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21 January 2011
Department of Justice Secures More Than $2 Billion in Judgments and Settlements<br /> as a Result of Enforcement Actions Led by the Criminal DivisionRead the Press Release
WASHINGTON – In fiscal year 2010, the Department of Justice secured approximately $2.072 billion in judgments and settlements as a result of enforcement actions led by the Criminal Division, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. This is part of a total of $3.4 billion in judgments and settlements that were secured in FY 2010 as a result of criminal matters in which the Criminal Division participated, including joint enforcement actions with U.S. Attorneys’ Offices throughout the country.
“By pursuing fines against bad actors, forfeiting the proceeds of their crimes and seeking restitution to make crime victims whole, the Criminal Division, working in partnership with the U.S. Attorneys’ Offices, is embracing a comprehensive approach to law enforcement,” said Assistant Attorney General Breuer. “We are taking money out of criminals’ hands, depriving criminal organizations of the resources they need to survive, and returning those funds to crime victims and law enforcement, while also benefiting U.S. taxpayers.”
The $2 billion in judgments and settlements secured by enforcement actions led by the Criminal Division includes over $1 billion in fines and penalties, $788 million in forfeiture and $116 million in restitution. The fines and penalties, upon payment, are provided by the department to the U.S. Treasury. Forfeiture funds are deposited in the Department of Justice Asset Forfeiture Fund or the Department of Treasury Forfeiture Fund, and are used to restore money to crime victims and for a variety of law enforcement purposes. Restitution funds are distributed to victims. Federal law requires defendants to pay restitution to victims of certain crimes who have suffered a physical injury or financial loss.
The Criminal Division’s Foreign Corrupt Practices Act (FCPA) enforcement involved imposition of $1 billion in penalties in FY 2010, the largest in the history of FCPA enforcement. The remaining $1 billion in Criminal Division judgments and settlements were primarily the result of other financial fraud cases brought by the Criminal Division in FY 2010, including bank settlements of substantial violations of the International Emergency Economic Powers Act (IEEPA) and Trading with the Enemy Act (TWEA), securities fraud and health care fraud-related recoveries, as well as judgments in child exploitation, narcotics, computer crime and organized crime cases.
Attorney General Holder Announces Violence Against Women Tribal Prosecution Task Force in Indian CountryRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced the formation and inaugural meeting of the Violence Against Women Federal and Tribal Prosecution Task Force.
The creation of the Prosecution Task Force fulfills a pledge made by Attorney General Holder at the department’s Tribal Nations Listening Session in October 2009.
“We know too well that tribal communities face unique law enforcement challenges and are struggling to reverse unacceptable rates of violence against women and children,” said Attorney General Holder. “The creation of the Violence Against Women Tribal Prosecution Task Force has been a priority for me since my visit with tribal leaders last year, and I believe it is a critical step in our work to improve public safety and strengthen coordination and collaboration concerning prosecution strategies with tribal communities.”
United States Attorney Deborah Gilg of the District of Nebraska, six Assistant United States Attorneys working in Indian Country, and six representatives from tribal governments comprise the Task Force. They include:
· U.S. Attorney Deborah R. Gilg, District of Nebraska, Chairperson
· Tribal Prosecutor Diane S. Cabrera, Crow Tribe (MT)
· Assistant U.S. Attorney Glynette R. Carson McNabb, District of New Mexico
· Assistant U.S. Attorney Gregg S. Peterman, District of South Dakota
· Assistant U.S. Attorney Susan Roe, Western District of Washington
· Assistant U.S. Attorney Trina A. Higgins, District of Utah
· Assistant U.S. Attorney Marcia Hurd, District of Montana
· DOJ’s National Indian Country Training Coordinator Leslie A. Hagen
· Deputy Attorney General M. Brent Leonhard, Confederated Tribes of the Umatilla Indian Reservation (OR)
· Chief Judge Theresa M. Pouley, Tulalip Tribal Court (WA)
· Chief Prosecutor Sheri Freemont, Salt River Pima Maricopa Indian (AZ)
· Tribal Attorney Michelle Rivard Parks, Spirit Lake Tribe (ND)
· Staff Attorney Joshua Breedlove, Mississippi Choctow (MS)
In addition to the six assistant U.S. Attorneys and six tribal attorneys, the task force includes a group of advisors and liaisons from the Justice Department’s Office of Violence Against Women, health care professionals and law enforcement officials.
Within a year of convening, the Task Force is directed to produce a trial practice manual on the federal prosecution of violence against women offenses in Indian Country. In the short term, the Task Force will explore current issues raised by professionals in the field, and recommend "best practices" in prosecution strategies involving domestic violence, sexual assault and stalking.
Violence against American Indian women occurs at epidemic rates. In 2005, Congress found that one in three American Indian women are raped during their lifetimes, and American Indian women are nearly three times more likely to be battered in their lifetimes than Caucasian women.
The launch of the Task Force marks another step in the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities. This effort is driven largely by input gathered from the department’s 2009 Tribal Nations Listening Session on Public Safety and Law Enforcement, the department’s annual tribal consultation on violence against women, and from written comments submitted by tribal governments, groups and organizations to the Justice Department.
Alabama Woman Charged with Conspiring to Use Stolen Identities of Student Loan BorrowersRead the Press Release
ON FALSE TAX RETURNSWASHINGTON Janika Fernae Bates of Millbrook, Ala., was indicted by a federal grand jury on charges of identity theft, wire fraud and conspiracy to make false claims for tax refunds, the Justice Department and Internal Revenue Service (IRS) announced today. Bates was previously employed at Electronic Data Systems in Montgomery, Ala.
According to the indictment filed against her, Bates obtained the names and Social Security numbers of student loan borrowers from the databases at her employer and conspired to use the stolen identifying information to steal money from the government. The indictment further alleges that Bates and a co-conspirator fraudulently obtained refund anticipation loans from the bank HSBC predicated on the fraudulently filed tax returns.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Janika Fernae Bates faces a minimum of two years in prison, a maximum of 354 years in prison and a maximum fine of $6,250,000.
John A. DiCicco, Acting Assistant Attorney General for the Tax Division, and Leura G. Canary, United States Attorney for the Middle District of Alabama, made the announcement.
This case was investigated by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Monica Stump and Tax Division Trial Attorney Justin K. Gelfand.
Related Documents:
United States v. Janika F. Bates
Indictment
(PDF documents)Portable Document Format (PDF) files may be viewed with a free copy of Adobe Acrobat Reader
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20 January 2011
Two Owners of Houston Health Care Company Plead Guilty to Alleged $5.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON -- Two owners of a Houston health care company pleaded guilty today in connection with an alleged $5.2 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Clifford Ubani, 52, and Princewill Njoku, 51, each pleaded guilty before U.S. District Court Judge Nancy Atlas in Houston to one count of conspiracy to commit health care fraud, one count of conspiracy to pay kickbacks and 16 counts of payment of kickbacks to Medicare beneficiary recruiters.
According to court documents, Ubani and Njoku were owners and operators of Family Healthcare Group (Family Group), a home health care company. Family Group purported to provide skilled nursing to Medicare beneficiaries. According to court documents, Ubani and Njoku hired co-conspirators to recruit Medicare beneficiaries for the purpose of filing claims with Medicare for skilled nursing that was medically unnecessary and/or not provided. Ubani and Njoku admitted that they paid kickbacks to the recruiters for their referrals.
Ubani and Njoku previously pleaded guilty to conspiracy to commit health care fraud related to their ownership of another Houston health care company, Family Healthcare Services (Family Services). Family Services submitted approximately $1.1 million in fraudulent claims to Medicare for the costs of durable medical equipment.
At sentencing, scheduled for July 19, 2011, Ubani and Njoku each face a maximum sentence of 10 years in prison for each health care fraud conspiracy count, five years in prison for each kickback conspiracy count and five years in prison for each kickback count.
Today’s guilty pleas were announced by Assistant Attorney General of the Criminal Division Lanny A. Breuer; U.S. Attorney José Angel Moreno of the Southern District of Texas; Special Agent-in-Charge Richard C. Powers of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations; and Texas Attorney General Greg Abbott.
This case is being prosecuted by Trial Attorneys Charles D. Reed and Laura Cordova, and Assistant Chief Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 850 individuals who collectively have falsely billed the Medicare program for more than $2.1 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
Minnesota-Based St. Jude Medical Pays U.S. $16 Million <br /> to Settle Claims that Company Paid Kickbacks to PhysiciansRead the Press Release
WASHINGTON – St. Jude Medical Inc. of St. Paul, Minn., has agreed to pay the United States $16 million to resolve allegations that the company used post-market studies and a registry to pay kickbacks to induce physicians to implant the company’s pacemakers and defibrillators, the Justice Department announced today.
Post-market studies are intended to assess the clinical performance of a medical device or drug after that device or drug has been approved by the Food and Drug Administration. Registries are collections of data maintained by a device manufacturer concerning its products that have been sold and implanted in patients.
The United States contends that St. Jude used three post-market studies and a device registry as vehicles to pay participating physicians kickbacks to induce them to implant St. Jude pacemakers and defibrillators. Although St. Jude collected data and information from participating physicians, it is alleged that the company knowingly and intentionally used the studies and registry as a means of increasing its device sales by paying certain physicians to select St. Jude pacemakers and I mplantable cardioverter defibrillator for their patients. In each case, St. Jude paid each participating physician a fee that ranged up to $2,000 per patient. The United States alleges that St. Jude solicited physicians for the studies in order to retain their business and/or convert their business from a competitor’s product.
“When companies pay kickbacks to health care providers in order to pad their bottom line, it taints the information patients rely on to make informed choices about their health,” said Tony West, Assistant Attorney General for the Civil Division. “It is critical that physicians base their decisions on which medical device to implant on the best interest of the patient, not on whether a device manufacturer will pay an extra fee or honoraria for the implant.”
“Medical device and pharmaceutical companies can use post-market studies legitimately to obtain information about how their products work in the field, but they cannot use those studies, and the honoraria associated with them, to induce physicians to select their products. Cardiologists and electrophysiologists should make their decisions on which pacemaker or defibrillator to implant in a patient based on their independent medical judgment, not based on how much the manufacturer is paying them to implant the device,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts.
This action was initiated by the filing of a qui tam action under the False Claims Act (FCA) by a relator, Charles Donigian. The FCA permits a whistle blower to recover a share of the government recovery, and in this case Mr. Donigian will recover $2.64 million.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $6.8 billion since January 2009 in cases involving fraud against federal health care programs.
The settlement was the result of an investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Massachusetts, the Office of Inspector General at the U.S. Department of Health and Human Services and the FBI.
Justice Department Announces 2011 Application Process for Public Safety Funding for Tribal CommunitiesRead the Press Release
WASHINGTON –The Department of Justice today announced that it is accepting applications from American Indian and Alaska Native tribal communities for funding to improve public safety in Indian country. The funds are available through the Fiscal Year (FY) 2011 Coordinated Tribal Assistance Solicitation (CTAS), a streamlined single solicitation for existing tribal government-specific grant programs administered by the Office of Justice Programs, the Office of Community Oriented Policing Services and the Office on Violence Against Women.
The CTAS process is the result of consultations held with tribal leaders on how to improve the application process for tribal grant applicants. For FY 2011, American Indian and Alaska Native tribal communities will submit a single application for all available tribal government-specific grant programs. The coordinated approach allows the Justice Department’s grant-making components to consider the totality of a tribal community’s overall public safety needs.
The FY 2011 solicitation includes revisions that will improve the award and application process, including a 90-day application period, closing April 21, 2011. Awards will be based upon available funding for FY 2011 and can be used to enhance law enforcement, bolster justice systems, prevent youth substance abuse, serve sexual assault and elder abuse victims, and support other efforts to combat crimes. Last year, CTAS provided more than $127 million to American Indian and Alaska Native tribal communities nationwide.
Native communities and tribal consortiums may be eligible for other non-tribal government-specific grant funding opportunities and are encouraged to submit a separate application to any grant programs for which they may be eligible. Additional resources and information, including a fact sheet and tips for pre-and post-application tasks are located on the website at www.tribaljusticeandsafety.gov/grants.html.
Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities.
The coordinated, comprehensive solicitation is now available at www.tribaljusticeandsafety.gov/grants.html.
Dos propietarios de empresa de atención médica de Houston se declararon culpables de supuesto ardid de fraude de 5.2 millones de dólares contra MedicareRead the Press Release
WASHINGTON -- Dos propietarios de una empresa de atención médica de Houston se declararon culpables hoy en conexión con un supuesto ardid de fraude de 5.2 millones de dólares contra Medicare, anunciaron los Departamentos de Justicia y de Salud y Servicios Humanos [Health and Human Services (HHS)].
Clifford Ubani, 52, y Princewill Njoku, 51, se declararon culpables ante la Juez Federal de Distrito Nancy Atlas en Houston de un cargo de conspiración para cometer fraude de atención médica, un cargo de conspiración para pagar comisiones ilícitas y 16 cargos de pago de comisiones ilícitas a reclutadores de beneficiarios de Medicare.
De acuerdo con el expediente judicial, Ubani y Njoku eran propietarios y operadores de Family Healthcare Group (Family Group), una compañía de atención médica domiciliaria. Family Group alegaba proveer servicios de enfermería especializada a beneficiarios de Mediare. De acuerdo con el expediente judicial, Ubani y Njoku contrataron a coconspiradores para reclutar a beneficiarios de Medicare con la finalidad de presentar reclamos a Medicare por servicios de enfermería especializada médicamente innecesarios y/o que nunca fueron brindados. Ubani y Njoku admitieron que pagaron comisiones ilícitas a los reclutadores por sus remisiones.
Ubani y Njoku se habían declarado ya culpables de conspiración para cometer fraude de atención médica asociada a su titularidad de otra compañía de atención médica en Houston, Family Healthcare Services (Family Services). Family Services presentó aproximadamente 1.1 millón de dólares en reclamos fraudulentos a Medicare por los costos de equipos médicos durables.
En la lectura de la sentencia, programada para el 19 de julio de 2011, Ubani y Njoku enfrentan cada uno una sentencia máxima de 10 años en prisión para cada cargo de conspiración para cometer fraude de atención médica, cinco años en prisión por cada cargo de conspiración para pagar comisiones ilícitas y cinco años en prisión por cada cargo de pago de comisiones ilícitas.
Las declaraciones de culpabilidad de hoy fueron anunciadas por el Secretario de Justicia Auxiliar de la División de lo Penal Lanny A. Breuer; el Fiscal Federal Jose Angel Moreno del Distrito Sur de Texas; el Agente Especial a Cargo Richard C. Powers de la Oficina Local de Houston del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)]; el Agente Especial a Cargo Mike Fields de la Oficina Regional de Dallas de la Oficina del Inspector General del HHS (HHS-OIG), Oficina de Investigaciones; y el Secretario de Justicia de Texas Greg Abbott.
Están a cargo de la acusación en el caso los Abogados Litigantes Charles D. Reed y Laura Cordova, y el Jefe Auxiliar Sam S. Sheldon de la Sección de Fraude de la División de lo Penal. La demanda fue entablada como parte de la Fuerza de Ataque al Fraude contra Medicare, supervisada por la Fiscalía Federal para el Distrito Sur de Texas y la Sección de Fraude de la División de lo Penal.
Desde su creación en marzo de 2007, las operaciones de la Fuerza de Ataque al Fraude contra Medicare en siete distritos han logrado la formulación de cargos contra 850 individuos quienes, en conjunto, facturaron falsamente más de 2.1 mil millones de dólares al programa Medicare. Además los Centros para Servicios de Medicare y Medicaid del HH, en trabajo conjunto con la HHS-OIG, están tomando pasos para aumentar la responsabilización y reducir la presencia de proveedores fraudulentos.
Para conocer más sobre el Equipo de Acción de Coacción y Prevención del Fraude de Atención Médica [Health Care Fraud Prevention and Enforcement Action Team (HEAT)], visite: www.stopmedicarefraud.gov .
91 Leaders, Members and Associates of La Cosa Nostra Families in Four Districts Charged with Racketeering and Related Crimes, Including Murder and ExtortionRead the Press Release
WASHINGTON – Ninety-one members and associates of seven organized crime families of La Cosa Nostra (LCN), including the New England LCN family, all five New York-based families and the New Jersey-based Decavalcante family have been charged with federal crimes in 16indictments returned in four judicial districts, announced Attorney General Eric Holder. Another 36defendants also have been charged for their roles in alleged associated criminal activity.
Joining in the announcement were Janice K. Fedarcyk, Assistant Director in Charge of the FBI’s New York Division; Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of New York Loretta E. Lynch; U.S. Attorney for the Southern District of New York Preet Bharara; U.S. Attorney for the District of New Jersey Paul J. Fishman; U.S. Attorney for the District of Rhode Island Peter F. Neronha; Acting Inspector General of the U.S. Department of Labor Daniel R. Petrole; and New York City Police Commissioner Raymond W. Kelly.
More than 110 of the 127 charged defendants have been arrested, and will appear in federal court in the districts in which they are charged. The charges relate to a wide range of alleged illegal activity, including murder, murder conspiracy, loansharking, arson, narcotics trafficking, extortion, robbery, illegal gambling and labor racketeering, in some cases occurring over decades. The indictments charge leaders of these criminal enterprises, as well as mid-level managers, numerous soldiers and associates, and others alleged to be corrupt union officials.
"Today’s arrests and charges mark an important step forward in disrupting La Cosa Nostra’s illegal activities," said Attorney General Holder. "This largest single day operation against La Cosa Nostra sends the message that our fight against traditional organized crime is strong, and our commitment is unwavering. As we’ve seen for decades, mafia operations can negatively impact our economy – not only through a wide array of fraud schemes but also through the illegal imposition of mob "taxes" at our ports, in our construction industries, and on our small businesses. The violence outlined in these indictments, and perpetrated across decades, shows the lengths to which these individuals are willing to go to control their criminal enterprises and intimidate others. The Department of Justice and our partners are determined to eradicate these criminal enterprises once and for all, and to bring their members to justice."
"Some believe organized crime is a thing of the past; unfortunately, there are still people who extort, intimidate, and victimize innocent Americans. The costs legitimate businesses are forced to pay are ultimately borne by American consumers nationwide," said FBI Director Robert S. Mueller, III.
"Today’s indictments represent a major milestone in the Office of Inspector General’s statutory responsibility to investigate labor racketeering and organized crime influence and control of unions, employee benefit plans and their workers," said Daniel R. Petrole, Acting Inspector General for the U.S. Department of Labor. "Through the alleged domination of these unions, these investigations revealed that union officials and associates and members of La Cosa Nostra Organized Crime Families conspired to steal from and extort hard working union members. My office remains committed to continue working with our law enforcement partners to combat these types of crimes."
Among those charged are Luigi Manocchio, 83, the former boss of the New England LCN; Andrew Russo, 76, street boss of the Colombo family; Benjamin Castellazzo, 73, acting underboss of the Colombo family; Richard Fusco, 74, consigliere of the Colombo family; Joseph Corozzo, 69, consigliere of the Gambino family; and Bartolomeo Vernace, 61, a member of the Gambino family administration. In total, more than 30 official members of the LCN, or "made men," were charged in the indictments unsealed today.
According to the indictments, the LCN operates in numerous cities around the United States and routinely engages in violence and threatens violence to extort money from victims, eliminate rivals, settle vendettas and obstruct justice. In the New York City-area, five LCN families principally operate: the Bonanno, Colombo, Gambino, Genovese and Luchese families. The Decavalcante family operates principally in New Jersey, while the New England LCN family operates in areas including Providence and Boston. Each LCN family has a hierarchical structure, with an administration comprised of a boss, underboss and consigliere at the top overseeing crews of criminals led by captains, who in turn supervise organized crime soldiers and associates.
In Brooklyn, 12 indictments were unsealed today charging 85 defendants from all five New York-based families as well as defendants from the Decavalcante family. One indictment (United States v. Russo) charges 39 defendants, including the entire leadership of the Colombo family not currently in prison – street boss Andrew Russo, acting underboss Benjamin Castellazzo and consigliere Richard Fusco – as well as four of the crime family’s official captains and eight of its soldiers, with crimes including racketeering and racketeering conspiracy committed during an approximately 20-year period. Among other acts of violence, Colombo family acting captain Anthony Russo is charged with the 1993 murder of Colombo family underboss Joseph Scopo during an internecine war among family members. According to court documents, Scopo was shot in the passenger seat of a car outside of his residence in Ozone Park, Queens, N.Y. The Russo indictment also charges numerous crimes of extortion and fraud, including charges related to the Colombo crime family’s alleged long-standing control of Cement and Concrete Workers Union Local 6A, and its alleged defrauding of the City of New York in regard to an annually held feast, the Figli di Santa Rosalia. The indictment is based in part on hundreds of hours of recorded conversations of members and associates of the Colombo family, including meetings of the Colombo family administration.
Two of the indictments returned in Brooklyn (United States v. Vernace and United States v. Dragonetti) charge 13 members and associates of the Gambino family, including Bartolomeo Vernace, a member of the current Gambino family administration. The Vernace indictment includes, among others, charges against Vernace in regard to the 1981 double murder of Richard Godkin and John D’Agnese inside the Shamrock Bar in the Woodhaven neighborhood of Queens. D’Agnese died from a single gunshot to the face and Godkin died from a point-blank gunshot to his chest. The Dragonetti indictment charges numerous acts of extortion, including a conspiracy by the Gambino family to extort a New York City cement manufacturer, as well as various construction companies and sites outlined on the crime family’s so-called "Construction List."
In nine of the indictments charged in Brooklyn (United States v. Alesi, United States v. Balzano, United States v. Caramanica, United States v. Cicalese, United States v. Colandra, United States v. Gallo, United States v. Gioia, United States v. Messina and United States v. Samperi), members and associates of the Colombo, Gambino, Genovese and Decavalcante families are charged variously with racketeering, racketeering conspiracy, extortion, perjury, obstruction of justice, illegal gambling, receipt of stolen property and possession of contraband cigarettes. For example, in United States v. Messina, Bonanno family associate Neil Messina is charged with the murder of Joseph Pistone during a home invasion robbery in 1992. The Alesi indictment charges, among other things, a former member of the Suffolk County, N.Y., Police Department’s Emergency Services Unit with obstructing a state investigation of illegal gambling businesses by tipping off the business to upcoming law enforcement raids. The Cicalese indictment charges three members of the International Longshoremen’s Association (ILA) with committing perjury during testimony before a federal grand jury investigating organized crime’s infiltration of the waterfront and the ILA.
Another indictment (United States v. Depiro), being prosecuted jointly by the District of New Jersey and the Eastern District of New York, charges 15 defendants with various racketeering related crimes, including extortion of members of ILA Local Union 1235 and other New Jersey ILA locals, as well as for acts of illegal gambling through the management of a sports betting operation and a poker club, and extortionate collection of credit related to gambling debts. Certain defendants, who include numerous current and former officials in local ILA unions based in New Jersey, are alleged to be affiliated with the Genovese family. According to court documents, the Gambino and Genovese families have engaged in a multi-decade conspiracy to influence and control the unions and businesses that work on the New York-area piers. According to court documents, Stephen Depiro managed the Genovese family’s illegal activities on the New Jersey piers, including the Genovese family’s long-standing conspiracy to extort ILA members each year during the Christmas period, when the longshoremen annually receive a portion of royalty payments paid by shipping companies using the ports of New York and New Jersey. Depiro and others allegedly conspired with his cousin, Nunzio LaGrasso, an associate of the Genovese family and the vice-president of ILA Local 1478 in Newark, to extort ILA members each year.
In Manhattan, 26 defendants, primarily from the Gambino family, have been charged in two indictments that include charges related to racketeering conspiracy, murder, narcotics trafficking, extortion, assault, arson, loansharking, illegal gambling, mail and wire fraud, and stolen property crimes. Among the defendants charged are Joseph Corrozo, 69, who has served at times as the Gambino family consigliere; Bartolomeo Vernace, 61, a member of the Gambino family administration, who is also charged in Brooklyn; Gambino family captains Alphonse Trucchio, 34, and Louis Mastrangelo, 66; and Gambino soldiers Michael Roccaforte, 34, Anthony Moscatiello, 40, and Vincenzo Frogiero, 43.
According to court documents filed in the Manhattan cases, the criminal conduct allegedly occurred for more than two decades, from the late 1980s to approximately 2010. Gambino associate Todd LaBarca, 39, is charged with the 2001 conspiracy to murder and murder of Gambino family associate Marty Bosshart. According to the indictment, Bosshart was murdered on Jan. 2, 2002, with a single gunshot to the back of his head, and his body was left on the side of the road in Queens. According to court documents, a cooperating witness consensually recorded more than 100 conversations with other members and associates of the Gambino family, including conversations with LaBarca about the murder. In addition, according to court documents, the cocaine and marijuana trafficking involved multiple thousands of kilograms of the illegal drugs.
Finally, an indictment unsealed in Providence charges two defendants - longtime boss of the New England LCN Luigi Manocchio, 83, and LCN associate Thomas Iafrate, 61, - with extortion and extortion conspiracy. The extortion conspiracy allegedly spans almost two decades of illegal activity and involves the extortion of local pornographic bookstores and nightclubs, including the Satin Doll and the Cadillac Lounge, both in Providence.
The charges carry a variety of maximum penalties, up to life in prison on certain charges.
The charges announced today are merely allegations, and defendants are presumed innocent unless proven guilty in a court of law.
The defendants charged in each district will be prosecuted by Assistant U.S. Attorneys from each of the respective districts in which the cases were charged, including the U.S. Attorneys’ Offices for the Eastern and Southern Districts of New York, the District of Rhode Island and the District of New Jersey. The case charged in Providence is also being prosecuted by trial attorneys from the Criminal Division’s Organized Crime and Racketeering Section.
The cases were variously investigated by the FBI’s New York and Newark Field Offices, and the Boston Division’s Providence Resident Agency; the Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; the New York City Police Department; the Suffolk County District Attorney’s Office; the U.S. Secret Service; the Suffolk County Police Department; the Rhode Island State Police; and the Providence Police Department. The Drug Enforcement Administration; the Waterfront Commission of New York Harbor; U.S. Immigration and Customs Enforcement Homeland Security Investigations; the U.S. Marshals Service in the Eastern and Southern Districts of New York; the Monmouth County, N.J., Prosecutor’s Office; the New York State Police; the New Jersey State Police; the New Jersey Department of Corrections; the U.S. Army-Ft. Hamilton; and the Italian National Police also provided assistance.
Copies of the indictments can be found at www.justice.gov/opa/lacosanostra.htm.
19 January 2011
Provident Capital Indemnity, Its President and Auditor<br /> Charged in $670 Million Fraud SchemeRead the Press Release
RICHMOND, Va. – The president and the auditor of a Costa Rican company selling reinsurance bonds to life settlement companies were arrested and charged, along with the company itself, in a seven-count indictment unsealed today for their alleged role in a $670 million fraud scheme involving victims throughout the United States and abroad.
The charges were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Assistant Attorney General Lanny A. Breuer of the Criminal Division.
An indictment unsealed today in U.S. District Court for the Eastern District of Virginia charges Costa Rica-based Provident Capital Indemnity Ltd. (PCI), Minor Vargas Calvo, 59, and Jorge Castillo, 55, each with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. The indictment also seeks forfeiture of more than $40 million from all three defendants. Vargas was arrested on Jan. 18, 2011, at the John F. Kennedy International Airport, and Castillo was arrested earlier today in New Jersey.
“PCI is accused of lying to investors across the globe to sell more than half a billion dollars worth of ‘guaranteed’ bonds which turned out to be worthless,” said U.S. Attorney MacBride. “This case is another example of how the members of the Virginia Financial and Securities Fraud Task Force are working to detect, deter and punish financial fraudsters who target investors throughout Virginia, the nation and the world.”
“These defendants allegedly sold $670 million in bonds by making numerous false representations, which were disseminated to thousands of investors,” said Assistant Attorney General Breuer. “They stand accused of defrauding victims at home and abroad. As these charges show, the Justice Department is committed to rooting out investment fraud wherever we find it.”
According to the indictment, Vargas, a citizen and resident of Costa Rica, is the president and majority owner of PCI, an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. Castillo, a resident of New Jersey, is the purported independent auditor for PCI. If convicted, Vargas and Castillo face up to 20 years in prison on each count.
The defendants allegedly engaged in a scheme to defraud clients and investors by making misrepresentations about PCI’s reinsurers, PCI’s financial statements and PCI’s Dun and Bradstreet rating, in connection with PCI’s marketing and sale of “financial guarantee bonds” to companies that sold life settlements or securities backed by life settlements to investors. PCI’s bonds were allegedly marketed as a way to eliminate one of the primary risks of investing in life settlements, namely the possibility that the individual insured by the underlying life insurance policy will live beyond his or her life expectancy.
The indictment alleges that from 2004 through 2010, PCI sold approximately $670 million of bonds to life settlement investment companies located in various countries, including the United States, the Netherlands, Germany, Canada and elsewhere. PCI’s clients, in turn, sold investment offerings backed by PCI’s bonds to thousands of investors around the world. Purchasers of PCI’s bonds were allegedly required to pay up-front payments of 6 to 11 percent of the underlying settlement as “premium” payments to PCI before the company would issue the bonds.
This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and FBI, with assistance from the Virginia State Corporation Commission, the Texas State Securities Board, and the New Jersey Bureau of Securities. This case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica A. Brumberg of the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr. of the Criminal Division’s Fraud Section.
In a parallel investigation, the U.S. Securities and Exchange Commission announced today its filing of a parallel emergency enforcement action against PCI, Vargas and Castillo.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the 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.
Lufkin, Texas, Man Pleads Guilty to Involvement in MurdersRead the Press Release
WASHINGTON –A Lufkin, Texas, man pleaded guilty today to charges related to a double homicide that took place in Nacogdoches, Texas, in August 2007, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney John M. Bales for the Eastern District of Texas.
Carl Carver, 44, pleaded guilty today before U.S. District Judge Marcia Crone to committing a violent crime in aid of racketeering activity. Specifically, Carver admitted that he had participated in the murder of David Mitchamore.
According to information presented in court, Carver was a general of the Aryan Brotherhood of Texas (ABT), a powerful race-based state-wide organization that operates inside and outside of state and federal prisons throughout Texas and the United States. The ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, are required to follow the orders of higher ranking members, often referred to as “direct orders.”
According to court documents, David Mitchamore, aka “Super Dave,” an ABT member, and his girlfriend, Christie Rochelle Brown, were murdered as a result of a “direct order” issued by Carver against Mitchamore because of Mitchamore’s failure to repay an outstanding debt he allegedly owed to Carver. The bodies of Mitchamore and Brown were discovered in Nacogdoches County on Aug. 10, 2007.
Carver faces life in prison at sentencing. A sentencing date has not been set.
This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the National Gang Targeting, Enforcement and Coordination Center (Gang-TECC); the Nacogdoches Sheriff’s Department; the Nacogdoches Police Department; the Angelina County, Texas, Sheriff’s Department; the Texas Department of Public Safety; and the Texas Rangers. The case is being prosecuted by the Office of the U.S. Attorney in Lufkin and the Criminal Division’s Gang Unit, in full cooperation with the Nacogdoches County District Attorney’s Office.
Justice Department Obtains $35,000 Discrimination Settlement Against Chicago-area LandlordRead the Press Release
WASHINGTON - The Justice Department announced today that Orland Park, Ill., property owner Terence Flanagan has agreed to pay $35,000 in monetary damages and civil penalties to settle consolidated Fair Housing Act lawsuits against him. The lawsuits alleged that Flanagan discriminated against a family that tried to rent a single-family home from him, and that Flanagan made repeated statements to fair housing testers expressing a preference not to rent the home to African-Americans.
Today’s settlement, which has been approved by the U.S. District Court for the Northern District of Illinois in Chicago, resolves a lawsuit filed by the department and one filed by Kemal Majied and the South Suburban Housing Center, a private fair housing organization, against Flanagan in late 2009. Mr. Majied, who is African-American, and his family unsuccessfully sought to rent a single-family home that Flanagan had advertised for rent and contacted the South Suburban Housing Center for assistance. Both the Housing Center and the department later sent fair housing testers to the property, where Flanagan stated he would rent the house to a white tester for $100 less than the advertised rate, and further stated “you’re not black, that’s the reason you’re getting that.”
“This kind of discrimination is illegal and has no place in the housing market anywhere in this country,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This lawsuit demonstrates the department’s resolve to pursue and eradicate such discrimination, whether practiced by housing providers large or small.”
“This settlement reflects our resolve to guard against acts of discrimination and to protect the right of all area residents to seek housing wherever they choose to live,” said U.S. Attorney for the Northern District of Illinois Patrick Fitzgerald.
Under the terms of the settlement, Flanagan will pay $15,000 each to Mr. Majied and the Housing Center and a $5,000 civil penalty to the United States. The settlement also prohibits Flanagan from personally managing or renting any properties for its five-year term. In addition, Flanagan admits in the settlement that he made the statements to the fair housing testers alleged in the complaints against him.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at [email protected] . Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777 or at www.hud.gov . Fair housing enforcement is a priority of the department’s Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt
Jared Lee Loughner IndictedRead the Press Release
TUCSON , Ariz. - A federal grand jury in Tucson, today returned an initial three-count indictment against Jared Lee Loughner for attempting to kill U.S. Rep. Gabrielle Giffords, and two of her aides, Ron Barber and Pamela Simon.
Today’s charges represent the initial indictment in the investigation of the Jan. 8 shooting in Tucson.
“Today, the Grand Jury returned an initial three-count indictment against Jared Lee Loughner in the Tucson shooting case. We are in the early stages of this ongoing investigation. We have made considerable progress in a short period of time,” said U.S. Attorney Dennis Burke. “This case also involves potential death-penalty charges, and Department rules require us to pursue a deliberate and thorough process. Today’s charges are just the beginning of our legal action, and we are working diligently to ensure that our investigation is thorough and that justice is done for the victims and their families.”
The charges meet the requirement under the Federal Criminal Code which mandates that the United States bring an indictment within 30 days of arrest of the defendant.
The indictment alleges that Loughner, 22, of Tucson, attempted to assassinate Gabrielle Giffords, a Member of Congress, 18 USC 351(c,), and attempted to murder two federal employees, Ron Barber and Pamela Simon, 18 USC 1114 and 1113.
Loughner has been held in federal custody since Jan. 8.
A conviction for the attempted assassination of a Member of Congress carries a maximum penalty of life in prison, a $250,000 fine or both. A conviction for attempted murder of a federal employee carries a maximum penalty of 20 years in prison, a $250,000 fine or both.
In determining an actual sentence, Judge Burns will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.
An indictment is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
Burke emphasized that the procedure in any case which may result in a punishment of death requires a careful and deliberate process, and includes consultation with the victims of the crimes and their families, consideration of all evidence relevant to guilt and punishment, and consultation with all the law enforcement agencies investigating the case.
Also, in order to pursue the death penalty the United States Attorney’s Office for Arizona must provide information to the Capital Review Committee. For more detailed information about this process, click here.
The investigation preceding the indictment was conducted by a multi-jurisdictional law enforcement team led by the FBI. The prosecution is being handled by Assistant U.S. Attorneys Wallace Kleindienst, Beverly Anderson, Christina Cabanillas and Mary Sue Feldmeier of the District of Arizona, Tucson.
RELEASE NUMBER: 2011-007(Loughner) Indictment
Belarusian National Pleads Guilty to<br /> International Online Scheme to Steal U.S. Tax RefundsRead the Press Release
WASHINGTON – A Belarusian national and resident of Nantucket, Mass., pleaded guilty today to charges stemming from his participation in an international online scheme to steal income tax refunds from U.S. taxpayers around the country, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Carmen M. Ortiz of the District of Massachusetts.
Mikalai Mardakhayeu, 31, pleaded guilty before U.S. District Court Judge George A. O’Toole Jr. in the District of Massachusetts, to one count of conspiracy and nine counts of wire fraud.
According to court records, from 2006 through 2007, Mardakhayeu’s co-conspirators lured victims by operating websites that falsely claimed to be authorized by the Internal Revenue Service (IRS) to offer lower-income taxpayers free online tax return preparation and electronic tax return filing (e-filing). After taxpayers input and uploaded their tax information, co-conspirators in Belarus collected the data and altered the returns to increase the refund amounts and to direct the refunds to U.S. bank accounts controlled by Mardakhayeu. They then caused the fraudulently altered returns to be e-filed with the IRS. The conspirators ultimately caused the U.S. Treasury and various state treasury departments to deposit more than $200,000 in stolen refunds into bank accounts controlled by Mardakhayeu.
Sentencing is scheduled for April 26, 2011. Mardakhayeu faces a maximum sentence of 20 years in prison, to be followed by three years of supervised release, a $250,000 fine, forfeiture and restitution on each of the nine wire fraud counts. On the conspiracy count, he faces an additional five years in prison.
The case was investigated by the IRS Criminal Investigation Division and the Treasury Inspector General for Tax Administration and is being prosecuted by Assistant U.S. Attorney Adam Bookbinder of the District of Massachusetts’s Computer Crimes Unit and by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section.
Army Contracting Officer Sentenced to 60 Months in Prison for BriberyRead the Press Release
WASHINGTON – A U.S. Army contracting officer was sentenced today by U.S. District Judge Christine M. Arguello in Denver to 60 months in prison for accepting money and items of value in return for being influenced in the awarding of Army contracts, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Judge Arguello also ordered Army Major Roderick D. Sanchez, 45, of Pueblo, Colo., to serve three years of supervised release following his prison term, and to pay a $15,000 fine. In addition, Sanchez was ordered to forfeit Rolex watches, real estate and other property purchased with the proceeds of the bribery scheme. Sanchez pleaded guilty in U.S. District Court for the District of Colorado on Oct. 27, 2010, to one count of bribery.
According to court documents, Sanchez was employed by the U.S. Army and deployed overseas in Afghanistan, Iraq and Kuwait as a contracting officer at various times from approximately 2004 until 2007. Sanchez’s duties included reviewing bids submitted by contractors for Army contracts, recommending the award of Army contracts to specific contractors, and ultimately awarding those contracts to government contractors. Sanchez admitted that during that time period he accepted illicit and secret bribe payments from foreign companies seeking to secure Army contracts. In return, Sanchez admitted he used his official position to steer Army contracts to these companies. During the course of this criminal scheme, Sanchez accepted Rolex watches, cash payments and other things of value worth more than $200,000.
The case was prosecuted by Deputy Chief Justin V. Shur and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI, Army Criminal Investigation Command, Defense Criminal Investigative Service and the Special Inspector General for Iraq Reconstruction.
Alleged Terrorist Charged with Conspiracy to Kill Americans in IraqRead the Press Release
WASHINGTON -- Faruq Khalil Muhammad ‘Isa, 38, also known as “Faruk Khalil Muhammad ‘Isa,” “Sayfildin Tahir Sharif,” and “Tahir Sharif Sayfildin,” was arrested in Canada today pursuant to a U.S. provisional arrest warrant, based on a complaint in the United States charging him with conspiring to kill Americans abroad and with providing material support to that terrorist conspiracy to kill Americans abroad. The U.S. government will seek the defendant’s extradition to face the charges.
The charges were announced by David Kris, Assistant Attorney General for National Security; Loretta E. Lynch, U.S. Attorney for the Eastern District of New York; and Janice K. Fedarcyk, Assistant Director-in-Charge of the New York Field Office of the FBI. The government’s investigation is being conducted by the FBI New York Joint Terrorism Task Force, with assistance provided by the Department of Defense, the Royal Canadian Mounted Police, and the government of Tunisia.
The defendant is charged in connection with his support for a multinational terrorist network that conducted multiple suicide bombings in Iraq and that is responsible for the deaths of five American soldiers. According to the complaint, filed on Jan. 14, 2011, in the Eastern District of New York, the five American soldiers were killed on April 10, 2009, when a Tunisian jihadist, whose travel to and activities in Iraq were facilitated by the terrorist network, drove a truck laden with explosives to the gate of the U.S. Military’s Forward Operating Base Marez in Mosul, Iraq. The jihadist exchanged fire with Iraqi police officers and then the American convoy that was exiting the base. The truck detonated approximately 50 yards from the gate, alongside the last vehicle in the U.S. convoy, leaving a 60-foot crater in the ground.
Five American soldiers were killed in the blast. They are Staff Sergeant Gary L. Woods, 24, of Lebanon Junction, Kentucky; Sergeant First Class Bryan E. Hall, 32, of Elk Grove, California; Sergeant Edward W. Forrest Jr., 25, of St. Louis; Corporal Jason G. Pautsch, 20, of Davenport, Iowa; and Army Private First Class Bryce E. Gaultier, 22, from Cyprus, California.
As alleged in the complaint, the day after the attack, the defendant had a conversation with one of the Iraq-based members of the terrorist network during which the defendant asked, “Did you hear about the huge incident yesterday? Is it known?” When the network member replied that he had, the defendant said, “He was one of the Tunisian brothers.” The network member responded, “Praise God, may God acknowledge him” and the defendant said, “Amen.” This conversation, along with the others referenced in the complaint, was recovered pursuant to Canadian court-authorized wiretaps and search warrants.
The defendant’s network is allegedly also responsible for a suicide bombing attack on an Iraqi police station on March 31, 2009, in which at least seven Iraqis were killed. That attack was committed by two other Tunisian jihadists who were recruited by the defendant’s network and who traveled to Iraq with the bomber responsible for the April 10th attack. A day or two after the bombing, the brother of one of the bombers received an anonymous phone call in which the caller repeated three times that the bomber had “been martyred two days ago in combat with the Americans in Mosul.” The caller went on to say, “May God witness what I say. God is great.”
According to the complaint, the network unsuccessfully tried to send a second group of Tunisian jihadists to Iraq in March 2009. In online conversations with one of those jihadists as the jihadist was preparing to leave Tunisia, the defendant advised him not to leave a will, and to “try to delete everything. . . . off your computer. Don’t leave one character of information or anything behind. . . . Don’t leave any trace. . . . Do not forget to keep reading Qur’an and repeat the famous prayers on the way until you meet with God.” That jihadist was arrested by Tunisian authorities as he attempted to leave the country in April 2009.
According to the complaint, the defendant has continued, since the March and April 2009 attacks, to seek to further the network’s attacks against Americans in Iraq, and to state his motive for doing so. In Jan. 2010, he told another person, “There is no more pressing duty after the declaration of faith than fighting the enemy. Fighting comes before the other four pillars of faith.” In July 2010, he stated, “Islam came for the good of humanity. So if someone doesn’t like good, we fight them, like those dog Americans.” The defendant also instructed a family member in Iraq to “Go learn about weapons and go attack the police and Americans. Let it be that you die.” According to the complaint, the defendant used the code “farming” to refer to jihadist attacks because, as he put it, jihadists “plant metal and harvest metal and flesh.”
The defendant allegedly also sought to conduct attacks himself and become a suicide bomber for the terrorist network. He informed his mother in November 2009, that his greatest wish was to die a martyr and be greeted by 70 virgins in paradise. In a conversation with an Iraq-based leader of the terrorist network in January 2010, the defendant volunteered to travel to Iraq, take up arms against the Americans, and subsequently conduct a suicide mission. The defendant asked that his dedication to the network be explained to those in charge as follows: “He [i.e., the defendant] is not just 100 percent but 1,000,000 percent with you. He is with you on the doctrine, the loyalty and the enmity and everything one million percent.” He added, “Even if I can’t work over there, I can work here.”
“These changes underscore the global nature of the terrorist threat we face and the importance of international cooperation in addressing this threat. I applaud the many agents, analysts and prosecutors who worked to bring about this case and thank our foreign counterparts for their substantial assistance,” said Assistant Attorney General Kris.
“There is no safe harbor for terrorists, including those who endeavor to spread violence from halfway across the world,” stated U.S. Attorney Lynch. “The five American servicemen who lost their lives in Iraq as a result of the actions of this terrorist network made the ultimate sacrifice for our nation. Today’s arrest demonstrates that we have not forgotten that sacrifice and will continue to use every available means to bring to justice all those who are responsible.” Ms. Lynch also expressed her grateful appreciation to the New York City Police Department, the Canadian government, the Royal Canadian Mounted Police, and the government of Tunisia for their assistance and cooperation in the investigation.
“The terrorist threat may be decentralized, but it is undeniably international,” said FBI Assistant Director-in-Charge Fedarcyk. “In a real sense, the safety and security of people anywhere depends on the ability and commitment of counterterrorism entities everywhere to work together. If national borders don’t deter terrorists, we can’t allow boundaries to impede the global effort to prevent a global threat.”
If convicted, the defendant faces a maximum sentence of life imprisonment.
The government’s case is being prosecuted by Assistant U.S. Attorneys Zainab Ahmad, Berit W. Berger, and Carter H. Burwell, with assistance provided by Mary Futcher of the Counterterrorism Section in the Department of Justice’s National Security Division. The Criminal Division’s Office of International Affairs also provided assistance in this matter.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
18 January 2011
Justice Department Settles Lawsuit in California Against Titan Laboratories Inc. and Its Owner to Enforce the Employment Rights of Army Reserve MemberRead the Press Release
WASHINGTON — The Justice Department today announced that it has reached a settlement on behalf of U.S. Army reservist Miguel Orozco Garduño (Orozco) in its lawsuit against Titan Laboratories Inc., and its owner Harvey Berger. The lawsuit alleges that Titan and Berger willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by discriminating against and failing to reemploy Orozco after he returned from military leave. The settlement, embodied in a consent decree that the parties have submitted to the court for approval, calls for Titan and Berger to pay Orozco $21,000 in back pay.
The Justice Department’s complaint, filed in the U.S. District Court for the Northern District of California, alleges that while Orozco was away on military leave, Titan and Berger terminated Orozco’s employment because of his military obligations and hired as a permanent replacement someone who did not have such obligations. The complaint also alleges that when Orozco completed his honorable military service and requested reemployment, Titan and Berger refused to reemploy him because he had been replaced.
"The men and women who serve in the military must be able to do so without fear that they will lose their civilian jobs as a result of their service. This case demonstrates the Justice Department’s commitment to vigorously enforcing federal laws that protect the employment rights of our servicemembers," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
"We applaud the Justice Department not only for helping Mr. Orozco bring his case to a successful conclusion, but also for its outstanding efforts on behalf of our country’s Service Members," said Ray Jefferson, Assistant Secretary of Labor for Veterans’ Employment and Training.
The case stems from a referral by the Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service.
Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Settles Lawsuit in California Against Titan Laboratories Inc. and Its Owner to Enforce the Employment Rights of Army Reserve MemberRead the Press Release
WASHINGTON — The Justice Department today announced that it has reached a settlement on behalf of U.S. Army reservist Miguel Orozco Garduño (Orozco) in its lawsuit against Titan Laboratories Inc., and its owner Harvey Berger. The lawsuit alleges that Titan and Berger willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by discriminating against and failing to reemploy Orozco after he returned from military leave. The settlement, embodied in a consent decree that the parties have submitted to the court for approval, calls for Titan and Berger to pay Orozco $21,000 in back pay.
The Justice Department’s complaint, filed in the U.S. District Court for the Northern District of California, alleges that while Orozco was away on military leave, Titan and Berger terminated Orozco’s employment because of his military obligations and hired as a permanent replacement someone who did not have such obligations. The complaint also alleges that when Orozco completed his honorable military service and requested reemployment, Titan and Berger refused to reemploy him because he had been replaced.
“The men and women who serve in the military must be able to do so without fear that they will lose their civilian jobs as a result of their service. This case demonstrates the Justice Department’s commitment to vigorously enforcing federal laws that protect the employment rights of our servicemembers,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
“We applaud the Justice Department not only for helping Mr. Orozco bring his case to a successful conclusion, but also for its outstanding efforts on behalf of our country’s Service Members,” said Ray Jefferson, Assistant Secretary of Labor for Veterans’ Employment and Training.
The case stems from a referral by the Department of Labor following an investigation by the Department of Labor’s Veterans’ Employment and Training Service.
Additional information about USERRA can be found on the Justice Department website: www.servicemembers.gov and www.usdoj.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm .
Justice Department Settles Housing Discrimination Lawsuit Against Mississippi Mobile Home Park Owner and ManagersRead the Press Release
WASHINGTON - The Justice Department today announced that Mississippi property owner Indigo Investments LLC, has agreed to pay $50,000 in monetary damages and civil penalties to settle the government’s Fair Housing Act lawsuit. The government alleged that Indigo and its former employees, Barbara A. Hamilton and Edward L. Hamilton, discriminated against African-American residents and members of interracial households at Homestead Mobile Home Village in Gulfport, Miss., which Indigo formerly owned and the Hamiltons formerly managed.
The lawsuit originated as a result of a complaint filed with the Department of Housing and Urban Development (HUD) by an African-American couple who moved to the mobile home park after being displaced by Hurricane Katrina. After investigating the complaint, HUD issued a charge of discrimination, and the case was referred to the Justice Department, which filed the lawsuit in June 2009.
"The law protects all individuals from harassment and discrimination in housing on the basis of race," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "Unlawful discrimination is particularly abhorrent when directed against those who have been displaced by natural disaster. The Department of Justice is committed to ensuring equal housing opportunities for all, no matter their housing circumstances."
"Hurricane Katrina devastated the lives of many people on the Mississippi Gulf Coast. Those persons on whose behalf relief was obtained in this case were doubly affected – first by the hurricane and then in the very homes where they sought refuge when they were subjected to discriminatory treatment on the basis of race. It is never right to discriminate on any basis and this office will remain vigilant to protect the citizens of south Mississippi from unlawful discrimination in housing on any protected basis," said U.S. Attorney for the Southern District of Mississippi John M. Dowdy.
"Losing one’s home to any disaster is disruptive enough without facing housing discrimination when trying to find a new home to restart your life, " said John Trasviña, Assistant Secretary for Fair Housing and Equal Opportunity. "HUD and the Department of Justice continue our joint enforcement actions to eliminate illegal housing discrimination in all forms."
Under the settlement, which was approved by the U.S. District Court for the Southern District of Mississippi, Indigo Investments LLC, will pay $45,000 to 12 individuals and $5,000 to the United States as a civil penalty. The settlement also provides that if Indigo obtains any interest in rental dwellings in the future, it must adopt non-discrimination policies; require its members, employees and agents to receive fair housing training; and submit to further monitoring by the government. The agreement prohibits Homestead’s former managers, Barbara and Edward Hamilton, from owning or managing rental properties.
Fighting illegal housing discrimination 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. Persons who believe they have experienced or witnessed unlawful housing discrimination may 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. More information about the Fair Housing Act can also be found at www.justice.gov/crt/housing or www.hud.gov/fairhousing.
Justice Department Allows Comcast-NBCU Joint Venture to Proceed with ConditionsRead the Press Release
WASHINGTON – The Department of Justice announced today a settlement with Comcast Corp. and General Electric Co.’s subsidiary NBC Universal Inc. (NBCU) that allows their joint venture to proceed conditioned on the parties’ agreement to license programming to online competitors to Comcast’s cable TV services, subject themselves to anti-retaliation provisions and adhere to Open Internet requirements. The department said that the proposed settlement will preserve new content distribution models that offer more products and greater innovation, and the potential to provide consumers access to their favorite programming on a variety of devices in a wide selection of packages.
The Department of Justice’s Antitrust Division, along with five state attorneys general, filed a civil antitrust lawsuit today in U.S. District Court for the District of Columbia, to block the formation of the joint venture, alleging that the transaction would allow Comcast to limit competition from its cable, satellite, telephone and online competitors. At the same time, the department and the states filed a proposed settlement that, if approved by the court, would resolve the competitive concerns in the lawsuit. The participating states are: California, Florida, Missouri, Texas and Washington.
“The Antitrust Division worked in close cooperation and unprecedented coordination with the Federal Communications Commission (FCC) to reach a result that fully protects competition, allowing businesses to bring new and innovative products to the marketplace, providing consumers with more programming choices,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The conditions imposed will maintain an open and fair marketplace while at the same time allow the innovative aspects of the transaction to go forward.”
Today, the FCC also issued an order approving the proposed transaction subject to conditions, some of which are similar to those in the department’s settlement. The department and FCC consulted extensively to coordinate their reviews and create remedies that were both consistent and comprehensive. Consistent with the department’s complaint, the FCC order requires the joint venture to license NBCU content to Comcast’s cable, satellite and telephone competitors, making it unnecessary for the department to impose the same requirement.
The department’s complaint alleges that Comcast’s traditional and online rivals need access to NBCU programming, including the NBC broadcast network, to compete effectively against Comcast. The joint venture would have less incentive to distribute NBCU programming to Comcast’s video distribution rivals than a stand-alone NBCU, and could cause Comcast’s rivals and their customers to face higher prices for that content. The department said that the joint venture, as originally proposed, may have substantially lessened competition for video programming distribution in major portions of the United States. The department also said that the market would experience lower levels of investment, less experimentation with new models of delivering content and less diversity in the types and range of product offerings.
Under the proposed settlement and the FCC order, the joint venture must make available to online video distributors (OVDs) the same package of broadcast and cable channels that it sells to traditional video programming distributors. In addition, the joint venture must offer an OVD broadcast, cable and film content that is similar to, or better than, the content the distributor receives from any of the joint venture’s programming peers. These peers are NBC’s broadcast competitors (ABC, CBS and FOX), the largest cable programmers (News Corp., Time Warner Inc., Viacom Inc. and The Walt Disney Co.), and the largest video production studios (News Corp., Sony Corporation of America, Time Warner Inc., Viacom Inc. and The Walt Disney Co.).
In the event of a licensing dispute between the joint venture and an online video distributor, the department may seek court enforcement of the settlement or permit, in its sole discretion, the aggrieved online video distributor to pursue a commercial arbitration procedure established under the settlement. The FCC order also requires the joint venture to license content to OVDs on reasonable terms and includes an arbitration mechanism for resolving disputes. If timely arbitration is available for resolution of disputes under the FCC order, the department ordinarily will defer to the FCC’s arbitration process to resolve such disputes. The FCC order also allows Comcast’s traditional competitors, such as satellite and telephone companies, to invoke arbitration at the FCC to resolve program access and retransmission consent disputes.
The settlement also includes other relief aimed at ensuring that Comcast cannot evade the provisions designed to protect competition. For example:
- Comcast may not retaliate against any broadcast network (or affiliate), cable programmer, production studio or content licensee for licensing content to a competing cable, satellite or telephone company or OVD, or for raising concerns to the department or the FCC;
- Comcast must relinquish its management rights in Hulu, an OVD. Without such a remedy, Comcast could, through its seats on Hulu’s board of directors, interfere with the management of Hulu, and, in particular, the development of products that compete with Comcast’s video service. Comcast also must continue to make NBCU content available to Hulu that is comparable to the programming Hulu obtains from Disney and News Corp;
- In accordance with recently established Open Internet requirements, Comcast is prohibited from unreasonably discriminating in the transmission of an OVD’s lawful network traffic to a Comcast broadband customer. Comcast must also maintain the high-speed Internet service it offers to its customers by continuing to offer download speeds of at least 12 megabits per second in markets where it has upgraded its broadband network. Additionally, Comcast is required to give other firms’ content equal treatment under any of its broadband offerings that involve caps, tiers, metering for consumption or other usage-based pricing; and
- Comcast may not, with certain narrow exceptions, require programmers or video distributors to agree to licensing terms that seek to limit online distributors’ access to content.
Comcast is a Pennsylvania corporation headquartered in Philadelphia. It is the largest video programming distributor in the nation, with approximately 23 million video subscribers. Comcast wholly owns national cable programming networks (e.g., E! Entertainment, Golf, Style), has partial interests in other networks (e.g., MLB Network, PBS KIDS Sprout), and has controlling interests in regional sports networks. Comcast also owns digital properties such as DailyCandy.com, Fandango.com and Fancast, its online video website. In 2009, Comcast reported total revenues of $32 billion.
GE is a New York corporation with its principal place of business in Fairfield, Conn. GE is a global infrastructure, finance and media company. GE owns 88 percent of NBCU, a Delaware corporation, with its headquarters in New York City. NBCU is principally involved in the production, packaging and marketing of news, sports and entertainment programming. NBCU wholly owns the NBC and Telemundo broadcast networks, as well as 10 local NBC owned and operated television stations (O&Os), 16 Telemundo O&Os and one independent Spanish language television station. In addition, NBCU wholly owns national cable programming networks – Bravo, Chiller, CNBC, CNBC World, MSNBC, mun2, Oxygen, Sleuth, SyFy and USA Network – and partially owns A&E Television Networks (including the Biography, History and Lifetime cable networks), The Weather Channel and ShopNBC. NBCU also owns Universal Pictures, Focus Films and Universal Studios. In 2009, NBCU had total revenues of $15.4 billion.
As required by the Tunney Act, the proposed seven-year settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Nancy Goodman, Chief, Telecommunications & Media Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Imprisoned Spy Sentenced to 8 More Years for Conspiracy to Act as an Agent of the Russian Government and Money LaunderingRead the Press Release
PORTLAND, Ore. – Harold James Nicholson, 59, was sentenced today to 96 months imprisonment by U.S. District Judge Anna J. Brown following his guilty pleas to the crimes of conspiracy to act as an agent of a foreign government and conspiracy to commit international money laundering. This 8-year prison sentence will be served following the 283-month prison sentence the defendant is currently serving in connection with his 1997 espionage conviction in the Eastern District of Virginia. Pursuant to the plea agreement both parties requested the court imposed the 8-year consecutive sentence. This case represents the first time a convicted spy has been convicted of new crimes involving a foreign country they spied for, while serving a sentence for espionage.
Harold J. Nicholson, a former Central Intelligence Agency (CIA) employee, is serving a 283-month sentence at the Federal Correctional Institution (FCI) in Sheridan, Ore., for a 1997 conviction of conspiracy to commit espionage. At the plea hearing Nicholson admitted that from 2006 to December 2008, with the assistance of his son Nathaniel, he acted on behalf of the Russian Federation, passed information to the Russian Federation, and received cash proceeds for his past espionage activities.
Harold J. Nicholson admitted that during the course of the conspiracy he met with his son Nathaniel on several occasions at FCI Sheridan and provided Nathaniel information intended for the Russian Federation. Defendant admitted that it was part of the conspiracy that Nathaniel would travel to several locations including San Francisco; Mexico City; Lima, Peru and Nicosia, Cyprus, to meet with agents of the Russian Federation. At these meetings, Nathaniel provided the Russian Federation information from the defendant and collected money for the defendant’s past espionage activities. Defendant followed the instructions of the Russian Federation and provided information requested by the Russians to Nathaniel to deliver to Russian agents at the overseas locations. Defendant directed Nathaniel on how to covertly travel with the funds from the Russian Federation and how to disperse the funds to family members.
“Today, former CIA official Harold Nicholson is being held accountable for once again violating his oath to protect America’s national security,” said David Kris, Assistant Attorney General for National Security. “While imprisoned for a prior espionage conviction, Nicholson dispatched his son around the globe to pass information to and receive cash payments from agents of the Russian Federation. The many agents, analysts and prosecutors who uncovered and put an end to this continued betrayal deserve our thanks.”
Dwight C. Holton, U.S. Attorney for Oregon, stated, “Harold Nicholson betrayed his country and he betrayed his family -- and stooped so low as to involve his son in his corrupt scheme to collect money for his spying. For his new crimes, Nicholson will spend an additional 8 years in prison. Law enforcement and the Bureau of Prisons should be commended for an outstanding investigation uncovering these serious crimes.”
“At a global level, this investigation shows that international espionage is a threat America still faces, decades after the end of the Cold War,” said Arthur Balizan, Special Agent in Charge of the FBI in Oregon, “On a personal level, it shows the damage a father can do as he manipulates a son into a world of dishonor.”
The FBI and the Federal Bureau of Prisons investigated this case. Assistant U.S. Attorneys Pamala Holsinger and Ethan Knight of the U.S. Attorney’s Office for the District of Oregon prosecuted this case. Trial Attorney Patrick Murphy of the Counterespionage Section of the Justice Department’s National Security Division also assisted.
Capital One Bank (usa) N.a. Will Refund More Than $2 Million in Monies Improperly Collected from Consumers in BankruptcyRead the Press Release
WASHINGTON - The U.S. Trustee Program (USTP) announced today that Capital One Bank (USA) N.A. will refund approximately $2.35 million to consumers in bankruptcy (or their bankruptcy estates) for amounts received by Capital One as a result of erroneous claims it filed in bankruptcy cases for debts that previously had been discharged. Capital One also will reimburse attorneys' fees and costs to consumers and bankruptcy trustees who filed legal objections to Capital One's erroneous claims.
In October 2008, the USTP entered a settlement agreement with Capital One to resolve allegations that the company attempted to collect on debts that previously had been discharged in bankruptcy. At that time, the USTP alleged that Capital One had filed approximately 5,600 erroneous claims in bankruptcy cases, and the company acknowledged that it had received approximately $340,000 to which it was not entitled.
As part of the settlement with the USTP, Capital One agreed to an audit process overseen by an independent auditor chosen by the court to examine Capital One customer accounts to ensure that all monies improperly received by Capital One as a result of erroneously filed claims were returned to consumers who had filed bankruptcy or to their bankruptcy estates. The auditor would also approve reimbursement to consumers and bankruptcy trustees for out-of-pocket costs and expenses, including attorneys' fees, incurred to contest erroneous claims.
The auditor filed her report with the bankruptcy court today, after examining nearly 700,000 claims made by Capital One. The auditor found that Capital One erroneously filed approximately 15,500 claims totaling approximately $24.7 million on account of debts previously discharged in bankruptcy, and that the company received payment of approximately $2.35 million on approximately 5,100 of those erroneously filed claims. The refund to each affected consumer or bankruptcy estate will be based on the amount paid to Capital One as a result of the erroneous claim, and consumers and bankruptcy trustees need not take any further action. Similarly, reimbursement of attorneys' fees and costs will be based on the amount paid by consumers to their counsel or costs incurred by the bankruptcy trustee to object to Capital One's erroneous claims, and affected consumers and bankruptcy trustees will receive further information from the auditor.
The auditor's report and the October 2008 settlement agreement are filed in the U.S. Bankruptcy Court for the District of Massachusetts (United States Trustee v. Capital One Bank (USA) N.A., Adversary Proceeding No. 08-01272 (Bankr. D. Mass.)).
The USTP is the component of the Department of Justice that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Attorney General Holder Leads Stalking Awareness EventRead the Press Release
WASHINGTON – Attorney General Eric Holder, Associate Attorney General Tom Perrelli and Director of the Office on Violence Against Women (OVW) Susan B. Carbon today opened an event focused on the complexities and impact of stalking crimes. The program featured a panel of speakers who shared their involvement in one family’s experience as victims of stalking, and their work to investigate and identify stalking behavior, and make changes to a state law to protect victims.
The event, which commemorated National Stalking Awareness Month, welcomed an audience of victim advocates, law enforcement officials, prosecutors, congressional staffers, and representatives from national organizations and federal agencies.
"Commemorating National Stalking Awareness Month today allows the department to underscore our commitment and efforts to prevent violence against women, to empower victims, and to hold perpetrators accountable and bring them to justice," said Attorney General Holder. "By providing a model for how a potential tragedy can be turned into opportunity, today’s guests also inspire our efforts in meeting the goals and responsibilities that we share."
Today’s event, presented by OVW, focused on the story of a young girl, Hannah Perryman, who was stalked and faced a criminal justice system that was, at the time, ill-equipped to provide the assistance she needed. With extraordinary community collaboration, particularly from law enforcement, she was able to successfully persuade the Illinois General Assembly to pass new legislation on behalf of victims of stalking.
"Stalking is a crime that affects families, work colleagues, and entire communities," said Associate Attorney General Perrelli. "Therefore, when we help communities recognize stalking behavior as criminal and provide tools to help them deal with this crime, we support victims and take a step towards ending violence against women."
"Stalking, a complex and often dangerous crime, is sometimes difficult to recognize. Providing appropriate responses can also be challenging for communities that do not understand what stalking is," said Carbon, the Director of OVW. "This national observance of Stalking Awareness Month is intended to provide information about the crime and support to victims and to those who work to prevent and end behaviors associated with stalking."
In addition to Department officials, expert presenters included Rebecca Dreke, Senior Program Associate with the Stalking Resource Center of the National Center for Victims of Crime and Cindy Southworth, Director of Safety Net: the National Safe and Strategic Technology Project at the National Network to End Domestic Violence.
According to a report by the Office of Justice Program’s Bureau of Justice Statistics, during a 12-month period, an estimated 3.4 million persons age 18 or older were victims of stalking. The study measured behaviors such as unwanted phone calls, sending unsolicited or unwanted letters or e-mails, following or spying on the victim, showing up at places without a legitimate reason, waiting at places for the victim, leaving unwanted items, presents or flowers and posting information or spreading rumors about the victim on the Internet, in a public place, or by word of mouth. Additional findings included that approximately one in four stalking victims reported some form of cyberstalking such as e-mail (83 percent) and nearly three in four stalking victims knew the offender in some capacity.
Resources and information related to stalking awareness month are located on OVW’s website at www.ovw.usdoj.gov and the Stalking Resource Center’s National Stalking Awareness Month website at www.stalkingawarenessmonth.org.
OVW is a component of the Department of Justice. In recognition of the severity of the crimes associated with domestic violence, sexual assault and stalking, Congress passed the Violence Against Women Act in 1994 (VAWA) as part of the Violent Crime Control and Law Enforcement Act of 1994. Created in 1995, OVW administers financial and technical assistance to communities around the country to facilitate the creation of programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. Since its inception, OVW has awarded more than $4 billion in grants and cooperative agreements, and has launched a multifaceted approach to implementing VAWA. By forging state, local, federal and tribal partnerships among police, prosecutors, victim advocates, health care providers, and community leaders, OVW grant programs help provide victims with the protection and services they need to pursue safe and healthy lives, while simultaneously enabling communities to hold offenders accountable.
Attorney General Creates Professional Misconduct Review Unit, Appoints Kevin Ohlson ChiefRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today the creation of a new Professional Misconduct Review Unit to handle disciplinary actions for career attorneys at the Department of Justice that arise from Office of Professional Responsibility (OPR) investigations and appointed Kevin Ohlson to be its Chief.
The Professional Misconduct Review Unit (PMRU) will be responsible for all disciplinary and state bar referral actions relating to OPR findings of professional misconduct against career attorneys.
“The current procedures for resolving these disciplinary matters consume too much time, and risk inconsistent resolutions, but this new Unit will help change that by providing consistent, fair, and timely resolution of these cases,” said Attorney General Holder. “In the vast majority of cases, Department attorneys meet their professional obligations but when allegations of misconduct occur, all parties deserve a fair and timely resolution. This Unit will be instrumental in achieving that goal and will also further the Department’s mission of meeting its ethical obligations in every case.”
“Through his lengthy career at the Department of Justice, Kevin Ohlson has been an extraordinary prosecutor and public servant, and I know that he will bring the high standards of professionalism and integrity that he has always demonstrated to this new position,” the Attorney General said.
OPR is responsible for investigating allegations of professional misconduct involving Department attorneys.
The Unit will review only those cases involving findings of intentional or reckless professional misconduct by OPR and determine whether those findings are supported by the evidence and the applicable law. OPR findings of poor judgment or mistake will continue to be referred to the component head or through the Executive Office for United States Attorneys (EOUSA) to the relevant U.S. Attorney for appropriate action.
The Unit was created as a result of a comprehensive review of existing disciplinary procedures and processes with the aim of creating a more efficient and uniform system. OPR, EOUSA, the Criminal Division, the Justice Management Division and the Office of Attorney Recruitment and Management conducted the review and recommended the creation of the Unit. At the outset, the Unit will focus on cases involving career attorneys from the recommending components though the Department expects to expand the jurisdiction of the Unit to cover other litigating components over time.
Ohlson has served as Chief of Staff and Counselor to the Attorney General since February 2009. He has previously served as the Director of the Executive Office for Immigration Review, chief of staff to the Deputy Attorney General, and Assistant U.S. Attorney. A former officer in the U.S. Army where he served as both a judge advocate and as a paratrooper, Ohlson was awarded the Bronze Star in 1990 for his service during the Persian Gulf War.
A copy of the memorandum is available at:
http://www.justice.gov/opa/documents/pmru-creation.pdf.
14 January 2011
Two Men Plead Guilty to Federal Hate Crime Charge Related to Desecration of Synagogue and Churches in Modesto, CaliforniaRead the Press Release
WASHINGTON – Brian Lewis, 23, of Modesto, Calif., and Abel Mark Gonzalez, 23, of Morgan Hill, Calif., pleaded guilty today before U.S. District Judge Lawrence J. O’Neill to conspiring to violate the civil rights of congregants of Congregation Beth Shalom, a synagogue in Modesto, Calif.
According to court documents, on or about Feb. 2, 2006, Lewis, Gonzalez and a co-conspirator conspired to deface and damage the synagogue. Lewis and Gonzalez admitted that the men spray-painted anti-Semitic and neo-Nazi graffiti on the synagogue’s exterior walls. Lewis and Gonzalez further admitted that the men spray-painted anti-Christian graffiti on the exterior walls of, and caused other damage to, Our Lady of Fatima Church and School and the Greek Orthodox Church of the Annunciation, both churches located in Modesto.
Lewis and Gonzalez each face a maximum sentence of 10 years in prison and a fine of $250,000. A sentencing hearing has been set for April 8, 2011.
"Freedom of worship for all Americans is a constitutional right that the federal government will continue to protect through strong enforcement of our nation’s civil rights laws," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This prosecution sends a clear signal to all who may contemplate similar conduct that we will continue to seek justice for victims of hate crimes and will hold accountable those who threaten religious freedom."
U.S. Attorney for the Eastern District of California Benjamin B. Wagner said: "This country and this state are bastions of religious freedom, and our duty is to preserve and protect that liberty. No job is more important for this office than protecting the right to worship free from violence, fear, or intimidation. As this case indicates, together with the FBI and our state and local law enforcement allies, we will vigorously investigate and prosecute those who attack that right."
This case, which is ongoing, is being investigated by the Modesto Resident Agency of the FBI’s Sacramento Field Office with assistance from the Modesto Police Department, and is being prosecuted by Assistant U.S. Attorney David Gappa of the U.S. Attorney’s Office for the Eastern District of California and Civil Rights Division Trial Attorney Karen Ruckert Lopez.
President of Florida Corporation Sentenced to 33 Months in Prison for Money Laundering Related to Child Pornography DistributionRead the Press Release
WASHINGTON – The president and co-director of a Florida corporation was sentenced today to 33 months in prison for money laundering related to proceeds generated by the corporation through its distribution of child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Joyce White Vance of the Northern District of Alabama. The corporation, Webe Web Corporation, also was sentenced today to five years of probation for child pornography charges.
Marc Evan Greenberg, 45, of Fort Lauderdale, Fla., pleaded guilty in the Northern District of Alabama on April 21, 2010, to one count of money laundering. Webe Web pleaded guilty on April 21, 2010, to one count of conspiracy to produce child pornography and 16 counts of transporting child pornography. U.S. District Court Judge C. Lynwood Smith also sentenced Greenberg to three years of supervised release to follow his prison term and ordered Greenberg to pay $900,000 in restitution to six victims.
According to court documents, Webe Web was the registered owner of the website "www.childsupermodels.com," which purported to be a child modeling website that promoted models 7 through 16 years old and their photographers. It contained hyperlinks to websites containing photographs of individual “child super models” featuring minor female children in various poses and wardrobes.
Greenberg and Webe Web admitted that the websites pertaining to 16 different children contained illegal images of child pornography. In some of the photos, the victims, all girls aged 8 to 15, were wearing underwear, lingerie, bathing suits and other revealing outfits, and were posed in positions that constituted child pornography.
According to court documents, viewers of the websites could preview a certain number of images for free on the website homepage. If viewers wanted to join the website to access additional photographs, they could purchase a 30-day membership for approximately $30 per month. Greenberg and Webe Web admitted that the websites depicting the 16 victims generated approximately $1 million in revenue.
Webe Web also admitted that it promoted subscriptions to these individual sites through its free advertising website known as Babble Club. On Babble Club’s website, members could receive a free sample of images of the children. According to court documents, the website encouraged the purchase of subscriptions to the individual websites of the children, and hosted discussion boards and groups which were devoted to each individual website. Babble Club members made postings to the discussion boards, which included comments on specific images they liked, the type of clothing and poses they liked, and poetry written to the photographed child. Certain members posted expressions of fondness and devotion for a photographed child.
The vice president and co-director of Webe Web, Jeffrey Robert Libman, pleaded guilty on Sept. 15, 2010, to 16 counts of transporting child pornography and was sentenced on Dec. 17, 2010, to 108 months in prison.
According to court documents, the photographs of the 16 victims in this case were taken by Jeff Pierson, a former photographer based in the Birmingham, Ala., area. Pierson pleaded guilty in January 2007 to conspiracy to transport child pornography and transportation of child pornography.
This case is being prosecuted by Assistant U.S. Attorneys Jim Phillips and Daniel J. Fortune of the Northern District of Alabama, and Assistant Deputy Chief Alexandra Gelber of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).
This case was investigated by the FBI and the U.S. Postal Inspection Service. The Document and Media Exploitation Branch of the National Drug Intelligence Center provided assistance in ascertaining the revenue flow of this criminal enterprise to support analysis of and to identify the ill gotten gains of the defendants.
Nacogdoches, Texas, Man Pleads Guilty for Role in MurdersRead the Press Release
WASHINGTON – A Nacogdoches, Texas, man pleaded guilty today to charges related to a double homicide which took place in Nacogdoches in August 2007, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney John M. Bales for the Eastern District of Texas.
Charles Cameron Frazier, aka "Mojo," 29, pleaded guilty today to committing a violent crime in aid of racketeering activity before U.S. District Judge Marcia Crone in federal court in Beaumont, Texas. Specifically, Frazier admitted that he had participated in the murders of David Mitchamore and Christy Rochelle Brown.
According to information presented in court, Frazier was a member of the Aryan Brotherhood of Texas (ABT), a powerful race-based state-wide organization that operates inside and outside of state and federal prisons throughout Texas and the United States. The ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, are required to follow the orders of higher-ranking members, often referred to as "direct orders."
According to court documents, David Mitchamore, aka "Super Dave," an ABT member, and his girlfriend, Christie Rochelle Brown, were murdered as a result of a "direct order" by members of the ABT because of Mitchamore’s failure to repay an outstanding debt he allegedly owed to an Aryan Brotherhood general. The bodies of Mitchamore and Brown were discovered in Nacogdoches County on Aug. 10, 2007.
Frazier faces life in prison at sentencing. A sentencing date has not been set.
This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the National Gang Targeting, Enforcement and Coordination Center (Gang-TECC); the National Gang Intelligence Center; the Nacogdoches Sheriff’s Department; the Nacogdoches Police Department; the Angelina County, Texas, Sheriff’s Department; the Texas Department of Public Safety; and the Texas Rangers. The case is being prosecuted by the Office of the U.S. Attorney in Lufkin, Texas, and the Criminal Division’s Gang Unit, in full cooperation with the Nacogdoches County District Attorney’s Office.
Large Network of Private Schools Pays $215,000 to Settle Lawsuit Alleging Discrimination Against Children with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced the settlement of a lawsuit filed to enforce the Americans with Disabilities Act (ADA) against Nobel Learning Communities, Inc. (NLC), a private, for-profit entity that operates a nationwide network of more than 180 preschools, elementary schools and secondary schools. These entities operate in the District of Columbia and in 15 states (Arizona, California, Florida, Illinois, Maryland, Nevada, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Virginia and Washington) under a variety of names, including Chesterbrook Academy, Merryhill School and Evergreen Academy, among others.
In its lawsuit, filed in April 2009 in the Eastern District of Pennsylvania, the Justice Department alleged that NLC violated Title III of the ADA by excluding from its programs children with disabilities, including some children with autism spectrum disorder, Down Syndrome, Attention Deficit Hyperactivity Disorder, and global developmental delays. NLC denies the allegations.
“It is illegal under the ADA to discriminate against children with disabilities. Just like public schools, private schools must make reasonable modifications of policies to permit children with disabilities to participate fully in the programs they offer,” said Assistant Attorney General Thomas E. Perez. “This agreement ensures that children will not be denied quality preschool and other educational opportunities based upon their disabilities.”
U.S. Attorney for the Eastern District of Pennsylvania, Zane David Memeger, noted, “no child should be discriminated against on the basis of disability. All children should have an equal opportunity to attend any school for which they qualify, and schools must make reasonable modifications to policies, practices or procedures in accordance with the law.”
Key provisions of the Settlement Agreement include the following:
· Disability Non-Discrimination Policy: NLC has adopted and will implement a formal policy to ensure that it will operate its programs, facilities, and services in a non-discriminatory manner to comply with Title III of the ADA.
· Publicity: NLC will publicize the Disability Non-Discrimination Policy to its principals, teachers, and other staff at all facilities in the NLC network. The policy will be posted on NLC’s website and member schools’ websites. Paper copies of the policy will be available to any person upon request.
· Monetary Relief: Upon receipt of appropriate releases, NLC has agreed to pay $215,000.00 collectively to the children referred to in the United States’ First Amended Complaint.
· Commitment to Avoid Unnecessary Inquiries: In accordance with the requirements of the ADA, NLC will not make unnecessary inquiries into the existence of a disability or impose or apply eligibility criteria that screen out or tend to screen out students with disabilities from the full and equal enjoyment of NLC’s goods, services, facilities, privileges, advantages, or accommodations.
· Reasonable Modification Requests: NLC will, among other things, engage in a process to consider requests from a student’s parent(s)/guardian(s) for reasonable modifications of NLC’s programs and services when such modifications are necessary to afford NLC’s programs and services to students with disabilities, unless NLC can demonstrate that making such modifications would fundamentally alter the nature of the goods, services, facilities, privileges, advantages, or accommodations at issue.
· Appointment of an ADA Compliance Officer: NLC will designate a person who is knowledgeable about the ADA and its implementing regulations, and who will communicate with parents/guardians on decisions regarding requests for reasonable modifications. In addition, (s)he will review (for compliance with the Disability Non-Discrimination Policy) all decisions not to enroll a student with a disability, or to disenroll a student with a disability.
· Training: At specified periods during the term of the settlement agreement, NLC will train its regional executives, principals and assistant principals on the content of the Disability Non-Discrimination Policy and the terms and conditions of the settlement agreement. NLC will also require all of its teachers and assistant teachers to read the policy and report requests for reasonable modifications to appropriate NLC personnel.
· Reporting and Tracking: NLC will track and report to the United States, at one year and at 18 months from the effective date of the settlement agreement, information including the number of applicants with disabilities and their ultimate enrollment status, as well as the number of requests received on behalf of applicants and current students for reasonable modifications (and whether the modifications were provided).
Those interested in learning more about federal disability rights statutes can call the Justice Department’s toll-free ADA information line at 800-514-0301, 800-514-0383 (TTY) or access the ADA website at www.ada.gov .
Co-Founder of Casino-Cheating Criminal Enterprise Pleads Guilty to Racketeering Conspiracy Targeting Casinos Across the United StatesRead the Press Release
WASHINGTON – The co-founder of a criminal enterprise known as the “Tran Organization” pleaded guilty today in San Diego to conspiring to participate in the organization’s scheme to cheat casinos across the country out of millions of dollars, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Laura E. Duffy for the Southern District of California.
Van Thu Tran, 45, entered her guilty plea before U.S. Magistrate Judge Anthony J. Battaglia, subject to final acceptance of the plea by U.S. District Judge John A. Houston.
A three-count indictment was returned in San Diego on May 22, 2007, and unsealed on May 24, 2007, which charged Van Thu Tran and 13 others each with one count of conspiracy to participate in the affairs of a racketeering enterprise; one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering. The indictment also charged five separate individuals each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering.
In her plea agreement, Van Thu Tran admitted that in approximately August 2002, she, along with co-conspirators Phuong Quoc Truong, Tai Khiem Tran and others, created a criminal enterprise defined in the indictment as the Tran Organization, based in San Diego and elsewhere, for the purpose of participating in gambling cheats at casinos across the United States. In her plea agreement, Van Thu Tran also admitted that she and her co-conspirators unlawfully obtained up to $7 million during card cheats. As part of her plea agreement, Van Thu Tran agreed to the forfeiture of her interests in various assets, including jewelry.
“Today’s guilty plea by the co-founder of the Tran Organization marks the final chapter for a group that targeted as many as 29 casinos in the United States and Canada in their card cheating scheme,” said Assistant Attorney General Breuer. “Using false shuffles, specially developed computer programs, concealed microphones and transmitters, and a web of co-conspirators, Van Thu Tran and her co-conspirators obtained up to $7 million during card cheats. With the exception of two fugitives, every member of the organization has now been convicted. As this case shows, our prosecutors and agents will work relentlessly with federal, state, local and foreign authorities to dismantle organized criminal enterprises like the Tran Organization.”
At sentencing, scheduled for April 11, 2011, Van Thu Tran faces a maximum penalty of 20 years in prison, a $250,000 fine, forfeiture of certain assets and payment of restitution to the victims.
The investigation of the Tran Organization’s alleged casino-cheating conspiracy has led to the filing of three separate indictments. The charges contained in the indictments are merely accusations and defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt. According to the three indictments, the defendants and others executed a “false shuffle” cheating scheme at casinos in the United States and Canada during blackjack and mini-baccarat games. The indictments allege that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating “slugs” or groups of unshuffled cards. The indictments also allege that after tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a “false shuffle,” and members of the group would then bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy repeatedly won thousands of dollars during card games, including winning several hundred thousand dollars on one occasion.
The indictments also allege that the members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during blackjack games.
To date, 42 defendants have pleaded guilty to charges relating to the casino-cheating conspiracy, including: Van Thu Tran, Phuong Quoc Truong, Tai Khiem Tran, Anh Phuong Tran, Phat Ngoc Tran, Martin Lee Aronson, Liem Thanh Lam, George Michael Lee, Tien Duc Vu, Son Hong Johnson, Barry Wellford, John Tran, Willy Tran, Tuan Mong Le, Duc Cong Nguyen, Han Truong Nguyen, Roderick Vang Thor, Sisouvanh Mounlasy, Navin Nith, Renee Cuc Quang, Ui Suk Weller, Phally Ly, Khunsela Prom, Hop Nguyen, Hogan Ho, Darrell Saicocie, Bryan Arce, Qua Le, Outtama Keovongsa, Leap Kong, Thang Viet Huynh, Don Man Duong, Dan Thich, Jimmy Ha, Eric Isbell, Brandon Pete Landry, James Root, Jesus Rodriguez, Jason Cavin, Nedra Fay Landry, Connie Holmes and Geraldo Montaz. These defendants admitted to targeting, with the aid of co-conspirators, a combined total of approximately 29 casinos in the United States and Canada during the course of the conspiracy, including:
1) Beau Rivage Casino in Biloxi, Miss.;
2) Casino Rama, in Orillia, Ontario, Canada;
3) Foxwoods Resort Casino in Ledyard, Conn.;
4) Gold Strike Casino in Tunica, Miss.;
5) Horseshoe Casino in Bossier City, La.;
6) Horseshoe Casino and Hotel in Tunica;
7) Isle of Capri Casino in Westlake, La.;
8) Majestic Star Casino in Gary, Ind.;
9) Mohegan Sun Resort Casino in Uncasville, Conn.;
10) Palace Station Casino in Las Vegas;
11) Resorts East Chicago Hotel and Casino in East Chicago, Ind.;
12) Sycuan Casino in El Cajon, Calif.;
13) Cache Creek Indian Bingo and Casino in Brooks, Calif.;
14) Emerald Queen Casino in Tacoma, Wash.;
15) Imperial Palace Casino in Biloxi, Miss.;
16) Argosy Casino in Baton Rouge, La.;
17) Trump 29 Casino in Coachella, Calif.;
18) Isle of Capri Casino in Bossier City.;
19) Agua Caliente Casino in Rancho Mirage, Calif.;
20) Spa Resort Casino in Palm Springs, Calif.;
21) Pechanga Resort and Casino in Temecula, Calif.;
22) L'Auberge du Lac Casino in Lake Charles, La.;
23) Nooksack River Casino in Deming, Wash.;
24) Barona Valley Ranch Casino and Resort in Lakeside, Calif.;
25) Caesars Indiana Hotel and Casino in Elizabeth, Ind.;
26) Monte Carlo Resort and Casino in Las Vegas;
27) Harrah’s Casino in Lake Charles;
28) Golden Moon Casino in Choctaw, Miss.; and
29) Viejas Casino in Alpine, Calif.
Two other defendants, Ha Thuy Giang and Tammie Huynh, pleaded guilty to tax offenses stemming from the investigation, and Khai Hong Tran admitted to the offenses alleged in a 2007 U.S. indictment when he pleaded guilty to casino-cheating offenses in Canada.
On Dec. 15, 2010, Mike Waseleski, a former casino card dealer, was found guilty by a federal jury in San Diego for his role in the Tran Organization’s cheating scheme to steal approximately $1.5 million from Resorts East Chicago Casino. Waseleski’s sentencing is scheduled for March 28, 2011, in San Diego before U.S. District Judge John A. Houston.
The case is being investigated by the FBI’s San Diego Field Office; the Internal Revenue Service-Criminal Investigation; the San Diego Sheriff’s Department; and the California Department of Justice’s Bureau of Gambling Control. The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, Wash. and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission; and the Washington State Gambling Commission.
The prosecution of the case is led by the Criminal Division’s Organized Crime and Racketeering Section (OCRS). OCRS Trial Attorneys Joseph K. Wheatley and Robert S. Tully are prosecuting the case in San Diego.
13 January 2011
U.S. Announces Clean Air Act Settlement to Protect Public Health in IndianaRead the Press Release
WASHINGTON – Northern Indiana Public Service Co. (NIPSCO) has signed a settlement agreement in which it has agreed to invest approximately $600 million in pollution control technology to resolve violations of the Clean Air Act, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today. The proposed settlement covers all of NIPSCO’s coal fired power plants, located in Chesterton, Michigan City, Wheatfield and Gary, Ind. It will require that NIPSCO spend $9.5 million on environmental mitigation projects and pay a civil penalty of $3.5 million. The state of Indiana has been involved with developing this settlement and is a signatory.
“This settlement will bring substantial reductions in sulfur dioxide, nitrogen oxides, particulate matter and carbon dioxide emissions that will benefit the health and environment of residents across Indiana and the surrounding area,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Under the settlement, NIPSCO will achieve compliance with the Clean Air Act and reduce emissions from its entire coal-fired power plant system. This marks another positive step in our efforts, alongside EPA, to target large sources of air pollution and to bring about system and region-wide improvements to the environment.”
“The pollution reductions achieved in this settlement will ensure that the people of Indiana and neighboring states have cleaner, healthier air to breathe," said Cynthia Giles, Assistant Administrator for EPA's Office of Enforcement and Compliance Assurance. “EPA is committed to advancing its national enforcement initiative to reduce air pollution from the largest sources of emissions.”
The proposed settlement was lodged today in the U.S. District Court for the Northern District of Indiana, and is subject to a 30-day public comment period and final court approval.
Under the proposed settlement, NIPSCO will install pollution control technology at three of its four coal-fired power plants to comply with stringent emission rates and annual tonnage limitations. These actions will result in annual reductions of nitrogen oxide (NOx) emissions by 18,000 tons and sulfur dioxide (SO2) emissions by 46,000 tons. The proposed settlement will also result in significant reductions of particulate matter emissions. The proposed settlement also requires NIPSCO to permanently retire its fourth facility, the Dean H. Mitchell facility in Gary, Ind. The facility has been out of operation since 2002 and its permanent retirement will ensure that the facility does not restart without proper permitting under the Clean Air Act.
“The residents of northwest Indiana who are all too familiar with air pollution issues will benefit from this reasonable agreement that will improve air quality and fund local environmental projects including restoration near the Indiana Dunes, a unique area of remarkable ecological diversity. My office and our state and federal colleagues have worked diligently to ensure that the laws are enforced fairly and the public is protected,” said Indiana Attorney General Greg Zoeller, whose office represented the Indiana Department of Environmental Management (IDEM) in the settlement negotiations.
The proposed settlement also requires NIPSCO to spend $9.5 million on projects that will benefit the environment and human health in communities located near the NIPSCO facilities. These projects include a clean diesel retrofit project for public vehicles, a woodstove and outdoor boiler change-out project and a land restoration project to restore lands adjacent to the Indiana Dunes National Lakeshore.
Reducing air pollution from the largest sources of emissions, including coal-fired power plants, is one of EPA’s National Enforcement Initiatives for 2011-2013. SO2 and NOx, two key pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog, and haze. These pollutants are converted in the air to fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. Reducing these harmful air pollutants will benefit the communities located near NIPSCO facilities, particularly, communities disproportionately impacted by environmental risks and vulnerable populations, including children. In addition, air pollution from power plants can drift significant distances downwind, thereby affecting not only local communities, but also populations in a much broader area.
More information: www.epa.gov/compliance/resources/cases/civil/caa/nipsco.html
Taiwan Hannstar Executive Indicted for Role in LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A federal grand jury in San Francisco returned an indictment against the current president of HannStar Display Corporation for his participation in a global conspiracy to fix prices of thin-film transistor liquid crystal display (TFT-LCD) panels, the Department of Justice announced today.
The indictment, filed today in U.S. District Court in San Francisco, charges that Ding Hui Joe, aka David Joe, conspired with others to suppress and eliminate competition by fixing the prices of TFT-LCD panels. Joe, a resident of Taiwan, is charged with participating in the conspiracy from on or about Sept. 14, 2001, until on or about Jan. 31, 2006.
TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. By the end of the conspiracy period, the worldwide market for TFT-LCD panels was valued at $70 billion. Companies directly affected by the LCD price-fixing conspiracy are some of the largest computer and television manufacturers in the world, including Apple, Dell and Hewlett Packard.
According to the one-count felony charge, Joe participated in the conspiracy by agreeing to fix prices of TFT-LCD panels during secret meetings, referred to as "Crystal Meetings," in hotel rooms in Taipei, Taiwan. The participants in the conspiracy also exchanged information on the sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices. According to the court document, in order to keep the meetings secret and avoid detection, the participants took various steps to conceal the conspiracy.
As a result of this investigation, more than $890 million in criminal fines have been obtained to date. Including today’s indictment, 22 executives and eight companies have been charged in the department’s ongoing investigation into price fixing in the LCD industry.
Joe is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.
An indictment contains merely allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Today’s charge is the result of a joint investigation by the Department of Justice Antitrust Division’s San Francisco Field Office and the FBI in San Francisco.
Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660 or visit www.justice.gov/atr/contact/newcase.htm.
Minnesota-based National Hardware Store Distributor Fastenal to Pay U.S. $6.25 Million to Resolve False Claims Act AllegationsRead the Press Release
WASHINGTON - Fastenal Company, a national hardware store distributor, has reached a settlement with the United States following an investigation of alleged false claims in connection with a General Services Administration (GSA) contract, the Justice Department announced today. Fastenal has agreed to pay the United States $6.25 million.
The settlement relates to a contract entered into by the Winona, Minn.-based company to sell hardware products to government customers through the GSA’s Multiple Award Schedule (MAS) program. The MAS program provides the government and other GSA-authorized purchasers with a streamlined process for procurement of commonly-used commercial goods and services. To be awarded a MAS contract, and thereby gain access to the broad government marketplace, contractors must agree to disclose commercial pricing policies and practices, and to abide by the contract terms when selling to purchasers under the MAS contract.
The settlement resolves issues discovered during a GSA post-award audit of Fastenal’s contract. The GSA Office of Inspector General learned that Fastenal knowingly failed to meet its contractual obligations to provide the GSA with current, accurate and complete information about its commercial sales practices, including discounts afforded to other customers.
In addition, the settlement resolves allegations that Fastenal failed to comply with the price reduction clause of its GSA contract, overcharged government customers, and improperly assessed delivery and sales tax charges on government sales. As a result, the United States paid more than it should have for Fastenal products. The settlement also resolves allegations that Fastenal violated the Trade Agreements Act when it knowingly sold products to the United States that were manufactured in countries that do not have trade agreements with the United States, e.g., China.
"Misrepresentations during contract negotiations undermine the integrity of the government procurement process," said Tony West, Assistant Attorney General for the Civil Division. "The Justice Department is acting to ensure that government purchasers of commercial products can be certain that they are getting the prices to which they are entitled."
"This case is another demonstration of the value of OIG audits in helping to uncover fraud on government programs," said Brian D. Miller, GSA Inspector General.
This settlement was the result of a coordinated effort by the Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Western District of Missouri; and the GSA Office of Inspector General and Office of General Counsel in investigating and resolving the allegations.
Miami Contractor Sentenced to 24 Months in Prison for Employment Tax FraudRead the Press Release
MIAMI – Axel Rafael Mercado was sentenced today by U.S. District Court Judge Patricia A. Seitz to 24 months in prison for tax evasion, the Justice Department and the Internal Revenue Service (IRS) announced. Mercado was also ordered to pay $352,605 in restitution to the United States.
According to court documents, from 2005 through 2007, Mercado, who owns Mercado Enterprises Inc., attempted to evade a large part of his company’s federal employment taxes. To avoid his employment tax obligations, Mercado caused the company’s checks to be written to shell companies, which were supposedly legitimate subcontractors, but which in fact did no work for Mercado Enterprises. Mercado would then direct those checks to be cashed at a local check-cashing store, which was aware of the scheme, and use the cash to pay his workers. Mercado never reported the existence of the employees, never reported the cash wages of the employees, never filed employment tax returns and never paid the required employment tax.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and John A. DiCicco, Acting Assistant Attorney General for the Department of Justice, Tax Division, commended the IRS special agents who investigated the matter and Tax Division Trial Attorneys Jason H. Poole and Matthew J. Mueller who prosecuted the case.
Detroit-Area Men Charged with Tax EvasionRead the Press Release
WASHINGTON – A federal grand jury in Detroit has returned a 14-count indictment against Michigan residents David A. Cusumano and Henry Nino, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to the indictment, Cusumano was a mechanical engineer from Plymouth, Mich., and Nino was an electrician from Northville, Mich. Both men are alleged to have committed multiple counts of tax evasion by failing to file income tax returns and maintaining Employee's Withholding Allowance Certificates (IRS Forms W-4) which their employers falsely claimed were exempt from tax withholding.
Both are also charged with corruptly endeavoring to obstruct the administration of the internal revenue laws through the services of Florida-based American Rights Litigators/Guiding Light of God Ministries (ARL) and by other means. The indictment alleges that Cusumano and Nino used ARL to falsely accuse Internal Revenue Service (IRS) workers of criminal acts and to send false documents to the IRS.
Cusumano is also accused of sending fake financial instruments called "Registered Bonds" to the IRS and the Treasury Department while Nino is accused of sending fake financial instruments called "Registered Bills of Exchange" to the Treasury. Nino is also alleged to have willfully failed to file income tax returns for 2007 and 2008.
In August 2004, a federal district judge permanently enjoined ARL and two of its promoters from the sale of a nationwide tax scam. According to court documents, the purpose of ARL’s scheme was to thwart the IRS in its attempts to assess and collect taxes by various means. These schemes included manufacturing and selling worthless "bills of exchange" supposedly drawn on the U.S. Treasury for customers to use in purported payment of their taxes, as well as producing false and harassing complaints against IRS employees that were sent to the Treasury Inspector General for Tax Administration in Washington, D.C.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Tax Division Trial Attorneys Melissa Siskind and Jeffrey McLellan are prosecuting the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax .
Contratista de Miami sentenciado a 24 meses de prisión por fraude de cargas socialesRead the Press Release
MIAMI — Axel Rafael Mercado fue sentenciado hoy por la Jueza Federal de Distrito Patricia A. Seitz a 24 meses de prisión por evasión tributaria, anunciaron el Departamento de Justicia y Servicios de Impuestos Internos [Internal Revenue Service (IRS)]. También se ordenó a Mercado que pagara una restitución de 352,605 dólares a los Estados Unidos.
De acuerdo con el expediente judicial, de 2005 a 2007, Mercado, propietario de Mercado Enterprises Inc., intentó evadir una gran parte de las cargas sociales de empleo federales de su compañía. Para evadir sus obligaciones de cargas sociales de empleo, Mercado hizo que los cheques de la empresa fueran emitidos a empresas fantasma, que supuestamente eran subcontratistas legítimos, pero que en realidad no trabajaban para Mercado Enterprises. Luego, Mercado indicaba que los cheques fueran cobrados en una tienda local de cambio de cheques, que sabía del ardid, y usaba el dinero en efectivo para pagar a sus trabajadores. Mercado nunca informó de la existencia de los empleados, ni los sueldos en efectivo que recibían y tampoco presentó declaraciones de impuestos laborales o pagó las cargas sociales obligatorias.
Wifredo A. Ferrer, Fiscal Federal para el Distrito Sur de Florida, y el Secretario de Justicia Auxiliar Interino John DiCicco, de la División de Impuestos del Departamento de Justicia, felicitaron a los agentes especiales de IRS a cargo de la investigación en el caso y a los Abogados Litigantes de la División de Impuestos Jason H. Poole y Matthew J. Mueller, que estuvo a cargo de la acusación en el caso.
Assistant Attorney General David Kris Announces Departure from National Security DivisionRead the Press Release
WASHINGTON – David Kris, Assistant Attorney General for National Security, announced his resignation from the Department of Justice today, effective March 4, 2011.
“David Kris led the National Security Division (NSD) with great distinction through a period when the department confronted a number of threats to the nation’s security, and there is no doubt that his tireless work helped keep the American people safe,” said Attorney General Eric Holder. “I will miss his leadership.”
“I am grateful for my two years of service as Assistant Attorney General for National Security,” Kris said. “I started my legal career at the Department of Justice, and it has been a tremendous privilege to work with the department's leadership and the dedicated professionals in the National Security Division.”
As Assistant Attorney General for National Security, Kris helped lead the department’s response to a number of serious threats to the nation, including the attempted bombing of Times Square, the al-Qaeda plot to bomb the New York subway system, the attempted detonation of a bomb onboard an airliner on Christmas Day 2009, and the arrest and prosecution of Mumbai plotter David Headley.
Under Kris’ leadership, the National Security Division also played a pivotal role in the investigation, arrest and swap of Russian illegal agents during the summer of 2010, and prosecuted a number of other significant espionage cases, including Kendall and Gwendolyn Myers, who were caught and prosecuted after decades of spying for the government of Cuba. The division also continued and expanded its enforcement in the areas of export control and counter-proliferation.
During Kris’ tenure, the National Security Division also strengthened its partnerships with the intelligence community and other national security elements, including the Department of Defense and the National Security Council, and advanced significantly in establishing the processes, policies, and procedures necessary to make NSD a highly effective and fully functioning division.
Kris joined the department in March 2009 after being confirmed unanimously by the U.S. Senate. He previously served in the Justice Department from 1992 to 2003 as an attorney in the Criminal Division and Associate Deputy Attorney General.
12 January 2011
Tribunal Federal prohíbe permanentemente a hombre del Sur de Florida preparar declaraciones de impuestos para tercerosRead the Press Release
WASHINGTON -- Un tribunal federal ha prohibido en forma permanente a Sony Ducasse de Greenacres, Fla. preparar declaraciones de impuestos a la renta federales para terceros, anunció hoy el Departamento de Justicia. La orden de interdicto, a la que consintió Ducasse, fue emitida por el Juez James Cohn del Tribunal Federal de Distrito para el Distrito Sur de Florida en West Palm Beach.
La demanda entablada por el gobierno alega que Ducasse prepara declaraciones de impuestos federales para sus clientes, las que contienen reclamos falsos de crédito tributario por ingresos del trabajo o deducciones tributarias falsas. De acuerdo con la demanda, Ducasse ha preparado al menos 3,200 declaraciones desde 2007 y el Servicio de Impuestos Internos [Internal Revenue Service (IRS)] le ha impuesto más de $30,000 en multas por conducta indebida de preparador de declaraciones de impuestos. La demanda indica que el IRS estima que los ingresos perdidos debido a las declaraciones preparadas por Ducasse en la época de presentación de declaraciones de impuestos de los años 2007 a 2010 podrían superar los 6 millones de dólares.
En los últimos diez años, la División de Impuestos del Departamento de Justicia ha obtenido centenas de interdictos para detener la promoción de ardides de fraude tributario y la preparación de declaraciones fraudulentas. Se puede encontrar información sobre estos casos en el portal del Departamento de Justicia.
Medical Device Manufacturer Guidant Sentenced for Failure to Report Defibrillator Safety Problems to FDARead the Press Release
WASHINGTON – Guidant LLC, a wholly-owned subsidiary of Boston Scientific Corporation, was formally convicted and sentenced today in St. Paul, Minn., before U.S. District Court Judge Donovan W. Frank for criminal violations relating to its interactions with the Food and Drug Administration (FDA). Judge Frank sentenced Guidant to pay more than $296 million in criminal fines and forfeiture and also to submit to the supervision of the U.S. Probation Office for three years. The Justice Department brought criminal charges against Guidant for its mishandling of short-circuiting failures of three models of its implantable cardioverter defibrillators: the Ventak Prizm 2 DR (Model 1861) and the Contak Renewal (Models H135 and H155). Guidant’s Cardiac Rhythm Management division, which produced the defibrillators, is headquartered in Arden Hills, Minn. The company pleaded guilty to the charges last April.
Implantable cardioverter defibrillators are lifesaving devices used to detect and treat abnormal heart rhythms that can result in sudden cardiac death. The devices, once surgically implanted, continually monitor the electrical activity in a patient’s heart for deadly arrhythmias and deliver an electrical shock to the heart in an effort to return the heartbeat to normal rhythm. If they fail to operate properly when needed, a person can die within minutes.
Judge Frank sentenced Guidant for withholding information from the FDA regarding catastrophic failures in some of its lifesaving devices. Guidant made decisions at various junctures to conceal information from the FDA and medical professionals regarding the device failures. In June 2005, the company finally went public about the problem with information it had known for 10 months, and then only after three deaths had occurred.
The Justice Department’s sentencing memorandum filed with the court explains how Guidant decided to continue to implant hundreds of defective Renewal devices, even after the company had decided to stop shipping them from the factory due to the seriousness of the health risk they represented. Guidant developed a strategy to mitigate the health risk while not raising FDA concerns about the problem. This strategy included the company advising its sales representatives to tell physicians that “nothing was broken” with the Renewal, and falsely telling the FDA that c hanges it proposed to the device in response to the electrical short-circuiting “ were not being done to correct device flaws that threaten patient safety” but were rather “to improve process throughout.”
Under today’s sentence, Guidant is required to forfeit $42,079,675 to the United States and pay a criminal fine of $253,962,251. In addition, Guidant was sentenced to three years of probation. During that period, Guidant is required to make quarterly reports to the Probation Office and to submit to regular, unannounced inspections of its records by the Probation Office. The court also required Guidant to notify its employees and shareholders of its criminal conviction.
“The sentence the court imposed reflects the seriousness of Guidant’s conduct,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Patients are put at risk when health care companies fail to meet their responsibility to provide complete and accurate information to the FDA.”
Guidant was charged in federal district court on Feb. 25, 2010. Last April, Judge Frank declined to accept a proposed plea agreement between the government and Guidant.
“The safety and integrity of critical medical devices is assured only by close FDA oversight,” said First Assistant U.S. Attorney John Marti of the District of Minnesota. “This agency can only perform its mandated duty when medical device manufacturers provide the agency with timely and accurate information. When Guidant withheld important information, patient safety was jeopardized. The court’s sentence recognizes the harm of Guidant’s conduct.”
“FDA always works closely with companies to support compliance with standards that prevent serious safety problems from occurring. However, as today's sentence demonstrates, when companies fail to comply, we will use our enforcement tools to ensure the safety and efficacy of the medical products that Americans rely on every day,” said Margaret Hamburg, M.D., Commissioner of Food and Drugs.
The case was investigated by the FDA’s Office of Criminal Investigations and is being prosecuted by Assistant U.S. Attorney Robert M. Lewis of the U.S. Attorney’s Office for the District of Minnesota, and Justice Department Trial Attorneys Ross S. Goldstein and Matthew S. Ebert of the Civil Division’s Office of Consumer Litigation. Additional assistance has been provided by Steven Tave of FDA’s Office of Chief Counsel.
Illinois Commercial Print Broker Pleads Guilty to Making False Statement to the Government Printing OfficeRead the Press Release
WASHINGTON – An Illinois commercial print broker pleaded guilty today to making false statements in a bid submitted to the U.S. Government Printing Office (GPO), the Department of Justice announced.
Richard I. Keefe of Rock Falls, Ill., pleaded guilty today to a one-count felony charge filed on Nov. 4, 2010, in U.S. District Court in Chicago. According to the court document, Keefe submitted a bid to the GPO in or around January 2008 in the name of a company that had not authorized him to do so. Keefe also certified that the bid was not made with an understanding that a brokerage fee would be paid, when in fact it was. In order to reduce the costs of printing services procured by the federal government, the GPO procures most printing services through competitive bidding and attempts to limit the payment of commissions and brokerage fees in connection with print solicitations as much as possible.
The department said that the GPO, an agency within the legislative branch of the U.S. government, issued the bid on behalf of the Internal Revenue Service of the Department of the Treasury. By statute, the GPO performs, with few exceptions, all printing for the federal government. The GPO procures most printing services from outside vendors, and its annual print solicitations are approximately $1 billion.
Keefe is charged with making false statements, which carries a maximum penalty of five years in prison and a $250,000 fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either of those amounts is greater than the statutory maximum fine.
This case is the first to arise in an ongoing investigation of bids to the GPO and is being conducted by the Antitrust Division’s National Criminal Enforcement Section and by the GPO’s Office of Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct regarding GPO print solicitations should contact the National Criminal Enforcement Section at 202-307-5784, visit www.justice.gov/atr/contact/newcase.htm or contact the GPO’s Office of Inspector General at 1-800-743-7574.
Federal Court Permanently Bars South Florida Man from Preparing Tax Returns for OthersRead the Press Release
WASHINGTON – A federal court has permanently barred Sony Ducasse of Greenacres, Fla., from preparing federal income tax returns for others, the Justice Department announced today. The injunction order, to which Ducasse consented, was entered by Judge James Cohn of the U.S. District Court for the Southern District of Florida in West Palm Beach.
The government complaint in the case alleges that Ducasse prepares federal income tax returns for his customers containing false claims for the earned income tax credit or bogus tax deductions. According to the complaint, Ducasse has prepared at least 3,200 returns since 2007 and the Internal Revenue Service (IRS) has imposed over $30,000 in penalties against him for tax-preparer misconduct. The complaint states that the IRS estimates that the lost revenue from the returns Ducasse prepared in the 2007 through 2010 tax filing seasons could exceed $6 million.
In the past ten years the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.
Detroit Area Strip Club Owner Pleads Guilty to Using Computer Software Program<br /> to Delete Club’s Sales in Order to Cheat on TaxesRead the Press Release
Nicholas J. Faranso of Farmington Hills, Mich., pleaded guilty today before U.S. District Court Judge John Corbett O’Meara in the Eastern District of Michigan to one count of conspiracy to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. For his role in the conspiracy, Faranso faces a maximum sentence of five years in prison. The court set sentencing for July 14, 2011.
According to court documents, Faranso owned two strip clubs: BT’s in Dearborn, Mich., and Tycoon’s in Detroit. From 2001 through 2004, both establishments used a computerized point of sales system which produced guest checks and electronically tracked and recorded sales. Court documents reveal that, in 2001,Faranso purchased a computer software program called Journal Sales Remover from Theodore Kramer, a self-employed computer software salesman. This computer software program was specifically designed to remove a portion of the actual sales from the computerized point of sales systems. The program would make it appear that Faranso’s clubs received less income than they actually did.
Faranso directed Kramer to put the Journal Sales Remover program onto his businesses’ computer systems in order to help the club owner cheat on the businesses’ taxes. From about 2001 to about 2004, at Faranso’s request, Kramer made periodic visits to Faranso’s clubs to run the Journal Sales Remover program to remove a substantial amount of the actual sales from the computerized sales systems. Faranso then provided the reduced sales figures to his accountant. As a result, Faranso falsified the clubs’ tax returns by understating their gross receipts by more than $500,000. Kramer previously pleaded guilty to one count of conspiracy on Nov. 17, 2010.
Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan, and John A. DiCicco, Acting Assistant Attorney General for the Department of Justice, Tax Division, commended the IRS special agents who investigated this matter and Tax Division Trial Attorneys Kenneth C. Vert and Tiwana L. Wright, who prosecuted the case.
11 January 2011
Pennsylvania Odometer Tamperer Sentenced to 100 Months in PrisonRead the Press Release
PHILADELPHIA – Yakov Babchinetskiy, 43, of Huntingdon Valley, Pa., was sentenced today in Philadelphia by U.S. District Court Judge Legrome D. Davis to 100 months in prison plus three years of supervised release for his role in a conspiracy to alter odometers on used motor vehicles, provide false odometer statements, and commit wire and securities fraud, the Justice Department announced. He was also ordered to pay restitution of more than $4,098,165 to the victims of the fraud, which include consumers, retail automobile dealers and insurance companies.
From 2002 to 2005, Babchinetksiy conspired with other individuals to purchase high-mileage used motor vehicles, alter the mileage on the titles, roll back the odometers, and sell the vehicles at a false low-mileage to dealers and consumers. Co-defendants Mikhail Gokhman and Yan Hershman previously pleaded guilty to similar charges and were also sentenced by Judge Davis.
Mikhail Gokhman was sentenced in October 2008 to 10 years in prison; and Yan Hershman was sentenced in July 2008 to 48 months in prison. Hershman, who was an illegal alien, was deported to Israel after serving his sentence. Another co-defendant, Edvard Khakhan, remains a fugitive.
In a related case brought in the Middle District of Pennsylvania, James Russell Bradbury, a former Pennsylvania Department of Transportation title clerk, pleaded guilty and was sentenced in November 2006 by U.S. District Court Judge Yvette Kane to 21 months in prison for bribery concerning a program receiving federal funds.
"This type of financial fraud harms consumers making one of the biggest investments they will make: their automobile. Dishonest dealers who roll back odometers cheat customers out of their hard-earned money, impede informed buying choices, and raise safety concerns by misrepresenting the actual condition of the vehicles they sell," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "The Justice Department will seek appropriately tough sentences for those engaging in these illegal practices."
"Consumers are entitled to know exactly what they are buying," said Zane Memeger, U.S. Attorney for the Eastern District of Pennsylvania. "The type of fraud committed by this defendant deprives the car buying public of the right-to-know how many miles a car has been driven prior to purchase. Such mileage could ultimately affect car safety and the costs of future repairs to the consumer."
This case was investigated by the National Highway Traffic Safety Administration Office of Odometer Fraud Investigation and the Pennsylvania State Police. It was prosecuted by Senior Litigation Counsel Linda I. Marks and Trial Attorney Mary Murphy of the Civil Division’s Office of Consumer Litigation, with assistance from the U.S. Attorney’s Office in Philadelphia.
Maryland Man Indicted for Filing False Income Tax ReturnsRead the Press Release
WASHINGTON - A federal grand jury in Greenbelt, Md., today indicted Thomas Robert Turner, a resident of Prince George’s County, Md., for corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws between 2004 and January 2009, the Justice Department and Internal Revenue Service (IRS) announced. Turner is also charged with filing two false amended individual income tax returns with the IRS for 2004 and 2005.
According to the indictment, Turner worked as a bus driver for D & B Tours Inc., a tour bus company. He, along with at least two other people, caused false corporate income tax returns for 2001, 2002 and 2003 to be filed with the IRS. These corporate returns claimed false refunds of more than $177,000 based upon fraudulently inflated federal fuel tax credits. Turner also filed false individual tax returns for 2002 through 2005, which reported fictitious businesses and claimed more than $70,000 in false refunds based on fraudulently inflated federal fuel tax credits.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, and Rod Rosenstein, U.S. Attorney for the District of Maryland, commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division Trial Attorneys Caryn Finley and Jack Hinton, who are prosecuting the case on behalf of the United States.
Cincinnati-Area Man Sentenced 30 Months in Prison for Tax CrimesRead the Press Release
WASHINGTON - Homer Lee Richardson of Loveland, Ohio, was sentenced today for corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue Code, aiding and assisting in the preparation of a false income tax return on the behalf of another individual, and filing his own false individual income tax returns for the years 1998, 1999 and 2000, the Justice Department announced. Richardson, a former promoter of sham trust systems, had previously pleaded guilty.
U.S. District Court Senior Judge for the Southern District of Ohio Sandra S. Beckwith sentenced Richardson to 30 months in prison and one year of supervised release. The court also ordered Richardson to pay a $60,000 fine and $61,212 in restitution.
According to the indictment, Richardson marketed and promoted sham trusts for an organization known as Aegis. The trusts had no economic substance or business purpose and falsely gave the appearance that Aegis members relinquished control over their assets. Taxpayers who used these trusts filed false federal individual income tax returns understating their income.
In addition, Richardson attempted to obstruct Internal Revenue Service (IRS) audits of his own and at least one other individual’s income taxes. Finally, Richardson filed his own false tax returns which falsely understated his income.
John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, commended IRS Criminal Investigation Special Agent Ankur Arora, who investigated the case, as well as Tax Division trial attorneys Thomas Voracek and Rita Calvin, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax.
Assistant Attorney General Ignacia Moreno to Deliver Remarks on 2011 Priorities for the Environment and Natural Resources DivisionRead the Press Release
WASHINGTON – Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division, will deliver remarks regarding the division’s 2011 priorities to the Washington, D.C., Bar Association’s Environment, Energy and Natural Resources Section on THURSDAY, JAN. 13, 2011, at 12:00 P.M. EST. Following her remarks, Assistant Attorney General Moreno will hold a pen and pad briefing with reporters at 2:30 P.M. EST.
12:00 P.M. EST Assistant Attorney General Ignacia Moreno will deliver remarks regarding the division’s 2011 priorities.
Hunton & Williams
1900 K St., N.W.
Washington, D.C.
2:30 P.M. EST Assistant Attorney General Moreno will hold a pen and pad briefing with reporters.
Department of Justice
ENRD Conference Room – Room 2143
950 Pennsylvania Ave., N.W.
Washington, D.C.
NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Members of the press who wish to attend the speech or take part in the pen and pad briefing must RSVP to Robert O’Donnell at Robert.F.O’[email protected] or 202-514-2007 by Wednesday, Jan. 12, 2011, at 4:00 P.M. EST. Press inquiries regarding logistics should be directed to the Office of Public Affairs at 202-514-2007.
10 January 2011
Justice Department Settles Fair Housing Lawsuit Against Town of Garner, North CarolinaRead the Press Release
WASHINGTON – The Justice Department announced today that it has settled its suit against the town of Garner, N.C., and the town’s Board of Adjustment alleging that they violated the Fair Housing Act when refused to allow up to eight men recovering from drug and alcohol addictions to live together as a reasonable accommodation.
Oxford House Inc., the non-profit organization that chartered the home, sponsors the development of self-governing houses in which recovering addicts support each other’s determination to remain sober. The case began when Garner refused to consider requests by Oxford House to increase the number of residents in the home from six to eight. Oxford House filed a complaint with the U.S. Department of Housing and Urban Development, which referred the matter to the Justice Department. After conducting an independent investigation, the Justice Department filed suit in May 2009, and Oxford House subsequently intervened. In June 2010, the district court denied the defendants’ motion to dismiss the lawsuit, ruling that Oxford House had taken the legal steps necessary to have Garner consider its request for a reasonable accommodation.
"The Fair Housing Act requires equal access to housing for persons with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department will continue to ensure the right of people with disabilities to live in housing appropriate for their needs."
"This settlement demonstrates the high priority that our office gives to enforcement of all federal civil rights statutes, including the Fair Housing Act," stated George E.B. Holding, U.S. Attorney for the Eastern District of North Carolina.
Under the terms of the settlement, which must still be approved by the U.S. District Court in Raleigh, N.C., the defendants will pay $105,000 in monetary damages to Oxford House and $9,000 to the government as a civil penalty. The settlement requires the town to grant the reasonable accommodation requested by Oxford House to submit periodic reports to the government, and to train town officials on the requirements of the Fair Housing Act. In December 2010, in connection with the parties’ proposed settlement, the town amended its zoning code to establish a procedure for addressing future requests for reasonable accommodations.
Fighting illegal housing discrimination 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. Persons who believe they have experienced or witnessed unlawful housing discrimination may 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. More information about the Fair Housing Act can also be found at www.justice.gov/crt/housing or www.hud.gov/fairhousing.
Former NASA Employee Charged with Illegally Exporting<br /> Military Technology to South KoreaRead the Press Release
WASHINGTON – An Ohio man was charged with illegally shipping infrared military technology to South Korea, the Department of Justice announced today.
A criminal information was filed charging Kue Sang Chun, 66, of Avon Lake, Ohio, with one count of exporting defense articles on the U.S. Munitions List without first obtaining an export license or written authorization from the U.S. Department of State, and one count of knowingly making and subscribing a false U.S. individual income tax return.
Chun is a longtime employee at the NASA Glenn Research Center, though he is not accused of taking technology or related materials from the research center.
According to count one of the information, between March 2000 and November 2005, Kue Sang Chun knowingly exported and caused the export from the United States to the Republic of Korea (South Korea) of Infra Red Focal Plane Array detectors and Infra Red camera engines which were designated as defense articles on the U.S. Munitions List. The information charges that Chun did so without first obtaining an export license or written authorization for such export from the U.S. Department of State.
Count two charges Chun with knowingly making and subscribing a false U.S. individual income tax return for the year 2005, which failed to report approximately $83,399.08 of taxable income he earned during said tax year.
“This defendant is charged with violating important regulations designed to protect national security,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “He did it for money and, according to the charges, he intentionally failed to pay taxes on the money he made from his crimes.”
“ The FBI and the Department of Justice are committed to the protection of U.S. defense technology, particularly that which is governed by the International Trafficking in Arms Regulations. As such, the FBI will continue to pursue all investigative leads in this matter, and is committed to the continued investigation of any and all persons or entities who may be involved in such criminal activities and those activities with national security implications,” said Steven Anthony, Special Agent in Charge of the FBI Cleveland Field Office.
This case is being prosecuted by Assistant U.S. Attorneys Robert W. Kern and Justin E. Herdman of the U.S. Attorney’s Office for the Northern District of Ohio, following an investigation by the Cleveland Offices of the FBI and the Internal Revenue Service, Criminal Investigations.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Former Leader of MS-13 Gang in San Francisco Pleads Guiltyto Racketeering ChargesRead the Press Release
WASHINGTON — A former leader of La Mara Salvatrucha, or MS-13, pleaded guilty today in federal court in San Francisco to racketeering (RICO) conspiracy, conspiracy to commit murder in aid of racketeering, and the use or possession of a firearm in furtherance of a crime of violence, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Melinda Haag for the Northern District of California.
Ivan Cerna, aka “Tigre,” 34, admitted that since at least the late 1990s, he was a member of MS-13 in the San Francisco Bay area. Cerna admitted that he agreed with other MS-13 members that the gang would engage in acts involving murder, including the murder of rival gang members and others who defied or betrayed MS-13, such as individuals who cooperated with law enforcement against the gang. In 2004, following the murder of the then-leader of MS-13’s San Francisco clique, Cerna assumed the leadership of MS-13 in San Francisco and held this position until roughly 2006. As the leader, according to court documents, Cerna exhorted members of the gang to defend their turf by attacking rival gang members as well as to avenge attacks by rival gang members committed on members of MS-13. Cerna also possessed guns and directed others to arm themselves with guns in order to further the activities of MS-13.
In addition, two MS-13 members pleaded guilty on Jan. 7, 2011, to similar charges. Aristides Carcamo, aka “Indio,” 32, pleaded guilty to RICO conspiracy, conspiracy to commit murder in aid of racketeering, possession of a firearm in furtherance of a crime of violence, and conspiracy to commit robbery affecting interstate commerce. Carcamo admitted that he had been a member of MS-13 since roughly 2004 and that he agreed with other MS-13 members to commit crimes to further the goals of the gang, including acts involving murder, narcotics trafficking, robbery affecting interstate commerce and extortion. Carcamo also admitted that he possessed firearms related to and in furtherance of his membership in MS-13. Carcamo also admitted that between Oct. 10, 2008, and Oct. 22, 2008, he agreed with others, including another MS-13 member, to rob a jewelry merchant.
In addition, Jose Quinteros, aka “Fantasma,” 25, pleaded guilty to RICO conspiracy and conspiracy to commit assault with a dangerous weapon in aid of racketeering, also arising from his involvement in MS-13.
The maximum prison term for the RICO conspiracy charge is life for Cerna and Carcamo, and 20 years for Quinteros. RICO conspiracy also carries a maximum fine of $250,000. The maximum penalties for the conspiracy to commit murder in aid of racketeering are 10 years in prison and a $250,000 fine, while the maximum penalties for the conspiracy to commit assault with a dangerous weapon in aid of racketeering are three years in prison and a $250,000 fine. The possession of a firearm in furtherance of a crime of violence charge carries a mandatory minimum prison term of five years and a maximum term of life in prison, as well as a fine of up to $250,000. The robbery conspiracy charge carries a maximum penalty of 20 years in prison and a $250,000 fine. Sentencing for Cerna is scheduled for March 29, 2011. Carcamo is scheduled to be sentenced on March 22, 2011, and Quinteros is scheduled to be sentenced on April 5, 2011.
These guilty pleas are the most recent in a series of pleas by members of MS-13, a transnational gang, to racketeering charges arising out of a multi-year investigation by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations, called “Operation Devil Horns,” which targeted MS-13 gang members in the San Francisco Bay area. Cerna, Carcamo and Quinteros were previously indicted along with 26 other individuals as part of Operation Devil Horns. Since the original charges against MS-13 were unsealed on Oct. 22, 2008, three superseding indictments have been returned charging additional defendants as well as additional crimes. Thirteen defendants are still awaiting trial, which is currently scheduled to begin on March 7, 2011.
An indictment contains merely allegations and the remaining defendants are presumed innocent unless proven guilty.
The case is being prosecuted by Assistant U.S. Attorneys W.S. Wilson Leung, Wil Frentzen and Christine Y. Wong, and Trial Attorney Theryn G. Gibbons of the Criminal Division’s Gang Unit. The case was investigated by ICE Homeland Security Investigations.
Federal Court Permanently Bars Florida Woman from Preparing Federal Tax Returns for OthersRead the Press Release
WASHINGTON – A federal court has permanently barred Dianelys Armengol Guevara of Pembroke Pines, Fla., from preparing federal income tax returns for others, the Justice Department announced today. The permanent injunction order, to which Guevara consented, was entered by Judge Cecilia Altonaga of the U.S. District Court for the Southern District of Florida in Fort Lauderdale.
The government complaint in the case alleges that Guevara has prepared returns that falsely claim tax credits and deductions, including the first-time-homebuyer credit, for her customers. According to the complaint, Guevara improperly claimed over $950,000 in homebuyer credits, misrepresented the requirements for the credit to her customers, failed to disclose to her customers that a person must actually purchase a home in order to claim the credit, and claimed the credit without her customers’ knowledge or against their wishes.
The government’s suit also claims that Guevara failed to identify herself properly as the paid tax return preparer on many of the returns. She allegedly used a fictitious Social Security number to identify herself on hundreds of returns she prepared.
In the past 10 years the Justice Department’s Tax Division has obtained hundreds of injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.
Ex Líder de la Pandilla MS-13 en San Francisco se Declara Culpable de Cargos de Asociación IlícitaRead the Press Release
WASHINGTON - Un ex líder de La Mara Salvatrucha, o MS-13, se declaró culpable hoy en el tribunal federal en San Francisco de conspiración para formar una asociación ilícita, contra la Ley de Organizaciones Corruptas e Influenciadas por la Delincuencia Organizada [The Racketeer Influenced and Corrupt Organizations Act (RICO)], conspiración para cometer homicidio en apoyo a la asociación ilícita, y uso o posesión de arma de fuego para cometer un delito violento, anunciaron el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal y la Fiscal Federal Melinda Haag para el Distrito Norte de California.
Ivan Cerna, alias "Tigre," 34, admitió que, desde al menos fines de la década de 1990, fue miembro de la MS-13 en el área de la Bahía de San Francisco. Cerna admitió que acordó con otros miembros de la MS-13 que la pandilla realizaría actos de homicidio, incluido el homicidio de miembros de pandillas rivales y otros que desafiaron o traicionaron a la MS-13, tales como personas que cooperaron con las fuerzas del orden público contra la pandilla. En 2004, después del asesinato del entonces líder de la división de San Francisco de la MS-13, Cerna asumió el liderazgo de la MS-13 en San Francisco y mantuvo su cargo hasta alrededor de 2006. Como líder, de acuerdo con el expediente judicial, Cerna exhortó a miembros de la pandilla que defendieran su jurisdicción atacando a miembros de pandillas rivales, así como que se vengaran de ataques realizados por miembros de pandillas rivales contra miembros de la MS-13. Cerna también poseía armas de fuego e instruyó a otros que se armaran con armas de fuego a fin de promover las actividades de la MS-13.
Además, dos miembros de la MS-13 se declararon culpables el 7 de enero de 2011 a cargos similares. Aristides Carcamo, alias "Indio," 32, se declaró culpable de conspiración contra la RICO, conspiración para cometer homicidio para promover la asociación ilícita, posesión de arma de fuego para promover un delito violento y conspiración para cometer robo que afecta el comercio interestatal. Carcamo admitió que había sido miembro de la MS-13 desde alrededor de 2004 y acordó con otros miembros de la MS-13 cometer delitos para promover los objetivos de la pandilla, incluidos actos asociados a homicidio, narcotráfico, robo que afecta el comercio interestatal y extorsión. Carcamo también admitió que poseía armas de fuego asociadas a y para promover su membresía en la MS-13. Carcamo también admitió que entre el 10 de octubre de 2008 y el 22 de octubre de 2008, acordó con otros, incluido otro miembro de la MS-13, robar a un joyero.
Además, José Quinteros, alias "Fantasma", 25, se declaró culpable de conspiración contra la RICO y conspiración para cometer agresión con un arma peligrosa para promover la delincuencia organizada, también a partir de su participación en la MS-13.
La sentencia máxima de prisión por el cargo de conspiración contra la RICO es prisión perpetua para Cerna y Carcamo y 20 años para Quinteros. La conspiración contra la RICO también conlleva una multa màxima de 250,000 dólares. Las penas máximas para la conspiración para cometer homicidio para promover la delincuencia organizada son 10 años en prisión y una multa de 250,000 dòlares, mientras que las penas máximas para la conspiración para cometer agresión con un arma peligrosa para promover la delincuencia organizada es tres años en prisión y una multa de 250,000 dólares. La posesión de un arma de fuego para promover un cargo de delito violento conlleva una sentencia mínima obligatoria en prisión de cinco años y una sentencia máxima de prisión perpetua, así como una multa de hasta 250,000 dólares. La conspiración para cometer robo conlleva una pena máxima de 20 años en prisión y una multa de 250,000 dólares. La lectura de la sentencia de Cerna está programada para el 29 de marzo de 2011. La de Carcamo está programada para el 22 de marzo de 2011, y la de Quinteros para el 5 de abril de 2011.
Estas declaraciones de culpabilidad son las más recientes en una serie de declaraciones de culpabilidad realizadas por miembros de la MS-13, una pandilla transnacional, de cargos de asociación ilícita que surgieron de una investigación de varios años de duración realizada por Investigaciones de Seguridad Nacional del Servicio de Inmigración y Control de Aduanas de EE.UU. [U.S. Immigration and Customs Enforcement (ICE)] denominada "Operación cuernos del diablo", contra los miembros de la pandilla MS-13 en el área de la Bahía de San Francisco. Cerna, Carcamo y Quinteros fueron acusados formalmente con anterioridad junto con otros 26 individuos como parte de la Operación Cuernos del diablo. Desde que se revelaron los cargos originales contra la MS-13 el 22 de octubre de 2008, se han emitido tres acusaciones formales sobrevivientes acusando a demandados adicionales, así como por delitos adicionales. Trece demandados aun aguardan su enjuiciamiento, con inicio actualmente programado para el 7 de marzo de 2011.
Una acusación formal contiene meros alegatos y se supone que los demás demandados son inocentes hasta y si se prueba lo contrario.
Están a cargo de la acusación en el caso los Fiscales Federales Auxiliares W.S. Wilson Leung, Wil Frentzen y Christine Y. Wong, y el Abogado Litigante Theryn G. Gibbons de la Unidad de Pandillas de la División de lo Penal. El caso fue investigado por Investigaciones de Seguridad Nacional del ICE.
El Tribunal Federal Prohíbe en Forma Permanente a Mujer de Florida Preparar Declaraciones de Impuestos Federales para TercerosRead the Press Release
WASHINGTON -- Un tribunal federal ha prohibido en forma permanente a Dianelys Armengol Guevara of Pembroke Pines, Fla.,preparar declaraciones de impuestos a la renta federales para terceros, anunció hoy el Departamento de Justicia. La orden de interdicto permanente, a la que consintió Guevara, fue emitida por la Jueza Cecilia Altonaga del Tribunal Federal de Distrito para el Distrito Sur de Florida en Fort Lauderdale.
La demanda del gobierno en el caso alega que Guevara preparó declaraciones que reclaman falsamente créditos y deducciones tributarios, incluido el crédito de comprador de primera vivienda, para sus clientes. De acuerdo con la demanda, Guevara reclamó indebidamente más de 950,000 dólares en créditos para comprador de vivienda, realizó declaraciones falsas a sus clientes acerca de las exigencias para el crédito, dejó de informar a sus clientes que una persona debe efectivamente comprar una vivienda a fin de reclamar el crédito, y reclamó el crédito sin el conocimiento de sus clientes o contra sus deseos.
La demanda presentada por el gobierno también alega que Guevara dejó de identificarse debidamente como la preparadora de declaración de impuestos remunerada en muchas declaraciones. Se alega que utilizó un número de Seguro Social ficticio para identificarse en centenas de declaraciones que preparó.
En los últimos diez años, la División de Impuestos del Departamento de Justicia ha obtenido centenas de interdictos para detener la promoción de ardides de fraude tributario y la preparación de declaraciones fraudulentas. Se puede encontrar información sobre estos casos en el portal del Departamento de Justicia.