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30 June 2011
Justice Department Sues James J. Williams Bulk Service Transport in Washington to Protect Employment Rights of Air Force ReservistRead the Press Release
WASHINGTON - The Department of Justice today filed a lawsuit on behalf of Dave Axtell, a U.S. Air Force reservist, against James J. Williams Bulk Service Transport Inc. (JJW), its parent company Trans-System Inc., and another Trans-System subsidiary, System TWT Transportation Inc. The lawsuit alleges that the companies violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by failing to promptly and properly reemploy Axtell in April 2009, after he returned from military service in support of Operation Enduring Freedom. The complaint also alleges that the defendants unlawfully terminated Axtell’s employment without cause shortly after he was reemployed.
Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment been not interrupted by military service or in a position of like seniority, status and pay. In addition, any individual with Axtell’s length of absence for military service who is reemployed cannot be terminated, except for just cause, within one year after the date of reemployment.
JJW is a trucking company that specializes in hauling hazardous materials. According to the department’s complaint, filed in the U.S. District Court for the Western District of Washington in Tacoma, the defendant companies violated USERRA by not promptly or properly reemploying Axtell in his previous pre-service position as a driver supervisor, or in a position with comparable seniority status and pay. The defendants waited three months to reemploy Axtell, and thereafter employed him in an unsalaried, lower status position requiring longer hours. Defendants terminated Axtell’s employment without cause shortly after reemploying him, also in violation of USERRA.
In its lawsuit, the Justice Department seeks the lost wages and benefits that Axtell would have received if he had been properly reemployed in his pre-service position as a driver supervisor, or a comparable position, as well as damages resulting from the unlawful termination of his employment. The complaint also seeks double damages because the defendants’ actions constituted a willful violation of USERRA. The case will be litigated by the U.S. Attorney’s Office based in Seattle.
“The men and women who wear our nation’s uniform deserve the comfort of knowing that they do not have to sacrifice their civilian employment in order to serve our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to aggressive enforcement of USERRA to protect the rights of those who, through their bravery and sacrifice, secure the rights of all Americans.”
“Just as our dedicated men and women of the military protect our freedoms overseas, we must protect their interests here at home,” said U.S. Attorney for the Western District of Washington Jenny A. Durkan. “These soldiers have made many sacrifices, and the loss of a career or appropriate pay when they return home, cannot be allowed.”
The Labor Department’s Veterans’ Employment and Training Service investigated and attempted to resolve Axtell’s USERRA complaint before referring it to the Justice Department for litigation. “Our two agencies work closely together to ensure that our service members are treated right when they return from service” said Ray Jefferson, Assistant Secretary of Labor for Veterans’ Employment and Training.
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Reaches Agreement to Protect Rights of Military and Overseas Voters in New MexicoRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a supplemental agreement with New Mexico officials to help ensure that military service members and U.S. citizens living overseas will have an opportunity to participate fully in the 2012 federal general election cycle. The agreement is part of an ongoing case brought in 2010 to ensure New Mexico’s compliance with the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA), which requires states to give uniformed service voters (both overseas and within the United States) and their families and overseas citizens a reasonable opportunity to vote absentee in all Federal elections.
Today’s agreement, which must still be approved by the U.S. District Court in New Mexico, will partially extend a court-ordered consent decree previously entered to remedy New Mexico’s UOCAVA violations during the period leading to the November 2010 federal general election. In accordance with the consent decree, New Mexico recently passed legislation designed to provide more time for local election officials to prepare and transmit absentee ballots to military and overseas voters. Today’s agreement requires New Mexico to closely monitor its counties’ UOCAVA compliance, provide assistance to its counties when necessary, and report back to the United States about its UOCAVA compliance during the 2012 federal election cycle.
“The Justice Department continues to vigorously enforce UOCAVA so that members of the uniformed services, their families and other citizens living overseas are able to exercise their right to vote and know their votes will be counted,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I am pleased that New Mexico has continued to work cooperatively with the department to reach this agreement, which helps ensure that the state’s military and overseas voters can participate fully in upcoming federal elections.”
“Particularly at a time when so many of our military service men and women are in harm’s way while courageously serving their country overseas, it is imperative that they and other overseas citizens have a meaningful opportunity to participate in the election of our nation’s leaders, and to know that their votes will be counted,” said Kenneth J. Gonzales, U.S. Attorney for the District of New Mexico. “I commend the department’s Civil Rights Division for vigorously enforcing the voting rights of all American citizens, including our service men and women.”
More information about UOCAVA and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/about/vot/misc/activ_uoc.php . Complaints may be reported to the Voting Section of the Justice Department's Civil Rights Division at 1-800-253-3931.
Fraudulent Business Opportunity Owner Sentenced in MiamiRead the Press Release
WASHINGTON – Robert Nicol was sentenced this week in connection with a series of Utah-based business opportunity fraud ventures, the Justice Department and the U.S. Postal Inspection Service announced. Nicol was sentenced by Miami Federal District Court Judge Patricia A. Seitz to a term of 125 months in prison and three years of supervised release. He was ordered to pay more than $5.2 million in restitution to victims of his offense.
Beginning in approximately January 2003, Nicol and his accomplices promoted business opportunities to consumers across the country under the business name Table Top Vending Inc. and, later, Gold Star Vending Inc. Potential buyers were told that they would receive everything needed to operate a profitable business. The business involved placing table top games into restaurant and other locations and collecting the coins patrons fed into those games. Nicol and other salesmen falsely promoted the venture as a high profit business and told potential buyers to contact references, who claimed to operate highly successful table top games. References used fake names and lied about their experiences with the business opportunity. In reality, consumers lost more than $5 million to the scheme.
The U.S. Postal Inspection Service executed a search warrant on the offices of Gold Star Vending in February 2007. Robert Nicol later fled the country. In March 2010, Nicol was apprehended in a remote location in the Philippines and the Republic of the Philippines deported him back to United States to face the charges pending against him.
Nicol is the last of seven defendants to be convicted and sentenced in connection with Gold Star Vending. Others charged included Seth Lehrenbaum, who provided Nicol with fraudulent references for the scheme and Nicol’s son, Charles Nicol, who served as a Table Top Vending and Gold Star Vending salesmen. Lehrenbaum and Charles Nicol were sentenced to 78 months’ and 41 months in prison, respectively.
“This defendant used his business opportunity scam to target those trying to make an honest living, and then fled to the Philippines when his fraud was discovered,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “As this stiff sentence demonstrates, we will see to it that fraudsters who cheat others to make a quick buck cannot escape justice.”
“In recent years, over 100 individuals have been convicted and sentenced for business opportunity fraud in this District,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “Fraudulent telemarketers must realize that all financial fraud will be prosecuted vigorously.”
“Fraudsters can run but they cannot hide. Robert Nicol joins a growing number of business opportunity defendants the U.S. Postal Inspection Service, along with prosecutors, have brought to justice after being apprehended in other countries,” said Henry Gutierrez, U.S. Postal Inspector in Charge in Miami. “This investigation illustrates the Postal Inspection Service’s firm resolve to protect the American public from financial fraud through the mails.”
Assistant Attorney General West and U.S. Attorney Ferrer commended the investigative efforts of the Postal Inspection Service. The case was prosecuted by Trial Attorney Phil Toomajian and Assistant Director Richard Goldberg of the U.S. Department of Justice, Office of Consumer Protection Litigation.
Former United Nations Employee Charged in Connection with a $100,000 Fraud Scheme Involving Concurrent JobsRead the Press Release
WASHINGTON — A former employee of the United Nations (U.N.) was arrested today for allegedly obtaining more than $100,000 in salary payments as a result of holding jobs at the U.N. and the National Labor Relations Board (NLRB) at the same time, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Jeffery K. Armstrong, 51, of South Riding, Va., was charged in a nine-count indictment unsealed today in the Eastern District of Virginia with wire fraud stemming from a scheme to defraud the U.N., an international organization committed to humanitarian and peace-keeping efforts, and the NLRB, an independent agency of the U.S. government.
According to the indictment, in March 2008 Armstrong took a leave of absence from his position as a supervisory security specialist with the Department of the Army to accept a full-time position at the U.N. in New York City. As an assistant chief of the Security and Safety Service within the Department of Safety and Security at the U.N., Armstrong was responsible for all physical security of U.N. facilities in New York City, among other functions. According to the indictment, Armstrong received an annual salary from the U.N. of approximately $160,000. The indictment alleges that in February 2009, after working at the U.N. for almost a year, Armstrong applied for a position as chief of the security branch within the Division of the Administration at the NLRB in Washington, D.C. According to the indictment, Armstrong began work at the NLRB on April 13, 2009, with an annual salary of approximately $121,000.
The indictment alleges that between the middle of April and the end of September 2009, Armstrong was an employee of both the U.N. and the NLRB, receiving more than $100,000 in salary payments from the two entities. Armstrong allegedly concealed his dual employment from both employers by, among other things, dissuading NLRB personnel from contacting his supervisor at the U.N., submitting incomplete or inaccurate employment forms to the NLRB, and causing to be mailed to the NLRB false correspondence suggesting that he no longer worked at the U.N. In addition, Armstrong allegedly submitted medical leave documentation to the U.N., indicating that he was unable to work and was undergoing medical treatment, despite his full-time employment at the NLRB. According to the indictment, Armstrong failed to notify his superiors at both entities of his concurrent employment.
Armstrong made his initial appearance this morning before U.S. Magistrate Judge Theresa C. Buchanan in Alexandria, Va. Arraignment is scheduled for July 7, 2011, before U.S. District Judge Gerald B. Lee.
If convicted, Armstrong faces 20 years in prison and a fine of $250,000 on each wire fraud count.
The case is being prosecuted by Eric G. Olshan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Karen L. Dunn of the U.S. Attorney’s Office for the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office and the NLRB Office of Inspector General.
An indictment is merely an allegation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Former Chairman of Taylor, Bean & Whitaker Sentenced to <br /> 30 Years in Prison and Ordered to Forfeit $38.5 MillionRead the Press Release
WASHINGTON – The former chairman and owner of Taylor, Bean & Whitaker (TBW) was sentenced today to 30years in prison and ordered to forfeit approximately $38.5million for his role in a more than $2.9 billion fraud scheme that contributed to the failure of TBW and Colonial Bank. At one time, TBW was one of the largest privately held mortgage lending companies in the United States and Colonial Bank was one of the 25 largest banks in the United States.
Lee Bentley Farkas was sentenced today by U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Deputy Inspector General of the Department of Housing and Urban Development (HUD-OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA-OIG); and Victor S. O. Song, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI).
On April 19, 2011, after a 10-day trial, a federal jury found Farkas, 58, of Ocala, Fla., guilty of 14 counts, including one count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud; four counts of wire fraud; and three counts of securities fraud. According to court documents and evidence presented at trial, Farkas and his co-conspirators engaged in a scheme that misappropriated more than $1.4 billion from Colonial Bank’s Mortgage Warehouse Lending Division (MWLD) in Orlando, Fla., and approximately $1.5 billion from Ocala Funding, a mortgage lending facility controlled by TBW. Farkas and his co-conspirators misappropriated this money to, among other things, cover TBW’s operating expenses. The fraud scheme contributed to the failures of Colonial Bank and TBW.
Six other individuals have pleaded guilty and have been sentenced for their roles in the fraud scheme. Catherine Kissick, a former senior vice president of Colonial Bank and head of the mortgage warehouse lending division MWLD was sentenced to eight years in prison. Desiree Brown, the former treasurer of TBW, was sentenced to six years in prison. Paul Allen, the former chief executive officer of TBW, was sentenced to 40 months in prison. Ray Bowman, the former president of TBW, was sentenced to 30 months in prison. Teresa Kelly , a former operations supervisor for Colonial Bank’s MWLD, and Sean Ragland, a former senior financial analyst at TBW, were each sentenced to three months in prison.
The Securities and Exchange Commission (SEC) has civil actions pending against Farkas, Brown, Kissick, Kelly and Allen in the Eastern District of Virginia.
“Lee Farkas’ boundless greed ultimately led not to a life of luxury, but to a prison cell,” said Assistant Attorney General Breuer. “Mr. Farkas orchestrated a fraud of staggering proportions, the effects of which are still being felt by the thousands of former employees of TBW and Colonial Bank, and shareholders of Colonial BancGroup. From a $28 million private jet and vacation homes in Maine and Key West, to expensive antique cars and restaurants, Mr. Farkas plundered his company and Colonial Bank to prop up his failing business and to feed his ostentatious lifestyle. When greed and risky behavior lead individuals to break the law, we will do everything in our power to investigate, prosecute and punish those responsible.”
“Today’s sentence ensures that Lee Farkas will spend the rest of his life in prison and is just punishment for a man who pulled off one the largest bank frauds in history,” said U.S. Attorney MacBride. “Between 2007 and August 2009, as the country faced one of the worst financial crises in recent history – largely sparked by fraudulent mortgage-related transactions – Farkas ramped up his scheme to rip off banks through sales of fake mortgage assets and by double-and triple-selling mortgage loans. By causing the failure of Colonial Bank and TBW, two significant players in the mortgage market, Farkas’s scheme affected those at the heart of the financial crisis, including major financial institutions, government agencies, taxpayers, and employees and investors.”
According to court documents and evidence presented at trial, the fraud scheme began in 2002, when Farkas and his co-conspirators ran overdrafts in TBW bank accounts at Colonial Bank in order to cover TBW’s cash shortfalls. Farkas and his co-conspirators at TBW and Colonial Bank transferred money between accounts at Colonial Bank to hide the overdrafts. Evidence presented at trial showed that after the overdrafts grew to more than $100 million, Farkas and his co-conspirators covered up the overdrafts and operating losses by causing Colonial Bank to purchase from TBW over time more than $1.5 billion in what amounted to worthless mortgage loan assets, including loans that TBW had already sold to other investors and fake pools of loans purportedly being formed into mortgage-backed securities. Farkas and his co-conspirators caused Colonial Bank to report these assets on its books at face value when in fact the mortgage loan assets were worthless. By August 2009, approximately $500 million in fake pools of loans remained on Colonial Bank’s books.
According to court documents and evidence presented at trial, Farkas and his co-conspirators at TBW also misappropriated more than $1.5 billion from Ocala Funding. Ocala Funding sold asset-backed commercial paper to financial institution investors, including Deutsche Bank and BNP Paribas Bank. Ocala Funding, in turn, was required to maintain collateral in the form of cash and/or mortgage loans at least equal to the value of outstanding commercial paper.
Evidence presented at trial established that Farkas and his co-conspirators diverted cash from Ocala Funding to TBW to cover its operating losses, and as a result, created significant deficits in the amount of collateral Ocala Funding possessed to back the outstanding commercial paper. To cover up the diversions, the conspirators sent false information to Deutsche Bank, BNP Paribas Bank and other financial institution investors and led them to falsely believe that they had sufficient collateral backing the commercial paper they had purchased. When TBW failed in August 2009, the banks were unable to redeem their commercial paper for full value. Farkas and his co-conspirators also caused approximately $900 million in loans to be held on Colonial Bank’s books when in fact the loans had already been sold to Freddie Mac and other investors.
According to court documents and evidence at trial, in the fall of 2008, Colonial Bank’s holding company, Colonial BancGroup Inc., applied for $570 million in taxpayer funding through the Capital Purchase Program (CPP), a sub-program of the U.S. Treasury Department’s Troubled Asset Relief Program (TARP). In connection with the application, Colonial BancGroup submitted financial data and filings that included materially false information related to mortgage loans and securities held by Colonial Bank as a result of the fraudulent scheme perpetrated by Farkas and his co-conspirators. Colonial BancGroup’s TARP application was conditionally approved for $553 million contingent on the bank raising $300 million in private capital.
Evidence at trial established that Farkas and his co-conspirators falsely informed Colonial BancGroup that they had identified sufficient investors to satisfy the TARP capital contingency. Farkas and his TBW co-conspirators diverted $25 million from Ocala Funding into an escrow account and falsely represented that the money was on behalf of capital raise investors. Farkas and his TBW co-conspirators caused Colonial BancGroup to issue a false and misleading financial statement to the SEC and a press release announcing the success of the capital raise. Ultimately, Colonial BancGroup did not receive any TARP funds.
Evidence at trial also established that Farkas and his co-conspirators caused Colonial BancGroup to file materially false financial data with the SEC regarding its assets in annual reports contained in Forms 10-K and quarterly filings contained in Forms 10-Q. Colonial BancGroup’s materially false financial data included overstated assets for mortgage loans that had little to no value that Farkas and his co-conspirators caused Colonial Bank to purchase. Farkas and his co-conspirators also caused TBW to submit materially false financial data to the Government National Mortgage Association (Ginnie Mae) in order to extend TBW’s authority to issue Ginnie Mae mortgage-backed securities.
According to court documents and evidence presented at trial, Farkas also personally misappropriated more than $38.5 million from TBW and Colonial Bank to finance his lifestyle, including purchasing multiple homes, scores of cars, a jet and sea plane, and restaurants and bars.
In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver. Colonial BancGroup also filed for bankruptcy in August 2009.
“During the housing and financial crisis, while many American taxpayers struggled just to keep their heads above water, Farkas lived in the lap of luxury using the more than $38 million that he stole from TBW and Colonial Bank,” said Acting Inspector General Romero of SIGTARP. “Farkas used the stolen money to buy a jet, expensive antique and collector cars including a Rolls Royce, and multiple vacation homes, all while masterminding a fraud of stunning scope. His fraud began to unravel when he tried to obtain TARP funds to fill the billions of dollars of holes at TBW and Colonial Bank. He failed and his fraud was discovered by SIGTARP and its law enforcement partners. Shameless in his duping of investors and regulators, he attempted to deceive taxpayers. The judge’s sentence today makes it clear that Farkas will leave his lavish lifestyle behind and spend his golden years locked up in prison.”
“Through his scheme, Lee Farkas and his co-conspirators victimized innocent people and in the process their actions led to the collapse of two major U.S. financial institutions, no doubt a contributing factor to the nation’s financial downturn,” said Assistant Director McJunkin. “Today’s sentence does not make the victims whole, but it does punish the major architect of these crimes.”
“Lee Farkas was the mastermind behind one of the largest fraud schemes in history involving a mortgage lending company. For more than eight years, Farkas perpetuated his scam to defraud banks, regulators and taxpayers,” said Deputy Inspector General Stephens of the HUD-OIG. “We remain firmly committed to rooting out fraud at all levels of an institution – from the bottom to the very top – and holding those who engage in such destructive activity ultimately accountable to the American people.”
“We are pleased to join our colleagues in announcing the sentencing of Lee Farkas, whose actions contributed to the failure of Colonial Bank, causing a $4.2 billion loss to the FDIC’s Deposit Insurance Fund,” said Inspector General Rymer of the FDIC-OIG. “We appreciate the collaborative relationships with law enforcement partners that led to the successful outcomes of this case, one of the largest bank fraud prosecutions of our time. We also acknowledge the efforts of our FDIC colleagues, who, acting in their receivership capacity, assisted the prosecution in unraveling the complexities of this fraud. The American public needs to know that those who undermine the integrity of the financial services system will be held accountable. We are committed to helping maintain confidence in the financial system, ensure the safety and soundness of FDIC-insured institutions, and protect the viability of the insurance fund.”
“In the midst of the worst housing finance crisis since the great depression, Lee Farkas led a scheme that defrauded Freddie Mac and, in turn, the American taxpayers who have invested over $ 63 billion in Freddie Mac to cover its losses,” said Inspector General Linick of the FHFA-OIG. “Today’s sentence makes it clear that mortgage-related fraud will not be tolerated.”
The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC-OIG, HUD-OIG, FHFA-OIG and the IRS-CI. The department recognizes the substantial assistance of the SEC. The department also recognizes the assistance of the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury.
This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.StopFraud.gov .
Federal Court Bars Alabama Woman from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has permanently barred Aurelia Sanderson Johnson from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Johnson consented, was signed by Judge Mark E. Fuller of the U.S. District Court for the Middle District of Alabama. The court also ordered Johnson to provide a list of her customers to the government and to mail a copy of the court order to each person for whom she prepared a federal income tax return since Jan. 1, 2007.
According to the government complaint , Johnson, who resides and does business in Montgomery, Ala., employed at least two schemes on the returns she prepared for her customers in order to obtain false or overstated tax refunds. In one scheme, Johnson allegedly prepared returns reporting fictitious income or improperly reporting individuals as “qualifying children” in order to inflate or generate false earned income tax credits. In the second scheme, Johnson allegedly fabricated or inflated business expense deductions on her customers’ returns in order to reduce their taxable income and generate bogus refunds of withheld taxes.
Return preparer fraud is one of the Internal Revenue Service’s “Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department website .
California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
Eight California real estate investors have agreed to plead guilty for their roles in two separate conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Charges were filed today in U.S. District Court for the Northern District of California in Oakland, Calif., against Thomas Franciose of San Francisco; William Freeborn of Alamo, Calif.; Robert Kramer of Oakland, Calif.; Thomas Legault of Clayton, Calif.; David Margen of Berkeley, Calif.; Brian McKinzie of Hayward, Calif.; Jaime Wong of Dublin, Calif.; and Jorge Wong of San Leandro, Calif.
According to the felony charges, the real estate investors participated in a conspiracy to rig bids by agreeing to refrain from bidding against one another at public real estate foreclosure auctions in Contra Costa County and Alameda County, Calif. While some of the conspirators participated in the conspiracies in both Alameda and Contra Costa Counties, the collusive activity occurred independently in each county, and some individuals only participated in the conspiracy in one county.
“While the country faces unprecedented home foreclosure rates, the collusion taking place at these auctions is artificially driving down foreclosed home prices and is lining the pockets of the colluding real estate investors,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division will vigorously pursue these kinds of collusive schemes that eliminate competition from the marketplace.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.
“Through the hard work and partnership between the FBI and the Antitrust Division, we have been able to secure a victory in our fight against bid-rigging and anticompetitive practices in foreclosure auctions,” said FBI Special Agent in Charge Stephanie Douglas of the San Francisco Field Office. “We continue to ask for the public’s assistance in identifying and reporting those engaged in this type of activity.”
According to the court documents, the real estate investors conspired with others not to bid against one another at public real estate foreclosure auctions in Northern California, participating in a conspiracy in various lengths of time between May 2008 and January 2011. After the conspirators’ designated bidder bought a property, the conspirators would hold a secret, private auction at which each participant would bid the amount above the public auction price he was willing to pay. The department said that the secret, private auctions took place at or near the courthouse steps where the public auctions were held. The highest bidder at the private auction won the property. According to the court documents, the difference between the public auction price and that at the second auction was the group’s illicit profit, and it was divided among the conspirators, often in cash.
In addition, the eight conspirators were charged with using the U.S. mail in carrying out their conspiracy to defraud financial institutions by paying potential competitors not to bid competitively in the public auctions for foreclosed properties, according to court filings.
Franciose, Jaime Wong and Jorge Wong were charged with one count each of bid rigging to obtain selected real estate at foreclosure auctions in Alameda County and one count each of conspiracy to commit mail fraud. Freeborn and Legault were charged with one count each of bid rigging to obtain selected real estate at foreclosure auctions in Contra Costa County and one count each of conspiracy to commit mail fraud. Kramer, Margen and McKinzie were each charged with two counts of bid rigging to obtain selected real estate at foreclosure auctions in Alameda and Contra Costa Counties and two counts each of conspiracy to commit mail fraud.
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. Each count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.
The Antitrust Division and the FBI have identified a pattern of collusive schemes among real estate investors aimed at eliminating competition at real estate foreclosure auctions, and today’s charges are part of the department’s ongoing effort to combat this conduct and restore competition to public auctions. The investigation into fraud and bid rigging at certain real estate foreclosure auctions in Northern California is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at 415-553-7400.
Today’s charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
Arkansas Woman Pleads Guilty to Federal Civil Rights ViolationsRead the Press Release
WASHINGTON - Wendy Treybig, 31, of Evening Shade, Ark., pleaded guilty today to obstructing an investigation related to the Jan. 14, 2011, firebombing of the home of an interracial couple in Hardy, Ark., the Department of Justice announced.
Treybig, along with Jason Barnwell, 37, of Evening Shade; Gary Dodson, 32, of Waldron, Ark.; Jake Murphy, 19, of Waldron; and Dustin Hammond, 20, of Hardy, Ark., were indicted in April by a federal grand jury on civil rights charges and other federal charges stemming from their participation in the firebombing and subsequent cover-up. Murphy and Hammond have pleaded guilty and are awaiting sentencing.
Treybig admitted in court that she lied to FBI agents about her knowledge of what happened on the night of the incident. Treybig also admitted that she urged a friend to provide to the FBI a false story that would serve as an alibi for her co-defendants.
“Threatening a couple with violence because of their race will not be tolerated in our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute individuals that violate the rights of others because of race.
Treybig faces up to 20 years in prison. Barnwell and Dodson are scheduled to go to trial on Oct. 25, 2011.
This case was investigated by the Little Rock, Ark., Field Office of the FBI and is being prosecuted by Assistant U.S. Attorney John Ray White of the Eastern District of Arkansas and Trial Attorney Henry Leventis of the Civil Rights Division.
29 June 2011
Romanian Man Sentenced to 48 Months in Prison for Role<br /> in International Fraud Scheme Involving Online Auction WebsitesRead the Press Release
WASHINGTON – A Romanian man was sentenced today to 48 months in prison for his role in moving and hiding the illicit proceeds of an international fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Patrick J. Fitzgerald for the Northern District of Illinois and U.S. Attorney Ronald C. Machen Jr. for the District of Columbia.
Adrian Ghighina, 33, of Bucharest, Romania, was sentenced by U.S. District Judge Matthew F. Kennelly in Chicago. Ghighina pleaded guilty in February 2011 to one count each of wire fraud and conspiracy.
According to court documents, Ghighina, who entered the United States legally in late 2004, acted as a “money mule” in a complex Internet fraud conspiracy. Ghighina’s co-conspirators, many of whom are in Romania, created fraudulent online auctions for expensive items such as cars, motorcycles and RVs on websites such as eBay, Craigslist and AutoTrader.com.
Victims who responded to these fraudulent listings were directed, in some cases by email or telephone, to transmit payment for the non-existent items using Western Union and bank wire transfers to accounts controlled by Ghighina.
Ghighina admitted that he moved from city to city, opening new accounts at various banks using false identification as part of the conspiracy. The victims never received the items for which they had paid. From approximately September 2005 until his arrest in October 2009 in Miami, Ghighina opened accounts and/or received funds in Illinois, the District of Columbia, Florida, New York, Arizona and elsewhere.
The sentence resolves two separate indictments against Ghighina, one from a federal grand jury in the Northern District of Illinois and a separate indictment from a federal grand jury in the District of Columbia. Ghighina also previously was convicted on related charges of wire and visa fraud in the Southern District of Florida and sentenced on those charges to 27 months in prison. Based on the plea agreement, the sentence imposed today will run concurrently with Ghighina’s sentence in the Florida case, for which he has already served 21 months in prison.
The Chicago case is being prosecuted by Assistant U.S. Attorney Brian Hayes with the Northern District of Illinois. The Washington case is being prosecuted by Special Assistant U.S. Attorney Joseph Springsteen for the District of Columbia. Mr. Springsteen also serves as a Trial Attorney with the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS). Assistance on the Washington case was also provided by CCIPS Trial Attorneys Gavin Corn and Mysti Degani. The Criminal Division’s Office of International Affairs provided assistance in this matter. This case is being investigated by the Chicago and Washington Field Offices of the FBI, as well as the Chicago Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Pittsburgh Crips Gang Member Sentenced to 72 Months in PrisonRead the Press Release
WASHINGTON – A Pittsburgh man was sentenced today to 72 months in prison for conspiring to conduct a racketeering enterprise related to his membership in a Pittsburgh Crips gang, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Terrell Henson, 26, aka “50,” pleaded guilty on Feb. 1, 2011, before Senior U.S. District Judge Gustave Diamond to one count of conspiracy to engage in a racketeering enterprise.
According to the guilty plea, Henson and others participated in a pattern of racketeering activity that included multiple acts involving robberies at gun point; attempted murders; distribution of controlled substances, including cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Henson was a member of the Brighton Place Crips, a criminal street gang that controlled an area of Brighton Place and Morrison Street, also known as the Mad Cave, and Federal Street in the Northside area of Pittsburgh. The Brighton Place Crips were formed in the early 1990s; in 2003, it formed an alliance with the Northview Heights/ Fineview Crips. This alliance expanded the gang’s drug trafficking territory, and increased the number of gang members and associates available to preserve and protect the gang’s power, territory and profits through violence.
The Brighton Place/Northview Heights Crips gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees and bonds, as well as payments to jail commissary accounts and support payments to incarcerated members’ families.
In addition, gang members had violent confrontations with members of the rival Manchester OGs and other street gangs operating in the Northside area of Pittsburgh. Members and associates obtained greater authority and prestige within the enterprise based on their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs. According to court documents, the Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc” and “G.K.”
According to court documents, Henson served as a “hustler” for the gang. Hustlers were gang members who distributed controlled substances on behalf of the gang, in the territory controlled by the Northview Heights/ Brighton Place Crips.
Henson is one of 26 defendants charged in February 2010 with being members of, and conducting racketeering activity through, the Brighton Place/Northview Heights Crips gang. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2005. To date, 16 members of the Brighton Place/ Northview Heights Crips who were charged in this indictment have pleaded guilty to racketeering charges.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the City of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
Justice Department Reaches Agreement with Colorado State Courts to Remove Language BarriersRead the Press Release
WASHINGTON- The Justice Department today announced it has reached an agreement with officials of the Colorado Judicial Department to ensure that limited English proficient (LEP) individuals seeking services throughout Colorado’s state court system will have access to timely and competent language assistance.
The agreement resolves a Justice Department investigation of a complaint alleging that the Colorado Judicial Department, which receives federal funding, was not in compliance with Title VI of the Civil Rights Act of 1964, and the nondiscrimination provisions of the Omnibus Crime Control and Safe Streets Act of 1968. These two acts prohibit discrimination on the basis of race, color, national origin, sex or religion by recipients of federal assistance.
“Justice cannot be served without access and effective communication. This agreement shows that, even in tough economic times, this core principle can and must be attained,” Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I thank Chief Justice Michael L. Bender, State Court Administrator Gerald Marroney and their staff for working cooperatively with the Justice Department to bring down barriers to justice.”
As part of the agreement with the Justice Department, Colorado’s chief justice has issued a comprehensive directive that provides for free and competent interpreter services in all criminal and civil proceedings, as well as court operations. Colorado state court officials consulted with judges, administrators, and community experts to shape a directive that is an example for all courts subject to civil rights laws that require meaningful access to court proceedings and other court operations, at no charge to LEP individuals .
In addition, the Colorado Judicial Department, in consultation with the department, will develop state and local language access plans addressing both oral interpretation and the translation of vital written documents. An existing Court Interpreter Oversight Committee will be expanded to include a Colorado Legal Services attorney, a prosecutor, a public defender, an advocate representing the interests of the language minority populations in Colorado and other members, all of whom shall have relevant experience in court language access issues. This committee will have the opportunity to provide feedback on the directive, the state and district plans, and implementation efforts.
Under the terms of the agreement signed today, the Justice Department will monitor Colorado’s compliance for a period of at least three years.
On Aug. 17, 2010, Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, issued a letter to chief justices and administrators of state court clarifying the obligation of courts that receive federal financial assistance to provide oral interpretation, written translation and other language services to people who are LEP. The letter provided state courts additional guidance regarding the longstanding requirement to provide meaningful access, free of charge, to their programs and services for LEP persons through the provision of language services, pursuant to the prohibition against national origin discrimination contained in Title VI and the Safe Streets Act. .
The Civil Rights Division’s Federal Coordination and Compliance Section investigated this matter as part of its Courts Language Access Initiative. This multi-pronged initiative focuses on enforcement, technical assistance, outreach, resource identification and policy efforts to ensure meaningful access to courts receiving federal financial assistance.
For more information about Title VI and the Safe Streets Act, or to obtain copies of the Assistant Attorney General’s letter, visit www.lep.gov
El Departamento de Justicia logra acuerdo con los Tribunales del Estado de Colorado para eliminar barreras idiomáticasRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que ha logrado un acuerdo con funcionarios del Departamento Judicial de Colorado para asegurar que las personas con conocimientos limitados del idioma inglés [Limited English Proficient (LEP)] que busquen servicios en el sistema judicial de Colorado tengan acceso a asistencia idiomática competente en tiempo hábil.
El acuerdo resuelve una investigación realizada por el Departamento de Justicia de una demanda que alega que el Departamento Judicial de Colorado, el cual recibe fondos federales, no cumplía con el Título VI de la Ley de Derechos Civiles de 1964, y las disposiciones antidiscriminación de la Ley Amplia de Control de la Delincuencia y Calles Seguras de 1968. Estas dos leyes prohíben la discriminación debido a raza, color, origen nacional, sexo o religión por beneficiarios de asistencia federal.“No se puede hacer justicia sin acceso y comunicación eficaz. Este acuerdo demuestra que, inclusive en épocas de dificultades económicas, este principio central puede y debe cumplirse”, dijo Perez. “Agradezco al Juez Principal Michael L. Bender, al Administrador del Tribunal Estatal Gerald Marroney y a su equipo por trabajar en conjunto con el Departamento de Justicia para eliminar las barreras a la justicia”.
Como parte del acuerdo con el Departamento de Justicia, el Juez Principal de Colorado ha emitido una directiva integral que dispone el acceso a servicios de intérprete competentes y gratuitos en todos los procesos penales y civiles, así como en las operaciones de los tribunales. Funcionarios de los tribunales estatales de Colorado trabajaron en conjunto con jueces, administradores y expertos comunitarios en diseñar una directiva que fuera un ejemplo para todos los tribunales sujetos a las leyes de derechos civiles que exigen acceso sustancioso a procesos judiciales y otras operaciones judiciales, sin cargo para personas LEP.
Además, el Departamento Judicial de Colorado, en colaboración con el Departamento de Justicia [Department of Justice – DOJ], desarrollará planes estatales y locales de acceso idiomático, asociados tanto a la interpretación oral como la traducción de documentos escritos vitales. Se ampliará un Comité de Supervisión de Intérpretes Judiciales existentes, de modo a incluir un abogado de Servicios Legales de Colorado, un fiscal, un defensor público, un defensor que represente los intereses de las poblaciones de idiomas minoritarios en Colorado, y otros miembros, todos los cuales tendrán experiencia relevante en temas asociados al acceso idiomático judicial. Este comité tendrá la oportunidad de brindar opiniones sobre la directiva, los planes estatales y de distritos, y la labor de implementación.
Bajo los términos del acuerdo firmado hoy, el Departamento de Justicia vigilará el cumplimiento de Colorado por un periodo de al menos tres años.
El 17 de agosto de 2010, Thomas E. Perez, Secretario de Justicia Auxiliar de la División de Derechos Civiles, emitió una carta a los jueces principales y administradores de tribunales estatales aclarando la obligación de los tribunales que reciben asistencia financiera federal de brindar servicios de interpretación oral, traducción por escrito y otros servicios idiomáticos a personas LEP. La carta brindó orientación adicional a los tribunales respecto de la exigencia de larga trayectoria de brindar acceso sustancial, sin cargo, a sus programas y servicios a personas LEP a través de la prestación de servicios idiomáticos, de acuerdo con la prohibición de discriminar debido al origen nacional contenida en el Título VI de la Ley de Calles Seguras.
La Sección de Coordinación Federal y Cumplimiento de la División de Derechos Civiles investigó este asunto como parte de su Iniciativa de Acceso Idiomático Judicial. Esta iniciativa múltiple se centra en la coacción, la asistencia técnica, las campañas de alcance exterior, la identificación de recursos y formulación de políticas para garantizar el acceso sustancial a los tribunales que reciban asistencia financiera federal.
Para obtener más información sobre el Título VI y la Ley de Calles Seguras, o para obtener copias de la carta del Secretario de Justicia Auxiliar, visite www.lep.gov.
28 June 2011
Natchez, Mississippi, Police Officer Pleads Guilty to Conspiracy to Commit Identity Theft and FraudRead the Press Release
WASHINGTON – Natchez, Miss., Police Department Officer Dewayne Johnson, 33, pleaded guilty today to conspiring to commit identity theft, credit card fraud and bank fraud by agreeing with his cousin to illegally use credit and debit cards stolen from an arrestee in Johnson’s custody, the Department of Justice announced today.
“Law Enforcement officers are sworn to protect and serve our communities, and they must be held accountable when they commit crimes like this one,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to prosecuting those officers that violate the Constitution.”
During his plea hearing, Johnson admitted that he took the debit and credit cards of an arrestee who was in his patrol car. Johnson further admitted that he gave his cousin, Patricia A. Wilson, at least one of the cards and knew that she used it to make personal purchases. He also admitted that he lied to the FBI about his involvement with the stolen cards.
Wilson, 34, of Ferriday, La., previously pleaded guilty to this same offense. Following a jury trial in March 2011, Johnson was convicted of violating the civil rights of the man in his custody by stealing his credit and debit cards.
Sentencing for Johnson is scheduled for Sept. 13, 2011. At sentencing, Johnson faces a maximum punishment of five years in prison for participating in the conspiracy and 12 months in prison for the civil rights offense based upon the theft.
Fellow Natchez Police Department Officer Elvis Prater, 36, was also charged with civil rights offenses related to the beatings of two men in police custody and with lying to the FBI. The jury acquitted Prater on one count, and failed to reach a verdict on the two remaining counts. Retrial of the charges against Prater will begin on July 25, 2011.
The charges set forth in an indictment are merely accusations and the defendant is presumed innocent until proven guilty.
The case was investigated by the Jackson, Miss., Division of the FBI and the Mississippi State Office of the Attorney General, and is being prosecuted by Fara Gold and AeJean Cha of the Civil Rights Division and Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi. This case was formerly prosecuted by Erin Aslan and Kevonne Small of the Civil Rights Division.
Justice Department Signs Agreement with Van Buren County, Arkansas, to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON - The Justice Department today announced an agreement with Van Buren County, Ark., 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).
“Individuals with disabilities must have access to public facilities, programs, services and activities in order to participate equally in civic life,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I commend Van Buren County officials for making this commitment to its residents with disabilities by agreeing to come into voluntary compliance with the ADA.”
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 is the 190th under the PCA initiative. According to census data, more than 28 percent of Van Buren County residents have a disability and will benefit from this agreement.
Under the agreement announced today, Van Buren County, Ark., will take several important steps to improve access for individuals with disabilities, such as:
- Making physical modifications to facilities surveyed by the department so that parking, routes into buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
- Surveying other facilities and programs and making modifications wherever necessary to achieve full compliance with ADA requirements;
- Posting, publishing and distributing a notice to inform members of the public of the provisions of Title II of the ADA and their applicability to the county’s programs, services and activities;
- Training county staff in using the Arkansas Relay Service as a key means of communicating with individuals who are deaf, are hard-of-hearing or have speech disabilities;
- Undertaking the required planning and modifications to ensure equal, integrated access to emergency management for individuals with disabilities, including emergency preparedness, notification, evacuation, sheltering, response, clean up and recovery;
- Ensuring that the county’s official website and other web-based services are accessible to people with disabilities;
- Developing a method for providing information for interested persons with disabilities concerning the existence and location of the county’s accessible services, activities and programs;
- Installing signs at any inaccessible entrance to a facility directing individuals with disabilities to an accessible entrance or to information about accessing programs and services at other accessible facilities; and
- Implementing a comprehensive plan to improve the accessibility of sidewalks, transportation stops and pedestrian crossings by installing accessible curb ramps throughout Van Buren County.
Today’s 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 three years from June 28, 2011, or until all actions required by the agreement have been completed, whichever is later. The department will actively monitor compliance with the agreement until all required actions have been completed.
People interested in finding out more about the ADA, today’s agreement with Van Buren County, Ark., the PCA initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA website at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY). A copy of the agreement is available at: www.ada.gov/van_buren_pca/van-buren_sa.htm .
Justice Department Reaches Settlement with Connecticut Early Learning Center to Ensure Equal Opportunity for Children with AutismRead the Press Release
WASHINGTON— The Justice Department today announced a settlement agreement with Beach Babies Learning Center LLC, located in Old Saybrook, Conn., to resolve allegations that the center terminated the enrollment of a then two-year-old child from its program because the child has autism. Based upon a c omprehensive medical history and physical examination, the child’s pediatrician confirmed that the child was healthy and could participate in the programs at the center.
Title III of the Americans with Disabilities Act (ADA) prohibits discrimination on the basis of disability, including autism, in early education and child care centers. Under the agreement, the center agreed to implement policies and procedures to ensure that children with disabilities are afforded a full and equal opportunity to participate in and benefit from the center’s programs. The center will also post a nondiscrimination policy at its facility and include the policy on its website. The center also agreed to pay monetary damages to the child’s parents.
“Ensuring that children with disabilities, and their families, have equal access to early education and child care centers goes to the heart of the ADA’s promises and protections,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Beach Babies Learning Center cooperated with the department to address this matter through this agreement, and we hope that this agreement serves as a reminder to other education and child care providers about their responsibilities under the ADA.”
“Partnering with the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office has embarked on a significant civil rights enforcement initiative,” stated U.S. Attorney David B. Fein. “Autism is just one of many serious disabilities that affect so many families in Connecticut, and the U.S. Attorney’s Office is committed to ensuring that every child has equal access to early learning centers, public and private, and can participate in all of the programs that are available .”
Under Title III of the ADA, private early learning and child care providers are prohibited from discriminating on the basis of disability, and must make reasonable modifications to policies, practices and procedures to afford individuals with disabilities the opportunity to participate and benefit from the early learning services . The providers should permit changes in schedules whenever necessary to accommodate early intervention services provided by outside therapists so long as they do not result in a fundamental alteration of the services.
The enforcement of the ADA is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
HSBC India Client Indicted for Filing False Tax Returns and Failing to Report Foreign Bank AccountRead the Press Release
WASHINGTON – Dr. Arvind Ahuja of Greendale, Wis., was indicted today by a federal grand jury in Milwaukee on four counts of willfully filing materially false tax returns and four counts of failing to file Reports of Foreign Bank and Financial Accounts (FBARs), the Department of Justice and Internal Revenue Service (IRS) announced.
According to the indictment, Dr. Ahuja, a board-certified neurosurgeon, wire transferred and maintained millions of dollars in bank accounts in India and the Bailiwick of Jersey at The Hongkong and Shanghai Banking Corporation Ltd. (HSBC). In 2009, the HSBC bank account in India had a balance of $8,733,785. The indictment alleges that Dr. Ahuja failed to report these bank accounts to the IRS on his 2006-2009 tax returns. The indictment further alleges that Dr. Ahuja failed to report more than $1.2 million in interest income that he earned from his HSBC India account and failed to pay the taxes due on that income. For the 2006-2009 tax years, Dr. Ahuja also failed to file FBARs to report his foreign bank accounts to the Department of the Treasury.
As alleged in the indictment, U.S. citizens had an obligation to report to the IRS on Schedule B of their U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign county in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. They further had an obligation to report all income earned from foreign financial accounts on the tax return and to pay the taxes due on that income. Separately, U.S. citizens with a financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year, must also file an FBAR form with the Department of the Treasury disclosing such an account by June 30 of the following year.
Each false tax return charge carries a maximum penalty of three years in prison and a $250,000 fine. The failure to file FBAR charges each carry a maximum penalty of 10 years in prison and a $500,000 fine.
A trial date has not yet been set. An indictment is merely an allegation, and Dr. Ahuja is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being prosecuted by Senior Litigation Counsel John E. Sullivan and Trial Attorney Melissa S. Siskind, with the assistance of Assistant U.S. Attorney Tracy Johnson from the Eastern District of Wisconsin, and was investigated with the assistance of the IRS.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Former U.S. Army Sergeant Pleads Guilty to Stealing Equipment in Iraq and Receiving Proceeds from Sale on Black MarketRead the Press Release
WASHINGTON - A former U.S. Army sergeant pleaded guilty today to conspiring to steal U.S. Army equipment related to his work as a non-commissioned officer helping to train Iraqi army personnel in Mosul, Iraq, in 2008, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Robert Ashley Nelson, 46, of San Antonio, Texas, pleaded guilty today before U.S. Magistrate Judge John Primomo in the Western District of Texas to a criminal information charging him with one count of conspiracy to steal public property. According to the court document, Nelson was deployed to Forward Operating Base Diamondback, Iraq, as the non-commissioned officer-in-charge of the Ninewa Operations Command Military Transition Team. This transition team helped train the Iraqi Army units stationed nearby.
While serving in Iraq, Nelson agreed with a U.S. Army translator to steal eight generators from a lot on base that held various pieces of used equipment. Once the generators were taken off the base, the translator arranged for them to be sold on the black market in Iraq. Nelson admitted that he received half of the proceeds of the sales of stolen equipment, with approximately $35,000 of the money being wired to Nelson’s account by the translator’s brother. In total, Nelson admitted receiving approximately $44,830 from this scheme. The investigation into this conspiracy continues.
At sentencing, Nelson faces up to five years in prison, as well as a maximum fine of $250,000 and up to three years of supervised release following a prison term. Additionally, Nelson has agreed to criminal forfeiture of $44,830 to the United States. Sentencing is scheduled for Oct. 5, 2011, at 1:30 p.m., CDT before U.S. District Judge Xavier Rodriguez.
This case is being prosecuted by Special Trial Attorney Christopher L. Peele of the Criminal Division’s Fraud Section, on detail from SIGIR. The case is being investigated by the Special Inspector General for Iraq Reconstruction, the Defense Criminal Investigative Service, the Army Criminal Investigations Division and others.
Final Defendant Sentenced to Seven Years in Prison for Participation in Child Pornography Distribution RingRead the Press Release
WASHINGTON – The fifth defendant charged in relation to an Internet-based child pornography trafficking ring that specialized in images depicting the sexual abuse of young girls was sentenced yesterday to seven years in federal prison, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Central District of California Andre Birotte Jr.
Kevin Kaller Wright, 44, of Santa Monica, Calif., was sentenced by U.S. District Judge Margaret M. Morrow.
Wright and four other people have pleaded guilty to being members of the Quest4More Internet bulletin board, whose members “advocated the sexual torture of children,” according to court documents. Quest4More, which was investigated by the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), was a secret bulletin board that allowed members to post and view pictures and videos, which often depicted very young children, sometimes being tortured or in bondage.
The defendants previously sentenced in this case are:
Michael Pharis, 51, of Las Vegas, was sentenced in December 2010 to 15 years in prison;
Daniel Murphy, 53, of Millville, N.J., was sentenced in March 2011 to 151 months in prison;
Paul Challender, 54 of Big Rapids, Mich., was sentenced in March 2011 to 151 months in prison; and
William Ho, 39, of Hacienda Heights, Calif., was sentenced in March 2011 to 135 months in prison.
All five men charged in this case pleaded guilty to one count of conspiracy to transport, receive, distribute and possess child pornography. They all admitted being part of the Quest4More bulletin board, which was used to distribute illegal images and videos depicting prepubescent children, including toddlers, engaged in various sexual and sadistic acts. The group also posted links to other sites with images of child sexual abuse. Law enforcement was alerted to the group following the arrest of one of its members in 2008.
The defendants each made hundreds of posts to the bulletin board. According to court documents, Wright did not post any pictures to the bulletin board, but made more than 400 written posts including commentary on other pictures and requests for additional pictures.
Wright was sentenced to 10 years of supervised release and the four other defendants were sentenced to a lifetime of supervised release following their prison terms.
This case was brought as part of Project Safe Childhood, a nationwide initiative to
combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, 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 Assistant U.S. Attorney Robert Dugdale of the Central District of California, and Trial Attorney LisaMarie Freitas of the Criminal Division’s Child Exploitation and Obscenity Section. The case was investigated by ICE HSI.
Attorney General Eric Holder Welcomes Confirmation of James Cole, Lisa Monaco and Virginia SeitzRead the Press Release
WASHINGTON – Attorney General Eric Holder today welcomed the confirmation of James Cole, as Deputy Attorney General; Lisa Monaco, as Assistant Attorney General for National Security; and Virginia Seitz, as Assistant Attorney General of the Office of Legal Counsel. All three were confirmed today by the U.S. Senate.
“I am pleased the Senate moved to confirm Jim, Lisa and Virginia, following their appointments by President Obama,” said Attorney General Holder. “I’m confident they will provide invaluable leadership to the department, and will play a critical role in protecting the American people, ensuring the fairness and integrity of our financial markets and restoring the traditional missions of the department.”
Cole, who has been serving as Deputy Attorney General since Jan. 3, 2011, first joined the department in 1979 as part of Attorney General’s Honors Program and served there for 13 years – first as a trial attorney in the Criminal Division, and later as the Deputy Chief of the Division’s Public Integrity Section.
He entered private practice in 1992, becoming a partner with Bryan Cave LLP in 1995, specializing in white collar defense. He served as a court-appointed independent monitor to businesses to establish and oversee corporate compliance programs and ensure they adhere to laws and regulations. He also counseled businesses on securities, regulatory and criminal law issues.
In 2005, Cole was appointed to serve as an independent monitor at the insurance company AIG to review five years of transactions following a settlement with regulators involving allegations the company was setting up sham transactions to hide losses. His role there led to another appointment involving AIG in 2006, in which he was charged with developing financial reporting and regulatory compliance programs.
Cole has been a member of the adjunct faculty at Georgetown University Law Center, teaching courses on public corruption law and legal ethics, and has lectured at Harvard University’s Kennedy School of Government. He is a former chair of the American Bar Association (ABA) White Collar Crime Committee and serves as the first vice-chair of the ABA Criminal Justice Section.
He received his B.A. from the University of Colorado and his J.D. from the University of California-Hastings.
Most recently, Monaco served as the Principal Associate Deputy Attorney General, where she was the Deputy Attorney General’s primary advisor on a broad range of criminal, national security and civil matters. Prior to joining the Deputy Attorney General’s office, Monaco was the chief of staff to FBI Director Robert S. Mueller. Monaco also served as special counsel to Director Mueller. Monaco initially joined the FBI on detail from the U.S. Attorney’s Office for the District of Columbia.
From 2001 to 2007, Monaco served as a federal prosecutor. She was appointed to the Enron Task Force, serving as a co-lead trial counsel in the prosecution of five former executives of Enron Broadband Services. For her work on the Enron Task Force, Monaco received the Attorney General’s Award for Exceptional Service, the Justice Department’s highest award.
Monaco served as counsel to Attorney General Janet Reno from 1998 to 2001, providing advice and guidance on national security, law enforcement, budget and oversight issues.
Before joining the department, Monaco clerked for the Honorable Jane R. Roth, U.S. Court of Appeals for the Third Circuit. She earned her J.D. from the University of Chicago Law School and her B.A. from Harvard University.
Seitz most recently worked as a partner in Sidley Austin LLP’s Washington, D.C. office, where she focused on appellate litigation before the federal courts of appeals and the U.S. Supreme Court. Seitz has over 20 years of litigation experience and has worked on more than 100 Supreme Court briefs and petitions for certiorari and hundreds of filings in lower courts. She was the counsel of record on the amicus brief filed on behalf of retired military officers in Grutter v. Bollinger, which was cited by the Supreme Court in the oral argument and opinion in that case.
Before joining private practice, Seitz clerked for Judge Harry T. Edwards of the Court of Appeals for the D.C. Circuit and for Associate Justice William J. Brennan of the U.S. Supreme Court. From 1995 until 2000, she served on the board of directors of the Congressional Office of Compliance, which promulgates regulations and adjudicates disputes concerning legislative branch employees under the Congressional Accountability Act.
She received a B.A., summa cum laude, from Duke University, was a Rhodes Scholar at Oxford University, and holds a J.D. from Buffalo Law School, where she graduated first in her class.
27 June 2011
Miami Doctor Sentenced to 235 Months in Prison for Medicare Fraud SchemeRead the Press Release
WASHINGTON – Miami doctor Rene De Los Rios, 72, was sentenced today to 235 months in prison for his participation in a $23 million HIV injection and infusion Medicare fraud scheme , announced the Departments of Justice and Health and Human Services (HHS).
U.S. District Court Judge Joan A. Lenard of the Southern District of Florida also sentenced De Los Rios to three years of supervised release following his prison term and ordered him to pay a minimum of $11.7 million in restitution, jointly with his co-defendants. The final amount of restitution will be determined at a later hearing. On April 14, 2011, De Los Rios was convicted by a jury of one count of conspiracy to commit health care fraud and four counts of submission of false claims. De Los Rios was remanded to the custody of the U.S. Marshals Service after his conviction and has been detained since that time.
According to evidence presented at trial and sentencing, De Los Rios worked at multiple fraudulent medical clinics and signed medical documents authorizing tests and treatments that were medically unnecessary or never provided. The court found De Los Rios responsible for a total of $46 million in fraudulent billings to Medicare.
According to evidence presented at trial, De Los Rios was hired by the owner of Metro Med of Hialeah Corporation, an HIV infusion clinic that purportedly provided injection and infusion therapies to HIV-positive Medicare beneficiaries. Evidence presented at trial established that De Los Rios ordered unnecessary tests, signed medical analysis and diagnosis forms, and authorized treatments to make it appear that legitimate medical services, including injection and infusion therapies, were being provided to Medicare beneficiaries at Metro Med. However, the injection and infusion therapies were medically unnecessary and never provided. De Los Rios also signed medical charts, often without seeing the patient, indicating that certain treatments were medically necessary, when, in fact, he knew they were not.
Evidence at trial established that De Los Rios diagnosed almost all of the patients at Metro Med with the same rare blood disorders, which the patients did not have, in order to ensure maximum reimbursement from Medicare. The evidence at trial also showed that De Los Rios prescribed expensive medications, including Winrho, Procrit and Neupogen, to patients for the sole purpose of receiving reimbursement from the Medicare program. From approximately April 2003 through October 2005, Metro Med submitted approximately $23 million in claims to the Medicare program for injection and infusion treatments that were not medically necessary and were never provided. The Medicare program paid approximately $11.7 million in claims.
The owner and operator of Metro Med, Damaris Oliva, and three other individuals have each pleaded guilty for their roles in the Metro Med fraud scheme. Oliva was sentenced in December 2010 to 82 months in prison. Co-defendants Estrella Rodriguez, Jose Diaz and Lisandra Aguilera were sentenced to 57 months in prison, 54 months in prison and 70 months in prison, respectively.
Evidence at trial and sentencing also established that De Los Rios engaged in almost identical conduct at additional sham HIV injection and infusion therapy clinics in South Florida during the same time period. At J&F Community Medical Center Inc. and Rochris Medical Center Inc., De Los Rios prescribed the same medications that he prescribed at Metro Med to patients who he knew did not need them.
In a two-and-half-year period, De Los Rios made more than $587,000 in profits from the fraud schemes.
At sentencing, the court also found that De Los Rios obstructed justice by testifying falsely at his trial; that as a doctor, De Los Rios occupied a position of trust, which he violated; and that by prescribing medically unnecessary injections and infusions for HIV-positive patients, De Los Rios caused a reckless risk of serious bodily injury to those patients.
The court declared a mistrial in De Los Rios’ first trial in March 2011.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The case was prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section and Robert J. Luck, Assistant U.S. Attorney for the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants and organizations that collectively have billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov .
Lufkin, Texas, Man Sentenced to Life in Prison for Involvement in Double HomicideRead the Press Release
WASHINGTON –A Lufkin, Texas, man was sentenced today to life in prison for his role in a double homicide that took place in Nacogdoches, Texas, in August 2007, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John M. Bales for the Eastern District of Texas.
Carl Carver, 44, pleaded guilty on Jan. 19, 2011, before U.S. District Judge Marcia Crone in Beaumont, Texas, to committing a violent crime in aid of racketeering activity. Specifically, Carver admitted that he had participated in the murder of David Mitchamore.
According to information presented in court, Carver was a general of the Aryan Brotherhood of Texas (ABT), a race-based, state-wide organization that operates inside and outside of state and federal prisons throughout Texas and the United States. The ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, are required to follow the orders of higher ranking members, often referred to as “direct orders.”
According to court documents, David Mitchamore, aka “Super Dave,” an ABT member, and his girlfriend, Christie Rochelle Brown, were murdered by Brent Stalsby as a result of a “direct order” issued by Carver because of Mitchamore’s failure to repay an outstanding debt he allegedly owed to an Aryan Brotherhood general. The bodies of Mitchamore and Brown were discovered in Nacogdoches County on Aug. 10, 2007. Terry Stalsby was present when the “direct order” issued by Carver was delivered to Frazier. On May 25, 2011, Brent Stalsby was sentenced to life in federal prison and Terry Stalsby was sentenced to 162 months in federal prison. On June 22, 2011, Frazier was sentenced to life in prison.
This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the National Gang Targeting, Enforcement and Coordination Center (Gang-TECC); the Nacogdoches Sheriff’s Department; the Nacogdoches Police Department; the Angelina County, Texas, Sheriff’s Department; the Texas Department of Public Safety; and the Texas Rangers. The case is being prosecuted by the Office of the U.S. Attorney in Lufkin and the Criminal Division’s Organized Crime and Gang Section, in full cooperation with the Nacogdoches County District Attorney’s Office.
Justice Department Files Lawsuit Alleging Immigration-Related Employment Discrimination by Farmland Foods Inc. in MissouriRead the Press Release
WASHINGTON -The Justice Department today filed a lawsuit against Farmland Foods Inc., a major producer of pork products in the United States, alleging that it engaged in a pattern or practice of discrimination by imposing unnecessary documentary requirements on non-U.S. citizens when establishing their authority to work in the United States. Farmland Foods, a subsidiary of Smithfield Foods Inc., is headquartered in Kansas City, Mo.
The department’s investigation revealed that Farmland required all newly hired non-U.S. citizens and some foreign-born U.S. citizens at its Monmouth plant in Illinois to present specific and, in some cases, extra work authorization documents beyond those required by federal law. The Immigration and Nationality Act (INA) requires employers to treat all authorized workers in the same manner during the hiring process, regardless of their citizenship status. Farmland imposed different and greater requirements on non-U.S. citizens and foreign-born U.S. citizens as compared to applicants who were native-born U.S. citizens.
“Employers may not treat authorized workers differently during the hiring process based on their citizenship status,” said Thomas E. Perez, the Assistant Attorney General in charge of the Civil Rights Division. “Federal law prohibits discrimination in the employment eligibility verification process, and the Justice Department is committed to enforcing the law.”
The lawsuit charging Farmland with discriminatory practices has been filed before the Office of the Chief Administrative Hearing Officer (OCAHO) within the Executive Office for Immigration Review, another component of the Department of Justice.
The Office of Special Counsel (OSC) for Immigration Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process. For more information about protections against employment discrimination under the immigration law, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired), 1-800-255-8155 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email [email protected] ; or visit OSC’s website at www.justice.gov/crt/osc
Contractor Sentenced to 30 Months in Prison<br /> for Death of Afghan National in Kabul, AfghanistanRead the Press Release
WASHINGTON – Justin Cannon, 29, of Corpus Christi, Texas, was sentenced today to 30 months in prison for his role in shooting and killing an Afghan national while on an unauthorized convoy in Kabul, Afghanistan, on May 5, 2009, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office. U.S. District Judge Robert G. Doumar also ordered Cannon to serve two years of supervised release following his prison term.
On March 11, 2011, Cannon and Christopher Drotleff, 31, of Virginia Beach, Va., were convicted of involuntary manslaughter while working as contractors for the U.S. Department of Defense in Afghanistan. Cannon and Drotleff were acquitted of other charges, including second-degree murder, assault resulting in serious bodily injury and firearms offenses. On June 14, 2011, Drotleff was sentenced to 37 months in prison.
“Justin Cannon was hired to support the Defense Department mission in Afghanistan,” said Assistant Attorney General Breuer. “Instead, he recklessly fired on a civilian car, killing an Afghan national. He dishonored the American military, the Afghan people, and the many men and women in uniform who serve this country honorably. Today’s sentence brings some measure of justice to an otherwise tragic situation.”
“Justin Cannon opened fire with an AK-47 at the rear of a retreating vehicle and took the life of an innocent Afghan,” said U.S. Attorney MacBride. “While Mr. Cannon was in Afghanistan to support to U.S. troops, his incredibly reckless behavior instead undermined our military mission and weakened the bond of trust with the Afghans. Those serving overseas – even in dangerous places like Afghanistan – must follow the law and not make up their own rules. Today’s sentence makes clear that those who break the law will be held accountable, regardless of where their crimes occur.”
Cannon and Drotleff were charged under the Military Extraterritorial Jurisdiction Act (MEJA) in a superseding indictment filed on Aug. 5, 2010. Cannon and Drotleff were Department of Defense contractors employed by a subsidiary of Xe (formerly known as Blackwater Worldwide).
According to evidence presented at trial, on May 5, 2009, both men left their military base without authorization to transport local interpreters. The evidence at trial established that, after the lead vehicle in the convoy crashed and was overturned on the side of the road, Cannon and Drotleff fired multiple shots into the back of a civilian car that had attempted to pass the accident scene. The passenger of the car was fatally shot and the driver was seriously injured. An individual who happened to be walking his dog in the area was also killed in the shooting. The jury found the defendants guilty of involuntary manslaughter for the death of Romal Mohammad Naiem, the front-seat passenger. They were acquitted of charges relating to the death of the person walking his dog and injuries to the driver.
According to court records, 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.
The case is being prosecuted by Trial Attorney Robert McGovern of the Criminal Division’s Human Rights and Special Prosecutions Section and 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. The case was investigated by the FBI’s Washington Field Office and the U.S. Army Criminal Investigation Command.
24 June 2011
Michigan Man Who Operated Residential Facility for Youth in Haiti Indicted for Sexual Abuse of Minors at the FacilityRead the Press Release
WASHINGTON – The operator of Morning Star Center, a residential facility located in Port-au-Prince, Haiti, that provided food and shelter to minors, has been charged with offenses involving the sexual abuse of minors in Haiti, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Director John Morton, U.S. Immigration and Customs Enforcement (ICE).
Matthew Andrew Carter, aka “William Charles Harcourt” and “Bill Carter,” 66, of Brighton, Mich., was charged in a superseding indictment filed yesterday in the Southern District of Florida with four counts of traveling in foreign commerce for the purpose of engaging in illicit sexual conduct with minors. On May 8, 2011, Carter was arrested in Miami on a criminal complaint filed in the Southern District of Florida. He is currently detained.
“The acts that the defendant is charged with committing, quite simply, defy belief. As charged in the indictment, he preyed upon and terrorized impoverished Haitian children who were in dire need of the services offered by the Morning Star Center – the very children he was purporting to help,” said Assistant Attorney General Breuer. “As this indictment shows, we will not allow sexual predators to avoid facing justice by committing their crimes in foreign countries. Together with our law enforcement partners abroad, we are determined to combat the sexual abuse of children no matter where it occurs.”
“This defendant preyed on innocent Haitian children living in severely depressed conditions, making his conduct particularly deplorable,” said U.S. Attorney Ferrer. “Rather than using Morning Star as he promised – to administer aid and provide sanctuary to needy children – he used the center to manipulate, abuse and sexually exploit them. Sexual predators like this defendant cannot act with impunity. We will pursue and prosecute them, no matter where they choose to commit their heinous crimes.”
“Few crimes are as despicable as the ones committed against these children in Haiti. For years, he sexually abused poor and orphaned children who depended upon him for food and shelter – all under the guise of doing noble work,” said ICE Director Morton, “ICE is committed to working with our partners here and abroad to catch individuals, like this man, who engage in child sex tourism.”
According to court documents, prior to his arrest, Carter operated and lived at Morning Star Center in Port-au-Prince, Haiti. Morning Star Center, which Carter operated since the mid-1990s, was a residential facility that provided shelter, food and education to Haitian minors. The minors who lived at the center were orphans or from impoverished families who could not support them. From the mid-1990s to the present, Carter frequently traveled back and forth between the United States and the center in Haiti, often to raise funds for the continued operation of the center. According to court documents, Carter allegedly sexually abused several minors in his care and custody at Morning Star Center during this time period. As alleged in court documents, Carter required the child victims to engage in illicit sexual conduct in exchange for gifts or money or in order to remain at the center and continue receiving food, shelter and schooling.
The case against Carter was investigated by ICE’s Homeland Security Investigations (HSI) in Miami; the ICE HSI Assistant Attache’s Office in Santo Domingo, Dominican Republic; and the ICE HSI Santo Domingo Transnational Criminal Investigative Unit. Substantial assistance was provided by the FBI’s Washington and Miami Field Offices, the U.S. Secret Service in Miami, and the U.S. Embassy in Port-au-Prince, Haiti. The case is being prosecuted by Trial Attorney Bonnie L. Kane of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Maria K. Medetis of the Southern District of Florida.
If convicted, Carter faces a maximum sentence of 15 years in prison for one count of child sex tourism and a maximum sentence of 30 years in prison for each of the other three child sex tourism counts.
The details contained in the indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
East Hartford, Conn., Woman Sentenced to More Than Nine Years in Prison for Sex Trafficking of MinorsRead the Press Release
WASHINGTON – An East Hartford, Conn., woman was sentenced yesterday by U.S. District Judge Mark R. Kravitz in New Haven, Conn., to 110 months in prison for the sex trafficking of two minor girls in 2009, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David B. Fein for the District of Connecticut.
Hassanah Delia, 24, was also ordered to serve five years of supervised release following her prison term. Delia pleaded guilty on Dec. 7, 2010, to two counts of sex trafficking by force, fraud or coercion.
According to court documents and statements made in court, Delia and Jarell Sanderson recruited two 14-year-old girls to work as prostitutes. In July 2009, Sanderson and Delia transported the girls to hotels in Hartford and East Hartford where the girls engaged in sexual conduct with men in exchange for money that was paid either to Sanderson or Delia. The men who paid to engage in sexual conduct with the girls had responded to an advertisement Sanderson placed on a website by calling a phone that was answered by Delia, who then set up appointments for the girls.
Sanderson pleaded guilty on Jan. 20, 2011, to one count of conspiracy to commit sex trafficking of children and two counts of sex trafficking of children. On June 7, 2011, he was sentenced to 310 months in prison.
Delia and Sanderson will be required to pay restitution to the minor victims in an amount to be determined after additional court proceedings.
This matter was investigated by the FBI and the East Hartford Police Department. The case was prosecuted by Assistant U.S. Attorney David E. Novick and Trial Attorney Alecia Riewerts Wolak of the Criminal Division’s Child Exploitation and Obscenity Section.
23 June 2011
Two Men Charged in Plot to Attack Seattle Military Processing CenterRead the Press Release
SEATTLE – Two men were arrested late last night and are charged by criminal complaint with terrorism and firearms related charges. The complaint alleges that Abu Khalid Abdul-Latif, aka Joseph Anthony Davis, 33, of Seattle, and Walli Mujahidh, aka Frederick Domingue, Jr., 32, of Los Angeles, took possession of machine guns that they purchased and planned to use in an attack on the Military Entrance Processing Station (MEPS) located on East Marginal Way, Seattle.
Law enforcement has been monitoring Abdul-Latif and Mujahidh, including the weapons transaction, to prevent the attack and protect the public. Unbeknownst to the defendants, the weapons were rendered inoperable and posed no risk to the public. The defendants initially planned an attack on Joint Base Lewis-McChord in Washington State, but later changed targets. The defendants intended to carry out their attack with both grenades and machine guns.
“The complaint alleges these men intended to carry out a deadly attack against our military where they should be most safe, here at home,” said U.S. Attorney Jenny A. Durkan. “This is a sobering reminder of our need to be vigilant and that our first line of defense is the people who live in our community. We were able to disrupt the plot because someone stepped forward and reported it to authorities. I commend the joint efforts of the FBI, the Seattle Police Department, and the Joint Terrorism Task Force who quickly recognized the seriousness of the threat and ensured the safety of the community.”
Law enforcement first became aware of the potential threat when a citizen alerted them that he/she had been approached about participating in the attack and supplying firearms to the conspirators. The person then agreed to work with law enforcement, which began monitoring Abdul-Latif and Mujahidh. Since early June the conspirators were captured on audio and videotape discussing a violent assault on the Military Entrance Processing Station. The MEPS is where each branch of the military screens and processes enlistees. In addition to housing many civilian and military employees, the building houses a federal daycare center.
“Driven by a violent, extreme ideology, these two young Americans are charged with plotting to murder men and women who were enlisting in the Armed Forces to serve and protect our country. This is one of a number of recent plots targeting our military here at home, ” said Todd Hinnen, Acting Assistant Attorney General for National Security. “The threat was averted by the combined efforts of the federal, state and local law enforcement officers that make up the FBI’s Joint Terrorism Task Force.”
“The FBI remains committed to utilizing intelligence-based investigations to thwart would-be terrorists,” said Laura Laughlin, Special Agent in Charge of the FBI Seattle Division. “This case epitomizes the value and capabilities of the FBI’s Joint Terrorism Task Force concept as a means of preventing acts of terrorism. But for the courage of the cooperating witness, and the efforts of multiple agencies working long and intense hours, the subjects might have been able to carry out their brutal plan.”
“This attack was foiled because of the trust and relationships the men and women of the Seattle Police Department enjoy with our community,” said Seattle Police Chief John Diaz. “The complainant felt safe approaching a Seattle Police Detective and, in doing so, ended the plot intended to take innocent lives. This cooperative investigation involving local, state, and federal partners worked exactly as intended.”
Abdul-Latif and Mujahidh are charged by complaint with conspiracy to murder officers and employees of the United States, conspiracy to use a weapon of mass destruction (grenades), and possession of firearms in furtherance of crimes of violence. Abdul-Latif is also charged with two counts of illegal possession of firearms The defendants will make their initial appearance on the complaint at 2:30 p.m. in front of Magistrate Judge Mary Alice Theiler, on the 12th floor of the federal courthouse at 700 Stewart Street, Seattle.
Both Abdul-Latif and Mujahidh face potential sentences of life in prison if convicted of the charges.
The case is being prosecuted by the U.S. Attorney’s Office for the Western District of Washington, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. The investigation is being conducted by the FBI’s Joint Terrorism Task Force, which has investigators from federal, state and local law enforcement. The Bureau of Alcohol, Tobacco, Firearms & Explosives contributed significant expertise to this investigation.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Two Indicted in Kentucky on Conspiracy and Harboring of Undocumented Bolivian National for Financial GainRead the Press Release
WASHINGTON – Javier Arce, 58, and Cristina Mier Arce, 55, were indicted by a federal grand jury for conspiracy and harboring of an undocumented Bolivian national for their financial gain, the Justice Department announced today.
According to the indictment, the defendants, who were formerly married to one another, recruited an undocumented Bolivian woman to work as their domestic servant and harbored her unlawfully for a total of nearly 15 years. The indictment alleges that beginning in 1994, the defendants recruited the woman to travel to the United States, and then conspired to harbor her and derive financial benefit from her labor as a full-time domestic servant from 1994 to 2006.
The indictment, filed in the Western District of Kentucky, also alleges that the defendants confiscated the woman’s passport, threatened that she would be arrested and deported if she left their home, and falsely assured her that her wages were being deposited into a bank account maintained on her behalf, while actually failing to pay her as promised for her service. The indictment further alleges that Javier Arce harbored the woman for financial gain from 2006-2009.
At arraignment today, both defendants entered not guilty pleas and were released on $100,000 bonds. A trial date has been scheduled in U.S. District Court in Louisville, Ky., on Aug. 30, 2011, at 9:30 a.m. before Judge John G. Heyburn II. If convicted, Javier Arce faces a maximum sentence of 30 years in prison, $750,000 fine and three years supervised release. Christina Mier Arce faces a maximum sentence of 20 years in prison, $500,000 fine and three years supervised release.
The charges in the indictment are merely allegations, and all defendants are presumed innocent until proven guilty in a court of law.
The case is being investigated by the FBI and prosecuted jointly by Assistant U.S. Attorney Joshua Judd and Trial Attorney Daniel Weiss of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Three Brooklyn Physical Therapy Clinic Employees Plead Guilty in a $3.4 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – Three employees of the Solstice Wellness Center, a Brooklyn-area clinic that purported to specialize in providing physical therapy and various diagnostic tests, have pleaded guilty in connection with a $3.4 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Solstice employee Dmitry Shteyman, 36, pleaded guilty today before U.S. Magistrate Judge Steven M. Gold in Brooklyn, N.Y. Solstice employees Aleksey Shteyman, 42, and Maxsim Shvedkin, 39, pleaded guilty before Judge Gold on June 20, 2011, and June 21, 2011, respectively. All three defendants pleaded guilty to one count of conspiracy to commit health care fraud.
According to court documents, Dmitry and Aleksey Shteyman and Shvedkin were involved in a scheme to pay cash kickbacks to Medicare beneficiaries to induce the beneficiaries to visit Solstice. The beneficiaries were transported to and from Solstice purportedly to receive physicians’ services, physical therapy and diagnostic tests. At their plea hearings, Dmitry and Aleksey Shteyman and Maxsim Shvedkin admitted that they paid kickbacks to the beneficiaries so that Medicare could be billed for services and diagnostic tests that were not medically necessary. As a result of the fraud scheme, Medicare was billed more than $3.4 million for services that were not actually rendered and that were not medically necessary.
At sentencing, the defendants face a maximum sentence of 10 years in prison. Sentencing for Dmitry Shteyman is scheduled for Oct. 20, 2011. Sentencing for Aleksey Shteyman and Maxsim Shvedkin has not yet been scheduled.
Defendant Sara Kalantarov, a Solstice employee, and Yefim Drakhler, a Medicare beneficiary, have also pleaded guilty for their roles in the scheme. Ilya Gershkovich, Evgeny Gil, Yefim Kornfeld, Valentina Mushinskaya, Shelya Pinskaya and Vladimir Rubin were also charged for participating in the scheme and are scheduled for trial in October 2011.
The guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Loretta E. Lynch for the Eastern District of New York and Special Agent-in-Charge Thomas O’Donnell of the HHS-Office of Inspector General (HHS-OIG).
The case is being prosecuted by Acting Assistant Chief O. Benton Curtis III and Trial Attorneys Katherine Houston and Steven Kim of the Criminal Division’s Fraud Section. HHS-OIG, the New York Attorney General’s Medicaid Fraud Control Unit, and the New York Office of the Medicaid Inspector General conducted the investigation. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.
Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Texas Contract Security Officer Charged with Sexual AbuseRead the Press Release
WASHINGTON - The Justice Department today announced the unsealing of an indictment charging Contract Security Officer Edwin Rodriguez, 31, of Raymondville, Texas, with sexual abuse of a female Immigration and Customs Enforcement (ICE) detainee who was under his supervision at the Willacy Detention Center, a federally contracted detention facility in Raymondville, Texas.
Rodriguez is charged in a one-count felony indictment returned by a Brownsville, Texas, grand jury under seal on June 21, 2011, with the felony offense of sexual abuse of a ward. The indictment was unsealed following Rodriguez’s arrest on June 22, 2011. According to allegations contained in the indictment, Rodriguez engaged sexual intercourse with a female detainee on or about Oct. 26, 2008, while she was being held in official detention pending deportation.
Rodriguez appeared today before U.S. Magistrate Felix Recio in the Southern District of Texas today, and entered a plea of not guilty. The court has ordered Rodriguez to remain in federal custody without bond pending a detention hearing on June 27, 2011.
An indictment is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty. If convicted, Rodriguez faces a maximum sentence of 15 years in prison, $250,000 fine and three years of supervised release.
The case has been investigated by ICE’s Office of Professional Responsibility in Harlingen, Texas. Assistant U.S. Attorney Kebharu Smith and Civil Rights Division Criminal Section Trial Attorney Adriana Vieco are handling the prosecution.
Pittsburgh Crips Gang Member Sentenced to 10 Years in PrisonRead the Press Release
WASHINGTON – A Pittsburgh man was sentenced today to 10 years in prison for conspiring to conduct a racketeering enterprise related to his membership in a Pittsburgh Crips gang, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Lynn Gibson, 26, was also sentenced by Senior U.S. District Judge Gustave Diamond to serve three years of supervised release following the prison term. Gibson pleaded guilty on Feb. 2, 2011, to one count of conspiracy to engage in a racketeering enterprise.
According to the guilty plea, Gibson and others participated in a pattern of racketeering activity that included multiple acts involving robberies at gun point; attempted murders; distribution of controlled substances, including cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Clark was a member of the Northview Heights/ Fineview Crips, a criminal street gang operating out of the Northview Heights public housing facility in the Northside neighborhood, and in the nearby Fineview neighborhood of Pittsburgh. The gang had been operating in the Northside since 2002; in 2003, it formed an alliance with the Brighton Place Crips to expand the gang’s drug trafficking territory and increase the gang’s capability for violence.
The Brighton Place/Northview Heights Crips gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees and bonds, as well as payments to jail commissary accounts and support payments to incarcerated members’ families.
In addition, the Brighton Place/Northview Heights Crips gang maintains an ongoing feud with the Manchester Original Gangsters, a criminal street gang located in the Manchester area of the Northside Section of Pittsburgh. Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, using Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc,” and “G.K.” According to court documents, members and associates of the gang gain greater authority and prestige within the gang based upon their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs.
According to court documents, Gibson was considered a respected member of the gang who sold narcotics and taught other members how to successfully distribute narcotics. Gibson was involved in the distribution of heroin, and possessed firearms in connection with the enterprise’s criminal activities.
Gibson is one of 26 defendants charged in February 2010 with being members of, and conducting racketeering activity through, the Brighton Place/Northview Heights Crips gang. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2005. To date, 16 members of the Brighton Place/ Northview Heights Crips who were charged in this indictment have pleaded guilty to racketeering charges.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rivetti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by the ATF; the City of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
Members of International Procurement Network Indicted for Supplying Iran with U.S. Military Aircraft ComponentsRead the Press Release
MACON, Ga. – Seven individuals and five corporate entities based in the United States, France, the United Arab Emirates (U.A.E.) and Iran have been indicted in the Middle District of Georgia for their alleged roles in a conspiracy to illegally export military components for fighter jets and attack helicopters from the United States to Iran. One of the defendants and his company were sentenced yesterday, with the individual receiving nearly five years in prison. Another defendant and his company have admitted their illegal conduct and also pleaded guilty in the investigation.
Federal prosecutors today unsealed a superseding indictment in Macon, Ga., charging eight of the defendants with conspiring to violate and violating the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions Regulations, as well as conspiracy to defraud the United States, money laundering and false statement violations. Charges against the four other defendants, who have pleaded guilty in the case, are contained in the original indictment in the investigation that was filed previously.
The indictment and other enforcement actions were announced by Todd Hinnen, Acting Assistant Attorney General for National Security; Michael J. Moore, U.S. Attorney for the Middle District of Georgia; Brock Nicholson, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) office in Atlanta; Brian D. Lamkin, Special Agent-in-Charge of the FBI’s Atlanta Field Division; and Robert Luzzi, Special Agent-in-Charge of the Commerce Department, Office of Export Enforcement (OEE) Miami Field Office.
The Defendants
Thus far, four defendants based in the United States have been charged as part of the investigation. They are The Parts Guys LLC, a company in Port Orange, Fla., that maintains a warehouse at the Middle Georgia Municipal Airport in Macon, as well as the president of The Parts Guys, Michael Edward Todd, who is a U.S. national. In addition, Galaxy Aviation Services, a company in St. Charles, Ill., and its president, Hamid Seifi, also known as Hank Seifi, an Iranian-born U.S. national, have been charged.
Todd was arrested last year in Atlanta based on the original indictment in the case. Todd and his company, The Parts Guys, pleaded guilty to conspiracy to violate the AECA on May 9, 2011, and have yet to be sentenced. Federal agents arrested Seifi in Atlanta earlier this year, also based on the original indictment. Seifi and his company, Galaxy Aviation, pleaded guilty on Feb. 24, 2011, to conspiracy to violate the AECA and violating the IEEPA. Yesterday, Seifi was sentenced to 56 months in prison followed by three years of supervised release, a fine of $12,500 and forfeiture of $153,950, while Galaxy Aviation, which is now defunct, received a $400 special assessment.
Three defendants based in France have also been indicted as part of the investigation. They are Aerotechnic, a company in Pinsaguel, France, and its president, Philippe Sanchez, a French national, as well as Luc Teuly, a French national and the sales manager of Aerotechnic. Each of these defendants remains a fugitive.
Two defendants based in the U.A.E. have also been indicted in the case. They are Aletra General Trading, a company in Dubai doing business as “Erman & Sultan Trading Co,” and Syed Amir Ahmed Najfi, an Iranian national and purchaser for Aletra. Najfi remains a fugitive.
Three defendants based in Iran have also been charged in the case. They are Sabanican Company, a company in Tehran, and its president, Hassan Seifi, an Iranian national, as well as Reza Seifi, an Iranian national and the managing director of Sabanican Company. Each of these defendants remains at large.
As part of the U.S. government’s coordinated action against this procurement network, the Commerce Department announced today that it will add the eight defendants in France, Iran and the U.A.E. to its “Entity List.” The Entity List provides notice to the public that certain exports, re-exports and transfers (in-country) to parties identified on the Entity List require a license from the Commerce Department, and that availability of license exceptions in such transactions is limited. All eight parties will be added to the Entity List with a licensing requirement for all items subject to the Commerce Department export regulations and with a presumption of denial.
The Charges
According to the charges, the defendants conspired to export components for attack helicopters and fighter jets to Iran without obtaining the required U.S. export licenses. These components included military parts for the Bell AH-1 attack helicopter, the UH-1 Huey attack helicopter, as well as the F-5 and F-4 fighter jets.
Defendant Najfi and his firm in the U.A.E. are alleged to have placed orders and purchased military aircraft parts, including those for the Bell AH-1 attack helicopter, from Todd and his company, The Parts Guys, in the United States. Todd and other conspirators then attempted to and did cause the export of the aircraft parts to the U.A.E.
Defendant Hank Seifi and his firm in Illinois also allegedly placed orders and purchased U.S. aircraft parts from Todd and his company in Georgia -- on behalf of Hassan Seifi, Reza Seifi and their company in Iran. According to the charges, Todd and other conspirators then caused these aircraft parts to be exported to Iran via the defendants in France: Sanchez, Teuly and their company, Aerotechnic.
The charge of conspiracy carries a maximum penalty of five years in prison, while violating the AECA carries a maximum penalty of 20 years in prison, and violating IEEPA carries a maximum penalty of 20 years in prison. Money laundering carries a maximum 20 years in prison, while making false statements carries a maximum of five years in prison.
“The defendants in this case are alleged to have conspired to defraud the United States by illegally acquiring and exporting fighter jet and attack helicopter components. Keeping such advanced weaponry, which is designed to protect the men and women of our Armed Forces and to defend our national interests, from falling into the hands of state sponsors of terror has never been more important,” said Todd Hinnen, Acting Assistant Attorney General for National Security.
“Through coordinated law enforcement efforts, we have cut off more than a branch of this illegal supply tree; we have cut off the tree at its trunk. These parts have a military purpose, and I am determined to see that they are not used to harm the United States, its soldiers, citizens or friends. This type of criminal activity should remind each of us that we must be ever vigilant in our efforts to protect our national security. The threat is very real, and comes from even the least suspected places, including middle Georgia,” said U.S. Attorney Michael Moore.
“The illegal export of U.S. weapons and military technology presents a direct threat to our national security,” said Brock Nicholson, Special Agent-in-Charge of ICE-HSI in Atlanta. “This investigation demonstrates the importance of preventing our military equipment from falling into the wrong hands, where it could potentially be used against our military members, our homeland and our allies. Enforcing U.S. export laws is one of our top priorities, and we will continue working with our law enforcement partners to ensure that those who put our country at risk are discovered and brought forward for prosecution.”
Brian D. Lamkin, Special Agent-in-Charge, FBI Atlanta, stated: “The cooperative efforts among the FBI, ICE and U.S. Commerce was critical in bringing this case forward for prosecution by the U.S. Department of Justice. The enforcement of U.S. laws that prohibit the acquisition of specified defense related items is paramount to national security and is a daunting task when back dropped against the vast movement of legitimate international trade that occurs every day in the U.S. The FBI is pleased with the role that it has played in this multi-agency enforcement effort.”
“ The Commerce Department's Office of Export Enforcement (OEE) dedicates one hundred percent of its resources to enforcing export laws, and today's case is the result of ongoing cooperation with Immigration and Customs Enforcement and the FBI to protect our national security,” said Robert Luzzi, Special Agent-in-Charge of OEE's Miami Field Office. “Parties who export to embargoed destinations such as Iran will be pursued and prosecuted to the fullest extent of the law.”
This case was investigated by ICE Homeland Security Investigations in Atlanta, FBI Atlanta Field Division and the Department of Commerce’s OEE.
The prosecution is being handled by Assistant U.S. Attorneys Jennifer Kolman and Danial E. Bennett from the U.S. Attorney’s Office for the Middle District of Georgia and Trial Attorneys Ryan P. Fayhee and Brandon L. Van Grack from the Counterespionage Section of the Justice Department’s National Security Division.
The public is reminded that an indictment contains mere allegations and that defendants are presumed innocent unless and until proven guilty.
Justice Department Reaches Settlement with George’s Inc.Read the Press Release
WASHINGTON – The Department of Justice announced today that it has reached a settlement with George’s Inc. that requires George’s to make important capital improvements to a Harrisonburg, Va., chicken processing plant in order to settle the litigation surrounding George’s acquisition of the Tyson Foods Inc. plant. The department said that the settlement will avert the likely adverse competitive effects that would arise from the acquisition in western Virginia.
The department’s Antitrust Division filed a proposed settlement in U.S. District Court for the Western District of Virginia in Harrisonburg. If approved by the court, the settlement would resolve the civil antitrust lawsuit filed by the department on May 10, 2011, and would resolve the lawsuit’s competitive concerns.
“The proposed settlement enhances the competitive viability and increases the production of the Harrisonburg poultry processing plant, which translates into more opportunities to grow and process poultry,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “This resolution not only benefits poultry growers, but also the Shenandoah Valley community. It also demonstrates our commitment to enforcing the antitrust laws to protect competition in important agricultural markets.”
In May 2011, George’s acquired Tyson Foods’ Harrisonburg chicken processing plant. The department learned of the transaction, which was not required to be reported under the premerger notification law, shortly before it was completed. The department filed a lawsuit alleging that the acquisition would likely have the anticompetitive effect of reducing the prices paid to Shenandoah Valley area farmers who raise chickens for processors such as Tyson Foods and George’s.
The settlement requires that George’s make capital improvements to the Harrisonburg chicken processing plant that will lead to a significant increase in the number of chickens that will be processed at the facility. The improvements include the installation of a special freezer and deboning equipment, which will allow George’s to produce a variety of highly valued products at both its Harrisonburg and Edinburg facilities in the Shenandoah Valley. As a result of these improvements, George’s will have the incentive and ability to increase local poultry production, thereby increasing the demand for grower services and averting the likely adverse competitive effects arising from the acquisition. In addition, the division will monitor George’s efforts to improve the plant until the new equipment is installed and operational.
The department also noted in its court documents that there were significant concerns associated with the viability of the Harrisonburg processing plant, which was operating at a loss over the past few years. Taking all of the facts and circumstances into consideration, including the likely benefits resulting from the required improvements, the department determined that the proposed settlement is an effective remedy.
George’s, headquartered in Springdale, Ark., is the 11th largest chicken processor in the United States, with output of more than 20 million pounds of chicken per week. In addition to its Shenandoah Valley operations, George’s processes chicken in Springdale and Cassville, Mo.
Tyson Foods, headquartered in Springdale, is the largest chicken processor in the United States, with output of more than 205 million pounds of chicken per week.
The proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to William H. Stallings, Chief, Transportation, Energy & Agriculture Section, 450 Fifth Street, N.W., Suite 8000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the proposed settlement upon finding that it is in the public interest.
Justice Department Issues Technical Assistance Document on Enforcement of the Supreme Court Decision in Olmstead v. L.C.Read the Press Release
WASHINGTON – The Department of Justice released a new technical assistance document describing public entities’ obligations and individuals’ rights under the integration mandate of title II of the Americans with Disabilities Act (ADA) and the 1999 landmark Supreme Court decision, Olmstead v. L.C. The Olmstead decision held that the ADA requires public entities to provide community-based services to persons with disabilities when such services are appropriate; the affected persons do not oppose community-based treatment; and community-based services can be reasonably accommodated. The document also provides questions and answers on a variety of ADA enforcement issues related to Olmstead.
Additionally, in commemorating the 12th anniversary of the Olmstead decision yesterday, the department launched a new section of its ADA website, www.ada.gov/olmstead , providing information and resources about the decision and its enforcement. In addition to the newly created technical assistance document, users can visit the site to find briefs filed by the Department, as well as other materials relevant to this important area of law. The ADA website provides easy access to an extensive collection of ADA technical assistance materials and settlement agreements, as well as information about enforcement, mediation, technical assistance and certification activities and links to other sites with ADA information. The addition of the new Olmstead section of the site will provide critical information to individuals with disabilities, advocates and state and local officials responsible for complying with the ADA’s integration mandate.
“The Olmstead decision recognized the rights of individuals with disabilities to live the lives they choose, but its promise has not yet been fully realized. Far too many people remain segregated in institutions when they would rather be thriving in their communities,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to making the promise a reality, and will continue to aggressively enforce Olmstead.”
President Obama has made clear his commitment to Olmstead enforcement, and in 2009 launched “The Year of Community Living,” directing agencies to vigorously enforce Olmstead and the rights of individuals with disabilities. Since that time, the Civil Rights Division has made Olmstead enforcement a top priority, joining or initiating Olmstead litigation in more than 25 cases in 17 states. In 2010, the division reached a landmark settlement agreement with the state of Georgia that will allow thousands of individuals with disabilities to receive services in community settings, and will serve as a model for comprehensive agreements going forward.
For more information about the ADA , including how to file complaints related to Olmstead enforcement, c all the Justice Department’s toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY), or access the department’s ADA website at www.ada.gov/olmstead. For the full technical assistance document, please visit www.ada.gov/olmstead/q&a_olmstead.htm.
Justice Department Files Lawsuit Against the Alamance County, North Carolina, Sheriff’s OfficeRead the Press Release
WASHINGTON– The Justice Department filed a lawsuit today against the Alamance County Sheriff’s Office (ACSO), Alamance County and Alamance County Sheriff Terry Johnson seeking a judicial declaration that department attorneys may interview particular ACSO personnel outside the presence of ACSO’s counsel. The relevant North Carolina rule of professional conduct permits department attorneys to interview current non-command staff and all former ACSO employees outside the presence of ACSO’s counsel.
The Department of Justice is currently investigating allegations that ACSO, Alamance County and Sheriff Terry Johnson have engaged in discriminatory policing and unconstitutional searches and seizures. In the complaint, the department alleges that numerous current and former ACSO personnel are fearful that if they cooperate with the United States' investigation, they may be subject to retaliation. Therefore, the department’s ability to conduct interviews outside the presence of ACSO’s counsel is necessary to ensure that former and current employees feel free to openly share information with the government concerning ACSO practices.
“It is unfortunate that the department was forced to resort to litigation when the applicable ethical rules are so clear in this instance,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “A judicial decision will allow the department to move forward with the investigation.”
The department filed today’s lawsuit after exhausting all cooperative measures to negotiate access to the interviews with ACSO. The department has attempted to secure voluntary compliance with its investigation since July 2010.
The department’s investigation remains open and ongoing. For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt
Justice Department Files Lawsuit Against City of New Berlin, Wisconsin, for Blocking Affordable HousingRead the Press Release
WASHINGTON - The Department of Justice announced today that it has filed a lawsuit against the city of New Berlin, Wis., alleging that the city violated the Fair Housing Act by repeatedly taking action to prevent the construction of an affordable housing development by a private developer, MSP Real Estate Inc.
The complaint, filed today in the U.S. District Court for the Eastern District of Wisconsin, alleges that the city of New Berlin violated the Fair Housing Act when it took actions to block a proposal by MSP, first submitted in March 2010, to construct 180 units of affordable housing in the City Center area of New Berlin. All 180 units were to be reserved for persons earning 60 percent of the area median income or less, with some units set aside for persons earning less than 50 percent of the area median income. MSP’s project was to be financed using state-allocated tax credits under the federal Low Income Housing Tax Credit program, which provides federal tax credits to private developers as an incentive to create affordable housing. The planning commission initially approved the project on May 3, 2010. Later that month, however, the mayor and other city officials received numerous emails, calls and other communications from residents opposing the project. Some of the opponents expressed concern that the prospective tenants would be African-Americans or other minorities and used racially derogatory terms to refer to the prospective residents, or implied racial bias as the reason for objecting to the development. In response to the opposition, the planning commission reversed itself and denied MSP’s proposal on July 12, 2010. The common council of New Berlin denied a revised proposal submitted by MSP on Jan. 25, 2011.
“At a time when so many families are in need of decent and affordable housing, it is imperative that unlawful discrimination not be a barrier to the construction of housing that is affordable for seniors and working families with modest incomes,” said Thomas E. Perez, Assistant Attorney General for Civil Rights. “This case demonstrates our resolve to contest discriminatory actions by municipalities that unlawfully block the development of affordable housing wherever they occur.”
“This filing shows a history of discriminatory conduct and the department not only seeks a reversal of the discriminatory denial of permission to build that housing but other forms of remedial relief under the Fair Housing Act—including the municipality’s commitment to prevent a recurrence of this behavior. Today’s action highlights our strong, focused, tireless work to ensure that the civil rights of all Americans are observed and enforced in all communities—in the housing area and all others guaranteed by our Constitution and laws,” said U.S. Attorney for the Eastern District of Wisconsin James A. Santelle.
The lawsuit seeks a court order that would, among other things, require the city to approve MSP’s proposal to construct affordable housing in the City Center and require it to take steps to prevent the recurrence of any similar discriminatory conduct. The lawsuit also seeks monetary damages for persons harmed by the city’s actions and a civil penalty. The complaint is an allegation of unlawful conduct. The allegations in the complaint must still be proven in federal court.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt . Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected] , or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Illinois Man Pleads Guilty to Federal Duck Hunting ViolationsRead the Press Release
WASHINGTON – Professional duck hunter and guide Jeffrey B. Foiles pleaded guilty today in federal court in Springfield, Ill., to wildlife charges arising from the illegal sale of guided waterfowl hunts, the Department of Justice’s Environment and Natural Resources Division announced today.
Foiles, 54, of Pleasant Hill, Ill., pleaded guilty to an information charging him with one misdemeanor count of unlawful sale of wildlife in violation of the Lacey Act, as well as one misdemeanor count of unlawfully taking migratory game birds in violation of the Migratory Bird Treaty Act. At the same time, the company that operates Foiles’ hunting club, the Fallin’ Skies Strait Meat Duck Club LLC, located in Pike County, Ill., pleaded guilty to an information charging it with one felony count of unlawful sale of wildlife in violation of the Lacey Act and one felony count of making false writings in a matter within the jurisdiction of the U.S. Fish and Wildlife Service.
The Lacey Act is a federal law that makes it illegal to knowingly transport or sell wildlife taken in violation of federal law or regulation. The act defines the sale of wildlife to include the sale of guiding services for the illegal taking of wildlife.
According to the plea agreements filed today, between 2003 and 2007, Foiles sold and guided waterfowl hunts at the club for the purpose of illegally hunting ducks and geese in excess of hunters’ individual daily bag limits. Guided hunters paid $250 per day for hunts at the club. Foiles and others at the club also falsified hunting records in order to conceal the excesses.
According to the plea agreements filed today, the government and the defendants have jointly asked the court to sentence Foiles to 13 months in prison, to be followed by one year of supervised release during which time he may not hunt or guide hunters, and to pay a $100,000 fine for which Fallin’ Skies Strait Meat Duck Club LLC agreed to serve as guarantor. Further, Foiles agreed to one additional year, following completion of his term of supervised release, during which he will not hunt or guide.
The court must determine whether or not to accept the plea agreements. If the plea agreements are accepted by the court, the government has agreed to dismiss the pending felony indictment against Foiles.
The sentencing hearing for Foiles is currently set for Sept. 21, 2011, before U.S. Magistrate Judge Byron G. Cudmore. The sentencing hearing for Fallin’ Skies Strait Meat Duck Club LLC is scheduled for Oct. 27, 2011, before U.S. District Judge Richard Mills.
The case was investigated by the U.S. Fish & Wildlife Service, in cooperation with the Illinois Department of Natural Resources, the Iowa Department of Natural Resources, and the government of Canada. The case is being prosecuted by the U.S. Attorney’s Office for the Central District of Illinois and the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
22 June 2011
Owners of Houston Health Care Company Plead Guilty to <br /> Medicare FraudRead the Press Release
WASHINGTON – Two owners of a Houston health care company pleaded guilty for their roles in a scheme to defraud Medicare of more than $800,000, announced the Departments of Justice and Health and Human Services (HHS).
Kemmie Houston, 43, pleaded guilty today and Sharon Beal, 47, pleaded guilty yesterday in U.S. District Court in Houston. Houston and Beal both pleaded guilty before U.S. District Judge David Hittner to one count of conspiracy to commit health care fraud. In their pleas, Beal and Houston admitted that they defrauded Medicare of $851,212.
According to court documents, Beal and Houston owned and operated STK Consultants. STK maintained a Medicare provider number in order to submit Medicare claims for the costs of durable medical equipment (DME) and purported to provide orthotics, power wheelchairs, power wheelchair accessories and other DME to Medicare beneficiaries. According to court documents, STK submitted claims to Medicare for DME that was medically unnecessary and/or not provided. Many of the orthotic devices were components of what was referred to as an “arthritis kit,” and were purported to be for the treatment of arthritis-related conditions; in fact, however, they were not medically necessary or appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads. In total, from August 2005 through August 2010, STK submitted approximately $851,212 in fraudulent claims to Medicare.
Beal is scheduled to be sentenced on Sept. 14, 2011, and Houston is scheduled to be sentenced on Sept. 15, 2011. Beal and Houston each face a maximum sentence of 10 years in prison.
The guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Texas Attorney General Greg Abbott; Acting Special Agent-in-Charge Russell D. Robinson of the FBI’s Houston Field Office; and Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations.
This case is being prosecuted by Trial Attorney Laura M.K. Cordova and Assistant Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 individuals who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Owner of Houston Health Care Company Pleads Guilty in Connection with $1.3 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – An owner of a Houston health care company pleaded guilty today to committing health care fraud and making false statements relating to health care matters, announced the Departments of Justice and Health and Human Services (HHS).
Ekpedeme Obot, 34, pleaded guilty before U.S. District Court Judge Lee Rosenthal in Houston to one count of making false statements relating to health care matters and one count of health care fraud.
According to court documents, Obot was an owner and operator of Praise DME. Praise maintained a Medicare provider number in order to submit Medicare claims for the costs of durable medical equipment (DME) and purported to provide orthotics and other DME to Medicare beneficiaries. According to court documents, Praise submitted claims to Medicare for DME, including orthotic devices that were medically unnecessary and/or not provided. Many of the orthotic devices were components of an “arthritis kit,” and were purported to be for the treatment of arthritis-related conditions; in fact, however, they were not medically necessary or appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads. From March 2007 through August 2008, Obot submitted claims of more than $1.3 million to Medicare and was paid approximately $945,637.
In addition, according to the plea agreement, Obot admitted that he made false statements to Medicare in his supplemental Medicare Enrollment Application when he failed to provide information about a prior felony conviction. Specifically, the Medicare Enrollment Application included a section entitled “Adverse Legal Actions/Convictions,” which required DME providers to list prior felony convictions. Obot was convicted on March 5, 2007, in Harris County, Texas, on a felony theft charge, but in his application, he represented only that he had been subject to a recoupment action by Texas Medicaid in November 2006 that was resolved by entering into a payment plan.
At sentencing, Obot faces a maximum penalty of 10 years in prison on the health care fraud charge and five years in prison on the false statements charge. Sentencing is scheduled for Oct. 12, 2011, at 9:00 a.m., CDT before Judge Rosenthal.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Texas Attorney General Greg Abbott; Joseph J. Del Favero, Special Agent -in-Charge of the Chicago Field Office of the Railroad Retirement Board Office of Inspector General; Acting Special Agent-in-Charge Russell D. Robinson of the FBI’s Houston Field Office; and Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations.
This case is being prosecuted by Special Assistant U.S. Attorney Justin Blan and Trial Attorney Laura M.K. Cordova of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine districts have obtained indictments of more than 1,000 individuals who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Nacogdoches, Texas, Man Sentenced to Life in Prison for Role <br /> in 2007 MurdersRead the Press Release
WASHINGTON – A Nacogdoches, Texas, man has been sentenced to life in federal prison for his role in a double homicide that took place in Nacogdoches in August 2007, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S.
Attorney John M. Bales for the Eastern District of Texas.
Charles Cameron Frazier, aka “Mojo,” 29, pleaded guilty on Jan. 14, 2011, to committing a violent crime in aid of racketeering activity and was sentenced yesterday by U.S. District Judge Marcia Crone in federal court in Beaumont, Texas. Specifically, Frazier admitted that he had participated in the murders of David Mitchamore and Christy Rochelle Brown.
According to information presented in court, Frazier was a member of the Aryan Brotherhood of Texas (ABT), a powerful, race-based state-wide organization that operates inside and outside of state and federal prisons throughout Texas and the United States. The ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to commit murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, are required to follow the orders of higher-ranking members, often referred to as “direct orders.”
According to court documents, David Mitchamore, aka “Super Dave,” an ABT member, and his girlfriend, Christie Rochelle Brown, were murdered by Brent Stalsby as a result of a “direct order” issued by ABT member Carl Carver because of Mitchamore’s failure to repay an outstanding debt he allegedly owed to an Aryan Brotherhood general. The bodies of Mitchamore and Brown were discovered in Nacogdoches County on Aug. 10, 2007. Terry Stalsby was present when the “direct order” issued by Carver was delivered to Frazier. On May 25, 2011, Brent Stalsby was sentenced to life in federal prison and Terry Stalsby was sentenced to 162 months in federal prison.
This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the National Gang Targeting, Enforcement and Coordination Center ( Gang-TECC); the National Gang Intelligence Center; the Nacogdoches Sheriff's Department; the Nacogdoches Police Department; the Angelina County, Texas, Sheriff's Department; the Texas Department of Public Safety; and the Texas Rangers. The case is being prosecuted by the U.S. Attorney’s Office in Lufkin, Texas, and the Criminal Division’s Organized Crime and Gang Section, in full cooperation with the Nacogdoches County District Attorney’s Office.
Michael Jackson’s Former General Manager Pleads Guilty to Tax Charges in Washington, D.C., CourtRead the Press Release
WASHINGTON - Raymone Bain, a public relations specialist and the former general manager of the late pop star Michael Jackson, pleaded guilty today in federal court in Washington, D.C., to charges that she failed to file federal and District of Columbia income tax returns, the Justice Department, Internal Revenue Service (IRS) and the District of Columbia Office of Tax and Revenue (OTR) announced.
Bain, a resident of Washington, D.C., pleaded guilty to two counts of failure to file federal income tax returns (Forms 1040) and District of Columbia income tax returns (Forms D-40). U.S. Magistrate Alan Kay scheduled sentencing for Aug. 31, 2011. The federal criminal violation carries a maximum penalty of 12 months in prison and a $100,000 fine. The District of Columbia criminal violation carries a maximum penalty of six months in prison and $5,000 fine.
According to the evidence presented in court, Bain worked in the sports and entertainment industry in the District of Columbia and founded her public relations firm, Davis, Bain & Associates. Beginning in 2006, Bain became personal general manager for the performer Michael Jackson and president of the Michael Jackson Company. In that capacity, she was responsible for daily operations of the Michael Jackson Company, including financial, public relations and marketing tasks. Bain was compensated for her services.
Despite earning substantial income, Bain knowingly failed to file her federal her District of Columbia income tax returns, and she failed to pay income taxes owed during 2006 through 2008. According to the plea documents filed in court today, the tax loss is between $200,000 and $400,000.
Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; John DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; Rebecca A. Sparkman, Special Agent in Charge for the IRS-Criminal Investigation; and Stephen M. Cordi, OTR Deputy Chief Financial Officer Cordi praised the efforts of those who worked on the case. Assistant U.S. Attorney Susan Menzer and Department of Justice Trial Attorney Karen E. Kelly are prosecuting the matter.
Justice Department Moves to Intervene in Texas Case to Enforce the Supreme Court’s Olmstead DecisionRead the Press Release
WASHINGTON – The Justice Department today filed papers seeking to intervene in Steward, et al. v. Perry, et al., a case filed on behalf of thousands of Texans with developmental disabilities to enforce their right under the Americans with Disabilities Act (ADA) to receive services provided by the state in the most integrated setting appropriate to their needs.
The proposed complaint by the United States, which must first be approved for filing by the U.S. District Court in San Antonio alleges that Texas unnecessarily segregates individuals with developmental disabilities in nursing homes instead of providing them the opportunity to receive integrated, community-based services. The proposed complaint also alleges that Texas places individuals with developmental disabilities who currently live in the community at risk of unnecessary placement in nursing facilities by failing to provide necessary community-based services in violation of the ADA and Section 504 of the Rehabilitation Act.
“Individuals with disabilities have a right to access appropriate community-based services, and the administration is committed to helping them do so,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “For the Department of Justice, this suit presents an opportunity to turn the promise of the Olmstead decision into a reality for individuals with developmental disabilities confined to nursing facilities in Texas.”
The Justice Department’s filing in Texas comes on the 12th anniversary of the Supreme Court’s decision in Olmstead v. L.C., which held that the ADA requires public entities to provide community-based services to persons with disabilities when such services are appropriate; the affected persons do not oppose community-based treatment; and community-based services can be reasonably accommodated. The filing is part of the department’s continuing effort to enforce civil rights laws that require states to ensure that individuals with disabilities are served in the most integrated setting appropriate to meet their needs. The Justice Department has intervened, brought suit, or filed amicus briefs in support of Olmstead enforcement in 17 different states over the past two years.
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 website on Olmstead at www.ada.gov/olmstead , where all relevant information can be found.
Iowa Man Sentenced to 41 Months in Prison for Conspiring to Violate the Clean Air ActRead the Press Release
WASHINGTON – Bobby Joe Knapp, the former owner and operator of the Equitable Building in downtown Des Moines, Iowa, was sentenced today by U.S. District Judge James E. Gritzner to 41 months in prison for conspiring to violate the Clean Air Act and the Clean Air Act’s asbestos work practice standards for his role during the renovation of more than 10 floors of the building between 2005 and 2008.
Knapp’s prison sentence will be followed by two years of supervised release and 300 hours of community service. He must also pay a $12,500 fine and a $200 crime victim special assessment fee. On March 18, 2011, Knapp, of West Des Moines, Iowa, pleaded guilty to one count of conspiracy to violate the Clean Air Act and one count of failing to remove all regulated asbestos-containing material from the Equitable Building before beginning the renovation project. K napp owned the building and oversaw the renovation project, which involved converting several floors into luxury residential condominium units, and renovating other floors to attract additional commercial tenants.
“Knapp’s illegal conduct put at risk the health of workers who lacked basic training and protective equipment,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “The Clean Air Act work practice standards are designed to protect people’s health from real dangers, and we will hold violators fully responsible for their actions.”
“This office will continue to pursue serious violations of the environmental laws that put the community at risk,” said Nicholas A. Klinefeldt, U.S. Attorney for the Southern District of Iowa. “Compliance with the Clean Air Act is tremendously important to ensuring good health and the quality of life that Iowans enjoy.”
“Ignoring the safeguards put into place to protect workers and the public from the risk of exposure to asbestos is inexcusable,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s sentence reflects the seriousness of the crime and sends a strong warning to any anyone thinking of cutting corners to save money at the expense of people’s health.”
In the plea agreement, Knapp admitted that he conspired with Russell Coco, who was also charged and pleaded guilty to the same counts on Feb. 15, 2011, to remove asbestos-containing materials from the Equitable Building without complying with the requirements of the Clean Air Act. Exposure to asbestos increases the risk of developing lung cancer and other respiratory diseases
According to testimony presented at sentencing, while Knapp was overseeing the project, asbestos-containing material was removed from the building and disposed of in an uncovered dumpster. The testimony also showed that the demolition work was performed by workers who were not provided with personal protective equipment to reduce exposure to the asbestos. Testimony also showed that the building workers, one of whom was disabled, and tenants, were exposed to large amounts of dust that resulted from the demolition. A worker testified that the workers were not instructed to wet the tile containing asbestos before and during the demolition process, which increased their exposure to dust.
The Clean Air Act requires that owners of public buildings that contain asbestos follow federally established work practice standards to ensure the safe removal of the asbestos. The required standards include providing notice to the U.S. Environmental Protection Agency (EPA) before starting asbestos removal, adequately wetting the asbestos during the removal and before disposal, and properly disposing of the asbestos at an EPA-approved disposal site.
The case was investigated by the EPA’s Criminal Investigation Division and the Iowa Department of Natural Resources. The case was prosecuted by the U.S. Attorney’s Office for the Southern District of Iowa and the U.S. Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
Former Army Contracting Officials Charged with Conspiracy to Defraud the U.S. & Filing False Tax Returns and Ethics FormsRead the Press Release
WASHINGTON, D.C. – Kenneth H. Nix and Velma I. Salinas-Nix, both of Boerne, Texas, were indicted by a federal grand jury in San Antonio on a multi-count indictment alleging tax fraud and false statements to the U.S. government, the Justice Department announced today. The Nixes were charged with one count of conspiring for the dual purpose of impeding the Internal Revenue Service (IRS) in assessment and collection of income taxes and making false statements to the government, and four counts of filing false tax returns with the IRS. Velma Salinas-Nix also was charged with two counts of making false statements to the U.S. government by filing false financial disclosure ethics forms.
According to the indictment, the Nixes, both former high-level contracting officials with the U.S. Army, conspired between 2003 through 2010 to impede the IRS in the assessment and collection of income taxes and to make false statements to the federal government to conceal income that Kenneth Nix earned from a federal contractor to whom he awarded approximately $1.3 million in military contracts. To conceal this income, the Nixes were paid in cash, blank money orders and checks in another person’s name, among other things. They also structured cash deposits into their joint bank accounts, cashed money orders using false payor names, submitted false financial disclosure forms to the Army and filed false tax returns.
The conspiracy charge carries a maximum penalty of five years’ in prison and a $250,000 fine. The false tax return charges each carry a maximum penalty of three years in prison and a $250,000 fine. The false statement charges against Velma Salinas-Nix each carry a maximum penalty of five years in prison and a $250,000 fine.
A trial date has not yet been set. An indictment is merely an allegation, and Kenneth Nix and Velma Salinas-Nix are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Department of Justice Tax Division Trial Attorney Rebecca Perlmutter is prosecuting the case for the United States. This case was investigated by the Department of the Army-Criminal Investigation Division, IRS-Criminal Investigation, the FBI and the Defense Criminal Investigative Service.
More information about the Justice Department’s Tax Division and its enforcement efforts can be found at www.justice.gov/tax .
Department of Justice Launches Crimesolutions.Gov WebsiteRead the Press Release
Washington, D.C. – The Department of Justice’s Office of Justice Programs (OJP) today launched the website Crimesolutions.gov . This new site is a central, credible resource to inform practitioners and policymakers about what works in criminal justice, juvenile justice, and crime victim services. The site includes information on more than 150 justice-related programs and assigns “evidence ratings” – effective, promising, or no effects — to indicate whether there is evidence from research that a program achieves its goals.
“We all have tight budgets today. CrimeSolutions.gov helps us take a ‘smart on crime’ approach that relies on data-driven, evidence-based analysis to identify and replicate justice-related programs that have shown real results in preventing and reducing crime and serving crime victims,” explained Laurie O. Robinson, Assistant Attorney General.
CrimeSolutions.gov is a searchable online database of evidence-based programs covering a range of justice-related topics, including corrections; courts; crime prevention; substance abuse; juveniles; law enforcement; technology and forensics; and victims. The site is a tool to understand, access and integrate scientific evidence about programs into programmatic and policy decisions.
The new website is part of the Evidence Integration Initiative (E2I) launched by Assistant Attorney General Robinson in 2009. The Initiative’s three goals are improving the quantity and quality of evidence OJP generates; integrating evidence into program, practice and policy decisions within OJP and the field; and improving the translation of evidence into practice.
OJP, headed by Assistant Attorney General Laurie O. Robinson, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking. More information about OJP can be found at www.ojp.gov .
Department of Justice Disrupts International Cybercrime Rings Distributing ScarewareRead the Press Release
WASHINGTON – Today the Department of Justice and the FBI, along with international law enforcement partners, announced the indictment of two individuals from Latvia and the seizure of more than 40 computers, servers and bank accounts as part of Operation Trident Tribunal, an ongoing, coordinated enforcement action targeting international cybercrime. The operation targeted international cybercrime rings that caused more than $74 million in total losses to more than one million computer users through the sale of fraudulent computer security software known as “scareware.”
Scareware is malicious software that poses as legitimate computer security software and purports to detect a variety of threats on the affected computer that do not actually exist. Users are then informed they must purchase what they are told is anti-virus software in order to repair their computers. The users are then barraged with aggressive and disruptive notifications until they supply their credit card number and pay for the “anti-virus” product, which is, in fact, fake.
Warrants obtained from the U.S. District Court for the Western District of Washington and elsewhere throughout the United States led to the seizure of 22 computers and servers in the United States that were involved in facilitating and operating a scareware scheme. In addition, 25 computers and servers located abroad were taken down as part of the operation, including equipment in the Netherlands, Latvia, Germany, France, Lithuania, Sweden and the United Kingdom.
The first of the international criminal groups disrupted by Operation Trident Tribunal infected hundreds of thousands of computers with scareware and sold more than $72 million worth of the fake antivirus product over a three-year period. The scareware scheme used a variety of ruses to trick consumers into unknowingly infecting their computers with the malicious scareware products, including web pages featuring fake computer scans. Once the scareware was downloaded, victims were notified that their computers were infected with a range of malicious software, such as viruses and Trojans and badgered into purchasing the fake antivirus software to resolve the non-existent problem at a cost of up to $129. An estimated 960,000 users were victimized by this scareware scheme, leading to $72 million in actual losses. Latvian authorities also executed seizure warrants for at least five bank accounts that were alleged to have been used to funnel profits to the scam’s leadership.
A second international crime ring disrupted by Operation Trident Tribunal relied on online advertising to spread its scareware products, a tactic known as “malvertising.” An indictment unsealed today in U.S. District Court in Minneapolis charges the two operators of this scareware scheme with two counts of wire fraud, one count of conspiracy to commit wire fraud and one count of computer fraud. The defendants, Peteris Sahurovs, 22, and Marina Maslobojeva, 23, were arrested yesterday in Rezekne, Latvia, on the charges filed in the District of Minnesota. According to the indictment, the defendants created a phony advertising agency and claimed that they represented a hotel chain that wanted to purchase online advertising space on the Minneapolis Star Tribune’s news website, startribune.com. The defendants provided an electronic version of the advertisement for the hotel chain to the Star Tribune, and technical staff at startribune.com tested the advertising and found it to operate normally.
According to court documents, after the advertisement began running on the website, the defendants changed the computer code in the ad so that the computers of visitors to startribune.com were infected with a malicious software program that launched scareware on their systems. The scareware caused users’ computers to “freeze up” and then generate a series of pop-up warnings in an attempt to trick users into purchasing purported “antivirus” software, which was, in fact, fake. Users’ computers “unfroze” if the users paid the defendants for the fake antivirus software, but the malicious software remained hidden on their computers. Users who failed to purchase the fake antivirus software found that all information, data and files stored on the computer became inaccessible. The scam allegedly led to at least $2 million in losses. If convicted,the defendants face penalties of up to 20 years in prison and fines of up to $250,000 on the wire fraud and conspiracy charges, and up to 10 years in prison and fines of up to $250,000 on the computer fraud charge. The defendants also face restitution and forfeiture of their illegal profits. An indictment is merely a charge and defendants are presumed innocent until proven guilty.
“Today’s operation targets cybercrime rings that stole millions of dollars from unsuspecting computer users,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “These criminal enterprises infected the computers of innocent victims with malicious scareware, and then duped them into purchasing fake anti-virus software. Cybercrime is profitable, and can prey upon American consumers and companies from nearly any corner of the globe. We will continue to be aggressive and innovative in our approach to combating this international threat. At the same time, computer users must be vigilant in educating themselves about cyber security and taking the appropriate steps to prevent dangerous and costly intrusions.”
“This case shows that strong national and global partners can ensure there is no sanctuary for cyber-crooks,” said U.S. Attorney Jenny A. Durkan of the Western District of Washington. “We will continue to work with the public and the computer industry, to fortify our cyber defenses. A combination of safe online habits and smart technology will help reduce the threat posed by these organized criminal groups.”
“The global reach of the Internet makes every computer user in the world a potential victim of cybercrime,” said U.S. Attorney B. Todd Jones of the District of Minnesota. “Addressing cybercrime requires international cooperation; and in this case, the FBI, collaborating with our international law enforcement and prosecution partners, has worked tirelessly to disrupt two significant cybercriminal networks. Their efforts demonstrate that no matter the country, Internet criminals will be pursued, caught and prosecuted.”
Assistant Director Gordon M. Snow of the FBI’s Cyber Division said, “Scareware is just another tactic that cyber criminals are using to take money from citizens and businesses around the world. This operation targeted a sophisticated business enterprise that had the capacity to steal millions. Cyber threats are a global problem, and no single country working alone can be effective against these crimes. The FBI thanks the participating foreign law enforcement agencies for their ongoing partnership and commitment in disrupting this threat.”
Operation Trident Tribunal was conducted by the FBI’s Cyber Division, Seattle Field Office and Minneapolis Field Office; the Computer Crime and Intellectual Property Section and the Asset Forfeiture and Money Laundering Section of the Justice Department’s Criminal Division; the U.S. Attorney’s Office for the District of Minnesota; and the U.S. Attorney’s Office for the Western District of Washington. Operation Trident Tribunal was the result of significant international cooperation and substantial assistance from the Criminal Division’s Office of International Affairs. Multiple foreign law enforcement partners provided invaluable assistance in this operation, including the Cyprus National Police in cooperation with its Unit for Combating Money Laundering (MOKAS); German Federal Criminal Police (BKA); Latvian State Police; Security Service of Ukraine; Lithuanian Criminal Police Bureau; French Police Judiciare; the Netherlands’ National High-Tech Crime Unit; the Cyber Unit of the Swedish National Police; London Metropolitan Police; Romania’s Directorate for Combating Organized Crime; and the Royal Canadian Mounted Police.
To avoid falling victim to a scareware scheme, computer users should avoid purchasing computer security products that use unsolicited “free computer scans” to sell their products. It is also important for users to protect their computers by maintaining an updated operating system and using legitimate, up-to-date antivirus software, which can detect and remove fraudulent scareware products.
Additional tips on how to spot a scareware scam include:
Scareware advertising is difficult to dismiss. Scareware purveyors employ aggressive techniques and badger users with pop-up messages into purchasing their products. These fake alerts are often difficult to close and quickly reappear;
Fake anti-virus products are designed to appear legitimate, and can use names such as Virus Shield, Antivirus or VirusRemover. Only install software from trusted sources that you seek out. Internet service providers often make name-brand anti-virus products available to their customers for free;
Become familiar with the brand, look and functionality of the legitimate anti-virus software that is installed on your computer. This will assist you in identifying scareware.
Computer users who think they have been victimized by scareware should filea complaint with the FBI’s Internet Crime Complaint Center, www.ic3.gov.
Belarusian National is Sentenced to 41 Months in Prison for Participating in International Online Scheme to Steal U.S. Tax RefundsRead the Press Release
WASHINGTON – A Belarusian national and resident of Nantucket, Mass., was sentenced today in federal court to 41 months in prison for his participation in an international online scheme to steal income tax refunds from U.S. taxpayers around the country, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge William P. Offord of the Internal Revenue Service-Criminal Investigation (IRS-CI).
Mikalai Mardakhayeu, 31, was sentenced by U.S. District Court Judge George A. O’Toole Jr. in the District of Massachusetts. Mardakhayeu pleaded guilty in January 2011 to one count of conspiracy and nine counts of wire fraud. Judge O’Toole also sentenced Mardakhayeu to two years of supervised release and ordered him to pay $209,000 in restitution.
According to court documents and information presented at the change of plea hearing, from 2006 through 2007, Mardakhayeu’s co-conspirators lured victims by operating websites that falsely claimed to be authorized by the IRS to offer lower-income taxpayers free online tax return preparation and electronic tax return filing (e-filing). After taxpayers input and uploaded their tax information, co-conspirators in Belarus collected the data and altered the returns to increase the refund amounts and to direct the refunds to U.S. bank accounts controlled by Mardakhayeu. They then caused the fraudulently altered returns to be e-filed with the IRS. The conspirators ultimately caused the U.S. Treasury and various state treasury departments to deposit more than $200,000 in stolen refunds into bank accounts controlled by Mardakhayeu.
The case was investigated by the IRS-Criminal Investigation and the Treasury Inspector General for Tax Administration. The case was prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the District of Massachusetts’s Computer Crimes Unit.
21 June 2011
U.S. Parole Commission Moves into the DistrictRead the Press Release
Washington, DC – On May 23, 2011, the United States Parole Commission relocated its offices from Chevy Chase, MD, into Washington, DC.
The new offices are closer to many of our partner agencies in the District of Columbia. The location – four blocks north of Union Station – is also convenient to mass transportation. The new address and phone number are:
For more information, please call Johanna Markind at (202) 346-7036.
U.S. Army Sergeant and Associate Indicted for Alleged Bribe Scheme Involving Contracts at Camp Arifjan in KuwaitRead the Press Release
WASHINGTON – An 11-count indictment unsealed today in federal court in Wheeling, W.V., charges an Army sergeant first class and his associate for their alleged roles in a bribery and money laundering scheme at Camp Arifjan, a U.S. military base in Kuwait, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney William J. Ihlenfeld II for the Northern District of West Virginia.
The indictment, returned by a federal grand jury in the Northern District of West Virginia on June 8, 2011, charges Sergeant First Class Richard Evick, 41, of Parsons, W.V., with receiving more than $170,000 in bribes from two firms that had contracts with the U.S. Department of Defense (DoD) in Kuwait. The indictment also charges Evick and his associate, Crystal Martin, 48, of Pontiac, Mich., with laundering the bribe money through bank accounts in Kuwait and the United States. Evick and Martin were arrested today by special agents from the Army Criminal Investigation Division (Army CID), Defense Criminal Investigation Service (DCIS) and the Special Inspector General for Iraq Reconstruction (SIGIR). Martin made her initial appearance today in Detroit before U.S. Magistrate Judge Mona K. Majzoub of the Eastern District of Michigan. Evick is expected to make his initial appearance tomorrow in Raleigh, N.C., before U.S. Magistrate Judge James E. Gates of the Eastern District of North Carolina.
The indictment alleges that Evick, a senior procurement non-commissioned officer who served at Camp Arifjan from February 2005 to December 2006, along with former Majors James Momon and Christopher Murray, awarded Army contracting business and improperly disclosed contracting information to two firms that were seeking contracts from the U.S. military. According to the indictment, as a result of the actions taken by Evick, Momon and Murray, these firms received nearly $25 million from contracts to deliver bottled water and other commodities to U.S. military bases in Iraq and Kuwait, as well as to paint and clean DoD facilities in Kuwait. In exchange, Evick, Momon and Murray allegedly received cash, airplane tickets, hotel accommodations, and the ability to conceal large amounts of cash in a hidden safe located in the villa of Wajdi Rezik Birjas, a DoD contract employee who worked in the host nation affairs office at Camp Arifjan.
The indictment also alleges that Evick entrusted his bribe money to Martin, a former Army master sergeant, who from October 2005 to December 2008, operated a concession to sell clothing and other items at various U.S. military bases in Kuwait and maintained bank accounts in Kuwait and the United States. The indictment alleges that Martin arranged to transfer the bribe money from Kuwait to the United States and into the possession of Evick, his wife and his girlfriend. Additionally, the indictment alleges that Evick and Martin assisted Momon’s efforts to retrieve between $200,000 and $250,000 of Momon’s bribe money from Birjas and to transfer that money from Kuwait to the United States.
Evick is charged with one count of conspiracy to commit bribery, two substantive bribery counts, one count of conspiracy to commit money laundering, six substantive money laundering counts and one count of obstructing an agency proceeding. If convicted, he faces up to five years in prison on the bribery conspiracy charge, 15 years in prison for each of the bribery counts, 20 years in prison for the money laundering conspiracy count and each of the substantive money laundering counts and five years in prison on the obstruction charge.
Martin is charged with one count of conspiracy to commit bribery and four substantive money laundering counts. She faces up to 20 years in prison for the money laundering conspiracy count and each of the substantive money laundering counts. Evick and Martin also face fines and a term of supervised release, if convicted. The indictment also seeks the forfeiture of any property or money involved in the alleged offenses.
Momon, Murray and Birjas have pleaded guilty to crimes relating to their activities at Campr Arifjan and are awaiting sentencing.As a result of this investigation, 17 individuals have pleaded guilty or been found guilty at trial for their roles in the corruption at Camp Arifjan, and four others, including Evick and Martin, are awaiting trial.
An indictment is merely an accusation and defendants are presumed innocent unless and until proven guilty at trial beyond a reasonable doubt.
The case is being prosecuted by Trial Attorneys Peter C. Sprung and Timothy J. Kelly of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Robert McWilliams of the U.S. Attorney’s Office for the Northern District of West Virginia. The ongoing investigation is being handled by the Army CID, DCIS, FBI and SIGIR.
Texas Man Sentenced to Jail in Connection with Kansas Deer Hunting and Guiding OperationRead the Press Release
WASHINGTON – ATexas man was sentenced today in federal court in Wichita on felony charges of conspiracy, wildlife trafficking and obstruction of justice related to the illegal sale of guided deer hunts in southern Kansas, announced Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division and Barry Grissom, U.S. Attorney for the District of Kansas.
James Bobby Butler, Jr., 42, of Martinsville, Tex., was sentenced to 41 months in federal prison, to be followed by three years of supervised release during which Butler will be banned from all hunting and guiding. Butler was also ordered to pay a $25,000 fine to the Lacey Act reward fund, and $25,000 restitution to the Kansas Department of Wildlife and Parks. Butler pleaded guilty in March 2010 to one count of conspiracy to violate the Lacey Act, one Lacey Act interstate trafficking count and one count of obstruction of justice. His brother, Marlin Jackson Butler, 36, also of Martinsville, pleaded guilty in March 2011 to one count of conspiracy to violate the Lacey Act and one Lacey Act count. Marlin Butler is scheduled to be sentenced on June 24, 2011.
“Thanks to outstanding cooperation between federal and state law enforcement agents and prosecutors, we put an end to a criminal conspiracy that took valuable and limited wildlife resources through unlawful and unethical means,” said Assistant Attorney General Moreno. “This prosecution sends a message to hunters and guides in Kansas and elsewhere that there will be serious consequences for those who seek to profit by violating state and federal wildlife laws, especially at the expense of those who hunt and guide lawfully.”
“Illegal wildlife trafficking is a threat to the natural resources of Kansas,” Grissom said. “Our goal is to preserve and protect wildlife for everyone to enjoy – including hunters who abide by the law.”
The Lacey Act is a federal law that makes it illegal to knowingly transport or sell in interstate commerce any wildlife taken or possessed in violation of state law or regulation.
According to court documents filed in the case, James and Marlin Butler conspired together to knowingly transport and sell in interstate commerce deer that had been hunted in violation of Kansas state law. In particular, the brothers operated a guiding service and hunting camp near Coldwater, Kan., at which they sold guiding services to out-of-state hunters for the purpose of illegally hunting and killing white-tailed deer and mule deer. Hunters guided by the Butler brothers killed deer in excess of annual bag limits, hunted deer without permits or with permits for the wrong deer management unit, killed deer using illegal equipment, and hunted using prohibited methods such as spotlighting. The guided hunts were sold for between $2,500 and $5,500, and in several instances resulted in the killing of trophy-sized buck deer. In addition to selling guiding services, the brothers also arranged for transport of the deer, in particular the antlers and capes, from Kansas to Texas and Louisiana.
James Butler also pleaded guilty to instructing another person to conceal or destroy evidence during the investigation.
“This is the largest case in the history of wildlife law enforcement in Kansas,” said Steve Oberholtzer, Special Agent in Charge of the Mountain-Prairie Region, U.S. Fish and Wildlife Service. “Trophy deer are an important resource for the state of Kansas from both wildlife and economic standpoints. Joint investigations such as this one demonstrate that the combined efforts of state and federal agencies and our federal prosecutors result in prosecutions that hold those who violate the law accountable. We are grateful to the Kansas Department of Wildlife and Parks and the U.S. Attorney's Office for their assistance in this case and hope that it will serve as a deterrent to others who might consider exploiting our nation's wildlife for personal gain.”
The case was investigated by the U.S. Fish & Wildlife Service, the Kansas Department of Wildlife and Parks and the Texas Parks and Wildlife Department, and jointly prosecuted by District of Kansas U.S. Attorney Barry Grissom’s office and the Justice Department’s Environment and Natural Resources Division, Environmental Crimes Section.
Special Master Sheila L. Birnbaum Announces Draft Regulations <br /> to Govern 9/11 Victim Compensation FundRead the Press Release
NEW YORK – One month after assuming the position, September 11th Victim Compensation Fund (VCF) Special Master Sheila L. Birnbaum today published draft regulations to govern the VCF, and asked the public to give her feedback on the proposals before victims can begin submitting claims to the fund later this year.
The VCF was created under the James Zadroga 9/11 Health & Compensation Act to reactivate the September 11th Victim Compensation Fund that operated from 2001-2003. The Act expands the pool of claimants to include first responders and other individuals who experienced latent physical injuries associated with the attacks or with debris removal.
Birnbaum’s draft rules include a process by which claimants from the first VCF can amend their claims to reflect new injuries and an allowance for the fund to cover additional health conditions as scientific knowledge evolves. The draft rules also significantly expand the geographic area covered by the VCF from its first iteration. The VCF will begin by covering the same physical injuries that are covered by the medical monitoring and treatment program that the Zadroga Act established as the VCF’s companion program.
In an email to potential VCF claimants and others, Birnbaum reiterated that her goal is “to create a process that is fair, transparent, and easy to navigate.” She said that the proposed rules will help the VCF make its decisions based on the best scientific and medical evidence that is available, and that the rules seek to minimize administrative expenses and maximize the funds available to be distributed to claimants.
Birnbaum was appointed as Special Master by Attorney General Eric Holder on May 18, 2011, and has spent the month since her appointment meeting with the men and women who will be most affected by the VCF. In her email, Birnbaum indicated that she hoped to meet with many more over the coming months and would value the public’s feedback on the draft regulations.
Individuals who wish to receive communications regarding the VCF should visit: www.justice.gov/vcf .
Individuals interested in commenting on the draft regulations can visit: www.regulations.gov/#!documentDetail;D=DOJ-CIV-2011-0017-0001.