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2 June 2011
Federal Court Bars Florida Man from Promoting Alleged “Form 1099-OID” Tax Fraud SchemeRead the Press Release
WASHINGTON – A federal court in Ft. Meyers, Fla., has barred Gregory Boone of Riverview, Fla., from promoting an alleged tax fraud scheme, the Justice Department announced today. Boone consented to the civil injunction order without admitting the allegations against him.
The government complaint alleged that Boone, who allegedly uses the business names Provident Holdings International LLC and PHI LLC, promoted an abusive tax scheme in which he filed false Internal Revenue Service (IRS) Forms1099-OID to assist his customers in submitting federal income tax returns containing false claims for tax refunds. The complaint further alleged that Boone filed nearly 5,000 false tax forms and that the IRS issued at least eight erroneous refunds totaling $1.2 million. The court’s order bars Boone from preparing tax forms for others and requires him to provide his customers with a copy of the injunction order.
Claiming bogus tax refunds based on false Forms 1099-OID is one of the IRS’s “Dirty Dozen” tax scams for 2011. The Justice Department recently announced the filing of criminal charges against a resident of Lauderhill, Fla., in connection with her alleged participation in a fraudulent tax refund scheme involving false Forms 1099-OID.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.
1 June 2011
Two Former Shenandoah, Pennsylvania, Police Officers Sentenced for Falsifying Information About the Beating of a Latino ManRead the Press Release
WASHINGTON – The Justice Department announced that Matthew Nestor and William Moyer were sentenced today for falsifying information related to the investigation into the beating death of Luis Ramirez. Ramirez died on July 14, 2008, as a result of injuries he suffered after being attacked by four high school football players from Shenandoah, Pa., three of whom were convicted of federal hate crimes related to Ramirez’s death and were sentenced to prison terms ranging from 55 months to 9 years.
On Jan. 27, 2011, a federal jury found Nestor, the former chief of the Shenandoah Police Department, guilty of filing a report that contained materially false information with the intent of misleading the federal investigation. Moyer, the former lieutenant at the Shenandoah Police Department, was found guilty of making false statements to FBI agents concerning information provided by a witness at the scene.
Nestor was sentenced today to 13 months in prison, followed by one year of supervised release. Nestor was also ordered to pay a $100 special assessment and perform 50 hours of community service. Moyer was sentenced to three months in prison, followed by one year supervised release. Moyer was also ordered to pay a $100 special assessment and perform 20 hours of community service.
“Americans rely on their law enforcement officials to protect public safety and serve justice, but these officers chose to obstruct the very investigation they were charged with conducting,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division of the Department of Justice. “The Department of Justice will take action against anyone who interferes with the enforcement of our hate crimes laws, especially when those interfering with such enforcement are also violating their oaths to uphold the law.”
This case was investigated by the FBI, and was prosecuted by Trial Attorneys Myesha Braden and Shan Patel of the Department of Justice’s Civil Rights Division, with assistance from the U.S. Attorney’s Office for the Middle District of Pennsylvania.
Pittsburgh Crips Gang Member Pleads Guilty to Racketeering ChargesRead the Press Release
WASHINGTON – A Pennsylvania man pleaded guilty today in federal court to charges of conspiring to conduct a racketeering enterprise related to his membership in a Pittsburgh Crips criminal enterprise, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Nicklas Gay, 23, aka “GK,” pleaded guilty before Senior U.S. District Judge Gustave Diamond to one count of conspiracy to engage in a racketeering conspiracy.
According to the guilty plea, Gay 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 acts of obstruction of justice and witness intimidation.
According to court documents, Gay 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 Northside since 2002, and 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 Crips is a criminal street gang formed in the early 1990s that controlled the area of Brighton Place and Morrison Street, also known as the Mad Cave, and Federal Street in the Northside area of Pittsburgh.
The Brighton Place/Northview Heights Crips gang maintained 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 of incarcerated members’ families.
In addition, the Brighton Place/Northview Heights Crips gang maintains an ongoing feud with the Manchester Original Gangsters, a criminal street gang located in the Manchester area of the Northside Section of Pittsburgh. Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, using Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc” and “G.K.” According to court documents, members and associates of the gang obtain greater authority and prestige within the gang based on their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs.
According to court documents, Gay acted as a “hustler” or distributor of controlled substances including heroin, cocaine and crack cocaine, for the gang. He also acted as a “soldier/ gorilla” or enforcer for the gang, providing protection for the enterprise through the commission of violent crimes.
Also today, Michael Wade, 25, aka “Swade,” and Michael Henson, 29, aka “Henne,” members of the Northview Heights/ Brighton Place Crips, were sentenced to 70 and 110 months in prison, respectively, for their roles in the criminal enterprise. Wade and Henson pleaded guilty on Feb. 2, 2011, and Feb. 1, 2011, respectively, to one count of conspiracy to engage in racketeering before Judge Diamond.
Gay, Wade and Henson are three 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, more than half of the Brighton Place/ Northview Heights Crips members who were charged in this indictment have pleaded guilty to racketeering charges.
Gay faces a maximum penalty of 20 years in prison and a $250,000 fine. He is scheduled to be sentenced on Oct. 7, 2011, at 11:00 a.m. EDT.
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 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.
National Advisory Committee on Violence Against Women <br /> Holds Meeting in Washington, D.C.Read the Press Release
WASHINGTON – Susan B. Carbon, Director of the Justice Department’s Office on Violence Against Women (OVW), will convene the second meeting of the National Committee on Violence Against Women (NAC) on THURSDAY, JUNE 2, 2011 at 9:00 A.M. EDT.
The NAC was chartered to provide Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius with practical and general policy advice concerning improvements to the nation’s response to violence against women. The NAC’s members will continue deliberations and dialogue focused on children and youth exposed to violence and successful intervention and prevention strategies.
The agenda for the meeting includes facilitated discussions and presentations from experts, advocates and federal agency representatives on issues affecting children and youth, their families and communities.
WHO: Susan B. Carbon, Director, Office on Violence Against Women
National Advisory Committee Members attending the meeting include:
Dr. Jeffrey L. Edleson, Maria Jose Fletcher, Neil Irvin,
Amber Johnson, Monika Johnson Hostler, Debbie Lee,
Betsy McAlister Groves, Carol Post, Francine Sherman,
The Honorable Melvin Stoof, Jerry Tello, Joe Torre,
Gabrielle Union, Dr. Sujata Warrier WHAT: Opening Session and Interview Availability
National Committee on Violence Against Women Meeting WHERE: The Fairfax at Embassy Row
Ballroom
2100 Massachusetts Avenue, NW
Washington
OPEN PRESS WHEN: THURSDAY, JUNE 2, 2011
9:00 A.M. – 10:30 A.M. EDT
Media Interviews
10:30 A.M. EDTNOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Media interested in interviewing National Advisory Committee Members MUST contact Joan LaRocca at 202-307-6873.
Justice Department Reaches Agreement with Louisiana Private School to Ensure Effective Diabetes Care for StudentsRead the Press Release
WASHINGTON-- The Justice Department today announced a settlement agreement with the Alexandria Country Day School in Alexandria, La., to resolve allegations that the school denied a six-year-old girl with Type I diabetes admission to the school after her parents requested that the school supervise her in daily diabetes care practices . The parents said they had asked the school to supervise their daughter in her testing her blood glucose level and administering insulin using her insulin pump, in addition to other daily diabetes care practices. Title III of the Americans with Disabilities Act (ADA) prohibits discrimination on the basis of disability, including diabetes, in private schools.
According to the agreement, the school will not discriminate against individuals with, and will ensure that reasonable modifications to the policies and procedures will be made where necessary to ensure students with diabetes are provided an equal opportunity to attend and to participate in all programs, services or activities. The school will evaluate the application of each child with diabetes applying to attend the school on a case by case basis, and will make reasonable modifications to permit children with diabetes to participate in the programs.
“Schools have a responsibility to make reasonable modifications to policies so that all students with disabilities can enjoy their programs and activities, unless doing so would result in a fundamental alteration in the program,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I applaud the school for working with us to address this matter, and we hope this agreement serves as a reminder for other private schools about the requirements of the ADA.”
“I congratulate the school administration for dealing with this serious issue which affects so many members of our community,” said Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana. “ The U.S. Attorney’s Office, the Department and the Obama Administration are committed to ensuring that all individuals in this country can go to schools, public and private, and participate in all of the programs that are available .”
Today’s settlement follows an amicus curiae brief filed by the department on May 13, 2011, in a case before the California State Supreme Court that challenges a federal court settlement agreement between the American Diabetes Association and the State Superintendant of Education.
That agreement allowed professional school employees to be trained and then to monitor administration of insulin for students with diabetes in certain situations when a school nurse is not available. Many California schools have no nurses due to budget constraints, and without this agreement some students likely would not receive insulin doses that are both medically necessary and required by federal laws protecting students with disabilities. The American Nurses Association filed the case challenging the agreement, arguing that a nurse must be present in all situations to monitor insulin administration. The department’s brief addresses the question of whether California’s Nursing Practice Act, as interpreted by the California Court of Appeals and applied to this case, is preempted by Section 504 of the Rehabilitation Act, Title II of the ADA, or the Individuals with Disabilities Education Act.
The department’s brief argued that under the conditions described in the settlement, federal law requires that a trained school professional be permitted to administer insulin. Interpretation of state nurse practitioner acts may also affect people with disabilities who need basic assistance with health or physical conditions to live independently, where basic assistance can be provided by trained, non-medical personnel.
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.
Justice Department Files Suit Against Colorado Couple for Face Act ViolationsRead the Press Release
WASHINGTON – The Justice Department today filed a civil complaint in the U.S. District Court for the District of Colorado against Kenneth and JoAnn Scott for violating the Freedom of Access to Clinic Entrances Act (FACE Act).
According to court documents, from August 2009 to the present, Kenneth Scott has engaged in 10 separate incidents of physical obstruction against patients and staff attempting to enter or exit the Planned Parenthood of the Rocky Mountains (PPRM) facility in Denver. In addition, JoAnn Scott has used physical force against two different individuals seeking to obtain reproductive health services at the PPRM. The FACE Act prohibits the use of force against, or the physical obstruction of, any person providing or obtaining reproductive health services, or those seeking to do so, with the intent to intimidate or interfere with that person.
“The law protects the rights of individuals who seek to obtain or provide reproductive health services to do so without hazardous physical obstructions and the fear of physical assaults,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The right to free speech does not include the right to physically obstruct or use force against individuals seeking or providing reproductive health services, and we will continue to aggressively enforce the FACE Act.”
This civil action was filed by the Civil Rights Division Special Litigation Section Deputy Chief Julie Abbate and Trial Attorneys Je Yon Jung and Aaron Fleisher.
Florida and Arkansas Residents Charged for Involvement<br /> in Multi-Million Dollar Fraudulent Tax Refund SchemeRead the Press Release
WASHINGTON – Laura Barel of Lauderhill, Fla., has been charged with one count of filing a false claim and two counts of aiding and abetting the filing of a false claim, the Justice Department and Internal Revenue Service (IRS) announced today. The federal complaint against Barel was unsealed on May 24. In a related case, a federal grand jury returned an indictment on May 25, 2011, charging Philip Butcher, formerly of Rogers, Ark., with two counts of filing false claims.
The complaint against Barel alleges that she recruited clients on behalf of co-conspirator #1 and two entities -- PMDD Services and Forever Grace. According to the complaint, co-conspirator #1 has prepared at least 275 fraudulent individual tax returns for clients around the United States during 2008 and 2009. These returns collectively requested more than $120 million in fraudulent refunds. Some of these refunds were paid by the IRS, others were not. The complaint alleges that the IRS has paid out more than $4.7 million as a result of the scheme.
The complaint states that co-conspirator #1 held herself out to be a professional tax preparer and collected information from clients pertaining to all of their debt obligations such as credit card debt, car loans, mortgage obligations and lines of credit. Co-conspirator #1 took the amounts of the outstanding debts and created fraudulent tax documents which she titled “Form 1099-OID Original Issue Discount.” She would create fraudulent Forms OID purporting to convert taxpayers’ debts into interest income purportedly withheld by the lender. The taxpayers reported the withheld income as interest income on their Form 1040. As a result, the taxpayers were owed astronomical refunds because the entire amount of the OID “income” was reported as withheld taxes – not just a portion to cover the taxes owed, as is common with a taxpayer’s Form W-2. In other words, this OID scheme fraudulently inflated the taxpayer’s income and withheld income to create a fraudulent and enormous refund purportedly due to the taxpayer.
The complaint alleges that co-conspirator #1 and PMDD Services required that their clients pay 10 percent of any refund received from the IRS back to PMDD Services. According to the complaint, Barel then received 1.5 percent of the total refund, which was deposited into a bank account controlled by her. The complaint also alleges that Barel filed her own fraudulent OID tax return requesting a refund of $662,906.
Phillip Butcher, a client of PMDD Services and a former resident of Rogers, Ark., was indicted by a grand jury in Fort Smith, Ark., for filing a 2008 individual income tax return which sought a fraudulent tax refund of $672,781. According to the indictment, PMDD Services prepared the tax return and filed false Forms 1099-OID with the IRS on Butcher’s behalf. The indictment further alleges that Butcher paid more than $67,000 to PMDD Services shortly after receiving his refund. The indictment also alleges that after Butcher received the fraudulent $672,781 refund he requested on his first tax return, he filed an amended 2008 individual income tax return claiming an additional fraudulent refund of $1,456,696.
If convicted, Barel faces a maximum potential sentence of 15 years in prison and a maximum fine of $750,000. Butcher faces a maximum potential sentence of 10 years in prison and a maximum fine of $500,000.
A complaint and an indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax/.
Florida Physician Sentenced to Four Years in Prison for Fraudulent Lobbying and Fund Raising ConspiracyRead the Press Release
WASHINGTON — A Florida physician was sentenced today to four years in prison for his role in a fraud scheme involving lobbying and fund raising for political candidates and organizations, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
Alan D. Mendelsohn, 52, of Broward County, Fla., was also ordered by U.S. District Judge William J. Zloch to serve two years of supervised release following his prison term. Mendelsohn pleaded guilty to one count of conspiracy on Dec. 10, 2010.
According to courts documents, Mendelsohn entered into an agreement with a lobbyist and campaign consultant to create political entities for the purpose of raising money in support of political parties and candidates for political office in Florida. Between 2002 and 2007, Mendelsohn engaged in various lobbying activities that raised several million dollars in contributions for these political organizations, as well as for a pre-existing political entity for which Mendelsohn was an officer.
In pleading guilty, Mendelsohn admitted that from 2003 through 2008, he and his co-conspirator agreed to siphon approximately $330,000 from the political entities in direct and third party payments for Mendelsohn’s benefit. Mendelsohn also admitted that from 2003 through 2005, he caused certain lobbyists and, in some cases, their clients to make contributions totaling $50,000 to a private school his children attended in exchange for lobbying services. The funds were then used to pay tuition for Mendelsohn’s children. Mendelsohn caused another client to send a $75,000 wire transfer to a car dealer to purchase a car for Mendelsohn’s personal use, in exchange for his lobbying services. As Mendelsohn admitted, none of this income was reported to the Internal Revenue Service (IRS) as required.
From 2003 through mid-2006, Mendelsohn also admitted that he knowingly mischaracterized personal expenses totaling approximately $163,770 as business deductions, which had the result of illegally reducing the amount of income paid to Mendelsohn that his medical practice reported to the IRS in each of those years.
In total, Mendelsohn underreported his taxable income by more than $600,000 based on the various schemes. Moreover, Mendelsohn admitted that he caused the political entities, as well as certain corporations used to facilitate the conspiracy, to file false federal tax returns and information, and required state disclosure reports that mischaracterized these payments.
As part of the scheme, Mendelsohn also admitted that from 2003 through 2005, he and his co-conspirator used $82,000 from the political entities to make multiple payments to a person associated with a Florida state senator. Mendelsohn admitted that he knew some or all of the payments were benefitting the public official by allowing the public official to receive money without paying taxes on the money.
In addition, Mendelsohn admitted that beginning in late April and early May 2007, he contacted a Florida businessman, who previously had made large contributions to the political entities at Mendelsohn’s request, to solicit additional contributions that would be used by one of the entities to support a candidate for the Florida legislature. According to court documents, in order to persuade the contributor to make the payments, Mendelsohn told the contributor that he had reached an agreement with a senior public official in the Florida state government to use his office to have federal authorities close an investigation of the contributor and his businesses. Mendelsohn admitted that his representation to the contributor was false and that, at various times, he falsely told the contributor that the official and an intermediary were taking action on the contributor’s behalf. Ultimately, the contributor provided Mendelsohn with two checks totaling $150,000, made payable to one of the political entities.
Finally, Mendelsohn admitted that he falsely told FBI agents that the $75,000 payment for the car was a gift and not income from lobbying services. Similarly, Mendelsohn admitted that he lied to FBI agents when he claimed that he had never received any personal benefits from the political entities for which he raised money.
This case was prosecuted by Senior Trial Attorney Mary K. Butler, Trial Attorney Eric G. Olshan and Deputy Chief Justin V. Shur of the Criminal Division’s Public Integrity Section. This case was investigated by the Miami Division of the FBI and the Criminal Investigation Division of the IRS.
31 May 2011
Two Iraqi Nationals Indicted on Federal Terrorism Charges in KentuckyRead the Press Release
WASHINGTON -- An Iraqi citizen who allegedly carried out numerous Improvised Explosive Device (IED) attacks against U.S. troops in Iraq and another Iraqi national alleged to have participated in the insurgency in Iraq have been arrested and indicted on federal terrorism charges in the Western District of Kentucky.
The arrests in Bowling Green, Ky., and the criminal complaints and indictment unsealed today were announced by Todd Hinnen, Acting Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; Elizabeth A. Fries, Special Agent in Charge of the FBI Louisville Division; and the members of the Louisville Joint Terrorism Task Force (JTTF).
Waad Ramadan Alwan, 30, and Mohanad Shareef Hammadi, 23, both former residents of Iraq who currently reside in Bowling Green, were charged in a 23-count indictment returned by a federal grand jury in Bowling Green on May 26, 2011. Alwan is charged with conspiracy to kill U.S. nationals abroad; conspiracy to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of IEDs; attempting to provide material support to terrorists and to al-Qaeda in Iraq; as well as conspiracy to transfer, possess and export Stinger missiles. Hammadi is charged with attempting to provide material support to terrorists and to al-Qaeda in Iraq, as well as conspiracy to transfer, possess and export Stinger missiles.
Alwan and Hammadi were arrested on May 25, 2011, on criminal complaints and made their initial appearances today in federal court in Louisville, Ky. Each faces a potential sentence of life in prison if convicted of all the charges in the indictment. Both defendants were closely monitored by federal law enforcement authorities in the months leading up to their arrests. Neither is charged with plotting attacks within the United States.
“Over the course of roughly eight years, Waad Ramadan Alwan allegedly supported efforts to kill U.S. troops in Iraq, first by participating in the construction and placement of improvised explosive devices in Iraq and, more recently, by attempting to ship money and weapons from the United States to insurgents in Iraq. His co-defendant Mohanad Shareef Hammadi is accused of many of the same activities. With these arrests, which are the culmination of extraordinary investigative work by law enforcement and intelligence officials, the support provided by these individuals comes to an end and they will face justice,” said Todd Hinnen, Acting Assistant Attorney General for National Security.
“The filing of these charges in Bowling Green, Kentucky, underscores the readiness of federal law enforcement authorities and our partners in the Joint Terrorism Task Forces to effectively pursue and prosecute terrorists wherever in the United States they may be found,” said David J. Hale, U.S. Attorney for the Western District of Kentucky. “Whether they seek shelter in a major metropolitan area or in a smaller city in Kentucky, those who would attempt to harm or kill Americans abroad will face a determined and prepared law enforcement effort dedicated to the investigations and prosecutions necessary to bring them to justice. The dismantling of terrorist networks is the first priority of this office and the Department of Justice.”
“These arrests were the culmination of extremely well-coordinated, diligent and tireless efforts by the FBI and our law enforcement partners working on the JTTFs. My thanks to all those who assisted in this case,” said Elizabeth A. Fries, Special Agent in Charge of the FBI Louisville Division. “I want to remind the public that the FBI is responsible for protecting the civil rights of all persons in our communities. Just as we vigorously investigate terrorism cases, the FBI will vigorously pursue anyone who targets Muslims or their places of worship for backlash-related threats or violence in the wake of these arrests.”
According to the charging documents, Alwan entered the United States in April 2009 and has lived in Bowling Green since his arrival. Hammadi entered the United States in July 2009 and, after first residing in Las Vegas, moved to Bowling Green.
Prior Activities in Iraq
In September 2009, the FBI launched an investigation into Alwan. Later, the FBI began using a confidential human source (CHS) who met with and engaged in recorded conversations with Alwan, beginning in August 2010, and with Hammadi, beginning in January 2011. In a number of meetings with the CHS, Alwan allegedly discussed his prior activities as an insurgent in Iraq from 2003 until his capture by Iraqi authorities in May 2006, including his use of IEDs and sniper rifles to target U.S. forces and details about various attacks in which he participated.
For example, in recorded conversations with the CHS, Alwan allegedly stated that he used to procure explosives and missiles while an insurgent in Iraq; that his insurgent group conducted strikes daily; and that he used IEDs in Iraq hundreds of times. At one point, Alwan allegedly drew diagrams of four types of IEDs for the CHS and provided verbal instructions on how to build these devices. He also discussed occasions in which
he had used these types of IEDs against U.S. troops. Asked whether he had achieved results from these devices in Iraq, Alwan allegedly replied, “Oh yes,” mentioning that his attacks had “f--ked up” Hummers and also targeted Bradley fighting vehicles.
According to the charging documents, the FBI has been able to identify two latent fingerprints belonging to Alwan on a component of an unexploded IED that was recovered by U.S. forces near Bayji, Iraq. Alwan had allegedly advised the CHS that he lived in that area of Iraq and worked at the power plant in Bayji. Alwan had also allegedly told the CHS how he had used a particular brand of cordless telephone base station in IEDs. Alwan’s fingerprints were allegedly found on this particular brand of cordless base station in the IED that was recovered in Iraq.
In additional conversations with the CHS, Alwan also described IED attacks on U.S. troops that he participated in with others, including an associate whom Alwan said had lost an eye when an IED exploded prematurely. According to the charging documents, U.S. forces recovered an unexploded IED near Bayji from which a latent fingerprint belonging to this associate was later recovered. The charging documents allege that this associate was detained by U.S. troops in June 2006 and had a false eye.
The charging documents also allege that Hammadi has discussed his prior experience as an insurgent in Iraq and has told the CHS about prior IED attacks in Iraq in which he participated. In one conversation with the CHS, Hammadi allegedly described how he had been arrested in Iraq, explaining that authorities captured him after the car he was driving in got a flat tire shortly after he and others had placed IEDs in the ground.
Activities in the United States
According to the charging documents, beginning in September 2010, Alwan expressed interest in helping the CHS provide support to terrorists in Iraq. The CHS explained that he shipped money and weapons to the mujahidin in Iraq by secreting them in vehicles sent from the United States. Thereafter, Alwan allegedly participated in operations with the CHS to provide money, weapons – including machine guns, rocket-propelled grenade launchers, Stinger missiles and C4 plastic explosives – as well as IED diagrams and advice on the construction of IEDs, to what he believed were the mujahidin attacking U.S. troops in Iraq.
For instance, in November 2010, Alwan allegedly picked up machine guns and rocket-propelled grenade launchers from a storage facility in Kentucky and delivered them to a designated location believing they would be shipped to al-Qaeda in Iraq. In January 2011, the charging documents allege, Alwan recruited Hammadi to assist in the material support activities. Alwan allegedly described Hammadi to the CHS as a relative of his whose work as an insurgent in Iraq was well known.
Later that month, Alwan and Hammadi allegedly delivered money to a tractor-trailer, believing the money would ultimately be shipped to al-Qaeda in Iraq. In February 2011, the pair allegedly assisted in the delivery of additional weapons, including sniper rifles and inert C4 plastic explosives, to a tractor-trailer believing that these items would be shipped to al-Qaeda in Iraq. Finally, in March 2011, Alwan and Hammadi allegedly picked up two inert Stinger missiles from the storage facility and delivered them to a tractor-trailer believing these items would be shipped to al-Qaeda in Iraq.
Neither the Stinger missiles nor any of the other weapons or money delivered by Alwan or Hammadi in connection with the CHS in the United States were provided to al-Qaeda in Iraq, but instead were carefully controlled by law enforcement as part of the undercover operation.
In closing, Mr. Hale noted, “Let me be clear that this is not an indictment against a particular religious community or religion. Instead, this indictment charges two individuals with federal terrorism offenses.”
Mr. Hale commended the investigative efforts of the Louisville Division of the FBI and the Louisville JTTF, which is comprised of the following full-time member agencies: Louisville Metro Police, Kentucky State Police, Jefferson County Sheriff’s Office, U.S. Immigration and Customs Enforcement and U.S. Marshals Service. Also assisting were full-time members of the Lexington JTTF, which includes the University of Kentucky Police and Lexington-Fayette County Police. The U.S. Department of Defense also provided assistance in this investigation, as well as U.S. Citizenship and Immigration Services and the Bowling Green Police Department.
The prosecution is being handled by Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division, and Assistant U.S. Attorneys Bryan Calhoun and Mike Bennett from the U.S. Attorney’s Office for the Western District of Kentucky.
The public is reminded that charges contained in an indictment or criminal complaint are merely allegations, and that defendants are presumed innocent unless and until proven guilty.
Kansas Man Convicted of Visa FraudRead the Press Release
WASHINGTON – A Kansas man who previously resided in Rwanda was convicted today of visa fraud, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.
After a five-week trial and three days of deliberation, a federal jury in the District of Kansas found Lazare Kabaya Kobagaya, 84, of Topeka, Kan., guilty of one count of visa fraud. The jury was unable to reach a verdict with regard to one count of immigration fraud, resulting in the court declaring a mistrial on that count.
Based on court documents and information presented at trial, the jury found that Kobagaya lied during his immigration process about where he resided from 1993 to 1995. The government alleged that Kobagaya lied when he stated that he lived in Burundi rather than Rwanda during this time period. During trial, the government argued that the lie was material because it prevented the government from examining Kobagaya’s activities during the 1994 genocide that occurred in Rwanda.
Kobagaya faces a maximum penalty of 10 years in prison. A sentencing date has not yet been scheduled.
The case was prosecuted by Senior Trial Attorneys Christina P. Giffin, Steven C. Parker and Deputy Chief Robert G. Thomson of the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP), with support from Assistant U.S. Attorney Alan Metzger for the District of Kansas. The case was investigated by ICE Homeland Security Investigations Resident Agent in Charge in Wichita, Kan.
Justice Department Settles Allegations of Immigration-Related Employment Discrimination Against American Academy of PediatricsRead the Press Release
WASHINGTON – The Justice Department today reached a settlement agreement with the American Academy of Pediatrics (AAP), an organization of 60,000 pediatricians based in Elk Grove Village, Ill., resolving allegations that the organization impermissibly allowed postings on its www.PedJobs.org website that limited applications to U.S. citizens and certain visa holders. AAP has agreed to pay $22,000 in civil penalties.
According to the department’s findings, PedJobs’ employment postings for doctors, nurses and other professionals impermissibly limited applications to U.S. citizens and certain visa holders, even though other work authorized immigrants should have been allowed to apply as well. The Immigration and Nationality Act (INA) generally prohibits recruiters or referrers for a fee from discriminating on the basis of citizenship status.
Under the terms of the settlement agreement, AAP will monitor its job postings to ensure that work authorized individuals are treated equally. AAP has also agreed to train its PedJobs personnel about its non-discrimination responsibilities under the INA, and to provide periodic reports to the department for three years.
“No one who has the right to work in the United States should be deterred from applying for a job because of a discriminatory posting,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Companies that derive revenue from job postings have responsibilities under the anti-discrimination provisions of the Immigration and Nationality Act, and we look forward to working with those companies to achieve and to maintain compliance.”
The INA includes a provision designed to protect work-authorized immigrants . When Congress enacted this provision as part of the Immigration Reform and Control Act of 1986, it sought to strike a balance between immigration worksite enforcement and the civil rights of workers. While employers are banned from hiring unauthorized workers, they must also treat all work-authorized individuals the same regardless of citizenship status or national origin.
The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals against discrimination in hiring, firing and recruitment or referral for a fee on the basis of citizenship status and national origin. The INA also protects all work-authorized individuals from discrimination in the employment eligibility verification process and from retaliation.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired); e-mail [email protected] ; or visit OSC’s website at www.justice.gov/crt/about/osc .
Justice Department Reaches Americans with Disabilities Act Settlement with Wells FargoRead the Press Release
WASHINGTON – The Justice Department announced today a comprehensive settlement agreement under the Americans with Disabilities Act (ADA) with Wells Fargo & Company to ensure equal access for individuals with disabilities to Wells Fargo’s services nationwide, including its nearly 10,000 retail banking, brokerage and mortgage stores, over 12,000 ATMs, and its telephone and website services.
The agreement resolves numerous ADA complaints filed by individuals who are deaf, are hard of hearing or have speech disabilities who allege that Wells Fargo would not do business with them over the phone using a telecommunications relay service. Instead, the individuals were directed to call a TTY/TDD line that asked them to leave a message, which went unanswered. Wells Fargo started addressing these customers’ concerns before the Justice Department investigation began. Once the department opened an investigation, Wells Fargo worked cooperatively to achieve a comprehensive settlement addressing all ADA issues in its retail banking and financial services.
“Individuals who have disabilities must not be denied equal access to the services offered by financial institutions simply because of their disability. Wells Fargo has shown that it is committed to equal access and effective communication with its customers who have disabilities,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The department is aware that other major financial institutions are refusing to communicate with individuals with disabilities who use relay services to communicate by telephone. These refusals are discrimination, and other financial institutions must follow Wells Fargo’s example and accept relay calls immediately.”
“The U.S. Attorney’s Office is committed to working with the Civil Rights Division to help ensure that businesses in this district fully comply with the ADA,” said Melinda Haag, U.S. Attorney for the Northern District of California, which is where Wells Fargo is headquartered.
Wells Fargo will pay up to $16 million to compensate individuals harmed by certain violations of Title III of the ADA. The department will be administering a claims process to distribute these funds. Individuals who believe they were harmed by Wells Fargo’s failure to comply with ADA requirements may get information about filing a claim by sending an email to [email protected] or by calling 1-866-708-1273 (voice) or 1-866-544-5309 (TTY). Information on the claims process is also available on the ADA home page at www.ada.gov .
Wells Fargo will also pay a $55,000 civil penalty to the United States. In addition, Wells Fargo affirms its commitment to advancing the interests of individuals with disabilities by paying a total of $1 million in charitable donations to non-profit organizations that will assist veterans with disabilities resulting from injuries sustained while serving in Iraq or Afghanistan to live independently in the community.
Finally, the agreement requires Wells Fargo to take the following steps to improve access for customers with disabilities:
- Remove physical barriers to access, as required, at its retail stores across the nation and remedy all other instances of discrimination under Title III of the ADA that are identified during the claims process.
- Provide appropriate auxiliary aids and services, including qualified sign language interpreters, computer-assisted real time transcription, qualified readers and documents in Braille, large print, and other alternate formats to persons with disabilities when necessary to ensure effective communication throughout its financial services and programs.
- Adopt and enforce a policy on effective communication with individuals who are deaf, are hard of hearing, are blind or have low vision for all Wells Fargo retail stores and financial services nationwide, post a summary of the policy on its website and distribute the policy to current and new employees and contractors.
- Accept calls made through a relay service operator by customers who are deaf, are hard of hearing or have speech disabilities on an equivalent basis to calls from other customers. This includes eliminating special security provisions applied to relay calls and using the same caller verification procedures whether or not a customer uses a relay service.
- Maintain staffing of phone lines dedicated to TTYs / TDDs, wherever provided, on a basis equivalent to telephone lines that are not dedicated to TTYs / TDDs.
- Ensure that its ATMs and websites are accessible to individuals with disabilities.
- Establish a toll-free ADA comment/complaint line so customers with disabilities have an easy avenue for alerting Wells Fargo to concerns about disability-related problems accessing goods, services and facilities.
- Hire a full-time national ADA coordinator to coordinate Wells Fargo’s efforts to comply with its responsibilities under the ADA and this agreement, including the investigation of ADA complaints received on its ADA comment/complaint line.
- Provide staff training on the ADA and Wells Fargo’s obligations to provide effective communication to individuals with disabilities.
- Post and maintain in a conspicuous location in all Wells Fargo banking stores a notice stating that individuals with disabilities have a right under the ADA to request a sign language or oral interpreter or other auxiliary aids or services.
Title III of the ADA prohibits discrimination against individuals with disabilities by businesses that serve the public. Among other things, the ADA requires financial institutions, accountants, lawyers, doctors and other businesses to provide auxiliary aids and services that are necessary for effective communication. For individuals who are deaf or hard of hearing, auxiliary aids include qualified sign language or oral interpreters, use of relay services, computer-assisted real time transcription, and, for simple communications, the exchange of written notes. For individuals who are blind or have low vision, auxiliary aids include qualified readers, assistance in filling out forms and written materials provided in alternate formats, such as Braille, large print, audio recordings or accessible electronic formats such as email or HTML.
Those interested in finding out more about this agreement or businesses’ obligations under the ADA may call the Justice Department's toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected]. For the settlement and fact sheet on this announcement, please visit www.ada.gov/wells_fargo/.
- Remove physical barriers to access, as required, at its retail stores across the nation and remedy all other instances of discrimination under Title III of the ADA that are identified during the claims process.
Attorney General Eric Holder, Justice Department and Administration Officials Join with Actors from HBO’s the Wire for Launch of Drug Endangered Children Public Awareness CampaignRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today the launch of a public awareness campaign at a Federal Interagency Drug Endangered Children (DEC) Task Force event to bring attention to the challenges faced by children and families affected by drug abuse and highlight the work being done across the country to address these issues. Following opening remarks by Deputy Attorney General James Cole, Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA) moderated a panel discussion, featuring Attorney General Holder and actors Jim True-Frost (“Prez”), Wendell Pierce (“Bunk”) and Sonja Sohn (“Kima”) from the HBO hit series, The Wire. Office of National Drug Control Policy (ONDCP) Director Gil Kerlikowske delivered closing remarks.
Focused on protecting children from drug abuse and exploitation, the public awareness campaign will emphasize the important role law enforcement officials, health professionals, educators and community leaders play in helping first responders identify whether a child is endangered by drugs, as well as the resources available to assist vulnerable children.
“This public awareness campaign will highlight the risks posed to drug endangered children across the country and empower communities to better serve children exposed to drug abuse, trafficking and addiction by their parent or childcare provider,” said Attorney General Holder. “Protecting youth from exposure to drug abuse is a key priority for this department, and we are unwavering in our commitment to raising awareness about this vital mission and continuing our efforts to assist the most vulnerable victims of the illicit drug industry.”
“In collaboration with our federal, state, local and tribal partners, we are creating a more cohesive strategy to support communities to better respond to the special needs of drug endangered children,” said Deputy Attorney General Cole. “The DEC public awareness campaign will help strengthen our multi-faceted approach to serve children and families devastated by drug abuse.”
“Protecting drug endangered children is an essential tool to combating crime and safeguarding our communities,” said DEA Administrator Leonhart. “Children exposed to drug abuse are more than 50 percent more likely to be arrested as juveniles, so it is critical that we play an active role in preventing children’s exposure to drug abuse, as well as better serving children who are victims of drug abuse when it does occur.”
“Too many of our Nation’s children are at serious risk from drug use and its devastating consequences,” said Gil Kerlikowske, Director of National Drug Control Policy. “This task force will help break the cycle of abuse and neglect by providing vital services for drug endangered children. By offering valuable tools and encouraging collaboration across local organizations, we will be better able to rescue, protect and serve the victims of drug-related crimes.”
The DEC Task Force includes more than eight federal agencies and more than 80 participants. Following the task force’s kick-off meeting in May 2010, the DEC Task Force established multidisciplinary, multijurisdictional teams to assist communities with at-risk children. These teams include representatives from law enforcement, child protective services, health professionals, educators, victim services specialists, child advocates and the courts.
In coordination with the public awareness campaign, the DEC Task Force will launch a website providing resources to federal, state, local and tribal partners to better serve children endangered by drugs. The website can be viewed at: www.whitehousedrugpolicy.gov/Children.
27 May 2011
Vice President of Fraudulent Physical Therapy Company Pleads Guilty to Medicare FraudRead the Press Release
WASHINGTON – A Miami-area resident who was an owner and vice-president of a fraudulent physical therapy company in Lakeland, Fla., pleaded guilty today for his role in a scheme to defraud Medicare, the Departments of Justice and Health and Human Services (HHS) announced. Andres Cespedes, 44, pleaded guilty before U.S. Magistrate Judge Mark A. Pizzo in Tampa to one count of conspiracy to commit health care fraud. According to court documents, Cespedes was the vice-president of Dynamic Therapy Inc. Cespedes and his co-conspirators purchased Dynamic from its prior owners, and transformed it into a fraudulent enterprise. Dynamic purported to provide physical therapy services to Medicare beneficiaries, but in reality obtained patient information through kickbacks and bribes, and billed Medicare for physical therapy that never occurred. According to court documents, from fall 2009 to summer 2010, Cespedes submitted and caused the submission of $757,654 in fraudulent claims to the Medicare program by Dynamic. Cespedes admitted that he and his co-conspirators paid and caused the payment of kickbacks and bribes to Medicare beneficiaries in order to obtain their Medicare billing information, and used it to submit claims to Medicare for physical therapy services that were never provided. According to court documents, the owners and operators of Dynamic also stole the identities of a physical therapist and Medicare beneficiaries in order to submit additional false claims to Medicare. Cespedes admitted that he knew the Medicare beneficiaries, on whose behalf claims were submitted to Medicare by Dynamic, never received the services billed to Medicare. At sentencing, Cespedes faces a maximum penalty of 10 years in prison and a $250,000 fine. A sentencing date has not been set. Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Robert E. O’Neill of the Middle District of Florida; Steven E. Ibison, Special Agent-in-Charge of the FBI’s Tampa Division; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations’ Miami office. This case was prosecuted by Acting Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section and Special Assistant U.S. Attorney Christina M. Burden of the U.S. Attorney’s Office for the Middle District of Florida. The case was investigated by the HHS-OIG, Defense Criminal Investigative Service and FBI, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida. Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 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 Resident Sentenced to 70 Months in Prison for $17 Million Scheme to Defraud the U.S. Export-Import BankRead the Press Release
WASHINGTON – An El Paso, Texas, resident was sentenced yesterday to 70 months in prison for his role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of more than $17 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank; and Manuel Oyola-Torres, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in El Paso.
Jose Velasco, 40, was also sentenced by Judge Reginald Walton in U.S. District Court in Washington, D.C., to three years of supervised release and was ordered to pay $17.9 million in restitution and $17.9 million in forfeiture. Velasco pleaded guilty on Sept. 24, 2010, to a criminal information charging him with one count of wire fraud and one count of conspiracy to defraud the United States.
According to court documents, Velasco was the owner of Alamo Freight Forwarding, a company located in El Paso that purported to be a freight forwarding company specializing in the export of heavy equipment to Mexico. Velasco admitted that he and others conspired to defraud the Ex-Im Bank. From April 2004 through November 2007, Velasco purported to act as a freight forwarder in approximately 13 loan transactions with various lending banks whose loans were insured or guaranteed by Ex-Im Bank. The transactions involved a total of approximately $17.9 million. As part of the fraud scheme, Velasco and others prepared and submitted false documents to Ex-Im Bank falsely stating that goods and equipment had been purchased and shipped to buyers in Mexico. Velasco and others prepared false commercial invoices, bills of sale, bills of lading, and false Mexican Customs documents called “Pedimentos.” According to court records, all of the fraudulent loans in which Alamo Freight Forwarding was involved subsequently defaulted, causing Ex-Im Bank to pay claims losses to the lending banks in the amount of $17.9 million.
The case is being prosecuted by Senior Trial Attorney Peter B. Loewenberg and Senior Litigation Counsel Patrick Donley of the Criminal Division’s Fraud Section. The case is being investigated by the Ex-Im Bank Office of Inspector General and ICE HSI in El Paso.
Federal Court Shuts Down Georgia Tax Return PreparersRead the Press Release
WASHINGTON – A federal court has permanently barred two women from preparing federal income tax returns for others and from operating their tax preparation business, the Justice Department announced today. Judge J. Randal Hall of the U.S. District Court for the Southern District of Georgia entered the civil injunction order against Endia Delores Nipper, Jessie Mackie, and their business, TDNS Tax Service, which according to the government complaint, is located in Augusta, Ga. Nipper and Mackie agreed to the entry of the injunction.
In its amended complaint, the government alleged that Nipper fabricated or inflated earned income tax credit claims on tax returns that she prepared for her customers. The government also alleged that Nipper prepared numerous tax returns claiming the credit but failed to comply with the Internal Revenue Service (IRS) “due diligence” requirements for verifying whether her customers were eligible for the credit and in what amount.
In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.
EVA Airways Corporation Agrees to Plead Guilty and to Pay $13.2 Million Fine for Price Fixing on Air Cargo ShipmentsRead the Press Release
WASHINGTON — EVA Airways Corporation has agreed to plead guilty and to pay a $13.2 million criminal fine for its role in a conspiracy to fix prices in the air cargo industry, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the District of Columbia, Taiwan-based EVA participated in a conspiracy to fix particular cargo base rates or fees charged to customers for certain international air shipments, including to and from the United States from at least as early as January 2003 until at least Feb. 14, 2006. Under the plea agreement, which is subject to court approval, EVA has agreed to cooperate with the department’s antitrust investigation.
As a result of the department’s investigation into price fixing in the air transportation industry, including EVA, a total of 22 airlines and 21 executives have been charged. To date, more than $1.8 billion in criminal fines have been imposed and four executives have been sentenced to serve prison time. Charges are pending against the remaining executives.
EVA transports a variety of cargo shipments, including sensitive equipment used to manufacture liquid crystal display (LCD) panels, perishable commodities such as cherries and pet food, and consumer goods, on scheduled flights within Taiwan and internationally, including to and from the United States.
According to the charges, EVA and co-conspirators carried out the conspiracy by agreeing during meetings, conversations and other communications on particular cargo base rates or fees to be charged for certain international air shipments. As part of the conspiracy, the department said that EVA and co-conspirators levied cargo rates in accordance with the agreements reached, and monitored and enforced adherence to the agreed-upon cargo rates.
EVA is charged with price fixing in violation of the Sherman Act, which carries a maximum fine for corporations of $100 million. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is the result of a joint investigation into the air transportation industry being conducted by the Antitrust Division’s National Criminal Enforcement Section, the FBI’s Washington Field Office, the Department of Transportation’s Office of Inspector General and the U.S. Postal Service’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm or call the FBI’s Washington Field Office at 202-278-2000.
26 May 2011
Wisconsin Man Charged with FACE Act ViolationsRead the Press Release
WASHINGTON – The Justice Department announced today that Ralph Lang, 63, Marshfield, Wis., was charged today in a complaint filed in U.S. District Court in Madison, Wis., with attempting to injure, intimidate and interfere with other persons because those persons were providing reproductive health services.
As set out in the complaint, Lang traveled from Marshfield to Madison on May 25, 2011. While loading his handgun, he discharged a bullet through the door of his hotel room into the room across the hall. Madison Police responded and Lang was arrested for reckless endangerment. In statements to police, he admitted that he had traveled to Madison to kill individuals performing abortions. Lang will have his initial appearance in U.S. District Court on Friday, May 27, 2011.
Today’s charge is a result of an investigation conducted by the FBI and the Madison Police Department. Prosecution of this case is being handled by U.S. Attorney John W. Vaudreuil and Assistant U.S. Attorney Elizabeth Altman, in conjunction with the Justice Department’s Civil Rights Division.
Two Individuals Convicted of Importing and Selling Counterfeit Cisco Computer Networking EquipmentRead the Press Release
WASHINGTON – Chun-Yu Zhao, of Centreville, Va., and Donald H. Cone, of Frederick, Md., were convicted by a federal jury in Alexandria, Va., for their roles in a sophisticated scheme to import and sell counterfeit Cisco-branded computer networking equipment, announced U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.
In addition to the conspiracy conviction, Zhao was convicted of 15 additional counts, including importation fraud, trafficking in counterfeit goods and labels, false statements to law enforcement, false statements in naturalization and money laundering. She was acquitted on one count of false statements and one count of money laundering. The jury reached its verdict on May 24, 2011, after a 12-day trial and nearly four days of deliberations. Today, the jury returned a verdict regarding the forfeiture of numerous assets associated with Zhao, including two Porsches, one Mercedes, seven bank accounts containing more than $1.6 million, and four homes and three condominiums with a total value of more than $2.6 million.
“Zhao operated the U.S. headquarters of a Chinese company that was in the business of stealing intellectual property and defrauding customers,” said U.S. Attorney MacBride. “Customs and Border Protection and criminal investigators from Immigration and Customs Enforcement did an exceptional job of detecting this operation, despite the numerous false names and addresses used by Zhao to fly beneath the radar for many years. Zhao’s days of taking in millions of dollars from unsuspecting U.S. consumers and businesses are over.”
“Zhao and her co-conspirators trafficked in counterfeit networking equipment, to the detriment of consumers and of Cisco,” said Assistant Attorney General Breuer. “Intellectual property crime is a serious threat, and one that we are working hard with our law enforcement partners to fight. These guilty verdicts are strong signals to would-be counterfeiters and other intellectual property criminals that fighting these crimes is a priority for this Justice Department.”
“The creation, trafficking and sale of counterfeit goods is not a victimless crime,” said John Torres, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) Special Agent in Charge in the District of Columbia. “Products that are produced and sold illegally do harm to trademark holder’s brand name and to consumers who thought they were obtaining a genuine product. This case is an example of a scheme that robbed the legitimate companies that made these products, undermined the U.S. economy by robbing Americans of jobs, stifled American innovation and promoted other types of crime like money laundering.”
According to the evidence introduced at trial, Zhao, Cone and Zhao’s family members in China operated a large-scale counterfeit computer networking equipment business under the name of Han Tong Technology (Hong Kong) Limited. Zhao and her associates used a number of sophisticated schemes to defraud U.S.-based purchasers through a Virginia-based company called JDC Networking Inc. JDC Networking Inc. altered Cisco products by using pirated software, and created labels and packaging in order to mislead consumers into believing the products it sold were genuine Cisco products. To evade detection, Zhao used various names and addresses in importation documents, and hid millions of dollars of counterfeit proceeds through a web of bank accounts and real estate held in the names of her family members in China.
Sentencing for Cone is scheduled for Aug. 19, 2011, at 9:00 a.m. Zhao is scheduled to be sentenced on Aug. 26, 2011, at 9:00 a.m. At sentencing, the defendants face a maximum sentence of five years in prison and a $250,000 fine on the conspiracy charge. Zhao also faces 20 years in prison and a $250,000 fine for each count of importation and sale of improperly declared goods, as well as 20 years in prison and a $500,000 fine or twice the value of the property involved in the transaction for money laundering. She faces a maximum of 10 years in prison on each count of trafficking in counterfeit goods and a $2 million fine. On the false statement in naturalization charge, she faces 10 years in prison and a $250,000 fine. Finally, she faces 10 years in prison and a fine of $250,000 or twice the amount of the transaction on the charge of monetary transactions with criminally derived proceeds.
The case was investigated by ICE HSI’s Washington, D.C., Office, as well as the offices of the Inspector Generals from the General Services Administration and the U.S. Department of the Interior. U.S. Customs and Border Protection made a criminal referral to the department after intercepting counterfeit products from China destined for addresses associated with Zhao and JDC Networking Inc.
The case is being prosecuted by Assistant U.S. Attorneys Jay Prabhu and Lindsay Kelly from the Eastern District of Virginia, and Senior Counsel Michael Stawasz from the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.
The conviction announced today is part of a larger department-wide effort led by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Three Convicted of Sex Trafficking, Forced Labor and Immigration Offenses on Long Island, N.Y.Read the Press Release
WASHINGTON – A federal jury in Central Islip, N.Y., today found Antonio Rivera, 36, and Jason Villaman, 33, guilty of conspiracy, sex trafficking, forced labor, alien harboring and alien transportation, the Justice Department announced today. John Whaley, 31, was convicted of conspiracy, forced labor, alien harboring and alien transportation. The charges arose in connection with the defendants operation of two bars, Sonidos de la Frontera in Lake Ronkonkoma, N.Y., and La Hija del Mariachi, in Farmingville, N.Y. Rivera was the owner of the bars, and Whaley and Villaman transported the victims to and from the bars. Villaman also worked as a security guard at Sonidos de la Frontera.
The government’s evidence at trial established that the defendants and others compelled undocumented Latin American women from Honduras, Guatelmala, Mexico and El Salvador, hired as waitresses in Rivera’s bars to engage in commercial sex acts by using violence, fraud, coercion and threats of deportation.
“Human trafficking of this kind is the equivalent of modern day slavery. It deprives its victims of their freedom and dignity, and it has no place in our country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This case should serve as a reminder that the Justice Department is committed to the aggressive prosecution of those who rob individuals of their freedom for financial gain.”
“Those who exploit vulnerable individuals for personal gain will be prosecuted to the full extent of the law,” said U.S. Attorney Loretta E. Lynch. “We are committed to ensuring that everyone receives the full protection of our laws.” U.S. Attorney Lynch also thanked the Defense Criminal Investigative Service for its assistance in this case.
“This investigation and the resulting guilty verdicts prove that there is no tolerance in our society for this form of unbridled abuse and cruel exploitation of women,” said ICE/HSI Special Agent- In- Charge James T. Hayes. “This outcome further solidifies our resolve to work closely with other law enforcement agencies to root out those criminals who mistakenly view the most vulnerable among us as easy prey.”
“I congratulate the U.S. Attorney’s Office for the Eastern District of New York as well as the U.S. Department of Justice Civil Rights Division for the successful prosecution of this human trafficking case,” said Suffolk County Police Commissioner Richard Dormer. “I appreciate the difficult task the detectives and agents had overcoming the fear that these undocumented women expressed during this investigation. This case sends an important message to all undocumented persons who may be here illegally and are being victimized: the law enforcement community and prosecutors will not tolerate your criminal exploitation; if you come forward, we will protect you.”
“A jury has convicted these men of serious crimes that degraded and exploited particularly vulnerable women,”said FBI Assistant Director-in-Charge Janice K. Fedarcyk. “Through violence and other means, the women were coerced into sexual servitude. The FBI is committed to protecting victims and potential victims of sexual predators.”
“IRS Special Agents are an integral part of financial investigations,” said IRS Special Agent-in-Charge Charles R. Pine. “If the case involves money, as in sex trafficking, we provide value in tracking down money trails. We always welcome the opportunity to provide financial investigative assistance to our law enforcement partners.”
When sentenced by U.S. District Judge Sandra J. Feuerstein, the defendants face a maximum term of life in prison on the sex trafficking and conspiracy to commit sex trafficking offenses, and 20 years for the forced labor, alien harboring, and transportation of aliens offenses. In addition, the defendants face a fine equal to twice the pecuniary gain resulting from their crimes.
The government’s case was prosecuted by Assistant U.S. Attorneys Demetri M. Jones and Licha Nyiendo, and Senior Litigation Counsel John Cotton Richmond of the Civil Rights Division’s Human Trafficking Prosecution Unit.
San Diego Attorney Sentenced for Tax CrimesRead the Press Release
WASHINGTON – A San Diego attorney was sentenced by U.S. District Judge John A. Houston to 10 months in prison for evading taxes on at least $3 million in unreported income from 2000 to 2002, the Department of Justice and Internal Revenue Service (IRS) announced today. Judge Houston also ordered Craig Shaber, the attorney, to pay $555,000 in restitution to the IRS and to serve three years of supervised release. Shaber was indicted on conspiracy and tax evasion charges on Aug. 14, 2009, and subsequently pleaded guilty to tax evasion on Oct. 21, 2010.
According to the indictment, plea agreement and other documents filed in U.S. District Court in San Diego, between 1999 and 2002, Shaber and Steven Wright, a San Diego accountant, fraudulently acquired control of numerous public shell companies by, among other things, installing nominee officers and directors and submitting false registration statements and reports to the U.S. Securities and Exchange Commission (SEC) and the National Association of Security Dealers (NASD). Shaber and Wright earned millions of dollars from the sale of the public shell companies and deposited the proceeds into bank accounts in the names of Bonaventure Capital Ltd., International Solutions and one of Shaber’s client trust accounts. In 2002, Shaber and Wright received $260,000 in cash from the sale of one of the companies. In 2003, the SEC filed a complaint related to Shaber’s and Wright’s conduct selling the public shell companies.
Shaber then evaded taxes on the millions of dollars earned from the sale of the public shell companies. He withdrew the proceeds from the bank accounts for his own personal benefit in such a way that it concealed the fact that he received income from the stock scheme. Shaber disbursed these funds to various bank accounts in the names of nominee entities that he controlled and used accounts in the names of nominee entities to pay for personal expenses to help conceal his receipt of the income. Some of the nominee entities held title to various assets, which also helped conceal Shaber’s receipt of taxable income and his control over some of these assets.
The department said that Shaber also filed false individual federal income tax returns from 2000 to 2002 that failed to report income earned from the shell company scheme. Shaber and Wright also caused the filing of false corporate federal income tax returns that helped disguise their receipt of taxable income. According to the indictment, Shaber used the proceeds from the shell company scheme to purchase numerous luxury items, including his personal residence in Coronado, Calif., a McDonnell Douglas helicopter, a World War II-era Tigercat airplane, a Plymouth Prowler, a Porsche 996 Turbo and artwork.
Wright was sentenced on March 21, 2011, before U.S. District Judge Marilyn L. Huff in San Diego to three months in prison, three months community confinement and three years of supervised release. Wright also was ordered to pay a $2,000 fine and $378,000 in restitution for evading more than $380,000 in taxes from 2000 to 2002. Wright previously pleaded guilty on Aug. 14, 2009, and cooperated with the government in the prosecution of Shaber.
These cases are being prosecuted by Tax Division trial attorneys Christopher Maietta and Timothy J. Stockwell, and were investigated by the IRS-Criminal Investigation Division. Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax.
Lufkin, Texas, Man and Woman Sentenced to Federal Prison for Nacogdoches, Texas, MurdersRead the Press Release
WASHINGTON – A Lufkin, Texas, man and woman have been sentenced to federal prison for their part in a double homicide 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.
Brent Stalsby, 30, was sentenced yesterday to life in federal prison by U.S. District Judge Marcia Crone. Stalsby pleaded guilty on Jan. 21, 2011, to committing a violent crime in aid of racketeering activity. Specifically, Stalsby admitted that he murdered David Mitchamore and Christy Rochelle Brown. Terry Stalsby, 29, pleaded guilty on Jan. 21, 2011, to charges of serving as an accessory after the fact in the murder of Brown and was sentenced yesterday to 162 months in federal prison.
According to information presented in court, Carl 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 the state of 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 information presented in court, Mitchamore, aka “Super Dave,” an ABT member, and Brown, his girlfriend, 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 Carver, an ABT general. The bodies of Mitchamore and Brown were discovered in Nacogdoches County on Aug. 10, 2007. According to information presented in court, Terry Stalsby was present when the “direct order” issued by Carver was delivered to Charles Cameron Frazier; however, Brent Stalsby was the triggerman for both murders. Terry Stalsby also actively participated in a plan to conceal the gang members’ roles in the murders after they took place.
Carver pleaded guilty on Jan. 19, 2011, to committing a violent crime in aid of racketeering activity and admitted that he had participated in Mitchamore’s murder. Frazier pleaded guilty on Jan. 14, 2011, to his roles in the murders and is awaiting sentencing.
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 Office of the U.S. Attorney in Lufkin, Texas, and the Criminal Division’s Organized Crime and Gang Section, in full cooperation with the Nacogdoches County District Attorney’s Office.
Justice Department Settles with Bank of America and Saxon Mortgage for Illegally Foreclosing on ServicemembersRead the Press Release
WASHINGTON - The Justice Department today announced settlements with two lenders under the Servicemembers Civil Relief Act (SCRA) to resolve allegations that the lenders wrongfully foreclosed upon active duty servicemembers without first obtaining court orders, in violation of the SCRA. Combined, the settlements provide more than $22 million in monetary relief for the victims.
Under the first settlement , BAC Home Loans Servicing LP, formerly known as Countrywide Home Loans Servicing LP, a subsidiary of Bank of America Corporation, will pay $20 million to resolve a lawsuit alleging that Countrywide foreclosed on approximately 160 servicemembers between January 2006 and May 2009 without court orders. In addition to the $20 million, Countrywide agreed to pay any servicemember wrongfully foreclosed in the period from June 2009 through 2010. The complaint alleges that Countrywide did not consistently check the military status of borrowers on whom it foreclosed through at least May 31, 2009. The complaint was filed in the Central District of California, where Countrywide is headquartered.
Under the second settlement, Saxon Mortgage Services Inc., a subsidiary of Morgan Stanley, will pay $2.35 million to resolve a lawsuit alleging that Saxon foreclosed on approximately 17 servicemembers between January 2006 and June 2009 without court orders. In addition to the $2.35 million, Saxon agreed to pay any servicemember wrongfully foreclosed in the period from July 2009 through 2010. The complaint alleges that Saxon failed to consistently or accurately check the military status of borrowers on whom it foreclosed through at least June 30, 2009. The complaint was filed in the Northern District of Texas, where Saxon is headquartered.
“The men and women who serve our nation in the armed forces deserve, at the very least, to know that they will not have their homes taken from them wrongfully while they are bravely putting their lives on the line on behalf of their country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division of the Department of Justice. “The Civil Rights Division is committed to aggressively enforcing those laws that protect the rights of servicemembers. All lenders have an obligation to do their part to work with servicemembers while these brave men and women focus on keeping us safe. The Justice Department also thanks the Department of Defense for its critical assistance in identifying servicemembers whose rights were violated”
“Countrywide Home Loans failed to protect and respect the rights of our servicemembers, failed to comply with clearly mandated procedures and foreclosed against homeowners who are valiantly serving our nation,” said André Birotte Jr, U.S. Attorney for the Central District of California. “Military families lost their homes when Countrywide violated the law, causing undue stress to wartime personnel who have been protected from such actions since the Civil War.”
“With the numerous sacrifices our servicemembers make while they are serving our country, the last thing they need to worry about is whether or not their families will be forced from their homes,” said James T. Jacks, U.S. Attorney for the Northern District of Texas. “These lenders’ callous disregard for the SCRA, a law which was designed to insulate these patriots from unlawful foreclosures and other civil and financial obligations while they are on active duty, is deplorable and I applaud the Department’s Civil Rights Division’s efforts in identifying and seeking remedies for these wronged service members.”
Of the approximately 160 servicemembers upon whom Countrywide foreclosed without obtaining court orders, Countrywide allegedly foreclosed in many instances where it knew, or should have known, about their military status. The victims include individuals who have served honorably in Iraq and Afghanistan. The Department of Justice initiated its SCRA investigation of Countrywide in response to a referral by the U.S. Marine Corps regarding an active duty servicemember who was facing foreclosure by Countrywide.
Under the consent decree, Countrywide will establish a settlement fund of $20 million to compensate the servicemembers upon whom Countrywide foreclosed between January 1, 2006, and May 31, 2009. In addition to this settlement fund, Countrywide has agreed to compensate any additional SCRA-eligible individuals on whom Countrywide foreclosed without court orders between June 1, 2009, and Dec. 31, 2010. The consent decree also requires numerous corrective measures, including SCRA training for Countrywide employees and agents, developing modified SCRA policies and procedures and referring future SCRA complaints to the Justice Department. Countrywide will also repair any negative credit report entries related to the allegedly wrongful foreclosures and will not pursue any remaining amounts owed under the mortgages. Countrywide now will check the Defense Manpower Data Center’s website and its own files prior to conducting any foreclosure, and will not foreclose in violation of the SCRA if the borrower is in military service or is otherwise protected by the SCRA.
Of the approximately 18 servicemembers upon whom Saxon foreclosed without obtaining court orders, Saxon allegedly foreclosed on at least 10 servicemembers when Saxon knew or should have known about their military status. The servicemembers Saxon foreclosed on include men and women who have served honorably in Iraq, some of whom were severely injured in the line of duty or suffer from post-traumatic stress disorder. The Department of Justice initiated its SCRA investigation in response to an inquiry from Sergeant James Hurley, who resolved his claims against Saxon earlier this year in a confidential settlement.
Under the consent decree, Saxon will establish a settlement fund of $2.35 million to compensate the servicemembers upon whom Saxon allegedly wrongfully foreclosed between 2006 and 2009. In addition to this settlement fund, Saxon also has agreed to compensate any additional SCRA-eligible servicemembers on whom Saxon foreclosed without court orders between July 1, 2009, and Dec. 31, 2010. The consent decree also requires numerous corrective measures, including SCRA training for Saxon employees and agents, developing modified SCRA policies and procedures, and referring future SCRA complaints to the Justice Department. Saxon will also repair any negative credit report entries related to the wrongful foreclosures and will not pursue any remaining amounts owing under the mortgages. Saxon now will check the Defense Manpower Data Center’s website and its own files prior to conducting any foreclosure, and will not foreclose in violation of the SCRA if the borrower is in military service or is otherwise protected by the SCRA.
The division’s SCRA investigations have resulted in litigation or settlements enforcing SCRA’s provisions for termination of residential lease agreements, protection against enforcement of storage liens on towed vehicles without court orders, reduction of interest rates to six percent on credit obligations, and a prohibition against paying pre-payment penalties on mortgage loans when a servicemember must move for military service.
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 .
Servicemembers and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office. Please consult the military legal assistance office locator at http://legalassistance.law.af.mil and click on the Legal Services Locator. Additional information about the Justice Department’s enforcement of the SCRA and the other laws protecting servicemembers is available at www.servicemembers.gov. Servicemembers who believe they may have been victims, can contact the Justice Department directly at 1-800-896-7743, mailbox 6 for Countrywide or 1-800-896-7743, mailbox 995 for Saxon.
Houston Federal Jury Convicts Patient Recruiter of Medicare Fraud Involving Claims of Hurricane Damage to Power WheelchairsRead the Press Release
WASHINGTON – Marion Beverly Metoyer, a patient recruiter for a Houston durable medical equipment (DME) company, was convicted today by a Houston federal jury of health care fraud related to a power wheelchair fraud scheme, the Departments of Justice, Health and Human Services (HHS) and the FBI announced.
After a four-day trial, Metoyer, 57, of Dayton, Texas, was convicted on one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiring to receive illegal kickbacks for referring Medicare beneficiaries, and two counts of receiving illegal kickbacks for referring Medicare beneficiaries.
According to evidence presented at trial, Helen Etinfoh was the owner and operator of Luant & Odera Inc., a Houston-area DME company doing business as Tonni Medical Equipment & Supplies. Metoyer was a recruiter for Luant who was paid kickbacks in exchange for providing the company with beneficiaries in whose names bills could be submitted to Medicare. Etinfoh and other co-conspirators submitted false and fraudulent claims to Medicare for medically unnecessary DME, including power wheelchairs, wheelchair accessories and motorized scooters.
Evidence at trial showed that, based on representations from Metoyer and other recruiters, Luant would bill Medicare under a special code that designated the power wheelchairs as replacements for wheelchairs lost during hurricanes that hit the Houston area in fall 2008. In fact, the hurricanes did not damage the wheelchairs. Certain beneficiaries testified that they did not even have a power wheelchair before receiving the ones provided to them by Luant. Luant used the hurricane code because it allowed the company to submit claims to Medicare without a doctor’s order.
At trial, beneficiaries in whose names claims were submitted to Medicare testified that recruiters whom they had never met, including Metoyer, came to their homes and offered them free power wheelchairs in exchange for their Medicare information. The power wheelchairs were often billed to Medicare at more than $6,000 per chair.
Etinfoh was previously convicted by a federal jury of health care fraud in April 2010, and was sentenced to 41 months in prison. Paula Whitfield, a patient recruiter for Luant, was also convicted by a federal jury in April 2010, and was sentenced to 21 months in prison. Melvin Barnes, Johnnie Lee Andrews and Monica Rene Perry, each a patient recruiter for Luant, pleaded guilty to conspiracy to commit health care fraud and await sentencing.
At sentencing, Metoyer faces maximum penalties of 10 years in prison for the health care fraud conspiracy; 10 years in prison for committing health care fraud; five years in prison for conspiring to receive illegal kickbacks for referring Medicare beneficiaries; and five years in prison for receiving an illegal kickback for referring a Medicare beneficiary. A sentencing date has not been set.
Today’s guilty jury verdict was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Acting Special Agent-In-Charge Russell D. Robinson of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), Office of Investigations; and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The case was tried by Trial Attorney Laura 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, Strike Force operations in nine locations have obtained indictments of 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 .
Former Nasdaq Executive Pleads Guilty to Insider TradingRead the Press Release
WASHINGTON – A former managing director of the NASDAQ Stock Market pleaded guilty today for his participation in an insider trading scheme in which he purchased and sold stock in NASDAQ-listed companies based on material, non-public information he obtained in his capacity as a NASDAQ executive, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and Postal Inspector in Charge of Criminal Investigations Gerald O’Farrell of the U.S. Postal Inspection Service (USPIS).
Donald Johnson, 56, a resident of Ashburn, Va., pleaded guilty before U.S. District Judge Anthony J. Trenga in the Eastern District of Virginia to one count of securities fraud. In pleading guilty, he admitted that he purchased and sold stock in NASDAQ-listed companies based on material, non-public information, or inside information, on several different occasions from 2006 to 2009.
“Mr. Johnson was a fox in a hen-house,” said Assistant Attorney General Breuer. “NASDAQ-listed companies entrusted him with their sensitive, non-public information so that he could provide them with analyses about their stock. He then used that very information to cheat the system and make an illegal profit. Insider trading by a gatekeeper on a securities exchange is a shocking abuse of trust, and must be punished. The integrity of our securities markets is vital to the U.S. economy, and the Justice Department is determined to take on insider trading at every level.”
“Don Johnson used sensitive, confidential information as an executive at NASDAQ to pad his retirement by more than $600,000,” said U.S. Attorney MacBride. “He thought he could get away with it by using his wife’s account and inside information to make relatively small trades just a few times a year. But he learned what every other trader on Wall Street must now realize: We’re watching.”
“The U.S. Postal Inspection Service continues to identify and aggressively investigate those who commit securities fraud,” said Postal Inspector in Charge of Criminal Investigations O’Farrell. “The agency has placed a team of highly trained Postal Inspectors at the Department of Justice in Washington, D.C., working in partnership with Department of Justice attorneys, to assure that criminals who defraud innocent citizens are prosecuted to the fullest extent of the law.”
According to court documents, from 2006 to September 2009, Johnson was a managing director on NASDAQ’s market intelligence desk in New York. The market intelligence desk provides trading analysis and market information to the companies that list on NASDAQ. According to court documents, Johnson monitored the stock of companies traded on NASDAQ and offered NASDAQ-listed companies information and analyses concerning trading in their own stock. To enable him to perform these services, NASDAQ-listed companies routinely entrusted Johnson with material, non-public information about their stock, including advance notice of announcements concerning earnings, regulatory approvals and personnel changes. Johnson admitted that he repeatedly used this information to purchase or sell short stock in various NASDAQ-listed companies shortly before the information was made public. He would then generate substantial gains by reversing those positions soon after the announcement. According to court documents, to conceal his illegal trading, Johnson executed these trades in a brokerage account in his wife’s name. Johnson failed to disclose this account to NASDAQ in violation of NASDAQ rules.
Johnson admitted that he made illegal purchases and sales of stock in NASDAQ-listed companies on at least eight different occasions, generating gains totaling more than $640,000. The companies whose securities he traded were Central Garden and Pet Co.; Digene Corporation; Idexx Laboratories Inc.; Pharmaceutical Product Development Inc.; and United Therapeutics Corporation. According to court documents, in November 2007, Johnson used inside information related to successful trial results for United Therapeutics’ drug Viveta (now called Tyvaso) to purchase shares of United Therapeutics before the trial results were announced. Soon after the announcement, Johnson sold the shares and gained more than $175,000 in profits. According to court documents, in July 2009, Johnson used inside information about the approval of its drug Tyvaso to purchase shares of United Therapeutics before the approval was announced. He sold the shares after the announcement and gained more than $110,000 in profits.
Johnson is scheduled to be sentenced on Aug. 12, 2011. The maximum penalty for securities fraud is 20 years in prison and a fine of $5 million.
In a related action, the Securities and Exchange Commission today filed a civil enforcement action against Johnson in the Southern District of New York.
This case is being prosecuted by Trial Attorney Justin Goodyear of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Raymond E. Patricco Jr., of the Eastern District of Virginia. The Department would like to recognize the substantial assistance of the Securities and Exchange Commission. The case was investigated by USPIS. The Financial Industry Regulatory Authority also provided assistance. Brigham Cannon, formerly a Trial Attorney of the Criminal Division, also assisted with the investigation.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov .
Areté Sleep to Pay the United States $650,000 to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON – Areté Sleep LLC, Areté Sleep Therapy LLC and Areté Holdings LLC have agreed to pay the United States $650,000 to settle allegations that their sleep medicine and durable medical equipment facilities in Arizona and Texas submitted false claims to Medicare, the Justice Department announced today.
Today’s settlement resolves False Claims Act allegations that, from Nov. 1, 2002, through Dec. 31, 2009, Areté made false claims to Medicare for diagnostic sleep tests performed by technicians lacking the licenses or certifications required by Medicare rules and regulations. The settlement also resolves related allegations that Areté made false claims to Medicare for medical devices resulting from these same technicians’ tests.
On Jan. 26, 2011, Areté filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court in the District of Arizona. Areté has agreed to pay the False Claims Act settlement from the proceeds of the sale of its assets.
“The Department of Justice is committed to preventing waste, fraud and abuse in the Medicare program and ensuring that these funds are not spent on care that does not meet Medicare’s standards,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
“Cheating Medicare harms not only the health care of others but all taxpayers,” said Dennis K. Burke, U.S. Attorney for the District of Arizona. “This settlement demonstrates the ongoing efforts of our office to recover taxpayer dollars for the Medicare program.”
All three Arete entities were named as defendants in a whistleblower lawsuit brought under the False Claims Act, which permits private citizens, known as “relators,” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. Relator Amanda Drews will receive $107,250 as her share of the recovery.
“Every Medicare dollar is precious, so we expect the program will only be billed for properly provided services,” said Glenn R. Ferry, Special Agent in Charge, Los Angeles Region, Office of Inspector General (OIG) of the Department of Health & Human Services (HHS). “Maintaining the integrity of Medicare is a top OIG priority.”
The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the District of Arizona, the Commercial Litigation Branch of the Justice Department’s Civil Division and HHS-IG.
“This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and HHS Secretary Kathleen Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $7.3 billion.”
25 May 2011
North Carolina Pilot Indicted for Filing False Tax Returns and Obstructing the IRSRead the Press Release
WASHINGTON – Charles Alexander Davis formerly of Mooresville, N.C., was indicted by a federal grand jury in Charlotte, N.C., on 10 counts of willfully filing materially false tax returns and one count of obstructing and impeding the Internal Revenue Service (IRS), the Department of Justice and the IRS announced. The indictment was returned on May 19, 2011, and was unsealed today in U.S. District Court for the Western District of North Carolina.
According to the indictment, Davis’s employer, an international airline carrier, withheld little or no federal income tax from Davis’s wages for years 1997 through 2005 because Davis previously had falsely represented that he was exempt from income tax withholding. The department said, in April 2006, Davis filed five fraudulent amended income tax returns for 1996 through 2000, falsely claiming that he earned little or no adjusted gross income in each of those years.
The indictment further alleges that subsequently, from April 2008 to February 2009, Davis filed five fraudulent individual income tax returns for 2004 through 2008, reporting false amounts of federal income tax withheld for each of those years and requesting fraudulent refunds from the IRS in amounts up to approximately $1.5 million. During IRS efforts to collect Davis’s tax debt, the indictment alleges, Davis obstructed and impeded the IRS in numerous ways, including submitting fraudulent payment documentation to the IRS and concealing his assets and income in a nominee bank account.
Davis had his initial appearance on May 20, 2011, in Puerto Rico, where he was apprehended.
If convicted, Davis faces a maximum potential sentence of 33 years in prison and a maximum fine of $2.75 million. An indictment is merely an allegation, and Davis is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
The case is being prosecuted by Assistant U.S. Attorney Jenny Grus Sugar and Tax Division Trial Attorney Kevin C. Lombardi. The case was investigated by the IRS-Criminal Investigation Division.
More information about the Department of Justice’s Tax Division and its enforcement efforts can be found at www.usdoj.gov/tax.
Justice Department Settles Case Against South Bend, Indiana, Public Transportation Corporation to Defend Employment Rights of Army ReservistRead the Press Release
WASHINGTON – The Department of Justice announced today that it has resolved claims made by Stephen Ralston against the South Bend, Ind., Public Transportation Corporation (TRANSPO) under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members to the position they would have held had their employment not been interrupted by military service, or in a position of like seniority, status and pay. USERRA also prohibits an employer from denying, among other things, retention in employment to a member of the uniformed services on the basis of that membership, performance of service or service obligation.
The complaint in this case, which was filed along with a proposed consent decree in the U.S. District Court for the Northern District of Indiana, alleges that TRANSPO violated various sections of USERRA by, among other things, failing to properly reemploy Mr. Ralston after his military obligations ended, and discriminating against Mr. Ralston because of his military obligations. Mr. Ralston, who was employed by TRANSPO in January 2008, was activated to full-time military duty and deployed to Iraq. After Mr. Ralston’s military obligations concluded in November 2009, he promptly applied for reinstatement with TRANSPO. On his first day back at TRANSPO in December 2009, Mr. Ralston was informed by TRANSPO’s assistant general manager that Ralston’s position would cease to exist after Dec. 31, 2009. On Dec. 31, 2009, TRANSPO delivered a letter to Mr. Ralston stating that he was being discharged that day. No other TRANSPO employee was discharged that day. Under the terms of the consent decree, TRANSPO will pay Mr. Ralston $45,000 in back pay.
“Our country values its military reservists and the sacrifices they make. No service member should be disadvantaged because he or she heeded the call to duty,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division of the Department of Justice is fully committed to protecting the employment rights of persons who serve in the armed services.”
“Our commitment to returning service members is complete and unwavering,” said Ray Jefferson, Assistant Secretary of Labor for Veterans’ Employment and Training. “Members of our Armed Forces volunteered for the duty of protecting our nation, our values, our interests and our way of life. It is our duty to support them when they need assistance after returning home.”
The Justice Department’s lawsuit was filed after the Veterans’ Employment and Training Service of the Department of Labor referred the complaints filed by Mr. Ralston to the Justice Department upon completion of its investigation and unresolved settlement efforts. USERRA provides that the Department of Justice may appear on behalf of, and act as attorney for, persons whose complaints are referred to Department of Justice by the Department of Labor.
This case was handled jointly by the Office of the U.S. Attorney for the Northern District of Indiana and the Employment Litigation Section of the Civil Rights Division. Wayne Ault, Assistant U.S. Attorney, and Hector Ruiz, Senior Trial Attorney, served as counsel for plaintiff. 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 Honors Citizens, Law Enforcementat National Missing Children’s Day CeremonyRead the Press Release
WASHINGTON – Deputy Attorney General James Cole spoke at the annual National Missing Children’s Day ceremony today at the Justice Department’s Great Hall, honoring missing children, their families, child advocates and others who protect the safety of children.
“Protecting our children is one of the department’s highest priorities and we will continue to work with other federal agencies and organizations to ensure timely, accurate and thorough responses to missing and exploited children,” said Deputy Attorney General Cole. “Through efforts like the Defending Childhood initiative and the Federal Agency Task Force on Missing and Exploited Children, we will continue our efforts to prevent child abductions and exploitation as well as ensure that those who are responsible for such crimes are punished.”
Protecting children is a priority of Attorney General Eric Holder, who launched Defending Childhood in 2010 to address the issue of children exposed to violence. The department also supports the work of the National Center for Missing & Exploited Children; the Internet Crimes Against Children Task Force Program, a national network of 61 coordinated task forces addressing online child exploitation; and the AMBER Alert Program, instrumental in the recovery of 540 abducted children since its creation in 1996.
The Department announced the release of two Spanish translations of publications: Cuando su Niño desaparece: Una guía para la supervivencia de la familia (When Your Child Is Missing: A Family Survival Guide, 4th edition), providing advice about what to do when your child is missing, and how best to assist law enforcement in the search, and El Delito del Secuestro Familiar: La perspectiva de hijos y padres (The Crime of Family Abduction: A Child’s and Parent’s Perspective), offering insights into how a child abduction by a family member affects the child and the family.
The ceremony included remarks by Jeff Slowikowski, Acting Administrator of the Office of Juvenile Justice and Delinquency Prevention, followed by presentations of awards in the following categories:
Attorney General’s Special Commendation Award: Recognizes extraordinary efforts of an Internet Crime Against Children (ICAC) task force, an ICAC affiliate agency, or an individual assigned to an ICAC task force or affiliate agency for making significant investigative or program contributions to the ICAC task force program.
Recipients: Detective Gary Jackson, Miami Police Department; Detective Felix Mendigutia, Hialeah, Fla., Police Department; Special Agent Tim Aucoin, U.S. Secret Service, Miami; and Assistant U.S. Attorney Maria Medetis, Southern District of Florida, who worked to identify and locate a sexual predator and four child victims he was sexually abusing. The defendant received a 130-year prison sentence.
Missing Children’s Law Enforcement Award: Recognizes the extraordinary efforts of a law enforcement officer who made a significant investigative or program contribution to the safety of children.
Recipient: Sheriff David Barber, Knox County, Ohio, Sheriff’s Office, coordinated a high-profile investigation including federal, state, and local law enforcement and led to the safe recovery of an abducted 13-year-old girl.
Missing Children’s Citizen Award: Honors the extraordinary efforts of private citizens for their unselfish acts to safely recover missing or abducted children.
Recipient: Heather Picklesimer, Postmaster Relief, U.S. Postal Service, Ducktown, Tenn., whose work with the U.S. Postal Inspection Service led to the successful recovery of a missing infant.
Missing Children’s Child Protection Award: Honorsthe extraordinary efforts of a law enforcement officer who made a significant investigative or program contribution to protecting children from abuse or victimization.
Recipient: Detective Dana Ward, York, Pa., City Police Department, who served as a key drafter of protocols for the York County Child Abduction Response Team (CART). This team received full certification, becoming the first CART certified in Pennsylvania, and only the 12th such certified team in the United States. Ward was a primary investigator in a 2010 case in which two York parents were arrested and charged with five counts of child endangerment after they hid their five children in a squalid row house with no heat, electricity or running water.
Missing Children’s Art Contest Award:
Recipient : Julianna Hinton, a fifth grader at Oak Grove Upper Elementary , Hattiesburg, Miss., was selected as the 2011 Missing Children’s Art Contest winner for her depiction of a bald eagle with wings outstretched to protect our country’s missing children, clutching an AMBER Alert banner.
President Ronald Reagan proclaimed May 25, 1983, the first National Missing Children’s Day to remember Etan Patz, a 6-year-old boy who disappeared from a New York City street corner on that day in 1979. Missing Children’s Day honors his memory of children still missing.
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 seven 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; the Community Capacity Development Office, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking. More information about OJP is at www.ojp.gov .
Jackson County, Michigan, Man Arrested and Charged with Obstructing the IRS in Form 1099-OID SchemesRead the Press Release
WASHINGTON – Karl Herrington of Parma, Mich., was arrested today on charges of two counts of corruptly endeavoring to obstruct the administration of the internal revenue laws, and five counts of filing false tax forms with the Internal Revenue Service (IRS), the Department of Justice, the Treasury Inspector General for Tax Administration (TIGTA) and the IRS announced. The indictment was returned on May 12, 2011, and was unsealed today in U.S. District Court in Detroit.
According to the indictment, Herrington submitted false forms to the IRS to intimidate and harass state and local government officials and employees. These included Forms 1099-OID falsely reporting that Herrington paid original issue discount, which is taxable as interest, to law enforcement personnel and judges involved in a criminal case against him in Jackson County. In that case, Herrington was charged with being an accessory after the fact for harboring his wife, who was wanted for outstanding arrest warrants.
The indictment also alleges that Herrington sent false Forms 1099-OID to federal attorneys prosecuting a criminal tax case against his wife in the Northern District of Ohio in order to interfere with that case. Among the false tax forms Herrington is accused of filing was an individual income tax return for himself falsely reporting federal tax withheld of over $8 million.
If convicted, Herrington faces a maximum potential sentence of 21 years in prison and a maximum fine of $1.5 million. An indictment is merely an allegation, and Herrington is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.
Tax Division Trial Attorneys Kenneth Vert and Jeffrey McLellan are litigating the case for the United States.
Federal Court Bars Chicago Woman from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has permanently barred Martha A. Jones of Chicago from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Jones consented without admitting the allegations against her, was signed by U.S. District Court Judge Gary Feinerman for the Northern District of Illinois.
The government complaint in the case alleged that Jones included fabricated charitable contributions, employee business expenses and other deductions on tax returns that she prepared since 2005. The complaint alleged, for tax years 2005 through 2008, the Internal Revenue Service (IRS) examined 56 of the returns that Jones prepared and found inaccuracies in all of them. According to the complaint, the tax losses to the United States from Jones’s misconduct could exceed $1 million.
The complaint also alleged that Jones failed to sign her customers’ returns as the paid preparer, even after being advised by the IRS that she was legally required to sign them. The court order requires Jones to provide the government with a list identifying all persons for whom she prepared federal tax returns for tax years 2005 through 2009.
Return preparer fraud is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website.
El Departamento de Justicia homenajea a ciudadanos, fuerzas del orden público en ceremonia del Día Nacional de Niños DesaparecidosRead the Press Release
WASHINGTON - El Secretario de Justicia Adjunto James Cole habló en la ceremonia anual del Día Nacional de Niños Desaparecidos hoy en el Gran Salón del Departamento de Justicia, y prestó homenaje a los niños desaparecidos, sus familias, defensores de menores y otros que protegen la seguridad de los niños.
"La protección de nuestros niños es una de las más altas prioridades del departamento, y seguiremos trabajando con otras dependencias federales y organizaciones para asegurar respuestas oportunas, precisas y exhaustivas al tema de los menores desaparecidos y explotados", dijo el Secretario de Justicia Adjunto Cole. "A través de iniciativas como "Defensa de la Niñez" y la Fuerza de Tarea de Dependencias Federales para Niños Desaparecidos y Explotados", seguiremos adelante con nuestra labor de prevenir los secuestros y la explotación de niños, así como asegurar que los responsables por dichos delitos reciban castigo".
El proteger a los niños es una prioridad del Secretario de Justicia de los Estados Unidos Eric Holder, quien lanzó la iniciativa "Defensa de la Niñez" en 2010 para tratar de la problemática de los niños expuestos a la violencia. El departamento también promueve la labor del Centro Nacional para Niños Desaparecidos y Explotados; el Programa de la Fuerza de Tarea de Delitos en Internet contra Menores, una red nacional de 61 fuerzas de tarea coordinadas dedicadas a combatir la explotación de niños en Internet; y el Programa Alerta AMBER, instrumental para la recuperación de 540 niños secuestrados desde su creación en 1996.
El Departamento anunció el lanzamiento de dos traducciones al español de publicaciones: Cuando su niño desaparece: Una guía para la supervivencia de la familia (When Your Child Is Missing: A Family Survival Guide, 4ª edición), la que brinda consejos acerca de qué hacer si su hijo ha desaparecido, y cómo ayudar mejorar a las fuerzas del orden público en la búsqueda, y El Delito del secuestro familiar: La perspectiva de hijos y padres (The Crime of Family Abduction: A Child’s and Parent’s Perspective), la que ayuda a comprender cómo el secuestro de un niño por un familiar afecta al niño y a la familia.
La ceremonia incluyó comentarios de Jeff Slowikowski, Administrador Interino de la Oficina de Justicia Juvenil y Prevención de la Delincuencia, seguidos de presentaciones de premios en las siguientes categorías:
Premio Mención de Honor Especial del Secretario de Justicia de los Estados Unidos: Presta reconocimiento a la labor extraordinaria de una fuerza de tarea de Delitos en Internet contra Menores [Internet Crime Against Children (ICAC)], una dependencia afiliada a la ICAC, o una persona asignada a una fuerza de tarea ICAC o dependencia afiliada por la realización de aportes significativos de investigación o programas al programa de fuerzas de tarea ICAC.
Destinatarios: Detective Gary Jackson, Departamento de Policía de Miami; Detective Felix Mendigutia, Departamento de Policía de Hialeah, Fla.,; Agente Especial Tim Aucoin, Servicio Secreto de EE.UU., Miami; y Fiscal Federal Auxiliar Maria Medetis, Distrito Sur de Florida, quienes trabajaron en identificar y ubicar a un predador sexual y cuatro víctimas menores contra quienes cometía abuso sexual. El demandado recibió un sentencia de prisión de 130 años.
Premio Nacional Niños Desaparecidos para las Fuerzas del Orden Público: Presta reconocimiento a la labor extraordinaria de un agente de las fuerzas del orden público que haya realizado un aporte significativo de investigación o programa para la seguridad de los niños.
Destinatario: Alguacil David Barber, Condado de Knox, Ohio, Oficina del Alguacil, coordinó una investigación de alto perfil que incluyó a las fuerzas del orden público federales, estatales y locales y llevó a la recuperación de una niña secuestrada de 13 años de edad, sana y salva.
Premio Nacional Niños Desaparecidos para Ciudadanos: Presta homenaje a la labor extraordinaria de ciudadanos privados por sus actos desinteresados para lograr la recuperación de niños desaparecidos o secuestrados, sanos y salvos.
Destinataria: Heather Picklesimer, Relieve de Administrador de Correos, Servicio Postal de EE.UU., Ducktown, Tenn., cuyo trabajo con el Servicio de Inspección Postal de EE.UU. permitió la recuperación exitosa de un bebé desparecido.
Premio Nacional Niños Desaparecidos de Protección de Menores: Presta homenajea la labor extraordinaria de un agente de las fuerzas del orden público que haya realizado un aporte significativo de investigación o programa para la protección de menores contra el abuso o su victimización.
Destinatario: Detective Dana Ward, Departamento de Policía de la Ciudad de York, Pa., quien fue redactora clave de protocolos para el Equipo de Respuesta al Secuestro de Menores [Child Abduction Response Team (CART)] del Condado de York. Este equipo recibió certificación integral y pasó a ser el primer equipo CART certificado en Pensilvania y apenas el 12º con dicha certificación en los Estados Unidos. Ward fue la principal investigadora en un caso en 2010 en el que dos padres de York fueron arrestados y acusados de cinco cargos de puesta en peligro de menores, después de que escondieron sus cinco hijos en una casa adosada mugrienta sin calefacción, electricidad o agua corriente.
Premio del Concurso de Arte de Niños Desaparecidos:
Destinataria: : Julianna Hinton, una alumna del quinto grado de la Escuela Primera Superior de Oak Grove, Hattiesburg, Miss., fue elegida ganadora del Concurso de Arte de Niños Desaparecidos de 2011 por su retrato de un águila americana con las alas abiertas para proteger a los niños desaparecidos de nuestro país, aferrada a una bandera de Alerta AMBER.
El Presidente Ronald Reagan proclamó el 25 de mayo de 1983 el primer Día Nacional de Niños Desaparecidos en memoria de Etan Patz, un niño de 6 años de edad que desapareció de una esquina de una calle de la Ciudad de Nueva York ese día en 1979. El Día de los Niños Desaparecidos presta homenaje a los niños aún desaparecidos.
La Oficina de Programas Judiciales [Office of Justice Programs (OJP)], encabezada por la Secretario de Justicia Auxiliar Laurie O. Robinson, provee liderazgo federal en el desarrollo de la capacidad de la nación de prevenir y controlar la delincuencia, administrar justicia y prestar asistencia a víctimas. La OJP tiene siete componentes: el Buró de Asistencia Judicial; el Buró de Estadísticas Judiciales; el Instituto Nacional de Justicia; la Oficina de Justicia Juvenil y Prevención de la Delincuencia; la Oficina para Víctimas del Delito; la Oficina de Desarrollo de Capacidad Comunitaria y la Oficina de Sentencias, Control, Aprehensión, Registro y Rastreo de Delincuentes Sexuales. Para obtener más información acerca de la OJP, visite www.ojp.gov.
24 May 2011
New Jersey UBS Client Sentenced for Failing to Report More Than $1 Million in Swiss Bank AccountRead the Press Release
NEWARK, N.J. – An Oradell, N.J., man was sentenced today to three years of probation – including 12 months of home confinement with electronic monitoring – after admitting he failed to file a Report of Foreign Bank and Financial Accounts (FBAR), concealing more than $1 million in Swiss bank accounts, U.S. Attorney Paul J. Fishman and Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division announced.
Harry Abrahamsen previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to an information charging him with one count of willful failure to file an FBAR. Judge Cavanaugh also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court, at his plea hearing, Abrahamsen admitted that he failed to file an FBAR for calendar year 2005. Abrahamsen also failed to report his account at UBS AG in Switzerland on his individual income tax return for that year, and failed to report a second account opened in the name of Lucille Abrahamsen Jackson, his daughter. Additionally, Abrahamsen failed to report income deposited in and earned on the UBS bank accounts. The UBS accounts, originally opened in 1992, were transferred into the name of Primrose Properties S.A., a nominee Panamanian corporation, in 2000. Abrahamsen established Primrose in early 2000 with the assistance of a Swiss lawyer and Swiss banker, in order to hide these accounts from the Internal Revenue Service (IRS).
Abrahamsen also admitted that he funded the UBS accounts with approximately $1.3 million in false and inflated expenses paid by his pre-press printing business, SJT Imaging Inc., to a Swiss company. The inflated expenses were then deducted on SJT Imaging Inc.’s corporate tax returns, which allowed Abrahamsen to under report personal income for the years 1999, 2000, 2001, 2002 and 2003.
UBS entered into a deferred prosecution agreement in February 2009, in which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of its agreement, UBS provided the U.S. government with the identities of, and account information for, certain U.S. customers of UBS’ cross-border business.
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax returns. Additionally, U.S. citizens must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
In addition to the term of probation with home confinement, Judge Cavanaugh ordered Abrahamsen to pay back taxes, interest and penalties totaling more than $600,000. As a condition of his guilty plea, Abrahamsen has also agreed to pay an FBAR penalty in excess of $300,000.
Jackson pleaded guilty on Nov. 18, 2010, before Judge Cavanaugh to an information charging her with willfully subscribing to a false tax return and was sentenced yesterday to a year of probation.
U.S. Attorney Fishman and Principal Deputy Assistant Attorney General DiCicco commended special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Stacey A. Levine of the U.S. Attorney’s Office Criminal Division and Trial Attorney Michael C. Vasiliadis of the Department of Justice’s Tax Division.
Miami-Area Owners and Operators of Medical Equipment Company Plead Guilty to Medicare FraudRead the Press Release
WASHINGTON – Two Miami-area residents who were owners and operators of a durable medical equipment (DME) company, pleaded guilty today for their roles in a scheme to defraud Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
Obel Martinez and Damaris Gil, a married couple, each pleaded guilty before U.S. District Judge Donald M. Middlebrooks in the Southern District of Florida to one count of conspiracy to commit health care fraud.
According to plea documents, Martinez and Gil incorporated and operated OM Best Help Corp. in 2006 for the purpose of defrauding Medicare. OM Best purportedly specialized in the provision of DME and prescription drugs to Medicare beneficiaries.
According to court documents, starting in 2008, Martinez and Gil submitted and caused the submission of approximately $1,089,234 in fraudulent claims to the Medicare program. The defendants and their co-conspirators used without authorization the Medicare billing identifiers of licensed medical doctors and falsely represented to Medicare that the doctors had prescribed DME, when, in fact, the doctors had not done so. The defendants also knew that the Medicare beneficiaries, on whose behalf claims were submitted to Medicare by OM Best, never received the items OM Best billed to Medicare.
Sentencing for Martinez and Gil is scheduled for Aug. 23, 2011. Each defendant faces a maximum of 10 years in prison.
Today’s guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
This case was prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 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 .
Jenkens & Gilchrist Attorneys, Former BDO Seidman CEO and Deutsche Bank Broker Found Guilty in New York of Multi-Billion Dollar Criminal Tax Fraud SchemeRead the Press Release
NEW YORK – Paul M. Daugerdas, Donna M. Guerin, Denis M. Field and David Parse were convicted today in Manhattan federal court for their roles in a tax shelter scheme in which they designed, marketed and implemented fraudulent tax shelters used by wealthy individuals to avoid paying taxes to the Internal Revenue Service (IRS), announced Preet Bharara, U.S. Attorney for the Southern District of New York; John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; and Victor S.O. Song, Chief of the IRS Criminal Investigation. Together, Daugerdas, Guerin and Field made $130 million in profits from the 10-year scheme.
Raymond Craig Brubaker, 55, of Plano, Texas, a banker at Deutsche Bank who was also charged along with the defendants, was acquitted by the jury on all counts. U.S. District Judge William H. Pauley III presided over the 10-week trial.
“The multi-billion dollar tax fraud scheme perpetrated by this corrupt group of attorneys, accountants and bankers was stunning in scope, and today’s guilty verdicts are a just result,” said U.S. Attorney Bharara. “These privileged professionals wove an intricate web of deceit that spanned nearly a decade, enabling them to enrich themselves and their well-heeled clients to the tune of hundreds of millions of dollars. Surely there are many Americans who dread April 15th, but they put their checks in the mail nonetheless. These defendants thought they were above the law and found out the hard way that they were not. I commend the career prosecutors from my office and the Tax Division, along with the agents of the IRS, who have all devoted countless hours to bring this case to a successful conclusion.”
“ Today’s verdict sends a loud and clear message that dishonest tax professionals will be held accountable for their crimes,” said Principal Deputy Assistant Attorney General DiCicco. “The Justice Department will continue to pursue the lawyers, accountants, and others who enrich themselves at the public’s expense by selling abusive tax shelters."
“Promoting and marketing tax shelter transactions intended to conceal the true facts from the IRS isn't tax planning; it's criminal activity,” Chief of IRS-Criminal Investigation Song. “People trust their attorneys and Certified Public Accountants to hold the highest standards when dealing in financial transactions. Today’s conviction of the defendants reinforces our commitment to every American taxpayer to identify and to prosecute those who devise illegal tax shelters. It's a matter of fostering confidence in the tax system and compliance with the law.”
According to the trial evidence and other documents filed in the case:
From 1994 through 2004, Daugerdas, a lawyer and the former head of the Chicago Office of the Jenkens & Gilchrist law firm (J&G) and its tax practice; Guerin, a tax lawyer and shareholder at J&G’s Chicago Office; Field, the former chief executive officer and chairman of the board of the accounting firm BDO Seidman, former head of its national tax practice, and one of three heads of BDO’s “Tax Solutions Group” (TSG); and Parse, a former Deutsche Bank broker, participated in a scheme to defraud the IRS by designing, marketing, implementing and defending fraudulent tax shelters. All of the defendants are certified public accountants.
As part of their scheme, the defendants and others undertook to prevent the IRS from: detecting their clients’ use of these shelters; (understanding how the transactions operated to produce the tax results reported by the clients; learning that the shelters were marketed as cookie-cutter products designed to eliminate or reduce large tax liabilities; learning that the clients were not seeking profit-making investment opportunities, but were instead seeking huge tax benefits; and learning that, from the outset, all the clients intended to complete a pre-planned series of steps that had been designed by the defendants to lead to the specific tax benefits sought by the clients. The defendants created, and assisted in creating, transactional documents and other materials that falsely and fraudulently described their clients’ motivations for entering into the tax shelters and for taking various steps in order to yield the tax benefits.
As a result of the scheme, the defendants made millions of dollars in fees, commissions and bonuses. For example, Daugerdas made $95 million and Guerin made $17 million from the sale of the shelters. Field received $18 million in distributions and bonuses. Daugerdas, Field, and Parse also utilized the tax shelters for themselves in order to evade personal tax liabilities on the substantial income they were receiving from these fraudulent tax shelters. For example, Daugerdas used the shelters to reduce the income taxes he owed on the $95 million he made in fees on the illegal shelters to less than $8,000; without the shelters, he would have owed more than $32 million in taxes.
Daugerdas, 60, of Wilmette, Ill.; Guerin, 50, of Elmhurst, Ill.; and Field, 53, of Naples, Fla., were each convicted of conspiring to defraud the IRS and to evade taxes, and of corruptly endeavoring to obstruct and impede the internal revenue laws. The defendants were also convicted on multiple counts of tax evasion relating to the use of various tax shelters for specified clients, and of mail fraud. Daugerdas also was convicted of tax evasion based on his use of fraudulent tax shelters to eliminate or reduce his personal income tax liabilities between 1999 and 2001. Parse 49, of Elmhurst, was found guilty of mail fraud and obstructing internal revenue laws.
On the conspiracy charge, each defendant faces a maximum penalty of five years in prison; three years’ supervised release; a fine of the greatest of $250,000 or twice the gross gain to the defendant or twice the gross loss to the IRS; and restitution. On the mail fraud charge, each defendant faces a maximum penalty of 20 years in prison. Each count of tax evasion carries a maximum penalty of five years in prison; three years’ supervised release; a fine of the greatest of $250,000 or twice the gross gain to the defendant or twice the gross loss to the IRS; and costs of prosecution. Each defendant also faces a maximum penalty of three years in prison; one year supervised release; and a fine of the greatest of $250,000 or twice the gross gain to the defendant or twice the gross loss to the IRS on the charge of corruptly endeavoring to obstruct and impede internal revenue laws.
The defendants are scheduled to be sentenced by Judge Pauley on Oct. 14, 2011, at 2:00 p.m.
Several other defendants involved in the case have previously pleaded guilty:
Erwin Mayer, 47, of Winnetka, Ill., a lawyer and former shareholder at J&G’s Chicago Office in its tax practice.
Robert Greisman, 60, of Deerfield, Ill., a tax partner in BDO’s Chicago Office and a member of BDO’s tax solutions group.
Charles W. Bee Jr., 65, of Fredericksburg, Va., a former BDO Seidman Vice Chairman and board member.
Michael Kerekes, 48, of Santa Monica, Calif., a principal of BDO Seidman and a former member of BDO’s TSG and Tax Opinion Committee.
Adrian Dicker, 56, of Princeton Junction, N.J., a former Vice Chairman of BDO Seidman and TSG member.
In December 2010, as part of a non-prosecution agreement with the U.S. Attorney’s Office, Deutsche Bank AG agreed to pay $553,633,153 to the United States, and also admitted criminal wrongdoing, in connection with its participation in financial transactions which furthered the fraudulent tax shelters engineered by the defendants.
This prosecution is being handled by the U.S. Attorney’s Office’s Complex Frauds Unit. Assistant U.S. Attorneys Stanley Okula and Jason Hernandez, and Department of Justice Tax Division Assistant Section Chief Nanette L. Davis are in charge of the prosecution.
Former White Mountain Apache Tribal Police Officer Charged with Civil Rights ViolationsRead the Press Release
WASHINGTON – A federal grand jury in Phoenix returned a two-count indictment today charging former White Mountain Apache Tribal police officer, Glenn Cromwell, with federal crimes in connection with maliciously abandoning Anthony Archuleta and Barry Lowe in dangerously cold weather conditions in December 2008.
Today’s indictment was announced by Thomas E. Perez, Assistant Attorney General for the Civil Rights Division of the Department of Justice; Dennis K. Burke, U.S. Attorney for the District of Arizona; and Robert C. Rudge Jr., Acting Special Agent in Charge of the FBI Phoenix Field Office.
The indictment alleges that on Dec. 2, 2008, Cromwell transported a 29-year-old man who was in custody to a remote area, and then abandoned him in extreme cold weather conditions, resulting in bodily injury. The indictment also charges that on Dec. 6, 2008, Cromwell transported a 56-year-old man, who was also in custody, to a remote location, and then abandoned him in extreme cold weather conditions, resulting in bodily injury.
The indictment charges Cromwell with two counts of deprivation of civil rights. Cromwell faces a possible maximum sentence of 20 years in prison.
The ongoing case is being investigated by the Phoenix Field Office of the FBI, and is being prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division, along with Assistant U.S. Attorney Alison S. Bachus for the District of Arizona.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Federal Court Bars Arizona Family from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has barred a family of tax preparers in Overgaard, Ariz., from preparing federal tax returns for others, the Justice Department announced today. The court’s preliminary injunction order against Shelia Young, Deane Young and Kennith Defoor will remain in effect while a related criminal case against the defendants proceeds in court.
The government complaint in the civil injunction case alleged that the Youngs and Defoor promoted fraudulent tax schemes through their companies, Accurate Consulting LLC, and D4 Accounting, Consulting, Tax Services Inc. According to the complaint, these schemes included manipulating the amount of income and federal tax withholdings claimed on their customers’ tax returns, resulting in bogus claims for tax refunds. The complaint further states that, since 2001, the Youngs and Defoor prepared at least 337 federal tax returns requesting fraudulent tax refunds, often in amounts exceeding $100,000.
The three family members allegedly prepared frivolous tax returns that cumulatively claimed more than $24 million in fraudulent refunds and resulted in the Internal Revenue Service (IRS) issuing approximately $2.3 million in erroneous refunds. The complaint alleged that the Youngs and Defoor asserted fraudulent “zero income” and “commercial redemption” tax schemes and regularly submitted false IRS forms on behalf of their customers that reported both fictitious interest income and tax withholdings.
The IRS described the zero income and commercial redemption schemes as frivolous in its publication The Truth About Frivolous Tax Arguments . Return preparer fraud, bogus refund claims based on frivolous arguments, and claims of zero wages are also three of the “Dirty Dozen” tax scams identified by the IRS 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’s website .
Attorney General Calls for Action to Protect Children<br /> from Violence in New TV Public Service AnnouncementRead the Press Release
WASHINGTON – A public service announcement (PSA) featuring Attorney General Eric Holder began airing this week on the Investigation Discovery network. This 30-second PSA is part of the Attorney General’s Defending Childhood initiative to address the issue of children’s exposure to violence.
“This PSA calls on all of us to take action to protect our children from violence in communities across the country,” said Attorney General Holder. “We can protect and heal the most vulnerable among us and transform the country for the better—one child at a time.”
The goals of the initiative are to prevent children’s exposure to violence as victims and witnesses, to mitigate the negative effects that children exposed to violence experience, and to develop knowledge about and increase public awareness of this issue.
A key component of the Defending Childhood initiative is a multi-year demonstration program to develop comprehensive, community-based strategies to prevent and reduce the impact of children’s exposure to violence in their homes, schools and communities. In 2010, eight planning grants were awarded to begin this process to the City of Boston; the City of Portland, Maine; the Chippewa Cree Tribe of Montana; the City of Grand Forks, N.D.; the Cuyahoga County, Ohio, Board of Commissioners; the Multnomah County, Oreg., Department of Human Services; the Rosebud Sioux Tribe, S.D.; and Shelby County, Tenn.
Defending Childhood involves collaborative efforts across the Department of Justice and other federal agencies including the Departments of Health and Human Services and Education. Critical partners outside the federal government include state, local and tribal law enforcement agencies, national experts, practitioners and advocates.
The PSA was distributed nationally through the Department of Justice YouTube channel. Detailed information on Defending Childhood is located at: www.justice.gov/ag/defendingchildhood
The PSA can be viewed at: www.justice.gov/video.php?id=15
The script follows:
Our children are exposed to violence every day—in their neighborhoods, in their schools, even in their own homes.
Exposure to violence can have a devastating and lifelong impact.
Through community action and leadership at the national level…
We’re identifying the children who need our help.
I’m Attorney General Eric Holder.
And I’m asking those of you who have a role in a child’s life—to take action.
Through your attention and early intervention, we can help children in need to heal, to thrive.
Together, we can change their lives and their futures.
Join the Justice Department in Defending Childhood.
Alabama Tax Preparer Sentenced for Identity Theft and Filing False Tax ReturnsRead the Press Release
WASHINGTON – A resident of Elmore, Ala., was sentenced to 60 months in prison for stealing identities and using them to file false tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.
On Feb. 22, 2011, after a four-day trial, a jury in Montgomery, Ala., convicted Sharon Thurman of 14 counts of making false claims, two counts of theft of government money and two counts of aggravated identity theft. According to the indictment and evidence introduced during trial, Thurman owned and operated Sharon’s Tax Service in Elmore. Between January and April 2008, Thurman filed 14 fraudulent tax returns in which she unlawfully attempted to obtain tax refunds intended for individuals whose identities she stole.
At trial, 14 victims of identity theft testified that they did not file, and did not request Thurman to file the tax returns she filed in their names and Social Security numbers. Two victims in whose name she received payment from the IRS testified that they never received any money from Thurman. All 14 victims testified that, to the best of their knowledge, they had never met Thurman and had never been to Sharon’s Tax Service.
U.S. District Judge W. Harold Albritton III also ordered Thurman to serve three years of supervised release.
Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division and U.S. Attorney for the Middle District of Alabama Leura G. Canary commended the IRS Criminal Investigation special agents who investigated the case as well as Tax Division Trial Attorneys Justin Gelfand and Michael Boteler, and Assistant U.S. Attorney Jared Morris, who are prosecuting the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts can be found at www.usdoj.gov/tax.
23 May 2011
New Jersey UBS Client Sentenced for Failing to Report More Than $750,000 in Swiss Bank AccountRead the Press Release
NEWARK, N.J. – A Hillsdale, N.J., woman was sentenced today to probation after admitting she filed a false tax return and concealed more than $750,000 in a Swiss bank account, New Jersey U.S. Attorney Paul J. Fishman and Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division announced.
Lucille Abrahamsen Jackson pleaded guilty on Nov. 18, 2010, to an information charging her with willfully subscribing to a false tax return. Jackson entered her guilty plea before U.S. District Judge Dennis M. Cavanaugh, who also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court, Jackson admitted that she signed and filed a false tax return for 2005 that failed to disclose her UBS account and income generated from the account’s assets. Jackson also failed to file a Report of Foreign Bank or Financial Accounts (FBAR) with respect to the UBS account. The account, originally opened in 1992, was transferred in 2000 into the name of Primrose Properties S.A., a nominee Panamanian corporation. Jackson’s father, Harry Abrahamsen, established Primrose in 2000 with the assistance of a foreign lawyer and a Swiss banker, in order to hide the account from the Internal Revenue Service (IRS). On April 12, 2010, Abrahamsen pleaded guilty to a federal charge of failing to file an FBAR, admitting he concealed more than $1 million in Swiss bank accounts. He is scheduled to be sentenced on May 24, 2011, by Judge Cavanaugh.
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax returns. Additionally, U.S. citizens must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Jackson admitted that her failure to file the FBAR and her failure to disclose the existence of the UBS account on her personal income tax returns allowed her to underreport personal income for the years 2000 through 2007. In 2003, the account reached a high balance of more than $759,376.
UBS entered into a deferred prosecution agreement in February 2009, in which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of its agreement, UBS provided the U.S. government with the identities of, and account information for, certain U.S. customers of UBS’ cross-border business.
As a condition of her guilty plea, Jackson has agreed to pay an FBAR penalty of $379,688.
U.S. Attorney Fishman and Principal Deputy Assistant Attorney General DiCicco commended special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff, for the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Stacey A. Levine of the U.S. Attorney’s Office Criminal Division and Trial Attorney Michael C. Vasiliadis of the Department of Justice’s Tax Division.
Lender to Pay $300,000 to Settle Allegations Involving Small Business Administration LoanRead the Press Release
WASHINGTON – Garsh Lending LLC, a lender located in Miami, has agreed to pay the United States $300,000 to settle allegations involving a Small Business Administration (SBA) loan, the Justice Department announced today.
The allegations relate to the SBA’s 504 loan program, which offers small businesses long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization. A portion of the financing for 504 projects comes from independent third party lenders. Garsh, acting as the third party lender in this instance, loaned the borrower money and agreed to provide the SBA written notice of default on the loan. The United States alleges that the borrower missed payments on its loan with Garsh before the 504 loan had closed, yet Garsh failed to provide the required notice of default. The borrower never made any payments on the 504 loan, which was backed by an SBA guarantee.
“The SBA offers valuable assistance to small businesses and contributes to our nation’s economic development,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “The Justice Department will continue to protect the integrity of these important programs and safeguard the taxpayer dollars spent to make them effective."
“The SBA is an important program aimed at helping small businesses to expand and modernize,” said U.S. Attorney for the Southern District of Florida Wifredo Ferrer. “Compliance with loan repayment requirements is crucial to the success of the program. The U.S. Attorney’s Office will continue to help monitor and enforce compliance to protect the soundness of the SBA program.”
SBA General Counsel Sara Lipscomb said, “Increased lender oversight is a priority of the Office of General Counsel, and this recovery is part of that commitment.”
The settlement resulted from a collaborative effort by several federal agencies, including the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Florida and the SBA.
Leadership, Members and Associates of the Philadelphia La Cosa Nostra Family Charged with Racketeering Conspiracy and Related CrimesRead the Press Release
WASHINGTON – A superseding indictment was unsealed today against 13 members and associates of the Philadelphia organized crime family of La Cosa Nostra (LCN), including its current boss and underboss. The indictment charges various crimes involving racketeering conspiracy, extortion, loan sharking, illegal gambling and witness tampering.
The charges were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania; William H. Ryan Jr., Acting Attorney General for the Commonwealth of Pennsylvania; George C. Venizelos, Special Agent in Charge of the FBI’s Philadelphia Field Division; Special Agent in Charge Eric Hylton of the Philadelphia office of Internal Revenue Service (IRS)-Criminal Investigations; Philadelphia Police Commissioner Charles H. Ramsey; Pennsylvania State Police Commissioner Frank Noonan; and Superintendent of the New Jersey State Police Colonel Rick Fuentes
The defendants charged in the 50-count superseding indictment are Philadelphia LCN family boss Joseph Ligambi, Philadelphia LCN family underboss Joseph Massimino, George Borgesi, Martin Angelina, Anthony Staino Jr., Gaeton Lucibello, Damion Canalichio, Louis Monacello, Louis Barretta, Gary Battaglini, Robert Verrecchia, Eric Esposito and Robert Ranieri.
All but two of the defendants were arrested today and will make initial court appearances in U.S. District Court in Philadelphia at 1:30 pm. EST. Borgesi and Canalichio are already serving federal prison sentences for previous convictions.
“Today’s arrests and charges are the largest enforcement action in a decade against La Cosa Nostra in Philadelphia,” said Assistant Attorney General Breuer. “We have pried loose La Cosa Nostra’s grip on power and influence in the United States. But there is still work to be done. We will continue use all the tools at our disposal – including wiretaps, undercover operations and consensual recordings - to build cases against these individuals, and to bring them to justice.”
“It goes without saying that Philadelphia has a rich and vibrant history steeped in government, law and order,” said U.S. Attorney Memeger. “Indeed, the documents which form the basis of our government and the rule of law in this country were signed here. Unfortunately, there continues to exist within Philadelphia a criminal element which refuses to abide by our laws and continues to use force and violence to instill fear and exert power in order to make money. Today, we make clear that such activity will not be tolerated by my office and that La Cosa Nostra remains a priority for the Department of Justice.”
“The significance of the extensive and long-term investigative effort that has resulted in the unsealing of this indictment and the arrests today is that it represents our continuing commitment to the dismantling of the Philadelphia LCN crime syndicate family,” said FBI Special Agent-in-Charge Venizelos. “The FBI in Philadelphia and all of its law enforcement partners will remain focused on identifying and destroying the elements of organized crime that have long victimized Philadelphia and its surrounding communities.”
According to the superseding indictment, the Philadelphia LCN family is one of a number of LCN families based in various cities throughout the United States. The Philadelphia LCN family is led by a boss, who has authority over the activities of the members and associates of organization. If a boss is sent to prison, he appoints an “acting boss” to direct the organization’s affairs. In addition to the boss, the administration of the Philadelphia LCN includes an underboss and consigliere who together oversee crews of criminals led by captains, who in turn supervise organized crime soldiers and associates.
The superseding indictment alleges that for more than a decade, 10 of the defendants, including Ligambi as the boss and Masimino as the underboss, as well as other members and associates of the Philadelphia LCN family, conspired to conduct and participate in the affairs of the Philadelphia LCN family through a pattern of racketeering activity and through the collection of unlawful debts. The alleged racketeering activity includes numerous acts involving extortion, extortionate extensions of credit through usurious loans, extortionate collections, illegal gambling and witness tampering. The organization’s collection of unlawful debts allegedly relates to its loan sharking operations and debts that arose from their illegal gambling businesses.
For example, according to the superseding indictment, Ligambi, Massimino, Staino and other conspirators allegedly ran illegal electronic gambling device businesses, providing video poker machines and other gambling devices for bars, restaurants, convenience stores, coffee shops and other locations in Philadelphia and its suburbs, and then collected the illegal gambling proceeds. After federal law enforcement agents seized 34 of their illegal electronic gambling devices, Ligambi, Massimino and Staino allegedly forced the owners of another illegal electronic gambling device business to sell their illegal businesses to them, including 34 machines.
In another example, the superseding indictment charges that from 2002 to 2006 Massimino extorted yearly tribute payments from a bookmaker to the Philadelphia LCN family so that the bookmaker could avoid personal harm and disruption of the illegal bookmaking business.
According to the superseding indictment, the defendants promoted and furthered their illegal money-making activities through violence, actual and implied threats of violence, and the cultivation and exploitation of the Philadelphia LCN family’s long-standing reputation for violence. The defendants also used this reputation for violence to intimidate and prevent victims and witnesses from cooperating with law enforcement. The indictment alleges various instances where defendants used phrases such as “chop him up” and “put a bullet in your head” when threatening victims. In one instance, Canalicho allegedly used a bat to beat a victim for not paying a loan debt.
The superseding indictment alleges that some of the defendants continued their racketeering activities even after being sent to prison. For example, Borgesi and Massimino, while in prison, allegedly generated criminal proceeds for themselves and the Philadelphia LCN family by using intermediaries to operate criminal businesses and to make extortionate demands at their direction.
Each charge of racketeering conspiracy, collection of unlawful debt, collection of extensions of credit through extortionate means, making extortionate extensions of credit, financing extortionate extensions of credit and witness tampering carries a maximum penalty of 20 years in prison and a $250,000 fine. The illegal gambling charges each carry a maximum penalty of five years in prison and a $250,000 fine.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section, Assistant U.S. Attorneys David E. Troyer and Frank A. Labor III for the Eastern District of Pennsylvania, and Senior Deputy Attorney General Heather A. Castellino of the Pennsylvania Office of Attorney General.
The case is being investigated by the FBI, the IRS-Criminal Investigations, the U.S. Department of Labor Office of Labor Racketeering and Fraud Investigations, Office of Inspector General, the Pennsylvania State Police, the New Jersey State Police and the Philadelphia Police Department. Additional assistance was provided by the New Jersey Department of Corrections.
An indictment is merely an accusation and each defendant is presumed innocent until and unless they are proven guilty.
Justice Department Seeks to Shut Down South Florida Tax PreparersRead the Press Release
WASHINGTON – The United States has asked a federal court to permanently bar two Broward County, Fla., tax preparers and their business from preparing federal tax returns for others, the Justice Department announced today. The civil injunction suit alleges that Ronald Jerome Scriven, Danesa L. Webb and their business, Tamijah International LLC, prepare returns for customers that report false income and expenses and falsely claim several tax credits, including the first-time-homebuyer credit.
Congress enacted the first-time-homebuyer credit in 2008 to strengthen the real estate market and help the economy. It allowed persons who have not owned a home in the previous three years to claim a credit of up to $8,000 against their federal income taxes if they bought a home after April 8, 2008. Congress later expanded the program to allow current homeowners to claim the credit for a purchase of a new home, under certain conditions. The credit has since expired.
The government complaint, filed in the Southern District of Florida, alleges that the defendants claimed the credit on their customers’ tax returns even though they knew the customers had not bought new homes. The complaint also alleges that the defendants claimed fabricated business deductions and education credits on some customers’ returns, and that they failed to report the proper amount of customers’ income on other returns. At times, according to the complaint, the defendants prepared returns for persons without those persons’ knowledge and charged exorbitant fees for their services.
Return preparer fraud is identified by the IRS as one of the “Dirty Dozen” tax scams taxpayers are urged to avoid. In the past decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website .
Justice Department Files Antitrust Lawsuit to Stop H&R Block Inc. from Buying TaxACTRead the Press Release
WASHINGTON — The Department of Justice filed a civil antitrust lawsuit today to block the proposed acquisition by H&R Block Inc. of TaxACT, a digital do-it-yourself tax preparation software provider. The department said that the proposed deal would substantially lessen competition in the growing U.S. digital do-it-yourself tax preparation software market, resulting in higher prices and reduced innovation and quality for products that are used annually by millions of American taxpayers.
The Department of Justice’s Antitrust Division filed its lawsuit in U.S. District Court in Washington, D.C., to prevent H&R Block from acquiring 2SS Holdings Inc., an entity within TA IX L.P. and the maker of TaxACT.
Between 35 and 40 million taxpayers use digital software products, either on the provider’s website or uploaded onto the taxpayers’ computers, to prepare and file their federal and state income taxes. Currently, three companies account for 90 percent of all sales of digital do-it-yourself tax preparation products, and the acquisition would combine H&R Block and TaxACT, respectively the second- and third-largest providers of digital do-it-yourself tax preparation products, the department said.
“The combination of H&R Block and TaxACT would likely lead to millions of American taxpayers paying higher prices for digital do-it-yourself tax preparation products,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “In addition, TaxACT has aggressively competed in the digital do-it-yourself tax preparation market with innovations such as free federal filing. If this merger is allowed to proceed, that type of innovation will be lost.”
On Oct. 13, 2010, H&R Block agreed to purchase 2SS Holdings in a transaction valued at $287.5 million.
According to the department’s complaint, H&R Block’s acquisition of 2SS Holdings would eliminate a company that has aggressively competed with H&R Block and disrupted the U.S. digital do-it-yourself tax preparation market through low pricing and product innovation. By ending the head-to-head competition between TaxACT and H&R Block, American taxpayers would be left with only two major digital do-it-yourself tax preparation providers. This would lead to higher prices, lower quality, and reduced innovation. In addition, by taking control of the TaxACT business, which has been a maverick in the market, it would be easier for H&R Block to coordinate on prices, quality, and other business decisions with the other remaining industry leader – Mountain View, Calif.-based Intuit, which makes personal finance programs such as Quicken and TurboTax – the department said.
The complaint includes statements from H&R Block presentations and emails, such as:
· A primary benefit for H&R Block in acquiring TaxACT is: “Elimination of competitor.”
· In discussing the potential acquisition of TaxAct, one of the “[s]trategic [o]pportunities” of the acquisition is: “Acquire TaxACT and eliminate the brand to regain control of industry pricing and further price erosion.”
· The rationale for launching the H&R Block’s free online product was “[t]o match competitor offerings and stem online share loss to Intuit and TaxACT.”
· “Retail volume at Staples [is] at risk due to introduction of TaxACT [r]etail software on combined display.”
The department also alleges that by eliminating TaxACT, a significant, disruptive and aggressive competitor, the acquisition would likely substantially lessen competition between H&R Block and Intuit by facilitating coordination between them. H&R Block would likely degrade TaxACT’s free product and H&R Block and Intuit would increase the prices for their paid products. An internal H&R Block email said, “The other possible strategic consideration is that Intuit and HRB together would have 84% of the digital market and we both obviously have great incentive to keep this channel profitable.”
H&R Block is a Missouri corporation headquartered in Kansas City, Mo. H&R Block is one of the world’s largest tax service providers, utilizing more than 100,000 trained tax professionals. The company, with its H&R Block At Home products, is the second largest provider of digital do-it-yourself tax preparation products. In its fiscal year 2010, ending April 30, 2010, H&R Block prepared more than 23 million tax returns worldwide and earned revenues of more than $3.8 billion. Its digital do-it-yourself tax preparation product was used in 2010 by more than 5.9 million customers to prepare and file their federal and state income tax returns.
2SS Holdings, the maker of the TaxACT digital do-it-yourself tax preparation products, is a Delaware corporation headquartered in Cedar Rapids, Iowa. 2SS Holdings is the third-largest digital do-it-yourself tax preparation product provider in the United States, and the second-largest provider of such products online through the Internet. TaxACT products were used in 2010 by more than 5 million customers to prepare and file their federal and state income tax returns.
TA IX L.P. is a limited partnership organized and existing under the laws of Delaware and headquartered in Boston. TA IX L.P. is the majority shareholder of 2SS Holdings.
20 May 2011
VeriFone, Hypercom and Ingenico Abandon Plans to Divest Point of Sale Business to Ingenico Following Justice Department LawsuitRead the Press Release
WASHINGTON —VeriFone Systems Inc., Hypercom Corp. and Ingenico S.A. have abandoned plans for Hypercom to divest its U.S. point-of-sale (POS) business to Ingenico, the Department of Justice announced today. Their decision to abandon the divestiture came just one week after the department’s Antitrust Division filed a lawsuit to block the proposed acquisition by VeriFone of Hypercom and to block the proposed divestiture of Hypercom’s U.S. business to Ingenico. The department’s lawsuit to block the overall deal between VeriFone and Hypercom is still pending, and as the companies have publicly reported, the department is in discussions with them to identify an alternative buyer that is acceptable to the department.
“We are gratified that the parties recognized the anticompetitive nature of the agreement and abandoned its divestiture plan promptly,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Our discussions with the companies will continue as they seek to find an alternative buyer that will resolve the department’s antitrust concerns.”
POS terminals are used by retailers and other firms to accept electronic payments such as credit cards and debit cards. The three companies manufacture more than 90 percent of all POS terminals in the United States.
The department’s complaint alleged that the merger of VeriFone and Hypercom would result in a dominant POS terminal manufacturer that would likely raise prices and reduce innovation, quality, product variety and service. The complaint also alleged that the proposed divestiture to Ingenico did not adequately resolve the competitive concerns raised by the VeriFone/Hypercom transaction.
VeriFone is a Delaware corporation headquartered in San Jose, Calif. VeriFone earned more than $1 billion in worldwide revenues in its last fiscal year, ending in October 2010.
Hypercom is a Delaware corporation headquartered in Scottsdale, Ariz. Hypercom earned more than $450 million in worldwide revenues in 2010.
Ingenico is a French corporation with worldwide revenues in 2010 of more than $1.3 billion.
United States Announces Bankruptcy Settlement with Oil Company in Wake of October 2009 Explosions and FireRead the Press Release
WASHINGTON – Under a settlement agreement lodged today in federal bankruptcy court in Delaware, Caribbean Petroleum Corp., Caribbean Petroleum Refining L.P., and Gulf Petroleum Refining Corp. – Puerto Rico (collectively, CAPECO) will pay more than $8.2 million to address environmental liabilities relating to CAPECO’s former petroleum distribution facility in Bayamón, Puerto Rico, and more than 170 service stations owned or leased by CAPECO throughout Puerto Rico.
The $8.2 million payment will reimburse the Environmental Protection Agency (EPA) and the U.S. Coast Guard for cleanup costs incurred at the Bayamón facility during the bankruptcy, and cover penalties for violations of the Clean Water Act (CWA) and Resource Conservation and Recovery Act (RCRA) during the bankruptcy. The settlement also provides the United States with allowed general unsecured claims in excess of $18 million. These claims are for cleanup costs and penalties for violations of the CWA and RCRA before the bankruptcy, and will be paid based on the availability of funds in the bankruptcy estate.
CAPECO filed Chapter 11 petitions in the bankruptcy court in August 2010 following a series of catastrophic explosions and fires at the Bayamón facility on Oct. 23, 2009. The explosions, measuring 2.8 on the earthquake Richter scale, destroyed 15 above-ground storage tanks and damaged another 17 above-ground storage tanks, releasing approximately 30 million gallons of petroleum. EPA, serving as lead federal agency, conducted emergency cleanup actions with funds from the Oil Spill Liability Trust Fund administered by the U.S. Coast Guard’s National Pollution Funds Center. In February 2011, the United States filed proofs of claim against CAPECO in the bankruptcy proceeding, seeking to recover cleanup costs as well as penalties for violations of the CWA and RCRA.
The bankruptcy settlement is part of a broader settlement that includes three non-bankruptcy agreements announced on May 2, 2011 between EPA and Puma Energy Caribe LLC, under which Puma will perform cleanup work at the Bayamón facility. A fourth non-bankruptcy agreement, among Puma, the EPA and the Commonwealth of Puerto Rico, requires that Puma undertake comprehensive compliance measures at 147 of the service stations and make environmentally beneficial improvements at the service stations that are not required by regulations. Puma acquired the Bayamón facility and 147 service stations on May 11, 2011, through a court-ordered bankruptcy sale. CAPECO has also agreed to pay $850,000 to address the costs of investigation and remediation that is determined to be needed at service stations not acquired by Puma
“This bankruptcy settlement and the earlier agreements with Puma Energy are the result of a commitment by the United States to clean up the contaminated CAPECO site after the catastrophic explosions and fires in October 2009,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division at the Department of Justice. “Today’s settlement will send a message to the regulated community that they cannot declare bankruptcy and avoid environmental liabilities.”
“Today’s bankruptcy settlement and the earlier agreements with the new owner, Puma, will advance the ongoing work to clean up the former CAPECO facility,” said EPA Regional Administrator Judith Enck. “EPA is encouraged that Puma has agreed to perform necessary environmental work. EPA will continue to ensure that the cleanup of this facility, and compliance efforts at the service stations, are done properly and that the health of people in the surrounding communities is protected.”
The bankruptcy settlement is subject to approval by the bankruptcy court. Before approval, the settlement agreement will be lodged with the court for a period of seven days to afford members of the public an opportunity to comment on the settlement.
Two Aryan Brotherhood of Texas Gang Members <br /> Plead Guilty to Racketeering ChargesRead the Press Release
WASHINGTON – Two members of the Aryan Brotherhood of Texas (ABT) prison-based gang pleaded guilty today in federal court to racketeering aggravated assault in the 2008 beating of a gang prospect in Tomball, Texas, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney José Angel Moreno for the Southern District of Texas.
Shane Everett Dallmeyer, 30, aka “Lock Jaw,” and Michael Raymond Burkett, 33, aka “Redneck,” each pleaded guilty today to one count of committing violent crimes in aid of racketeering activity in Houston before Senior U.S. District Judge Ewing Werlein Jr.
According to the guilty pleas, Dallmeyer and Burkett were members of 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 was established in the early 1980s within the Texas prison system. The ABT modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. According to court filings, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, however, the ABT has expanded its criminal enterprise to include illegal activities for profit.
According to information presented in court, 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 the guilty pleas, Dallmeyer and Burkett participated in the beating of an ABT prospect member at the home of another ABT gang member in Tomball, Texas, on Sept. 22, 2008. The ABT prospect, who sustained serious bodily injury, was beaten by ABT gang members because he allegedly violated certain ABT rules of conduct.
On April 29, 2011, ABT gang member Stephen Kyle Knebel, 33, aka “Lil Evil,” pleaded guilty to racketeering aggravated assault. Fellow gang member, Bobby Dan Teets, 45, aka “Bull,” pleaded guilty to the same charge in December 2010.
Dallmeyer, Burkett, Knebel and Teets all face a maximum sentence of 20 years in prison. Sentencing for Dallmeyer and Burkett is scheduled for Aug. 12, 2011. Sentencing for Teets is scheduled for July 25, 2011, and sentencing for Knebel is scheduled for July 29, 2011.
This case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the FBI; the U.S. Marshals Service; the Texas Rangers; the Texas Department of Public Safety; the Montgomery County, Texas, Precinct 4 Constable’s Office; the Montgomery County, Texas, Sheriff’s Department; the Houston Police Department-Gang Division; and the Harris County, Texas Sheriff’s Office.
The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Jay Hileman of the U.S. Attorney’s Office for the Southern District of Texas.
Samuel K. Crocker Is Appointed United States Trustee for Tennessee, KentuckyRead the Press Release
WASHINGTON - Samuel K. Crocker has been appointed by Attorney General Eric Holder as U.S. Trustee for Tennessee and Kentucky (Region 8), and will assume his duties in June, the Executive Office for U.S. Trustees announced today. Mr. Crocker replaces Daniel M. McDermott, the U.S. Trustee for Region 9 (Ohio and Michigan), who has also served as U.S. Trustee for Region 8 since January 2011.
Mr. Crocker has engaged in the private practice of law in Nashville, Tenn., for more than 25 years, primarily representing bankruptcy debtors, creditors and trustees. In addition, since 1984 he has been a member of the panel of chapter 7 trustees in the Middle District of Tennessee. He has also served as a trustee in numerous chapter 11 cases.
Mr. Crocker has argued cases before the Fifth, Sixth and Eleventh Circuit Courts of Appeal. He is a former board member of the Mid-South Commercial Law Institute, which presents an annual seminar in Nashville on commercial law and bankruptcy issues, and a former board member and past president of the National Association of Bankruptcy Trustees. An authority on bankruptcy and trustee-related matters, Mr. Crocker speaks at bankruptcy seminars and training programs around the country and writes articles for scholarly journals and other bankruptcy publications. Mr. Crocker received his law degree from the University of Mississippi School of Law in Oxford, Miss., and his Bachelor of Arts degree from Vanderbilt University in Nashville.
The U.S. Trustee Program (USTP) is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 8 is headquartered in Memphis, with offices in Nashville and Chattanooga, Tenn., and Louisville and Lexington, Ky.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411President Barack Obama Grants PardonsRead the Press Release
WASHINGTON – Today President Barack Obama granted pardons to the following eight individuals:
Randy Eugene Dyer – Burien, Wash.
Offense: Conspiracy to import marijuana (hashish), 21 U.S.C. § 963; conspiracy to remove baggage from the custody and control of the U.S. Customs Service and convey false information concerning an attempt to damage a civil aircraft, 18 U.S.C. § 371.
Sentence: June 19, 1975; Western District of Washington; five years in prison and two years of special parole (special parole term subsequently vacated.)
Danny Alonzo Levitz - Angola, Ind.
Offense: Conspiracy, 18 U.S.C. § 371.
Sentence: Aug. 18, 1980; Northern District of Indiana; two years of probation, $400 fine.
Michael Ray Neal - Palm Coast, Fla.
Offense: Manufacture, assembly, modification and distribution of equipment for unauthorized decryption of satellite cable programming, 47 U.S.C. § 605(e)(4).
Sentence: May 31, 1991, as amended June 2, 1992; Eastern District of Virginia; six months in prison, three years of supervised release conditioned on six months of home confinement, $2,500 fine.
Edwin Alan North - Wolcottville, Ind.
Offense: Transfer of a firearm without payment of transfer tax, 26 U.S.C. § 5861(e).
Sentence: Aug. 18, 1980; Northern District of Indiana; six months of unsupervised probation.
Allen Edward Peratt Sr. - Sioux Falls, S.D.
Offense: Conspiracy to distribute methamphetamine, 21 U.S.C. §§ 841(a)(1) and 846.
Sentence: July 23, 1990, as amended May 29, 1991; District of South Dakota; 30 months in prison, five years of supervised release.
Christine Marie Rossiter - Lincoln, Neb.
Offense: Conspiracy to distribute less than 50 kilograms of marijuana, 21 U.S.C. §§ 841(a)(1) and 846.
Sentence: Oct. 7, 1992; District of Nebraska; three years of probation conditioned on performance of 500 hours of community service.
Patricia Ann Weinzatl - Prentice, Wis.
Offense: Structuring transactions to evade reporting requirements, 31 U.S.C. § 5324(a)(3).
Sentence: Aug. 15, 2001; Western District of Wisconsin; three years of probation, $5,000 fine.
Bobby Gerald Wilson - S ummerton, S.C.
Offense: Aiding and abetting the possession and sale of illegal American alligator hides (Lacey
Act), 16 U.S.C. § 3373(d)(1)(B) and 18 U.S.C. § 2.
Sentence: Dec. 19, 1985, as amended May 13, 1986; Southern District of Georgia; three and one-half months in prison, five years of probation conditioned on performance of 300 hours of community service.
Massachusetts Man Sentenced to Five Years in Prison for Child Pornography ChargesRead the Press Release
WASHINGTON – Timothy S. Kelly, 40, of North Attleboro, Mass., was sentenced today to five years in prison and five years of supervised release following his prison term for receipt and possession of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the District of Massachusetts Carmen M. Ortiz and Bruce M. Foucart, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Boston.
Kelly was sentenced by U.S. District Court Judge Richard G. Stearns in Boston. On Feb. 23, 2011, Kelly pleaded guilty to four counts of receipt of child pornography and one count of possession of child pornography. In pleading guilty, Kelly admitted to using an online chat program to communicate with and transmit pictures to others in real time. In these chats, Kelly received images of child pornography and discussed his sexual interest in girls between the ages of 8 and 13 years old. During the execution of a federal search warrant at his residence, Kelly admitted to collecting and trading child pornography since 2003. The images he received and possessed included depictions of prepubescent children engaging in sexually explicit conduct. Kelly previously was employed as a swim coach for the Attleboro YMCA and North Attleboro High School.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Michael I. Yoon of the District of Massachusetts and CEOS Trial Attorney Bonnie L. Kane of the Criminal Division, in coordination with the Bristol County District Attorney’s Office. The case against Kelly was investigated by ICE HSI with the North Attleboro Police Department providing significant assistance.