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4 May 2011
Petroleum Distributors to Pay $2.5 Million to Settle Clean Air Act Allegations of Illegal Mixing and Distribution of Gasoline in Colorado and NebraskaRead the Press Release
WASHINGTON – Three gasoline distributors have agreed to pay $2.5 million to resolve claims that they illegally mixed and distributed more than one million gallons of gasoline that did not meet Clean Air Act emissions and fuel quality requirements. The settlement with Rocky Mountain Pipeline System LLC, Western Convenience Stores Inc. and Offen Petroleum Inc., was filed in federal court in Denver today, announced the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA).
Use of gasoline that does not meet the Clean Air Act’s standards for fuel can result in increased emissions from car tailpipes, affect vehicle performance, and in some cases can damage engines and emissions controls. The settling companies will pay a $2.5 million civil penalty and conduct an environmental project designed to offset the harm EPA alleges was caused by their failure to meet federal gasoline quality requirements.
“Providing and distributing gasoline that fails to meet the Clean Air Act standards for fuel can have serious consequences for human health and the environment,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “This settlement appropriately requires that the distributors undertake a project that will result in major annual reductions in emissions of volatile organic compounds in order to offset any harm they may have caused.”
“Complying with the Clean Air Act’s fuel regulations is critical to ensuring that our nation’s important emissions standards are met,” said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "Today’s settlement shows that EPA is committed to protecting the air we breathe by reducing illegal air pollution.”
According to the government’s complaint, at two terminals in Dupont and Fountain, Colo., between 2006 and 2009, the companies produced millions of gallons of illegal gasoline by mixing natural gasoline, a byproduct of natural gas production, and ethanol with gasoline previously certified to meet Clean Air Act requirements. The blended gas was distributed and sold by Western Convenience Stores, Inc. (Western), and Offen Petroleum, Inc. (Offen), at retail gasoline stations in Colorado and Nebraska.
The Clean Air Act allows refiners to produce gasoline by adding other fuel sources to previously certified gasoline, but anyone using this method must ensure that the blended gasoline still meets applicable emissions and fuel standards. They must also comply with sampling, testing, and quality assurance requirements to ensure that the gasoline meets these standards.
The companies’ gasoline blending operations may have resulted in the introduction into the environment of a total of more than 10 tons of excess emissions of volatile organic compounds (VOCs), which can lead to higher levels of ozone. Human exposure to ozone can cause lung damage, aggravate asthma, and cause difficulty breathing. EPA sets gasoline standards to reduce air pollutants from motor vehicles, such as volatile organic compounds, particulate matter, and toxic air pollutants, because they contribute to serious public health and environmental problems. To offset any excess emissions, the companies will install a geodesic dome cover on a gasoline storage tank at one of the terminals where the fuel blending took place. The cover is expected to reduce VOC emissions by more than 8.6 tons annually.
Learn more about this settlement: www.epa.gov/compliance/resources/cases/civil/caa/rockymountainpipeline.html
The consent decree, which is subject to a 30-day public comment period and final court approval, is available at: www.justice.gov/enrd/
Pennsylvania Tax Defier Home Builder and Landlord Convicted of Tax FraudRead the Press Release
HARRISBURG, Pa. – Troy A. Beam was convicted today in the Middle District of Pennsylvania before U.S. District Judge Christopher C. Conner. Beam, a resident of Shippensburg, Pa., was convicted of tax evasion, obstructing and impeding the due administration of the Internal Revenue laws and willful failure to file federal income tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the indictment and evidence at trial, Beam, a former certified public accountant and state auditor in the Pennsylvania Auditor General’s Office, earned substantial sums of income from 1992 to the date of the indictment while operating a home construction business known as “Sunbeam Builders,” as well as owning and operating two real estate businesses known as “Latrobe Leasing” and “Goldstar Property Management” that purchased, rented and sold real estate. Despite earning substantial income from these businesses, as well as other activities, Beam failed to file any federal income tax returns since April 1996, when he filed his 1995 tax return reporting a loss. In April 1996, Beam also filed false amended federal income tax returns for 1992, 1993 and 1994, seeking tax refunds for taxes he previously had paid for those years.
The indictment alleged and the evidence at trial proved that Beam obstructed the IRS in its attempt to calculate and collect his taxes by using numerous sham trusts and other entities, including North Star Investment Holdings Ltd. to hide his income and assets. Beam used North Star to set up a bank account in the Cayman Islands into which he deposited nearly $3 million of income derived from his construction business.
Beam faces up to 12 years in prison, $900,000 in fines and full restitution to the IRS for all back taxes due and owing. Sentencing is scheduled for Aug. 12, 2011.
Principal Deputy Assistant Attorney General John A. DiCicco of the Department of Justice’s Tax Division and Peter J. Smith, U.S. Attorney for the Middle District of Pennsylvania, commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Jorge Almonte and Mark S. McDonald who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.justice.gov/tax.
Michigan Business Owner Pleads Guilty to Tax EvasionRead the Press Release
WASHINGTON – John Walter Kaber, a resident of Bloomfield, Mich., pleaded guilty to tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. The Honorable U.S. District Court Judge Victoria A. Roberts set sentencing for Sept. 20, 2011.
According to the plea agreement, Kaber was the owner of Merchant Processing, a business that installed credit card processing systems. Despite earning substantial income from Merchant Processing and incurring a tax liability on that income, Kaber failed to file timely U.S. Individual Income Tax Returns (IRS Forms 1040) for the 1991 and 2005 tax years. Kaber filed Forms 1040 for the 1992-1996 and 2000-2004 tax years that reflected a tax due and owing, but failed to pay the taxes due. Kaber also failed to pay a portion of the employment taxes for Merchant Processing that were due to the IRS during the 2000-2003 tax years. The defendant’s total tax due and owing to the United States for the 1991-1996 and 2000-2005 tax years, including both income taxes and employment taxes, is more than $868,000.
According to the plea agreement, in order to carry out his tax evasion scheme and to conceal his assets from the IRS, the defendant, among other things, used his wife’s name to purchase and refinance two parcels of real property and to purchase a boat, boat slip and vehicle. Kaber also sought to prevent the IRS from collecting unpaid taxes from his bank accounts by, among other things, cashing checks rather than depositing them in the bank, depositing business receipts into his wife’s checking account, and removing his name from a joint bank account after it became subject to an IRS levy.
On Nov. 6, 2007, the U.S. District Court for the Eastern District of Michigan entered a judgment against the defendant for his unpaid 1991-1996 taxes.
This case is being prosecuted by Tax Division trial attorney Melissa Siskind and was investigated by the IRS-Criminal Investigation Division. Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax/index.html .
Houston Federal Jury Convicts Four Defendants in Connection <br /> with $5.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – A federal jury in Houston convicted four defendants today in connection with a $5.2 million Medicare fraud scheme that operated from April 2006 to August 2009, announced the Departments of Justice and Health and Human Services (HHS), the FBI and the Texas Attorney General.
Ezinne Ubani, 46, of Houston, and Mary Ellis, 55, of Missouri City, Texas, were each convicted of one count of conspiring to commit health care fraud, and two counts of making false statements for use in determining rights for benefit and payment by Medicare. Ellis was also convicted of one count of conspiring to receive illegal kickbacks for referring Medicare beneficiaries, and three counts of receiving illegal kickbacks for referring Medicare beneficiaries.
Caroline Njoku, 45, of Houston, was convicted of one count of conspiring to commit health care fraud and one count of conspiring to receive kickbacks for referring a Medicare beneficiary. Njoku was found not guilty of one count of receiving illegal kickbacks for referring a Medicare beneficiary. Terrie Porter, 47, of Houston, was convicted of one count of conspiring to receive illegal kickbacks for referring a Medicare beneficiary and one count of illegally receiving a kickback for referring a Medicare beneficiary. Estella Joseph, 62, of Houston, was found not guilty of one count of conspiring to receive kickbacks for referring a Medicare beneficiary, and not guilty of one count of receiving an illegal kickback for referring a Medicare beneficiary
The four defendants were convicted after a 15-day trial before U.S. District Court Judge Nancy Atlas in Houston. According to the evidence presented at trial, Family Healthcare Group, a Houston home health care company, purported to provide skilled nursing to Medicare beneficiaries. Family Healthcare Group hired Njoku, Ellis, Porter and other co-conspirators to recruit Medicare beneficiaries for the purpose of filing claims with Medicare for skilled nursing that was medically unnecessary and/or not provided. After the Medicare beneficiaries were recruited, Ubani, a registered nurse, and other co-conspirators fraudulently signed plans of care stating that the beneficiaries needed home health care when in fact they knew the beneficiaries were not home-bound and not in need of skilled nursing.
Ubani’s husband, Clifford, and Njoku’s husband, Princewill, were co-owners of Family Healthcare Group and they both previously pleaded guilty to conspiring to commit healthcare fraud and conspiring to paying illegal kickbacks for referring Medicare beneficiaries. Additionally, Adelma Casas-Sevilla, a registered nurse employed by Family Healthcare Group, previously pleaded guilty to conspiring to commit healthcare fraud. Sammie Wilson and Cynthia Garza-Williams, both patient recruiters for Family Healthcare Group, also pleaded guilty to conspiring to commit healthcare fraud. Erica Walker and Florida Holiday Island, both patient recruiters for Family Healthcare Group, pleaded guilty to conspiring to receive illegal kickbacks for referring a Medicare beneficiary and illegally receiving a kickback for referring a Medicare beneficiary. Family Healthcare Group is no longer in business.
At sentencing, scheduled for July 20 and 21, 2011, the defendants face maximum penalties of 10 years in prison for the health care fraud conspiracy count; five years in prison for making false statements for use in determining rights for benefit and payment by Medicare; 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.
Today’s guilty verdicts were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Special Agent-in-Charge Richard C. Powers of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations; and Texas Attorney General Greg Abbott.
This case is being prosecuted by Trial Attorneys Charles D. Reed and Sarah Hall, and Assistant Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants 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 .
Federal Officials Close the Investigation Involving Pittsburgh Bureau of Police OfficersRead the Press Release
WASHINGTON - The Justice Department announced today that it will not pursue criminal charges against three Pittsburgh Bureau of Police officers in connection with the events of Jan. 12, 2010, involving former Pittsburgh School for the Creative and Performing Arts (CAPA) student Jordan Miles.
Officials from the U.S. Attorney’s Office for the Western District of Pennsylvania, the Justice Department’s Civil Rights Division and the FBI met today with Jordan Miles and his family to inform them of the decision.
The U.S. Attorney’s Office , the Civil Rights Division and the FBI, working together, conducted an exhaustive review of the incident, which included interviews of more than 40 witnesses, some on multiple occasions, visits to the scene and careful review of all police reports, medical records, photographs, laboratory reports, cell phone records and other documentation related to the incident. After thorough review of all of the evidence, experienced federal officials concluded that there was insufficient evidence to prove beyond a reasonable doubt a violation of the applicable federal criminal civil rights statutes.
Under the applicable federal criminal civil rights laws, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right. Proving “willfulness” is a heavy burden, and means that it must be proven that the officer acted with the deliberate and specific intent to do something the law forbids. To act “willfully,” for purposes of the federal statute, means to act with a bad purpose to disobey or disregard the law. Neither negligence, accident, mistake, fear nor bad judgment is sufficient to establish such a criminal violation. After a lengthy, independent and thorough review consuming hundreds of hours of agent and prosecutor time, federal officials determined that the evidence was insufficient to prove a federal civil rights violation, beyond a reasonable doubt, against any of the Pittsburgh Bureau of Police officers.
The Justice Department is committed to investigating allegations of excessive force by law enforcement officers and will continue to devote the resources necessary to ensure that all allegations of serious civil rights violations are fully and completely investigated.
Chief Engineer Pleads Guilty in Maryland to Obstructing Investigation into the Illegal Overboard Discharge of Oily WasteRead the Press Release
WASHINGTON – Dimitrios Grifakis, 57, of Kallithea, Greece, pleaded guilty today in federal court in Baltimore to obstructing a Coast Guard inspection that took place aboard the M/V Capitola from May 3 to May 11, 2010. Grifakis was then the Chief Engineer of the Capitola.
The guilty plea was announced by U.S. Attorney for the District of Maryland Rod J. Rosenstein; Ignacia S. Moreno, Assistant Attorney General, Environment & Natural Resources Division, U.S. Department of Justice; Rear Adm. Dean Lee, Commander of the U.S. Coast Guard's 5th District; Special Agent in Charge Otis E. Harris, Jr. of the Coast Guard Investigative Service-Chesapeake Region; and Acting Special Agent in Charge Christian Spangenberg of the Environmental Protection Agency’s (EPA) Criminal Investigation Division.
According to Grifakis’ guilty plea and other court documents, the investigation into the M/V Capitola was launched on May 3, 2010, at the Port of Baltimore, after a crew member informed a clergy member, who was on board the Capitola on a pastoral visit, that there had been “monkey business in the engine room,” which involved a “magic pipe.” The “magic pipe” proved to be a bypass hose that allowed the dumping of waste oil overboard, circumventing pollution prevention equipment required by law. The crew member asked the minister to alert the Coast Guard which triggered an inspection of the Capitola.
Grifakis admitted that from about March 2009 through May 3, 2010, he ordered his subordinates to illegally pump oil-contaminated waste directly into the ocean, most commonly through the “magic pipe.” However, during the investigation, Grifakis falsely denied having ordered anyone to pump oily waste overboard and falsified documents to hide these discharges from inspectors in ports visited by the Capitola.
Every ship that enters the U.S. is required to have an accurate Oil Record Book that records the ship’s operation related to oil, including the handling and disposal of oil contaminated waste. Grifakis intentionally presented an Oil Record Book to the U.S. Coast Guard that was intentionally falsified to conceal the illegal overboard discharges of oil contaminated waste.
Grifakis also obstructed the investigation by denying that the Capitola had a Daily Sounding Record, which is a daily measurement of the contents of the ship’s waste tanks. This record would have been useful during the Coast Guard’s inspection of the Capitola in that it could have shown when the levels of the waste tanks changed, which could be compared to entries in the Oil Record Book. Sudden, unexplained drops in the measurements could have indicated specific dates when wastes were discharged overboard. The Daily Sounding Record was not produced to the Coast Guard. Grifakis also directed other members of the engine room crew to lie to investigators and claim that the Capitola did not have a daily record of soundings.
In a related case, Cardiff Marine Inc., a Liberian-registered shipping company pleaded guilty to a felony violation of the Act to Prevent Pollution from Ships and was sentenced to pay a $2.4 million fine, and to serve three years probation, subject to an environmental compliance plan that includes audits by an independent third party auditor.
This prosecution was made possible through the combined efforts of the U.S. Coast Guard Sector-Baltimore, the Coast Guard Investigative Service-Baltimore, Coast Guard Fifth District Legal Office, Coast Guard Office of Maritime and International Law, Coast Guard Office of Investigations and Analysis, EPA Criminal Investigation Division with assistance from U.S. Customs and Border Protection. The cases were prosecuted by Justin S. Herring, Assistant U.S. Attorney in Maryland and Thomas T. Ballantine, Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
3 May 2011
United States Sues Deutsche Bank and Subsidiary MortgageIT for Years of Reckless Lending PracticesRead the Press Release
NEW YORK – The United States has filed a civil mortgage fraud lawsuit against Deutsche Bank AG and its wholly owned subsidiary, MortgageIT Inc. The government’s complaint seeks damages and civil penalties under the False Claims Act for repeated false certifications made to the U.S. Department of Housing and Urban Development (HUD) in connection with the residential mortgage origination and sponsorship practices of MortgageIT. To date, the Federal Housing Administration (FHA) has paid insurance claims on more than 3,100 mortgages, totaling $386 million, for mortgages endorsed by MortgageIT.
Today’s announcement was made by Preet Bharara, U.S. Attorney for the Southern District of New York; Tony West, Assistant Attorney General for the Justice Department’s Civil Division; Helen Kanovsky, General Counsel of HUD; and Michael P. Stephens, Acting Inspector General of HUD.
According to the government’s complaint filed today in Manhattan federal court: Between 1999 and 2009, MortgageIT was an approved direct endorsement lender, and endorsed more than 39,000 mortgages for FHA insurance, totaling more than $5 billion in underlying principal obligations. These mortgages were highly marketable for resale to investors because they were insured by the full faith and credit of the United States. MortgageIT and Deutsche Bank, which acquired MortgageIT in January 2007, made substantial profits through the resale of these endorsed FHA-insured mortgages.
According to the complaint, MortgageIT repeatedly made false certifications to HUD to obtain approval of mortgages that MortgageIT underwriters wrongfully endorsed for FHA insurance. These mortgages were not eligible for FHA insurance under HUD rules. Notwithstanding the mortgages' ineligibility, underwriters at MortgageIT endorsed the mortgages by falsely certifying that they had conducted the due diligence required by HUD rules when, in fact, they had not. By endorsing ineligible mortgages and falsely certifying compliance with HUD rules, MortgageIT wrongfully obtained approval of these ineligible mortgages for FHA insurance, thereby putting millions of FHA dollars at risk.
In addition, according to the complaint, MortgageIT and Deutsche Bank never implemented the quality control procedures required of direct endorsement lenders, but falsely certified to HUD that MortgageIT had the required procedures in place. On various occasions when HUD discovered evidence that MortgageIT was violating the quality control requirement, MortgageIT falsely stated the failures had been corrected.
The government’s complaint seeks treble damages and penalties under the False Claims Act for the insurance claims already paid by HUD for mortgages wrongfully endorsed by MortgageIT through the false statements of Deutsche Bank and MortgageIT. In addition, the United States seeks compensatory and punitive damages under the common law theories of breach of fiduciary duty, gross negligence, negligence and indemnification for the insurance claims that HUD expects to pay in the future for mortgages wrongfully endorsed by MortgageIT as a result of Deutsche Bank’s and MortgageIT’s false statements.
“Many working families count on FHA’s mortgage insurance program to help them achieve the dream of home ownership,” said Assistant Attorney General West. “According to our complaint, these lenders put millions of dollars of taxpayer funds at risk and violated the integrity of this important program by making false certifications to HUD.”
“As alleged, MortgageIT and Deutsche Bank ignored every type of red flag and breached every duty of due diligence before underwriting thousands of federally insured mortgages,” said U.S. Attorney Bharara. “While the homes the defendants issued loans for may have been built on solid ground, the defendants’ lending practices were built on quicksand. Ultimately, prudence was trumped by profit, and good faith took a back seat to good fees. This is exactly the kind of misconduct that our Civil Frauds Unit was created to combat.”
Background on FHA Mortgage Insurance
FHA mortgage insurance makes home ownership possible for millions of American families by protecting lenders against defaults on mortgages, thereby encouraging lenders to make loans to borrowers who might not be able to meet conventional underwriting requirements. To assist as many qualified homeowners as possible, FHA operates a direct endorsement lender program, which grants participating lenders the authority to endorse mortgages that are qualified for FHA insurance. Direct endorsement lenders act as fiduciaries of HUD in underwriting mortgages and endorsing them for FHA insurance. The integrity of the program requires these direct endorsement lenders to carefully review mortgages to ensure compliance with HUD rules and underwriting standards. These lenders are entrusted with safeguarding the public from taking on risks that exceed statutory and regulatory limits.
To qualify as a direct endorsement lender, a lender must implement a quality control plan. Every direct endorsement lender must submit a certification to HUD for each mortgage the lender endorses, stating that the lender has conducted due diligence in accordance with all HUD rules.
“We don’t tolerate fraud in FHA’s mortgage insurance business,” said HUD General Counsel Kanovsky. “Each and every lender has a responsibility to properly underwrite mortgages not only to protect FHA's insurance fund but those families who depend on the FHA mortgage insurance program to provide them safe and sustainable mortgage financing.”
“The Department of Housing and Urban Development Office of Inspector General is committed to aggressively pursuing, in cooperation with our law enforcement partners, those who would seek to damage our nation’s important housing programs,” said HUD Acting Inspector General Stephens. “In today's trying economic times, it is all the more important to protect those programs, such as the FHA’s, which are so critical to our fragile recovery and to our country’s citizenry.”
The case is being handled by the U.S. Attorney’s Civil Frauds Unit, with assistance from the Commercial Litigation Branch, Civil Division.
Today’s lawsuit was brought in coordination with President Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Two Miami-Area Corporations Plead Guilty to More Than <br /> $200 Million Medicare FraudRead the Press Release
WASHINGTON - Two Miami-area corporations, American Therapeutic Corporation (ATC) and Medlink Professional Management Group Inc., pleaded guilty today in U.S. District Court in Miami for a fraud scheme that resulted in the submission of more than $200 million in fraudulent claims to Medicare, the Departments of Justice and Health and Human Services (HHS) announced.
According to court documents, ATC is a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando, Fla. A PHP is a form of intensive treatment for severe mental illness. Medlink is a Florida corporation headquartered in Miami that purported to act as a “management company” for health care businesses. In reality, ATC and a related company, the American Sleep Institute (ASI), were Medlink’s only clients. ATC and Medlink are each charged with conspiracy to commit health care fraud in a superseding indictment unsealed on Feb. 15, 2011. ATC is also charged in the superseding indictment with health care fraud and conspiracy to defraud the United States and to pay and receive illegal health care kickbacks.
“ATC and Medlink, and their owners, have now pleaded guilty to perpetrating a massive $200 million Medicare fraud scheme in South Florida,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “The fraud scheme was staggering in scope, and those who concocted the scheme exhibited a complete disregard for the elderly, infirm and disabled victims who were used to commit it. Today’s guilty pleas mark an important step forward in our effort to hold accountable everyone -- and every entity -- involved in the scheme, and to recover the maximum amount possible on behalf of American taxpayers.”
“The defendants altered patient files, diagnoses and medication types and levels to make it appear that patients being treated qualified for PHP treatments,” said U.S. Attorney Wifredo Ferrer for the Southern District of Florida. “This was done so that the defendants could fraudulently bill Medicare for more than $200 million in medically unnecessary services. We are pleased to have put these unscrupulous operators out of business.”
“No matter what the scheme or how elaborately it was disguised, personal and corporate greed by these two corporations and their owners defrauded taxpayers of millions of dollars,” said Special Agent in Charge John V. Gillies of the FBI’s Miami Field Office. “Ultimately, health care fraud robs from the elderly and disabled.”
“ATC and Medlink shared a common business model: the systematic defrauding of American taxpayers. Now these companies are out of business and they’ll pay for their crimes.” said Daniel R. Levinson, HHS Inspector General. “Investigators from my office will continue to keep the heat on health care criminals whose victims are the most vulnerable in society.”
Marianella Valera, the president of ATC, and Lawrence S. Duran, the president of Medlink, entered the pleas on behalf of the two corporations before Magistrate Judge Barry L. Garber in Miami. Valera and Duran each pleaded guilty on April 14, 2011, to all counts charged against them individually in the superseding indictment. The superseding indictment charged Duran with 38 felony counts and Valera with 21 felony counts, including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements.
In pleading guilty on behalf of the companies, Duran and Valera admitted that the corporate entities together, and along with individuals, executed a scheme to defraud Medicare beginning in 2002 and continuing until they were arrested in October 2010. Duran and Valera also admitted that they used ASI to submit fraudulent Medicare claims.
Specifically, according to the superseding indictment, Duran, Valera and others caused the alteration of patient files and therapist notes for the purpose of making it appear, falsely, that patients being treated by ATC qualified for PHP treatments. According to court documents, Duran and Valera also instructed employees and doctors to alter diagnoses and medication types and levels to make it falsely appear that ATC patients qualified for PHP services. The superseding indictment also charges that Duran, Valera and their co-conspirators caused doctors to refer ATC patients to ASI even though the patients did not qualify for sleep studies.
According to court filings, Duran, Valera and others paid kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. In some cases, the patients received a portion of those kickbacks. The defendants and their co-conspirators actively recruited ALF and halfway house owners and operators and patient brokers to participate in this kickback scheme. Throughout the course of the ATC and ASI conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries, who did not qualify for PHP services, attending treatment programs that were not legitimate PHP programs. This was done so that ATC and ASI could bill Medicare for more than $200 million in medically unnecessary services.
According to court documents, Duran, Valera and others used Medlink to conceal the health care fraud and kickbacks from Medicare and law enforcement. Once Medicare paid ATC and ASI for the fraudulently billed services, Duran, Valera and others transferred millions of dollars to Medlink. The superseding indictment and a related indictment charge individuals, including Duran and Valera, with using Medlink to distribute those millions of dollars to shell corporations and individuals with the purpose of laundering the money into cash to pay kickbacks.
Sentencing for the two corporations is scheduled for July 13, 2011, at 9:30 a.m. The two corporations, which have been out of business since the arrests of their owners in October 2010, face maximum financial penalties of more than $80 million, the amount paid by Medicare as a result of this scheme. The corporations’ assets were frozen in October 2010 through civil forfeiture proceedings.
Co-conspirator Margarita Acevedo, also charged in the February 2011 superseding indictment, pleaded guilty on April 7, 2011, for her role in the fraud scheme. Trial against a fourth individual charged in the superseding indictment, Judith Negron, is scheduled to begin Aug. 1, 2011. An indictment is merely an allegation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Today’s guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The criminal case is being prosecuted by Trial Attorneys Jennifer L. Saulino and Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The related civil action is being handled by Vanessa I. Reed and Carolyn B. Tapie of the Justice Department’s Civil Division and Assistant U.S. Attorney Ted L. Radway of the Southern District of Florida. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Pittsburgh Crips Leader Sentenced to 20 Years <br /> in Prison on Racketeering ChargesRead the Press Release
WASHINGTON – Bryant Mathis, who served in a leadership role as a member of a Pittsburgh Crips street gang, was sentenced today in federal court in Pittsburgh to 20 years in prison on charges of conspiring to conduct a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Mathis, 23, aka “Lil B,” pleaded guilty, before Senior U.S. District Judge Gustave Diamond, on Jan. 18, 2011, to one count of conspiracy to engage in a racketeering conspiracy.
According to court documents and information presented in court, Mathis and other members of the conspiracy 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 intimidation of victims and witnesses.
According to court documents, Mathis was a member of the Brighton Place Crips, a criminal street gang that controlled an area of Brighton Place, Morrison Street, also known as the Mad Cave, and Federal Street in the Northside area of Pittsburgh. The Brighton Place Crips were formed in the early 1990s and in approximately 2003, it formed an alliance with the Northview Heights/Fineview Crips. This alliance expanded the gang’s drug trafficking territory, and increased the number of members and associates of the enterprise available to preserve and protect the power, territory and profits of the enterprise through violence.
The gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees, bond, jail commissary accounts and support of incarcerated members’ families.
In addition, the Brighton Place/Northview Heights Crips gang maintains an ongoing rivalry with other Northside street gangs such as the Manchester Original Gangsters. According to information presented in court, these gangs have been involved in multiple retaliatory shootings. Brighton Place/Northview Heights Crips gang members often identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc” and “G.K.”
According to evidence presented in court at today’s sentencing hearing, Mathis referred to himself in letters he sent from prison as a “Ho-town Killa,” a reference to the Crips rivalry with the Hoodtown Mafia, a Northside gang. In recorded telephone conversations played in court at today’s hearing, Mathis threatened an eyewitness to the April 2008 murder of Mathis’ uncle. The eyewitness, formerly a sheriff’s deputy in North Carolina, was visiting Mathis’ uncle in Pittsburgh at the time of the murder. Mathis threatened the sheriff’s deputy that he had better not cooperate with the police in the investigation of his uncle’s killer, stating that they need to “keep it gangster” and handle the issue on the streets. In a subsequent telephone conversation, Mathis discussed seeking retribution for this uncle’s murder by shooting “anybody in Hoodtown…kids, babies whoever.”
According to court documents Mathis was considered a respected member and leader of the enterprise, due to his reputation for violence, as well as his ability to instruct other members as to how to conduct the affairs of the enterprise.
Mathis is one of the 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 2007. 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.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s Gang Unit. 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.
BP Exploration Alaska to Pay $25 Million Penalty for Alaskan North Slope Oil SpillRead the Press Release
WASHINGTON – BP Exploration Alaska, Inc. (BP Alaska) will pay a $25 million civil penalty and carry out a system-wide pipeline integrity management program as part of a settlement for spilling more than 5,000 barrels of crude oil from the company’s pipelines on the North Slope of Alaska in 2006, the U.S. Department of Justice, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) announced today. The penalty is the largest per-barrel penalty to date for an oil spill.
“This penalty should serve as a wake-up call to all pipeline operators that they will be held accountable for the safety of their operations and their compliance with the Clean Water Act, the Clean Air Act and the pipeline safety laws,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Companies like BP Alaska must understand that they can no longer afford to ignore, neglect or postpone the proper monitoring and maintenance of their pipelines. This agreement will help prevent future environmental disasters and protect the fragile ecosystem of Alaska’s North Slope.”
“This penalty is a stern reminder to pipeline operators to follow orders issued by PHMSA or risk a federal civil lawsuit and steep fines,” said PHMSA Administrator Cynthia L. Quarterman. “Also, it is a warning that operators must know, test and maintain their pipelines or risk harming people and the environment and having to spend, as in this instance, hundreds of millions of dollars replacing those pipelines.”
“Today’s settlement with BP Alaska imposes a tough penalty and requires the company to take action to prevent future pipeline oil spills on the Alaska North Slope,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “The Clean Water Act gives the U.S. authority to assess higher penalties when oil spills are the result of gross negligence, and this case sends a message that we intend to use that authority and to insist that BP Alaska and other companies act responsibly to prevent pipeline oil spills.”
“BP Alaska admits that it cut corners and failed to do what was required to adequately maintain its pipelines,” said Karen Loeffler, U.S. Attorney for the District of Alaska. “The penalty reflects the seriousness of the conduct. The consent decree is important to ensure that BP Alaska implements changes that will prevent spills like this in the future. The Department of Justice and the United States Attorney's office for the District of Alaska are committed to strong enforcement of our environmental laws."
In March 2006, BP Alaska spilled approximately 5,054 barrels of crude oil on the North Slope in Alaska. A second spill occurred in August 2006, spilling approximately 24 barrels of crude oil. Investigators from EPA and PHMSA determined that the spills were a result of BP Alaska’s failure to properly inspect and maintain the pipeline to prevent corrosion. PHMSA issued a Corrective Action Order (CAO) to BP Alaska that addressed the pipeline’s risks and ordered pipeline repair or replacement. When BP Alaska did not fully comply with the terms of the corrective action, PHMSA referred the case to the Department of Justice. Today’s settlement also addresses Clean Air Act violations arising out of BP Alaska’s improper asbestos removal along the pipeline in the aftermath of the spill.
Today’s settlement requires BP Alaska to develop a system-wide program to manage pipeline integrity for the company’s 1600 miles of pipeline on the North Slope based on PHMSA’s integrity management program. The program will address corrosion and other threats to these oil pipelines and require regular inspections and adherence to a risk-based assessment system. The program will cost an estimated $60 million over three years and is in addition to the approximately $200 million BP Alaska has already spent replacing the lines that leaked on the North Slope.
Of the $25 million penalty, $20.05 million will be deposited in the Oil Spill Liability Trust Fund established under the Clean Water Act. The remainder, $4.95 million, will be paid to the U.S. Treasury. The funds paid to the Oil Spill Liability Trust Fund will be used to finance federal response activities and provide compensation for damages sustained from future discharges or threatened discharges of oil into water or adjoining shorelines. Oil spills are known to cause both immediate and long-term harm to human health and ecosystems, including the suffocation of wildlife and the contamination of nesting habitats.
In 2007, BP Alaska pleaded guilty to one misdemeanor violation of the Clean Water Act for the March 2006 spill and was sentenced to three years probation, ordered to pay a $20 million criminal penalty, including a $12 million fine, $4 million to the National Fish and Wildlife Foundation to support research and activities on the North Slope and pay $4 million in restitution to the state of Alaska.
The consent decree, which is subject to a 30-day public comment period and final court approval, is available at: www.justice.gov/enrd/ .
More information on the settlement: www.epa.gov/compliance/resources/cases/civil/cwa/bpnorthslope.html.
2 May 2011
Stock Promoters Indicted for Conspiracy in Stock Manipulation SchemeRead the Press Release
WASHINGTON – Three stock promoters have been indicted for their roles in a stock manipulation scheme that defrauded investors, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Chief Postal Inspector Guy Cottrell of the U.S. Postal Inspection Service (USPIS) and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
Timothy Barham Jr., 43, of Henderson, Tenn.; Nathan Montgomery, 30, of Henderson, Nev.; and Ryan Reynolds, 39, of Dallas, were each charged in a superseding indictment filed on April 28, 2011, in U.S. District Court for the Southern District of Florida. On April 29, 2011, Barham was arrested in Henderson, Tenn., and Montgomery was arrested in Las Vegas. Reynolds, who was in custody on previously filed civil charges, made his initial appearance today in U.S. District Court in Dallas.
The superseding indictment charges Barham, Montgomery and Reynolds each with one count of conspiracy to commit securities fraud, wire fraud and mail fraud. The superseding indictment also charges six individuals who were originally indicted in February 2010 for their roles in the fraud scheme: Jonathan Randall Curshen, 46, of Sarasota, Fla.; Michael Simon Krome, 49, Long Island, N.Y.; Ronald Salazar Morales, aka “Ronny Salazar,” 39, of Costa Rica; Robert Lloyd Weidenbaum, 44, of Miami; and Eric Ariav Weinbaum, 37, and Izhack Zigdon, 47, both of Israel.
According to the superseding indictment, Curshen was the principal behind Red Sea Management and Sentry Global Securities, two companies located in San Jose, Costa Rica, that provided offshore accounts and facilitated trading in penny stocks. The superseding indictment alleges that Weinbaum and Zigdon took control of the outstanding shares of a company called CO2 Tech (ticker CTTD), which traded in the over-the-counter market through listings on Pink Sheets, an inter-dealer electronic quotation and trading system. Weinbaum and Zigdon allegedly obtained the shares by retaining Krome, a securities attorney. Krome allegedly evaded federal securities registration requirements in order to provide co-conspirators with millions of unregistered and “free-trading” shares of CO2 Tech that the co-conspirators could not have otherwise legally obtained.
The superseding indictment alleges that the shares were subsequently sold to the general investing public by Weinbaum, Zigdon, Curshen and Salazar, a Sentry Global stock trader, through Sentry Global’s stock trading floor. According to court documents, the defendants concealed from the investing public the actual financial condition and business operations of CO2 Tech by evading the registration requirements. The superseding indictment also alleges that Weidenbaum, Reynolds, Montgomery and Barham coordinated trades by purchasing shares of CO2 Tech on the open market from Curshen, Weinbaum, and Salazar. Weidenbaum was allegedly paid approximately $1 million by Weinbaum and Zigdon to participate in sham stock trades of CO2 Tech to make it appear that there were genuine investors in the market that were buying the shares.
As alleged in the superseding indictment, coordinated trades were often made between the co-conspirators in conjunction with the issuance of false and misleading press releases that were designed to make CO2 Tech appear that it had significant business prospects. According to these press releases, CO2 Tech purported to have a business relationship with Boeing to reduce polluting gases emitted from airplanes. The superseding indictment alleges that these relationships never existed.
After fraudulently “pumping” the market price and demand for CO2 Tech stock through these press releases and coordinated trades, Weinbaum, Curshen, Salazar, Reynolds, Montgomery and Barham allegedly “dumped” shares by selling them for large profits to the general investing public in the over-the-counter market through listings on Pink Sheets. These shares were allegedly purchased by unsuspecting investors, including in the Southern District of Florida, and were often rendered virtually worthless.
The superseding indictment further alleges that Curshen and Salazar engaged in a conspiracy to commit money laundering. Curshen, through Red Sea and Sentry Global, allegedly established domestic and offshore bank accounts through which the proceeds of stock manipulation schemes flowed. The superseding indictment alleges that Curshen and Salazar used these accounts to conceal the origin and ownership of the ill-gotten gains from these schemes.
The defendants are all charged with one count of conspiracy to commit securities, mail and wire fraud. Additionally, as in the original indictment, the superseding indictment charges Krome with one count of securities registration violation, one count of obstruction of justice and one count of wire fraud. Weinbaum and Zigdon also continue to be charged with three counts of wire fraud. In addition, Curshen and Salazar each are charged with two counts of mail fraud, and Weidenbaum and Weinbaum each are charged with one count of mail fraud. The superseding indictment also charges Curshen and Salazar with one count of conspiracy to commit money laundering. The superseding indictment seeks forfeiture in the amount of $7 million.
The fraud conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine. Each count of wire fraud and mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. The securities registration violation carries a maximum penalty of five years in prison and a $10,000 fine and the obstruction count carries a maximum penalty of 20 years in prison and a $250,000 fine. The money laundering conspiracy charge carries a maximum penalty of 20 years in prison.
Curshen, Krome, Salazar, Weinbaum, Zigdon and Weidenbaum were also charged by the Securities and Exchange Commission in February 2010 in a related civil matter.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
The case was investigated by the FBI’s Washington Field Office and the USPIS. The case is being prosecuted by Trial Attorneys N. Nathan Dimock and Rina Tucker Harris of the Criminal Division’s Fraud Section. The U.S. Attorney’s Office for the Southern District of Florida provided significant assistance in this case. The Department of Justice acknowledges the significant assistance of the Financial Industry Regulatory Authority (FINRA) and the SEC in its investigation. The Criminal Division’s Office of International Affairs and Costa Rican authorities also provided assistance.
Today’s charges are part of efforts underway by the Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Statement of the Department of Justice’s Antitrust Division on Its Decision to Close Its Investigation of Perdue’s Acquisition of Coleman Natural FoodsRead the Press Release
WASHINGTON – The Department of Justice’s Antitrust Division issued the following statement today after announcing the closing of its investigation into the proposed acquisition by Perdue Farms Inc.’s parent company, FPP Family Investments, of Coleman Natural Foods:
The Antitrust Division obtained extensive information from Perdue, Coleman and a wide range of market participants, including interviews of customers, chicken processors and more than 100 chicken growers. After a thorough review of the evidence, the division concluded that the facts did not support challenging the proposed transaction.
Although the Antitrust Division concluded that it could not prove that this particular transaction would likely cause harm, the division will continue to be vigilant in the enforcement of the antitrust laws to protect competition in agricultural markets.
The division’s investigation focused on the potential effect of the transaction on competition among chicken processors, also known as integrators, for the purchase of services from chicken growers.
The department said that mergers of competing buyers can enhance market power on the buying side of a market, raising significant antitrust concerns. For example, a merger may anticompetitively reduce the number of processors that purchase grower services in a particular region, allowing the merged firm to depress prices paid to growers. Such a concern was not an issue in this case as Perdue’s and Coleman’s facilities do not overlap in any local region. Coleman’s processing plants are located in Fredericksburg, Pa.; Petaluma, Calif.; and Mount Vernon, Wash. Perdue has a number of processing plants on the East Coast, but its closest plant is 150 miles from Coleman’s plant in Fredericksburg. It has no plants on the West Coast.
Under certain circumstances, mergers can make coordination more likely, the department said. In light of the Antitrust Division’s experience with this industry, the division looked closely at this transaction and considered whether it might increase the possibility of coordination under several theories, including a “multi-market contact” theory which provides that firms may find it more feasible to coordinate on terms, such as payment for grower services, as they interact in more numerous regions.
The transaction would add an additional region – the area around Coleman’s Fredericksburg plant – in which Perdue will compete with another major chicken processor for chicken grower services. The division, however, concluded that this additional point of contact was not likely to increase the risk of coordination due to a number of conditions particular to this specific investigation.
Coordinated effects will continue to be an area of division focus in merger review where the facts suggest it and especially for markets where participants have raised concerns about whether markets are working competitively. While the multi-market contact theory did not apply given the specific facts of this matter, the division will continue to consider its application in future transactions, especially those involving agricultural markets where processors interact in numerous local markets for the purchase of goods or services from producers.
In 2010, the Department of Justice and the U.S. Department of Agriculture (USDA) held joint workshops to hear from market participants about competition-related issues in various agriculture industries, including concerns raised by chicken growers about the impact of concentration in poultry processing. The department continues to work with USDA on these important issues.
FPP Family Investments and Perdue are both headquartered in Salisbury, Md. Perdue is the third largest processor of conventional chicken in the United States, with annual revenues of more than $4 billion. Coleman, headquartered in Golden, Colo., processes natural, antibiotic free and organic chicken, with annual revenues of more than $400 million. It does not process conventional chicken.
The division provides this statement under its policy of issuing statements concerning the closing of investigations in appropriate cases. This statement is limited by the division’s obligation to protect the confidentiality of certain information obtained in its investigations. As in most of its investigations, the division’s evaluation has been highly fact-specific, and many of the relevant underlying facts are not public. Consequently, readers should not draw overly broad conclusions regarding how the division is likely in the future to analyze other collaborations or activities, or transactions involving particular firms. Enforcement decisions are made on a case-by-case basis, and the analysis and conclusions discussed in this statement do not bind the division in any future enforcement actions. Guidance on the division’s policy regarding closing statements is available at www.usdoj.gov/atr/public/guidelines/201888.htm.
Justice Department Reaches Agreement with Arizona Medical Center to Ensure Effective Communication with Individuals Who Are Deaf or Hard of HearingRead the Press Release
WASHINGTON – The Justice Department reached a settlement agreement with the Yavapai Regional Medical Center in Prescott and Prescott Valley, Ariz., to resolve an investigation into the policies and procedures for effective communication with individuals who are deaf or hard of hearing at the medical center.
The complaint alleged that the medical center discriminated against individuals on the basis of disability by requiring them to sign a waiver of liability as a condition for the use of sign language interpreters. Title III of the Americans with Disabilities Act (ADA) prohibits discrimination on the basis of disability, including hearing disabilities, in hospitals.
With full cooperation from the center, the Department of Justice conducted an extensive investigation of the center’s policies and procedures with regard to the provision of auxiliary aids and services to ensure effective communication with patients and companions with disabilities. The department gathered evidence indicating that the center’s policies, procedures and trainings were not adequately addressing effective communication with patients and companions, including the appropriate use of video remote interpreting service. The center quickly took corrective steps to ensure effective communication, and voluntarily entered into the settlement agreement.
“All individuals have a right to go to the hospital and communicate with medical staff without having to sign a waiver of liability, and hospitals have a responsibility to ensure that individuals get effective communication,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “I applaud the medical center for working with us to address this matter, and we hope this agreement is a reminder for other hospital and health care providers about the requirements of the ADA.”
“Proper medical care depends on effective communication – and hospital officials are the key to making that happen. That’s why the Obama Administration is committed to ensuring all individuals in this country can go to the hospital and communicate effectively with staff in order to receive proper medical care,” said Dennis K. Burke, U.S. Attorney for the District of Arizona. “To hospitals: Take the appropriate steps to ensure effective communication.”
According to the agreement, the center will ensure that individuals who are deaf or hard of hearing receive a benefit equal to that provided to others, and to ensure that appropriate auxiliary aids and services, including qualified interpreters, will be provided where necessary to afford effective communication between the center and individuals. To that end, the center has agreed, among other things, to improve its policies and procedures concerning effective communication, conduct training of all center staff on discrimination and effective communication, and provide annual compliance reports to the department for the next three years.
The enforcement of the ADA is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt .
Justice Department Files Motion to Ensure That Mississippi School District Complies with Desegregation OrdersRead the Press Release
WASHINGTON – The Department of Justice announced that it has asked the federal court overseeing a longstanding desegregation case against the school district in Cleveland, Miss., to enforce the previously-entered desegregation orders governing the district and compel the district’s compliance with federal law.
In a motion filed with the court today, the United States alleges that the school district has failed to dismantle the vestiges of segregation in its schools, and that schools that were racially segregated by law in 1969, when the district was originally ordered to desegregate, remain so today. Prior to 1969, schools on the west side of the railroad tracks that run through Cleveland were white schools segregated by law. More than forty years later, these schools maintain their character and reputation as white schools with a student body and faculty that are disproportionately white. Similarly, schools on the east side of the railroad tracks – originally black schools segregated by law – have never been integrated; and remain all-black or virtually-all-black schools today. In most cases, the schools on the east side and west side of the railroad tracks are less than three miles apart.
After unsuccessful attempts to work with the school district on this matter, the United States has asked the court to rule that the school district has violated the existing desegregation orders and federal law, and order the district to devise and implement a desegregation plan that will eliminate the vestiges of the district’s former dual school system in an expeditious manner.
“It is intolerable for school districts to continue operating schools that retain their racial identity from the Jim Crow era,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “If school districts are not willing to work collaboratively to eradicate the vestiges of de jure segregated schools, we will ask the courts to take the steps necessary to ensure that students of all racial backgrounds have the opportunity to attend diverse, inclusive schools.”
Enforcement of the court orders mandating the desegregation of school districts formerly segregated by law is a top priority of the Justice Department’s Civil Rights Division. For example, on March 23, 2011, the U.S. District Court for the Southern District of Mississippi entered an order modifying the 1969 desegregation order governing the operations of the school district in Leake County, Miss. After a comprehensive review, the department determined that the school district continued to operate four essentially single-race schools. After taking account of a district wide capacity study and the input of more than 800 students, parents and concerned citizens who attended a community meeting, the Department of Justice and the school district jointly requested the closure of two schools as well as the reassignment of students and faculty, and improvements to the quality of education and extracurricular activities at the remaining schools. The court’s order granted all of the modifications sought by the parties.
Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt .
California Man Pleads Guilty for Role in Distributing Pirated Music During Five-Year PeriodRead the Press Release
WASHINGTON – Richard Franco Montejano, 29, of Harbor City, Calif., pleaded guilty today to conspiring to commit criminal copyright infringement, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney André Birotte Jr. for the Central District of California and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Montejano pleaded guilty before U.S. District Judge George H. King in Los Angeles to one count of conspiracy to commit willful copyright infringement by the distribution of a work being prepared for commercial distribution.
In his plea agreement, Montejano admitted that from 2002 to September 2007, he was a member and leader of an Internet music release group known as “Old School Classics” or “OSC.” OSC was a “warez” group that specialized in the unauthorized reproduction and distribution of copyrighted music using the Internet.
According to court documents, warez groups such as OSC are music piracy groups that act as first-providers of copyrighted works to the “warez scene.” These groups obtain copyrighted works, sometimes from industry insiders before the work’s commercial release, and then prepare the works for distribution. Once a warez release group prepares a stolen work for distribution, the material is distributed to servers of affiliated warez groups. This sharing with other groups is generally based on getting access to the pirated works of those groups. From there, many of the works copied and distributed by warez groups ultimately are distributed to an even wider audience through peer-to-peer networks.
Montajano admitted that he maintained a computer server at his Harbor City residence to which other OSC members uploaded pirated music. He admitted that a member of OSC uploaded the Kanye West album “Graduation,” to Montejano’s server in August 2007, more than one week before the album was commercially released. Montejano also admitted using his server to upload pirated music to other warez group servers.
In addition, Montejano admitted that after the break-up in January 2007 of another warez group known as “Rabid Neurosis” or “RNS,” OSC began obtaining pre-release music from two former RNS members known to Montejano as “adeg” and “StJames.” Both adeg and StJames, whose true identities were Bennie Glover and James Anthony Dockery, respectively, were employed at a North Carolina factory that manufactured compact discs for Universal Music Group and its subsidiary labels. Glover and Dockery pleaded guilty on Oct. 15, 2009, to conspiracy to commit willful copyright infringement. Both defendants were sentenced on Jan. 15, 2010, in U.S. District Court in Alexandria, Va., to three months in prison and two years of supervised release.
At sentencing, scheduled for July 25, 2011, Montejano faces a maximum penalty of five years in prison and a $250,000 fine.
The case is part of a multi-year federal investigation of organized piracy groups responsible for the illegal distribution of significant amounts of copyrighted movies, software, games and music through the Internet. The investigation of music piracy groups was led by agents from the FBI’s Washington Field Office-Northern Virginia Resident Agency.
The case is being prosecuted by Assistant U.S. Attorney Jay Prabhu of the U.S. Attorney’s Office for the Eastern District of Virginia, Trial Attorney Kendra Ervin of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Lisa Feldman of the U.S. Attorney’s Office for the Central District of California.
The guilty plea announced today is an example of the type of efforts being undertaken 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/ .
30 April 2011
Attorney General Eric Holder and Department of Agriculture Secretary Tom Vilsack Announce Settlement of Lawsuit Against USDA by Native American FarmersRead the Press Release
WASHINGTON –Attorney General Eric Holder and Department of Agriculture (USDA) Secretary Tom Vilsack announced the approval by the U.S. District Court of the settlement of a class action lawsuit filed against USDA by Native American farmers alleging discrimination by USDA. The court’s approval of the settlement ends litigation concerning discrimination complaints from Native Americans generally covering the period 1981-1999.
“The settlement approved by the court Thursday will allow USDA and the Native American farmers involved in the lawsuit to move forward and focus on the future,” said Attorney General Holder. “Under the process established in this agreement, Native American farmers who believe they suffered discrimination will have their claims heard. The Department of Justice is proud to partner with USDA in the agency’s effort to ensure fair and equitable treatment of its clients."
“The Keepseagle settlement approved by the court marks just one more step toward our goal of ensuring that American Indian and Alaskan Native Tribe farmers and ranchers not only have a place at the table, but are welcome as full participants in USDA programs,” said Secretary Vilsack. President Obama, Attorney General Holder and I are delighted this day has come and recognize that today is a good day for Indian Country.
This lawsuit, Marilyn Keepseagle et al., v. Vilsack (Civil Action No. 99-3119 (D.D.C.)), was filed on Nov. 24, 1999. The settlement will not become final until it is formally approved by the U.S. District Court for the District of Columbia.
29 April 2011
Three Men Sentenced on Federal Hate Crime Charges Related to Desecration of Synagogue and Churches in Modesto, CaliforniaRead the Press Release
WASHINGTON – The Justice Department announced today that Brian Lewis, Abel Mark Gonzalez and Andrew Kerber were sentenced for their roles in violating the civil rights of congregants of several houses of worship in Modesto, Calif.
Lewis and Gonzalez each received sentences of nine months incarceration and 36 months supervised release on the felony charge of conspiracy to violate civil rights. Lewis was also ordered to perform 200 hours of community service. Kerber was sentenced to 36 months probation, with a condition that he serves six months home detention with electronic monitoring at his expense, on the misdemeanor charge of damaging religious property. The defendants were also ordered to pay $3,700 in restitution.
Lewis, 23, of Modesto, Calif.; Gonzalez, 23, of Morgan Hill, Calif.; and Kerber, 23, of Chico, Calif., pleaded guilty in January to defacing and damaging the Congregation Beth Shalom synagogue on Feb. 2, 2006, by spray-painting anti-Semitic and neo-Nazi graffiti on its exterior walls. The men further admitted to spray-painting anti-Christian graffiti on the exterior walls of, and causing other damage to, Our Lady of Fatima Church and School and the Greek Orthodox Church of the Annunciation.
“Today’s sentences demonstrate that those who employ hate and intimidation to jeopardize the First Amendment rights of their fellow Americans to worship freely will be held accountable for their criminal conduct,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
“Americans have the right to worship as they choose, free from intimidation and harassment. Today’s sentences make clear that we will enforce that right,” said U.S. Attorney Benjamin B. Wagner.
In announcing the sentence, Assistant Attorney General Perez and U.S. Attorney Wagner commended the FBI and the Modesto Police Department for their work in this investigation and prosecution. Assistant U.S. Attorney David Gappa and Civil Rights Division Trial Attorney Karen Ruckert Lopez prosecuted this case for the government.
Justice and Education Departments Commemorate Sexual Assault Awareness Month with Students at Banneker High SchoolRead the Press Release
WASHINGTON – Wrapping up a month’s worth of events in recognition of Sexual Assault Awareness Month, the Departments of Justice and Education participated in a town hall-style event today at Benjamin Banneker Academic High School in Washington, D.C. Associate Attorney General Tom Perrelli; Susan B. Carbon, Director for the Office on Violence Against Women (OVW); Vincent Cohen Jr., Principal Assistant U.S. Attorney; Sunil H. Mansukhani, Deputy Secretary for Policy at the Department of Education’s Office of Civil Rights; and local resource providers took part in a discussion with the school’s student body focused on healthy relationships, sexual assault prevention, early intervention and resources available to assault victims.
President Obama first proclaimed April as Sexual Assault Awareness Month in 2009, urging Americans to support victims and to work together to prevent these crimes in our communities.
“We at the Justice Department share a vision of a world where women, men, girls, boys and communities live without fear of sexual violence,” said Associate Attorney General Perrelli. “I am honored to be here today with a thoughtful and engaged set of students, because it’s never too early to begin a dialogue about these issues and work to find solutions.”
“Sexual Assault Awareness Month provides an important focus for recognizing that we can all be agents of social change and end sexual violence,” said Director Carbon. “In the 16 years since the Violence Against Women Act was signed into law, we have been able to equip communities with the resources to save lives and protect survivors. This month’s theme encourages everyone to get involved, take action, and support the ongoing work done in the field of sexual assault—and we hope to impress that same message upon the students here at Banneker High School.”
More than 400 students engaged in a lively question and answer session with department officials, Neil Irvin of Men Can Stop Rape, Tonya Turner of Break The Cycle and Melinda Coles of the DC Rape Crisis Center.
Throughout April, Director Carbon and members of the department’s OVW team have visited nine different states to discuss sexual assault prevention and awareness. During these visits OVW spoke with members of the military, student groups, advocates, elected officials and community members about the importance of getting involved in stopping these crimes and supporting the work of those in the field who are working to transform the lives of survivors.
The Justice Department’s 2006 National Violence Against Women Survey found that nearly 18 million women and 3 million men had experienced a sexual assault. In 2008, according to the department’s Bureau of Justice Statistics, 57 percent of the sexual assaults against females were committed by an offender whom they knew, and one in five sexual assaults against females was committed by an intimate partner. Less than half (47 percent) of the sexual assaults against females in 2008 were reported to police. Young women ages 16 to 24 are at greatest risk, and an alarming number of young women are sexually assaulted while in college. One National Institute of Justice study found that 1 in 4 women will be raped over the course of their college career.
OVW provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. For more information, please visit www.ovw.usdoj.gov.
Italian Executive of California Valve Company<br /> Pleads Guilty to Foreign Bribery OffensesRead the Press Release
WASHINGTON – Flavio Ricotti, a former executive of Rancho Santa Margarita, Calif.-based valve company Control Components Inc. (CCI), has pleaded guilty for his participation in a conspiracy to secure contracts by paying bribes to officials of foreign state-owned companies as well as officers and employees of foreign and domestic private companies.
The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney André Birotte Jr. of the Central District of California. Ricotti, 49, of Bientina, Italy, was previously arrested on Feb. 14, 2010, in Frankfurt, Germany, and subsequently extradited to the United States.
Ricotti pleaded guilty yesterday before U.S. District Judge James V. Selna in Santa Ana, Calif., to a one-count superseding information charging him with conspiring to make corrupt payments to foreign government officials, and officers and employees of private companies in several countries, including Saudi Arabia and Qatar, in violation of the Foreign Corrupt Practices Act (FCPA) and the Travel Act. According to court documents, CCI designed and manufactured service control valves for use in the nuclear, oil and gas, and power generation industries worldwide. From 2001 through 2007, Ricotti was CCI’s director and then vice-president of sales for Europe, Africa and the Middle East (EAME). In these positions, Ricotti was responsible for overseeing the marketing and sales of CCI’s products to customers in the EAME region.
In connection with his guilty plea, Ricotti admitted that he conspired with other CCI employees to offer a payment to an official of Saudi Aramco, a Saudi Arabian state-owned oil company, in connection with attempting to obtain a valve contract for CCI in 2003. Ricotti also admitted to conspiring with other CCI employees to make a payment to an employee of a private company so that the employee would assist in awarding to CCI a valve contract in Qatar. Ricotti admitted that during the bidding process, one of his subordinates informed him that an employee of the private company was willing to provide CCI with confidential information about the bids of CCI’s competitors and to exercise influence in CCI’s favor in the awarding of the contract in exchange for a commission. Ricotti admitted that the benefit conferred on CCI as a result of the corrupt payments with which he was directly involved was more than $400,000 but less than $1 million.
On Apr. 8, 2009, Ricotti and five other former executives of CCI were charged in a 16-count indictment for their roles in the foreign bribery scheme. The other five former CCI executives also charged are Stuart Carson, CCI’s former president; Hong (Rose) Carson, CCI’s former director of sales for China and Taiwan; Paul Cosgrove, CCI’s former director of worldwide sales; David Edmonds, CCI’s former vice president of worldwide customer service; and Han Yong Kim, the former president of CCI’s Korean office. Trial is scheduled to begin on Oct. 4, 2011. An indictment is merely an accusation and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
In related cases, two defendants previously pleaded guilty to conspiring to bribe officers and employees of foreign state-owned companies on behalf of CCI. On Jan. 8, 2009, Mario Covino, the former director of worldwide factory sales for the valve company, pleaded guilty to one count of conspiracy to violate the FCPA and admitted to causing the payment of approximately $1 million in bribes to officers and employees of several foreign state-owned companies. On Feb. 3, 2009, Richard Morlok, the former finance director for the valve company, pleaded guilty to one count of conspiracy to violate the FCPA and admitted to causing the payment of approximately $628,000 in bribes to officers and employees of several foreign state-owned companies. Covino and Morlok are scheduled to be sentenced in February 2012.
On July 31, 2009, CCI pleaded guilty to a three-count criminal information charging the company with conspiracy to violate the FCPA and the Travel Act, and two substantive violations of the FCPA. CCI was ordered to pay an $18.2 million criminal fine, placed on organizational probation for three years, and ordered to create and implement a compliance program and retain an independent compliance monitor for three years. CCI admitted that from 2003 through 2007 it made corrupt payments in more than 30 countries, which resulted in net profits to the company of approximately $46.5 million from sales related to those corrupt payments.
As part of his plea agreement, Ricotti has agreed to cooperate with the department. At sentencing, Ricotti faces a maximum of five years in prison.
The case is being prosecuted by Deputy Chief Charles G. La Bella and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Douglas McCormick of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI’s Washington Field Office, and its team of special agents dedicated to the investigation of foreign bribery cases. Significant assistance was provided by the Criminal Division’s Office of International Affairs.
Four Pittsburgh Crips Gang Members Plead Guilty to Racketeering ChargesRead the Press Release
WASHINGTON – Four members of a Pittsburgh Crips street gang pleaded guilty this week in federal court to charges of conspiring to conduct a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Vance Pearson, 25, aka “Vinny P;” Rayshawn Malachi, 25, aka “Melly Mel;” Arthur Davis, 24, aka “Seven;” and Phillip Turner, 22, aka “Philly C” each pleaded guilty to one count of conspiracy to engage in a racketeering conspiracy before Senior U.S. District Judge Gustave Diamond. Davis also pleaded guilty to three counts of attempted murder under the violent crimes in aid of racketeering activity statute. In addition, Turner pleaded guilty to charges stemming from a carjacking he and an indicted co-conspirator committed at gunpoint on Sept. 4, 2007, and a charge of possession of a firearm on Dec. 15, 2009.
According to the guilty pleas, Pearson, Malachi, Davis, Turner and others participated in a pattern of racketeering activity that included multiple acts involving gun point robberies; attempted murders; distribution of controlled substances, including cocaine, heroin and crack cocaine; and acts of obstruction of justice and intimidation.
According to information presented in court, Pearson, Turner, Davis and Malachi were members 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 Fineview neighborhood of Pittsburgh. The gang had been operating in Northside since 2002, when in 2003 it formed an alliance with the Brighton Place Crips to expand the gang’s drug trafficking territory and increase the gang’s capability for violence.
The gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees, bond, jail commissary accounts and support of incarcerated members’ families.
In addition, the Brighton Place/Northview Heights Crips gang maintains an ongoing rivalry with other Northside street gangs such as the Manchester Original Gangsters. According to information presented in court, these gangs have been involved in multiple retaliatory shootings. Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc,” and “G.K.”
According to information presented in court, Pearson, Malachi and Turner acted as “hustlers” or distributors of controlled substances including heroin, cocaine and crack cocaine for the gang. Davis was a “soldier” or enforcer for the gang, providing protection for the enterprise through the commission of violent crimes. Malachi was involved in the distribution of heroin on multiple occasions from approximately 2003 to August 2006 including arrests for heroin, marijuana and crack cocaine. On June 22, 2009, while on probation and still wearing an ankle monitoring bracelet, Malachi was arrested selling heroin in the Crips-controlled neighborhood of Northview Heights.
According to information presented in court, on Aug. 27, 2007, Turner and a Crips co-conspirator robbed another man at gunpoint in Crips controlled territory. Less than two weeks later on Sept. 4, 2007, in Crips-controlled territory, Turner and the same Crips co-conspirator robbed a different victim of his automobile at gunpoint. According to the information presented in court, Turner approached the victim as he was walking toward his brother’s automobile and pointed a firearm at the victim while his co-conspirator knocked the victim to the ground. While pointing the firearm at the victim, the two Crips members took the victim’s Nike Jordan shoes, went through the victim’s pockets and stole his brother’s automobile.
In addition, according to information presented in court, Pearson and another Crips member robbed two individuals at gunpoint on May 23, 2005, in the Crips-controlled neighborhood of Northview Heights. While waiting in an automobile for a friend, two victims were approached at gunpoint by Pearson and Michael Wade, a Crips member who previously pleaded guilty in the case. The victims were pulled out of the car at gunpoint and the Crips members robbed the victims of a gold chain, $300, a Playstation video game and a CD player. On May 19, 2005, Davis and other Crips members entered a barbershop in Pittsburgh when a Manchester OG gang member entered and called them “Crabs,” a derogatory term for Crips. Davis followed the rival gang member outside of the shop and shot him four times.
On Sept. 7, 2006, while in a store on the Northside of Pittsburgh, Davis and another Crips member got into an argument with two individuals associated with the Wilson Avenue Gangsters, a rival street gang. They continued their argument into the parking lot where the victims both suffered gunshot wounds Officers pursued Davis and his accomplice to a nearby residence and inside the home they arrested the two Crips members, and found two firearms and approximately 80 grams of crack cocaine hidden in a vacuum cleaner.
Pearson, Malachi, Davis and Turner are four of the 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.
Pearson and Malachi face maximum penalties of 20 years in prison and a fine of $250,000. Davis faces a maximum penalty of 50 years in prison and a fine of $1 million. Turner faces a maximum penalty of life in prison and a fine of $500,000. Pearson is scheduled to be sentenced on Aug. 24, 2011. Davis, Malachi and Turner are scheduled to be sentenced on Aug. 25, 2011.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s Gang Unit. 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.
Former Leader of the Arellano-Felix Organization<br /> Extradited from Mexico to United States to Face ChargesRead the Press Release
WASHINGTON – Alberto Benjamin Arellano-Felix, an alleged leader of the Arellano-Felix Organization (AFO), was extradited today by the government of Mexico to the United States to face racketeering, money laundering and narcotics trafficking charges in the Southern District of California.
The extradition was announced by U.S. Attorney Laura E. Duffy of the Southern District of California, Assistant Attorney General Lanny A. Breuer of the Criminal Division, Administrator Michele M. Leonhart of the Drug Enforcement Administration (DEA) and Assistant Director Kevin Perkins of the FBI’s Criminal Investigative Division.
Arellano-Felix was taken into custody by Mexican authorities in 2002. A final order of extradition to the United States was granted in 2007. After years of unsuccessful appeals, Arellano-Felix arrived in the United States this afternoon. He is scheduled to be arraigned on May 2, 2011, in U.S. District Court in San Diego before Judge Larry Alan Burns.
U.S. Attorney Laura Duffy, whose office secured the indictment against Arellano-Felix, said that she was “extremely proud of the dedication and commitment that teams of people have demonstrated in bringing Arellano-Felix to answer, in an American court of law, to the very serious charges with which he is charged.” Duffy stated, “We are grateful to the Government of Mexico for its assistance in the extradition and have personally relayed our thanks to Mexican Attorney General Marisela Morales.” Over the last several years, Duffy and Morales have worked together on a number of transborder crime matters.
“The extradition of Benjamin Arellano-Felix reflects our close collaboration with our Mexican law enforcement partners to dismantle violent criminal organizations in Mexico and the United States,” said Assistant Attorney General Breuer. “The Arellano-Felix Organization has spread fear and violence on both sides of the border, and today’s extradition is an important step forward in our effort to hold the alleged leaders of this criminal enterprise to account.”
“Using violence, intimidation, kidnapping and murder, the Arellano-Felix Organization, also known as the Tijuana Cartel, has been one of the world’s most brutal drug trafficking networks,” said DEA Administrator Leonhart. “The extradition of Benjamin Arellano-Felix is one of many great victories against this criminal enterprise, which has seen five of the seven Arellano-Felix brothers either arrested or killed. Together with our Mexican partners, we will continue sustained attacks on cartels that threaten our way of life.”
“The FBI is pleased with Mexico’s efforts to bring to justice a leader from one of the most violent criminal enterprises in our history,” said Assistant Director Perkins of the FBI’s Criminal Investigative Division. “The cooperation between our two countries is a powerful force in disrupting the Arellano-Felix Organization’s criminal activities that instill fear and threaten the safety of our citizens.”
Long-reputed to be one of the most notorious multi-national drug trafficking organizations, the AFO controlled the flow of cocaine, marijuana and other drugs through the Mexican border cities of Tijuana and Mexicali into the United States. Its operations also extended into southern Mexico as well as Colombia.
The seventh superseding indictment charges Arellano-Felix with conducting the affairs of an illegal enterprise through a pattern of racketeering activity (RICO), conspiracy to import and distribute cocaine and marijuana, and money laundering. The indictment alleges that the leadership of the AFO negotiated directly with Colombian cocaine trafficking organizations for the purchase of multi-ton shipments of cocaine, received those shipments in Mexico by sea and by air, and then arranged for the smuggling of the cocaine into the United States and its further distribution throughout the U.S. The indictment also alleges that the proceeds of the AFO’s drug trafficking, estimated by law enforcement to be in the hundreds of millions of dollars, were then smuggled back into Mexico.
The indictment also alleges that the AFO recruited, trained and armed groups of bodyguards and assassins who were responsible for protecting the leaders of the organization, and also for conducting assassinations of rival drug traffickers, suspected cooperators, uncooperative Mexican law enforcement and military personnel, and members of the Mexican news media who printed stories unfavorable towards the AFO.
This case is being investigated by agents from the DEA, the FBI, and the Internal Revenue Service Criminal Investigations, and prosecuted in the Southern District of California by Assistant U.S. Attorneys Joseph Green and James Melendres. The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The investigation of Alberto Benjamin Arellano-Felix was coordinated by an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was created to consolidate and coordinate all law enforcement resources in this country’s battle against major drug trafficking rings, drug kingpins and money launderers.
An indictment is not evidence that the defendant committed the crimes charged. The defendant is presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
API Healthcare Corp. Abandons Merger Plans with Kronos Inc. After Justice Department Expresses Antitrust ConcernsRead the Press Release
WASHINGTON — API Healthcare Corporation has abandoned its merger plans with Kronos Inc. after the Department of Justice expressed concerns that the acquisition would have reduced competition and increased prices in healthcare-specific workforce management technology. As a result of the contract termination, both Kronos, which is owned by investment firm Hellman & Friedman Capital Partners VI L.P., and API, which is owned by investment firm Francisco Partners II L.P., will continue to sell health-care specific workforce management solutions.
By purchasing API, Kronos would have acquired its most significant competitor for healthcare time and attendance solutions, and led to the loss of a vigorous competitor that offered innovative staff scheduling capabilities in combination with its time and attendance products. The department said that according to industry sources, the transaction would have resulted in a single firm controlling approximately 70 percent of the time and attendance healthcare market.
“We welcome the decision to abandon this deal, which will preserve competition in the market for time and attendance technology in the healthcare industry,” said Christine Varney, Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “The abandonment of this transaction means that consumers will continue to receive the same benefits of competition, including greater innovation and lower prices, they’re now receiving.”
API, headquartered in Hartford, Wis., has installations in more than 1,000 client sites in the healthcare industry and had 2010 revenues of $52 million. Kronos, headquartered in Chelmsford, Mass., provides workforce management software to tens of thousands of organizations in approximately 60 countries, both within the healthcare industry as well as many other industries.
28 April 2011
Two Indicted in Alabama for Filing False Income Tax Returns Using Stolen IdentitiesRead the Press Release
WASHINGTON – Alchico Grant and Melinda Clayton were indicted by a federal grand jury in the Middle District of Alabama on a variety of charges stemming from an identity theft and tax fraud scheme, the Department of Justice, U.S. Attorney Leura G. Canary and the Internal Revenue Service (IRS) announced today. The 21-count indictment charges the two with filing false claims against the United States, wire fraud and aggravated identity theft.
Clayton had previously been arrested on a criminal complaint on April 8, 2011, following the execution of a search warrant at her house that same day. Grant had been indicted, along with several co-conspirators, in December 2010, for his involvement in an earlier conspiracy to obtain tax refunds using stolen identities. Grant was on pretrial release when indicted on the new charges. At a hearing on April 28, 2011, Grant’s pretrial release was revoked and he was ordered detained.
According to the new indictment, Clayton and Grant fraudulently obtained tax refunds using stolen identities. The two would illegally obtain identity information, file false tax returns claiming fraudulent refunds using the stolen identities and have the proceeds deposited into bank accounts and stored value card accounts they controlled. Grant would purchase stored value cards that were used to receive proceeds from some of the false returns.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Clayton and Grant both face a maximum of 189 years in prison and a mandatory minimum sentence of 2 years. If convicted, they will also face forfeiture of the proceeds of their crimes and mandatory restitution.
The case was investigated by Special Agents of the IRS - Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Jared Morris are prosecuting the case.
Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Three Sentenced for Involvement in Civil Rights Conspiracy and Cover-Up in Connection with Cross-Burning in Athens, LouisianaRead the Press Release
WASHINGTON –Jeremy Matthew Moro, 33, and Joshua James Moro, 23, have been sentenced by U.S. District Judge Donald E. Walter following their January 2011, guilty pleas to conspiring to violate the civil rights of an interracial couple by burning a cross near their home in Athens, La., in October 2008. Sonya Marie Hart, 31, was sentenced today following her January 2011, guilty plea to withholding information from the FBI regarding the defendants’ attempt to cover-up the cross-burning. The Moros’ cousin, Daniel Danforth, was previously convicted by a federal jury for organizing, carrying out, and attempting to cover up the same cross-burning.
Jeremy Moro was sentenced to 12 months and one day in prison followed by three years of supervised release; Joshua Moro was sentenced to 12 months and one day in prison followed by three years of supervised release; Sonya Hart was sentenced to three years of supervised probation. The defendants’ co-conspirator, Daniel Danforth, was previously sentenced to 48 months in prison for his role in the cross-burning and attempted cover-up.
During their guilty pleas in January 2011, Joshua and Jeremy Moro admitted that in October 2008, they and Danforth agreed to build, erect and burn a cross near the home of another cousin, her African American boyfriend (now husband), her 11-year-old son, and their grandmother who was believed to approve of the cousin’s interracial relationship. Joshua Moro admitted that he offered Danforth diesel fuel to use to burn the cross and that, later that evening, he sent a text message to see if Danforth and Jeremy Moro still needed the diesel to burn the cross. Jeremy Moro admitted that he helped Danforth find an accelerant, transport the cross to an area near the victims’ homes, and that he watched Danforth light the cross on fire because Danforth was upset about the presence of the African American man living with their cousin. Hart admitted that she affirmatively withheld information from the FBI in connection with the investigation into the cross-burning and attempted cover-up.
Evidence during Danforth’s trial in January 2010 showed that in the days following the cross-burning, Danforth, Jeremy Moro, and Sonya Hart agreed to remove the burned cross when they learned that the FBI was going to investigate the matter. With Jeremy Moro’s and Hart’s assistance, Danforth removed the cross, disassembled it and hid it in the woods. The evidence also showed that Joshua Moro, Jeremy Moro and Sonya Hart lied to the FBI and a federal grand jury during the investigation into the cross-burning.
“The defendants used an unmistakable symbol of hate to threaten a member of their own family simply because of her boyfriend’s race,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Incidents of this kind have no place in this country, and they are a reminder of the civil rights challenges we still face in 2011.”
“Cross burnings have historically been symbols of intense hatred of others based on their race. There is no place in our communities for this kind of activity,” said Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana. “ Everyone should feel comfortable to live in their communities without fear of violence because they are different or because of their race. Every citizen has this right. We hope that these sentences send a message that these kinds of acts are serious and have serious consequences.”
This case was investigated by the FBI. The case was prosecuted by Assistant U.S. Attorney Mary J. Mudrick for the Western District of Louisiana and Trial Attorney Erin Aslan from the Justice Department’s Civil Rights Division.
Louisiana Man Pleads Guilty to Federal Civil Rights ViolationsRead the Press Release
WASHINGTON - The Justice Department announced today that Johnny Mathis, 47, of Lecompte, La., pleaded guilty to two federal crimes for shooting at the home of three Hispanic men living across the street from him because of the victims’ race and national origin.
Mathis pleaded guilty to criminal interference with the right to fair housing and using a firearm during a crime of violence. Mathis admitted that, on June 15, 2008, he shot at the victims’ home because the victims were Mexican. When the defendant began shooting at their home, the victims fled into the woods behind their residence. Mathis then entered the home with his firearm. All three victims survived the shooting unharmed.
“The defendant targeted his neighbors with violence because of their race and national origin,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Acts of violence like this one have no place in our country, and the department will vigorously prosecute those who engage in such conduct.”
“Everyone, regardless of race, national origin or religion, etc., has the right to feel secure in their homes and free from violence,” said U.S. Attorney for the Western District of Louisiana Stephanie A. Finley. “That’s pretty basic. Our office will protect that right for all people residing in this district and will continue to prosecute these types of crimes.”
Sentencing is scheduled for July 28, 2011. Mathis faces a maximum of 10 years in prison, a fine of $ 250,000, or both, on the fair housing charge. He also faces a mandatory minimum term of 10 years in prison for the firearm charge, which must run consecutively to any term imposed on the fair housing charge.
The case was investigated by the FBI. It is being prosecuted by Assistant U.S. Attorney Mary Mudrick of the Western District of Louisiana and by Nicole Lee Ndumele, a Trial Attorney in the Department of Justice’s Civil Rights Division.
Justice Department Signs Agreement with the City of Independence, Kansas, toEnsure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON - The Justice Department today announced an agreement with the city of Independence, Kan., to improve access to all aspects of civic life for people with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
“ Individuals with disabilities must have the opportunity to participate in local government programs, services and activities on an equal basis with their neighbors,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We applaud Independence officials for their commitment to improving access for all residents and visitors with disabilities to the full range of city programs and facilities, including the zoo, library, aquatic center and city hall.”
“I hope Kansans will take note of this settlement,” said Barry Grissom, U.S. Attorney for the District of Kansas. “It is time to recognize the right of Americans with disabilities to the care and services they need.”
PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society. As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements. The agreements are tailored to address the steps each community must take to improve access. This agreement is the 189th under the PCA initiative. According to census data, the city population is 9,846, and 23 percent of Independence residents have a disability.
Under the agreement announced today, the city of Independence will take several important steps to improve access for individuals with disabilities, such as:
· Making physical modifications to facilities surveyed by the department so that parking, routes into the buildings, entrances, service areas and counters, restrooms, public telephones and drinking fountains are accessible to people with disabilities;
· Surveying other facilities and programs and making modifications wherever necessary to achieve full compliance with ADA requirements;
· Ensuring that buildings and outdoor facilities that will be built or altered by or on behalf of the city comply with the ADA’s architectural requirements;
· Posting, publishing and distributing a notice to inform members of the public of the provisions of Title II and their applicability to the city’s programs, services and activities;
· Officially recognizing the Kansas telephone relay service as a key means of communicating with individuals who are deaf, are hard-of-hearing, or have speech impairments, and training staff in using the relay service for telephone communications;
· Undertaking the required planning and modifications to ensure equal, integrated access to emergency management for individuals with disabilities, including emergency preparedness, notification, evacuation, sheltering, response, clean up and recovery;
· Developing a method for providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs;
· Installing signs at any inaccessible entrance to a facility directing individuals with disabilities to an accessible entrance or to information about accessing programs and services at other accessible facilities;
· Implementing a plan to improve the accessibility of city sidewalks and provide for the installation of accessible curb ramps throughout the city; and
· Adopting a grievance procedure to deal with complaints of disability discrimination relating to city programs and services.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement requires most actions to be completed within three years. For the required accessibility modifications to sidewalks, pedestrian crossings, transportation stops and curb ramps, the city will work with the disability community to prioritize and complete these modifications within five years. The department will actively monitor compliance with the agreement until it has confirmed that all required actions have been completed.
People interested in finding out more about the ADA, today’s agreement with the city of Independence, the Project Civic Access initiative, or the ADA Best Practices Tool Kit for State and Local Governments can access the ADA website at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
For the full agreement, please visit www.ada.gov/independence_ks/independenceks_sa.htm.
Former U.S. Probation Officer Pleads Guilty to Civil Rights and Sex Abuse ChargesRead the Press Release
WASHINGTON– Mark John Walker, 52, of Eugene, Ore., pleaded guilty today to charges related to his engaging in sexual contact or aggravated sexual abuse with female offenders who were under his direct supervision as a federal probation officer from 2006 to 2009. Sentencing is scheduled for July 18, 2011 before Chief U.S. District Judge Ralph R. Beistline, who is a visiting judge from Alaska.
As a U.S. Probation Officer, Walker supervised offenders who were serving probation or supervised release terms imposed by a federal judge, including offenders with vulnerable backgrounds involving sexual abuse, mental illness and drug addiction. Walker had the power to recommend that offenders who violated their conditions of probation or supervised release be incarcerated or otherwise sanctioned. Under the U.S. Constitution and federal law, law enforcement officials cannot use their authority to willfully sexually assault individuals under their control.
While exercising his authority as a probation officer, Walker willfully violated the victims’ civil rights by kissing them, touching their breasts, buttocks and inner thighs, and forcing one victim to have sexual intercourse with him when he visited her home as part of his official duties. At the time, he was wearing his badge and carrying his government-issued firearm, and the victim was not able to escape. The victims feared reporting the violations to authorities because they were afraid that no one would believe them and that Walker, as their probation officer, had the power to have them incarcerated or otherwise punished.
Under the terms of the plea agreement, the parties have agreed to recommend that Walker be sentenced to 10 years in prison, followed by five years of supervised release. The defendant will also have to register as a sex offender under the federal Sex Offender Registration and Notification Act, and keep the registration current in any state in which he resides, is employed or is a student. Chief Judge Beistline has the authority to accept or reject the joint sentencing recommendation.
“ Law enforcement officials violate the public trust when they abuse the rights of individuals under their supervision,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those who abuse their power in this way.
“ Federal Probation Officers are entrusted and empowered by law to serve others,” said U.S. Attorney Dwight Holton. “Our criminal justice system is enhanced every day by their dedicated and loyal service. Walker betrayed his fellow officers and abused his power by sexually abusing the vulnerable people he had sworn to help. These victims have been heard.”
“We have a very high standard when it comes to the actions of federal officers,” said Arthur Balizan, Special Agent in Charge of the FBI in Oregon. “This defendant’s criminal actions did great harm to women who were already very vulnerable. That is intolerable.”
The case has been investigated by the FBI in Eugene, Ore. Assistant U.S. Attorneys Pamala Holsinger, Hannah Horsley and Craig Gabriel are prosecuting the case with assistance from the U.S. Department of Justice, Civil Rights Division, Criminal Section.
Federal Court Bars Colorado Man from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has permanently barred George Thomas Gaines of Aurora, Colo., from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Gaines consented, was signed by Judge Robert E. Blackburn of the U.S. District Court for the District of Colorado.
The government complaint in the case alleged that Gaines and his companies, G&G Tax Service and American Benefits, prepared federal income tax returns for customers that used fictitious businesses to claim false tax deductions and improper earned income tax credits. According to the complaint, more than 96 percent of the audited tax returns prepared by Gaines between 2004 and 2007 understated his customers’ tax liabilities.
Return preparer fraud is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past ten years, 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.
Deputy Attorney General James Cole and Assistant Attorney General Ignacia Moreno Commend Efforts by Employees of the Environment and Natural Resources Division at Earth Day Service EventRead the Press Release
WASHINGTON – Marking the eighth annual Earth Day Service Celebration today, Deputy Attorney General James Cole and Assistant Attorney General Ignacia S. Moreno commended volunteers from the Justice Department’s Environment and Natural Resources Division (ENRD) as they began work on a future Community Greening Center near Marvin Gaye Park in Northeast Washington, D.C.
The Community Greening Center will be a neighborhood-based nursery for plants and trees as well as an environmental education resource center to be located near the intersection of 51st Street and Nannie Helen Burroughs Ave., N.E. The Justice Department volunteers are breaking ground on this project together with Washington Parks & People and the DC Green Corps.
2011 will mark the eighth consecutive Earth Day service celebration at Marvin Gaye Park. In those seven years, ENRD has devoted over 5,000 hours of employee time to planting trees, removing trash, laying sod and gardening. The event Thursday featured brief remarks by Deputy Attorney General Cole; Assistant Attorney General Moreno; Steve Coleman, Director and President of Washington Parks and People; and Lisa A. Hayes, Director of Development and Senior Counsel at the American Constitution Society of Law and Policy. Ms. Hayes is also the daughter of Earth Day Network founder Denis Hayes, who coordinated the first Earth Day in 1970.
“Earth Day is a reminder to all of us at the Department that we serve not only to protect the people of our country, but also its natural resources such as our lands, waters, air and wildlife, and the tremendous work of the Environment Division is essential to that mission,” said Deputy Attorney General Cole. “The Division has contributed its expertise and hard work in a number of key areas, including the government’s response to the Deepwater Horizon oil rig explosion and oil spill, important tribal matters and our overall efforts in advancing environmental justice, and I am grateful for their continued dedication.”
Assistant Attorney General Ignacia S. Moreno also announced the publication of ENRD’s Fiscal Year 2010 Accomplishments Report. The full report, which details the division’s work across the nation during FY2010, is posted at www.justice.gov/enrd/Current_topics.html . Among other things, the report details the civil and criminal enforcement of the nation’s environmental laws, resulting in immeasurable benefits for human health and the environment derived from significant reductions in emissions and discharges of harmful pollutants. Other results detailed in the report show:
$1.3 billion in civil and stipulated penalties, cost recoveries, natural resource damages, and other civil monetary reliefm, including $922 million recovered for the Superfund to support the cleanup of toxic waste;
$7.5 billion in corrective measures through court orders and settlements; and
50 criminal cases against 79 defendants, resulting in $104 million in fines.
A core mission of the division is the strong enforcement of civil and criminal environmental laws to protect our nation’s air, land, water and natural resources. The division’s mission also includes vigorous defense of environmental, wildlife and natural resources laws and agency actions; effective stewardship of our public lands and natural resources; and careful and respectful management of the United States’ obligations to American Indian tribes and their members, including litigation to protect tribal sovereignty, rights and resources. Also in 2010, with colleagues in the Civil Division, ENRD played an instrumental role in supporting the federal response to, and investigation of, the catastrophic oil spill in the Gulf of Mexico, and the filing of a civil enforcement action on Dec. 15, 2010 in Louisiana.
In her remarks, Assistant Attorney General Moreno underscored the achievements of the past year and the Division’s commitment to environmental justice:
“I am proud of the meaningful results that we have achieved for the benefit of the American people over the past year. In our work, we have not forgotten vulnerable communities and have taken concrete steps to make environmental justice a reality.”
The D.C. Green Corps, based at the Marvin Gaye Community Greening Center in the Watts Branch sub-watershed of the Anacostia River, will provide a city-wide gateway to 50 different green career tracks in urban and community forestry and forest-based ecosystem and watershed restoration. Helping under-served sub-watershed communities across the city, the Green Corps job program will focus on environmental justice, sustainable native reforestation, riparian buffer planting, invasive removal and green controls of urban systems, such as storm and sewer flows. The Green Corps and Center will develop a referral system to help participants connect to jobs through a wide range of agencies, professional and trade associations, trades, professions and industries.
The Green Corps is a pilot job training program funded by the American Recovery and Reinvestment Act, in partnership with the U.S. Forest Service, the D.C. Urban Forest Administration and the D.C. Department of Parks and Recreation.
27 April 2011
North Carolina Bank Agrees to Pay $400,000 in Restitution to Victims of Investment Fraud Scheme It Failed to Detect and ReportRead the Press Release
WASHINGTON – CommunityONE Bank N.A., based in Asheboro, N.C., with 45 offices throughout the state, has entered into a deferred prosecution agreement with the Department of Justice related to its failure to file a suspicious activity report (SAR) and maintain an effective anti-money laundering program, announced Assistant Attorney General Lanny Breuer of the Criminal Division and U.S. Attorney Anne Tompkins of the Western District of North Carolina. The bank has agreed to pay $400,000 toward restitution to victims of a third-party ponzi scheme that operated through accounts maintained at the bank.
The criminal information filed today in U.S. District Court for the Western District of North Carolina charges CommunityONE Bank with failing to maintain an effective anti-money laundering program. CommunityONE Bank waived indictment and accepted and acknowledged responsibility for its conduct. The deferred prosecution agreement, also filed today, recognizes that the bank has committed to, and already taken significant steps toward, overhauling its anti-money laundering program. This resolution allows the bank, which had been critically undercapitalized according to information contained in court documents, to undergo a merger and recapitalization to survive, and to avoid losses from a bank failure to innocent account holders and to the FDIC fund estimated at $500 million. The agreement recognizes that the bank’s total value under the recapitalization and merger is $2.5 million, and requires the bank to pay 16 percent of its value, or $400,000, to the victims of the ponzi scheme that the bank failed to detect and report. Provided that the bank fully implements the significant anti-money laundering measures required by the agreement, the government will recommend dismissal of the criminal charge in two years.
“Banks asleep at the switch need to wake up,” said U.S. Attorney Tompkins. “Federal law requires banks to implement a robust and proactive anti-money laundering program to detect fraud and protect the public from harm. This bank’s failure to detect and report a ponzi scheme cost it 16 percent of its value. Other financial institutions should heed this warning: the Bank Secrecy Act applies to more than just drug and terrorist financing.”
“CommunityONE Bank turned a blind eye to criminal conduct occurring under its nose,” said Assistant Attorney General Breuer. “By agreeing to pay restitution to the victims of a customer’s investment fraud scheme, and to overhaul its anti-money laundering program, the bank has begun the process of righting its wrongs. We will take every necessary step to hold banks committing similar offenses to account.”
“The Bank Secrecy Act was enacted to protect the public from harm by identifying and detecting money laundering from criminal enterprises, terrorism, tax evasion or other unlawful activities. IRS-Criminal Investigation and our fellow law enforcement agencies stand ready to make sure the laws are followed,” said Jeannine A. Hammett, Special Agent in Charge, Internal Revenue Service (IRS)-Criminal Investigation.
“CommunityOne should serve as an example to other banks – you won’t be allowed to ignore inconvenient or unpopular laws against fraud, especially when it has such a negative impact on people’s lives. When customers deposit their hard-earned income into a bank, they trust those banks to take care of their livelihood,” said Chris Briese, Special Agent in Charge of the FBI’s Charlotte, N.C., Division.
According to information contained in court documents, the actions taken today were the result of an investigation related to a $40 million ponzi scheme operated by bank customer Keith Franklin Simmons for two and a half years almost entirely through an account at the bank. Simmons was convicted of securities fraud, wire fraud and money laundering following a jury trial in Charlotte in December 2010 and is being detained pending sentencing. At sentencing, he faces a maximum prison sentence of 80 years.
From April 2007 until September 2009, Simmons deposited more than $35 million in investor funds into one account with the bank and withdrew over the same time span more than $35 million from the same account. According to court documents, the bank failed to detect and report the suspicious transactions, as required by the Bank Secrecy Act, due to deficiencies in its anti-money laundering program. The bank did not file any SAR on Simmons during this time period, despite the hundreds of suspicious transactions that took place over those two and a half years.
In addition, according to the court documents, the bank’s records also showed that Simmons diverted more than $2 million to other accounts with the bank that he controlled to operate his other businesses; diverted nearly $800,000 in cash withdrawals, gift cards and transfers to his personal account with the bank; and diverted numerous payments to support his luxurious lifestyle including payments for private jets, vehicles and gifts.
Under the Bank Secrecy Act, banks are required to establish, implement and maintain programs designed to detect and report suspicious activity indicative of money laundering and other financial crimes, such as investment fraud schemes. A bank is required to file a SAR when it detects known or suspected money laundering activity or a federal crime.
The case was prosecuted by Assistant U.S. Attorneys Kurt Meyers and Mark Odulio of the U.S. Attorney’s Office for the Western District of North Carolina and Trial Attorney Michael Mosier with the Asset Forfeiture and Money Laundering Section in the Justice Department’s Criminal Division. This case was jointly investigated by the FBI’s Charlotte Division and IRS-Criminal Investigation.
These actions are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Greenwich, Connecticut, to Pay Penalty and Fix Wastewater InfrastructureRead the Press Release
WASHINGTON – Under a settlement between the United States, state of Connecticut, and the town of Greenwich, Conn., the town will pay a $200,000 penalty and rehabilitate a critical wastewater collection system that serves three of the town’s major wastewater pump stations. The agreement settles allegations of Clean Water Act violations by the town stemming from two major ruptures of the town’s sewage system.
On Oct. 14, 2005, the town’s Old Greenwich Common Force Main ruptured and released 14.5 million gallons of raw sewage into the Cos Cob Harbor, a tributary to the Long Island Sound. The same force main ruptured again on Dec. 16, 2008, releasing 28 million gallons of raw sewage into Cos Cob Harbor.
Under the settlement lodged in federal district court in Hartford today, in addition to paying a $200,000 penalty to be split equally between the federal and state governments, the town will replace the section of the force main which previously failed. The town will also evaluate the need to replace other sections of the force main that have not been replaced in the past. In the event another rupture to the force main occurs, the agreement requires the town to pay additional penalties and replace some or all of the older sections of the force main – depending on the circumstances of the rupture.
The settlement further requires the town to develop a strategy for communicating with other entities, such as utilities, to facilitate emergency repairs of the force main that may be required in the future.
More information: Enforcing Clean Water requirements in New England: www.epa.gov/region1/enforcement/water/index.html.
Federal Jury Finds That Massachusetts Cranberry Growers’ Filling Wetlands Was Subject to Clean Water ActRead the Press Release
WASHINGTON – A federal jury this week found that the Clean Water Act applied to the filling of wetlands and other waters at two properties in Carver, Mass., owned by Charles Johnson, Genelda Johnson, Francis Vaner (“Van”) Johnson, and Johnson Cranberries Limited Partnership (the Johnsons), announced Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division, U.S. Attorney Carmen M. Ortiz and EPA Regional Administer H. Curtis Spaulding.
The Johnsons filled and altered approximately 46.1 acres of wetlands and other waters in order to construct cranberry bogs and associated structures.
The suit was originally brought by the United States in 1999 at the request of the U.S. Environmental Protection Agency (EPA) to enforce a provision of the Clean Water Act which prohibits the discharge of dredged and fill material into waters of the United States, which include certain wetlands, without first obtaining a permit from the U.S. Army Corps of Engineers.
In 2004, the U.S. District Court ruled that the Johnsons had filled the wetlands and other waters without obtaining a permit. After two appeals and a change in law resulting from a 2006 Supreme Court ruling, the case was given to a jury to decide whether the Clean Water Act applied to the wetlands and other waters at the Johnson properties under new standards set out by the Supreme Court’s 2006 ruling in Rapanos v. United States. On Monday, April 25, 2011, the jury upheld the government’s assertion of jurisdiction.
The prosecution of the case was handled by Assistant U.S. Attorney George B. Henderson of the U.S. Attorney’s Office in the District of Massachusetts, Department of Justice Environment and Natural Resources Division Attorney Jered J. Lindsay, with assistance from EPA Enforcement Counsel Margery Adams and Christine Foot.
26 April 2011
Statement of the Department of Justice Antitrust Division on Its Decision to Close Its Investigation of Southwest's Acquisition of AirtranRead the Press Release
WASHINGTON – The Department of Justice’s Antitrust Division issued the following statement today after announcing the closing of its investigation into the proposed acquisition of AirTran Airways by Southwest Airlines Company:
After a thorough investigation, the division determined that the merger is not likely to substantially lessen competition. The merged firm will be able to offer new service on routes that neither serves today, including new connecting service through Atlanta’s Hartfield Jackson International Airport from cities currently served by Southwest to cities currently served by AirTran. The division said that the presence of low cost carriers like Southwest and AirTran has been shown to lower fares on routes previously served only by incumbent legacy carriers.
Although there are overlaps on certain nonstop routes, the division did not challenge the acquisition after considering the consumer benefits from the new service. Also, the airports affected by the overlaps are not subject to restrictions on slots or gate availability. Where such restrictions exist, entry by other airlines may be particularly difficult.
Southwest Airlines is based in Dallas. In 2010, it had revenues of $12.1 billion carrying approximately 88 million passengers. Southwest serves 72 cities in the United States. AirTran is based in Orlando. In 2010, it had revenues of $2.6 billion carrying approximately 25 million passengers. AirTran serves 69 cities in the United States, Mexico and the Caribbean.
Oakland, California, Patient Recruiter Sentenced to 57 Months in Prison for Causing the Submission of $1.2 Million in False Power Wheelchair Claims to MedicareRead the Press Release
WASHINGTON – An Oakland, Calif., woman was sentenced today to 57 months in prison for her role in a scam to bill Medicare for more than $1.2 million in claims for expensive, high-end power wheelchairs and other durable medical equipment (DME) that were not medically necessary, announced the Departments of Justice and Health and Human Services (HHS).
Donna K. Wells, 52, was convicted in November 2010 of health care fraud after a one-week jury trial in the Central District of California. In addition to her prison term, U.S. District Court Judge Dale S. Fischer sentenced Wells to three years of supervised release and ordered her to pay $240,380 in restitution.
The evidence introduced at Wells’ trial showed that Wells worked the streets and low-income, senior living communities of Oakland to recruit Medicare beneficiaries to bill Medicare for expensive power wheelchairs and DME that the beneficiaries did not want, need, or use. Medicare beneficiaries who testified at trial said that Wells approached them on the street, at the store, or in the lobbies of their apartment buildings and offered them free power wheelchairs in exchange for the beneficiaries allowing Wells to copy their Medicare and California identification cards. Witnesses who lived in or worked at the San Pablo Hotel, a low-income, senior living community in Oakland, testified that Wells often sat in the lobby of the hotel to recruit beneficiaries. These and other witnesses testified that many of the residents of the San Pablo Hotel did not use the power wheelchairs that Wells provided to them.
Witness testimony at Wells’ trial established that Wells sold to other individuals the information she solicited from beneficiaries for between $400 and $500 per beneficiary. The individuals who purchased the information from Wells, including the operators of a fraudulent medical clinic in Los Angeles, used the beneficiary information from Wells to fabricate fraudulent prescriptions and medical documents which were then sold to and used by numerous fraudulent Los Angeles-area DME supply companies to submit false claims to Medicare. The claims were for power wheelchairs that cost Medicare approximately $4,000 per wheelchair but cost the DME supply companies only approximately $900 per wheelchair, the wholesale price. One of the DME supply companies that used the Medicare beneficiary information from Wells to defraud Medicare was Maydads Medical Supply of Arleta, Calif, which was owned by Wells’ co-defendant, Sylvester Ijewere, who was sentenced in October 2010 to 46 months in prison for Medicare fraud.
In imposing Wells’ sentence, Judge Fischer found that Wells was responsible for more than $1.2 million in false claims that were submitted to Medicare for approximately 200 Medicare beneficiaries. Judge Fischer also found that Wells purposely misled beneficiaries into believing that she worked for Medicare or another government agency when Wells solicited them to receive power wheelchairs and DME.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General for HHS (HHS-OIG); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
The case was prosecuted by Trial Attorney Jonathan Baum and Senior Trial Attorney John Michelich of the Criminal Division’s Fraud Section. The case was investigated by the California Department of Justice. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,000 defendants who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, 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 .
Maryland Man Pleads Guilty to Corruptly Endeavoring to Impede the Internal Revenue ServiceRead the Press Release
WASHINGTON - Thomas Robert Turner, a resident of Prince George’s County, Md., pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, the Justice Department and Internal Revenue Service (IRS) announced today. Sentencing is scheduled for Aug. 12, 2011.
According to the plea agreement and statement of facts, Turner worked as a bus driver for D & B Tours Inc., a tour bus company. He, along with at least two other people, devised a plan to file false corporate income tax returns for 2001, 2002 and 2003 for D & B Tours with the IRS in order to get money from the government to which they were not entitled. These corporate returns claimed false refunds of more than $177,000 based upon fraudulently inflated federal fuel tax credits. Turner received $70,000 as his share of the fraudulent refunds.
According to the court documents, Turner also admitted that he was aware that false individual tax returns for 2002 through 2005 were filed in his name. Although he never saw the tax returns, he was aware that, just as he had been in the case with the false D & B Tours corporate tax returns, his personal tax returns would report false information relating to fuel expenses to support false claims for tax refunds. Turner received two refund checks from the IRS -- one for more than $20,000 and a second for more than $19,000. He retained a portion of these refund checks. Turner also admitted that in January 2009 he made false statements to a criminal investigator of the IRS who had questions about the tax refunds related to the false D & B Tours corporate tax returns.
John DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division, and Rod Rosenstein, U.S. Attorney for the District of Maryland, commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division Trial Attorneys Caryn Finley and Jack Hinton, who are prosecuting the case on behalf of the United States.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/ .
Lufkin, Texas, Woman Sentenced to 180 Months in Prison for Involvement in Gang MurdersRead the Press Release
WASHINGTON – A Lufkin, Texas, woman was sentenced today by U.S. District Judge Marcia Crone to 180 months in prison for her role in a double homicide that took place in Nacogdoches, Texas, in August 2007, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John M. Bales for the Eastern District of Texas.
April Flanagan, 31, pleaded guilty on Nov. 29, 2010, to committing a violent crime in aid of racketeering activity, the object of which was a conspiracy to murder David Clyde Mitchamore Jr., and to acting as an accessory after the fact in the murder of Christy Rochelle Brown.
According to information presented in court, Flanagan had close ties to the Aryan Brotherhood of Texas (ABT), a race-based state-wide organization that operates inside and outside of state and federal prisons located 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, as well as ABT associates and prospects, are required to follow, without question, the orders of higher-ranking members. These so-called “direct orders” typically task the ABT member or associate to “discipline” the offending individual with physical force.
According to court documents, David Mitchamore, aka “Super Dave,” an ABT member, and his girlfriend, Christie Rochelle Brown, were murdered as a result of a “direct order” by ABT members because of Mitchamore’s failure to repay an outstanding debt he allegedly owed to an ABT member. The bodies of Mitchamore and Brown were discovered in Nacogdoches County on Aug. 10, 2007.
Flanagan admitted that she knew and approved of the plan to murder Mitchamore, and provided ABT members with the shotgun used to murder Mitchamore and Brown. She also admitted that she loaned her vehicle to them for use during the commission of the murders.
This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the National Gang Targeting, Enforcement and Coordination Center (Gang-TECC); the Nacogdoches Sheriff's Department; the Nacogdoches Police Department; the Angelina County, Texas, Sheriff's Department; the Texas Department of Public Safety; and the Texas Rangers. The case is being prosecuted by the Office of the U.S. Attorney in Lufkin, Texas, and the Criminal Division’s Gang Unit, in full cooperation with the Nacogdoches County District Attorney’s Office.
Justice Department Settles Allegations of <br /> Immigration-Related Employment Discrimination Against <br /> Wendy’s Franchise Owners in MaineRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a settlement agreement with Restwend LLC, the corporate owner of several Wendy’s restaurants in Maine, to resolve allegations that at least one of its restaurants engaged in employment discrimination by refusing to hire individuals believed to be non-U.S. citizens.
According to the department’s findings, since at least 2009 this Restwend-owned Wendy’s instituted a policy of refusing to hire work authorized individuals whom it believed to be non-U.S. citizens. The Immigration and Nationality Act (INA) generally prohibits discrimination in hiring against authorized workers on the basis of citizenship status.
Under the terms of the settlement, Restwend has agreed to pay $14,500 in back pay, plus interest, to a victim of its citizens-only policy, plus $3,200 in civil penalties. Restwend will also train its human resources personnel about employers’ nondiscrimination responsibilities under the INA, and the company agreed to monitoring provisions.
“No one who is authorized to work in the United States should face discrimination because of their perceived immigration status,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are pleased to have reached the settlement with Restwend and look forward to continuing to work with all employers, both public and private, to educate them about their responsibilities under federal law.”
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 the immigration laws, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired), 1-800-255-8155 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email [email protected]; or visit OSC’s website at www.justice.gov/crt/osc.
Justice Department Reaches ADA Settlement to Make Law School Application Processes Accessible to Blind ApplicantsRead the Press Release
WASHINGTON – The Justice Department announced today its participation in two related settlement agreements involving the accessibility of the Law School Admission Council’s (LSAC) online application service, which is used by law schools nationwide for their application processes. As a result of these agreements, LSAC’s online application service, and the online application process of the nation's law schools, will be accessible to individuals who are blind.
Under the first agreement, which resolves a lawsuit filed against LSAC by the National Federation of the Blind, LSAC will take critical steps to ensure that its online application website, www.lsac.org , will be fully accessible to individuals who use screen readers by the beginning of the fall 2012 application cycle. Application through the LSAC website offers several convenient features to applicants—including LSAC’s “Common Information Form;” bundling of applications into the required LSAC Credential Assembly Service, which eliminates the need to obtain multiple transcripts, letters of recommendations and evaluations for applicants to more than one school; and online payment of the application fee. The department is a signatory to this agreement, which signifies that the steps the LSAC will undertake for its website will satisfy, in part, the law schools’ obligations under the Americans with Disabilities Act (ADA) to make their application processes equally accessible to individuals who are blind.
The second agreement is between the department and Atlanta’s John Marshall Law School. It requires the law school to modify its own website to notify potential applicants of a process they may use to apply to the law school until the LSAC electronic application process has been made fully accessible. Specifically, the notice will state that LSAC currently provides telephone assistance free of charge to individuals completing applications. The law school will also post current policies of non-discrimination on the basis of disability on its application website. Finally, the law school will cease using the LSAC electronic application process for the fall 2012 application cycle if the LSAC website is not fully accessible under the terms reached in the agreement involving the National Federation of the Blind (NFB), LSAC and the department. The agreement is the result of an investigation following a complaint from the NFB about the school’s use of the LSAC website. The department is working with other law schools to reach similar agreements.
“Increased use of the Internet or other electronic technologies may enhance convenience for law schools and applicants alike, but the rights of individuals with disabilities may not be violated in the process,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “In this case, blind students were denied an equal opportunity to apply to law school. The ADA requires equal access to educational opportunities, and the Civil Rights Division is committed to vigorous enforcement of the ADA.”
In passing the ADA and the recent ADA Amendments Act, Congress found that individuals with disabilities were uniquely disadvantaged in critical areas, including education. The ADA prohibits discrimination on the basis of disability by public accommodations and covers discrimination by private educational facilities, including law schools and other post-graduate institutions. Those interested in seeking information about ADA rights and responsibilities may access the department’s ADA website at www.ada.gov or call the Justice Department’s toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD). For the full agreements, visit www.ada.gov/LSAC.htm and www.ada.gov/john-marshall-lawsch.htm .
Justice Department Announces $6.9 Million in Grants to Engage Men in Preventing Crimes Against WomenRead the Press Release
WASHINGTON – The U.S. Department of Justice Office on Violence Against Women (OVW) announced $6.9 million in awards to 23 projects in the Engaging Men in Preventing Sexual Assault, Domestic Violence, Dating Violence and Stalking Grant Program (Engaging Men Grant Program). This is the first time in the history of OVW that a grant program directly encourages men to be part of successful crime prevention efforts addressing sexual assault, domestic violence, dating violence and stalking, and to become partners in creating respectful and positive relationships.
The Engaging Men Grant Program creates a unique opportunity for OVW to support public education campaigns and community organizations to encourage men and boys to work as allies with women and girls for preventing violence.
“All men play a critical role in preventing crimes against women and are important partners in our effort to address the full spectrum of these crimes,” said Susan B. Carbon, Director of the Office on Violence Against Women. “These grants and the work of the grantees will provide the framework for extending and developing these partnerships across the country.”
The funded projects include non-profit non-governmental victim services agencies; non-profit community based agencies; state domestic violence or sexual assault coalitions; an institution of higher education; a unit of local government; a tribal coalition; and a tribal non-profit victim services agency. These awards are part of OVW’s ongoing commitment to support gender and culturally specific education on healthy relationships and strengthen existing community outreach efforts to men and boys.
The following 23 organizations received $300,000 :
Alaska Network on Domestic Violence & Sexual Assault (Juneau, Alaska)
Korean American Family Service Center Inc. (Los Angeles)
Peace Over Violence (Los Angeles)
Howard University (Washington, D.C.)
Tapestri Inc. (Tucker, Ga.)
Idaho Coalition Against Sexual & Domestic Violence ( Boise, Idaho)
Maine Boys to Men (Portland, Maine)
Maine Coalition to End Domestic Violence ( Augusta, Maine)
Boston Public Health Commission (Boston)
Michigan Coalition Against Domestic Violence and Sexual Assault ( Okemos, Mich.)
Family & Children’s Service ( Minneapolis)
Minnesota Indian Women’s Sexual Assault Coalition (St. Paul, Minn.)
North Carolina Coalition Against Sexual Assault ( Raleigh, N.C.)
North Dakota Council on Abused Women’s Services ( Bismarck, N.D.)
Enlace Comunitario ( Albuquerque, N.M.)
Family Services Inc. ( Poughkeepsie, N.Y.)
Retreat Inc. ( East Hampton, N.Y.)
Vera House Inc., ( Syracuse, N.Y.)
Klamath Crisis Center ( Klamath Falls, Ore.)
White Buffalo Calf Woman Society Inc. ( Mission, S.D.)
Migrant Clinicians Network Inc. ( Austin, Texas)
Migrant Health Promotion Inc. (Weslaco, Texas)
Refugee Women’s Alliance (Seattle)
The Office on Violence Against Women (OVW), a component of the U.S. Department of Justice, provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act (VAWA) and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing 21 federal grant programs, OVW often undertakes initiatives in response to special needs identified by communities facing acute challenges.
More information is available at www.ovw.usdoj.gov .
Former Humanitarian Workers Each Sentenced to 142 Months <br /> in Prison for Defrauding Usaid of $1.9 MillionRead the Press Release
WASHINGTON – Two former humanitarian aid workers were each sentenced today to 142 months in prison for defrauding the U.S. Agency for International Development (USAID) of approximately $1.9 million that was intended to assist impoverished people and towns in Liberia.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Ronald C. Machen Jr. of the District of Columbia and Donald A. Gambatesa, Inspector General of USAID.
Joe O. Bondo, 39, and Morris B. Fahnbulleh, 41, both of Monrovia, Liberia, were each convicted by a jury in November 2010 of one count of conspiracy to defraud the United States, four counts of mail fraud, two counts of wire fraud and four false claims counts. Bondo was also convicted of two counts of witness tampering. Fahnbulleh was also convicted of one count of conspiracy to commit mail and wire fraud.
U.S. District Court Judge Reggie B. Walton of the District of Columbia also ordered Bondo and Fahnbulleh to pay jointly and severally $1.2 million in restitution. Bondo and Fahnbulleh were also sentenced to three years of supervised release following their prison term.
“Today’s sentences reflect the reprehensible nature of the defendants’ conduct,” said Assistant Attorney General Breuer. “Bondo and Fahnbulleh defrauded USAID of nearly $2 million intended to provide food for the needy and build infrastructure in war-torn Liberia. Serious crimes deserve serious punishment. These defendants have learned first hand that we are committed to pursuing aggressively those who steal from our government programs.”
“Through their tax dollars, the American people battle hunger and disease and poverty throughout the world,” said U.S. Attorney Machen. “Today’s sentence makes clear that we will punish opportunists who try to undermine the good work of USAID by diverting development assistance for personal profit.”’
“Our office will continue to pursue anyone who defrauds USAID,” said Inspector General Gambatesa. “As in this instance, we will use the necessary resources to investigate allegations of wrongdoing worldwide in order to serve the U.S. taxpayer.”
According to court documents and information presented at trial, after Liberia’s 14-year civil war, USAID awarded a grant in 2005, through Catholic Relief Services, to World Vision, an international non-profit Christian humanitarian foundation. The grant was a two-year humanitarian project in Liberia for community reconstruction projects.
Under the agreement, Bondo and Fahnbulleh were assigned to supervise World Vision employees as they assisted Liberian communities with infrastructure projects, including road, latrine and water well construction. In return for their labor, USAID, through World Vision, was supposed to then distribute food to the residents of these communities.
However, in 2008, an internal audit conducted by World Vision revealed that up to 91 percent of the food never reached its intended beneficiaries. According to the trial evidence, the defendants sold the food and pocketed the proceeds and then instructed World Vision employees to falsify the documents used to track food distributions.
Bondo and Fahnbulleh also directed USAID-salaried employees to perform construction work on their personal compounds, instead of building clinics, schools, roads and other vital infrastructure projects which the federal government had funded. They further concealed these activities from World Vision headquarters, Catholic Relief Services and USAID by intimidating the World Vision employees with threats of job loss and by paying some subordinates “hush money” to cement their silence and cooperation.
As a result of the defendants’ conduct, thousands of families never got the food or reconstruction assistance they were intended to receive. More than 250 towns in Liberia submitted statements to the court that detailed the consequences of the fraud. In addition, World Vision has repaid about $1.9 million to USAID through Catholic Relief Services. World Vision also expended extensive resources in investigating the fraud and working with authorities.
The case was prosecuted by Assistant U.S. Attorney John Borchert of the District of Columbia and Trial Attorney Liam Brennan of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs assisted in the case. The investigation was conducted by USAID Office of the Inspector General.
Former Air France Cargo Executives Indicted in Conspiracy to Fix Rates and Surcharges on Air Cargo ShipmentsRead the Press Release
WASHINGTON — A Chicago grand jury returned an indictment today against two former executives of Paris-based Société Air France (Air France), for participating in a conspiracy to fix and coordinate surcharges on air cargo shipments to and from the United States and elsewhere and air cargo service rates to certain locations in the United States and elsewhere, the Department of Justice announced today. The indictment further alleges that the former executives along with co-conspirators also agreed to refuse to pay their customers commissions on surcharges for air cargo shipments to and from the United States and elsewhere.
The indictment, returned today in U.S. District Court in Chicago, charges Marc Boudier, former executive vice president of the cargo division of Air France, and Jean Charles Foucault, former vice president of the cargo division of sales and marketing of Air France, with conspiring with other air cargo carriers and their officials to suppress and restrain competition for international air cargo services. The department said that Boudier and Foucault carried out a conspiracy by fixing and coordinating rates on air cargo shipments to certain U.S. locations and elsewhere and surcharges on air cargo shipments to and from the United States and elsewhere, and refusing to pay their customers commissions on surcharges for air cargo shipments to and from the United States and elsewhere . According to the indictment, Boudier and Foucault participated in the conspiracy from at least as early as August 2004 until at least February 2006.
Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights.
According to the indictment, Boudier, Foucault and co-conspirators carried out the conspiracy by participating in or directing the participation of subordinate employees in meetings, conversations and communications to discuss rates for air cargo shipments to certain U.S. locations and elsewhere and surcharges for air cargo shipments to and from the United States and elsewhere. The department said, in accordance with the agreement and understanding reached by Boudier, Foucault and co-conspirators, they issued announcements of increases on surcharges and rates.
Boudier and Foucault are charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. 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.
A total of 21 airlines and 21 executives, including Boudier and Foucault, have been charged in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. 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 17 executives, including Boudier and Foucault.
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 and Cleveland Field Office, the FBI’s Atlanta and Washington Field Offices, 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 Atlanta Field Office at 404-679-9000 or Washington Field Office at 202-278-2000.
Federal Court Bars Chicago Woman from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court has permanently barred Rita Augustus from preparing federal tax returns for others, the Justice Department announced today. Augustus prepared tax returns in Chicago under the business names Windy City Tax Service and Windy City Insurance Agency Inc. The civil injunction order, to which Augustus consented, was signed by Judge Rebecca Pallmeyer of the U.S. District Court for the Northern District of Illinois.
According to the government complaint , Augustus has included fabricated charitable donations, employee business expenses and other deductions on tax returns that she has prepared since 2006. For tax years 2005 through 2009, Augustus allegedly prepared more than 4,000 federal income tax returns for customers with an unusually high refund rate. According to the complaint, the Internal Revenue Service (IRS) estimates that her return preparation activity for those years could have resulted in as much as $20 million or more in lost tax revenue.
The court order requires Augustus to provide the government with a list identifying all persons for whom she prepared federal tax returns for tax years 2005 through 2009. The court also required her to post a copy of the order at her business address in a place visible to potential customers.
Return preparer fraud is one of the IRS’s “Dirty Dozen” tax scams for 2011. In the past 10 years, 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 .
Baton Rouge, La., Tax Preparer Sentenced to Prison for Aiding in Preparation of False Tax ReturnsRead the Press Release
WASHINGTON – Cynthia Peters was sentenced to 27 months in prison based on her plea of guilty to one count of willfully aiding and assisting in the preparation and filing of a false income tax return, the Justice Department and Internal Revenue Service (IRS) announced today. The court also ordered Peters to serve a one-year term of supervised release following her prison term and to pay restitution to the IRS in the amount of $76,908. The case arises out of a March 31, 2010, indictment filed in the Middle District of Louisiana.
According to her plea agreement, Peters, who worked at Jasmine and Melissa’s Tax Service in Baton Rouge, prepared fraudulent tax returns for 23 clients that reported falsely inflated telephone excise tax refund (TETR) credits in the total amount of $92,932. The TETR credit was a one-time credit available to taxpayers for the 2006 year. The sentencing court found that the tax loss, including all relevant conduct, was approximately $501,376
John A. DiCicco, Principal Deputy Assistant Attorney General for the Department of Justice Tax Division, commended the IRS Special Agents who investigated this case and Tax Division Trial Attorneys Kevin C. Lombardi and Matthew J. Mueller and Assistant U.S. Attorney Rene Salomon of the Middle District of Louisiana, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/
25 April 2011
Three Miami-Area Medical Professionals Each Sentenced to Prison for Roles in $23 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Two Miami-area medical assistants and a physician assistant were sentenced to prison today for their roles in a $23 million Medicare fraud scheme involving HIV infusion therapy, announced the Departments of Justice and Health and Human Services.
Jose Diaz, a 62-year old physician assistant, Lisandra Aguilera, a 40-year old medical assistant, and Estrella Rodriguez, a 43-year old medical assistant, were sentenced by U.S. District Judge Joan A. Lenard to 54 months, 70 months and 57 months in prison, respectively. The defendants each previously pleaded guilty to one count of conspiracy to commit health care fraud for their roles in an HIV infusion fraud scheme.
According to court documents, Diaz, Aguilera and Rodriguez each worked at Metro Med of Hialeah Corp. (Metro Med). In 2003, Metro Med began operating as an HIV infusion clinic that purportedly provided injection and infusion therapies to HIV positive Medicare beneficiaries. In fact, the injection and infusion therapies were medically unnecessary and not provided. Metro Med paid cash kickback payments to Medicare beneficiaries in exchange for those beneficiaries allowing Metro Med to use their Medicare numbers to bill Medicare.
According to court documents, Diaz worked at Metro Med as a physician assistant and instructed Damaris Oliva, the owner of Metro Med, which medications and in what amounts to bill Medicare. Diaz provided these instructions to Oliva to ensure that Metro Med received the maximum reimbursement from Medicare, even though the injection and infusion drugs Metro Med billed to Medicare were not actually provided to the patients. Aguilera was hired by Oliva and worked at Metro Med as an infusionist. Rodriguez also worked at Metro Med as a medical assistant.
While at Metro Med, Diaz, Aguilera and Rodriguez falsified patient files to indicate that injection and infusion treatments were medically necessary, when, in fact, they were not. According to court documents, Aguilera and Rodriguez signed medical records indicating that injection and infusion treatments were provided to Metro Med patients, when, in fact, they were not. Aguilera and Rodriguez also fabricated medical records to show that Metro Med patients had received specific dosages of medications, when the patients had not actually received the treatments or medications reflected on those documents. Aguilera manipulated patient blood samples to make it appear that unnecessary injection and infusion treatments were medically necessary. Diaz, Aguilera and Rodriguez also were aware that beneficiaries who attended the clinic were being paid kickbacks in exchange for allowing Metro Med to bill Medicare under their Medicare numbers for injection and infusion treatments.
From approximately April 2003 through October 2005, Metro Med submitted approximately $23 million in claims to the Medicare program for injection and infusion treatments for Medicare beneficiaries that were not medically necessary, and not provided. The Medicare program paid approximately $11.7 million in claims.
Diaz, Aguilera and Rodriguez were charged in a July 2010 indictment, along with Oliva and Dr. Rene De Los Rios. All five defendants now have pleaded guilty or been convicted at trial. Oliva was sentenced in December 2010 to 82 months in prison.
Today’s prison sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Miami.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,000 defendants and organizations that collectively have billed the Medicare program for more than $2.3 billion. In addition, 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 .
Last of 10 Las Vegas Defendants Pleads Guilty to Falsifying Emissions Test RecordsRead the Press Release
WASHINGTON – Wajdi Waked, 25, of Las Vegas, pleaded guilty today before Judge Philip M. Pro of the U.S. District Court in Nevada, to one count of violating the Clean Air Act by falsifying emissions test results.
A grand jury in Las Vegas indicted Waked in January of 2010. Waked was one of nine other defendants, all at different testing locations, accused of similarly submitting false tests to the Nevada Department of Motor Vehicles (NDMV). The cases came to the attention of Nevada authorities in 2008 when the NDMV hired a contractor to build a vehicle identification database to find possible emissions testing fraud. NDMV discovered that in 2008 alone, there were over 4,000 false vehicle emissions certificates issued in Las Vegas. The database allows investigators to check the vehicle identification number that the emissions tester enters against the vehicle actually tested. Las Vegas and surrounding Clark County is required by the EPA to have emissions testing because the area is in non-attainment for carbon monoxide and ozone.
All of the other nine defendants pleaded guilty. Two in addition to Waked remain scheduled for sentencing. Judge Pro set Waked’s sentencing for Aug. 1, 2011.
The case was investigated by the U.S. Environmental Protection Agency and the Nevada Division of Motor Vehicles. The case was prosecuted by Assistant U.S. Attorney Roger Yang ofthe District of Nevada and Senior Trial Attorney J. Ronald Sutcliffe of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
Lake Worth, Fla., Owner of Construction Business Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
WASHINGTON - Richard Rosaire Routhier of Lake Worth, Fla., pleaded guilty to a one-count information charging him with conspiring to defraud the Internal Revenue Service (IRS), the Justice Department and the IRS announced today. According to the information, Routhier and others conspired to defraud the United States and unlawfully enrich themselves by paying employees in cash and not withholding and paying over employment taxes to the U.S. Treasury.
According to court documents, Routhier owned and operated Drymension Inc., a custom drywall installation and framing contracting company in Lake Worth. From 2002 through 2008, the defendant caused Drymension checks to be issued to several shell corporations. These entities, while purporting to be legitimate subcontractors, existed only on paper and did not do any work for Drymension. The checks written to shell corporations totaled approximately $9,132,516. The checks were cashed at local check cashing stores that were aware of the scheme and Routhier used the cash to pay Drymension employees. Routhier neither withheld from the cash wages nor paid over to the IRS the employment and income taxes as required by law.
The court scheduled sentencing for June 2, 1011. The defendant faces a maximum of five years in prison and a fine of $250,000.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and John A. DiCicco, Principal Deputy Assistant Attorney General for the Department of Justice, Tax Division, thanked the IRS Special Agents who investigated this case and Tax Division Trial Attorneys Matthew J. Mueller, Jason H. Poole and Assistant Chief Gregory E. Tortella who are prosecuting the case.
22 April 2011
New York Broker Pleads Guilty in International Stock Fraud SchemeRead the Press Release
WASHINGTON - A New York stock broker has pleaded guilty in federal court in Detroit to conspiracy to commit securities fraud and wire fraud in connection with the Alan Ralsky spamming organization’s stock pump-and-dump scheme, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney Barbara McQuade for the Eastern District of Michigan.
Gregg M. S. Berger, 47, of New York City, pleaded guilty yesterday before U.S. District Judge Marianne O. Battani. A federal grand jury in the Eastern District of Michigan indicted Berger in December 2010, charging him in a wide-ranging fraud scheme to illegally pump-and-dump thinly traded Chinese and Israeli stocks.
“Like so many other financial fraudsters we have prosecuted, Gregg Berger knew better,” said Assistant Attorney General Breuer. “He traded on his position as a stockbroker to defraud hundreds of investors out of their hard-earned savings. Now that he has pleaded guilty for his crimes, he faces serious and deserved punishment.”
Under the terms of the plea agreement, Berger faces up to 51 months in prison, a possible fine of up to $75,000, as well as restitution and a five-year term of supervised release. Sentencing is scheduled for Aug. 23, 2011.
According to the indictment, Berger conspired with Ralsky, Francis Tribble, How Wai John Hui, Scott Bradley and others to carry out a sophisticated stock fraud scheme from January 2005 through December 2007. Ralsky, Tribble, Hui and Bradley have all been convicted and sentenced for their roles in the case.
The charges arose after a multi-year investigation, led by agents from the FBI, with assistance from the U.S. Postal Inspection Service and the Internal Revenue Service, revealed a sophisticated and extensive operation that largely focused on running a pump-and-dump scheme, whereby the defendants sent spam touting thinly traded Chinese penny stocks, drove up their stock price, and reaped profits by selling the stock at artificially inflated prices.
In pleading guilty, Berger acknowledged that he established brokerage accounts at the direction of Hui and Tribble, and communicated with Ralsky and Bradley during the conspiracy. Berger’s roles in the scheme included trading the stocks that were illegally promoted by spam email campaigns; arranging for shares of the stocks to be transferred into the brokerage accounts he established; executing stock trades at the direction of Tribble rather than the direction of the named account holders; causing funds that resulted from the stock trades to be transferred to bank accounts beneficially controlled by Hui and other co-conspirators; and providing confidential account information, including trade amounts, prices, cash balances and wire transfer details to Tribble, Bradley and others involved in the scheme who were not entitled to such information, without authorization from the actual named account holders.
The stocks pumped-and-dumped by conspirators included China World Trade Corporation (CWTD), Pingchuan Pharmaceutical Inc. (PGCN), China Digital Media Corporation (CDGT), World Wide Biotech and Pharmaceutical Co. (WWBP), China Mobility Solutions (CHMS) and m-Wise (MWIS).
The indictment alleged that during the course of the scheme Berger caused the sale of approximately 30 million shares of stock, generating approximately $30 million for the co-conspirators and more than $600,000 in commissions for himself. The plea agreement stipulates that Berger may litigate at sentencing the amount he actually earned as a result of his participation in the conspiracy.
The case is being prosecuted by Assistant U.S. Attorney Terrence Berg for the Eastern District of Michigan and Senior Counsel Thomas Dukes of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.
Federal Charges Filed Against Las Vegas Man for Defrauding Distressed HomeownersRead the Press Release
WASHINGTON – A Las Vegas man was arrested yesterday on charges that he defrauded distressed homeowners in Las Vegas who were attempting to refinance or adjust their home mortgages, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Daniel G. Bogden for the District of Nevada.
Alex P. Soria, 64, is charged in an indictment in U.S. District Court in Nevada with six counts of wire fraud, three counts of mail fraud, one count of concealment of information from the Social Security Administration and one count of theft of government funds. Soria was arrested yesterday in Las Vegas, and made an initial appearance before a federal magistrate judge.
According to the indictment, Soria worked in the mortgage lending industry since approximately 1970. From approximately May 2008 to January 2010, Soria allegedly devised a scheme to defraud distressed homeowners who were trying to refinance or adjust their home mortgages. The indictment alleges that Soria solicited the homeowners through advertisements and word of mouth to hire him as a mortgage agent to assist them with their mortgages. Soria allegedly falsely told the homeowners he was a loan officer with Amwest Capital and that he could help them obtain relief with their mortgages through two federal programs, Hope for Homeowners and the Troubled Asset Relief Program (TARP). Soria also falsely told the homeowners that he had helped other homeowners obtain financing. According to the indictment, Soria’s Nevada mortgage agent license had expired in April 2008 and he lacked licensing or status to help the homeowners obtain financing through the federal programs.
The indictment also alleges that in order to make the homeowners think they were going to receive assistance with their home mortgages, Soria provided false information to the homeowners, such as letters and emails, stating that they had prequalified for refinancing and were on track to receive help or that the government was to blame for loans not closing. In fact, Soria did not obtain government assistance for any of the victims identified in the indictment, even though he fraudulently collected approximately $17,000 from 15 homeowners through the alleged scheme.
Soria is also charged with unlawfully collecting Social Security disability benefits for approximately 20 years, from January 1990 to December 2010, when he was actually working in and profiting from the mortgage industry.
If convicted, Soria faces up to 20 years in prison for each fraud count, up to five years in prison on the concealment count, up to 10 years in prison on the theft count, and a fine of up to $250,000 on each count.
The case was investigated by the Office of the Inspector General for U.S. Housing and Urban Development and the Office of the Inspector General for the Social Security Administration. It is being prosecuted by Brian R. Young, Trial Attorney with the Fraud Section in the Justice Department’s Criminal Division.
An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
This law enforcement action is part efforts underway by the interagency Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov .
Dyncorp International LLC and the Sandi Group Pay U.S. More Than $8.7 Million to Resolve False Claims AllegationsRead the Press Release
WASHINGTON - The United States has settled a whistleblower lawsuit against DynCorp International LLC and The Sandi Group (TSG), the Justice Department announced today. The lawsuit, filed in the U.S. District Court for the District of Columbia, alleges that DynCorp and its subcontractor TSG submitted or caused to be submitted false claims for payment under DynCorp’s contract with the Department of State to provide civilian police training in Iraq.
DynCorp has agreed to pay the United States $7.7 million to resolve allegations that it submitted inflated claims for the construction of container camps at various locations in Iraq. TSG agreed to pay $1.01 million to resolve allegations that it sought reimbursement for danger pay that it falsely claimed to have paid its U.S. expatriate employees working in Iraq.
The lawsuit was initially filed by two former TSG employees under the qui tam or whistleblower provisions of the federal False Claims Act, which permit private individuals, called “relators” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. As a result of the settlement, the two, Drew Halldorson and Brian Evancho, will receive up to $481,710 as their share of the government’s recovery.
“The hard work of stabilizing Iraq is challenging enough without contractors and subcontractors inflating the cost of rebuilding by making false claims at taxpayers’ expense,” said Tony West, Assistant Attorney General for the Civil Division. “This case demonstrates that the Department of Justice will pursue these cases that undermine the integrity of our public contracting process.”
"This settlement demonstrates our commitment to aggressively investigating wartime profiteering that corrupts the integrity of our government contracting process,” said U.S. Attorney Ronald C. Machen Jr. “This office worked hand-in-hand with the relators and federal investigators to uncover these fraudulent claims and recover inflated costs that were illegitimately billed to the American taxpayers.”
“We’re pleased with the successful resolution of this case, and I commend the dedication of our Office of Inspector General (OIG) criminal investigators,” said Harold Geisel, Deputy Inspector General for the Department of State. “Our efforts should reinforce to American taxpayers that oversight of their tax dollars is taken seriously.”
“False claims filed by contractors have been a problem in Iraq,” said Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction (SIGIR). “While SIGIR continues to pursue a number of allegations in this regard, I am pleased to see that today one of those cases has come to just resolution. I commend the Department of Justice prosecutors, the Department of State investigators and my SIGIR team for working together to achieve this important victory on behalf of the U.S. taxpayers.”
Assistant Attorney General West and U.S. Attorney Machen thanked the joint investigation team, which includes special agents with the Department of State-OIG and the SIGIR, for their efforts in the investigation of this matter.
Alabama Man Pleads Guilty to Role in Tax Fraud ConspiracyRead the Press Release
WASHINGTON – Eric Bernard Caldwell, a resident of Montgomery County, Ala., pleaded guilty to conspiring to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today. The guilty plea took place before U.S. Magistrate Judge Charles S. Coody in the U.S. District Court in Montgomery, Ala.
According to the indictment and other court documents, Caldwell was part of a conspiracy to file false federal tax returns using stolen identities. Caldwell would provide identity information to co-conspirator Ora Mae Adamson, who would file the returns, in exchange for a portion of the illicit refunds generated by the false tax returns. In all, the conspiracy defrauded the United States of $621,738.
Adamson pleaded guilty to conspiracy and identity theft charges and was sentenced to 46 months in prison on March 10, 2011. Another co-conspirator, Jeffrey Leon Ceaser, also pleaded guilty to conspiracy and identity theft charges and was sentenced to 36 months in prison on March 2, 2011.
The case was investigated by Special Agents of the IRS – Criminal Investigation. Trial attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division are prosecuting the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax .