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17 March 2011
Department of Justice Releases Investigative Findings Involving the New Orleans Police DepartmentRead the Press Release
WASHINGTON – Following a comprehensive investigation, the Justice Department today announced its findings that the New Orleans Police Department (NOPD) has engaged in patterns of misconduct that violate the Constitution and federal law. The investigation, announced on May 15, 2010, was conducted pursuant to the Violent Crime Control and Law Enforcement Act of 1994, the Omnibus Crime Control and Safe Streets Act of 1968 and Title VI of the Civil Rights Act of 1964.
The Justice Department’s thorough and independent investigation involved extensive community engagement and in-depth review of NOPD practices. Department attorneys and investigators held interviews and meetings with NOPD officers, supervisors and command staff, as well as members of the public, city and state officials, and other community stakeholders. The Justice Department participated in more than 40 community meetings with various advocacy groups, civic leaders and public officials. The investigation also involved thorough review of a wide range of NOPD documents, as well as ride-alongs and other opportunities to observe police activity. On May 5, 2010, Mayor Mitch Landrieu sent a letter to the Justice Department asking for an independent investigation of NOPD’s systems and operations.
The Justice Department found reasonable cause to believe that patterns and practices of unconstitutional conduct and/or violations of federal law occurred in several areas, including:
- Use of excessive force;
- Unconstitutional stops, searches and arrests;
- Biased policing, including:
- Racial and ethnic profiling and lesbian, gay, bi-sexual and transgender (LGBT) discrimination;
- A systemic failure to provide effective policing services to persons with limited English proficiency; and
- A systemic failure to investigate sexual assaults and domestic violence.
The Justice Department also found a number of long-standing and entrenched practices within NOPD that caused or contributed to these patterns or practices of unconstitutional conduct, including:
- Failed systems for officer recruitment, promotion and evaluation;
- Inadequate training;
- Inadequate supervision;
- Ineffective systems of complaint intake, investigation and adjudication;
- A failed “Paid Detail” system;
- Failure to engage in community oriented policing;
- Inadequate officer assistance and support services; and
- Lack of sufficient community oversight.
“For far too long, the New Orleans Police Department failed to adequately protect the citizens of the city. This was a result of its failure to ensure respect for and adherence to the Constitution,” said Deputy Attorney General James Cole. “Today’s findings should serve as a foundation not only to rebuild the police department, but to help restore the community’s trust in fair, just and effective law enforcement.”
“Our findings show that the problems facing the NOPD are wide ranging, systemic, and deeply rooted in the culture of the Department,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Our team looks forward to working with the people of New Orleans, Mayor Landrieu, Chief Serpas and his officers in creating and implementing a comprehensive blueprint for sustainable reform.”
“Today, the Justice Department has taken a critical step forward towards building a police department which the people deserve and desperately need – one which is free from corruption and which is dedicated to the protection of its citizens,” said U.S. Attorney for the Eastern District of Louisiana James Letten. “Through this partnership, and through the tireless efforts of our U S Attorney’s Office, the department’s Civil Rights Division and our federal partners, we will continue to do whatever it takes to reach these essential goals and to restore trust in the men and women of the police department.”
The Justice Department will work with the NOPD and the city of New Orleans to address the violations of constitutional and federal law by developing and implementing comprehensive reforms that will reduce crime, ensure respect for the Constitution and the rule of law, and restore public confidence in the NOPD. The NOPD must develop and implement new policies and protocols and train its officers in effective and constitutional policing. In addition, the NOPD must implement systems to ensure accountability, foster police-community partnerships, improve the quality of policing to all parts of the city and eliminate unlawful bias from all levels of policing decisions.
This investigation was not related to any ongoing federal criminal prosecutions of NOPD officers.
This investigation was conducted by the Special Litigation Section of the Civil Rights Division with the assistance of the U.S. Attorney’s Office for the Eastern District of Louisiana. In addition, the investigators consulted with a number of police experts from around the country and with Department experts within the Office of Justice Programs, the Office on Violence Against Women, the Office of Community Oriented Policing Services, the Office on Juvenile Justice Delinquency Prevention and the Access to Justice Initiative. Over the past six months, the Community Relations Service has facilitated community participation, allowing community members to express their concerns and to share their ideas.
The executive summary and full report can be found at www.justice.gov/crt/about/spl/nopd.php . Over the next few weeks and months, Department of Justice personnel will be meeting with interested community groups. Comments or suggestions can also be e-mailed to [email protected] .
Denton County, Texas, Man Pleads Guilty to Sex Trafficking and Related Federal ChargesRead the Press Release
DALLAS — Marcus Choice Williams, 36, of Fort Worth, Texas, pleaded guilty this morning before U.S. Magistrate Judge Irma C. Ramirez to various felony offenses related to a conspiracy to traffic young women for prostitution, the Department of Justice announced.
Williams pleaded guilty to one count of conspiracy to transport individuals for prostitution; six counts of transporting individuals for prostitution; one count of sex trafficking by force, fraud or coercion; two counts of attempted sex trafficking by force; and one count of money laundering.
According to documents filed in the case, Williams operated an interstate prostitution enterprise headquartered in the Dallas-Fort Worth area. He began operating in Texas in 2003 and, in 2006, expanded his enterprise into a multi-state operation that included advertising on websites. Williams was also known as “Cross Country Redd,” “Redd,” and “Marcus Choice.”
Court documents showed that Williams recruited vulnerable women, specifically single mothers from troubled backgrounds, and, in some cases used a combination of deception, fraud, coercion, threats and physical violence to compel the women to engage in prostitution. Williams required each young woman to secure a daily quota of money, and if operating out of town, to wire the funds to him.
“The exploitation of vulnerable women through sex trafficking is the equivalent of modern-day slavery, and will not be tolerated in this nation,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to the aggressive prosecution of all human trafficking cases.”
“The idea that an individual can be held in captivity by another person and forced to work in the world of prostitution is shocking to most people, said U.S. Attorney for the Northern District of Texas James T. Jacks. “As evidenced by this and other cases brought by the Department of Justice, these activities are all too prevalent. This office and the Department of Justice as a whole are working to change that fact. We call upon the public to report any and all suspicious activity which may lead to apprehending and prosecuting those persons engaged in this activity and giving freedom to their victims.”
Under the terms of the plea agreement, Williams faces a sentence of 30 years in prison, if the Court accepts the sentencing recommendation in the plea agreement. Williams, who has been in custody in the Northern District of Texas since October 2010, when his pretrial release was revoked, is scheduled to be sentenced on June 20, 2011, by U.S. District Judge David C. Godbey.
Co-defendant Kenya Thomas, 31, of Plano, Texas, the mother of two of Williams’ children, assisted Williams in managing the operation and supervising new recruits. Thomas pleaded guilty to her role in the conspiracy in December 2009.
The case remains pending against the other co-defendant in the case, Preston Petitt, 44, of Houston, Texas. According to court documents, in addition to serving as Williams’ butler and bodyguard, Petitt allegedly provided child care for the other defendants and for victims while they performed commercial sex acts at the defendants’ direction. Williams made thousands of dollars in profits, while the victims received next to nothing.
The case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Errin Martin and Department of Justice Civil Rights Division Trial Attorney Myesha Braden.
16 March 2011
United States Files Counterclaims Against KBR Alleging False Claims and KickbacksRead the Press Release
WASHINGTON – In response to a pending lawsuit from Kellogg Brown & Root Services Inc. (KBR) in the U.S. Court of Federal Claims, the Department of Justice has filed counterclaims alleging that KBR managers had received kickbacks from a dining facility subcontractor in violation of the False Claims Act and the Anti-Kickback Act. The subcontractor was retained in connection with KBR’s contract with the U.S. Army to provide logistical support to the military in Iraq and elsewhere. The counterclaims also allege that the kickbacks should cause KBR to forfeit its claims against the United States and to return money paid by the United States as reimbursement to KBR upon the tainted subcontract.
The counterclaims assert that, from late 2002 through 2003, Terry Hall, who was KBR’s regional food services manager for Iraq and Kuwait, and his deputy, Luther Holmes, received more than $45,000 in kickbacks from Mohammad Shabbir Khan, vice president of Tamimi Global Company. Khan provided the kickbacks to ensure that Tamimi was treated favorably by KBR. Hall and Holmes used their positions to advocate on behalf of Tamimi, and, during the time that they received the kickbacks, KBR awarded Tamimi subcontracts worth more than $400 million. Other KBR managers knew of apparent irregularities involving the Tamimi subcontracts, but approved them anyway.
The subcontracts were awarded under the Logistics Civil Augmentation Program (LOGCAP) III contract, which was awarded to KBR by the Army in 2001 to provide logistical support for U.S. military operations abroad. One of the tasks directed by the Army under the LOGCAP III contract was for KBR to provide dining facilities at its bases in Iraq and Kuwait. The Army reimbursed KBR for its costs in doing so plus a fee, based upon the amount of costs incurred. Thus, all of the allegedly improperly awarded subcontracts and KBR’s profit on these subcontracts were paid for by U.S. taxpayers.
“Kickbacks in military subcontracts open the door to wartime profiteering and corrupt the integrity of our government contracting process,” said Assistant Attorney General for the Civil Division Tony West. “When we learn of such illegal conduct at the expense of taxpayers, we will pursue it.”
KBR’s original lawsuit seeks approximately $41 million that the United States required KBR to return after a Defense Contract Audit Agency (DCAA) audit. The DCAA found that KBR overpaid Tamimi $41 million for dining facility costs from July 2004 to December 2004, compared to what it was paying other contractors during that time period.
The assertion of these counterclaims demonstrates the Department of Justice’s commitment to ensuring the integrity of the government procurement process.
Three Former Executives Charged in $200 Million Fraud Scheme Involving Fair Financial Company InvestorsRead the Press Release
WASHINGTON – Three former executives of Fair Financial Company, an Ohio financial services business, were arrested today and charged in an indictment filed in the Southern District of Indiana for their roles in a scheme to defraud approximately 5,000 investors of more than $200 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; Timothy M. Morrison, First Assistant U.S. Attorney for the Southern District of Indiana; and Special Agent in Charge Michael E. Welch of the FBI in Indiana.
The indictment, returned by a federal grand jury on March 15, 2011, and unsealed today, charges Timothy S. Durham, 48; James F. Cochran, 55; and Rick D. Snow, 47, with one count of conspiracy to commit wire and securities fraud, 10 counts of wire fraud and one count of securities fraud. Durham was arrested in Los Angeles, and Cochran and Snow were arrested in Indianapolis.
According to the indictment, Durham and Cochran purchased Fair, whose headquarters were in Akron, Ohio, in 2002. Durham was the chief executive officer of Fair and a member of the board of directors, Cochran was the chairman of the board of Fair, and Snow, a certified public accountant, served as the chief financial officer of Fair.
The indictment alleges that between approximately February 2005 through the end of November 2009, Durham, Cochran and Snow executed a scheme to defraud Fair’s investors by making and causing others to make false and misleading statements about Fair’s financial condition and about the manner in which they were using Fair investor money. The indictment further alleges that Durham, Cochran and Snow executed the scheme to enrich themselves, to obtain millions of dollars of investors’ funds through false representations and promises, and to conceal from the investing public Fair’s true financial condition and the manner in which Fair was using investor money.
According to the indictment, when Durham and Cochran purchased Fair in 2002, Fair reported debts to investors from the sale of investment certificates of approximately $37 million and income producing assets in the form of finance receivables of approximately $48 million. The indictment alleges that in November 2009, after Durham and Cochran had owned the company for seven years, Fair’s debts to investors from the sale of investment certificates had grown to more than $200 million, while Fair’s income producing assets consisted only of the loans to Durham and Cochran, their associates and the businesses they owned or controlled, which they claimed were worth approximately $240 million, and finance receivables of approximately $24 million.
“These former executives are charged with engaging in fraudulent and deceptive business practices to hide from investors and regulators Fair’s true financial condition and their misuse of the company’s funds,” said Assistant Attorney General Breuer. “As alleged in the indictment, by using investors’ money to fund their failing business ventures and personal lifestyles, they perpetrated a $200 million fraud. Today’s charges and arrests reflect that investigating and prosecuting financial fraud is a Justice Department priority.”
“This has been an arduous journey, as are most large white collar cases,” said First Assistant U.S. Attorney Morrison. “But we now welcome the opportunity to prove the indictment’s allegations against these three men beyond a reasonable doubt.”
“These arrests follow the largest corporate fraud investigation in the history of the FBI in Indiana which resulted in over 5,000 victims and an estimated loss of $200 million dollars,” said Special Agent in Charge Welch.
According to the indictment, when Durham and Cochran bought Fair in 2002 its primary business was purchasing and collecting finance receivables. Fair financed its purchase of finance receivables by selling investment certificates to investors. Investors who purchased investment certificates were promised regular interest payments for a set period of time, at the end of which they were entitled to the return of their principal investment.
In order to sell its investment certificates, Fair was required to register the investment certificates with the State of Ohio Division of Securities. Fair did so by submitting registration documents and a proposed “offering circular” to the Division of Securities that was required to contain truthful and accurate disclosures about Fair’s business.
The indictment alleges that after Durham and Cochran acquired Fair, they changed the manner in which the company operated and used its funds. Rather than using the funds Fair raised from investors primarily for the purpose of purchasing finance receivables, Durham and Cochran caused Fair to extend loans to themselves, their associates and businesses they owned or controlled, which caused a steady and substantial deterioration in Fair’s financial condition.
According to the indictment, companies owned or controlled by Durham and Cochran, including DC Investments LLC (DCI) and Obsidian Enterprises Inc., as well as other businesses controlled through Obsidian and DCI, were among the primary beneficiaries of the loans Durham and Cochran made with Fair investor money. Durham and Cochran allegedly loaned money through Obsidian and DCI to a variety of struggling businesses and start-up ventures, including a car magazine, restaurants, a surgery center, trailer manufacturers, internet companies, a race car team, a replica vintage car manufacturer, a rubber reclaiming plant and a luxury bus leasing business. The indictment further alleges that after receiving loans from Fair, many of these businesses failed and were never able to repay the money they borrowed, while others, with the benefit of continued loans from Fair, struggled as unprofitable entities for years. In addition, Durham and Cochran allegedly took loans of Fair investor money for themselves, and used a significant portion of the proceeds of the loans to maintain their lifestyles and to pay for personal expenses.
According to the indictment, Durham, Cochran and Snow terminated Fair’s independent accountants who, at various points during 2005 and 2006, told the defendants that many of Fair’s loans were impaired or did not have sufficient collateral. The indictment alleges that after firing the accountants, the defendants never released audited financial statements for 2005, and never obtained or released audited financial statements for 2006 through September 2009. The indictment further alleges that with independent accountants no longer auditing Fair’s financial statements, the defendants were able to conceal from investors Fair’s true financial condition.
The indictment also alleges that Durham, Cochran and Snow falsely represented, in registration documents and offering circulars submitted to the Division of Securities and in offering circulars distributed to investors, that the loans on Fair’s books were assets that could support Fair’s sale of investment certificates. According to the indictment, the defendants knew that in reality, the loans were worthless or grossly overvalued; producing little or no cash proceeds; supported by insufficient or non-existent collateral to assure repayment; and in part advances, salaries, bonuses and lines of credit for Durham and Cochran’s personal expenses.
The indictment alleges that the defendants engaged in a variety of other fraudulent activities to conceal from the Division of Securities and from investors Fair’s true financial health and cash flow problems, including making false and misleading statements to concerned investors who either had not received principal or interest payments on their certificates from Fair or who were worried about Fair’s financial health, and directing employees of Fair not to pay investors who were owed interest or principal payments on their certificates. According to the indictment, even though Fair’s financial condition had deteriorated and Fair was experiencing severe cash flow problems, Durham and Cochran continued to funnel Fair investor money to themselves for their personal expenses, to their family, friends and acquaintances, and to the struggling businesses that they owned or controlled.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Also today, the U.S. Securities and Exchange Commission filed civil securities charges against Durham, Cochran and Snow.
This case is being prosecuted by Assistant U.S. Attorneys Winfield D. Ong and Joe H. Vaughn of the Southern District of Indiana and Assistant Chief Robertson Park and Trial Attorney Henry P. Van Dyck of the Fraud Section of the Criminal Division. The investigation was led by the FBI in Indianapolis.
Durham, Cochran and Snow each face a maximum of five years in prison for the conspiracy count, 20 years in prison for each wire fraud count and 20 years in prison for the securities fraud count. Additionally, each defendant could be fined $250,000 for each count of conviction. An initial hearing was held today in Indianapolis before a U.S. Magistrate Judge Kennard Foster for Cochran and Snow, and an initial hearing for Durham will be held in Los Angeles.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov .
Maryland Resident Charged with Making False Statements<br /> and Submitting False Documents in Applications for Federal JobsRead the Press Release
WASHINGTON – A Maryland woman has been charged by a federal grand jury in Alexandria, Va., with making false statements and submitting false documents in multiple job applications to U.S. federal government agencies, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Inspector General H. David Kotz of the U.S. Securities and Exchange Commission (SEC.)
The indictment returned today charges Karen M. Lancaster, 52, of Upper Marlboro, Md., with four counts of making false statements, three counts of submitting false documents and one count of engaging in a concealment scheme. Lancaster will be arraigned on March 25, 2011, in U.S. District Court in Alexandria.
According to the indictment, Lancaster was employed in various positions with the U.S. Department of Defense (DoD) from 1991 until March 2005, when she was notified by DoD that she was being fired due to performance failures. In October 2006, according to the indictment, Lancaster reached a settlement with DoD in which she was allowed to resign from DoD, retroactive to March 2005.
Between 2006 and 2008, Lancaster applied for jobs at the U.S. Departments of State, Commerce and Defense, as well as with the SEC. According to the indictment, as part of the application processes, Lancaster allegedly submitted documents that falsified and concealed information about her criminal history, employment history and suitability for employment with the federal government. Among the documents submitted by Lancaster were SF-50 forms, which are used by the U.S. federal government to document and report certain personnel actions such as hirings, promotions, conversions and separations; OF-306 forms, which are used to, among other things, determine an applicant’s acceptability for federal employment; and SF-86 forms, which are used in conducting background investigations for applicants and employees requiring a security clearance. According to the indictment, Lancaster made false statements on, among other documents, OF-306 and SF-86 forms, and provided two federal agencies with fraudulent versions of her SF-50 form.
Specifically, according to the indictment, Lancaster concealed and falsified information in her application materials about her prior arrests, charges, convictions and prison terms; the unfavorable circumstances under which she had resigned from prior federal employment; the roles and responsibilities she had at previous federal jobs; and her salary history.
The maximum penalty for each count of making a false statement, submitting a false document and engaging in a concealment scheme is five years in prison. Lancaster also faces a maximum fine of $250,000 per count.
An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.
This case is being prosecuted by Trial Attorneys Ethan H. Levisohn and Peter Mason of the Criminal Division’s Public Integrity Section, and Assistant U.S. Attorney Mark D. Lytle for the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office and the SEC’s Office of Inspector General.
Leaders of Colorado-Based Vending Machine Fraud Sentenced to PrisonRead the Press Release
DENVER – The two leaders of a Colorado-based scheme that defrauded more than 400 consumers throughout the country of $5 million were sentenced to prison, the Justice Department and U.S. Postal Inspection Service announced today. Gary Luckner, 41, of Highlands Ranch, Colo., was sentenced today to 90 months in prison and was ordered to pay $4,524,456 in restitution. Richard Black, 52, of Arcadia, Calif., was sentenced yesterday to 97 months in prison and was ordered to pay $5,066,456 in restitution.
Black and Luckner created, led and operated the fraudulent scheme from 2007-2009, according to documents filed in the case. The two men arranged for various telemarketing sales rooms to sell business opportunities for vending machines that dispensed highly caffeinated energy chews and energy shots. For a purchase price of typically about $10,000, purchasers were promised vending machines, high-traffic locations for the vending machines and ongoing assistance in operating the vending machine business. Most of the victims never made any money and lost their entire investment. The largest of the telemarketing sales rooms involved – and the one that made the most sales – was American Vending Systems, which was located in Centennial, Colo.
Black and Luckner acknowledged in their plea agreements that sales representatives lied about likely profits from the business, the quality of locations that were available for the vending machines and the level of customer service that purchasers would receive. Black and Luckner also used phony “references” to persuade the victims to buy. Black himself was one such reference. Using an alias, Black falsely told potential buyers that he was an American Vending customer who operated a financially profitable vending route.
Black and Luckner pleaded guilty to conspiracy to commit mail fraud. Four other defendants were also convicted as part of the same scheme:
Trey Friedmann, 46, of Denver, was sentenced yesterday by Judge David M. Ebel to two years in prison and was ordered to pay $465,734 in restitution. Friedmann was the top salesman at American Vending.
Louis J. Gubitosa, 63, of Littleton, Colo., was sentenced earlier this year to 18 months in prison. Gubitosa was the president of American Vending.
Henry Melvin Hendrix, 48, of Galt, Calif., was ordered earlier this year to serve five years of probation, including eight months of home confinement. Hendrix was a phony reference who was paid to pretend to be a successful vending route owner.
Jennifer Putnam, 33, of Bluffton, S.C., was sentenced earlier this year to five years of probation, including eight months of home confinement. Putnam operated a locating company involved in the scheme that falsely claimed to have good locations ready and waiting in the area of the potential buyer.
“The victims’ stories are heartbreaking,” said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. “Like so many Americans struggling to make ends meet, these folks were trying to supplement modest incomes by investing in themselves and starting their own businesses. Instead of taking a step up the financial ladder, their losses now put them in a financial hole because these defendants lied to them. That’s why this department will continue to prosecute and seek stiff sentences for fraudsters like those sentenced today.”
“Prosecuting perpetrators of financial fraud is a top priority,” said U.S. Attorney for the District of Colorado John Walsh. “Victims of these crimes are more than just names on a piece of paper, they are real people who have lost their hard earned money. That is why it is so important to pursue cases such as this.”
“Federal agents with the United States Postal Inspection Service work diligently to protect citizens from being victimized by criminals who use the mail to commit fraud,” said Inspector in Charge of the U.S. Postal Inspection Service Denver Division Andrew Balkin. “Postal Inspectors from the Denver office are pleased with the efforts of the Justice Department in seeing these criminals brought to justice. Investigations like this will always be a priority for Postal Inspectors.”
The case was investigated by the U.S. Postal Inspection Service. Luckner, Black and the other defendants were prosecuted by Trial Attorney Patrick Jasperse of the U.S. Justice Department’s Office of Consumer Litigation.
Former Colonial Bank Mortgage Lending Supervisor <br /> Pleads Guilty to Fraud SchemeRead the Press Release
WASHINGTON – Teresa Kelly, a former operations supervisor in Colonial Bank’s Mortgage Warehouse Lending Division (MWLD), pleaded guilty today to conspiring to commit bank, wire and securities fraud for her role in a fraud scheme that contributed to the failures of Colonial Bank and Taylor, Bean & Whitaker (TBW).
The guilty plea was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Special Inspector General Neil Barofsky for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA OIG); and Victor F. O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.
Kelly, 35, of Ocoee, Fla., pleaded guilty before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Kelly faces a maximum penalty of five years in prison when she is sentenced on June 17, 2011. In a related action, the U.S. Securities and Exchange Commission (SEC) today filed civil charges against Kelly in the Eastern District of Virginia.
According to court documents, Kelly admitted that from 2002 through August 2009, she and her co-conspirators at Colonial Bank and TBW engaged in a scheme to defraud various entities and individuals, including Colonial Bank, a federally-insured bank; Colonial BancGroup Inc.; and the investing public. Kelly admitted that she knowingly and intentionally placed Colonial Bank and Colonial BancGroup at significant risk by causing them to purchase more than $400 million in assets that had no value.
Court documents state that in early 2002, TBW began running overdrafts in its master bank account at Colonial Bank because of TBW’s inability to meet its operating expenses, which included payroll, servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities and other obligations. Kelly and her co-conspirators engaged in a series of fraudulent actions to cover up the overdrafts, first by sweeping overnight money from one TBW account with excess funds into another, and later through the fictitious “sales” of mortgage loans to Colonial Bank, a fraud scheme the conspirators dubbed “Plan B.” The conspirators accomplished this by sending mortgage data to Colonial Bank for loans that did not exist or that TBW had already committed or sold to other third-party investors. Kelly admitted that she knew and understood she and her co-conspirators had caused Colonial Bank to pay TBW for assets that were worthless to the bank.
According to court documents, Kelly and her conspirators also caused TBW to engage in sales to Colonial Bank of fictitious trades that had no collateral backing them and had no value. To obtain fraudulent funding through these trades, TBW co-conspirators would contact Kelly or another co-conspirator at Colonial Bank when the mortgage company needed an advance from the bank. Conspirators at TBW would wire a request that included false documentation purporting to represent the sale of the trades to Colonial Bank to support the release of the funds. Kelly and others caused the false information to be entered into Colonial Bank’s books and records, giving the appearance that Colonial Bank owned a 99 percent interest in legitimate securities, when in fact the securities had no value and could not be sold.
Kelly admitted today that she and her co-conspirators took steps to hide the fraud scheme from Colonial Bank’s and Colonial BancGroup’s senior management, auditors and regulators, and Colonial BancGroup’s shareholders, including by providing materially false information that significantly overstated assets held in the MWLD portfolio. Kelly knew that these actions caused materially false financial data to be reported to Colonial BancGroup and incorporated in its publicly filed statements.
In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver. Colonial BancGroup also filed for bankruptcy in August 2009.
Raymond Bowman, the former president of TBW; Desiree Brown, the former treasurer of TBW; and Catherine Kissick, a former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division, previously pleaded guilty for their roles in the fraud scheme.
The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC OIG, HUD OIG, FHFA OIG and the IRS Criminal Investigation. The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.
This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Brothers Plead Guilty to Felonies in Connection with Kansas Deer Hunting and Guiding OperationRead the Press Release
WASHINGTON – James Bobby Butler Jr. and Marlin Jackson Butler pleaded guilty today in federal court in Wichita, Kan., to felony conspiracy and wildlife trafficking charges stemming from the illegal sale of guided deer hunts in southern Kansas, the Department of Justice and the U.S. Attorney’s Office for the District of Kansas announced.
James Bobby Butler Jr., 42, pleaded guilty to one count of conspiracy to violate the Lacey Act, one substantive Lacey Act count and one count of obstruction of justice. His brother, Marlin Jackson Butler, 36, pleaded guilty to one count of conspiracy to violate the Lacey Act and one Lacey Act count. Both men are from Martinsville, Texas.
The Lacey Act is a federal law that makes it illegal to knowingly transport or sell in interstate commerce any wildlife taken or possessed in violation of state law or regulation.
According to the May 2010 indictment in the case and today’s plea agreements, James and Marlin Butler conspired together to knowingly transport and sell in interstate commerce deer that had been hunted in violation of Kansas state law. The brothers operated a guiding service and hunting camp near Coldwater, Kan., at which they sold guiding services to out-of-state hunters for the purpose of illegally hunting and killing white-tailed and mule deer. Hunters guided by the Butler brothers killed deer in excess of annual bag limits, hunted deer without permits or using permits for the wrong deer management unit, killed deer using illegal equipment and hunted using prohibited methods such as spotlighting.
The guided hunts were sold for between $2,500 and $5,500, and in several instances resulted in the killing of trophy-sized buck deer. In today’s plea agreements, the Butlers admitted knowingly selling guided hunts for the illegal taking of the 25 buck deer identified in the indictment, for which hunters paid them a total of $77,500 in guiding fees plus tips. In addition to selling guiding services, the brothers also arranged for transport of the deer, in particular the antlers and capes, from Kansas to Texas and Louisiana.
James Butler also admitted in his plea agreement that he instructed another person to conceal or destroy evidence during the investigation.
The maximum penalty for a felony violation of the conspiracy statute and the Lacey Act includes up to five years in prison and a $250,000 fine. The maximum penalty for the obstruction charge against James Butler includes up to 20 years in prison and $250,000 fine. According to the plea agreements filed today, the prosecution agreed to recommend sentences of 41 months in prison for James Butler and 27 months in prison for Marlin Butler, in addition to fines, restitution and three years of supervised release during which time both Butler brothers would be prohibited from all hunting and guiding activity. Sentencing hearings for both defendants are set for June 2, 2011.
The case was investigated by the U.S. Fish & Wildlife Service, the Kansas Department of Wildlife and Parks, and the Texas Parks and Wildlife Department. The case is being jointly prosecuted by the U.S. Attorney’s Office for the District of Kansas and Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
15 March 2011
Texas Man Sentenced to 84 Months in Prison for<br /> Conspiracy to Distribute and Receive Child PornographyRead the Press Release
WASHINGTON – Daniel Cox of Houston was sentenced today in the Western District of Pennsylvania to 84 months in prison and lifetime supervised release for conspiracy to distribute and receive child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney for the Western District of Pennsylvania David J. Hickton and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Special Agent in Charge John Kelleghan.
Cox, 45, pleaded guilty before U.S. District Court Judge Arthur J. Schwab on July 21, 2010, to one count of conspiracy to distribute and receive child pornography. According to court documents and proceedings, Cox and others distributed images and videos of children being sexually abused to other members of an international group that had restricted membership and was formed on a social networking website. Members of the group distributed to one another thousands of sexually explicit images and videos of children, many of which graphically depicted prepubescent, male children, including some infants, being sexually abused and sometimes sodomized or subjected to bondage.
This case was investigated by HSI in Pittsburgh and the High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Assistant U.S. Attorney Craig W. Haller of the Western District of Pennsylvania and CEOS Trial Attorney Andrew McCormack prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
Massachusetts Man Pleads Guilty to Child Pornography ChargesRead the Press Release
WASHINGTON – George H. Lunt, 26, formerly of Plymouth, Mass., pleaded guilty today to two counts of transportation of child pornography and one count of possession of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division , U.S. Attorney for the District of Massachusetts Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the FBI Boston Field Office.
Lunt pleaded guilty before U.S. District Court Judge George A. O’Toole Jr. in Boston. Lunt was indicted on May 26, 2010. In pleading guilty, Lunt admitted to possessing thousands of images and videos of child pornography that included depictions of prepubescent children and toddlers, and sadistic conduct. Lunt admitted to distributing child pornography through online peer-to-peer file-sharing software. This case arose from an FBI investigation of individuals sharing and trading child pornography over the Internet.
Lunt is scheduled to be sentenced on June 21, 2011. Lunt faces a mandatory minimum penalty of five years in prison, a fine of $250,000 and restitution if appropriate.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case against Lunt was prosecuted by Assistant U.S. Attorney Michael I. Yoon of the District of Massachusetts and CEOS Trial Attorney Bonnie L. Kane of the Criminal Division. The case was investigated by the FBI.
Latin Kings Member Convicted in Maryland of <br /> Racketeering Conspiracy, Murder, Robbery and Firearms OffensesRead the Press Release
WASHINGTON - A federal jury convicted Chinua Shepperson, aka “Nu,” “NuNu” and “King Nu,” 28, of Washington, D.C., late yesterday of conspiracy to participate in a racketeering enterprise known as the Almighty Latin King and Queen Nation (Latin Kings), murder in aid of racketeering, robbery, using a gun during a crime of violence and murder resulting from the use of a gun during a crime of violence.
The conviction was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Theresa R. Stoop of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) - Baltimore Field Division; Chief J. Thomas Manger of the Montgomery County Police Department; Montgomery County State’s Attorney John McCarthy; Interim Chief Mark Magaw of the Prince George’s County Police Department; and Prince George’s County State’s Attorney Angela Alsobrooks.
“The Latin Kings is a brutal gang that uses violence to achieve its ends,” said Assistant Attorney General Breuer. “With Mr. Shepperson’s conviction, all 19 defendants charged in this investigation have been held to account. Our deliberate approach to prosecuting the Latin Kings and other gangs is taking violent offenders off our streets, and working to make our communities safer.”
“Chinua Shepperson robbed and murdered a Hyattsville man, and participated in an armed robbery in order to further his position in the Latin Kings,” said U.S. Attorney Rosenstein. “The strategy of combining the resources and intelligence of local, state and federal law enforcement agencies to pursue federal racketeering charges against criminal gangs is proving effective in removing violent offenders from the streets and making our neighborhoods more safe.”
“The ATF RAGE Task Force built a strong case against the Latin Kings through tireless police work documenting the criminal acts of the defendants and the RICO enterprise,” said ATF Special Agent in Charge Stoop. “The jury heard the facts of the investigation, including the violence perpetrated by Shepperson and the Latin Kings. The success of this investigation shows the effectiveness of the criminal justice system, and how hard ATF works to combat gang violence.”
According to court documents, the Latin Kings is a violent street gang with thousands of members across the country and overseas. The Latin Kings have a detailed and uniform organizational structure, which is outlined – along with various “prayers,” codes of behavior and rituals – in a written “manifesto” widely distributed to members throughout the country. Members of the Latin Kings are also traditionally given “King Names” or “Queen Names,” which are names other than their legal names by which they are known to members of the gang and to others on the street. At the local level, groups of Latin Kings are organized into “tribes,” including, the Royal Lion Tribe, MOG, Sun Tribe and UTL.
According to evidence presented during the two-week trial, Shepperson conspired with other Latin Kings members to engage in gang activities from a date unknown until November 2009. Specifically, evidence presented at trial showed that on Dec. 14, 2007, Sheppersonand other gang members participated in the armed robbery of a prostitute at a motel in Laurel, Md. In addition, evidence showed that on April 25, 2008, Shepperson conspired with other gang members to rob John Realpe Montoya of cocaine, and fatally shot him behind the Marylander Condominiums in Langley Park, Md.
All of Shepperson’s 18 co-defendants previously pleaded guilty to the racketeering conspiracy.
Shepperson faces a maximum sentence of life in prison. U.S. District Judge Alexander Williams scheduled sentencing for June 17, 2011, at 9:30 a.m.
The ATF-led Regional Anti-Gang Enforcement (RAGE) Task Force, which includes the Gaithersburg, Md., Police Department; the Montgomery County Department of Police; the Montgomery County State’s Attorney’s Office; the Prince George’s County Police Department; the Prince George’s County State’s Attorney’s Office; the Montgomery County Sheriff’s Office; the Maryland National Capital Park Police - Prince George’s County Division; and the Maryland State Police; as well as the New York City Police Department , the U.S. Secret Service and the Internal Revenue Service - Criminal Investigation provided assistance in the investigation and prosecution.
The case was prosecuted by Assistant U.S. Attorneys Emily Glatfelter and David Salem, and Trial Attorney Lara M. Peirce with the Criminal Division’s Gang Unit.
Justice Department Settles with Hertford County, N.C., Involving Pregnancy DiscriminationRead the Press Release
WASHINGTON – The Justice Department announced today that it has resolved a lawsuit alleging that Kimberly Sathoff was subjected to pregnancy discrimination by the Hertford County, N.C., Public Health Authority, in violation of Title VII of the Civil Rights Act of 1964.
The complaint, which was filed along with a consent Decree in the U.S. District Court for the Eastern District of North Carolina, alleges that the health authority discriminated against Ms. Sathoff on the basis of her sex by when the authority’s former health director rescinded an offer of employment and failed to hire Ms. Sathoff for a position with the health authority once the health director found out she was pregnant.
Under the terms of the consent decree, the health authority will implement policies and procedures that prohibit sex discrimination, including pregnancy discrimination, and provide training to all health authority employees with hiring responsibilities and all supervisors on the law of equal employment opportunity, including discrimination based on sex. Additionally, the health authority will pay Ms. Sathoff a $20,000 monetary award.
“A woman should not be regarded as unable to perform a job simply by virtue of her pregnancy. The Department of Justice is committed to protecting the employment rights of women,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
The enforcement of Title VII is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division and its work is available on its website at www.justice.gov/crt.
Justice Department Files Lawsuit Against the State of California for Violating Inmate’s Right to Practice His ReligionRead the Press Release
WASHINGTON– The Justice Department filed a lawsuit today against the state of California, Governor Jerry Brown and the California Department of Corrections and Rehabilitation for violating the right of an inmate to practice his religion. The lawsuit follows a Justice Department investigation that revealed that California’s inmate grooming policy substantially burdens the rights of an inmate to practice his Sikh faith.
By filing the complaint, the department seeks to resolve its investigation and participate in a lawsuit filed recently on behalf of the inmate, who has been subjected to punishment for maintaining an unshorn beard in accordance with the dictates of his religion. By requiring the inmate, Sukhjinder S. Basra, to cut his beard, California compels him to violate his religious beliefs in contravention of the Religious Land Use and Institutionalized Persons Act (RLUIPA). Basra is housed at the California Men’s Colony in San Luis Obispo, Calif.
“The freedom to practice one’s faith in peace is among our most cherished rights. RLUIPA has proven to be a powerful tool in combating religious discrimination and ensuring religious freedom,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Department of Justice is committed to vigorously enforcing RLUIPA to ensure that religious liberty for all remains protected.”
“The rights guaranteed by the Constitution extend to all people in the United States,” said André Birotte Jr., U.S. Attorney for the Central District of California. “By protecting those rights – even for those incarcerated – we strengthen those rights for all.”
RLUIPA, which protects the religious freedom of persons confined to institutions such as prisons, mental health facilities and state-run nursing homes, was enacted by both houses of Congress unanimously and signed into law on Sept. 22, 2000. The law also addresses religious discrimination in land use, and was passed in response to concerns that places of worship, particularly those of religious and ethnic minorities, were frequently subjected to discrimination in zoning matters. In the 10 years since its passage, RLUIPA has helped secure the ability of thousands of individuals and institutions to practice their faiths freely and without discrimination.
More information on the Civil Rights Division’s efforts to combat religious discrimination may be found at www.justice.gov/crt .
Departments of Justice and Health and Human Services Team up in Detroit to Crack Down on Health Care FraudRead the Press Release
WASHINGTON – Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius visited Detroit today to participate in the fifth regional health care fraud prevention summit. These summits bring together a wide array of federal, state and local partners, beneficiaries, providers and other interested parties to discuss innovative ways to eliminate fraud within the U.S. health care system. The summits are part of a larger effort on behalf of the Obama Administration to root out waste, fraud and abuse within the U.S. health care system.
In Detroit, the joint efforts of the Departments of Justice (DOJ) and HHS have achieved significant results in an area with major health care fraud problems. Since May 2009, this collaboration has resulted in charges against 120 defendants, in 18 separate criminal cases, for fraud schemes totaling approximately $120 million in taxpayer funds. So far, eight of these individuals have been convicted at trial and 63 have pleaded guilty.
“Here in Detroit and communities across this region, many of you have witnessed the devastating effects of health care fraud,” said Attorney General Holder. “Through a collaborative DOJ-HHS effort, we are working in partnership with government, law enforcement and industry leaders to protect taxpayer dollars, control health care costs and ensure the strength and integrity of our most essential health care programs. The results are clear: thanks to our efforts, health care fraud schemes throughout this region and across the country are being aggressively and permanently shut down. And as we renew our commitment to this work today, I am committed to building on the progress we’ve made, continuing to collaborate with each of you, and seeking new ways to expand our operations to fight health care fraud.”
“Thanks to provisions in the Affordable Care Act, the prospects for a criminal thinking about targeting our health care system have gotten a lot gloomier,” said Secretary Sebelius. “Here in Detroit, we are honoring our commitment to America’s seniors, meeting our obligation to taxpayers, and standing up to criminals who, in the past, have gotten away with far too much.”
In addition to remarks by the Attorney General and the Secretary, the summit featured three educational panels aimed at identifying best practices for providers, law enforcement and beneficiaries in preventing health care fraud.
The summits are integral to the overall health care fraud-fighting effort undertaken jointly by DOJ and HHS through the Health Care Fraud Prevention and Enforcement Action Team (HEAT). As one part of HEAT’s efforts, Medicare Fraud Strike Force operations have expanded from South Florida and Los Angeles to a total of nine health care fraud hot spots including Houston; Detroit; Brooklyn, N.Y.; Baton Rouge, La.; Tampa, Fla.; Chicago and Dallas. The Strike Force is a partnership between the Criminal Division’s Fraud Section, U.S. Attorneys’ Offices, HHS Office of Inspector General, FBI and other federal, state and local law enforcement partners. Since their inception in 2007, Strike Force operations have charged more than 1,000 defendants for Medicare fraud involving more than $2.3 billion in claims.
In addition, the Affordable Care Act provides new tools and resources to fight fraud in federal health care programs by providing an additional $350 million over the next 10 years through the Health Care Fraud and Abuse Control Account. The law toughens sentencing for criminal activity, enhances screenings and enrollment requirements, encourages increased sharing of data across government, expands overpayment recovery efforts and provides greater oversight of private insurance abuses. For information on the Health Care Fraud and Abuse Control Program Report for Fiscal Year 2010, please visit: http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2010.pdf .
For a summary of new tools and resources the Affordable Care Act has put in place to help fight fraud, visit: www.HealthCare.gov/news/factsheets/fraud03152011a.html .
Investments in fraud detection and enforcement have been shown to pay for themselves many times over, and the Administration’s tough stance against fraud is already yielding results. In FY 2010, more than $4 billion was returned to the Medicare Health Insurance Trust Fund, the U.S. Department of the Treasury and others as a result of enforcement activities targeting false claims and fraud perpetrated against government health care programs. This was an increase of $1.4 billion, or 56 percent, over FY 2009. The $4 billion recovered in FY 2010 includes recoveries from the $2.5 billion in settlements and judgments obtained in FY 2010 by the Department of Justice in False Claims Act matters alleging health care fraud. This is an unprecedented level of funds obtained in a single year and represents a 53 percent increase over FY 2009, in which $1.63 billion was obtained.
On June 8, 2010, President Obama announced this nationwide series of regional fraud prevention summits as part of a multi-faceted effort to crack down on health care fraud. The Detroit summit was the fifth in a series, with additional summits to follow in the coming months. Previous summits were held in Miami (July 16, 2010), Los Angeles (Aug. 26, 2010), Brooklyn, N.Y. (Nov. 5, 2010) and Boston (Dec. 16, 2010).
14 March 2011
UBS Client Sentenced in San Diego for Hiding Assets in Secret Bahamian and Swiss Bank AccountsRead the Press Release
WASHINGTON – Jeffrey Chatfield of San Diego was sentenced before U.S. District Judge Michael M. Anello to three years probation for hiding assets in secret offshore UBS bank accounts, the Justice Department and the Internal Revenue Service (IRS) announced today. Chatfield was also ordered to pay more than $96,000 to resolve his civil liability with the IRS for failing to file the required Reports of Foreign Bank and Financial Reports (FBARs) on Forms TD F 90-22.1.
According to court documents and statements made in court, Chatfield filed false tax returns for 2000 through 2008 in which he failed to report that he had an interest in or a signature authority over Bahamian and Swiss financial accounts at UBS and Credit Suisse. He also failed to report income earned on these Swiss bank accounts and never filed any FBARs disclosing his interest in any offshore financial accounts.
According to court documents and statements made in court, in or about 2000, with the assistance of a UBS banker, Chatfield opened a bank account at UBS Bahamas Ltd. in the name of nominee entity Alder West. Chatfield deposited into the account approximately $900,000 in untaxed securities and cash that he received in 2000 from his consulting work, which included advising private companies seeking to go public.
In August 2002, Chatfield closed the Alder West account and with the assistance of his UBS banker and others, formed Iberia West Ltd., a Bahamian nominee entity. Chatfield then opened a new Swiss account at UBS in the name of Iberia West and transferred into that account securities and cash previously held at UBS Bahamas Ltd. In August 2004, Chatfield closed his Iberia West account and transferred all remaining assets to an account at Credit Suisse, also held in the name of the nominee entity Iberia West. In 2008, Credit Suisse told Chatfield that it was closing all accounts held by U.S. taxpayers. Chatfield closed this account in 2008.
In February 2009, UBS entered into a deferred prosecution agreement under which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain U.S. customers of UBS’s cross-border business, including Chatfield.
Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division John A. DiCicco commended the investigative efforts of the IRS-Criminal Investigation agents who investigated the case, and Tax Division trial attorney Timothy J. Stockwell, who is prosecuting the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax
New Jersey Pipe Supply Company and Its Owner Plead Guilty to Fraud and Bribery Conspiracy in Power Generation IndustryRead the Press Release
WASHINGTON — A New Jersey industrial pipe supply company and its owner pleaded guilty today to participating in a conspiracy to commit fraud and pay bribes to a purchasing manager at Consolidated Edison of New York (Con Edison) in return for the manager’s efforts to steer contracts to the company, the Department of Justice announced today.
Andrew Martingano of Staten Island, N.Y., and his company, American Pipe Bending and Fabrication Co. Inc. of Edison, N.J., each pleaded guilty today in U.S. District Court in Manhattan to participating in a conspiracy to defraud Con Edison.
According to a one-count felony charge filed on Feb. 1, 2011, against Martingano and American Pipe, Martingano and others agreed to pay approximately $510,000 in cash bribes to James M. Woodason, a department manager of the purchasing department at Con Edison. In exchange for the bribes, Woodason steered Con Edison industrial pipe supply contracts to American Pipe by secretly providing Martingano with confidential competitor bid information, thereby causing Con Edison to pay higher, non-competitive prices for materials. At the time of Woodason’s arrest in August 2010, Woodason had already received approximately $45,000 in cash bribe payments from Martingano and American Pipe. The department said the conspiracy took place from approximately January 2009 through approximately August 2010.
Con Edison is a regulated utility headquartered in Manhattan. It provides electric service to approximately 3.2 million customers and gas service to approximately 1.1 million customers in New York City and Westchester County, N.Y. Con Edison received more than $10,000 in federal funding each year between 2003 through 2010.
Martingano and American Pipe are charged with conspiracy, which carries a maximum fine of $500,000 for companies, and a maximum penalty of five years in prison and a $250,000 fine for individuals. Each of the maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s pleas arise from an ongoing federal investigation of bid rigging, bribery, fraud and tax-related offenses in the power generation industry. On Nov. 19, 2010, Woodason pleaded guilty in U.S. District Court in Manhattan to charges that he accepted and agreed to accept bribes from American Pipe and another industrial pipe supply vendor. Robert D. Rosenberg, a former sales broker for a Lyndhurst, N.J.-based industrial pipe supply company, pleaded guilty on Dec. 2, 2010, for his role in a conspiracy to defraud Con Edison.
The investigation is being conducted by the Antitrust Division’s New York Field Office, with the assistance of the FBI’s New York Division and the Internal Revenue Service-Criminal Investigation. Con Edison cooperated with the department’s investigation.
Anyone with information concerning bid rigging, bribery, tax offenses or fraud in the power generation industry should contact the Antitrust Division’s New York Field Office at 212-264-9308, visit www.justice.gov/atr/contact/newcase.htm or contact the FBI’s New York Division at 212-384-3252.
Kentucky Couple Charged with Lacey Act Crimes Based on the Illegal Harvest of Paddlefish from the Ohio RiverRead the Press Release
WASHINGTON – A Kentucky couple and their caviar companies were charged today with trafficking in and falsely labeling illegally harvested paddlefish (Polydon spathula), the Department of Justice and the U.S. Attorney for the Southern District of Ohio announced today.
The American paddlefish (Polydon spathula), also called the Mississippi paddlefish or the spoonbill (hereinafter paddlefish), is a freshwater fish that is primarily found in the Mississippi River drainage system. Paddlefish eggs are marketed as caviar. Paddlefish were once common in waters throughout the Midwest. However, the global decline in other caviar sources, such as sturgeon, has led to an increased demand for paddlefish caviar. This increased demand has led to over-fishing of paddlefish, and consequent decline of the paddlefish population. Paddlefish, whose eggs are marketed as caviar, are protected by both federal and Ohio law. It is illegal to harvest paddlefish in Ohio waters, but they can be harvested legally in Kentucky waters.
The indictment charges Steve T. Kinder, 51, and Kinder Caviar Inc. with illegally harvesting paddlefish from Ohio waters and falsely reporting to the Kentucky Department of Fish & Wildlife Resources that he caught the fish in Kentucky. The indictment charges Cornelia Joyce Kinder, 53, as well as Kinder Caviar Inc. and Black Star Caviar Company with providing false information about the paddlefish eggs to the U.S. Fish & Wildlife Service in order to obtain permits to export the paddlefish eggs to foreign customers, including the amount of paddlefish eggs to be exported, the names of the fishermen that harvested the paddlefish and the location where the paddlefish were harvested. The alleged violations occurred between March 2006 and December 2010.
Steve Kinder and his wife Cornelia Joyce Kinder, both of Owenton, Ky., owned and operated Kinder Caviar and Black Star Caviar. Those companies were in the business of exporting paddlefish eggs as caviar to customers in foreign countries.
If convicted, the Kinders face a maximum penalty of five years in prison, a $250,000 fine or both on each count. The companies could be fined up to $500,000 per count.
An indictment is merely an accusation and a defendants is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case is being investigated by the U.S. Fish & Wildlife Service Office of Law Enforcement, the Ohio Department of Natural Resources, Division of Wildlife; and the Kentucky Department of Fish & Wildlife Resources. It is being prosecuted by the U.S. Attorney’s Office for the Southern District of Ohio and the Environmental Crimes Section of the Environmental and Natural Resources Division of the Department of Justice.
Justice Department’s New ADA Rules Go into Effect on March 15, 2011Read the Press Release
WASHINGTON – Revised regulations implementing the Americans with Disabilities Act (ADA) will take effect tomorrow, March 15, 2011, the Department of Justice announced. The revised rules are the department’s first major revision of its guidance on accessibility in 20 years.
The regulations apply to the activities of more than 80,000 units of state and local government and more than seven million places of public accommodation, including stores, restaurants, shopping malls, libraries, museums, sporting arenas, movie theaters, doctors’ and dentists’ offices, hotels, jails and prisons, polling places, and emergency preparedness shelters. The rules were signed by Attorney General Eric Holder on July 23, 2010, and the official text was published in the Federal Register on September 15, 2010.
The department is also releasing a new document, “ADA Update: A Primer for Small Business,” to help small businesses understand the new and updated accessibility requirements. In addition, the department is announcing the release of a new publication explaining when the various provisions of its amended regulations will take effect. Both documents will be available tomorrow on the department’s ADA website, www.ada.gov .
“The new rules usher in a new day for the more than 50 million individuals with disabilities in this country,” said Thomas E. Perez, Assistant Attorney General for Civil Rights. “The rules will expand accessibility in a number of areas and, for the first time, provide detailed guidance on how to make recreation facilities, including parks and swimming pools, accessible.”
The new ADA rules adopt the 2010 ADA Standards for Accessible Design, which have been retooled to be more user-friendly for building code officials, builders, and architects, and have been harmonized with state and local accessibility codes. The 2010 standards also include, for the first time, standards on making swimming pools, parks, golf courses, boating facilities, exercise clubs, and other recreation facilities accessible for individuals with disabilities. Entities covered by the ADA have until March 15, 2012 to comply with the 2010 Standards. In addition to adopting the new ADA 2010 Standards, the amended regulations contain many new or expanded provisions on general nondiscrimination policies, including the use of service animals, the use of wheelchairs and other power-driven mobility devices, selling tickets for wheelchair-accessible seating at sports and performance venues, reserving and guaranteeing accessible rooms at hotels, providing interpreter services through video conferencing, and the effect of the new regulations on existing facilities. The compliance date for the all the new nondiscrimination provisions, except for those on hotel reservations, is March 15, 2011. Compliance with the hotel reservation provisions is not required until March 15, 2012.
“ADA Update” and “ADA 2010 Revised Requirements: Effective Date/Compliance Date” are the first of several planned publications aimed at helping businesses, not-for-profit organizations, and state and local governments understand their obligations under the amended Title II and Title III regulations. Individual print copies of the Effective Date/Compliance Date publication can be ordered from the ADA Information Line (800-514-0301 voice or 800-514-0383 TTY).
For more information about the ADA , c all the Justice Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY), or access the department’s ADA website at www.ada.gov .
Justice Department Increases Transparency with Launch of <br /> FOIA.gov Website, Commemorates Sunshine WeekRead the Press Release
The Department of Justice marked the start of Sunshine Week today with the launch of FOIA.gov, the “flagship initiative” of the department’s Open Government Plan and one of the most significant contributions yet toward making this the most transparent administration in history.
“The Administration’s openness initiatives are central to this President’s approach to governing. Where we can open up the process of governing and enlist our fellow citizens to participate in solving the challenges we face, we’re all going to be better off,” said Associate Attorney General Tom Perrelli. “We believe very simply that if we give people the information they seek, they will create a better government.”
FOIA.gov, brings together all the FOIA data collected by the department on behalf of the federal government.
“As we look forward, today we are pleased to unveil an initiative that will make FOIA easier for the thousands of Americans who use it to find out more about their government or to gain access to information that can make their lives better,” explained Perrelli. “The site is designed not just to make FOIA easier. It tries to make FOIA better.”
FOIA.gov was inspired by public feedback gathered during the Open Government dialogues last year. FOIA.gov:
- Allows the public to easily search, sort and compare data from annual Freedom of Information Act (FOIA) reportsm,
- Offers a plain language explanation of the law,
- Explains how to submit a request, how requests are processed, and
- Provides detailed information on where to send a FOIA request.
At an event held this morning in the department’s Great Hall, experts from across the federal government came together to discuss the ways they are implementing the President and Attorney General’s transparency initiatives.
“The Freedom of Information Act is a vital part of our democracy,” said Melanie Anne Pustay, Director of the Office of Information Policy. ”Greater transparency and a more open government are happening right now, as a direct result of the actions that have been taken by all agencies, large and small, to implement the President’s and Attorney General’s initiatives.”
The Office of Information Policy, which oversees compliance with the FOIA for the entire federal government, released a summary of these achievements which detail how agencies are putting into practice a “presumption of openness” as directed by the President’s directive and the Attorney General’s FOIA guidelines of 2009. For example:
- The Department’s rate of disclosure spiked for both releases in full and in part in 2010 -- with full releases jumping by 21 percent over 2009, and partial releases increasing by 18.2 percent.
- The Office of the Secretary of Defense/Joint Staff posted 85 percent of all of its FOIA responses --totaling over 300,000 pages -- on its website, and moved to require all 31 Department of Defense components to follow suit.
- Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) achieved a backlog reduction of 66 percent, after nearly doubling the resources it committed to FOIA and creating a “Backlog Strike Force.”
- By making process changes and focusing on strategic goals, the U.S. Citizenship & Immigration Services (USCIS) slashed its backlog from 88,361 FOIA requests in 2006 to approximately 8,000 backlog cases at the end of FY 2010, for an over 90 percent total reduction.
For more information, visit FOIA.gov or www.justice.gov/oip.
- Allows the public to easily search, sort and compare data from annual Freedom of Information Act (FOIA) reportsm,
Former President of TBW Pleads Guilty to Fraud SchemeRead the Press Release
WASHINGTON – Raymond Bowman, the former president of Taylor, Bean & Whitaker (TBW), pleaded guilty today to conspiring to commit bank, wire and securities fraud, and lying to federal agents about his role in a fraud scheme that contributed to the failures of TBW and Colonial Bank.
The guilty plea was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Special Inspector General Neil Barofsky for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA OIG); and Victor F. O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.
Bowman, 45, of Atlanta, pleaded guilty before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Bowman faces a maximum penalty of five years in prison on the conspiracy charge and a maximum penalty of five years in prison on the false statements charge when he is sentenced on June 10, 2011.
According to court documents, Bowman admitted that from 2003 through August 2009, he and his co-conspirators, including former TBW chairman Lee Farkas, engaged in a scheme to defraud various entities and individuals, including Colonial Bank, a federally-insured bank; Colonial BancGroup Inc.; and the investing public. Bowman admitted that he knowingly and intentionally participated in a fraud scheme that caused Colonial Bank and Colonial BancGroup to purchase tens of millions of dollars of worthless assets, caused Colonial BancGroup to report false information in its financial statements, and artificially inflated the value of TBW’s mortgage servicing rights.
Court documents state that in early 2002, Bowman learned that TBW began running overdrafts in its master bank account at Colonial Bank because of TBW’s inability to meet its operating expenses, which included payroll, servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities and other obligations. In or about the fall of 2003, Bowman, along with Farkas and other co-conspirators, engaged in a series of fraudulent actions to cover up the overdrafts, first by sweeping overnight money from one TBW account with excess funds into another, and later through the fictitious “sales” of mortgage loans to Colonial Bank, a fraud scheme the conspirators dubbed “Plan B.” The conspirators accomplished this by sending mortgage data to Colonial Bank for loans that did not exist or that TBW had already committed or sold to other third-party investors. According to the statement of facts, Bowman believed that Plan B data included data for loans that did not exist and knew that without Plan B, TBW would likely fail and go out of business.
TBW used its mortgage servicing rights (MSR) to collateralize a working capital line of credit at Colonial Bank, and it retained third-party companies to conduct periodic MSR valuations. According to court documents, Bowman admitted that he, at Farkas’s request, directed co-conspirators to manipulate TBW’s borrowing base by billions of dollars to artificially inflate the MSR valuations and to avoid a margin call.
In 2005, TBW established a wholly-owned special purpose entity called Ocala Funding LLC, as a financing vehicle to provide it with additional funding for mortgage loans. The facility obtained funds for mortgage lending from the sale of asset-backed commercial paper to financial institutions. In his statement of facts, Bowman admitted that he learned from Farkas and other co-conspirators at TBW that within a year of its creation, Ocala Funding had a significant collateral deficit. As Bowman acknowledged, the government could prove that by August 2009, that deficit had grown to approximately $1.5 billion and that TBW had caused Colonial Bank and the Federal Home Loan Mortgage Corporation (Freddie Mac) to falsely believe that they each had an undivided ownership interest in thousands of the same loans worth hundreds of millions of dollars.
On Aug. 3, 2009, Bowman was interviewed by agents from the FBI and the Office of the SIGTARP. Today, Bowman admitted that he falsely stated to the agents that he was not aware of Plan B loans, and that he was not aware of any fraudulent activities between Colonial Bank and TBW.
In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver. Colonial BancGroup also filed for bankruptcy in August 2009.
In June 2010, Farkas was arrested and charged in a 16-count indictment for his role in the fraud scheme. His trial is scheduled to begin in April 2011. An indictment is merely a charge and a defendant is presumed innocent until proven guilty. Desiree Brown, the former treasurer of TBW, pleaded guilty on Feb. 24, 2011, and Catherine Kissick, a former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division, pleaded guilty on March 2, 2011, for their roles in the fraud scheme.
The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC OIG, HUD OIG, FHFA OIG and the IRS Criminal Investigation. The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.
This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Consol Energy to Pay $5.5 Million Penalty and Install Wastewater Treatment Plant to Settle Clean Water Act ViolationsRead the Press Release
WASHINGTON – The U.S. Department of Justice, U.S. Environmental Protection Agency (EPA) and the state of West Virginia announced today that Consol Energy Inc., the largest producer of coal from underground mines in the United States, has agreed to pay a $5.5 million civil penalty for Clean Water Act violations at six of its mines in West Virginia. In addition to the penalty, Consol will spend an estimated $200 million in pollution controls that will reduce discharges of harmful mining wastewater into Appalachian streams and rivers.
“In this settlement, Consol takes responsibility for its past failures to abide by the terms of its Clean Water Act permits,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “As a result of this enforcement action, Consol will install a state-of-the-art system to treat wastewater from multiple mines that will set the standard for the responsible management of discharges from underground mining operations in Appalachia. This settlement will ensure protection of human health and the environment for the benefit of the people who live in Appalachia.”
“Complying with the Clean Water Act is a critical responsibility of those who operate mines near our nation’s treasured rivers, lakes and streams,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “The state-of the-art technology required by today’s settlement is an important step forward in protecting local waterways and the health of communities in Appalachia.”
“We are committed to cleaning up the waters of Dunkard Creek and the Monongahela watershed and holding those who pollute it accountable,” said EPA Regional Administrator Shawn M. Garvin. “The centerpiece of this settlement – a new advanced wastewater treatment plant – will substantially reduce pollution by keeping nearly 100 million pounds of total dissolved solids, including chloride, from reaching these waterways each year.”
“This agreement between the state, the federal government and industry will create a complex waste water treatment facility that will significantly improve the water quality in the Monongahela watershed, and implement measures that will have positive effects on streams along the Ohio River, while allowing the mineral extraction industry to continue to have a positive economic impact in the region,” said Scott Mandirola, director of the Division of Water and Waste Management for the West Virginia Department of Environmental Protection.
“Addressing the serious issues that affect our environment, by measures such as this one, will not only promote a healthier society and enhance our safety, but as recent studies are reporting, the expected investments in technology and alternative production methods may actually result in the creation of jobs,” said U.S. Attorney William J. Ihlenfeld, II. “It is my sincere hope that this settlement will send a strong message that the federal government is serious about protecting the health of its citizens and ensuring that its laws are followed during the process of energy extraction.”
Consol has agreed to build and operate an advanced wastewater treatment plant using reverse osmosis technology near Mannington, W.V., to remove high levels of chloride from mining wastewater. When completed, the plant will be the largest such treatment plant in Appalachia and capable of treating 3,500 gallons of mine water per minute, substantially reducing chloride and other salts in mining waters discharged to streams. This treatment will eliminate over 96 million pounds of total dissolved solids, including over 11 million pounds of chloride. High levels of chloride and dissolved solids can harm aquatic life, clog irrigation devices and carry toxic chemicals that impact drinking water.
The U.S. complaint filed concurrently with the settlement agreement alleges that six Consol mines violated pollution discharge limits in their Clean Water Act permits hundreds of times over the last four years. The complaint alleges chronic exceedances of chloride discharge limits at the Blacksville No. 2, Loveridge, Robinson Run and Four States mines in the Monongahela watershed and the Shoemaker and Windsor mines discharging into tributaries of the Ohio River.
The complaint also alleges that discharges of high amounts of chloride and total dissolved solids from Consol’s facilities at Blacksville No. 2 and Loveridge contributed to severe impairment of aquatic life and conditions favorable for golden algae to thrive in Dunkard Creek. In September 2009, a species of golden algae bloomed in Dunkard Creek, killing thousands of fish, mussels and amphibians.
The consent decree, lodged in the U.S. District Court for the Northern District of West Virginia, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Department of Justice and state of West Virginia websites at:
http://www.justice.gov/enrd/Consent_Decrees.html and
http://www.dep.wv.gov/pio/Pages/Settlements,Ordersouttopublicnotice.aspx
Alleged Mexican Drug Kingpin Extradited to the United States <br /> to Face Drug and Money-Laundering ChargesRead the Press Release
WASHINGTON – Alleged Mexican drug kingpin Esteban Rodriguez-Olivera, 47, was extradited from Mexico to the United States on Friday, March 11, 2011, and was arraigned today before U.S. Magistrate Judge Cheryl L. Pollak at the federal courthouse in Brooklyn, N.Y., on charges contained in a superseding indictment returned on March 21, 2008. Rodriguez-Olivera is one of two brothers believed to be the leaders of “Los Gueros,” an international drug organization responsible for shipping more than 100 tons of cocaine to the United States. Mexican authorities arrested Rodriguez-Olivera on a provisional warrant issued from the Eastern District of New York, and he and his brother, Luis Rodriguez-Olivera, also face federal criminal charges in the District of Columbia.
The extradition was announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York; Assistant Attorney General Lanny A. Breuer of the Criminal Division; John P. Gilbride, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York; and James T. Hayes Jr., Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York. The investigation was conducted by DEA offices in New York, Texas and Guadalajara, Mexico, and ICE/HSI, in New York, with assistance provided by the Internal Revenue Service and law enforcement authorities in Mexico.
According to the indictment and an unsealing application filed by the government in the Eastern District of New York, in 2007 the U.S. Organized Crime and Drug Enforcement Task Force designated the defendant and his brother drug kingpins, adding them to the list of the world’s most significant narcotics traffickers and money launderers. Los Gueros’ supply route originated in Mexico, stretched into Texas, and branched off to various points within the United States, including the New York City metropolitan area. The organization received multi-ton shipments of cocaine from Colombia along the Gulf coast of Mexico, and transported drug shipments into the United States through Laredo and McAllen, Texas.
The superseding indictment alleges that, from 1996 to 2008, Los Gueros imported more than 100,000 kilograms (100 tons) of cocaine into the United States, and the DEA estimates that between 2004 and 2006, the organization was responsible for shipping truckloads containing more than 2,000 kilograms (two tons) of cocaine to New York City alone. As part of the investigation, in October 2004, ICE agents seized approximately 156 kilograms of cocaine hidden in one of the organization’s tractor-trailers; and in 2005, ICE agents seized approximately $2.1 million in drug proceeds bound for the organization in Mexico.
As detailed in the government’s detention letter, to minimize the chance of his detection and arrest, Rodriguez-Olivera frequently relied on his associates to communicate with other co-conspirators by telephone and rarely spoke on the telephone himself. He also avoided being photographed. However, during the course of the investigation, in one instance when Rodriguez-Olivera spoke by telephone directly with a co-conspirator, he was recorded by law enforcement setting up a meeting in the Dominican Republic to plan shipments of narcotics to New York.
Esteban Rodriguez-Rivera and Luis Rodriguez-Olivera are charged in the U.S. District Court in the District of Columbia in relation to the seizure of approximately 5.2 tons of cocaine in January 2006 by the Mexican Navy in the Pacific Ocean near Manzanillo, Colima. The defendants are charged with engaging in a conspiracy to import cocaine and to manufacture and distribute cocaine knowing and intending that it would be imported into the United States, as well as with the substantive offense of manufacturing and distributing cocaine knowing that it will be imported into the United States.
“No matter what steps a narcotics trafficker might take to avoid being apprehended, ultimately there is no escape from justice,” stated U.S. Attorney Lynch. “Thanks to the cooperation of our partners in Mexico, there is no safe haven for a drug trafficker, and kingpins are no exception.” U.S. Attorney Lynch extended her grateful appreciation to the agencies that conducted the government’s investigation and thanked the Criminal Division’s Office of International Affairs for its significant assistance in this case.
“Extraditions are critical to our ability to bring major narcotraffickers to justice, and are a central component of the cooperative relationship between U.S. and Mexican law enforcement,” said Assistant Attorney General Breuer. “The extradition to the United States of Esteban Rodriguez-Olivera – an alleged leader of a major drug trafficking organization – is a concrete example of how we are working with our Mexican partners to dismantle these criminal enterprises.”
DEA Special Agent-in-Charge Gilbride stated, “With roots in Guadalajara to distribution cells throughout the Eastern seaboard, this drug trafficking organization was responsible for smuggling millions of dollars of cocaine into our nation. The arrest today sends a message to drug traffickers that you can run, but you cannot hide from global law enforcement who share a goal of putting you out of business.”
ICE/HSI Special Agent-in-Charge Hayes stated, “As alleged in the indictment and other court filings, the defendant is not only responsible for importing tons upon tons of cocaine destined for New York City, but he made millions of dollars in profit from this illegal drug activity. Dismantling this type of criminal enterprise and stemming the flow of drugs into the United States remains a top priority for Homeland Security Investigations and our federal partners.”
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The case pending in the Eastern District of New York is being prosecuted by Assistant U.S. Attorney Walter M. Norkin. The case pending in the District of Columbia is being prosecuted by Trial Attorney Charles D. Griffith Jr. of the Narcotics and Dangerous Drug Section in the Criminal Division of the Department of Justice.
11 March 2011
UK Solicitor Pleads Guilty for Role in Bribing Nigerian Government Officials as Part of KBR Joint Venture SchemeRead the Press Release
WASHINGTON – Jeffrey Tesler, a former consultant to Kellogg, Brown & Root Inc. (KBR) and its joint venture partners, pleaded guilty today in Houston to conspiring to violate the Foreign Corrupt Practices Act (FCPA) and to violating the FCPA for his participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts, the Criminal Division of the Department of Justice announced. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.
Tesler, 62, a United Kingdom citizen and licensed solicitor, was extradited on March 10, 2011, from the United Kingdom to the United States. Tesler pleaded guilty today before U.S. District Judge Keith P. Ellison to one count of conspiracy to violate the FCPA and one count of violating the FCPA contained in a Feb. 17, 2009, indictment.
KBR, Technip S.A., Snamprogetti Netherlands B.V. and a Japanese engineering and construction company were part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. Tesler admitted that from approximately 1994 through June 2004, he and his co-conspirators agreed to pay bribes to Nigerian government officials, including top-level executive branch officials, in order to obtain and retain the EPC contracts. The joint venture hired Tesler as a consultant to pay bribes to high-level Nigerian government officials and hired a Japanese trading company to pay bribes to lower-level Nigerian government officials. During the course of the bribery scheme, the joint venture paid approximately $132 million in consulting fees to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company. Tesler admitted that he used the consulting fees he received from the joint venture, in part, to pay bribes to Nigerian government officials.
In related cases, KBR’s former CEO, Albert “Jack” Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme, while KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to FCPA-related charges for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program.
In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip on June 28, 2010. According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years. On July 7, 2010, the department filed a deferred prosecution agreement and criminal information against Snamprogetti Netherlands BV, which also agreed to pay a $240 million criminal penalty. Tesler’s co-defendant, Wojciech J. Chodan, was extradited from the United Kingdom on Dec. 3, 2010, and pleaded guilty on Dec. 6, 2010, to conspiring to violate the FCPA.
As part of his plea agreement, Tesler agreed to forfeit $148,964,568. At sentencing, scheduled for June 22, 2011, Tesler faces a maximum penalty of five years in prison on the conspiracy charge, and five years in prison on the FCPA violation charge.
The case is being prosecuted by Assistant Chief William J. Stuckwisch and Deputy Chief Patrick F. Stokes of the Criminal Division’s Fraud Section, with investigative assistance from the FBI-Houston Division. The Criminal Division’s Office of International Affairs provided substantial assistance. Significant assistance was provided by the SEC’s Division of Enforcement and by the authorities in France, Italy, Switzerland and the United Kingdom, including in particular the Crown Prosecution Service, the Serious Fraud Office’s International Assistance and Anti-Corruption Units, the London Metropolitan Police and the City of London Police in the United Kingdom.
Two Contractors Convicted of Involuntary Manslaughter <br /> for Death of Afghan National in Kabul, AfghanistanRead the Press Release
WASHINGTON – A federal jury in Norfolk, Va., today convicted Justin Cannon, 27, of Corpus Christi, Texas, and Christopher Drotleff, 29, of Virginia Beach, Va., of involuntary manslaughter while working as contractors for the U.S. Department of Defense in Afghanistan.
Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement today following the jury’s verdict.
Cannon and Drotleff were acquitted of other charges, including second-degree murder, assault resulting in serious bodily injury, and firearms offenses.
Cannon and Drotleff were charged under the Military Extraterritorial Jurisdiction Act (MEJA) through a superseding indictment on Aug. 5, 2010. According to court documents, Cannon and Drotleff were charged with shooting and killing two Afghanistan nationals and seriously wounding a third while on an unauthorized convoy in Kabul, Afghanistan, on May 5, 2009.
Cannon and Drotleff were Department of Defense contractors employed by a subsidiary of Xe (formerly known as Blackwater Worldwide). According to evidence presented at trial, Cannon and Drotleff left their military base without authorization to join a convoy transporting local interpreters. Evidence at trial established that, after a traffic accident involving one of the vehicles in the convoy, Cannon and Drotleff fired multiple shots into the back of a civilian car that had attempted to pass the accident scene. The passenger of the car was fatally shot and the driver was seriously injured. An individual who happened to be walking his dog in the area was also killed in the shooting. Today, the jury found the defendants guilty of involuntary manslaughter for the death of Romal Mohammad Naiem, the front-seat passenger. They were acquitted of responsibility for the death of the person walking his dog and the injuries to the driver.
According to court records, as contractors, Cannon and Drotleff provided training to the Afghan National Army for the Islamic Republic of Afghanistan in the use and maintenance of weapons and weapons systems.
At sentencing, scheduled for June 14, 2011, Cannon and Drotleff face a maximum penalty of eight years in prison.
Today’s conviction is the result of a retrial. Cannon and Drotleff were originally tried before a jury in September 2010, which ended in a hung jury and mistrial.
The case is being prosecuted by Assistant U.S. Attorneys Randy C. Stoker and Alan M. Salsbury from the U.S. Attorney’s Office for the Eastern District of Virginia - Norfolk Division as well as Trial Attorney Robert McGovern of the Criminal Division’s Human Rights and Special Prosecutions Section. The case is being investigated by the FBI.
Houston-Area Resident Sentenced to 41 Months in Prison for Medicare Fraud Scheme Involving Claims of Hurricane Damage to Power WheelchairsRead the Press Release
WASHINGTON – Helen Etinfoh, the former owner and operator of a Houston durable medical equipment (DME) company was sentenced today to 41 months in prison in connection with a $3 million power wheelchair fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Etinfoh, 50, was also ordered by U.S. District Judge Ewing Werlein Jr. of the Southern District of Texas to pay $851,228 in restitution jointly and several with her co-defendant. In addition, Etinfoh was sentenced to three years of supervised release following her prison term. Eitnfoh was remanded to custody after sentencing.
On April 16, 2010, after a week-long trial, a federal jury convicted Etinfoh of one count of conspiracy to commit health care fraud and four counts of health care fraud. The jury also convicted Paula Whitfield, a patient recruiter for the DME company, of one count of conspiracy to commit health care fraud and one count of health care fraud. Whitfield was previously sentenced to 21 months in prison.
According to evidence presented at trial, Etinfoh was the owner and operator of Luant & Odera Inc., a Houston-area DME company doing business as Tonni Medical Equipment & Supplies. Whitfield was a recruiter for Luant who was paid kickbacks in exchange for providing the company with beneficiaries in whose names bills could be submitted to Medicare. Etinfoh and other co-conspirators submitted false and fraudulent claims to Medicare for medically unnecessary DME, including power wheelchairs, wheelchair accessories and motorized scooters.
Evidence at trial showed that, based on representations from Whitfield and other recruiters, Luant would bill Medicare under a special code that designated the power wheelchairs as replacements for wheelchairs lost during hurricanes that hit the Houston area in fall 2008. In fact, the hurricanes did not damage the wheelchairs. Certain beneficiaries testified that they did not even have a power wheelchair before receiving the ones provided to them by Luant. Luant used the hurricane code because it allowed the company to submit claims to Medicare without a doctor’s order.
At trial, beneficiaries in whose names claims were submitted to Medicare testified that recruiters whom they had never met, including Whitfield, came to their homes and offered them free power wheelchairs in exchange for their Medicare information. The beneficiaries, all of whom could walk, testified that they neither needed nor used the power wheelchairs delivered to them by Luant, which were often billed to Medicare at more than $6,000 per chair.
Today’s sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; 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 the Inspector General (HHS-OIG), Office of Investigations; and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The case was tried by Assistant Chief Sam S. Sheldon and Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Strike Force operations in nine locations have obtained indictments of 1,000 individuals who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Honeywell Pleads Guilty in Illinois to Illegal Storage of Hazardous WasteRead the Press Release
WASHINGTON – Honeywell International Inc. pleaded guilty today in federal district court in Benton, Ill., to one felony offense for knowingly storing hazardous waste without a permit in violation of the Resource Conservation and Recovery Act (RCRA). Honeywell was also sentenced today to pay a criminal fine in the amount of $11.8 million.
“Today, Honeywell must account for its knowing violation of a federal law that protects the public from exposure to hazardous waste containing radioactive material,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “All companies who generate hazardous waste must have a permit to store the waste and, when granted a permit under RCRA, must fully comply with its requirements or they will be prosecuted.”
“The citizens of Southern Illinois should not and will not tolerate improper storage of hazardous wastes so near their homes and businesses,” said Stephen R. Wigginton, U.S. Attorney for the Southern District of Illinois. U.S. Attorney Wigginton noted that he will “continue to seek out and prosecute environmental criminals on behalf of the residents of the Southern District of Illinois in order to insure the environmental safety of our communities.”
“The defendant’s illegal storage practices put employees at risk of exposure to radioactive and hazardous materials,” s aid Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s plea agreement and sentencing shows that those who try to circumvent the law and place people’s health and the environment at risk will be vigorously prosecuted.”
Honeywell, a Delaware corporation with corporate headquarters in Morristown, N.J., owns and operates a uranium hexafluoride (UF6) conversion facility in Massac County, Ill., near the city of Metropolis and the Ohio River. Honeywell is licensed by the U.S. Nuclear Regulatory Commission to possess and otherwise manage natural uranium, which it converts into UF6 for nuclear fuel. The Metropolis facility is the only facility in the United States to convert natural uranium into UF6.
At the Metropolis facility, air emissions from the UF6 conversion process are scrubbed with potassium hydroxide (KOH) prior to discharge. As a result of this process, KOH scrubbers and associated equipment accumulate uranium compounds that settle out of the liquid and are pumped as a slurry into 55-gallon drums. The drummed material, called “KOH mud” and consisting of uranium and KOH, has a pH greater than or equal to 12.5.
In November 2002, Honeywell shut down part of the wet reclamation process it used to reclaim the uranium from the KOH mud, knowing that previously accumulated drums of KOH mud and any additional drums of KOH mud generated thereafter would have to be stored onsite until such time as the wet reclamation process was restarted. Honeywell also knew that, because the pH of KOH mud generated at the facility was greater than or equal to 12.5, it is classified as corrosive hazardous waste under regulations issued pursuant to RCRA. Therefore, Honeywell needed, but did not have, a RCRA permit to store any drums of KOH mud at its facility longer than 90 days.
In July 2007, Honeywell requested a modification of its RCRA permit from the Illinois Environmental Protection Agency (IEPA) so that they could store drums of KOH mud. IEPA issued Honeywell a modified permit in July 2008, allowing Honeywell to store drums containing KOH mud only in a KOH container storage area designed to contain any spills, leaks or precipitation that accumulates in the drum storage area. By September 2008, Honeywell had accumulated over 7,000 drums of KOH mud. In April 2009, EPA special agents conducted a search warrant and found nearly 7,500 illegally stored drums containing waste that was both radioactive and hazardous. Honeywell began storing the KOH mud drums in compliance with the terms of its RCRA permit in approximately March 2010.
In accordance with the terms of the criminal plea agreement, Honeywell will serve a five-year term of probation. As a condition of probation, Honeywell must comply with the terms of the interim consent order entered into with the Illinois Attorney General’s Office and the Illinois Environmental Protection Agency, filed on April 21, 2010, and any subsequent revisions, which imposes a schedule for the processing of KOH mud. As a further condition of probation, Honeywell must implement a community service project in the community surrounding the Metropolis facility, whereby Honeywell will develop, fund and implement a household hazardous waste collection program and arrange for proper treatment, transportation and disposal of this waste collected during at least eight collection events over a two-year period, at a cost of approximately $200,000.
The case was investigated by the Environmental Protection Agency Criminal Investigation Division. It was prosecuted by Jennifer A. Whitfield and Susan L. Park of the Environmental Crimes Section of the Department of Justice Environment and Natural Resources Division and by William E. Coonan and Michael J. Quinley of the U.S. Attorney’s Office for the Southern District of Illinois.
Former Senior U.S. District Judge Sentenced to One Month in Prison for Misuse of Government Property and Drug OffensesRead the Press Release
WASHINGTON – Former Senior U.S. District Court Judge Jack T. Camp Jr., was sentenced today in U.S. District Court in Atlanta to one month in prison for unlawful possession of controlled substances charges and unlawful conversion of government property, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Special Agent in Charge Brian D. Lamkin of the FBI’s Atlanta Office and Director Vernon Keenan of the Georgia Bureau of Investigation.
Camp, 67, a former Senior U.S. District Judge in the Northern District of Georgia, pleaded guilty in November 2010 to an information charging him with one count of unlawful possession of controlled substances, one count of aiding and abetting the unlawful possession of controlled substances by a previously convicted drug felon and one count of conversion of government property. Camp was sentenced today in the Northern District of Georgia by Senior U.S. District Judge Thomas F. Hogan for the District of Columbia. Judge Hogan was sitting by designation in the Northern District of Georgia.
As part of his plea, Camp admitted that between May 2010 and Oct. 1, 2010, he unlawfully used and possessed cocaine, marijuana and Roxycodone, a Schedule II controlled substance. Camp also admitted to giving an individual, whom he knew had a prior felony drug conviction, money to purchase cocaine, Roxycodone and marijuana for their joint use. Camp admitted that he unlawfully gave the individual a U.S. District Court laptop computer for her personal use. Camp was arrested on Oct. 1, 2010, after attempting to purchase drugs from an undercover FBI agent posing as a drug dealer. Camp further resigned his commission as Senior U.S. District Judge. On Feb. 28, 2011, Camp voluntarily surrendered his license to practice law in the state of Georgia.
Camp was also sentenced to pay a $1,000 fine and $825 in restitution. He was sentenced to one year of supervised release.
The case was prosecuted by Trial Attorneys Deborah Sue Mayer and Tracee Joy Plowell of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI Atlanta’s Public Corruption Squad. The Georgia Bureau of Investigaiton provided substantial assistance in this case.
Former Alabama Mayor Pleads Guilty to Filing False Tax ReturnRead the Press Release
WASHINGTON – John Jackson, the former mayor of White Hall, Ala., pleaded guilty before U.S. Magistrate Judge Susan Walker in U.S. District Court in Montgomery, Ala., to one count of filing a false tax return, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the court documents, Jackson admitted filing a false joint 2004 U.S. Individual Income Tax Return, Form 1040, that did not report all of the total income earned by Jackson and his spouse. Jackson also admitted in his plea to filing false joint Individual Income Tax Returns, Forms 1040, for 2005 and 2006, which failed to report all of the total income earned by him and his spouse.
No sentencing date has been scheduled. Jackson faces a maximum of three years in prison, three years of supervised release and a maximum fine of $250,000 or twice the loss resulting from his offense.
The case was investigated by special agents of the IRS - Criminal Investigation. Trial Attorney Michael Boteler of the U.S. Department of Justice, Tax Division, Southern Criminal Enforcement Section, and Todd Brown, Assistant U.S. Attorney for the Middle District of Alabama, handled the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax
Alabama Man Indicted in Tax Fraud & Identity Theft ConspiracyRead the Press Release
WASHINGTON - Eric Bernard Caldwell was indicted by a federal grand jury in the Middle District of Alabama on charges of conspiracy and theft of government funds, the Department of Justice and the Internal Revenue Service (IRS) announced today. The indictment was returned on Feb. 16, 2011, and unsealed today.
Caldwell, a resident of Montgomery County, Ala., was charged with conspiring to defraud the United States by filing false claims and also charged with one count of theft of government funds. According to the indictment, Caldwell was part of a conspiracy that filed false tax returns using stolen identities. Caldwell provided identifying information to co-conspirator Ora Mae Adamson , who filed the returns, in exchange for a share of the illicit proceeds generated by the false tax returns.
Adamson pleaded guilty to conspiracy and identity theft charges on Dec. 2, 2010, and was sentenced to 46 months in prison on March 10, 2011. Another co-conspirator, Jeffery Leon Ceaser, has also pleaded guilty and was sentenced, on March 2, 2011, to 36 months in prison.
An indictment merely alleges that crimes have been committed, and defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Caldwell faces a maximum of 20 years in prison and a fine of $500,000.
IRS – Criminal Investigation agents investigated this case, and Tax Division trial attorneys Jason Poole and Michael Boteler are prosecuting the case.
Additional information about the Justice Department’s recent efforts to stop fraudulent claims for the first-time homebuyer tax credit is available here . Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax .
10 March 2011
Tennessee Man Charged with Tax CrimesRead the Press Release
WASHINGTON - Kenneth L. Richardson of Nashville, Tenn., was arraigned in Nashville on charges of making and subscribing a false income tax return for 2004, and for failure to file a tax return for years 2005, 2006 and 2007, the Justice Department and Internal Revenue Service (IRS) announced today.
The indictment alleges that Richardson owned and operated a bail bonding company in Nashville, which did business as “Skyy Bonding Company.” According to the indictment, in 2004, Richardson did willfully make and subscribe an IRS Form 1040, U.S. Individual Income Tax Return, which he did not believe to be true and correct as to every material matter. The indictment alleges that Richardson knew he had substantial gross income in addition to the amount stated on his 2004 tax return.
The indictment further alleges that for tax years 2005, 2006 and 2007, Richardson had gross income that required the filing of a tax return, but willfully failed to make an income tax return as required by law.
An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, the defendant faces a maximum potential sentence of six years in prison and maximum fines of $550,000. The court has not yet set a trial date.
The case is being prosecuted by Tax Division trial attorneys Michelle M. Petersen and Kathryn B. Ward. The case was investigated by the IRS-Criminal Investigation Division.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax .
Former New York Correctional Officer Convicted of Assaulting Inmate, Making False Statements to FBIRead the Press Release
WASHINGTON – A former correctional officer from Cohoes, N.Y., was convicted following a jury trial in Albany, N.Y., of violating the civil rights of an inmate while working at the Rensselaer County Correctional Facility (RCCF), and making false statements to the FBI regarding the incident, the Department of Justice announced today.
Following trial before U.S. District Judge Gary L. Sharpe, the jury found that in January 2009, Keith Ronald Hancock Jr., 37, while employed as a correctional officer at the RCCF in Troy, N.Y., assaulted an inmate and made a false statement to the FBI during the investigation of the incident. At trial, the jury heard evidence that Hancock struck an inmate on multiple occasions while the inmate was handcuffed behind the back and under the control of other correctional officers. After the incident, Hancock prepared an incident report in which he failed to report his uses of force or provide any justification for them. Thereafter, during the course of the federal investigation, Hancock falsely denied his conduct.
“Corrections officers who abuse their authority and violate the rights of inmates under their supervision do a disservice to all officers who take an oath to uphold the U.S. Constitution,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Civil Rights Division will aggressively prosecute these abuses of official authority, wherever they occur.”
“Conduct such as the defendant’s has no place in our correctional institutions, or in our society,” said U.S. Attorney for the Northern District of New York Richard S. Hartunian. “Prosecutions such as this send an important message that such conduct cannot and will not be tolerated.”
The defendant’s conviction for violating the inmate’s civil rights carries a maximum statutory penalty of up to 10 years in prison, a $250,000 fine, or both. The conviction for making a false statement to the FBI carries a maximum statutory penalty of up to five years in prison, a $250,000 fine, or both. Sentencing is scheduled for July 12, 2011.
The investigation in this matter was conducted by the Albany Division of the FBI, with the assistance of the Rensselaer County Sheriff’s Office. The case was prosecuted by the Criminal Section of the Civil Rights Division and the U.S. Attorney’s Office for the Northern District of New York.
Former New York Correctional Officer Convicted of Assaulting Inmate, Making False Statements to FBIRead the Press Release
WASHINGTON – A former correctional officer from Cohoes, N.Y., was convicted following a jury trial in Albany, N.Y., of violating the civil rights of an inmate while working at the Rensselaer County Correctional Facility (RCCF), and making false statements to the FBI regarding the incident, the Department of Justice announced today.
Following trial before U.S. District Judge Gary L. Sharpe, the jury found that in January 2009, Keith Ronald Hancock Jr., 37, while employed as a correctional officer at the RCCF in Troy, N.Y., assaulted an inmate and made a false statement to the FBI during the investigation of the incident. At trial, the jury heard evidence that Hancock struck an inmate on multiple occasions while the inmate was handcuffed behind the back and under the control of other correctional officers. After the incident, Hancock prepared an incident report in which he failed to report his uses of force or provide any justification for them. Thereafter, during the course of the federal investigation, Hancock falsely denied his conduct.
“Corrections officers who abuse their authority and violate the rights of inmates under their supervision do a disservice to all officers who take an oath to uphold the U.S. Constitution,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Civil Rights Division will aggressively prosecute these abuses of official authority, wherever they occur.”
“Conduct such as the defendant’s has no place in our correctional institutions, or in our society,” said U.S. Attorney for the Northern District of New York Richard S. Hartunian. “Prosecutions such as this send an important message that such conduct cannot and will not be tolerated.”
The defendant’s conviction for violating the inmate’s civil rights carries a maximum statutory penalty of up to 10 years in prison, a $250,000 fine, or both. The conviction for making a false statement to the FBI carries a maximum statutory penalty of up to five years in prison, a $250,000 fine, or both. Sentencing is scheduled for July 12, 2011.
The investigation in this matter was conducted by the Albany Division of the FBI, with the assistance of the Rensselaer County Sheriff’s Office. The case was prosecuted by the Criminal Section of the Civil Rights Division and the U.S. Attorney’s Office for the Northern District of New York.
Former Managers of South Dakota Apartment Complex Fined $30,000 for Racial DiscriminationRead the Press Release
WASHINGTON – The U.S. District Court for the District of South Dakota has ordered the former property managers of the Lakeport Village Apartment in Sioux Falls, S.D., to pay a total of $30,000 in civil penalties because they racially discriminated against three families in violation of the Fair Housing Act, the Department of Justice announced today. The former owner of the complex, TK Properties LLC, and one of its principals, Scott Terveen, had previously paid $30,000 to settle the United States’ claims against them as part of a settlement approved by the court on Dec. 21, 2010.
The government’s lawsuit, filed on Oct. 15, 2009, alleged that former property manager Ann Wagner and former maintenance supervisor Corey Anderson created a racially hostile housing environment for one African-American family and two white families who associated with the African-American family while they were tenants at Lakeport Village. The complaint alleged that Wagner and Anderson used racial epithets in reference to the African-American family and in the presence of all three families, including minor children. The complaint also alleged that Wagner and Anderson retaliated against two white families that had befriended the African-American family. All three families eventually moved out as a result of the defendants’ racially hostile and retaliatory conduct. Wagner and Anderson did not respond to the complaint and the court entered a judgment of default against them in July 2010.
“No person or family should be discriminated against because of race, or retaliated against because of the race of their friends or relatives,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The court’s decision makes clear that such discrimination is unacceptable and that perpetrators will be penalized.”
“This decision helps ensure that equal housing opportunities required by law are available to all South Dakotans. Our office will not tolerate discrimination against persons based upon their race,” said U.S. Attorney for the District of South Dakota Brendan Johnson
The lawsuit originated as a result of complaints the three families filed with the Department of Housing and Urban Development (HUD). After an investigation, HUD found reasonable cause to believe that unlawful discrimination had occurred and referred the matter to the Justice Department.
“Today, HUD and the Justice Department stand together against housing discrimination,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity . “More than that, we will not tolerate retaliation against individuals or families who file discrimination complaints or assist those who do.”
The order, issued on March 9, 2011, by Judge Karen E. Schreier, requires Wagner and Anderson to each pay a $15,000 civil penalty. The order also enjoins Wagner and Anderson from participating in the management or operation of rental housing for a three year period.
Fighting illegal housing discrimination is a top priority of the Justice Department. The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt .
Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
Former Drug Company Executive Pleads Guilty in Oversized Drug Tablets CaseRead the Press Release
WASHINGTON – Marc S. Hermelin, the former chairman of the board and chief executive officer of St. Louis-based KV Pharmaceutical Company, pleaded guilty and was sentenced today in a case involving KV’s production and distribution of oversized morphine sulfate tablets, the Justice Department announced. U.S. District Judge E. Richard Webber of the Eastern District of Missouri ordered Hermelin to pay a $1 million fine, forfeit $900,000 and serve a sentence of 30 days in jail.
Hermelin pleaded guilty to two misdemeanor violations of the Food, Drug and Cosmetic Act (FDCA). In a plea agreement that was submitted to the court, Hermelin admitted that KV introduced misbranded morphine sulfate tablets into interstate commerce in 2007 and 2008. Morphine sulfate is a pain relief drug and opiate. The government charged that the morphine sulfate discussed in the plea agreement included some oversized tablets, which contained more active ingredient of the drug morphine than was specified in its labeling. This made the morphine sulfate “misbranded” under federal law, according to the court documents.
In May 2008, KV received complaints about oversized morphine sulfate tablets, according to court documents. An oversized tablet discovered by a pharmacist in California weighed twice as much as a normal pill. An oversized tablet found by a Canadian drug distributor was approximately 65 percent heavier than a normal pill. Both oversized tablets had been made on “BB2” pill press machines, which KV used to make many other tablet drugs. In June 2008, KV disclosed the discovery of the oversized morphine sulfate tablets to the Food and Drug Administration (FDA) and publicly recalled various morphine sulfate lots. At the same time, the government alleged that although KV knew of other oversized, BB2-made tablets and that its BB2 machine could randomly produce some oversized tablets, the company did not inform FDA of the other oversized tablets.
Hermelin also served as an officer of Ethex Corporation, a KV subsidiary that branded and distributed generic drugs, according to court documents. The government charged that by virtue of his roles at KV and Ethex, Hermelin was a “responsible corporate officer” with the authority and responsibility to prevent and correct FDCA violations at both companies.
According to court documents in a related federal case in St. Louis, several months after the oversized drug tablets came to light, FDA conducted an inspection of KV’s facilities and found numerous drug-production problems and potential law violations. In March 2009, the Justice Department filed a civil suit against KV, Ethex and of their several senior executives, including Hermelin, asking the court to have the companies and the executive officers take immediate action to remedy problems. The U.S. District Court in St. Louis issued an order the same month that required the companies and their executives to take prompt remedial action , according to court documents.
In another related case, in March 2010, the Justice Department filed criminal charges against Ethex, which pleaded guilty to two felony offenses as a result of its failure to file required reports with the FDA concerning certain oversized drug tablets. Ethex was ordered to pay $28.1 million in fines, forfeitures and restitution, and was placed on probation for five years.
“We will hold corporate executives responsible when company profits are pursued at the expense of consumer safety,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
“FDA’s drug-labeling laws and regulations are designed to ensure that Americans can safely consume effective drug products,” said Special Agent-in-Charge Patrick Holland, FDA’s Office of Criminal Investigations. “We will continue to work with the U.S. Attorney’s Office and the Department of Justice to investigate those companies and individuals who participate in the distribution of misbranded drugs,” he added.
The Hermelin case was investigated by the FDA’s Office of Criminal Investigations, with assistance from the FBI and the U.S. Postal Inspection Service. The case was prosecuted by the U.S. Attorney’s Office for the Eastern District of Missouri and the Justice Department’s Office of Consumer Litigation. Additional assistance was provided by the FDA’s Office of Chief Counsel.
Florida Man Sentenced to 30 Months in Prison for Immigration Fraud Scheme and Tax Evasion Involving Florida Property Development CompanyRead the Press Release
WASHINGTON – Richard A. Murdoch of Florida was sentenced today to 30 months in prison for immigration fraud and tax evasion charges related to his role in a scheme to fraudulently procure visas from the U.S. Embassy in London through a Florida property development company called Royal Development. The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Robert E. O’Neill of the Middle District of Florida; Eric J. Boswell, Assistant Secretary of State for Diplomatic Security; and Special Agent in Charge Linda J. Osuna of the Internal Revenue Service (IRS) Criminal Investigation Division.
Murdoch, 54, was sentenced by U.S. District Court Judge Gregory A. Presnell in the Middle District of Florida. Judge Presnell also ordered Murdoch to pay $2.3 million in restitution, jointly and several with his co-defendants, to United Kingdom visa applicants who were defrauded by Royal Development. Murdoch was also ordered to pay $189,852 in back taxes and sentenced to three years of supervised release.
On April 7, 2010, Murdoch was indicted with Hugh Morgan, 68, a U.K. national residing in Ontario, Canada, and Christopher A. Barrett, 49, a U.K. national residing in Florida, on one count of conspiracy to commit immigration fraud and four counts of immigration fraud in relation to Royal Development. The indictment also charged Murdoch with three counts of tax evasion. Murdoch and Barrett were arrested on April 26, 2010, in Florida and Morgan was arrested on the same day in Ontario in response to a U.S. government extradition request. All three defendants pleaded guilty on Dec. 10, 2010.
Yesterday, Judge Presnell sentenced Morgan to three months in prison and three years of supervised release. Today, Judge Presnell sentenced Barrett to one month in prison and two years of supervised release. Morgan and Barrett are subject to removal from the United States as a result of the convictions.
According to court documents, from approximately June 2003 to November 2006, the defendants conspired to commit immigration fraud through Royal Development, which purportedly sold Florida-based home construction companies to foreign nationals. The conspirators represented that the purchase of a company would enable foreign nationals to qualify for and obtain either a treaty investor (E-2) visa or intracompany transferee (L-1A) visa. Along with the sale of the companies, the conspirators generally represented that they would submit the required visa paperwork to U.S. authorities, help the foreign nationals run the company, and help the foreign nationals adjust to life in the United States. According to court documents, the conspirators required a payment of between $65,000 to $165,000 for the purchase of the company and the visa services. During the course of this conspiracy, Royal Development obtained more than $2.4 million from the U.K. investors.
According to court documents, Murdoch admitted that he knowingly presented required applications, affidavits and other documents that contained materially false statements to U.S. immigration authorities. In addition, Murdoch admitted that from approximately June 2003 to April 2006, Murdoch received approximately $536,593 in income from Royal Development for which he should have paid income taxes and that he intentionally failed to file his federal income tax returns for 2003, 2004 and 2005, by the respective due dates, because he was concealing his income from the IRS. The total tax due and owing on this taxable income to the U.S. government is $189,852. Murdoch also admitted that he used the taxable income from Royal Development for personal expenses such as hang gliding, cigars, and the purchase of a 1987 Porsche.
According to court documents, Morgan and Barrett admitted that they knowingly presented required applications, affidavits and other documents that contained materially false statements to U.S. immigration authorities. In particular, Morgan and Barrett admitted that they knowingly prepared and submitted fraudulent immigration benefit applications for Barrett as well as Barrett’s adult daughter, enabling both Barrett and his daughter to fraudulently procure L-1A visas and come to and work in the United States.
The case was investigated by the Diplomatic Security Service - Criminal Investigations Division in Washington, D.C., and the IRS-Criminal Investigation Division in Maitland, Fla. The Fraud Prevention Unit at the U.S. Embassy in London provided significant assistance. The Diplomatic Security Service - Regional Security Offices in Toronto, Canada, and London, and the Diplomatic Security Service Miami Field Office provided invaluable support.
In addition, the government of Canada, including Canadian prosecutors and the Toronto Fugitive Squad, provided significant assistance. The Criminal Division’s Office of International Affairs provided valuable assistance.
The case is being prosecuted by Senior Trial Attorney James S. Yoon of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Karen L. Gable and Nicole M. Andrejko of the U.S. Attorney’s Office for the Middle District of Florida.
Bexar County, Texas, Corrections Officer Charged with Civil Rights ViolationsRead the Press Release
WASHINGTON – A Bexar County, Texas, corrections officer was charged today in a two-count federal indictment with violating the civil rights of two detainees, announced the Department of Justice. The charges stem from two incidents – one on Oct. 8, 2007; the other on May 31, 2009 – in which Raymond Quintero, 33, of San Antonio, allegedly assaulted inmates at the Bexar County Detention Center.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendant is presumed innocent unless and until proven guilty.
If convicted, the defendant faces maximum penalties of 10 years in prison on each of the civil rights charges.
This case was investigated by Special Agent Mirella Rodriguez of the San Antonio Division of the FBI with assistance from the Bexar County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Bill Baumann of the Western District of Texas and Civil Rights Division Trial Attorney Christopher Lomax.
Alabama Women Sentenced to 46 Months in Prison for Tax Fraud and Identity TheftRead the Press Release
WASHINGTON – Ora Mae Adamson, a resident of Montgomery County, Ala., was sentenced to 46 months in prison, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to court documents, between March 2009 and September 2009, Adamson conspired with others to defraud the United States by filing 158 false federal income tax returns. As part of the scheme, Adamson and her co-conspirators fraudulently obtained the names and Social Security numbers of individuals. Adamson would then file false tax returns in these individuals’ names, without their authorization. The tax returns falsely claimed the first-time homebuyer’s credit and fuel tax credit. The refunds from the false returns were deposited into bank accounts controlled by Adamson and other co-conspirators.
In all, the conspiracy defrauded the United States of $621,738. One of Adamson’s co-conspirators, Jeffery Ceaser, was sentenced to 36 months in prison on March 2, 2011.
In addition to 46 months in prison, Adamson was also ordered to pay $621,738.41 in restitution to the United States.
Ronald A. Cimino, Deputy Assistant Attorney General for the Department of Justice’s Tax Division, and Leura G. Canary, U.S. Attorney for the Middle District of Alabama, commended the IRS special agents who investigated this case and Tax Division Trial Attorneys Jason Poole and Michael Boteler, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/. Additional information about the Justice Department’s recent efforts to combat fraudulent claims for the first-time homebuyer tax credit is available here
Alabama Man Pleads Guilty for Role in Tax Fraud and Identity Theft ConspiracyRead the Press Release
MONTGOMERY, Ala. – Leroy Howard, a resident of Montgomery pleaded guilty to one count of conspiring to defraud the United States, the Justice Department of Justice and Internal Revenue Service (IRS) announced today.
Along with four other defendants, Howard was indicted Dec. 14, 2010, by a federal grand jury sitting in Montgomery on a variety of charges stemming from a large-scale tax fraud and identity theft conspiracy based in that city. According to the indictment and other court documents, over a two year period in 2009 and 2010, the conspirators used stolen identities to file millions of dollars in false tax returns that claimed fraudulent refunds. Between January and June of 2010, Howard was responsible for funneling tens of thousands of dollars in fraud proceedsto his co-conspirators.
In January 2010, Howard opened up a bank account into which fraudulent tax refunds were deposited, he withdrew the money and then provided it to co-conspirator Veronica Dale and others. Howard also received tens of thousands of dollars in checks from Betty Washington, who also helped move fraud proceeds. Howard received a monetary portion of each of these transactions.
Washington pleaded guilty Jan. 5, 2011, to a charge of conspiring to defraud the United States. Her sentencing is set for June 16, 2011. The case against Dale and several other co-conspirators is awaiting trial.
The court did not set a sentencing date. Howard faces a maximum of 10 years in prison, three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense.
IRS-Criminal Investigation agents investigated this case, and Justice Department Tax Division trial attorneys Jason Poole and Michael Boteler are prosecuting the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.
9 March 2011
Statement of the Attorney General on Death of Deputy U.S. MarshalRead the Press Release
WASHINGTON -- The Attorney General made the following statement today:
“Yesterday’s tragic shootings in St. Louis are yet another solemn reminder of the dangers that United States Marshals confront on a daily basis. These brave men and women routinely put their lives on the line in their work to combat crime and gun violence, to apprehend dangerous criminals, and to help bring fugitives to justice. Yesterday’s actions by two Deputy U.S. Marshals and local police officers in St. Louis reflect the dedication and courage that defines America’s law enforcement community.
“Less than a month after Deputy U.S. Marshal Derek Hotsinpiller was killed in the line of duty in Elkins, West Virginia, our thoughts and prayers now are with the families of Deputy U.S. Marshal John Perry, who made the ultimate sacrifice, as well as with Deputy U.S. Marshal Theodore Abegg and the St. Louis police officer who were injured yesterday. Their service, their courage, and their willingness to risk their own lives to protect the safety of others will not be forgotten. As we mourn this devastating loss, we also reaffirm that the Justice Department’s commitment to supporting our law enforcement partners – and to ensuring officer safety – will continue to be a top priority.”
State Department Contract Employee Pleads Guilty to Illegally Accessing Confidential Passport FilesRead the Press Release
WASHINGTON - A State Department contract employee pleaded guilty today to illegally accessing confidential passport application files, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Mark Carter, 51, of Upper Marlboro, Md., pleaded guilty to a one-count criminal information charging him with unauthorized computer access.
According to information contained in plea documents, Carter worked as a contract employee for the State Department, serving as the network administrator in the Eastern District of Virginia. Carter admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains, among other data, all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Carter admitted that between March 2007 and March 2008, he logged onto the PIERS database and viewed the passport applications of approximately 60 celebrities, musicians, actors, members of the business community, colleagues, a professional athlete, members of his family and other individuals. Carter admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.
To date, 12 current or former State Department employees or contractors, including Carter, have pleaded guilty in this continuing investigation.
This case is being prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section. The case is being investigated by the State Department Office of Inspector General.
Ohio Man Sentenced in Church Arson CaseRead the Press Release
WASHINGTON – An Ohio man was sentenced to 51 months in prison for setting fire to the First Azusa Apostolic Faith Church of God in Conneaut, Ohio , the Department of Justice announced today. Ronald J. Pudder, 23, of Conneaut, pleaded guilty last year to one count of intentionally damaging, destroying and attempting to destroy religious property because of the race, color, and ethnic characteristics of individuals associated with that property.
“In this nation, one of our most basic rights is the freedom to practice our faith in peace. We will not tolerate acts of violence that attempt to disrupt that right,” said Thomas E. Perez, Assistant Attorney General for Civil Rights. “The Justice Department will aggressively prosecute acts of violence fueled by hate.”
“The defendant in this case meant to send a hateful message that hearkens back to the darkest days of our nation,” said U.S. Attorney for the Northern District of Ohio Steve M. Dettelbach. “But today, standing here, united against hate, we – black, white, Jewish, Muslim and Christian, man and woman, old and young – are sending a stronger message.
According to court documents, Pudder admitted that on May 20, 2010, he set on fire the First Azusa Apostolic Faith Church of God, which is the sole predominantly African-American church in the Conneaut area.
Neighbors called police around 4:45 a.m. after seeing the church in flames. The front door was scorched, but the flames did not penetrate the interior of the church. Investigators later determined the door had been doused with an accelerant, as had other doors on the church, but those did not catch fire.
This case is being prosecuted by Patricia A. Sumner, trial attorney with the Criminal Section of the Civil Rights Division, and Assistant U.S. Attorney James V. Moroney, following an investigation by the Painesville Resident Agency of the Cleveland FBI and the Conneaut Police Department.
Justice Department Fines Houston Bus Company $55,000 for Violating the ADARead the Press Release
WASHINGTON – A Houston bus company was fined $55,000 for violating passenger carrier accessibility requirements under the Americans with Disabilities Act (ADA), announced the Departments of Justice and Transportation. In addition to the fine, a consent agreement reached with the Federal Motor Carrier Safety Administration (FMCSA) and the Justice Department requires Autobuses Ejecutivos LLC dba Omnibus Express to upgrade its fleet to meet ADA requirements by July 2011 or have its operating authority revoked.
An extensive investigation conducted by FMCSA uncovered that Omnibus Express was operating a fleet of 85 leased buses, and none were equipped with wheelchair lifts. In the past 12 months, the bus company leased 22 new buses that were not accessible to individuals with disabilities. ADA regulations require that at least 50 percent of a carrier’s buses be accessible, and that all new buses leased or purchased be accessible by individuals with disabilities.
“Equal access to transportation is at the cornerstone of autonomous and independent living, and this agreement demonstrates the strong commitment both the Justice Department and the Department of Transportation have to joint enforcement of the requirements that transportation be accessible to all,” said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. “We will continue to vigorously enforce these requirements to ensure individuals with disabilities have equal access as guaranteed by the ADA.”
“Every day, thousands of people rely on motorcoaches and other types of commercial passenger buses to travel where they need to go safely and efficiently,” said FMCSA Administrator Anne S. Ferro. “We owe it to the traveling public to make sure commercial buses are safe and accessible for everyone.”
In February 2009, FMCSA and the Justice Department entered into a memorandum of understanding concerning the enforcement of commercial passenger buses. The memorandum between the two agencies was included in the Over-the-Road Bus Transportation Accessibility Act of 2007, and is designed to ensure consistent ADA enforcement nationwide.
More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt . The consent agreement with Omnibus Express can be found at www.fmcsa.dot.gov/documents/ABOUT/News/Omnibus-ConsentAgreement-508.PDF .
Federal Court Permanently Bars Owner and Employees of Rhode Island Firm from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON – A federal court in Providence, R.I., has ordered that Michael Brier, the owner of the tax return preparation firm Refunds Now Inc., and his employees, Jeffrey Sroufe, Esther Santiago and Carmen Miranda, be permanently barred from preparing federal income tax returns for others, the Justice Department announced today. The permanent injunction order, to which the four individuals consented, applies to them personally and doing business under the names Refunds Now Inc., RNTS Inc., FTIRS Inc., POTIRS Inc. and IHIRS Inc.
In November 2010 the court entered a preliminary injunction against Brier, Sroufe and Santiago after finding that at least 300 tax returns prepared by Brier and Refunds Now understated customers’ tax liabilities and that Brier and his employees fabricated tax deductions and credits on the returns. The court also noted that a Refunds Now employee had offered to provide one of Brier’s customers with fake receipts in order to substantiate amounts reported on the customer’s tax return.
According to the court, Brier and his employees prepared approximately 24,000 federal income tax returns between 2003 and 2007. The court found that the Internal Revenue Service examined 350 of those returns and determined that 92 percent of them required adjustments, resulting in a government-estimated loss of more than $1.1 million in tax revenue based on the examined returns.
The court’s permanent injunction order requires Brier, Sroufe and Santiago to mail a copy of the order to all customers for whom they have prepared tax returns since Jan. 1, 2004. The order additionally requires Brier to remove or cover all exterior signs at 381 Wickenden Street in Providence indicating that tax preparation service is offered there and to post a copy of the court’s order at the front and back entrances of that address.
Since 2001, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of false tax returns. More information about these cases can be found at the Tax Division’s website .
35 miembros y asociados de la pandilla Barrio Azteca fueron acusados de asociación ilícita y otros delitos, incluidos 10 acusados de asesinatos en el Consulado de EE.UU. en Juárez, MéxicoRead the Press Release
WASHINGTON - Treinta y cinco miembros y asociados de la pandilla Barrio Azteca (BA) fueron acusados en una tercera acusación formal sobreviviente revelada hoy de diversos cargos de asociación ilícita, homicidio, delitos asociados a drogas, lavado de dinero y obstrucción de la justicia, anunció el Secretario de Justicia de los Estados Unidos Eric Holder. De los 35 demandados, 10 ciudadanos mexicanos fueron acusados de los asesinatos del 13 de marzo de 2010 en Juárez, México, de la empleada del Consulado de EE.UU. Leslie Ann Enríquez Catton, su esposo Arthur Redelfs, y Jorge Alberto Salcido Ceniceros, el marido de una empleada del Consulado de EE.UU.
Acompañaron al Secretario de Justicia de EE.UU. Holder en el anuncio de los cargos el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal, el Fiscal Federal John E. Murphy para el Distrito Oeste de Texas, el Director Auxiliar Ejecutivo del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)] Shawn Henry y la Administradora Michele Leonhart de la Administración de Control de Drogas de EE.UU. [U.S. Drug Enforcement Administration (DEA)].
Hoy, equipos de autoridades federales, estatales y locales estadounidenses arrestaron en Texas y Nuevo México a 12 de los demandados acusados aún sin detener. Siete de los 10 demandados acusados de los homicidios del 13 de marzo de 2010 y otros dos demandados contra los que se formularon cargos se encuentran detenidos en México. Las autoridades de EE.UU. están trabajando con las autoridades mexicanas en la extradición y otros asuntos relacionados con este enjuiciamiento en curso.
"La acusación formal revelada hoy representa nuestra acción continua para garantizar la seguridad a lo largo de nuestra frontera sudoeste, obtener justicia para las víctimas de delitos violentos en esta región y debilitar a organizaciones delictivas peligrosas que operan actualmente en México y los Estados Unidos", dijo el Secretario de Justicia de los Estados Unidos Holder. "Estos arrestos y cargos criminales desmantelarán las operaciones actuales de Barrio Azteca, y reafirman que no toleraremos actos de violencia contra quienes sirven y protegen a los ciudadanos estadounidenses. Seguiremos trabajando con nuestros asociados en México y, juntos, incrementaremos nuestra labor conjunta sin precedentes para combatir la violencia y proteger a los pueblos estadounidense y mexicano".
"La acusación formal revelada hoy ofrece un panorama escalofriante de una pandilla altamente organizada y extremamente brutal", dijo el Secretario de Justicia Auxiliar Breuer. "Las víctimas, como tantas otras víctimas de las guerras mexicanas del narcotráfico, se encontraron, totalmente sin sentido, en el blanco de mira de una violenta empresa criminal". Se trata, a veces, de una batalla macabra. Pero que no queden dudas: dedicaremos toda nuestra fuerza a llevar a Barrio Azteca y otras pandillas ante la justicia por sus actos de violencia e intimidación a lo largo de nuestra frontera".
"Los crueles asesinatos de Leslie Enríquez, su marido Arthur Redelfs, y Jorge Salcido ilustran cuán insensata se ha vuelto la violencia cometida por los cárteles de narcotráfico y sus pandillas delictivas afiliadas", dijo el Fiscal Federal Murphy. "Acompañamos en su dolor a las familias de estas tres inocentes víctimas, así como a las miles de otras que han sufrido pérdidas trágicas para las que no hay reparación. La acusación formal es un reflejo de nuestra determinación de perseguir enérgicamente a los responsables por estos actos injustificables y hacerlos pagar por sus actos bajo el imperio de la ley".
"La violencia trasfronteriza es una amenaza grave para cuya prevención y eliminación estamos utilizando el poder de las asociaciones", dijo el Director Auxiliar Ejecutivo del FBI Henry. "Junto con nuestros otros homólogos de las fuerzas del orden público federales, estatales y locales, estamos especialmente agradecidos a nuestras dependencias mexicanas asociadas por el apoyo crítico que brindaron para ayudar a resolver este caso y hacer con que los autores de estos delitos deban enfrentar a la justicia. Podemos estar en lados opuestos de la frontera, pero estamos del mismo lado de la ley".
"Los miembros de la pandilla Barrio Azteca son delincuentes con sangre fría sin ningún respeto por la ley o la justicia, y que asesinan a víctimas inocentes, trafican drogas e incitan a la violencia", dijo la Administradora de la DEA Leonhart. "Sin embargo, junto con nuestros asociados del FBI y el apoyo del gobierno de México, hemos demostrado que el imperio de la ley prevalecerá, y trabajando juntos enjuiciaremos a esos individuos para que paguen por sus actividades delictivas despiadadas".
La acusación formal alega que los demandados son miembros o asociados de la BA, la que comenzó a fines de la década de 1980 como una pandilla violenta de prisión, ampliándose hasta convertirse en una organización criminal transnacional. La BA está sedeada, principalmente, en el Oeste de Texas; Juárez, México; y en prisiones estatales y federales en los Estados Unidos y México. La pandilla cuenta con una estructura de comando militarista e incluye capitanes, tenientes, sargentos y soldados - todo con la finalidad de mantener el poder y enriquecer a sus miembros y asociados a través del narcotráfico, el lavado de dinero, la extorsión, la intimidación, la violencia, amenazas de violencia y asesinato.
La acusación formal alega que, para incrementar su poder e influencia, la BA formó una alianza con la organización de narcotráfico Vicente Carrillo-Fuentes (VCF) en México. Como parte de esta alianza, se alega que la BA conduce operaciones de coacción contra rivales de la VCF y que la VCF provee drogas ilegales a la BA a precios con descuento.
La acusación formal alega una infinidad de actividades criminales cometidas por miembros y asociados de la BA desde el 1º de enero de 2003, incluidos narcotráfico, extorsión, lavado de dinero, secuestro y asesinato, incluidos los del 13 de marzo de 2010 en el consulado en Juárez.
Específicamente, la acusación formal alega que, el 13 de marzo de 2010, Ricardo Valles de la Rosa llamó a un individuo en el Distrito Oeste de Texas y recibió verificación de la descripción de una persona a ser asesinada. La acusación formal alega que 10 miembros de la BA nombrados, entre otros, participaron en los homicidios de Enríquez, Redelfs y Salcido en Juárez.
José Antonio Acosta Hernández, alias “Diego”; Eduardo Ravelo, alias “Tablas”; Luis Méndez, alias “Alex”; Arturo Gallegos Castrellon, alias “Benny”; Ricardo Valles de la Rosa, alias “Chino”; José Guadalupe Díaz Díaz, alias “Zorro”; Martin Pérez Marrufo, alias “Popeye”; Luis Humberto Hernández Celis, alias “Pac”; Miguel Ángel Nevarez, alias “Lentes”; y Enrique Guajardo López, alias “Kiki” están imputados en la acusación formal con conspiración para matar personas en un país extranjero, homicidio resultante del uso y portación de un arma de fuego y homicidio con la finalidad de cometer delincuencia organizada por su supuesta participación en el homicidio de Enríquez, Redelfs y Salcido.
Hernández, Ravelo y Méndez se encuentran actualmente fugitivos. Los Estados Unidos han presentado órdenes de arresto provisionales al gobierno de México para la detención de estos hombres en conexión con este caso. Ravelo es actualmente uno de los Diez Fugitivos Más Buscados del FBI, y el FBI está ofreciendo una recompensa de hasta $100,000 por información que lleve directamente a su arresto.
Además de los homicidios del consulado, la acusación formal alega que, en diciembre de 2006, un miembro de la BA baleó y mató a José Luis Oviedo en El Paso. En 2007, se alega que miembros de la BA secuestraron a un hombre en El Paso y lo llevaron al otro lado de la frontera entre EE.UU. y México, a la ciudad de Juárez. En marzo de 2008, se alega que la BA ordenó el homicidio del miembro de la BA David Merez, quien fue asesinado ese mismo mes en Juárez. Asimismo, la acusación formal alega que la BA hizo que dos personas fueran baleadas y asesinadas en Socorro, Texas, el 2 de julio de 2009. En agosto de 2010, alega la acusación formal que miembros de la BA secuestraron a la esposa y padres de un miembro de la BA quien creían estar cooperando con las fuerzas del orden público de EE.UU. y también mataron a la hijastra del miembro de la BA.
De acuerdo con la acusación formal, la BA obtiene ganancias a través de la importación de México a los Estados Unidos de heroína, cocaína y marihuana. La acusación formal señala actos específicos en los que más de 8 kilos de heroína, más de 100 kilos de cocaína y casi 300 libras de marihuana están asociados a la posesión, distribución o importación de sustancias controladas a los Estados Unidos.
También se alega que miembros y asociados de la BA cobran un "impuesto callejero" o "cuota" a empresas y delincuentes que operan en su territorio. Estas ganancias son utilizadas para mantener a los miembros de la BA que se encuentran en prisión al encauzar dinero a cuentas de tiendas de prisiones de líderes de pandillas y para pagar por abogados de defensa o multas. También se alega que las ganancias provenientes de las "cuotas" se reinvierten en la organización para la compra de drogas, armas y municiones.
Si se los condena, los demandados enfrentan una variedad de penas máximas por cargo, incluida prisión perpetua.
Una acusación formal es apenas una acusación. Se supone que todos los demandados son inocentes hasta que se pruebe lo contrario en un juicio, más allá de la duda razonable.
Están a cargo de la acusación en este caso los Abogados Litigantes Joseph A. Cooley de la Unidad de Pandillas de la División de lo Penal, el Abogado Litigante Brian Skaret de la Sección de Derechos Humanos y Enjuiciamientos Especiales de la División de lo Penal y fiscales de la Fiscalía Federal para el Distrito Oeste de Texas. La Fiscalía Federal para el Distrito de Nuevo México brindó importante asistencia en este caso, incluida la Fiscal Federal Auxiliar Sarah Davenport. Las Oficinas de Asuntos Internacionales y Operaciones de Coacción de la División de lo Penal brindaron asistencia valiosa. Las autoridades de las fuerzas del orden público estadounidenses y mexicanas, incluidas la Procuraduría General de la República (PGR) y la Policía Federal (Secretaría de Seguridad Pública o SSP) mexicanas cooperaron y brindaron asistencia recíproca en este caso en curso.
El caso fue investigado por el FBI y la DEA. Brindaron asistencia especial el Buró de Alcohol, Tabaco, Armas de Fuego y Explosivos; el Servicio de Inmigración y Control de Aduanas; el Servicio de Alguaciles Federales; Control de Aduanas y Protección de Fronteras de EE.UU.; el Buró Federal de Prisiones; el Servicio de Seguridad Diplomática de EE.UU.; el Departamento de Seguridad Pública de Texas; el Departamento de Justicia Penal de Texas; el Departamento de Policía de El Paso; la Oficina del Alguacil del Condado de El Paso; el Departamento de Policía del Distrito Escolar Independiente de El Paso; la Comisión de Alcohol y Bebidas de Texas; el Área de Alta Intensidad de Narcotráfico del Oeste de Texas; el Servicio de Libertad Condicional de EE.UU.; la Policía del Estado de Nuevo México; la Oficina del Alguacil del Condado de Dona Ana, N.M.; el Departamento de Policía de Las Cruces, N.M.; el Establecimiento Correccional del Sur de Nuevo México y la Prisión del Condado de Otero, N.M.
35 Members and Associates of Barrio Azteca Gang Charged with Racketeering and Other Offenses, Including 10 Charged in U.S. Consulate Murders in Juarez, MexicoRead the Press Release
WASHINGTON – Thirty-five members and associates of the Barrio Azteca (BA) gang have been charged in a third superseding indictment unsealed today with various counts of racketeering, murder, drug offenses, money laundering and obstruction of justice, announced Attorney General Eric Holder. Of the 35 defendants, 10 Mexican nationals were charged with the March 13, 2010, murders in Juarez, Mexico, of U.S. Consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. Consulate employee.
Attorney General Holder was joined in announcing the charges by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney John E. Murphy for the Western District of Texas, FBI Executive Assistant Director Shawn Henry and Administrator Michele Leonhart of the U.S. Drug Enforcement Administration (DEA).
Today, teams of U.S. federal, state and local authorities arrested in Texas and New Mexico 12 of the charged defendants not already in custody. Seven of the 10 defendants charged with the March 13, 2010, murders, and two other indicted defendants, are in custody in Mexico. U.S. authorities are working with Mexican authorities regarding extradition and other matters related to this ongoing prosecution.
“The indictment unsealed today represents our continued action to ensure safety along our Southwest border, to seek justice for victims of violent crime in this region, and to weaken dangerous criminal organizations currently operating in Mexico and the United States,” said Attorney General Holder. “These arrests and criminal charges will disrupt Barrio Azteca’s current operations, and they reaffirm that we will not tolerate acts of violence against those who serve and protect American citizens. We will continue to stand with our partners in Mexico, and together, build on our unprecedented joint efforts to combat violence and protect the safety of the American and the Mexican people.”
“The indictment unsealed today offers a chilling picture of a highly organized, and extremely brutal gang,” said Assistant Attorney General Breuer. “The victims – like so many other victims of the Mexican drug wars – were senselessly caught in the crosshairs of a violent criminal enterprise. This is, at times, a gruesome battle. But let there be no mistake: we will devote our might to bringing Barrio Azteca and other gangs to justice for their acts of violence and intimidation along our border.”
“The vicious murders of Leslie Enriquez, her husband Arthur Redelfs, and Jorge Salcido illustrate how senseless the violence perpetrated by the drug cartels and their affiliated criminal gangs has become,” said U.S. Attorney Murphy. “Our hearts go out to the families of these three innocent victims, as well as thousands of others, who have suffered tragic losses for which there can be no reparation. The indictment reflects our resolve to vigorously pursue those responsible for these wanton acts and hold them accountable under the rule of law.”
“Trans-border violence is a serious threat that we are using the power of partnerships to combat and prevent,” said FBI Executive Assistant Director Henry. “Along with our other federal, state and local law enforcement counterparts, we are especially grateful to our Mexican partner agencies for the critical support they provided to help resolve this case and bring the subjects to justice. We may stand on opposite sides of the border, but we stand together on the same side of the law.”
“Barrio Azteca gang members are cold blooded criminals who show no respect for the law or justice , murdering innocent victims, trafficking drugs and inciting violence,” said DEA Administrator Leonhart. “But, along with our FBI partners and the support of the government of Mexico, we have shown that the rule of law will prevail, and working together we will bring these individuals to justice to answer for their ruthless criminal activities.”
The indictment alleges that the defendants are members or associates of the BA, which began in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization. The BA is primarily based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico. The gang has a militaristic command structure and includes captains, lieutenants, sergeants and soldiers – all with the purpose of maintaining power and enriching its members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder.
The indictment alleges that to increase its power and influence, the BA formed an alliance with the Vicente Carrillo-Fuentes (VCF) drug trafficking organization in Mexico. As part of this alliance, the BA allegedly conducts enforcement operations against VCF rivals and the VCF provides illegal drugs to the BA at discounted prices.
The indictment alleges a host of criminal activity committed by members and associates of the BA since Jan. 1, 2003, including drug trafficking, extortion, money laundering, kidnapping and murder, including the March 13, 2010, consulate murders in Juarez.
Specifically, the indictment alleges that on March 13, 2010, Ricardo Valles de la Rosa called an individual in the Western District of Texas and received verification of the description of an intended target for murder. The indictment alleges that 10 named BA members, among others, participated in the murders of Enriquez, Redelfs and Salcido in Juarez.
Jose Antonio Acosta Hernandez, aka “Diego”; Eduardo Ravelo, aka “Tablas”; Luis Mendez, aka “Alex”; Arturo Gallegos Castrellon, aka “Benny”; Ricardo Valles de la Rosa, aka “Chino”; Jose Guadalupe Diaz Diaz, aka “Zorro”; Martin Perez Marrufo, aka “Popeye”; Luis Humberto Hernandez Celis, aka “Pac”; Miguel Angel Nevarez, aka “Lentes”; and Enrique Guajardo Lopez, aka “Kiki” are charged in the indictment with conspiracy to kill persons in a foreign country, murder resulting from the use and carrying of a firearm and murder in aid of racketeering for their alleged participation in the murder of Enriquez, Redelfs and Salcido.
Hernandez, Ravelo and Mendez are currently at large. The United States has filed provisional arrest warrants with the government of Mexico for the arrest of these men in connection with this case. Ravelo is currently one of the FBI’s Top Ten Most Wanted Fugitives, and the FBI is offering a reward of up to $100,000 for information leading directly to his arrest.
In addition to the consulate murders, the indictment alleges that in December 2006, a BA member shot and killed Jose Luis Oviedo in El Paso. In 2007, BA members allegedly kidnapped a man in El Paso and took him across the U.S./Mexico border to Juarez. In March 2008, the BA allegedly ordered the murder of BA member David Merez, who was killed that same month in Juarez. The indictment also alleges that the BA caused two persons to be shot and killed in Socorro, Texas, on July 2, 2009. In August 2010, the indictment alleges that BA members kidnapped the wife and parents of a BA member whom they believed was cooperating with U.S. law enforcement and also killed the BA member’s step-daughter.
According to the indictment, the BA profits by importing heroin, cocaine and marijuana into the United States from Mexico. The indictment points to specific acts in which more than 8 kilos of heroin, more than 100 kilograms of cocaine, and nearly 300 pounds of marijuana are associated with the possession, distribution or importation of controlled substances into the United States.
BA members and associates also allegedly charge a “street tax” or “cuota” on businesses and criminals operating in their turf. These profits are used to support BA members in prison by funneling money into prison commissary accounts of gang leaders and to pay for defense lawyers or fines. The “cuota” profits are also allegedly reinvested into the organization to purchase drugs, guns and ammunition.
If convicted, the defendants face a variety of maximum penalties per charge, including up to life in prison.
An indictment is merely an accusation. All defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt.
The case is being prosecuted by Trial Attorneys Joseph A. Cooley of the Criminal Division’s Gang Unit, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and prosecutors from the U.S. Attorney’s Office for the Western District of Texas. The U.S. Attorney’s Office for the District of New Mexico provided significant assistance in this case, including Assistant U.S. Attorney Sarah Davenport. Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations. U.S. and Mexican law enforcement authorities, including the Mexican Attorney General’s Office ( Procuradura General de la República or PGR) and the Mexican Federal Police (Secretaría de Seguridad Pública or SSP) have cooperated and provided assistance to one another in this ongoing matter.
The case was investigated by the FBI and the DEA. Special assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; the Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; the West Texas High Intensity Drug Trafficking Area; U.S. Probation Service; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility and Otero County, N.M., Prison Facility.
8 March 2011
Puerto Rico Senator and Businessman Convicted<br /> in Bribery SchemeRead the Press Release
WASHINGTON – Puerto Rico Senator Hector Martinez Maldonado and Juan Bravo Fernandez, the former president of one of the largest private security companies in Puerto Rico, were convicted by a jury in San Juan, Puerto Rico, for their roles in a bribery scheme involving legislation beneficial to Bravo Fernandez’ business, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Martinez Maldonado , 42, of Carolina, Puerto Rico, and Bravo Fernandez, 55, of San Juan, were each convicted late yesterday of federal program bribery. In addition, Bravo Fernandez was convicted of traveling in interstate commerce in aid of racketeering and conspiracy to commit to travel in interstate commerce in aid of racketeering. Martinez Maldonado was acquitted of conspiracy, traveling in interstate commerce in aid of racketeering and obstruction of justice.
“ By participating in a brazen scheme involving the exchange of cash and lavish trips for votes and official acts, these defendants subverted the democratic process,” said Assistant Attorney General Breuer. “Now they are seeing the consequences. As these convictions show, the Justice Department is committed to investigating and prosecuting public corruption wherever we find it.”
“Corruption relies on connections, forcing businessmen to forge questionable relationships with government officials, who facilitate their requests and grant them favors. This corrupt behavior, ingrained so deeply in the Puerto Rican government's fabric, allows money and power to become one. Law abiding citizens must denounce those dishonest government officials in order to weed out corruption from our society,” said Luis Fraticelli, Special Agent in Charge of the FBI-San Juan Field Office.
Martinez Maldonado was elected to the Puerto Rican Senate in 2004 and began serving a four-year term in January 2005. He was reelected in 2008. Bravo Fernandez was the president and chief executive officer of Ranger American, one of the largest private security firms in Puerto Rico.
The jury convicted the defendants for their role in a bribery scheme in which Bravo Fernandez conspired to secure the passage of two bills favorable to his business interests by bribing Martinez Maldonado and Jorge de Castro Font, a former Puerto Rican senator. De Castro Font served in the Puerto Rico House of Representatives from 1989 to 2004, and served in the Puerto Rico Senate from 2005 to 2008. Beginning in 2005, De Castro Font served as Chairman of the Committee on Rules and Calendars, exercising significant control over which bills, confirmations and other matters were brought to a vote on the floor of the Senate and when they were brought to a vote. Beginning in 2005, Martinez Maldonado served as Chairman of the Puerto Rico Public Safety Committee, exercising significant control over legislation related to the security and community safety.
According to court documents and evidence presented at trial, Martinez Maldonado and De Castro Font exercised significant control over the fate of the legislation benefitting Bravo Fernandez’ business interests. Specifically, Martinez Maldonado’s committee had jurisdiction over Bravo Fernandez’ two bills and was required to approve the legislation before De Castro Font could schedule them for a vote before the entire Senate. Evidence at trial showed that in order to secure passage of the two bills, Martinez Maldonado and De Castro Font made an agreement with Bravo Fernandez to take official acts supporting the legislation benefitting his business interests in exchange for things of value provided by Bravo Fernandez. Specifically, Bravo Fernandez provided numerous cash payments to De Castro Font.
According to court documents and evidence presented at trial, Bravo Fernandez also agreed to provide to Martinez Maldonado and De Castro Font a trip to Las Vegas to watch the May 14, 2005, championship boxing match between Winky Wright and Felix “Tito” Trinidad, a popular Puerto Rican boxer. As part of this agreement, Bravo Fernandez provided, among other things, first-class airfare, hotel rooms at the Mandalay Bay Resort and Casino, tickets to the Trinidad vs. Wright boxing match worth $1,000, hotel rooms in Miami for the return trip, as well as meals and drinks. Evidence at trial showed that on March 2, 2005, the day that Bravo Fernandez paid for the boxing tickets, Martinez Maldonado submitted one of the bills for consideration by the Puerto Rico Senate. Also, on April 21, 2005, Bravo Fernandez used his personal credit card to reserve a hotel room at the Mandalay Bay Resort and Casino. The deposit for this hotel room was credited to Martinez Maldonado’s hotel room. According to court documents, the reservation was made the day after Martinez Maldonado presided over a Public Safety Committee hearing for one of the two bills at which Bravo Fernandez was the only representative from the private security industry to testify. Martinez Maldonado authorized a committee report in support of Bravo Fernandez’ bill immediately after the hearing. According to evidence at trial, on May 17, 2005, the day after the three men returned from their trip to Las Vegas, Martinez Maldonado and De Castro Font both cast their vote in support of one of Bravo Fernandez’ bills in front of the entire Puerto Rico Senate. On May 18, 2005, the other bill was approved by the Puerto Rico Public Safety Committee, Chaired by Martinez Maldonado. That bill was passed by the Puerto Rico Senate on May 23, 2005.
De Castro Font pleaded guilty on Jan. 21, 2009, to 20 counts of honest services wire fraud and one count of conspiracy to commit extortion. He is currently awaiting sentencing.
Bravo Fernandez faces a maximum penalty of five years in prison and a $250,000 fine for each count of conspiracy and travel in aid of racketeering and 10 years in prison and a $250,000 fine for the bribery count. Martinez Maldonado faces a maximum penalty of 10 years in prison and a $250,000 fine for the bribery count. Sentencing has been scheduled for June 7, 2011.
This case is being prosecuted by Trial Attorneys Peter Koski and Deborah Sue Mayer of the Criminal Division’s Public Integrity Section. The case is being investigated by the FBI.
Justice Department Resolves Citizenship Status Discrimination Charge Against California EmployerRead the Press Release
WASHINGTON – American Education and Travel Services Inc. (AETS) in Antioch, Calif., has agreed to pay $10,000 in back pay and compensatory damages to a lawful permanent resident who was denied a residential counselor position because he was not a U.S. citizen or native English speaker, the Justice Department announced today.
The settlement agreement was jointly negotiated by the department and the Equal Employment Opportunity Commission (EEOC). The underlying charge alleged that AETS violated both the anti-discrimination provision of the Immigration and Nationality Act (INA) and Title VII of the Civil Rights Act of 1964, as amended. In addition to monetary relief for the victim, the agreement requires AETS to provide its managers and employees training on the anti-discrimination requirements of both the INA and Title VII, adopt nondiscrimination policies with respect to recruitment and hiring, and maintain and submit records to the United States for the two-year term of the agreement.
“Federal law protects authorized workers discrimination based on unlawful citizenship requirements,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to working with the EEOC to eliminate this kind of discrimination.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA, which prohibits employers from discriminating against work-authorized individuals on the basis of citizenship status or national origin in hiring, firing, recruitment or referral for a fee.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), OSC’s employer hotline at 1-800-255-8255 (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email [email protected] ; or visit the website at www.justice/gov/crt/osc .
Justice Department Obtains $110,000 Settlement in Discrimination Lawsuit Against Apartment Complex Near SeattleRead the Press Release
WASHINGTON – The owners and operators of Summerhill Place Apartments, a 268 apartment complex in Renton, Wash., have agreed to pay $110,000 in damages and civil penalties to settle a lawsuit alleging that the complex had discriminated against African-Americans, Hispanic Americans, Indian Americans and families with children in violation of the Fair Housing Act, the Justice Department announced today. The settlement must still be approved by the U.S. District Court for the Western District of Washington.
“Working families already face enough challenges finding affordable housing,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Unlawful discrimination because of their race, their national origin, or because they have children, should not be one of them.”
“I am pleased that this settlement will both assist those who were discriminated against, and ensure rights are protected going forward,” said U.S. Attorney for the Western District of Washington Jenny A. Durkan. “The fair housing training for Summerhill’s employees and the plan to provide a recreation area for all the tenants, including children, will provide a brighter future for all prospective residents.”
The lawsuit, filed on July 16, 2010, named as Summerhill Place LLC (the owner of Summerhill Place Apartments), Gran Inc. (the management company) and Rita Lovejoy (the former on site manager). Lovejoy is no longer employed by the other defendants. The suit alleged, among other things, that defendants steered Indian tenants away from one of the five buildings at Summerhill, treated tenants from India less favorably than other tenants and discouraged African-Americans, Hispanics and families with children from living at Summerhill. The suit arose after the Fair Housing Council of Washington conducted testing at Summerhill, and the results of that testing were reported to the Department of Housing and Urban Development (HUD). After an investigation, the secretary of HUD determined that there was reasonable cause to believe that discriminatory housing practices had occurred, issued a charge of discrimination, and referred the matter to the Department of Justice.
“HUD has the authority to bring cases under the Fair Housing Act based on any credible evidence that discrimination is occurring at a housing development, even if no specific individual steps forward to file a formal complaint,” said John Trasviña, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “Whenever HUD discovers that a housing provider is turning away potential tenants or mistreating current residents because of their race, ethnicity, or family composition, HUD will vigorously enforce the Fair Housing Act.”
Under the terms of the settlement, the defendants will:
- Pay $85,000 to tenants and prospective tenants who were harmed by the discriminatory practices alleged in the lawsuit;
- Pay $25,000 to the government as a civil penalty;
- Maintain a common recreational area for all their tenants, including children;
- Provide fair housing training to their employees; and
- Develop and maintain non-discrimination policies at Summerhill.
Individuals who are entitled to share in the settlement fund will be identified through a process established in the settlement. Persons who believe they were subjected to unlawful discrimination at Summerhill should contact the Justice Department toll-free at 1-800-896-7743 mailbox # 9997 or e-mail the Justice Department at [email protected] .
Fighting illegal discrimination in housing is a top priority of the Justice Department. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
Former Ohio Man Pleads Guilty to Failing to Report His Foreign Bank Account at UBS in SwitzerlandRead the Press Release
WASHINGTON - Edward Gurary, formerly of Orange Village, Ohio, pleaded guilty today in federal court in the Northern District of Ohio to filing false personal income tax returns for the years 2004 through 2008, the Justice Department and Internal Revenue Service (IRS) announced. Gurary’s guilty plea was accepted by U.S. District Judge Dan Polster in Cleveland.
According to court documents, Gurary, 45, has resided in Switzerland since 2010, but lived in Orange Village during the prosecution years. Gurary admitted that from approximately 2002 through 2008, he owned and controlled a financial account at UBS AG which was in the name of a Bahamian entity called Demko Ltd. and which contained balances ranging from $490,000 to $947,000. Gurary controlled transactions in the Demko account by sending faxes using a code name “Vanda” to UBS from an OfficeMax store in the Cleveland area rather than his home or business. UBS would in turn send his requests for authorizations to officers of Demko in the Bahamas in order to make it appear that Demko owned and controlled the account. During the prosecution years, interest was paid by UBS into the Demko account, in amounts ranging from $3,400 to more than $21,000, all of which Gurary admitted he failed to report on his tax returns.
According to court documents, Gurary also admitted that for three of the years (2004, 2006 and 2007) he not only failed to report the interest income from his UBS account, but he also falsely stated on his Schedule B attached to his income tax return that he did not have signature or other authority over a foreign financial account. Gurary further admitted that in addition to the account at UBS in Switzerland he also had a foreign financial account with significant assets at Credit Suisse AG. Further, because Gurary did not file any Report of Foreign Bank or Financial Account (FBAR) form or otherwise disclose to the IRS his Demko account at UBS or his Credit Suisse account, he is subject to significant penalties. An FBAR form is a form separate from an income tax return that the law requires taxpayers to file with the IRS every June to disclose additional information about foreign financial accounts over which a taxpayer has signature or other control over, and which had an aggregate value exceeding $10,000 at any time during the year. Gurary agreed to pay a penalty amount of 50 percent of the highest aggregate amount in the two accounts between the years 2002 and 2009, which according to his plea agreement was at least $473,000. At the plea hearing, Gurary tendered a check in the amount of $300,000 made payable to the government and he has agreed to surrender the $200,000 cash bond he already paid on the date of his sentencing. Gurary faces a maximum of three years in prison and a fine of $250,000. Judge Polster scheduled sentencing for June 1, 2011.
The announcement was made by Bruce M. Salad, Acting Deputy Assistant Attorney General for Offshore Matters of the Justice Department’s Tax Division; Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio; and Jose A. Gonzalez, Special Agent in Charge, IRS-Criminal Investigation, Cincinnati.
The case is being prosecuted by Assistant U.S. Attorney John M. Siegel and Tax Division Trial Attorney Richard M. Rolwing, following an investigation by the IRS-Criminal Investigation, Cleveland.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax
Colorado Woman Pleads Guilty to Conspiracy to Provide Material Support to TerroristsRead the Press Release
WASHINGTON – Jamie Paulin Ramirez, 32, a U.S. citizen and former resident of Colorado, pleaded guilty today to one count of conspiracy to provide material support to terrorists. Ramirez faces a potential maximum penalty of 15 years in prison and a $250,000 fine at sentencing.
The guilty plea, which was entered today before U.S. District Court Judge Petrese B. Tucker in the Eastern District of Pennsylvania, was announced by Todd Hinnen, acting Assistant Attorney General for National Security; Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania; and George C. Venizelos, Special Agent-in-Charge of the FBI’s Philadelphia Division.
Ramirez was first charged in a superseding indictment filed in April 2010, along with co-defendant Colleen R. LaRose, a U.S. citizen and former resident of Montgomery County, Pa. On Feb. 1, 2011, LaRose, aka “JihadJane, aka “Fatima LaRose,” pleaded guilty to conspiracy to provide material support to terrorists, conspiracy to kill in a foreign country, making false statements and attempted identity theft.
According to documents filed with the court, Ramirez, LaRose and others conspired to obtain military-style training in South Asia and then traveled to and around Europe to participate in and in support of violent jihad.
In a series of electronic communications dated July 19, 2009, one co-conspirator (identified as CC#2 in the superseding indictment) directed another to recruit online “some brothers that can travel freely . . . with eu passports . . . [A]nd I also need some sisters too.” The co-conspirator further explained that “sister fatima will be in charge of other sister care. . . .[W]e have already organized everything for her. . . . [W]e are will[ing] to die in order to protect her no matter what the risk is.”
Ramirez exchanged e-mail messages with LaRose during the summer of 2009, in which LaRose invited Ramirez to join her in Europe to attend a training camp. For example, on Aug. 1, 2009, LaRose sent electronic communications to Ramirez stating that “soon i will be moving to Europe to be with other brothers & sisters . . . . when i get to europe, i will send for you to come be with me there . . . . [T]his place will be like a training camp as well as a home.”
In electronic communications dated on or about August 7, 2009, CC #2 recruited another individual to find brothers and sisters to go to a “camp for [military-style] training . . . and th[e]n come back to europe to do the job . . . . [T]he job is to [k]nock down some individual[s] that are harming islam.” CC#2 goes on to explain that he is structuring “an ORGANIZATION” divided into a “plan[n]ing team . . . research team . . . action team . . . recruitment team . . . finance team.”
Ramirez accepted LaRose’s invitation to travel to Europe and asked to bring along her minor male child. On Sept, 12, 2009, Ramirez traveled to Ireland with her child with the intent to live and train with jihadists. The day after she arrived in Ireland, Ramirez married CC#2, whom she had never before met in person, in an Islamic ceremony, knowing and intending that her presence in Europe, her marriage to CC#2 and her future actions would provide support for the conspiracy.
“Today’s guilty plea by Jamie Ramirez, coupled with that of Colleen LaRose last month, underscores the evolving nature of the terrorist threat we face,” said acting Assistant Attorney General Hinnen. “Many counterterrorism and law enforcement officials worked tirelessly to deal with the threat these defendants posed; I applaud their efforts and those of all of the national security professionals and prosecutors that work to keep the country safe.”
“Keeping our community and the country safe are a top priority of this office,” said U.S. Attorney Memeger. “This case and the guilty pleas are a culmination of the vigilant efforts by the FBI agents in this district, the prosecutors in my office and law enforcement officers around the globe. It underscores the importance and success of international collaboration when fighting terrorism.”
“The guilty plea in this case today is yet one more success our efforts against the continuing and evolving threats that we face,” said FBI Special Agent in Charge Venizelos. “Our Joint Terrorism Task Forces work very closely with all of our partners in the law enforcement and intelligence communities to ensure that we remain vigilant, alert and creative in our approaches to identifying and preventing acts of terrorism.”
This case was investigated by the FBI Field Division in New York, the FBI’s Joint Terrorism Task Force in Philadelphia, the FBI Field Division in Denver, and the FBI Field Office in Washington, D.C. Authorities in Ireland also provided assistance in this matter.
The case is being prosecuted by Assistant U.S. Attorney Jennifer Arbittier Williams, in the Eastern District of Pennsylvania, and Matthew F. Blue, Trial Attorney from the Counterterrorism Section in the Justice Department’s National Security Division. The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance.