’s password. Less than two weeks before the Nov. 4, 2008, election, Tschiegg admitted he sent two e-mails threatening to injure the legislator, the legislator’s family and supporters, unless the legislator withdrew from the race.
The charges arose after a six-month investigation, led by the FBI and with assistance from the Sarasota County, Fla., Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Deborah A. Solove for the Southern District of Ohio and Trial Attorney Joseph E. Springsteen of the Criminal Division’s Computer Crime and Intellectual Property Section, with assistance from Assistant U.S. Attorney Laurel Moore of the U.S. Attorney’s Office for the Middle District of Florida.
Attorney General Announces Significant Reforms to Improve Public Safety in Indian CountryRead the Press Release
Attorney General Eric Holder today announced sweeping reforms intended to improve public safety on tribal land. The new directive is part of a larger Justice Department initiative to create better communication and coordination to fight crime and promote justice in Indian Country.
"The public safety challenges we face in Indian Country will not be solved by a single grant or a single piece of legislation," Holder said. "There is no quick fix. While today’s directive is significant progress, we need to continue our efforts with federal, state and tribal partners to identify solutions to the challenges we face, and work to implement them."
The Attorney General directed all U.S. Attorneys’ Offices with districts containing Indian Country (44 out of 93) to: meet and consult with tribes in their district annually; develop an operational plan addressing public safety in Indian Country; work closely with law enforcement to pay particular attention to violence against women in Indian Country and make these crimes a priority; and to provide summaries of their operational plans to the Office of the Deputy Attorney General and make those summaries available to the tribes in their districts .
The Attorney General also announced that the Justice Department’s FY 2010 appropriation includes an additional $6 million for Indian Country prosecution efforts. At least 35 additional Assistant U.S. Attorneys and 12 additional FBI victim specialists will be added in offices with an Indian Country caseload. These new resources will enable the Justice Department to bring the federal justice system closer to Indian Country, including through a Community Prosecution Pilot Project that the Executive Office of U.S. Attorneys is currently developing.
Today’s announcement came out of the recommendations that have been gathered by Department leadership as part of a larger department-wide initiative on public safety in tribal communities. As part of this effort, Deputy Attorney General David W. Ogden and Associate Attorney General Tom Perrelli conducted a series of meetings addressing violent crime in Indian Country. On Oct. 28-29, 2009, Attorney General Holder convened a national tribal leaders listening session in St. Paul, Minn. Also in October, the Justice Department held its annual tribal consultation on violence against women, as required by the Violence Against Women Act of 2005. The department again had the opportunity to engage with tribal leaders on public safety in tribal communities during the White House Tribal Nations Conference in November 2009. In addition to these sessions with tribal leaders, department leadership has conducted meetings with Indian Country experts on law enforcement and public safety efforts.
The districts include: District of Alaska; Southern District of Alabama; District of Arizona; Central District of California; Eastern District of California; Northern District of California; Southern District of California; District of Colorado; District of Connecticut; Southern District of Florida; District of Idaho; Northern District of Iowa; District of Kansas; Western District of Louisiana; District of Maine; District of Massachusetts; Eastern District of Michigan; Western District of Michigan; District of Minnesota; Southern District of Mississippi; District of Montana; District of Nebraska; District of Nevada; District of New Mexico; Eastern District of New York (anticipating federal recognition of the Shinnecock Nation); Northern District of New York; Western District of New York; Western District of North Carolina; District of North Dakota; Eastern District of Oklahoma; Northern District of Oklahoma; Western District of Oklahoma; District of Oregon; District of Rhode Island; District of South Carolina; District of South Dakota; Eastern District of Texas; Western District of Texas; District of Utah; Eastern District of Washington; Western District of Washington; Eastern District of Wisconsin; Western District of Wisconsin; and the District of Wyoming.
A copy of the guidelines, in a memo from Deputy Attorney General David W. Ogden to the relevant U.S. Attorneys, can be found here : http://www.justice.gov/dag/dag-memo-indian-country.html .
Associate Attorney General Perrelli Hosts Town Hall CommemoratingNational Stalking Awareness MonthRead the Press Release
WASHINGTON – As part of the Justice Department’s year-long commemoration of the 15th anniversary of the Violence Against Women Act (VAWA), Associate Attorney General Tom Perrelli today hosted an event with survivors, advocates, law enforcement and judicial officials, and victim service providers to explore stalking behavior, the use of technology in stalking and the intersection between stalking and other crimes such as domestic violence, sexual assault, dating violence and homicide. A panel and town hall discussion was moderated by Paula Zahn, producer and host of Investigation Discovery’s On the Case With Paula Zahn , in honor of National Stalking Awareness Month, held each January. The Department is marking this year with our renewed dedication and a recommitment to ending violence against women," said Associate Attorney General Perrelli. "We must recognize the changing nature of these crimes and develop new strategies for addressing them. This is particularly important with stalking, in which the use of technology by stalkers has become a common practice. We in law enforcement, and our partners in the judiciary, need to adapt in order to stop those who stalk and provide help to victims of stalking." Safety Net: The National Safe and Strategic Technology Project at the National Network to End Domestic Violence ; Linda Major, Executive Director of Domestic Violence Affairs for the Marion County, Indiana prosecutor’s office; and Mark Wynn, former Nashville police officer and national trainer on stalking protocol and procedures.
"This year cannot just be an anniversary – it must be a call to action.
"I am honored to help the Department of Justice bring awareness to the 15th anniversary of the Violence Against Women Act and, specifically stalking awareness," said Paula Zahn. "I have covered the issue of violence against women extensively over my more than 30 years in journalism and I know that it’s critically important that we commemorate how far we’ve come and explore how we can work together to do even more. I am proud to be a voice for this initiative."
Today’s event was presented by the Department’s Office on Violence Against Women (OVW) with the assistance of the National Stalking Resource Center, an OVW grantee. In addition to remarks by Associate Attorney General Perrelli and OVW Acting Director Catherine Pierce, the audience also heard from former Washington Post reporter George Lardner Jr. about the 1992 stalking and murder of his youngest daughter, Kristin, an experience he subsequently wrote about in a Pulitzer Prize-winning series.
Expert panelists included Michelle Garcia, Director of the National Stalking Resource Center; Cindy Southworth, Director of Safety Net: The National Safe and Strategic Technology Project at the National Network to End Domestic Violence ; Linda Major, Executive Director of Domestic Violence Affairs for the Marion County, Indiana prosecutor’s office; and Mark Wynn, former Nashville police officer and national trainer on stalking protocol and procedures.
Each year, approximately 3.4 million Americans are victims of stalking, a crime that is pervasive, dangerous and – far too often – lethal. Nearly three in four stalking victims know their offender in some capacity, and 30 percent of victims are stalked by a current or former intimate partner. While both men and women can be victims of stalking, women are nearly three times more likely to be stalked.
In the past decade, the use of technology by stalkers has become commonplace. According to National Stalking Resource Center, among the most common stalking behaviors that victims experience are unwanted phone calls and messages (66 percent) and unwanted e-mails and letters (31 percent). More than one in four victims report that stalkers have used technology, such as e-mail or instant messaging, to follow and harass them, and one in 13 says stalkers use electronic devices to intrude on their lives.
Today’s event is another installment in the Justice Department’s mission to raise public awareness on issues around violence against women, to build and renew coalitions among federal, state, local and tribal law enforcement and victim services communities, and to end stalking, sexual assault, domestic and dating violence for men, women and children across the country. As part of this public awareness initiative, the Department has encouraged the more than 100 celebrity allies, including Paula Zahn, who have lent their names in support of the Department’s "Join the List" initiative to raise awareness with their fans, through Web and fan sites, and social networking profiles.
The Department’s Bureau of Justice Statistics 2009 report, Stalking Victimization in the United States, is available for download at: http://bjs.ojp.usdoj.gov/content/pub/pdf/svus.pdf.
Friday 8 January 2010
Justice Department Reaches Agreement with New York City to Correct Conditions at Kings County Hospital CenterRead the Press Release
WASHINGTON – The Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of New York today announced that they have entered into an agreement with New York City to correct conditions of confinement at the Kings County Hospital Center’s (KCHC) psychiatric emergency room and psychiatric in-patient units located in Brooklyn, N.Y. The agreement, in the form of a consent judgment, was approved today by U.S. District Judge Kiyo A. Matsumoto.
Under the terms of the consent judgment, New York City will work to ensure that patients at KCHC are safe and receive the care and services necessary to meet their individual needs. The agreement underscores the city’s obligation to actively pursue discharge of patients to the most integrated setting appropriate based on their needs and follow-up services, consistent with the requirements of the Americans with Disabilities Act and the Supreme Court’s ruling in Olmstead v. L.C.. In addition, the city has agreed to undertake a variety of measures, including improving medical and mental health care, and ensuring that patients are free from undue restraint.
A joint investigation of the psychiatric units at KCHC began in December 2007, under provisions of the Civil Rights of Institutionalized Persons Act (CRIPA). The investigation uncovered systemic deficiencies that violated the constitutional and civil rights of patients with psychiatric disabilities. These violations included failure to protect patients from harm, failure to treat the psychiatric disabilities of patients, the use of drugs to sedate rather than treat patients, failure to provide adequate and individualized discharge planning and follow-up services, falsification of patient medical records, and failure to respond promptly to medical emergencies.
These violations and others contributed to the death of at least one patient in June 2008, Esmin Green, who collapsed in the psychiatric emergency room after waiting 23 hours to be seen by a doctor. Green lay on the floor for over an hour while hospital employees, including doctors and security staff, walked in and out of the area, ignoring her condition and making no effort to attend to her. Subsequently, the Justice Department entered into negotiations regarding remedies the city was required to implement to correct unconstitutional conditions at KCHC’s psychiatric service.
"Jurisdictions have a responsibility to protect the constitutional rights of individuals in their care and to protect those individuals from harm. We have worked cooperatively with New York City to craft an agreement that will benefit the lives of persons with disabilities at Kings County Hospital Center," said Thomas E. Perez, Assistant Attorney General in charge of the Civil Rights Division. "We commend Mayor Michael Bloomberg, the Hospital Center, and the New York City Health and Hospitals Corporation for their willingness to work aggressively to remedy these problems."
U.S. Attorney Benton J. Campbell of the Eastern District of New York stated, "This consent judgment is designed to improve the quality of psychiatric care provided to some of our district’s neediest and most vulnerable residents. We thank the city for its cooperation in achieving this important goal."
The agreement provides for regular site visits by a team of experts to assess compliance with the agreement, and that this review and assessment occur regularly over a period of at least five years, until KCHC substantially complies with the consent judgment’s requirements. Settlement documents were filed today in federal court and will be available on the Justice Department Web site http://www.justice.gov.
CRIPA authorizes the U.S. Attorney General to investigate conditions of confinement in certain institutions owned or operated by, or on behalf of, state and local governments. In addition to psychiatric hospitals, these institutions include nursing homes, residential facilities serving persons with developmental disabilities, jails, prisons, and juvenile correctional facilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems. Please visit http://www.justice.gov/crt to learn more about CRIPA and other laws enforced by the Justice Department’s Civil Rights Division.
The investigation was conducted by David Deutsch, Cathleen Trainor, and Laura Welp, Trial Attorneys in the Special Litigation Section of the Civil Rights Division, and Assistant U.S. Attorney Michael J. Goldberger of the Eastern District of New York.
Former Vice President of Texas Company Pleads Guilty to Environmental CrimeRead the Press Release
WASHINGTON—Michael Sayklay, the former vice president of Economy Cash & Carry Inc., a Texas-based grocery wholesaler, pleaded guilty today in federal court in El Paso, Texas, to a criminal violation of the Plant Protection Act, the Justice Department and the Department of Agriculture announced.
Sayklay pleaded guilty to one felony charge for falsifying stamps that certified that wood pallets were heat-treated to prevent infestation, and were suitable for use in international transportation. Sayklay had the false stamp affixed to Economy Cash & Carry Inc., wood pallets which were used to carry products back and forth across the US-Mexican border. The offense took place in March 2006. Sayklay no longer works for the company.
As part of the plea agreement, Sayklay has agreed to pay a fine of $8,000 dollars and serve a term of probation.
The Department of Agriculture requires the heat treatment of wood pallets imported into the United States. The requirement is designed to prevent plant pests that can destroy domestic agriculture and livestock from entering the United States in wood packaging materials. The Department of Agriculture began implementation of the heat treatment requirement of wood packing material in September 2005. Wood pallets that carry products transported within the United States are not required to be heat treated.
Economy Cash & Carry Inc. utilizes wood pallets to transport food products and pharmaceuticals it sells in both the United States and Mexico. Sayklay was the warehouse manager for the El Paso-based company, and was expected to direct the transfer of products destined for Mexico from untreated pallets to treated pallets.
Instead, Sayklay created a copy of a stamp certification utilized by a legitimate wood pallet treating company. Sayklay had hundreds of untreated domestic pallets falsely stamped as if they were treated, saving the time to transfer products between pallets as well as the cost of treatment.
The falsified stamp Sayklay used was smaller than the legitimate stamp. When companies that received the fraudulently stamped pallets from Mexico, sent them to the legitimate stamp owner for repair, the legitimate stamp owner noticed the falsification and notified the government. A follow up investigation by the Department of Agriculture resulted in the seizure of fraudulently stamped pallets at the U.S-Mexican border.
The investigation was conducted by the U.S. Department of Agriculture. It was prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Western District of Texas.
10 Las Vegas Men Indicted for Falsifying Vehicle Emissions TestsRead the Press Release
WASHINGTON—A federal grand jury in Las Vegas today returned indictments against 10 Nevada-certified emissions testers for falsifying vehicle emissions test reports, the Justice Department announced.
Each defendant faces one felony Clean Air Act count for falsifying reports between November 2007 and May 2009. The number of falsifications varied by defendant, with some defendants having falsified approximately 250 records, while others falsified more than double that figure. One defendant is alleged to have falsified over 700 reports.
The individuals indicted include:
- Eduardo Franco, 30
- Alexander Wayne Worster, 27
- William Joseph McCown, 48
- Joseph DeMatteo, 52
- David Eugene Nelson, 46
- Louis Engene Demeo, 50
- Adolpho Silva-Contreras, 47
- Peter Escudero, 47
- Wadji Waked, 24
- Gary Smith, 47
Escudero resides in Pahrump, Nev. All other individuals are from Clark County, Nev.
The 10 defendants are alleged to have engaged in a practice known as "clean scanning" vehicles. The scheme involved entering the Vehicle Identification Number (VIN) for a vehicle that would not pass the emissions test into the computerized system, then connecting a different vehicle the testers knew would pass the test. These falsifications were allegedly performed for anywhere from $10 to $100 over and above the usual emissions testing fee.
The U.S. Environmental Protection Agency (EPA), under the Clean Air Act, requires the state of Nevada to conduct vehicle emissions testing in certain areas because the areas exceed national standards for carbon monoxide and ozone. Las Vegas is currently required to perform emissions testing.
To obtain a registration renewal, vehicle owners bring the vehicles to a licensed inspection station for testing. The emissions inspector logs into a computer to activate the system by using a unique password issued to the emissions inspector. The emissions inspector manually inputs the vehicle’s VIN to identify the tested vehicle, then connects the vehicle for model year 1996 and later to an onboard diagnostics port connected to an analyzer. The analyzer downloads data from the vehicle’s computer, analyzes the data and provides a "pass" or "fail" result. The pass or fail result and vehicle identification data are reported on the Vehicle Inspection Report. It is a crime to knowingly alter or conceal any record or other document required to be maintained by the Clean Air Act.
"Falsifications of vehicle emissions testing, such as those alleged in the indictments unsealed today, are serious matters and we intend to use all of our enforcement tools to stop this harmful practice. These actions undermine a system that is designed to reduce air pollutants including smog and provide better air quality for the citizens of Nevada," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"The residents of Nevada deserve to know that the vast majority of licensed vehicle emission inspectors are not corrupt and are not circumventing emission testing procedures," said U.S. Attorney Bogden. "These indictments should serve as a clear warning to offenders that the Department of Justice will prosecute you if you make fraudulent statements and reports concerning compliance with the federal Clean Air Act."
"Lying about car emissions means dirtier air, which is especially of concern in areas like Las Vegas that are already experiencing air quality problems," said Cynthia Giles, Assistant Administrator for Enforcement and Compliance Assurance at EPA. "We will take aggressive action to ensure communities have clean air."
The maximum penalty for the felony violations contained in the indictments includes up to two years in prison and a fine of up to $250,000.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the EPA, Criminal Investigation Division; and the Nevada Department of Motor Vehicles Compliance Enforcement Division. The case is being prosecuted by the U.S. Attorney’s Office for the District of Nevada and the Justice Department’s Environmental Crimes Section.
Thursday 7 January 2010
Two Individuals Charged with Murder and Other Offenses Related to Shooting Death of Two Afghan Nationals in Kabul, AfghanistanRead the Press Release
Justin Cannon, 27, of Corpus Christi, Texas, and Christopher Drotleff, 29, of Virginia Beach, Va., have been charged with crimes including second-degree murder, attempted murder and firearms offenses while working as contractors for the U.S. Department of Defense in Afghanistan. Cannon and Drotleff were charged under the Military Extraterritorial Jurisdiction Act (MEJA).
The 13-count indictment, returned by a federal grand jury in the Eastern District of Virginia on Jan. 6, 2010, and unsealed today, alleges that on May 5, 2009, in Kabul, Afghanistan, Cannon and Drotleff shot and killed two Afghanistan nationals and wounded a third. The indictment alleges that at the time of the shootings, Cannon and Drotleff were Department of Defense contractors employed by Paravant LLC, which is a subsidiary of Xe (formerly known as Blackwater Worldwide). According to the indictment, as contractors, Cannon and Drotleff provided training to the Afghan National Army for the Islamic Republic of Afghanistan in the use and maintenance of weapons and weapons systems.
Cannon was arrested today in Corpus Christi by FBI agents. Drotleff was also arrested today by FBI agents in Virginia Beach.Cannon and Drotleff were each charged with two counts of second-degree murder, one count of attempted murder, six counts of using and discharging a firearm during a violent crime, and four counts of murder resulting from the use of a firearm during a violent crime. If convicted, the maximum penalty faced by Cannon and Drotleff is life in prison or the death penalty.
The case is being prosecuted by Assistant U.S. Attorneys Randy C. Stoker and Alan M. Salsbury from the U.S. Attorney’s Office for the Eastern District of Virginia - Norfolk Division as well as Trial Attorney Robert McGovern of the Criminal Division’s Domestic Security Section. The case is being investigated by the FBI.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless and until convicted through due process of law.
Indictment
Justice Department Files Six Lawsuits to Enjoin Preparation<br /> of Fraudulent Federal Income Tax ReturnsRead the Press Release
WASHINGTON - The United States this week filed five civil injunction lawsuits in Detroit, Cincinnati and Chicago against several individuals and their tax preparation services, the Justice Department announced today. In December 2009, the government also filed a civil injunction suit against 12 individuals and entities in Providence, R.I. These lawsuits seek to enjoin individuals and entities from:
- Preparing federal income tax returns and amended returns, and other related documents and forms for others;
- Filing federal income tax returns for others;
- Representing customers before the Internal Revenue Service (IRS);
- Advising, assisting, counseling or instructing anyone about the preparation of a federal tax return; or
- Promoting tax-fraud schemes or other plans or arrangements that advise or encourage taxpayers to attempt to evade the assessment or collection of federal income taxes.
These defendants engage in a variety of schemes, all of which involve false deduction and credit claims, to fraudulently reduce their customers’ federal income tax liabilities. For example, court filings in Rhode Island against Michael Brier, operating through Refunds Now Inc. and Refunds Now Tax Service Inc., allege that he prepared, or directed the preparation of over 24,000 customer tax returns containing fabricated charitable contributions and employee business expense deductions, inflated dependent exemptions, fraudulent earned income tax credit claims and false income and expense reporting relating to rental real estate. Court papers filed in Chicago against Sidney Dove, of Sid’s Tax, allege that Dove tells customers that they are entitled to a charitable contribution deduction equal to 10 percent of their wages, regardless of whether they can substantiate their claim. Court papers filed in Chicago against Natalie Bradford and Kristine Burkland-Valdez, of K & N Tax Pros Inc., allege that defendants prepared and directed preparation of over 23,800 customer tax returns containing fabricated or falsified deductions such as employee business expenses, mileage, cash contributions, rental losses and medical expenses. All of these defendants’ actions cause substantial revenue loss to the United States Treasury, much of which may be unrecoverable. In addition, their actions harm their customers because the customers pay the defendants to prepare their tax returns, and, after the fraud is detected, customers are responsible for paying all taxes, interest and penalties.
"The too-good-to-be-true results some return preparers tout are just that," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. "The IRS and Justice Department are working together closely to ensure that unscrupulous return preparers are shut down and their customers pay their correct federal tax liabilities. Taxpayers using these types of preparers, at best, are stuck with paying additional taxes and interest, and at worst, depending on culpability, may be subject to penalties and possibly even criminal prosecution."
"Filing a tax return is one of the biggest financial transactions an average American taxpayer makes each year," said IRS Commissioner Doug Shulman. "This week, the IRS announced a set of comprehensive recommendations to ensure people receive ethical, competent and professional advice when they use a tax return preparer. We want to make sure taxpayers don't pay good money for bad advice. That's why we're taking extra steps this tax season, and planning more actions in future years, to help make sure people can count on their tax return preparer."
Listed below are details of the six lawsuits, filed in the United States District Courts in the cities indicated:
Case
Summary of Scheme
Returns Prepared and Harm to the Government
United States v. Michael Brier, Jeffrey Sroufe, Esther Santiago, Maria Caroline Halog, Criselyn Rivera, Nitza Benitez, Carmen Miranda, Refunds Now, Inc., RNTS (a/k/a Refunds Now Tax Service, Inc.), FTIRS, Inc., POTIRS, Inc. and IHIRS, Inc.
District of Rhode Island
Improper filing status claims;
Inflated dependent exemptions;
Fraudulent earned income tax credit claims;
False or inflated charitable contributions and business expense deductions;
False or fraudulent income and expense reporting related to rental real estate
Over 24,000 returns prepared for tax years 2003 through 2007. Tax loss to date from 313 examined returns exceeds $1.1 million.
United States v. Harold K. Solomon
, individually and d/b/a Solomon ServiceEastern District of Michigan
Inflated earned income tax credit claims;
False business expense claims;
False or fabricated itemized deductions
Over 1,900 returns prepared for tax years 2005 through 2007.
United States v. Erin Pryor, individually and d/b/a EP Express Tax Service
Southern District of Ohio
Fraudulent disabled access and earned income tax credit claims;
False telephone excise tax refund claims
Over 230 tax returns prepared during 2007 and 2008.
United States v. Matoi Rimes, individually, and d/b/a Rimes Accounting Service
Northern District of Illinois
Inflated or fabricated itemized deductions;
Inflated or fabricated rental property and business expense deductions;
False tuition and rental expense deductions;
Misuse of Refund Anticipation Loan Program
Over 3,100 tax returns prepared since 2006. Tax loss from 48 examined returns is $230,677.
United States v. Sidney Dove, individually and d/b/a Sid’s Tax
Northern District of Illinois
Inflated or fabricated charitable contribution deductions;
Inflated or fabricated business expense deductions;
False deductions for tuition and rental expenses
Over 1,200 tax returns prepared since January 1, 2006. Tax loss from 79 examined returns is $460,910.
United States v. Natalie Bradford, individually and d/b/a K & N Tax Pros, Inc., and Kristine Burkland-Valdez (a/k/a Kristine Valdez), individually and d/b/a K & N Tax Pros, Inc. and Tax Pros, Inc.
Northern District of Illinois
Fabricated or falsified employee business expense, mileage, cash contributions, rental losses and medical expense deductions
Over 23,800 tax returns prepared from 2005 through 2009. Tax loss for 100 examined returns is $830,147
Taxpayers and tax professionals who submit fraudulent tax returns to the IRS face substantial civil monetary penalties, as well as possible criminal prosecution. In the past decade the Justice Department has obtained injunctions against more than 435 tax-scheme promoters and tax preparers. Information about those cases is available on the Justice Department Web site, at http://www.justice.gov/tax/taxpress2010.htm
Justice Department Files Lawsuit Alleging New Jersey’s Written Civil Service Examination for Promotion to Police Sergeant Discriminates Against African-Americans and HispanicsRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against the state of New Jersey and the New Jersey Civil Service Commission alleging a pattern or practice of employment discrimination against African-Americans and Hispanics, in violation of Title VII of the Civil Rights Act of 1964. The complaint challenges New Jersey’s use of a written examination for promotion to the rank of police sergeant in localities throughout the state.
The United States’ complaint alleges that African-American and Hispanic candidates for promotion to sergeant pass the examination at significantly lower rates than white candidates. The complaint also alleges that even those African-American and Hispanic candidates who pass the examination suffer discrimination because their passing examination scores are significantly lower than those of white candidates, and New Jersey certifies candidates for promotion to police sergeant in descending rank-order based primarily upon each candidate’s written examination score. The complaint concludes that New Jersey’s use of the examination violates Title VII because the state has not demonstrated that its pass/fail use of the police sergeant written examination or its certification of candidates in descending rank-order to local jurisdictions is job related and consistent with business necessity.
Title VII prohibits discrimination in employment on the basis of race, color, sex, national origin or religion. Title VII prohibits not only intentional discrimination, but also the use of employment practices – like the state’s written examination for police sergeant in this case – that result in a disparate impact upon a protected group, unless the defendant can prove that such practices are job related and consistent with business necessity.
According to the complaint, New Jersey administers the challenged written examination as part of its police sergeant promotional process for local jurisdictions that participate in its civil service system. Police officers in participating local jurisdictions cannot be considered for promotion to police sergeant unless they take and pass the written examination. Currently, 18 of New Jersey’s 20 largest cities and townships (all but Cherry Hill and Edison Township), and 20 of New Jersey’s 21 counties (all but Somerset County), participate in the state’s civil service system. According to information the Justice Department received from New Jersey, at least 120 local police jurisdictions participated in the state’s police sergeant examination promotion process during the time frame of the Justice Department’s pre-suit investigation.
"This complaint should send a clear message to all public employers that employment practices with unlawful discriminatory impact on account of race or national origin will not be tolerated," said Thomas Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department will take all necessary action to ensure that such discriminatory practices are eliminated and that the victims of such practices are made whole."
The Justice Department is seeking a court order enjoining New Jersey from continuing to discriminate against African-Americans and Hispanics in violation of Title VII and, specifically, from continuing to use the challenged examination in a manner that does not meet the requirements of Title VII. The Justice Department also is asking the court to order New Jersey to provide make-whole relief (including, where appropriate, offers of promotion, backpay and retroactive seniority) to individual African-Americans and Hispanics who have been or will be harmed as a result of the state’s use of the examination.
Additional information about Title VII and other federal employment laws is available on the Civil Rights Division’s Web site at http://www.justice.gov/crt/.
Former Military Official Sentenced to Three Years in Prison<br /> for Participation in Bribery Conspiracy Involving<br /> $206 Million Telecommunications Contract in KoreaRead the Press Release
A former Army and Air Force Exchange Service (AAFES) official was sentenced today in U.S. District Court in Columbus, Ga., to three years in prison for his role in a bribery conspiracy involving a multi-million dollar telecommunications contract, and for not reporting the bribes he accepted on his income tax returns.
In addition to the prison term, U.S. District Judge Clay D. Land also ordered Henry Lee Holloway to pay a $5,000 fine and to forfeit $70,000 as the proceeds of Holloway’s involvement in the conspiracy. Holloway pleaded guilty on April 21, 2009, to a two-count information, charging him with one count of conspiracy and one count of making a false statement on a federal income tax return.
According to court documents, Holloway, 42, of Hamilton, Ga., worked as an AAFES general store manager at the Central Exchange in the Republic of Korea from 2003 through 2007. The Department of Defense provides billions of dollars worth of merchandise and services annually through AAFES to military personnel by operating base and post exchanges worldwide.
From May 2003 to April 2005, Holloway admitted to conspiring with, among others, Gi-Hwan Jeong, the chief executive officer of Samsung Rental Company Ltd (SSRT), to use Holloway’s official position to maintain SSRT’s $206 million contract with AAFES to provide telecommunications services to U.S. Armed Forces installations in the Republic of Korea. Holloway admitted that in exchange for at least $70,000 worth of stock, entertainment, travel expenses, cash and other things of value from Jeong, he took official action to protect SSRT and further its interests, despite Holloway’s knowledge and belief that SSRT was underperforming and violating the terms of its contract with AAFES. According to court documents, prior to Jeong’s payments to Holloway, and as a result of SSRT’s failures to perform under the contractual relationship with AAFES, Holloway sought termination of the contract between AAFES and SSRT. Holloway admitted that after the payments from Jeong to Holloway began, and as a result of those payments, he used official acts and influence to support and expand that contractual relationship.
On June 11, 2009, Jeong pleaded guilty in the U.S. District Court in Dallas to a five-count superseding indictment, charging him with two counts of bribery, two counts of honest services wire fraud and one count of conspiracy. On Nov. 10, 2009, U.S. District Court Judge Ed Kinkeade sentenced Jeong to five years in prison and a $50,000 fine.
This case is being prosecuted by Senior Trial Attorney Richard C. Pilger and Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section. The case was investigated by the Air Force Office of Special Investigations, the FBI’s Dallas Field Office and the Internal Revenue Service Criminal Investigation.
Fact Sheet: Department of Justice Activities Focused on Addressing Abuses in Juvenile FacilitiesRead the Press Release
The findings reported in the Bureau of Justice Statistics’ (BJS) report, Sexual Victimization in Juvenile Facilities Reported by Youth, 2008-2009 , bring into focus the dire circumstances that too many youth in juvenile correctional facilities have to endure. While the report focuses on specific types of juvenile facilities—larger facilities that typically hold adjudicated youth for longer periods—the Department of Justice is committed to addressing confinement issues for all youth in all facilities.
- The Department’s Office of Justice Programs’ (OJP) Review Panel on Prison Rape (Panel) will review and conduct hearings on the BJS report. The Panel, as required by the Prison Rape Elimination Act, is responsible for conducting annual hearings to collect evidence to assist the Bureau of Justice Statistics in identifying common characteristics, not only of victims and perpetrators of prison rape, but also of prisons and prison systems with a high incidence of prison rape and those that have been successful in deterring prison rape.
- OJP’s Office of Juvenile Justice and Delinquency Prevention (OJJDP) has long been concerned with the conditions and challenges that confront youth in the juvenile justice system, particularly those in custody.
- OJJDP plans to issue a solicitation in Fiscal Year (FY) 2010 for a National Training and Technical Assistance Center for Youth in Custody. The Center will serve as a resource for juvenile detention and correctional facilities and among other activities will promulgate data-driven approaches for facilities to identify, monitor, and improve conditions and treatment services provided to youth in custody, using evidence-based standards and outcome measures.
- OJJDP will increase outreach and information about available training and technical assistance on best practices for juveniles in custody, to all grant recipients who use funding to support a juvenile facility (public or private).
- OJJDP will convene a listening session of juvenile detention and correctional leaders and experts to garner their input on the BJS study findings and discuss potential strategies for improving conditions of juvenile facilities.
- In late 2009, OJJDP provided funds to the National Institute of Corrections (NIC) and will partner with NIC to assess, plan, design, develop, deliver, and evaluate training programs, technical assistance and related services to address the needs of juvenile detention and correctional professionals working with youth.
- The Department’s Civil Rights Division enforces two statutes concerning conditions in juvenile justice facilities – the Civil Rights of Institutionalized Persons Act (CRIPA) and Section 14141 of the Violent Crime Control and Law Enforcement Act of 1994. The Division’s Special Litigation Section has investigated unlawful conditions in more than 100 juvenile facilities and monitors more than 65 facilities in the United States and its territories. Sharing information on the sexual victimization of youth in juvenile justice facilities between Justice Department components will further ensure that systemic changes occur so that youth are protected from such serious harm.
- The Attorney General has also established a Prison Rape Elimination Act (PREA) Working Group to review standards proposed by the National Prison Rape Elimination Commission and draft national standards to enhance the detection, prevention, reduction and punishment of prison rape. The working group is working diligently on these standards and to address the other recommendations of the commission.
Wednesday 6 January 2010
Umar Farouk Abdulmutallab Indicted for Attempted Bombing of Flight 253 on Christmas DayRead the Press Release
WASHINGTON – The Justice Department announced that Umar Farouk Abdulmutallab, a 23-year-old Nigerian national, was charged today in a six-count criminal indictment returned in the Eastern District of Michigan for his alleged role in the attempted Christmas day bombing of Northwest Airlines flight 253 from Amsterdam, the Netherlands, to Detroit.
Count one of the indictment charges Abdulmutallab with attempted use of a weapon of mass destruction, which carries a penalty of up to life in prison. Count two of the indictment charges him with attempted murder within the special aircraft jurisdiction of the United States, which carries a penalty of up to 20 years in prison. Count three of the indictment charges him with willful attempt to destroy or wreck an aircraft within the special aircraft jurisdiction of the United States, which carries a penalty of up to 20 years in prison.
Count four of the indictment charges Abdulmutallab with willfully placing a destructive device on an aircraft within the special aircraft jurisdiction of the United States, which was likely to endanger the safety of such aircraft. This violation carries a penalty of up to 20 years in prison. Count five of the indictment charges him with use of a firearm/destructive device during and in relation to a crime of violence, which carries a consecutive mandatory 30 years in prison. Count six of the indictment charges the defendant with possession of a firearm/destructive device in furtherance of a crime of violence, which carries a consecutive mandatory 30 years in prison
"The charges that Umar Farouk Abdulmutallab faces could imprison him for life," said Attorney General Eric Holder. "This investigation is fast-paced, global and ongoing, and it has already yielded valuable intelligence that we will follow wherever it leads. Anyone we find responsible for this alleged attack will be brought to justice using every tool -- military or judicial -- available to our government."
"The attempted murder of 289 innocent people merits the most serious charges available, and that’s what we have charged in this indictment," said U.S. Attorney Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan.
According to the indictment, Northwest Airlines flight 253 carried 279 passengers and 11 crewmembers. Abdulmutallab allegedly boarded Northwest Airlines flight 253 in Amsterdam on Dec. 25, 2009 carrying a concealed bomb. The bomb components included Pentaerythritol (also known as PETN, a high explosive), as well as Triacetone Triperoxide (also known as TATP, a high explosive), and other ingredients.
The bomb was concealed in the defendant’s clothing and was designed to allow him to detonate it at a time of his choosing, thereby causing an explosion aboard flight 253, according to the indictment. Shortly prior to landing at Detroit Metropolitan Airport, Abdulmutallab detonated the bomb, causing a fire on board flight 253.
According to an affidavit filed in support of a criminal complaint, Abdulmutallab was subdued and restrained by the passengers and flight crew after detonating the bomb. The airplane landed shortly thereafter, and he was taken into custody by U.S. Customs and Border Protection officers. Abdulmutallab required medical treatment, and was transported to the University of Michigan Medical Center after the plane landed.
This prosecution is being handled by the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.
The investigation is being conducted by 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. Additional assistance has been provided by the Transportation Security Administration, the State Department’s Bureau of Diplomatic Security, the Wayne County Airport police, as well as international law enforcement partners.
The public is reminded that an indictment contains mere allegations and a defendant is presumed innocent unless and until proven guilty in a court of law.
Massachusetts Man Sentenced to Five Years in Prison on Child Pornography ChargesRead the Press Release
Johnny Pires, 24, was sentenced today to five years in prison and five years of supervised release following his prison term for attempting to receive and possessing child pornography. Pires was also ordered to register as a sex offender.
Pires, formerly of Middleboro, Mass., was convicted on July 30, 2009, on one count of attempted receipt and one count of possessing child pornography, following a four-day trial before U.S. District Judge Rya W. Zobel. According to evidence presented during the trial, the case arose as the result of an FBI undercover operation that targeted individuals using file sharing programs to download child pornography. According to testimony at trial, Pires obtained images of children engaged in sexually explicit conduct, through a file share program called Limewire, which allows users to exchange image and video files for free. During the course of the investigation, a federal agent downloaded images fromPires and was able to access Pires’ shared folder, which stored numerous images of child pornography depicting pre-pubescent children engaged in various sexual acts. According to testimony at trial, a search warrant was executed at Pires’ residence based on this information. A forensic examiner testified that a hard drive seized from Pires’ residence revealed numerous images of child pornography, including those downloaded using Limewire software.
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 online sexual exploitation of children. 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 using the Internet, 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 Attorney LisaMarie Freitas of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Thomas Kanwit for the District of Massachusetts. The case was investigated by the FBI.
Tuesday 5 January 2010
Federal Court Shuts Down Idaho Tax PreparerRead the Press Release
WASHINGTON – A federal court has issued a preliminary injunction barring Penny Lea Jones of Idaho Falls, Idaho, from preparing federal income tax returns for others, the Justice Department announced today. The court found that Jones promotes a tax defier scheme that claims large fraudulent tax refunds for customers. The order, entered by U.S. District Judge Edward J. Lodge, remains in effect while the lawsuit is pending.
The court found that Jones repeatedly prepared federal income tax returns claiming bogus refunds based on a tax fraud scheme known as the "redemption" scheme. The court held that Jones prepared and filed 333 income tax returns for customers in 2008 and 2009 claiming more than $93 million in fraudulent refunds. The court said that the redemption scheme is based on a frivolous theory that the federal government maintains secret accounts for its citizens, and that taxpayers can gain access to funds in those accounts by issuing IRS 1099-OID forms to their creditors.
The case against Jones is one of seven lawsuits the Justice Department filed across the nation in October 2009 that seek to shut down tax preparers who allegedly promote the redemption scheme. The defendants in those cases allegedly prepared tax returns fraudulently requesting a total of $562.4 million in refunds. Under the scheme, participants file a series of false IRS forms, including tax returns, amended returns, and Forms 1099 (including Form 1099-OID) or Forms W-2, to request fraudulent tax refunds based on phony claims of large income tax withholding.
The Internal Revenue Service (IRS) catches the vast majority of fraudulent redemption-scheme tax refund claims without issuing any refund. Taxpayers who submit the claims face substantial civil monetary penalties, and possible criminal prosecution.
John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked James Strong, the Justice Department trial attorney who handled the case and Shauna Henline, the IRS senior technical advisor who conducted the investigation.
In the past decade, the Justice Department’s Tax Division has obtained more than 435 injunctions against dishonest tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
Order (PDF)
Monday 4 January 2010
Minnesota Hospital to Pay U.S. to Resolve Allegations<br /> of False Claims Involving Unnecessary AdmissionsRead the Press Release
WASHINGTON – Wheaton Community Hospital, the City of Wheaton, Minn. and Dr. Stanley Gallagher (collectively WCH) have agreed to pay $846,461 to settle allegations that their hospital admission practices violated the False Claims Act, the Justice Department announced today.
This settlement resolves allegations that WCH knowingly made false claims to Medicare for unreasonable and unnecessary hospital admissions. Specifically, the government contended that, from 1998 to 2004, WCH admitted some patients and kept others admitted to acute care when doing so was not medically necessary. The defendants then billed Medicare for the cost of these hospital admissions.
"Hospitals and doctors have a responsibility to provide patients with reasonable and necessary care. When they neglect those obligations, patients and taxpayers suffer," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
The allegations against WCH arose from a lawsuit filed in federal court in Minnesota under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private individuals to file civil actions on behalf of the United States and share in any recovery. Dr. Steven Radjenovich, the whisteblower in this case, formerly practiced at Wheaton Community Hospital with Dr. Gallagher. Dr. Radjenovich will receive $203,150 as his share of the settlement with WCH.
Assistant Attorney General West thanked the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Minnesota and the Department of Health and Human Services’ Office of the Inspector General for their efforts in handling this investigation and settlement.
The case is entitled United States ex rel. Steven Radjenovich v. Stanley Gallagher, et al., Case No.: 04-4538 (D. Minn.).
Thursday 31 December 2009
UTStarcom Inc. Agrees to Pay $1.5 Million Penalty for Acts of Foreign Bribery in ChinaRead the Press Release
UTStarcom Inc. (UTSI) has entered into an agreement with the Department of Justice, agreeing to pay a $1.5 million fine for violations of the Foreign Corrupt Practices Act (FCPA) by providing travel and other things of value to foreign officials, specifically employees at state-owned telecommunications firms in the People’s Republic of China. The announcement was made today by Assistant Attorney General Lanny A. Breuer of the Criminal Division.
UTSI, a Delaware corporation headquartered in Alameda, Calif., and listed on the Nasdaq, is a global telecommunications company that designs, manufactures and sells network equipment and handsets. According to information contained in the agreement, UTSI has historically focused on Asian markets, with a particular emphasis on China. UTSI generally does business in China through its wholly-owned subsidiary, UTStarcom China Co. Ltd. (UTS-China).
As described in the agreement, UTSI has acknowledged responsibility for the actions of UTS-China and its employees and agents, who arranged and paid for employees of Chinese state-owned telecommunications companies to travel to popular tourist destinations in the United States, including Hawaii, Las Vegas and New York City. The trips were purportedly for individuals to participate in training at UTSI facilities. In fact, UTSI had no facilities in those locations and conducted no training. UTS-China then falsely recorded these trips as "training" expenses, while the true purpose for providing these trips was to obtain and retain lucrative telecommunications contracts.
The agreement requires that UTSI pay a $1.5 million penalty, implement rigorous internal controls and cooperate fully with the Department. The agreement recognizes UTSI’s voluntary disclosure, thorough self-investigation of the underlying conduct, the cooperation provided by the company to the Department, and the remedial efforts undertaken by the company. As a result of these factors, the Department has agreed not to prosecute UTSI or its subsidiaries for the making of improper payments, provided that UTSI satisfies its ongoing obligations under the agreement.
In a related matter, UTSI reached a settlement today with the U.S. Securities and Exchange Commission under which it agreed to pay an additional $1.5 million penalty and satisfy additional obligations for a period of four years.
This case is being prosecuted by Trial Attorney James M. Koukios of the Criminal Division’s Fraud Section.
Agreement
Tuesday 29 December 2009
Major International Hacker Pleads Guilty for Massive Attack on U.S. Retail and Banking NetworksRead the Press Release
WASHINGTON- Albert Gonzalez, 28, of Miami, pleaded guilty today to conspiring to hack into computer networks supporting major American retail and financial organizations, and to steal data relating to tens of millions of credit and debit cards, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the District of New Jersey Paul J. Fishman, U.S. Attorney for the District of Massachusetts Carmen Milagros Ortiz and Director of the U.S. Secret Service Mark Sullivan.
Gonzalez, aka "segvec," "soupnazi" and "j4guar17," pleaded guilty to two counts of conspiracy to gain unauthorized access to the payment card networks operated by, among others, Heartland Payment Systems, a New Jersey-based card processor; 7-Eleven, a Texas-based nationwide convenience store chain; and Hannaford Brothers Co. Inc., a Maine-based supermarket chain. The plea was entered in federal court in Boston before U.S. District Court Judge Douglas P. Woodlock. The case is one of the largest data breaches ever investigated and prosecuted in the United States.
According to information contained in the plea agreement, Gonzalez leased or otherwise controlled several servers, or "hacking platforms," and gave access to these servers to other hackers, knowing that they would use them to store malicious software, or "malware," and launch attacks against corporate victims. Malware used against several of the corporate victims was also found on a server controlled by Gonzalez. Gonzalez tested malware by running multiple anti-virus programs in an attempt to ascertain if the programs detected the malware. According to information in the plea agreement, it was foreseeable to Gonzalez that his co-conspirators would use malware to steal tens of millions of credit and debit card numbers, affecting more than 250 financial institutions. Gonzalez was indicted in New Jersey in August 2009 for this criminal conduct.
Based on the terms of the plea agreement, Gonzalez will not seek a prison term under 17 years and the government will not seek a prison term of more than 25 years. Gonzalez pleaded guilty in September 2009 in Boston to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft relating to hacks into numerous major U.S. retailers including TJX Companies, BJ’s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble and Sports Authority. Gonzalez was indicted for those offenses in August 2008 in the District of Massachusetts. Gonzalez also pleaded guilty in September 2009 in Boston to one count of conspiracy to commit wire fraud relating to hacks into the Dave & Buster’s restaurant chain, which were the subject of a May 2008 indictment in the Eastern District of New York.
As part of the plea agreement with the government, the New Jersey case was transferred to the District of Massachusetts for plea and sentencing. According to the terms of the New Jersey plea agreement, the parties agree that Gonzalez’ sentence in the New Jersey case should run concurrently with the sentence imposed in the Boston and New York cases. Gonzalez remains in federal custody. Sentencing in the Boston and New York cases is currently scheduled for March 18, 2010, in Boston. Sentencing in the New Jersey case is scheduled for March 19, 2010.
"The Department of Justice will not allow computer hackers to rob consumers of their privacy and erode the public’s confidence in the security of the marketplace," said Assistant Attorney General Breuer. "Criminals like Albert Gonzalez who operate in the shadows will be caught, exposed and held to account. Indeed, with timely reporting of data breaches and high-tech investigations, even the most sophisticated hacking rings can be uncovered and dismantled, as our prosecutors and agents demonstrated in this case."
"Commercial hackers like Gonzalez believe they are immune from detection and prosecution as they lurk in the shadows of the Internet," said U.S. Attorney Fishman of the District of New Jersey. "But time and again they are caught, prosecuted and sentenced to lengthy federal prison terms. Other hackers should sit up and take notice."
"The conviction of Mr. Gonzalez, and the unraveling of one of the most complex and large scale identity theft cases in history, should serve as a reminder to hacker organizations, that the Department of Justice will vigorously investigate and prosecute cybercrimes, regardless of their sophistication and global reach. Mr. Gonzalez’s conviction is the result of unprecedented coordination across agency and geographical lines, and I want to commend the investigators and prosecutors who have worked tirelessly to bring this case to fruition," said U.S. Attorney Ortiz of the District of Massachusetts.
"Today’s plea proves that although cyber criminals can threaten our nation’s financial sector, the Secret Service and its many partners around the world will pursue and prosecute them," said U.S. Secret Service Director Sullivan. "Time and again, cooperation and advanced methodologies have allowed us to focus our resources in order to detect and prevent these types of crimes, wherever they originate."
The New Jersey case is being prosecuted by Assistant U.S. Attorneys Erez Liebermann and Seth Kosto of the District of New Jersey, Assistant U.S. Attorneys Stephen Heymann and Donald Cabell of the District of Massachusetts, and Senior Counsel Kimberly Kiefer Peretti of the Criminal Division’s Computer Crime and Intellectual Property Section. All of these cases are being investigated by the U.S. Secret Service.
Colorado-based Spectranetics Corporation to Pay $5 Million <br /> to Resolve Allegations Relating to Its Medical DevicesRead the Press Release
Spectranetics Corporation, a medical device manufacturer, has agreed to pay the United States $4.9 million in civil damages plus a $100,000 forfeiture to resolve claims against the company, the Justice Department announced today. The claims arise from allegations that the company illegally imported unapproved medical devices and provided them to physicians for use in patients, conducted a clinical study in a manner that failed to comply with federal regulations and promoted certain products for procedures for which the company had not received Food and Drug Administration approval or clearance.
The company manufactures, distributes and sells certain medical lasers and peripheral devices for those lasers, such as lead wires that guide the lasers through vascular tissue and catheters that carry and contain the lasers inside the veins, including, specifically, the CVX-300 Medical Laser and the CliRpath Turbo Laser Catheter, the TURBO Elite Laser Ablation Catheter, and the TURBO-Booster Laser Guide Catheter.
In resolving this matter, Spectranetics has entered into a civil settlement agreement and a non-prosecution agreement with the United States. The company also entered into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.
According to the non-prosecution agreement, officers and employees who acted on behalf of the company engaged in multiple areas of wrongdoing. Specifically, Spectranetics illegally imported unapproved medical devices from overseas manufacturers and distributed those devices for use in human patients, and failed to meet its reporting obligations to FDA regarding a study named "CORAL" (C Oronary graft Results after Atherectomy with Lasers) and another associated study in connection with the devices listed above.
Under the terms of the non-prosecution agreement, Spectranetics has accepted responsibility for its conduct, has instituted remedial measures to prevent this conduct in the future, and will continue to cooperate in the ongoing criminal investigation. As a result, Spectranetics will not be criminally prosecuted for this conduct. Under the civil settlement agreement, the United States asserted that, as a result of the conduct described here and set forth in more detail in the civil agreement, Spectranetics caused false claims to be submitted to the Medicare Program during portions of the time period from 2003 to 2008.
"It is important to hold those who submit false claims to Medicare responsible for their actions," said U.S. Attorney David Gaouette. "Settlements such as this help to protect the integrity of the Medicare system."
"The Department of Justice will be vigilant in pursuing cases against medical device companies that break the law and defraud taxpayers," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
"Our compliance agreement with Spectranetics holds the company and its executives accountable for violations of Federal health care program and FDA requirements," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. "Records from Spectranetics’ clinical investigations will be audited by an Independent Review Organization to ensure compliance with FDA rules – including reporting of adverse events."
The matter was handled by the U.S. Attorney’s Office for the District of Colorado, the Office of Consumer Litigation and the Commercial Litigation Branch of the Justice Department’s Civil Division and the Food and Drug Administration Office of Criminal Investigation. The corporate integrity agreement was handled by the Department of Health and Human Services Office of the Inspector General.
Monday 28 December 2009
Michigan Health Care Provider to Pay United States $669,413 to Settle False Claims AllegationsRead the Press Release
WASHINGTON – Genesys Health System has agreed to pay the United States $669,413 to settle a lawsuit alleging that the health care provider violated the False Claims Act by submitting false claims to Medicare, the Justice Department announced today.
Genesys, a Grand Blanc, Mich.-based company, provides health care services through a network of medical facilities located in Michigan. The government alleged that between 2001 and 2007, Genesys violated the False Claims Act by billing Medicare for higher levels of service than were actually rendered to patients. Specifically, the government alleged that Genesys overbilled for evaluation and management services provided to cardiology patients.
"As this case demonstrates, we are committed to vigorously pursuing those who defraud Medicare," said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. "Taxpayer dollars should be spent on health care services for patients, not wasted on fraud and abuse." Assistant Attorney General West praised the coordinated efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Michigan, and the Office of Investigations for the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.
The allegations resolved by today’s settlement were initiated by a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private citizens to sue for fraud on behalf of the United States and share in any recovery. The whistleblower in this case will receive a $133,882 share of today’s settlement.
"With the rising cost of health care and the related pressure on the Medicare Trust Fund, the last thing our nation can afford are providers who are profiteering at the expense of patients," said Terrence Berg, U.S. Attorney for the Eastern District of Michigan. "The relator can be proud that she brought these serious allegations of Medicare fraud to our attention and paved the way for the government to uncover the false claims. It is important that anyone who has information about alleged fraud on the federal government come forward so we can investigate."
The lawsuit was captioned as United States ex rel. Wendy Buterakos v. Ascension Health and Genesys Health System, Civil Action No. 06-10550 (E.D. Mich.).
Saturday 26 December 2009
Nigerian National Charged with Attempting to Destroy Northwest Airlines AircraftRead the Press Release
WASHINGTON - A 23-year-old Nigerian man was charged in a federal criminal complaint today with attempting to destroy a Northwest Airlines aircraft on its final approach to Detroit Metropolitan Airport on Christmas Day, and with placing a destructive device on the aircraft.
According to an affidavit filed in support of the criminal complaint, Umar Farouk Abdulmutallab, 23, a Nigerian national, boarded Northwest Flight 253 in Amsterdam, Netherlands on December 24, 2009 and had a device attached to his body. As the flight was approaching Detroit Metropolitan Airport, Abdulmutallab set off the device, which resulted in a fire and what appears to have been an explosion. Abdulmutallab was then subdued and restrained by the passengers and flight crew. The airplane landed shortly thereafter, and he was taken into custody by Customs and Border Patrol officers.
A preliminary FBI analysis found that the device contained PETN, also known as pentaerythritol, a high explosive. Further analysis is ongoing. In addition, FBI agents recovered what appear to be the remnants of the syringe from the vicinity of Abdulmutallab’s seat, believed to have been part of the device.
"This alleged attack on a U.S. airplane on Christmas Day shows that we must remain vigilant in the fight against terrorism at all times," Attorney General Eric Holder said. "Had this alleged plot to destroy an airplane been successful, scores of innocent people would have been killed or injured. We will continue to investigate this matter vigorously, and we will use all measures available to our government to ensure that anyone responsible for this attempted attack is brought to justice."
Abdulmutallab required medical treatment, and was transported to the University of Michigan Medical Center after the plane landed. He will make his initial court appearance later today.
Interviews of all of the passengers and crew of Flight 253 revealed that prior to the incident, Abdulmutallab went to the bathroom for approximately twenty minutes, according to the affidavit. Upon returning to his seat, Abdulmutallab stated that his stomach was upset, and he pulled a blanket over himself. Passengers then heard popping noises similar to firecrackers, smelled an odor, and some observed Abdulmutallab’s pants leg and the wall of the airplane on fire. Passengers and crew then subdued Abdulmutallab and used blankets and fire extinguishers to put out the flames. Passengers reported that Abdulmutallab was calm and lucid throughout. One flight attendant asked him what he had had in his pocket, and he replied "explosive device."
These prosecutions are being handled by the U.S. Attorney’s Office for the Eastern District of Michigan, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.
The investigation is being conducted by the Federal Bureau of Investigation, US Customs and Border Protection, and the Joint Terrorism Task Force.
The public is reminded that criminal complaints contain mere allegations and a defendant is presumed innocent until proven guilty.
Thursday 24 December 2009
Nashville, Tennessee, Woman Sentenced on Sex Trafficking ChargesRead the Press Release
Cristina Andres Perfecto of Nashville, Tenn., was sentenced late yesterday in federal court in Memphis to 190 months in prison for sex trafficking by force, fraud and coercion, sex trafficking of a juvenile and conspiracy.
Perfecto pleaded guilty on Aug . 28, 2007, to two counts of sex trafficking by force, fraud and coercion and sex trafficking of a juvenile in the Western District of Tennessee, as well as one count of conspiracy in the Middle District of Tennessee.
Perfecto’s co-defendant, Juan Mendez, was sentenced to 50 years in prison on June 27, 2008, after pleading guilty to child sex trafficking and sex trafficking by force, fraud, and coercion. Perfecto and Mendez each admitted to fraudulently luring two young girls, including a 13 year-old, from rural Mexico to Tennessee with the intent of forcing them into prostitution. Both further admitted that Mendez, with Perfecto’s assistance, physically, verbally, and sexually abused the victims in order to coerce them into prostitution.
Nine other defendants had earlier pleaded guilty in this same case for crimes including: child sex trafficking, conspiracy to harbor illegal aliens, conspiracy to commit money laundering, enticing an individual to travel in interstate commerce to commit prostitution, and violating the Mann Act.
"This defendant lured vulnerable victims to the United States under false pretenses and coerced them into sexual slavery, depriving them of their freedom, their dignity and their civil rights," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We will continue to aggressively prosecute individuals who engage in coercive sexual exploitation."
Assistant U.S. Attorney Steve Parker for the Western District of Tennessee and Trial Attorney Jonathan Skrmetti from the Justice Department’s Civil Rights Division prosecuted the case. The investigation was led by Memphis FBI Agent Tracey Harris and Memphis U.S. Immigration and Customs Enforcement (ICE) Agent Greg Swearngin. They were assisted by ICE agents in Nashville, the Memphis Police Department, the Nashville Police Department and FBI and ICE agents from around the country who lent their expertise to the investigation. Catholic Charities, the Salvation Army, the YWCA, and World Relief have assisted the victims and witnesses in this matter.
Wednesday 23 December 2009
Visiting Physicians Association to Pay $9.5 Million to<br /> Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON - Visiting Physicians Association, which is based in Farmington Hills, Mich., will pay the United States and the state of Michigan $9.5 million to settle allegations that the association violated the False Claims Act by submitting false claims to Medicare, TRICARE and the Michigan Medicaid program, the Justice Department announced today. Visiting Physicians Association is a Michigan professional corporation which has provided home health services at various times in Michigan, Ohio, Georgia and Wisconsin.
The agreement announced today settles allegations that Visiting Physicians Association submitted claims to the Medicare, TRICARE and Michigan Medicaid for unnecessary home visits and care plan oversight services, for unnecessary tests and procedures, and for more complex evaluation and management services than the services that Visiting Physicians Association actually provided.
"This settlement illustrates the government’s commitment to pursuing those who defraud Medicare and other important programs and drive up the costs of health care," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "The Justice Department will continue to work with our federal and state partners to ensure that taxpayer dollars are spent on health care services for patients, not wasted on fraud and abuse."
"This settlement furthers the public interest and protects the strength and soundness of the Medicare program while ensuring that Medicare beneficiaries receive appropriate care. Cooperation between federal and state entities is crucial to this effort," said Carter Stewart, U.S. Attorney for the Southern District of Ohio.
"My office is committed to ensuring that healthcare providers are reimbursed only for legitimate services provided to qualified beneficiaries. We will use all tools available to us, including civil enforcement remedies, to maintain the integrity of government programs,"said Terrence Berg, U.S. Attorney for the Eastern District of Michigan.
This settlement resolves four lawsuits filed by private plaintiffs under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to file an action on the government’s behalf and share in any recovery. This settlement provides that the four whistleblower plaintiffs will collectively receive a total of approximately $1.7 million.
The U.S. Department of Health and Human Services, Office of Inspector General; the FBI; and the Michigan Attorney General’s Office investigated this matter. The Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Ohio, the U.S. Attorney’s Office for the Eastern District of Michigan, and the Michigan Attorney General’s Office handled the lawsuits.
Ohio Attorney Charged with Tax Fraud, Obstruction of Justice for Scheme to Hide Income and Assets Through Trusts and in Foreign Bank AccountRead the Press Release
WASHINGTON - Aristotle R. Matsa, an attorney in Columbus, Ohio, was charged with tax offenses, obstruction of justice and additional charges in a 20-count indictment unsealed today, the Justice Department and Internal Revenue Service (IRS) announced. Additionally, George Z. Pappas, an attorney in Urbana, Ohio, was charged in a one-count information with making a false statement. According to a plea agreement filed in conjunction with the information, Pappas has agreed to plead guilty to the false statement charge.
The indictment, which was returned on Dec. 21, 2009, was unsealed upon Matsa’s arrest. Matsa was charged with fifteen counts of aiding and assisting in the preparation of false and fraudulent tax returns that related to five different trusts; one count of willfully failing to file a report of foreign bank and financial accounts; one count of conspiracy to commit obstruction of justice; one count of witness tampering; one count of submitting a false statement; and one count of obstruction of justice.
According to the indictment, Matsa, who is an attorney, real estate broker, architect and licensed minister in Ohio, created and operated several nominee entities in order to disguise his assets and income. Specifically, Matsa caused the preparation and filing of 15 fraudulent trust tax returns, Forms 1041, with the IRS. The trust returns represent filings for at least five separate trust entities during the tax years 2003 to 2005. Each of the trusts reported receiving significant amounts of interest income each year; however, no income tax was reported as due as a result of fraudulently claimed deductions for distributions purportedly paid to a foreign beneficiary each year. The indictment alleges that Matsa used funds from these trusts to purchase a 150-acre farm in Hocking County, Ohio, as well as a single-family residence in Worthington, Ohio, both of which he used as his personal residences.
According to the indictment, Matsa violated the foreign bank account reporting requirements by failing to disclose his ownership and control over a foreign bank account held in the Netherlands during calendar year 2003, where an account was maintained by Matsa with funds in excess of $10,000 from at least August 2003 to November 2003.
According to the indictment, after learning of the grand jury investigation into his business activities in May 2006, Matsa and others conspired to obstruct justice by misleading and concealing evidence from the grand jury, making false statements to the grand jury, creating false documents, tampering with a witness and lying to federal investigators.
According to his plea agreement, Pappas admitted that he made false statements to federal agents during his grand jury testimony and in a letter to the Justice Department about the ownership of a law firm doing business in the Short North area. According to the indictment from 1987 until 2004, the law firm was known as The Law Offices of Aristotle R. Matsa, when the name was changed to The Law Offices of George Z. Pappas.
An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, Matsa faces a maximum sentence of 90 years in prison, a fine of $5 million, and 5 years of supervised release.
Judge Sargus has not yet scheduled a change of plea hearing for Pappas. Pappas faces a maximum sentence of 5 years in prison, a $250,000 fine, and 3 years of supervised release.
The case is being prosecuted by Justice Department Tax Division trial attorneys Richard M. Rolwing and Jorge Almonte. The case was investigated by the IRS, Criminal Investigation Division.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax/. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site at http://www.irs.gov/compliance/enforcement/index.html.
Justice Department to Participate in Community Integration Case in North CarolinaRead the Press Release
WASHINGTON – The Justice Department today filed a brief as a friend of the court in Marlo M., et al. v. Cansler, et al., a community integration case in federal court for the Eastern District of North Carolina. The government’s brief supports the two plaintiffs, individuals with a developmental disability and mental illness, who are seeking to block the state of North Carolina from making major reductions in services offered to them, which could also affect similarly situated people.
The United States seeks to participate in this case as part of its ongoing commitment to enforcing the Supreme Court decision in Olmstead v. L.C., a ruling requiring states to eliminate unnecessary segregation of persons with disabilities and to move persons who can function in the community out of segregated facilities and into supported living situations.
North Carolina’s planned reductions will directly impact individuals with disabilities, potentially forcing the plaintiffs and others out of community placements. The plaintiffs have successfully resided in the community for years. Cuts to the services provided by the state would put them and other individuals with disabilities at imminent risk of being placed in an institutional setting. The lawsuit alleges that the move to institutional placements will increase costs to the state.
"By supporting the plaintiffs in this case, we seek to ensure that the civil rights of individuals with mental illness and developmental disabilities in North Carolina are protected," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "North Carolina has provided critical services to disabled individuals with significant needs, allowing them to fully participate in their communities. Now cuts to these services threaten to take this away at a cost to the plaintiffs and the state. "
The Supreme Court ruled in the Olmstead case that unnecessary segregation of individuals with disabilities wrongly stigmatizes them as unworthy of participating in community life. Today’s filing follows new activity by the Justice Department to better enforce Olmstead’s mandate of community integration. The Civil Rights Division has recently filed briefs in support of four separate Olmstead cases in Florida, Connecticut, Virginia and New York.
The full and fair enforcement of the ADA and its mandate to integrate individuals with disabilities is a major priority of the Civil Rights Division. The ADA protects individuals with disabilities from discrimination by public entities. People interested in finding out more about the ADA can call the Justice Department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY), or access its ADA Web site at http://www.ada.gov.
Chevron to Pay U.S. More Than $45 Million to Resolve Allegations of False Claims for Royalties UnderpaymentRead the Press Release
WASHINGTON – Chevron Corporation, Texaco, Unocal Incorporated and their affiliates (the Chevron companies) have agreed to pay the United States $45,569,584.74, to resolve claims that they violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian leases, the Justice Department announced today.
The Minerals Management Service (MMS) of the U.S. Department of the Interior is responsible for overseeing the collection of royalties on federal and Indian leases. Each month, companies are required to report to the MMS the value of the natural gas produced from their federal and Indian leases and to pay a percentage of the reported value as royalties. The settlement resolves claims by the United States that the Chevron, Texaco and Unocal companies improperly deducted from royalty values the cost of boosting gas up to pipeline pressures, used affiliate transactions to falsely reduce the reported value of gas taken from federal and Indian leases, and improperly reported processed gas as unprocessed gas to reduce royalty payments.
"This settlement successfully ends long-standing litigation and ensures that taxpayers receive their fair share of royalty revenues from energy production on federal and American Indian lands," said Interior Secretary Ken Salazar. "Most of the $45 million settlement will be disbursed to appropriate federal, state and American Indian accounts that were affected by Chevron companies’ underpayment of natural gas royalties and improper deductions. This administration is changing the way Interior does business and settlements, such as this one, demonstrate our determination to assure the American public receives fair market value for the resources we manage in their name."
"Mineral royalties provide an important source of income for Native Americans, the United States, and various States. The Department of Justice is committed to protecting public and Indian lands and to ensuring that companies with leases to take natural gas from those lands pay their fair share of royalties," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. Assistant Attorney General West noted that this settlement resulted from the collaborative efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Texas, and the Department of the Interior’s Office of Inspector General, Minerals Management Service and Office of the Solicitor.
Today's settlement resolves allegations under the False Claims Act that the Chevron companies systematically under reported the value of natural gas that they took from federal and Indian leases from March 1988 to November 2008 and, consequently, that they paid less royalties than they owed to the United States and various Indian tribes.
"Perhaps it is part of the human condition to take advantage of others and to not conduct business in a honorable fashion. But it will never be the right way to do business. Today’s settlement affirms the basic truth that it is never a good idea to cheat. Both the Department of Justice and the U.S. Attorney’s Office will always take the necessary steps to protect the royalty interests of the Indian tribes as well as the United States," said Malcolm Bales, the U.S. Attorney for the Eastern District of Texas.
The settlement with the Chevron companies arises from a lawsuit filed in federal court in Texas by Harrold Wright under the whistleblower provisions of the False Claims Act, which allow private citizens to file actions on behalf of the United States and share in any recovery. Because Mr. Wright is deceased, his heirs will receive $12,303,787.88, plus interest, as part of this settlement. Mr. Wright’s suit alleges that a number of companies systematically underpaid royalties due for their production of natural gas from federal and Indian lands. The Justice Department previously settled with Burlington Resources Inc. for $105.3 million, Shell Oil Company for $56 million and Dominion Exploration and Production Company for $2 million.
The case is U.S. ex rel. Wright v. Chevron USA, Inc. et al., 5:03-CV-264 (E.D. Tex.)
Attorney General Appoints Gary Grindler Acting Deputy Attorney GeneralRead the Press Release
Attorney General Eric Holder announced today that he has appointed Gary Grindler Acting Deputy Attorney General, effective Feb. 5, 2010. Grindler will become Acting Deputy Attorney General upon the departure of Deputy Attorney General David W. Ogden, who announced his resignation effective Feb. 5.
"Gary is a great asset to the Department, and I am pleased he has agreed to take on this responsibility," Attorney General Eric Holder said. "He will be instrumental in our work to keep the American people safe, ensure the fairness and integrity of our financial markets, and restore the traditional missions of the Department."
"I am honored to serve the American people in this new capacity," Grindler said. "I look forward to assisting the Attorney General in moving the Department forward."
Grindler will serve until Feb. 5 as Principal Associate Deputy Attorney General. He rejoined the Department in March as Deputy Assistant Attorney General in the Criminal Division. He returned to the Department after previously serving in a number of roles, including as Principal Associate Deputy Attorney General and Counselor to the Attorney General, Deputy Assistant Attorney General in the Civil Division, and as an Assistant U.S. Attorney in the Southern District of New York and the Northern District of Georgia.
Most recently, Grindler was a partner at King & Spalding LLP in its Washington, D.C., office where he focused on white collar criminal defense, internal corporate investigations and complex civil litigation. He was selected for inclusion in the 2006-2009 editions of The Best Lawyers in America in the area of white collar criminal defense and on the 2008-2009 Washington, D.C., Super Lawyers lists. In 2000, he received the Edmund J. Randolph Award in recognition of his outstanding contributions to the Department of Justice. He received both his undergraduate and law degrees from Northwestern University.
Tuesday 22 December 2009
Two Former San Juan Municipal Police Officers Sentenced for Using Excessive Force Resulting in DeathRead the Press Release
WASHINGTON – Two former San Juan, Puerto Rico, Municipal Police Officers, Elias Perocier Morales and Eliezer Rivera Gonzalez, were sentenced yesterday in federal court for using excessive force that resulted in the death of Jose Antonio Rivera Robles, the Justice Department announced.
Perocier Morales received a sentence of 10 years in prison. Rivera Gonzalez received a sentence of six and a half years in prison.
Both Perocier Morales and Rivera Gonzalez pleaded guilty in June 2009. In the plea proceedings and court documents, Perocier Morales admitted that on July 20, 2003, in the course of arresting Rivera Robles, he punched his prisoner repeatedly in the face while Rivera Robles was handcuffed and incapable of defending himself. He also admitted to later kicking Rivera Robles hard when he appeared unconscious. Rivera Gonzalez admitted to kicking Rivera Robles extremely hard when he was lying face down toward the ground, in no way posing a threat to anyone. Both men admitted that their actions, together with the actions of their fellow officers, resulted in Rivera Robles’s death.
On Aug. 13, 2009, three other officers were convicted, following trial, of civil rights violations arising out of the fatal assault, and one other officer was convicted of obstruction-related offenses. Vidal Maldonado, Juan Morales Rosado, Carlos Pagan Ferrer and Jose Pacheco Cruz will be sentenced on their convictions at a later date.
"Every person has the right to expect that they will be safe when in the custody of law enforcement officers. Today’s sentence reflects the damage done to the public trust when law enforcement officers engage in such egregious misconduct," Assistant Attorney General Thomas E. Perez said. "The Civil Rights Division will continue to aggressively prosecute officers who abuse their power in this manner."
Special Agent Louis Rivera of the FBI’s San Juan Office investigated this matter. The case was prosecuted by Assistant U.S. Attorney Antonio Bazan, Special Litigation Counsel Gerard Hogan and Trial Attorney Avner Shapiro of the Justice Department’s Civil Rights Division.
Settlement Reached at Sutton Brook Disposal Area Superfund Site in MassachusettsRead the Press Release
A settlement estimated worth more than $30 million will ensure that cleanup of the Sutton Brook Disposal Area Superfund Site in Tewksbury, Mass., will move forward, the Justice Department and U.S. Environmental Protection Agency (EPA) and the Massachusetts Department of Environmental Protection (MassDEP) announced today.
The agreement, lodged in U.S. district court in Boston, resolves federal and state liability claims against 49 potentially responsible parties for the cleanup of the site.
Under the settlement, 20 of the parties will be responsible for implementation of the remedy selected by EPA in 2007. These parties will also pay for the state’s past response costs, oversight costs incurred by EPA and MassDEP, as well as $1.65 million to the U.S. Fish and Wildlife Service and the state for natural resource damages claims stemming from injuries to groundwater and wetlands. The remaining settling parties are required to make payments to two trusts to be used to partially fund the cleanup at the site and to pay for response costs.
The selected remedy includes excavation and consolidation of contaminated soils and sediments, construction of a multi-layered impermeable cap, capture and treatment of contaminated groundwater, institutional controls and long term monitoring. The total cost for the selected remedy is estimated to be $29.9 million.
The 20 defendants responsible for performing the cleanup include:
Ausimont Industries Inc.; BASF Corporation; Boston and Maine Corporation; Browning-Ferris Industries Inc.; Allied Waste Systems Inc.; BFI Waste Systems of North America LLC; BTU International Inc.; E.I. DuPont De Nemours and Co.; Honeywell International Inc.; Mallinckrodt LLC; M/A-COM Inc.; Raytheon Company; Sears, Roebuck and Co.; Textron Systems Corp.; town of Tewksbury, Verizon New England Inc.; Waste Management of Massachusetts Inc.; Waste Management Disposal Services of Massachusetts Inc.; Waste Management of New Hampshire Inc. and Zeneca, Inc.
The site, also known as Rocco’s Landfill, is located on South Street in Tewksbury, Mass. It contains two major source areas: a 40 acre landfill, which includes a northern lobe and a southern lobe and an area of contaminated soils adjacent to the northern lobe. The site was listed on EPA’s National Priorities List in 2001 after state and federal site investigations revealed the presence of volatile organic compounds (VOCs), semi-volatile organic compounds (SVOCs), pesticides, polychlorinated biphenyls and inorganic substances in the soil, groundwater, surface water and sediments samples on and off the Site. SVOCs and VOCs were also found in air samples.
Waste disposal activities at the site can be traced back to 1957. Until approximately 1988, Rocco’s Landfill accepted municipal, commercial and industrial wastes from both inside and outside of the town of Tewksbury, including unknown quantities of hazardous substances.
The consent decree, lodged in the U.S. District Court for the District of Massachusetts, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
More information on the Sutton Brook Disposal Area Superfund Site can be found at http://www.epa.gov/region1/superfund/sites/suttonbrook.
Oklahoma Hospital Group Pays U.S. $13 Million<br /> to Settle False Claims Act AllegationsRead the Press Release
St. John Health System, headquartered in Tulsa, Okla., has agreed to pay the United States $13,229,348.88 to settle allegations that it violated the False Claims Act, the Justice Department announced today.
The United Sates alleges that St. John submitted claims to Medicare and Medicaid that were tainted by the hospital’s financial relationships with referring physicians. Specifically, the United States determined that St. John made payments to 23 individual physicians or physician groups to induce referrals for medical services.
Federal law prohibits healthcare providers like St. John from billing a federal health care program for referrals from doctors with whom the providers have a financial relationship, unless that relationship falls within certain exceptions. Additionally, the Anti-Kickback Statute prohibits the payment of kickbacks for the referral of services that are paid for under a federal health care program.
In April 2008, St. John submitted a self-disclosure report to the Department of Health and Human Service’s Office of Inspector General that acknowledged that the physician agreements may have run afoul of federal law. The settlement announced today resulted from the company’s disclosure.
"The resolution of this matter yielded a substantial recovery for taxpayers, and it underscores our commitment to ensure that services reimbursable by federal health care programs are based on the best interests of patients rather than the personal financial interests of referring physicians," said Tony West, Assistant Attorney General for the Department’s Civil Division.
"This case reflects how we work with providers who self-disclose serious misconduct to efficiently and fairly reach a resolution that protects Federal health care programs and their beneficiaries," said Daniel R. Levinson, Inspector General for the Department of Health and Human Services.
The case was handled by the Department of Justice’s Civil Division and the Office of Inspector General of the Department of Health and Human Services.
Indiana Man to Spend 42 Months in Prison for Cross BurningRead the Press Release
WASHINGTON – Bruce Mikulyuk, 50, of Mishawaka, Ind., was sentenced today to 42 months in prison for interfering with the housing rights of a white woman and an African-American man by burning a cross in their yard and later returning with a knife and threatening the man if he did not leave. Mikulyuk pleaded guilty to the offense in October.
According to the plea agreement filed with the court, Mikulyuk used racial slurs and threatened the male victim on Sept. 27, 2007. Later that evening, Mikulyuk built a cross, took it to the victims’ home, and set it on fire several feet from the home while the victims and two young children were in the home. Mikulyuk later returned to the home with a hunting-style knife and again threatened the male victim. Mikulyuk admitted that he burned the cross and threatened the victims in order to intimidate them and interfere with their housing rights because of race.
This is the fourth Indiana man in two months to be sentenced to prison time for burning a cross. Richard LaShure, Richard Logue and Aaron Latham, of Muncie, Ind., were sentenced on Nov. 5, 2009, after pleading guilty to charges of interference with housing rights and conspiracy against rights for burning a cross in the yard of an African-American family in July 2008.
"The burning cross is an unmistakable symbol of hatred with a painful history, and it has no place in this country. Unfortunately, such incidents are all too common," said Assistant Attorney General Thomas E. Perez of the Justice Department’s Civil Rights Division. "Prosecuting hate crimes is a top priority for the Civil Rights Division."
This case was investigated by Special Agent Art Grist from the Merrillville Field Office of the FBI and prosecuted by Betsy Biffl from the Civil Rights Division.
Florida Man Pleads Guilty to Traveling to the Philippines <br /> for Sex TourismRead the Press Release
Donald Mathias of Davie, Fla., pleaded guilty today to engaging in sex tourism in the Philippines
Mathias, 64, pleaded guilty before U.S. District Judge William Peter Dimitrouleas in Ft. Lauderdale, Fla., to four counts of traveling in foreign commerce and engaging in illicit sexual conduct. He was indicted on those charges on Oct. 27, 2009.
As part of his plea agreement, Mathias admitted that from 2005 until December 2008, he communicated and arranged with the mother of two minor females located in the Philippines, to travel to the Philippines and engage in sexual conduct with the minors. During this time, Mathias and the mother exchanged hundreds of e-mails regarding sexual activity between Mathias and the minor females, recording those sexual acts with a video camera and making payments to the mother in exchange for the sexual acts.
Mathias admitted that he traveled to the Philippines in April 2007 and again in December 2007, engaged in sexual conduct with the minors on those trips and recorded those acts with a video camera. Mathias also admitted that he made the minors sign a contract in December 2007, requiring the minors to be his sex slaves. Money transfer and e-mail records showed that Mathias sent thousands of dollars to the mother between 2005 and December 2008. Mathias also admitted that he traveled to the Philippines in December 2008 to engage in sexual conduct with the minors again. However, Filipino law enforcement detained Mathias and he was not successful in meeting the minors. On Oct. 14, 2009, the defendant was arrested by U.S. law enforcement in Miami.
As part of the plea agreement, the defendant and the government both agreed to recommend a sentence of 20 years in prison and a lifetime period of supervised release. The defendant also agreed to pay $200,000 in restitution to the victims of his crimes located in the Philippines, and agreed to transfer his real property to the United States in order to satisfy the restitution.
Sentencing has been set for March 2, 2010. At sentencing, Mathias faces a maximum sentence of 30 years in prison, up to a $250,000 fine and the possibility of a lifetime period of supervised release.
This case was investigated by ICE’s Office of Investigations in Miami and the U.S. Postal Inspection Service, with assistance from the Philippines Department of Justice. This case is being prosecuted by Trial Attorney Anitha Ibrahim of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Marlene Rodriguez of the U.S. Attorney’s Office for the Southern District of Florida.
Duke Energy to Spend Approximately $93 Million to Resolve Clean Air Act ViolationsRead the Press Release
Duke Energy, one of the largest electric power companies in the nation, will spend approximately $85 million to significantly reduce harmful air pollution at an Indiana power plant and pay a $1.75 million civil penalty, under a settlement to resolve violations of federal clean air laws, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today. The settlement also requires Duke to spend $6.25 million on environmental mitigation projects.
The agreement, filed in federal court in Indianapolis, resolves violations of the Clean Air Act’s new source review requirements found at the company’s Gallagher coal-fired power plant in New Albany, Ind., located directly across the Ohio River from Louisville, Ky.
The settlement is anticipated to reduce sulfur dioxide emissions at the Gallagher plant by almost
35,000 tons per year, an 86 percent reduction when compared to 2008 emissions. This is equivalent to the emissions from 500,000 heavy duty semi trucks, which is more than all the trucks registered in Indiana, Illinois, Kentucky, and Ohio combined. Sulfur Dioxide harms the environment and human health.
The settlement also requires that Duke spend $6.25 million on environmental mitigation projects, including $250,000 for the U.S. Forest Service to address acid rain in downwind national forests, $5 million for one or more other projects such as conversion to hydro generation or hybrid vehicle fleets and $1 million for environmental mitigation projects will be allocated among the states that joined the settlement.
The states of New York, New Jersey and Connecticut, as well as the Hoosier Environmental Council and the Ohio Environmental Council joined the federal government in the settlement.
"This important settlement resolves lengthy litigation on very favorable terms," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The settlement will achieve substantial emission reductions through the use of natural gas and other control measures, and it includes important steps to mitigate the negative impact from past illegal emissions as well as a significant civil penalty. The Justice Department will continue to vigorously enforce the Clean Air Act to ensure that the electric utility industry complies with laws designed to protect human health and the environment."
"Coal-fired power plants are big contributors to air pollution, which is why we need to make sure they comply with the law," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "As a result of this enforcement action, Duke will make large cuts in air pollution, which means cleaner air and better health for the millions of people living in communities downwind of this plant."
As a result of a lawsuit filed in 1999, Duke went to trial in May 2009 for the alleged violations. At that time and Indianapolis jury found that Duke violated the Clean Air Act by failing to obtain required permits and pollution controls before making modifications to Gallagher Units 1 and 3 that caused significant increases in sulfur dioxide. The trial to determine the appropriate remedy for these violations resolved by the settlement had been scheduled to begin on Jan. 25, 2010.
The settlement requires Duke to either repower units 1 and 3 at the Gallagher plant with natural gas or shut them down to remove all sulfur dioxide pollution. This natural gas repowering will also reduce other air pollutants, including nitrogen oxides, particulate matter, mercury, and carbon dioxide. The combined nitrogen oxide emissions from units 1 and 3 are expected to decrease by about 2,198 tons per year as compared to 2008 emissions. By using natural gas rather than coal, Duke will eliminate emissions of particulate matter and mercury from the units. EPA also expects a 50 percent reduction per unit of energy in these units’ carbon dioxide emissions because of the switch to natural gas.
The settlement also requires that Duke install new pollution controls for sulfur dioxide at the other two units at the plant, units 2 and 4. The work and projects that are required by the settlement will, when fully implemented, result in substantial improvements to the air quality for the communities that are the most heavily impacted by the Gallagher plant’s emissions.
This is the 17th settlement secured by the federal government as part of a national enforcement initiative to control harmful emissions from coal-fired power plants under the Clean Air Act’s new source review requirements. The total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed nearly 2 million tons each year once all the required pollution controls have been installed and implemented.
Sulfur dioxide and nitrogen oxides can cause severe harm to human health and the environment. After being emitted from power plants, they are converted to fine particles of particulate matter which can lodge deep in the lungs, causing a variety of health impacts including premature death. Sulfur dioxide and nitrogen oxides are also significant contributors to acid rain, smog, and haze which impair visibility in national parks. Air pollution from power plants can travel significant distances downwind, crossing state lines and creating region-wide health problems.
The settlement does not resolve other pending litigation against Duke for violations of the Clean Air Act, including an appeal to the U.S. Court of Appeals for the Seventh Circuit involving the Wabash River Plant located in West Terre Haute, Ind., and an enforcement action pending in the U.S. District Court for the Middle District of North Carolina involving the company’s coal-fired power plants located in North and South Carolina.
Duke Energy, which is based in Charlotte, N.C., supplies and delivers energy to approximately 4 million customers in the Midwest and the Carolinas.
The proposed settlement was lodged today in the U.S. District Court for the Southern District of Indiana and is subject to a 30-day public comment period. A copy of the consent decree will be available on the Department of Justice Web site at http://www.justice.gov/enrd/Consent_Decrees.html
Monday 21 December 2009
Former New York State Supreme Court Justice<br /> Thomas J. Spargo Sentenced for Attempted Extortion and BriberyRead the Press Release
Former New York State Supreme Court Justice Thomas J. Spargo was sentenced today by U.S. District Judge Gary Sharpe in Albany, N.Y. to 27 months in prison followed by two years of supervised release for attempted extortion and bribery, Assistant Attorney General Lanny A. Breuer of the Criminal Division and Special Agent in Charge John F. Pikus of the FBI’s Albany office announced.
A federal jury convicted Spargo, 66, on Aug. 27, 2009. Evidence introduced at trial showed that on Nov. 13, 2003, Spargo solicited a $10,000 payment from an attorney with cases pending before him in Ulster County, N.Y., while Spargo was serving as a state supreme court justice. The trial evidence showed that when the attorney declined to pay the money, Spargo increased the pressure to pay by a second solicitation communicated through an associate. Finally, according to evidence presented at trial, on Dec. 19, 2003, Spargo directly told the attorney in a telephone conversation that he and another judge close to him had been assigned to handle cases in Ulster County, including the attorney’s personal divorce case. According to the evidence at trial, the attorney felt that if he did not pay the money, both the cases handled by his law firm and his interests in his personal divorce proceeding would be in jeopardy.
"Fair and impartial judgment by those entrusted to carry out the laws is the bedrock of our legal system. When those sworn to uphold the law violate it, they will be held accountable," said Assistant Attorney General Lanny A. Breuer. "We cannot and will not allow the public’s faith in our legal system to be shaken by judicial corruption."
"The FBI wants to assure those who have been extorted by public officials that investigating such crimes is the highest priority of our agency. As our recent public corruption convictions illustrate, the FBI will continue to focus on corruption occurring in all branches of New York State government," said FBI Special Agent in Charge John F. Pikus.
State authorities separately removed Spargo from the bench before his trial and disbarred him after his conviction.
This case is being prosecuted by Senior Trial Attorney Richard C. Pilger and Trial Attorney M. Kendall Day of the Public Integrity Section. The case was investigated by the FBI’s Albany Division.
Sunday 20 December 2009
United States Transfers 12 Guantanamo Bay Detainees <br /> to Afghanistan, Yemen and the Somaliland RegionRead the Press Release
Twelve detainees have been transferred from the detention facility at Guantanamo Bay to Afghanistan, Yemen and the Somaliland region.
As directed by the President’s Jan. 22, 2009 Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of each of these cases. As a result of that review, which examined a number of factors, including potential threat, mitigation measures and the likelihood of success in habeas litigation, the detainees were approved for transfer. In accordance with Congressionally-mandated reporting requirements, the Administration informed Congress of its intent to transfer the detainees at least 15 days before their transfer.
Over the weekend, four Afghan detainees, Abdul Hafiz, Sharifullah, Mohamed Rahim and Mohammed Hashim, were transferred to the Government of Afghanistan. In addition, two Somali detainees, Mohammed Soliman Barre and Ismael Arale, were transferred to regional authorities in Somaliland. Finally, six Yemeni detainees, Jamal Muhammad Alawi Mari, Farouq Ali Ahmed, Ayman Saeed Abdullah Batarfi, Muhammaed Yasir Ahmed Taher, Fayad Yahya Ahmed al Rami and Riyad Atiq Ali Abdu al Haf, were transferred to the Government of Yemen.
These transfers were carried out under individual arrangements between the United States and relevant foreign authorities to ensure the transfers took place under appropriate security measures. Consultations with foreign authorities regarding these individuals will continue.
Since 2002, more than 560 detainees have departed Guantanamo Bay for other destinations, including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Hungary Iran, Iraq, Ireland, Italy, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Palau, Portugal, Russia, Saudi Arabia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
Friday 18 December 2009
Three Detroit-Area Residents Plead Guilty to Health Care FraudRead the Press Release
WASHINGTON – Jackson, Mich., resident Terrence Hicks and Detroit residents Muhammed Al Mahdi and John Saunders pleaded guilty in U.S. District Court in the Eastern District of Michigan this week for their roles in a $4.2 million Medicare fraud scheme, Assistant Attorney General Lanny A. Breuer of the Criminal Division, Acting U.S. Attorney Terrence Berg of the Eastern District of Michigan, Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office and Daniel R. Levinson, Inspector General of the Department of Health and Human Services (HHS) announced today.
Hicks, 42, and Saunders, 70, pleaded guilty to one count of conspiracy to commit health care fraud before Chief Judge Gerald E. Rosen of the U.S. District Court in Detroit today; Al Mahdi, 63, pleaded guilty on Dec. 15, 2009, to the same charge before Chief Judge Rosen. All three defendants admitted that they participated in a conspiracy to defraud Medicare, operating out a Southfield, Mich., clinic called Sacred Hope Center (Sacred Hope). The clinic purported to specialize in providing injection and infusion therapy services to Medicare patients.
Specifically, Hicks admitted that beginning in September 2006, he began working as a patient recruiter and driver at Sacred Hope. Sacred Hope was owned by defendant’s co-conspirators, Jose Rosario and Daisy Martinez, who pleaded guilty in the same case in August and September 2009, respectively. According to court documents, Sacred Hope routinely billed the Medicare program for medications and services that were medically unnecessary and, in many instances, never provided. Hicks admitted to being aware that the purpose of the clinic was to defraud the Medicare program, not to provide legitimate health care to patients.
According to court documents, Medicare beneficiaries were not referred to Sacred Hope 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 kickbacks. Hicks, along with co-conspirator Wayne Smith, who pleaded guilty on Dec. 10, 2009, was responsible for driving into Detroit neighborhoods and recruiting Medicare beneficiaries by offering them cash and prescriptions for controlled substances. In exchange for their kickbacks, the Medicare beneficiaries would visit the clinic, typically driven there by Hicks and/or Smith, and sign documents indicating that they had received the services billed to Medicare. Hicks and/or Smith would obtain cash on a daily basis from co-conspirators for the purpose of paying the beneficiaries cash kickbacks. Hicks or Smith would then distribute this cash to the Medicare beneficiaries.
In their pleas, Al Mahdi and Saunders admitted that they were Medicare beneficiaries who permitted their Medicare numbers to be used for fraudulent billings at Sacred Hope. Specifically, they admitted being driven by Hicks and Smith to Sacred Hope, and signing forms indicating that they had received injection and/or infusion therapy. They admitted that in return for signing these forms, they were paid cash kickbacks of approximately $50 per visit.
Both defendants admitted that when visiting Sacred Hope, they were repeatedly injected with unknown substances, the purposes of which were never explained to them. Al Mahdi and Saunders were aware that the clinic was making notations in medical charts for medications that were never provided to them. Both Al Mahdi and Saunders admitted that they did not visit Sacred Hope for the purpose of receiving legitimate medical care. Rather, they visited Sacred Hope for the sole purpose of receiving kickbacks, and knowingly allowed Medicare to be billed for the services supposedly provided to them there.
The case is being prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation.The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of Michigan. Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three), Houston (Phase Four) and Brooklyn (Phase Five) – the Strike Force has obtained indictments of more than 460 individuals and organizations that collectively have falsely billed the Medicare program for more than one billion dollars. 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 HEAT team, go to: www.stopmedicarefraud.govTexas Man Sentenced to 292 Months in Prison for Advertising <br /> and Possessing Child PornographyRead the Press Release
Mark Edwin Cairnes, 51, was sentenced today to 292 months in prison and lifetime supervised release following his prison term for advertising and possessing child pornography.
Cairnes, of Jonestown, Texas, pleaded guilty on Sept. 25, 2009, before U.S. District Judge Sam Sparks in Austin, Texas, to one count of advertising child pornography and one count of possession of child pornography. As part of his plea agreement, Cairnes admitted to being a member of an Internet-based bulletin board group dedicated to the trading of child pornography. The group could only be accessed by using a unique username and password. The groups had very detailed rules for behavior, including requiring all members to post only pornographic images or videos depicting minors under the age of 18. Members were also required to post their images or videos in pre-established categories based on the type of material, such as the hardcore category, which contained only images or links to images that depicted minors engaged in sexually explicit acts with either adults or other minors.
Cairnes admitted he was an active participant on the bulletin board and that his involvement dated from October 2006. Cairnes also admitted that on some occasions he made requests for images and videos of child pornography by name or by providing "sample images" of the material he sought. Cairnes also admitted to commenting on the quality of the child pornography he received from other members and expressing his gratification upon seeing the images and videos of child pornography, some of which depicted very young children. Through his plea, Cairnes also admitted to possessing tens of thousands of images of child pornography, including images of the sexual abuse of infants and images of children engaged in sadistic and masochistic abuse.
Cairnes was identified through "Operation Joint Hammer," the U.S. component of an ongoing global enforcement operation targeting transnational rings of child pornographers. The operation has led to the arrest of more than 60 people in the United States involved in the trade of child pornography. Operation Joint Hammer was initiated through evidence developed by European law enforcement and shared with U.S. counterparts by Europol and Interpol. The European portion of this global enforcement effort, "Operation Koala," was launched after the discovery of the activities of several people in Europe who were abusing children and producing photographs of the abuse for commercial gain. Further investigation unveiled a number of online child pornography rings.
The case was prosecuted by Assistant U.S. Attorney Matthew B. Devlin of the Western District of Texas and Trial Attorney Alecia Riewerts Wolak of the Criminal Division’s Child Exploitation and Obscenity Section. The investigation was handled by U.S. Immigration and Customs Enforcement.
Roanoke, Virginia, Neo-Nazi Convicted for Threats, Witness IntimidationRead the Press Release
WASHINGTON -- William A. "Bill" White, the self-proclaimed commander of the neo-Nazi group the American National Socialist Workers Party, was convicted by a federal jury for threatening three individuals and for attempting to intimidate litigants in a federal housing discrimination lawsuit, the Justice Department announced. White was convicted today of three counts of communicating threats in interstate commerce, and one count of witness intimidation.
According to the testimony at trial, from late 2006 through mid-2008, White targeted individuals and engaged in a pattern of threatening communications which resulted in those individuals fearing for their personal safety. These communications included late night telephone calls to the victims’ homes, during which he would identify himself as the leader of a white supremacist group; emails to the victims in which he would make threatening statements; and posting the victims’ names, addresses, phone numbers, and other personal information on neo-Nazi Web sites, sometimes accompanied by language advocating the murder of the targeted victim.
In one instance, White threatened a bank employee because of a personal financial dispute. In another instance, he sent letters marked with swastikas to the homes of individuals involved in a federal housing discrimination suit, filled with racial epithets and causing the victims to feel that they may suffer dire consequences for their participation in the lawsuit. Other counts of conviction victims included threats to a human rights lawyer from Canada and threats to a university administrator who was responsible for implementing a diversity program. White was acquitted of three additional counts.
White faces a maximum punishment of 25 years: a maximum of 10 years in prison for witness intimidation; and a maximum of five years imprisonment for each of the three counts of communicating threats in interstate commerce. Each of the aforementioned charges entails a potential fine of up to $250,000.00.
"One of the greatest truths about our nation is that everyone has the right to be free from threats violence because of the color of their skin, the language they speak or the country from which they come. Those individuals who are driven by bigotry to violate that right will be brought to justice," said Assistant Attorney General Perez. "The jury’s verdict in this case sends a strong message that hate crimes will not be tolerated on our free society."
"For an extended period of time, William White has hidden behind the First Amendment while making racist remarks and threatening people who are different from him. While the First Amendment protects our ability to express views even if unpopular, it does not provide a license to threaten, intimidate, and inflict emotional distress,"
U.S. Attorney Timothy Heaphy for the Western District of Virginia said, "William White did just that, using hateful words as a sword. We appreciate the strength of the victims of those hateful words. Because they came forward, William White will be held accountable for his misguided attempt at intimidation."
Oklahoma Man Sentenced to 12 Months in Prison for Kickback Scheme<br /> Involving Government Contract in AfghanistanRead the Press Release
WASHINGTON — An Oklahoma man was sentenced today to 12 months and one day in prison for his role in a scheme to solicit kickbacks in connection with the award of a private security services subcontract to protect U.S. government personnel and contractors in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Assistant Attorney General Christine Varney of the Antitrust Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Bryan Lee Burrows, 42, of Wagoner, Okla., also was sentenced to two years of supervised release by U.S. District Court Judge Leonie M. Brinkema in the Eastern District of Virginia. He pleaded guilty on Sept. 2, 2009, to one count of conspiracy to solicit a kickback.
According to court documents, the U.S. Agency for International Development (USAID) is the principal federal U.S. agency that extends assistance to countries recovering from disaster, trying to escape poverty and engaging in democratic reforms. The agency works to support long-term and equitable economic growth and advance U.S. foreign policy objectives.
In August 2006, USAID awarded a $1.4 billion contract known as the Afghanistan Infrastructure Rehabilitation Project (the AIRP contract). The AIRP contract required the award of numerous subcontracts, including for the provision of security services to protect AIRP workers. According to court documents, from approximately February 2009 through May 2009, Burrows was employed in Kabul, Afghanistan, by Civilian Police International, a Virginia-based company that provides law enforcement training internationally. Burrows admitted that he conspired with others to solicit kickbacks from private security vendors in return for favorable treatment for those potential bidders in connection with the award of a subcontract. According to court documents, the subcontract provided for private security services to protect USAID personnel and contractors in Afghanistan operating under the AIRP contract.
The case is being prosecuted by Trial Attorney Bradford Geyer of the Criminal Division’s Fraud Section, Trial Attorneys Kimberly A. Justice and Joseph Muoio of the Antitrust Division’s Philadelphia Field Office and Assistant U.S. Attorney Timothy D. Belevetz of the U.S. Attorney’s Office for the Eastern District of Virginia. The investigation is being conducted by USAID’s Office of Inspector General as well as members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.
Thursday 17 December 2009
Three New York City Home Health Agencies Pay $9.7 Million<br /> to the United States to Settle False Claims Act ClaimsRead the Press Release
WASHINGTON - The Department of Justice announced today that the United States and the state of New York have entered into settlement agreements with three home health agencies to resolve allegations that they submitted false claims to the New York Medicaid and Medicare programs.
The New York Medicaid program provides coverage for home health aides only if those aides have valid certificates showing that they received proper training. The United States contended that Nursing Personnel Home Care (Nursing Personnel) knowingly supplied aides with phoney training certificates to Extended Home Care (Extended) and Excellent Home Care (Excellent), which then billed New York Medicaid for the aides’ services; that Extended and Excellent knowingly billed for aides with phoney certificates who were untrained; and that Extended and Excellent knowingly submitted claims to the Medicare program for home health aide services purportedly rendered by aides supplied by Nursing Personnel that were not actually provided. The United States is receiving approximately $9.7 million as a result of the settlement with these three companies, and the state of New York is receiving approximately $14.3 million, for a total recovery of $24 million.
"Our nation’s Medicare and Medicaid patients deserve nothing less than quality health care they can depend on," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "When home health agencies cut corners to avoid compliance with legal training standards, they seriously undermine the integrity of the care they provide." Assistant Attorney General West thanked the cooperative efforts of the Commercial Litigation Branch of the Civil Division, the U.S. Attorney’s Office for the Eastern District of New York, the Office of Investigations for the Department of Health and Human Services’ Office of Inspector General, the Medicaid Fraud Control Unit of the New York Attorney General’s Office, and the New York State Office of the Medicaid Inspector General in achieving this settlement.
New York Attorney General Andrew M. Cuomo said, "The size of this settlement underscores the seriousness of the allegations and the importance of vigorous oversight of the Medicaid program and the medical care of our loved ones. Being treated at home is an important option for many New Yorkers, and the companies that provide this service at taxpayer expense have an obligation to ensure that the health care workers they employ are qualified for the job."
"This settlement reflects this office’s commitment to investigate allegations of fraud committed on the Medicare or Medicaid programs, especially when the alleged fraud could impact the standard of care received by New Yorkers in need of medical assistance," said Benton J. Campbell, U.S. Attorney for the Eastern District of New York. Mr. Campbell praised the collaborative efforts of the state and federal agencies that contributed to the recovery of funds for the Medicaid and Medicare programs.
The allegations resolved by today’s settlements were initiated by two lawsuits filed under the whistleblower provisions of the False Claims Act, which allow private citizens to file suit on behalf of the United States for fraud and share in any recovery. Maurice Keshner will receive $251,107 from the government’s recovery from Nursing Personnel. Deborah Yannicelli will receive $1,663,040 from the government’s recovery from Extended and Excellent.
The lawsuits were captioned as United States ex rel. Keshner v Nursing Personnel Home Care, et al., Civil Action No. 06-1067 (E.D.N.Y.), and United States and the State of New York ex rel. Jane Doe v. Extended Nursing Personnel CHHA, LLC, et al., Civil Action No. 07-4621 (E.D.N.Y.).
Guyanese National Charged with Smuggling Indian Nationals to the United StatesRead the Press Release
A Guyanese national has been indicted on charges of conspiracy and alien smuggling in connection with her role in the smuggling or attempted smuggling of four Indian nationals to the United States.
Annita Devi Gerald, aka Annita Rampersad, 52, was charged in a nine-count indictment returned yesterday by a federal grand jury in the Southern District of Texas. Gerald was arrested by ICE special agents in Houston on Nov. 17, 2009, and has been held without bond since that time.
According to the indictment, from approximately April 2009 to Nov. 17, 2009, Gerald and others conspired to smuggle four Indian nationals into the United States. Allegedly, Gerald and her co-conspirators fraudulently obtained Belizean visas for the Indian nationals and escorted them from India to Belize, moving through various countries in Central and South America. Gerald allegedly provided lodging for all four Indian nationals in Belize while further smuggling arrangements were made.
In August 2009, Gerald allegedly arranged transportation for one of the Indian nationals to cross the border from Belize into Mexico where he met with Gerald’s co-conspirator, who escorted him through Mexico. In Monterrey, Mexico, Gerald’s co-conspirator paid a Mexico-based smuggler to illegally transport the individual across the Mexico-U.S. border to Houston. After making these arrangements, Gerald’s co-conspirator allegedly flew to Houston where the co-conspirator received the Indian national at a motel approximately 10 days later. The smugglers who delivered the Indian national to Gerald’s co-conspirator in Houston allegedly demanded and received a smuggling payment prior to releasing him. The Indian national smuggled to Houston is currently being administratively detained by ICE, awaiting removal. The whereabouts of the other three Indian nationals allegedly harbored by Gerald in Belize is currently unknown.
If convicted, Gerald faces a maximum sentence of five years in prison for conspiracy, and 10 years in prison for each of the four counts of encouraging and inducing aliens to come to the United States for profit. Additionally, she is subject to the maximum penalty for each of the four counts of bringing aliens to the United States for profit, which is 10 years for a first or second violation, and 15 years for any other violation. She is also subject to a fine of up to $250,000.
An indictment is merely an accusation, and the defendant is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
The investigation was conducted by ICE’s Office of Investigations in Miami and Houston, with the critical assistance of the ICE Attaché offices in El Salvador, Ecuador, Brazil, Singapore and Panama, as well as the ICE Office of Intelligence in Washington, and the Alien Smuggling Interdiction Unit of Customs and Border Protection (CBP) in Washington. El Salvadoran authorities, particularly the Direción General de Migración y Extranjería (El Salvador Immigrations) and the Grupo Especial de Investigaciones Nacionales e Internacionales (El Salvador Police-GEINI) also provided invaluable assistance.
The case is being prosecuted by Trial Attorneys Jerry Massie and Jessica Morris of the Criminal Division’s Domestic Security Section, with the assistance of Assistant U.S. Attorneys Edward Gallagher and Douglas Davis of the Southern District of Texas.
Former FBI Contract Linguist Pleads Guilty to <br /> Leaking Classified Information to BloggerRead the Press Release
A former FBI contract linguist pleaded guilty today to unlawfully providing classified documents to the host of an Internet blog who then published information derived from those documents on the blog.
Shamai Kedem Leibowitz, aka Samuel Shamai Leibowitz, 39of Silver Spring, Md., pleaded guilty in federal court in Greenbelt, Md., to a one-count information charging him with knowingly and willfully disclosing to an unauthorized person five FBI documents classified at the "secret" level that contained classified information concerning the communication intelligence activities of the United States.
Under the plea agreement, the government and Leibowitz have agreed that a term of 20 months in prison is the appropriate sentence in this case. The court may accept or reject the plea agreement between the government and Leibowitz. In addition, the court retains discretion to impose any lawful term of supervised release or fine, and to set any lawful conditions of supervised release.
"The willful disclosure of classified information to those not entitled to receive it is a serious crime," said David Kris, Assistant Attorney General for National Security. "Today’s guilty plea should serve as a warning to anyone in government who would consider compromising our nation’s secrets."
"Government employees who are given access to classified information are prohibited from disclosing the information without permission," said U.S. Attorney Rod J. Rosenstein.
"As a trusted member of the FBI ranks, Leibowitz abused the trust of the FBI and the American public by using his access to classified information for his own purposes," said Special Agent in Charge Richard A. McFeely.
According to the plea agreement, from January 2009 through August 2009, Leibowitz was employed by the FBI as a contract linguist in an office in Calverton, Md. As part of his official duties, Leibowitz held a top secret security clearance and had lawful access to classified documents and information relating to the communication intelligence activities of the United States.
In April 2009, according to the plea agreement, Leibowitz knowingly and willfully caused five documents that were classified at the secret level and which contained classified information relating to the communication intelligence activities of the United States, to be furnished to a person not entitled to receive such information.
The recipient was the host of a public blog available to anyone with access to the Internet. The recipient then published on the blog information derived from the classified documents provided by Leibowitz.
This investigation was conducted by the FBI Baltimore Field Office. The prosecution is being handled by Assistant U.S. Attorney Steven M. Dunne, of the U.S. Attorney’s Office for the District of Maryland, and Trial Attorney Kathleen M. Kedian, of the Counterespionage Section of the Justice Department’s National Security Division.
Wednesday 16 December 2009
Virginia Resident Charged with Conspiring to Bribe<br /> Former Panamanian Government Officials for Maritime ContractRead the Press Release
A federal grand jury has charged a Virginia Beach, Va., resident with conspiracy to pay bribes to former Panamanian government officials to secure maritime contracts.
John W. Warwick, 63, yesterday was charged in U.S. District Court for the Eastern District of Virginia with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for Ports Engineering Consultants Corporation (PECC) in violation of the Foreign Corrupt Practices Act (FCPA). PECC, a company incorporated under the laws of Panama, was affiliated with an engineering firm based in Virginia Beach. According to the indictment, PECC was created so that Warwick, co-conspirator Charles Jumet, the engineering firm and others could corruptly obtain certain maritime contracts from the Panamanian government.
The indictment alleges that from at least 1997 through July 2003, Warwick, the former president of PECC, was involved in a conspiracy to pay money secretly to former Panamanian government officials for awarding PECC contracts to maintain lighthouses and buoys along Panama’s waterway. The indictment also alleges that the former Panamanian government awarded PECC a no-bid 20-year concession to perform these duties. Upon receipt of the concession, Warwick and others authorized corrupt payments to be made to the former Panamanian government officials.
As a result of the contracts, PECC received approximately $18 million in revenue from 1997 to 2000. In 2000, Panama’s Comptroller General Office suspended the contract while it investigated the government’s decision to award PECC a contract without soliciting any bids from other entities. In 2003, the Panamanian government resumed making payments to PECC.
The indictment also alleges Warwick, Jumet and others conspired to make corrupt payments totaling more than $200,000 to the former administrator and deputy administrator of the Panama Maritime Authority and to a former, high-ranking elected executive official of the Republic of Panama.
An indictment is merely an accusation and the defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
Jumet pleaded guilty on Nov. 13, 2009, to a two-count criminal information charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for PECC, in violation of the FCPA, and making a false statement. Jumet is scheduled to be sentenced on Feb. 12, 2010.
If convicted, Warwick faces a maximum of five years in prison and a fine of the greater of $250,000 or twice the gain or loss. The indictment seeks forfeiture of the proceeds that Warwick and his engineering firm received as a result of the contracts that the Panamanian government awarded PECC.
The case is being prosecuted by Trial Attorney Rina Tucker Harris of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael S. Dry of the U.S. Attorney’s Office for the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office, the FBI’s Richmond Field Office, ICE’s Washington Field Office and ICE’s Richmond Field Office.
Retired Army Major Sentenced to 57 Months in Prison for Role in Bribery Scheme Involving DOD Contracts in KuwaitRead the Press Release
WASHINGTON — A retired major in the U.S. Army today was sentenced to 57 months in prison for his role in a bribery scheme related to Department of Defense (DOD) contracts awarded in Kuwait, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and Assistant Attorney General of the Antitrust Division Christine Varney.
Christopher H. Murray, 42, a resident of Cataula, Ga., was also ordered by Judge Clay D. Land of the U.S. District Court for the Middle District of Georgia - Columbus Division to pay $245,000 in restitution and to serve three years of supervised release following the prison term.
Murray pleaded guilty in January 2009 to a five-count criminal information charging him with four counts of bribery and one count of making a false statement. According to the court documents, in 2005 and 2006, then-Major Murray served as a contracting specialist in the small purchases branch of the contracting office at Camp Arifjan, Kuwait. As a contracting specialist, Murray was responsible for soliciting bids for military contracts, evaluating the sufficiency of those bids, and then recommending the award of contracts to particular contractors. In this capacity, Murray solicited and received approximately $225,000 in bribes from DOD contractors in exchange for recommending the award of contracts for various goods and services.
According to court documents, Murray returned to Kuwait in fall 2006, as a contracting officer, and solicited and received another $20,000 in bribes from a DOD contractor in exchange for the award of a construction contract. When confronted with evidence of his criminal conduct, Murray made false statements to federal agents investigating the matter.
This case is being prosecuted by trial attorney Richard B. Evans of the Criminal Division’s Public Integrity Section as well as trial attorneys Mark W. Pletcher, Emily W. Allen and Finnuala Kelleher of the Antitrust Division’s National Criminal Enforcement Section.
The case is being investigated by the Special Inspector General for Iraq Reconstruction; the Army Criminal Investigation Command, Defense Criminal Investigative Service; U.S. Immigration and Customs Enforcement; the FBI; and the Internal Revenue Service.
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.
Anyone with information concerning bid rigging, bribery or other criminal conduct regarding DOD contracts is urged to call the Defense Criminal Investigative Service at 800-424-9098 or [email protected]; Army Criminal Investigation Division at www.cid.army.mil; or the FBI at 800-225-5324.
Justice Department Signs Agreement with Santa Rosa, California, to Ensure Civic Access for People with DisabilitiesRead the Press Release
The Justice Department today announced an agreement with Santa Rosa, Calif., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
"PCA is about more than just ADA compliance, it is about ensuring that individuals with disabilities can expect the same access to civic programs, services, and facilities as everyone else," said Assistant Attorney General Thomas E. Perez of the Civil Rights Division. "I commend city officials for making this commitment to provide equal access to city programs, activities and services for all its residents."
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. This agreement marks the 175th under the PCA initiative and the 14th agreement reached this year.
"We appreciate the commitment to accessibility and ADA compliance made by each of the 175 cities, counties, and other government entities who have entered into a PCA agreement with the Justice Department," said Assistant Attorney General Perez. "We hope that all local governments throughout the country are committed to achieving full compliance with the ADA, particularly as we approach the 20th anniversary of this important civil rights law’s passage."
Under the agreement announced today, Santa Rosa will take several important steps to improve access for individuals with disabilities, such as:
- Making physical modifications to its facilities so that parking, routes into the buildings, entrances, public telephones, restrooms, service counters and drinking fountains are accessible to people with disabilities;
- Posting, publishing and distributing a notice to inform members of the public of the provisions of Title II and their applicability to the city’s programs, services and activities;
- Officially recognizing California’s telephone relay service and training staff in using the relay service for telephone communications;
- Developing a method for providing emergency management policies and procedures for persons with disabilities, including preparation, notification, response and clean up;
- Developing a method for providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs;
- Installing signs at any inaccessible entrance to a facility directing users to an accessible entrance or to information about other accessible facilities; and
- Implementing a plan to improve the accessibility of city sidewalks and provide for the installation of accessible curb cuts throughout the city.
Today’s settlement agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement will remain in effect for five years or until the parties agree that all actions required by the agreement have been completed, whichever is later. The department will monitor compliance with the agreement until required actions have been completed.
Santa Rosa is just 55 miles north of San Francisco, where wine and farm country meet the redwoods and the ocean. Santa Rosa sits at the heart of Sonoma County. It is the county seat and has a local population of approximately 155,000 people. The city has much to offer by way of arts and culture, parks, trails and green spaces, making it a prime destination for tourist and wine enthusiasts. Santa Rosa was also home to Peanuts comic strip creator Charles Schulz and lists the Charles M. Schulz Museum and Research Center among the attractions located in the city.
People interested in finding out more about the ADA, today’s agreement with Santa Rosa, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA Web page at http://www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD).
Justice Department Reaches Americans with Disabilities Act Settlement with Intellitec CollegesRead the Press Release
WASHINGTON – The Department of Justice today announced a settlement agreement under the Americans with Disabilities Act (ADA) with Intellitec Colleges in Colorado Springs, Grand Junction, and Pueblo, Colo., to ensure access to its technical colleges for individuals with disabilities.
Intellitec offers career training programs for automotive technicians, drafting, medical and dental assistants, administrative professionals and more at its three campuses. The agreement requires, among other things, that Intellitec remove barriers to access at its existing facilities, ensure that future construction complies with the ADA, and ensure that any future alterations to existing facilities are, to the maximum extent feasible, readily accessible to and usable by individuals with disabilities. The agreement with Intellitec is the result of a compliance review conducted by the department.
"This agreement with a long-standing technical school will help ensure that job skills training is available to everyone, including individuals with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "It is a top priority of the Justice Department to enforce the laws that guarantee that persons with disabilities have equal access to educational opportunities and the doors those opportunities open."
The ADA prohibits discrimination by public accommodations on the basis of disability, including nursery, elementary, secondary, undergraduate or postgraduate private schools, and other places of education. Those interested in finding out more about these agreements or seeking information about and how to comply with the ADA can call the Justice Department’s toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD), or access its ADA Web site at http://www.ada.gov .
Former Kansas Businessman Sentenced to 57 Months in Prison for Role<br /> in Scheme to Defraud Federal E-rate ProgramRead the Press Release
WASHINGTON – A former owner of three Kansas computer service companies was sentenced to 57 months in prison for his role in a conspiracy to defraud the federal E-Rate program and for making a false statement to the U.S. Department of Housing and Urban Development (HUD), the Department of Justice announced today.
Leonard Douglas "Doug" LaDuron, former owner and president of Serious ISP Inc., Myco Technologies Inc. and Elephantine Corporation, also was ordered by Chief Judge Kathryn H. Vratil in the U.S. District Court in Kansas City, Kan., to pay $238,607 in restitution. LaDuron pleaded guilty on June 29, 2009, to one count of conspiracy and one count of making a false statement. LaDuron was originally indicted on April 24, 2008.
According to court documents, LaDuron and his co-conspirators, Benjamin Rowner and Jay H. Soled, who are former owners of DeltaNet Inc., steered E-Rate contracts to their respective companies and devised a scheme to defraud the E-Rate program by submitting false statements and concealing material facts from the Universal Service Administrative Company (USAC), a non-profit corporation. The conspiracy, which began in 1999 and ran at least until 2003, affected at least 10 schools located across the country.
Additionally, in July 2003, LaDuron knowingly submitted a false statement to the Lawrence-Douglas County Housing Authority, HUD’s local administrator of the Housing Choice Voucher Program in Lawrence, Kan., when he forged an employee’s signature and submitted an inaccurate employment verification form.
The E-Rate program was created by Congress in the Telecommunications Act of 1996 and is administered by the USAC, under the auspices of the Federal Communications Commission (FCC). The program provides subsidies to economically disadvantaged schools and libraries. Depending on the financial needs of applicant schools, the program pays 10 to 90 percent of the cost for Internet access and telecommunications services, as well as internal computer and communications networks.
LaDuron’s co-conspirators, Benjamin Rowner and Jay H. Soled, pleaded guilty to their role in the conspiracy on July 10, 2008, and are scheduled to be sentenced Feb. 4, 2010. Mary Jo LaDuron, Doug LaDuron’s mother, pleaded guilty to making a false statement to the FBI and was sentenced on Oct. 13, 2009, to pay a $3,743 fine.
Today’s sentencing is a result of an investigation conducted by the Antitrust Division, the FBI, the HUD Office of Inspector General, and the FCC with assistance from the U.S. Attorney’s Office for the District of Kansas. Anyone with information concerning violations of the E-Rate program or other anticompetitive conduct is urged to call the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit http://www.justice.gov/atr/contact/newcase.htm.
Credit Suisse Agrees to Forfeit $536 Million in Connection with Violations of the International Emergency Economic Powers Act and New York State LawRead the Press Release
Credit Suisse AG, a Swiss corporation headquartered in Zurich, has agreed to forfeit $536 million to the United States and to the New York County District Attorney’s Office in connection with violations of the International Emergency Economic Powers Act (IEEPA) and New York state law. The forfeiture is the largest ever entered against an entity for IEEPA violations.
The violations relate to transactions Credit Suisse illegally conducted on behalf of customers from Iran, Sudan and other countries sanctioned in programs administered by the Department of the Treasury’s Office of Foreign Assets Control (OFAC).
A criminal information was filed today in the U.S. District Court for the District of Columbia charging Credit Suisse with one count of violating the IEEPA. Credit Suisse waived indictment, agreed to the filing of the information, and has accepted and acknowledged responsibility for its criminal conduct. Today, Credit Suisse also entered into an agreement with OFAC to settle the apparent civil violations of IEEPA and other authorities arising from this conduct. Credit Suisse agreed to forfeit the funds as part of the deferred prosecution agreements reached with the Department of Justice and the New York County District Attorney’s Office and in settlement of the civil claims with OFAC.
"One of this administration’s top priorities is to employ our resources aggressively to hold accountable those who engage in financial misconduct," said Attorney General Eric Holder. "Credit Suisse’s decades-long scheme to flout the rules that govern our financial institutions robbed our system of the legitimacy that is fundamental to its success. Today’s announcement sends a strong message that we will not let this type of conduct stand."
Under IEEPA, it is a crime to willfully violate, or attempt to violate, any regulation issued under the act, including the regulations related to Iran, Sudan, Burma, Cuba and Libya.
According to court documents, beginning as early as 1995 and continuing through 2006, Credit Suisse, in Switzerland and the United Kingdom, altered wire transfers involving U.S. sanctioned countries or persons. Specifically, according to court documents, Credit Suisse deliberately removed material information, such as customer names, bank names and addresses, from payment messages so that the wire transfers would pass undetected through filters at U.S. financial institutions. Credit Suisse also trained its Iranian clients to falsify wire transfers so that such messages would pass undetected through the U.S. financial system. This scheme allowed U.S. sanctioned countries and entities to move hundreds of millions of dollars through the U.S. financial system.
For its Iranian clients, Credit Suisse promised that no message would leave the bank without being hand-checked by a Credit Suisse employee to ensure that the message had been formatted to avoid U.S. filters. If an Iranian client provided payment messages that contained identifying information, Credit Suisse employees would remove the detectable information so that the message could pass undetected through OFAC filters at U.S. financial institutions. According to court documents, Credit Suisse’s international communications showed a continuous dialogue about the scheme, assessing how to better process Iranian transactions to ensure increased business from existing and future Iranian clients. For example, in 1998, Credit Suisse provided its Iranian clients with a pamphlet entitled, "How to transfer USD payments", which provided detailed payment instructions on how to avoid triggering U.S. OFAC filters or sanctions. Additionally, Credit Suisse processed 88 payments for those listed as "Specially Designated Nationals" by OFAC. Specially Designated Nationals are individuals and entities specifically named by OFAC to be subject to U.S. sanctions. Their assets are blocked and U.S. persons are generally prohibited from dealing with them.
"Through its egregious conduct, Credit Suisse illegally moved hundreds of millions of dollars through the American financial system and actively assisted sanctioned countries in evading U.S. laws," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "In essence, Credit Suisse said to sanctioned entities, ‘We’ve got a service, and that service is helping you evade U.S. banking regulations.’"
"This case provides a timely lesson about how Iran seeks to involve others in deceptive conduct to evade legal and regulatory controls," said Treasury Under Secretary for Terrorism and Financial Intelligence Stuart Levey. "Those who do business with Iran expose themselves to the risk, and the consequences, of participating in transactions supporting proliferation, terrorism or sanctions evasion."
"Investigations involving OFAC regulations and IEEPA violations are often long and complicated and require significant resources," said Kevin Perkins, Assistant Director of the FBI’s Criminal Investigative Division. "The FBI will work closely with our law enforcement partners and federal regulators to ensure compliance with federal banking laws and regulations and to promote the highest level of transparency across financial institutions worldwide."
"In the world’s increasingly complex financial markets, it’s critical that global institutions follow U.S. law, including sanctions against other countries," said Steve Miller, IRS Deputy Commissioner for Services and Enforcement. "We’re proud our Criminal Investigation agents applied their special money-tracing skills to unmask this deception."
The bank’s forfeiture of $268 million to the United States and $268 million to the New York County District Attorney’s Office will settle forfeiture claims by the Department of Justice and the state of New York and civil claims by OFAC related to the misconduct. In light of the bank’s remedial actions to date and its willingness to acknowledge responsibility for its actions, the Department will recommend the dismissal of the information in two years, provided Credit Suisse fully cooperates with, and abides by, the terms of the agreement.
Throughout the investigation, Credit Suisse has provided prompt and substantial cooperation, including working with regulators to find a method consistent with Swiss law to disclose a significant portion of the data, communications and documentation underlying the misconduct. Credit Suisse has also committed substantial resources to conducting an extensive internal investigation of the misconduct and has agreed to enhance its sanctions compliance programs to be fully transparent in its international payment operations.
The case was prosecuted by Section Chief Richard Weber, Trial Attorneys Frederick Reynolds and Keith Liddle, and supported by Laurie Bender and Karina Lleva of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by FBI’s New York Field Office and IRS-Criminal Investigation’s Washington Field Division. The Department of Justice expressed additional gratitude to Bureau Chief Adam Kaufmann, Assistant District Attorneys Gary Fishman, Richard Preiss and Aaron Wolfson of the New York County District Attorney’s Office, Investigation Division Central. The Department of Justice also expressed gratitude to the Department of Treasury’s Office of Foreign Assets Control, the New York Federal Reserve and the Board of Governors of the Federal Reserve System for the significant and valuable assistance.
Deferred Prosecution Agreement
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Factual StatementAssistant Attorney General for Antitrust, Christine Varney, Issues Statement on European Commission Microsoft SettlementRead the Press Release
WASHINGTON – Christine Varney, Assistant Attorney General of the Department’s Antitrust Division, issued the following statement today after the European Commission and Microsoft Corporation announced their settlement:
"The Department of Justice’s Antitrust Division commends the efforts of the European Commission and Microsoft Corporation, which have announced that they have reached a comprehensive settlement resolving their disputes under European competition law. As we understand it, the settlement is based on measures to enhance competition and is designed to preserve industry participants’ incentives and ability to compete going forward. A settlement that helps to clarify obligations under European law allows the industry to move forward. The Department is committed to continuing its strong and cooperative relationship with the European Commission to promote competition policy that protects consumer welfare."