Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
9 January 2011
Federal Complaint Filed Against Jared Lee LoughnerRead the Press Release
WASHINGTON The United States Attorney for the District of Arizona, Dennis K. Burke, announced today that his office filed a federal complaint against Jared Lee Loughner. The complaint was signed by Magistrate Judge Michelle Burns in Phoenix.
Loughner is suspected of shooting U.S. Representative Gabrielle Giffords, Chief Judge John Roll, Giffords' staff member Gabriel Zimmerman and approximately 16 others Saturday in Tucson, Ariz.
The federal complaint alleges five counts against Loughner:
COUNT 1
On or about Jan. 8, 2011, at or near Tucson, in the District of Arizona, the defendant, Jared Lee Loughner, did attempt to kill Gabrielle Giffords, a Member of Congress; in violation of Title 18, United States Code Section 351(c).
COUNT 2
On or about Jan. 8, 2011, at or near Tucson, in the District of Arizona, the defendant, Jared Lee Loughner, did unlawfully kill Gabriel Zimmerman, an employee of the United States who was engaged in performance of official duties and who was assisting Member of Congress Gabrielle Giffords while she was engaged in performance of official duties; in violation of Title 18, United States Code, Sections 1114 and 1111.
COUNT 3
On or about Jan. 8, 2011, at or near Tucson, in the District of Arizona, the defendant, Jared Lee Loughner, did unlawfully kill John M. Roll, a U. S. District Court Judge for the District of Arizona, an employee of the United States who was engaged in performance of official duties; in violation of Title 18, United States Code, Sections 1114 and 1111.
COUNT 4
On or about Jan. 8, 2011, at or near Tucson, in the District of Arizona, the defendant, Jared Lee Loughner, did, with intent to kill, attempt to kill Pamela Simon, an employee of the United States who was engaged in performance of official duties and who was assisting Member of Congress Gabrielle Giffords while she was engaged in performance of official duties; in violation of Title 18, United States Code, Sections 1114 and 1113.
COUNT 5
On or about Jan. 8, 2011, at or near Tucson, in the District of Arizona, the defendant, Jared Lee Loughner, did, with intent to kill, attempt to kill Ron Barber, an employee of the United States who was engaged in performance of official duties and who was assisting Member of Congress Gabrielle Giffords while she was engaged in performance of official duties; in violation of Title 18, United States Code, Sections 1114 and 1113.
Loughner will make an initial appearance on the complaint at 2 p.m. Mountain time Monday, Jan. 10, 2011, in front of U.S. Magistrate Judge Lawrence Anderson at the Sandra Day O’Connor Courthouse in Phoenix in courtroom 302. He is entitled to a preliminary hearing and a detention hearing. The court will set a date for both hearings. Loughner remains in federal custody.
The Rules of Criminal Procedure require that a grand jury review the evidence and issue an indictment within 30 days of the defendant's initial appearance.
The U.S. Attorney's Office for the District of Arizona is in the process of drafting an indictment against Loughner for presentation to the grand jury.
7 January 2011
Ludlow Falls, Ohio, Builder Sentenced to 16 Months in Prison for Filing False Federal Tax ReturnRead the Press Release
WASHINGTON – Roy W. Bradford was sentenced today in federal district court in Dayton, Ohio, for willfully filing a false federal income tax return for 2004, the Justice Department and Internal Revenue Service (IRS) announced. U.S. Judge Thomas M. Rose sentenced Bradford to 16 months in prison and ordered him to pay $379,852 in restitution to the IRS.
On Sep. 22, 2010, Bradford pleaded guilty to willfully filing a false tax return for 2004. According to court documents, Bradford owned and operated Bradford Builders out of his residence in Ludlow Falls, Ohio. Bradford Builders built wooden frames for residential construction.
For the 2003 and 2004 tax years, Bradford filed false Forms 1099 that deliberately inflated the amounts that he paid to his independent contractor crew chiefs. Bradford then used these false amounts from the Forms 1099 to inflate the deductions for labor costs on his 2003 and 2004 individual income tax returns. Bradford also improperly deducted as business expenses many of the costs incurred in constructing his personal residence. Bradford also understated his business income by not reporting money he received for work performed for certain clients.
In addition to falsifying his own tax information, Bradford used false tax ID numbers on the Forms 1099 that he issued to workers who did contract work for him. He also provided false information to an IRS agent during the course of an audit and to another IRS agent conducting the criminal investigation. Bradford admitted that he caused a tax loss of $379,852.
“Those who don’t obey the nation’s tax laws and pay their fair share face potentially serious consequences, including time in prison,” said John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. “As the familiar April tax deadline approaches, the Justice Department is making every effort to ensure that those who willfully evade their taxes are prosecuted to the full extent of the law.”
“Tax violations have been erroneously referred to as victimless crimes, but it's the honest law abiding citizen who is harmed when someone tries to manipulate our nation's tax system." said Victor S. O. Song, Chief, IRS Criminal Investigation Division. "Wrongdoers will be held accountable for such actions, and today's sentencing is a costly reminder."
The case was investigated by IRS - Criminal Investigation and prosecuted by Tax Division Trial Attorneys Jorge Almonte and Jeffrey B. Bender.
Additional information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax .
Lobbyist Sentenced to 27 Months in Prison for Role in Illegal Campaign Contribution SchemeRead the Press Release
WASHINGTON – Paul Magliocchetti, the founder and president of PMA Group Inc., a lobbying firm, was sentenced today to 27 months in prison for making hundreds of thousands of dollars in illegal campaign contributions and making false statements to a federal agency, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
U.S. District Court Judge T.S. Ellis III also sentenced Magliocchetti to two years of supervised release and ordered him to pay a $75,000 fine. Magliocchetti pleaded guilty in U.S. District Court in Alexandria, Va., on Sept. 24, 2010, to one count each of making false statements, making illegal conduit contributions and making illegal corporate contributions.
“Paul Magliocchetti spent half of a decade gaming the system. He concocted a massive scheme to secretly funnel money to political campaigns – all so that he could gain wealth and prestige,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “As today’s sentence makes clear, he must now pay a price. We will continue to bring to justice those who hide the source of campaign funds and thus damage the integrity of our election process.”
“Mr. Magliocchetti carried out one of the largest federal campaign finance frauds in history,” said U.S. Attorney MacBride. “He learned that no one – despite wealth and influence – is above the law. Today’s sentence should put anyone on notice that if you seek to buy the influence of elected public officials through skirting the campaign finance laws you’ll not merely be exposed publicly but you’ll go to prison for a long time.”
“Enhancing one’s professional reputation by using colleagues, friends and even family to make illegal campaign contributions is dishonest; and Mr. Magliocchetti knew that his actions were against the law,” said James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office. “I am proud of the team of agents from the Defense Criminal Investigative Service and FBI who worked on behalf of all Americans to investigate this blatant abuse of prestige and money. The public needs to trust that elections will not be influenced in this manner.”
He was charged in an indictment unsealed on Aug. 5, 2010. According to the indictment, Magliocchetti orchestrated a scheme to make illegal conduit and corporate federal campaign contributions in an effort to enrich himself and PMA by increasing the firm’s influence, power and prestige among the firm’s current and potential clients as well as among the elected public officials to whom PMA and its lobbyists sought access. The federal campaigns that received these funds were unaware of Magliocchetti’s scheme.
Magliocchetti admitted that, from 2003 through 2008, he used members of his family, friends and PMA lobbyists to make unlawful campaign contributions. Aware of the strict limits on individual federal campaign contributions – and the outright ban on corporate contributions – Magliocchetti admitted that he instructed the conduits to write checks out of their personal checking accounts to specific candidates for federal office and that, for the purpose of making these contributions, Magliocchetti advanced funds to or reimbursed these individuals using personal and corporate monies. Magliocchetti also admitted that, through this scheme, he caused various federal campaign committees to unknowingly create and file false reports with the Federal Election Commission (FEC) regarding the contributions they had received. These reports, which the FEC made available to the public, falsely stated that the conduits had made contributions, when in fact the contributions were made by Magliocchetti or PMA.
In connection with this investigation, Mark Magliocchetti pleaded guilty on Aug. 5, 2010, before U.S. Magistrate Judge T. Rawles Jones Jr., in U.S. District Court in Alexandria to making illegal corporate campaign contributions. According to court documents, Mark Magliocchetti admitted to receiving payments from an individual and a company with the understanding that those monies were to be used for federal campaign contributions. According to court documents, the amount of contributions made by Mark Magliocchetti and his wife, and funded by the individual and the company, exceeded $120,000 but was less than $200,000. Mark Magliocchetti was sentenced to 14 days in prison plus five and a half months of home confinement.
This case was prosecuted by Deputy Chief Justin V. Shur and Trial Attorneys M. Kendall Day and Kevin O. Driscoll of the Criminal Division’s Public Integrity Section, and by Assistant U.S. Attorney Mark D. Lytle of the U.S. Attorney’s Office for the Eastern District of Virginia. The case was investigated by the FBI and the Defense Criminal Investigative Service.
Former U.S. Army Staff Sergeant Sentenced to 90 Months in Prison for Bribery in Afghanistan Fuel Theft SchemeRead the Press Release
WASHINGTON A former U.S. Army staff sergeant was sentenced today to 90 months in prison in connection with a fuel theft scheme to solicit more than $400,000 in bribes from a government contractor in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride of the Eastern District of Virginia and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
Stevan Nathan Ringo, 26, of Marrero, La., was also ordered by U.S. District Judge T. S. Ellis III to forfeit the proceeds of the scheme, which included $408,495 and other property. In addition, Judge Ellis sentenced Ringo to serve three years of supervised release following his release from prison. Judge Ellis deferred until a later date his decision on the amount of restitution the defendant will be ordered to pay. Ringo pleaded guilty on Sept. 24, 2010, to one count of bribery.
According to court documents, Ringo was stationed at Forward Operating Base (FOB) Shank, a U.S. Army installation in the Logar Province of Eastern Afghanistan. FOB Shank supports U.S. military operations in Afghanistan in various ways, including through fuel receipt and redistribution. More specifically, the Army stores large quantities of fuel at FOB Shank and redistributes that fuel to installations in the surrounding area through government contractors. Ringo’s responsibilities at FOB Shank included supervision of that fuel redistribution process.
In his guilty plea, Ringo admitted that between December 2009 and February 2010, he accepted more than $400,000 in cash payments from a government contractor in exchange for creating and submitting fraudulent paperwork permitting that contractor to steal fuel from FOB Shank. The total value of the fuel stolen in the course of the scheme was nearly $1.5 million.
The case was prosecuted by Trial Attorney Ryan S. Faulconer of the Criminal Division’s Fraud Section and former Assistant U.S. Attorney Edmund P. Power for the Eastern District of Virginia. Substantial assistance was provided by the Criminal Division’s Office of International Affairs. The case was investigated by the FBI’s Washington Field Office, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigative Division, other military law enforcement at FOB Shank, and members of the former National Procurement Fraud Task Force (NPFTF) and the International Contract Corruption Task Force (ICCTF).
The NPFTF, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud. In November 2010, the NPFTF membership became a part of the Financial Fraud Enforcement Task Force, an interagency task force established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate, and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations worldwide, including in Kuwait, Afghanistan and Iraq.
6 January 2011
Wife of Convicted Felon Thomas Parenteau Sentenced in Ohio to 33 Months in Prison for Money Laundering ConspiracyRead the Press Release
WASHINGTON - Marsha Parenteau of Dublin, Ohio, has been sentenced for conspiring to commit money laundering, the Justice Department and Internal Revenue Service (IRS) announced. U.S. District Court Judge Michael H. Watson on Wednesday sentenced Parenteau to serve 33 months in prison. In addition to the prison term, Judge Watson ordered Parenteau to serve a three year term of supervised release after her prison term, and to pay restitution.
The court also ordered Parenteau to forfeit to the U.S. government a vacant lot in the Wedgewood golf community in Dublin, which was purchased with some of the illegally obtained funds. The court furthered ordered the government to seize Parenteau’s personal belongings maintained at two storage garages and the home of a friend, and sell the belongings at auction to pay towards the restitution judgment.
Pamela McCarty of Columbus, Ohio, one of Marsha Parenteau’s co-conspirators, was sentenced today for conspiring to commit tax fraud, money laundering and bank fraud. U.S. District Court Judge Michael H. Watson sentenced McCarty to 24 months in prison.
According to court testimony and documents, Marsha Parenteau was the wife of convicted Columbus-area home builder, Thomas Parenteau. Marsha Parenteau conspired with her husband, his accountant Dennis Sartain, McCarty and others to launder unlawful proceeds generated from nearly $19 million in fraudulently obtained loans against a personal residence.
Marsha Parenteau was called as a witness by her husband at his trial in July 2010, in which Thomas Parenteau was convicted of conspiracy to commit tax fraud, money laundering, bank fraud, obstruction of justice and other felony charges. The sentencing for Mr. Parenteau is not yet scheduled.
According to court testimony and documents, McCarty was a real estate agent, whom witnesses during court proceedings described as Thomas Parenteau’s mistress. McCarty previously pleaded guilty to conspiring with other individuals at Your Home Source, real estate brokerage company, to defraud the United States by impairing and impeding the IRS by falsely understating amounts paid to workers. McCarty also admitted conspiring with Thomas Parenteau, Marsha Parenteau, Sartain and others to launder unlawful proceeds generated from more than $6 million in fraudulently obtained loans against a personal residence. McCarty further admitted to conspiring with Sartain and others to commit bank fraud by helping a Your Home Source employee fraudulently obtain a mortgage to buy a home from McCarty, which she held in trust for Thomas Parenteau, at an inflated price with an undisclosed kickback.
McCarty participated pro-actively with the government in the investigation of the Parenteaus and Sartain by wearing a recording device and taping conversations with her co-conspirators.
John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, commended the IRS Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Richard Rolwing and Sean O’Connell, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at
www.usdoj.gov/tax>Persona Se Declara Culpable de Defraudar al Programa del Servicio de Transmisión de Videos de la FCCRead the Press Release
WASHINGTON - Marc Velasquez se declaró culpable hoy de participar en una conspiración para defraudar al programa del Servicio de Transmisión de Videos [Video Relay Service (VRS)] de la Comisión Federal de Comunicaciones [Federal Communications Commission (FCC)], anunciaron el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal y James W. McJunkin, Director Auxiliar a Cargo de la Oficina Local de Washington del Buró Federal de Investigaciones [Federal Bureau of Investigation (FBI)].
Velasquez se declaró culpable ante el Juez Federal de Distrito Joel A. Pisano en Trenton, N.J., de un cargo de conspiración para cometer fraude telegráfico. Velasquez fue acusado formalmente el 18 de noviembre de 2009, junto con otros que se alega que participaron en la conspiración delictiva. Los demandados también alegaron haber causado que la FCC pagara millones de dólares en reembolsos fraudulentos.
Al declararse culpable, Velasquez admitió que, a partir de aproximadamente octubre de 2008, conspiró con terceros para pagar a personas para que realizasen llamadas telefónicas de VRS fraudulentas utilizando el servicio de VRS de una compañía. A su vez, se le pagó a Velasquez al menos el 20 por ciento de cada dólar de llamadas reembolsadas fraudulentas pagadas por la FCC.
De acuerdo con la acusación formal, el VRS es un servicio de traducción en línea vía video que permite que personas con discapacidades auditivas se comuniquen con personas oyentes a través del uso de intérpretes y cámaras web. Una persona con una discapacidad auditiva que desee comunicarse con una persona oyente puede hacerlo comunicándose con un proveedor de VRS a través de una conexión de audio y video vía Internet. El proveedor de VRS, a su vez, emplea un intérprete por video para visualizar e interpretar la conversación en lenguaje de señas de la persona con discapacidad auditiva y transmitir la conversación oralmente a una persona oyente. El VRS es financiado por cargos cobrados por proveedores de telecomunicaciones a clientes de servicios telefónicos, y se provee sin costo al usuario de VRS.
En oportunidad de la emisión de la sentencia el 6 de junio de 2011, Velasquez enfrenta una sentencia máxima de 20 años en prisión, una multa de 250,000 dólares, así como restitución obligatoria y confiscación obligatorias.
Están a cargo de la acusación en estos casos el Jefe Adjunto Hank Bond Walther y los Abogados Litigantes Brigham Cannon y Robert Zink de la Sección de Fraude de la División de lo Penal, con la asistencia en la investigación de la Oficina Local de Washington del FBI, el Servicio de Inspección Postal y la Oficina del Inspector General de la FCC.
New Orleans Doctor and Owner of Medical Equipment Company Sentenced to Prison for Their Roles in Baton Rouge-area Medicare Fraud SchemeRead the Press Release
WASHINGTON – A New Orleans-area medical doctor and the owner and operator of a medical equipment company were sentenced today to 48 and 30 months in prison, respectively, for their roles in a Baton Rouge-area durable medical equipment (DME) health care fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Medical doctor Dahlia V. Kirkpatrick and Emmanuel M. Komandu, the owner and operator of the medical equipment company, each pleaded guilty on Oct. 4, 2010, before U.S. District Judge Brian A. Jackson in the Middle District of Louisiana, to one count of conspiracy to commit health care fraud.
In addition to their prison terms, Judge Jackson sentenced Kirkpatrick and Komandu each to three years of supervised release. Kirkpatrick and Komandu also were ordered to pay $302,811 in restitution jointly and severally with each other. The restitution is to be paid to the victim in this case, HHS’s Centers for Medicare and Medicaid Services (CMS).
According to plea documents, Kirkpatrick began working with Komandu in approximately January 2005. Komandu was the owner and operator of Alpha Medical Solutions Inc., a purported DME supplier based in Baker, La. Alpha purportedly specialized in the provision of power wheelchairs, wheelchair accessories and feeding nutrients to Medicare beneficiaries.
According to court documents, from approximately January 2005 through February 2010, Komandu and Kirkpatrick submitted and caused the submission, on behalf of Alpha, of approximately $775,019 in fraudulent claims to the Medicare program. The majority of Alpha’s fraudulent claims were based on prescriptions for medically unnecessary DME that were written and provided by Kirkpatrick. Kirkpatrick wrote prescriptions for medically unnecessary DME, such as power wheelchairs, wheelchair accessories and feeding nutrients. Medicare paid $302,811 to Alpha based on these fraudulent claims.
Today’s sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Donald J. Cazayoux for the Middle District of Louisiana, FBI Special Agent in Charge David W. Welker and HHS Office of Inspector General (HHS-OIG) Special Agent in Charge Mike Fields.
This case was prosecuted by Trial Attorneys O. Benton Curtis III and Sarah M. Hall of the Criminal Division’s Fraud Section. The case was investigated by the FBI, HHS-OIG and the Louisiana Attorney General’s Office. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Louisiana.
Since their inception in March 2007, Strike Force operations in seven districts nationwide 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
Individual Pleads Guilty to Defrauding FCC Video Relay Service ProgramRead the Press Release
WASHINGTON – Marc Velasquez pleaded guilty today to engaging in a conspiracy to defraud the Federal Communications Commission’s (FCC) Video Relay Service (VRS) program, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
Velasquez pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton, N.J., to one count of conspiracy to commit wire fraud. Velasquez was indicted on Nov. 18, 2009, along with others alleged to have been involved in the criminal conspiracy. The defendants are alleged to have caused the FCC to pay millions of dollars in fraudulent reimbursements.
In pleading guilty, Velasquez admitted that, beginning in approximately October 2008, he conspired with others to pay individuals to make fraudulent VRS phone calls using a company’s VRS service. In return, Velasquez was paid at least 20 percent of every dollar of fraudulent reimbursed calls paid out by the FCC.
According to the indictment, VRS is an online video translation service that allows people with hearing disabilities to communicate with hearing individuals through the use of interpreters and web cameras. A person with a hearing disability who wants to communicate with a hearing person can do so by contacting a VRS provider through an audio and video Internet connection. The VRS provider, in turn, employs a video interpreter to view and interpret the hearing disabled person’s signed conversation and relay the signed conversation orally to a hearing person. VRS is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to the VRS user.
At sentencing on June 6, 2011, Velasquez faces a maximum sentence of 20 years in prison, a fine of $250,000, and mandatory restitution and forfeiture.
These cases are being prosecuted by Deputy Chief Hank Bond Walther and Trial Attorneys Brigham Cannon and Robert Zink of the Criminal Division’s Fraud Section, with the investigative assistance of the FBI’s Washington Field Office, the U.S. Postal Inspection Service and the FCC Office of Inspector General.
Former CIA Officer Arrested for Alleged Unauthorized Disclosure of National Defense Information and Obstruction of JusticeRead the Press Release
WASHINGTON – A former CIA officer was arrested today on charges that he illegally disclosed national defense information and obstructed justice, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Jeffrey Alexander Sterling, 43, of O’Fallon, Mo., was charged in a 10-count indictment returned by a federal grand jury in the Eastern District of Virginia on Dec. 22, 2010, and unsealed today. The indictment charges Sterling with six counts of unauthorized disclosure of national defense information, and one count each of unlawful retention of national defense information, mail fraud, unauthorized conveyance of government property and obstruction of justice. Sterling was arrested today in St. Louis and is expected to make his initial appearance this afternoon before U.S. Magistrate Judge Terry I. Adelman in U.S. District Court for the Eastern District of Missouri.
According to the indictment, Sterling was employed by the CIA from May 1993 to January 2002. From November 1998 through May 2000, he was assigned to a classified clandestine operational program designed to conduct intelligence activities related to the weapons capabilities of certain countries, including Country A. During that same time frame, he was also the operations officer assigned to handle a human asset associated with that program. According to the indictment, Sterling was reassigned in May 2000, at which time he was no longer authorized to receive or possess classified documents concerning the program or the individual.
In connection with his employment, the indictment alleges that Sterling, who is a lawyer, signed various security, secrecy and non-disclosure agreements in which he agreed never to disclose classified information to unauthorized persons, acknowledged that classified information was the property of the CIA, and also acknowledged that the unauthorized disclosure of classified information could constitute a criminal offense. According to the indictment, these agreements also set forth the proper procedures to follow if Sterling had concerns that the CIA had engaged in any "unlawful or improper" conduct that implicated classified information. These procedures permit such concerns to be addressed while still protecting the classified nature of the information. The media, according to the indictment, was not an authorized party to receive such classified information under such circumstances.
The indictment alleges that Sterling, in retaliation for the CIA’s refusal to settle on terms favorable to him in the civil and administrative claims he was pursuing against the CIA, engaged in a scheme to disclose information concerning the classified operational program and the human asset – first, in connection with a possible newspaper story to be written by an author employed by a national newspaper in early 2003 and, later, in connection with a book published by the author in January 2006.
"The indictment unsealed today alleges that Jeffrey Sterling violated his oath to protect classified information and then obstructed an investigation into his actions. Through his alleged actions, Sterling placed at risk our national security and the life of an individual working on a classified mission," said Assistant Attorney General Lanny A. Breuer. "Those who violate the law, and the trust placed in them by the U.S. government to keep our national security information secure, must be held accountable."
"Our national security requires that sensitive information be protected," said U.S. Attorney MacBride. "The law does not allow one person to unilaterally decide to disclose that information to someone not cleared to receive it. Those who handle classified information know the law and must be held accountable when they break it."
The indictment alleges that Sterling took a number of steps to facilitate the disclosure of the classified information, including:
- stealing classified documents and other information from the CIA and unlawfully retaining those documents without the authority of the CIA;
- communicating by telephone, via e-mail and in person with the author in order to arrange for the disclosure of or to disclose classified information to the author;
- meeting with the author in person to orally disclose classified information to the author and to provide documents containing classified information to the author for review or use;
- characterizing the classified information in a false and misleading manner as a means of inducing the author to write and publish a story premised on that false and misleading information;
- deceiving and attempting to deceive the CIA into believing that he was a former employee adhering to his secrecy and non-disclosure agreements; and
- deliberately choosing to disclose the classified information to a member of the media, knowing that such an individual would not reveal his identity, thereby concealing and perpetrating the scheme.
Specifically, the indictment alleges that beginning in August 2000, Sterling pursued various administrative and civil actions against the CIA concerning alleged employment-related racial discrimination and decisions made by the CIA’s Publications Review Board regarding Sterling’s efforts to publish his memoirs. According to the indictment, on Feb. 12, 2003, the CIA rejected Sterling’s third offer to settle his discrimination lawsuit, which was ultimately dismissed by the court.
The indictment alleges that beginning a few weeks later, in February and March 2003, Sterling made various telephone calls to the author’s residence, and e-mailed the author a newspaper article about the weapons capabilities of Country A. According to the indictment, while the possible newspaper article containing the classified information Sterling allegedly provided ultimately was not published in 2003, Sterling and the author remained in touch from December 2003 through November 2005 via telephone and e-mail. The indictment alleges that in January 2006, the author published a book which contained classified information about the program and the human asset.
The indictment also alleges that Sterling obstructed justice when, between April and July 2006, he deleted the e-mail he had sent to the author concerning the weapons capabilities of Country A from his account. According to the indictment, Sterling was aware by June 2003 of an FBI investigation into his disclosure of national defense information, and was aware of a grand jury investigation into the matter by June 2006, when he was served a grand jury subpoena for documents relating to the author’s book.
The charges of unauthorized disclosure and retention of national defense information each carry maximum penalties of 10 years in prison. The charge of mail fraud carries a maximum penalty of 20 years in prison. The charge of unauthorized conveyance of government property carries a maximum penalty of 10 years in prison. The charge of obstruction of justice carries a maximum penalty of 20 years in prison. Each of these charges also carries a maximum fine of $250,000 or twice the loss or gain associated with the offense.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty in a court of law.
This case is being prosecuted by Senior Litigation Counsel William M. Welch II of the Criminal Division, Trial Attorney Timothy J. Kelly of the Criminal Division’s Public Integrity Section and Senior Litigation Counsel James L. Trump of the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office, with assistance in the arrest from the FBI’s St. Louis Field Office.
City of Evansville, Indiana, Agrees to Upgrade Sewer Systemsto Comply with Clean Water ActRead the Press Release
WASHINGTON—The city of Evansville, Ind., has agreed to make extensive improvements to its sewer systems that will significantly reduce the city’s longstanding sewage overflows into the Ohio River in a comprehensive Clean Water Act settlement with federal and state governments, the Justice Department, the U.S. Environmental Protection Agency (EPA), and the state of Indiana announced today. The agreement would resolve allegations made in a lawsuit filed by the United States and Indiana in September 2009 against Evansville for alleged violations of its Clean Water Act discharge permits.
Evansville’s sewer system has a history of maintenance and system capacity problems that result in it being overwhelmed by rainfall, causing it to discharge untreated sewage combined with storm water into the Ohio River. Under this settlement, the city will improve operation and maintenance, as well as develop and implement a comprehensive plan to increase capacity of its sewer system to minimize, and in many cases, eliminate those overflows. Costs may exceed $500 million. The plan must be fully implemented by calendar year 2032 or 2037, depending on Evansville’s financial health. Additional measures to improve the capacity, management, operation, and maintenance of its separate sanitary sewer system to eliminate overflows of untreated sewage will begin immediately.
In addition, the city will take immediate steps to upgrade the treatment capacity of its two wastewater treatment plants. In total, the measures undertaken by the city of Evansville and required by today’s settlement will help eliminate over four million pounds of pollutants and hundreds of millions of gallons of untreated overflows discharged into the Ohio River and Pigeon Creek every year.
"Evansville’s inadequate and aging sanitation infrastructure allows potentially harmful sewage and storm water overflows into the Ohio River," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. "As a result of this settlement, Evansville will implement significant measures to achieve the requirements of the Clean Water Act. Like other settlements we have reached in municipalities across the country with outdated sewer systems, this settlement will protect public health and improve the water quality for the local community."
"By reducing the volume of sewage and polluted runoff entering the Ohio River, this settlement will improve water quality and protect the health of people that use the river," said EPA Regional Administrator Susan Hedman. "The comprehensive plan will improve the performance and sustainability of Evansville’s sewer system and significantly reduce basement backups and overflows."
In addition to improving its sewer system, Evansville has agreed to pay the U.S. a civil penalty of $420,000 and the state of Indiana a civil penalty of $70,000. Evansville will also implement an environmental project that will connect homes with failing septic systems to the city’s sewer system at a cost of more than $4 million. Failing septic systems often contribute significant pollutants that can impair local water quality.
Evansville is located in Vanderburgh County on the north bank of the Ohio River in southwest Indiana. Evansville’s sewer system serves a population of approximately 163,000. Thirty-nine percent of Evansville’s total sewered area is served by combined sewers while 61 percent is served by separate sanitary sewers. The combined sewers are located in the older, downtown portion of Evansville and lack sufficient capacity to transport all of the combined sewage that it receives to Evansville’s two wastewater treatment plants during rainfall. As a result, Evansville commonly discharges the combination of sewage and storm water through one or more of its 22 combined sewer overflow outfalls on the Ohio River and Pigeon Creek.
In the past, the U.S. has reached similar agreements with numerous municipal entities across the country including Jeffersonville, Ind.; Fort Wayne, Ind.; Indianapolis; Nashville, Tenn.; Mobile, Ala.; Jefferson County (Birmingham), Ala.; Atlanta; Knoxville, Tenn.; Miami; New Orleans; Toledo, Ohio; Hamilton County (Cincinnati), Ohio; Baltimore; Los Angeles; Louisville, Ky.; and northern Kentucky’s No. 1 Sanitation District.
Once the consent decree is lodged in the U.S. District Court for the Southern District of Indiana, it will be subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree will be available on the Justice Department website at www.usdoj.gov/enrd/Consent_Decrees.html
5 January 2011
U.S. Army Contractor Charged with Assault <br /> in Relation to Stabbing at Kandahar Airfield in AfghanistanRead the Press Release
WASHINGTON – A U.S. Army contractor was indicted today for stabbing another individual with a knife at Kandahar Airfield in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.
The indictment, returned today by a federal grand jury in the Eastern District of Virginia, charges Sean T. Brehm, 44, of Western Cape, South Africa, with one count of assault with a dangerous weapon with intent to do bodily harm and without just cause or excuse, and one count of assault resulting in serious bodily injury.
According to the indictment, the stabbing took place on Nov. 25, 2010. The indictment alleges that at the time of the stabbing, Brehm was working as a contractor for DynCorp International LLC, a U.S. Army contractor in Afghanistan. Brehm originally was charged in a criminal complaint filed in U.S. District Court in Alexandria, Va., on Dec. 9, 2010. U.S. Magistrate Judge Ivan D. Davis ruled on Dec. 10, 2010, that Brehm be removed to the United States, and he arrived on Dec. 21, 2010, at Dulles International Airport in Virginia.
If convicted, the defendant faces a maximum penalty of 10 years in prison for assault with a dangerous weapon with intent to do bodily harm and without just cause or excuse, and 10 years in prison for assault resulting in serious bodily injury.
The defendant is charged under the Military Extraterritorial Jurisdiction Act (MEJA), a statute that gives U.S. courts jurisdiction to prosecute crimes committed outside the United States by, among others, contractors or subcontractors of the Department of Defense.
The case is being prosecuted by Trial Attorney James S. Yoon of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Ronald L. Walutes Jr., for the Eastern District of Virginia. The Criminal Division’s Office of International Affairs provided assistance. The case is being investigated by the FBI’s Washington Field Office.
An indictment is merely a formal accusation. It is not proof of guilt, and a defendant is presumed innocent unless and until proven guilty.
Two Alabama Women Separately Plead Guilty for Roles in Tax Fraud ConspiracyRead the Press Release
MONTGOMERY, Ala. – Betty Washington, a resident of Montgomery County, Ala., pleaded guilty to one count of conspiring to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.
According to charging documents, between October 2009 and September 2010 Washington conspired with others to fraudulently obtain tax refunds by using stolen identities to file false income tax returns. Washington opened up an account at a local bank to receive tax refunds from the scheme and deposited 16 different refunds, issued in the name of 16 different individuals, into the account. When the bank closed the account because of the suspicious nature of the deposits, she opened new accounts at a credit union in her name and in the name of Central Alabama Financial Services.
Over the course of several months, more than 300 false refunds totaling more than $1.4 million were deposited into these accounts. To disburse these proceeds, Washington wrote checks, withdrew cash and obtained official checks payable to various co-conspirators and associates. She retained a portion of the proceeds for herself.
Sentencing has not yet been scheduled. Washington faces a maximum of 10 years in prison, three years of supervised release, restitution and a maximum fine of $250,000, or twice the loss caused by the offense.
In a separate case, Wendy Delbridge, also a resident of Montgomery County, Ala., pleaded guilty to one count of conspiring to defraud the United States. Both women admitted to working for members of a tax fraud and identity theft conspiracy indicted last month in Montgomery.
According to charging documents, between February 2010 and June 2010 Delbridge conspired with others to fraudulently obtain tax refunds by using stolen identities to file false income tax returns. Delbridge opened up an account at a local bank to receive tax refunds from the scheme. When the bank closed the account because it was receiving tax refunds that were not in Delbridge’s name, she opened a new account at a credit union. The two accounts received over $50,000 in false tax refunds, which Delbridge withdrew in cash and provided to a co-conspirator. In return, Delbridge was paid a portion of the fraudulently obtained proceeds.
Sentencing has not yet been scheduled. Delbridge faces a maximum of ten years in prison, three years of supervised release, restitution and a maximum fine of $250,000.
IRS-Criminal Investigation agents investigated this case, and Justice Department Tax Division trial attorneys Jason Poole and Michael Boteler are prosecuting the case.
Former Member of Virginia House of Delegates Charged with Bribery and ExtortionRead the Press Release
WASHINGTON – A federal grand jury in the Eastern District of Virginia returned an indictment today charging Phillip A. Hamilton, a former member of the Virginia House of Delegates, with allegedly soliciting employees of Old Dominion University (ODU) for a paid position at the same time he was introducing legislation to fund the position, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Hamilton, 58, was charged with one count of federal program bribery and one count of extortion under color of official right. He will make an initial appearance in U.S. District Court in Norfolk, Va., tomorrow.
According to the indictment, Hamilton began representing the 93rd District, which includes Newport News and James City County, Va., in 1988. As part of his duties, Hamilton sat on the Elementary & Secondary Education Subcommittee of the Virginia House Appropriations Committee.
The indictment alleges that from August 2006 through February 2007, Hamilton solicited employees of ODU for a position as director for the ODU Center for Teacher Quality and Educational Leadership. The center’s objective was to train teachers for success in urban school environments. According to the indictment, during this period, Hamilton simultaneously introduced legislation that would establish and fund the center, including his salary as the director.
According to the indictment, in an e-mail to an ODU official on Dec. 21, 2006, stating that the current budget did not include any funding for the center, Hamilton also allegedly indicated that his retirement payments from another source were being reduced in May 2007 and that he would need to supplement his current income. According to the indictment, an ODU official assured Hamilton in December 2006 and January 2007 that if ODU obtained funding from the Virginia General Assembly for the creation of the center, then Hamilton would have a job at the center. During this same period, in January 2007, Hamilton introduced a budget amendment in the House of Delegates to appropriate $1 million in fiscal year 2007-2008 (July 1, 2007 – June 30, 2008) for a “Center for Teacher Quality and Educational Leadership.” According to the indictment, Hamilton purposely kept ODU’s name out of the amendment so that it would be assigned to the Elementary & Secondary Education Subcommittee on which he served. The amendment passed the subcommittee and committee unanimously.
On Feb. 24, 2007, after a conference between the Virginia house and senate that resulted in an amendment to appropriate $500,000 to ODU for the center – for which Hamilton voted in favor - the budget bill was passed. The next day, according to the indictment, Hamilton and ODU officials exchanged e-mails about Hamilton receiving the director job. According to the indictment, approximately three people applied in response to a job posting for the position; however, none of them were interviewed. Hamilton, who was awarded the job, never submitted an application.
In June 2007, Hamilton and an ODU official signed an employee contract indicating, among other things, that Hamilton would direct the center and seek continual funding for the center. The contract also stated that Hamilton would be paid $40,000 per year. From approximately July 2007 through July 2009, Hamilton collected approximately $80,000 from ODU.
The indictment also alleges that Hamilton took numerous steps to conceal this arrangement, including telling ODU officials not to mention his name in connection with the center to members of the Virginia Senate Finance Committee; allegedly advising an ODU official to tell a Virginia senate staffer that the official, and not Hamilton, was the director of the center; and, unsuccessfully attempting to persuade ODU leadership not to release incriminating e-mails in response to a Freedom of Information Act request that ODU had received.
If convicted, Hamilton faces maximum penalties of up to 10 years in prison on the bribery charge, and up to 20 years in prison on the extortion charge. The indictment also seeks forfeiture.
An indictment is merely an allegation and a defendant is presumed innocent unless proven guilty in a court of law.
The case is being prosecuted by Trial Attorney David V. Harbach II of the Criminal Division’s Public Integrity Section and Supervisory Assistant U.S. Attorney Robert J. Seidel Jr. of the Eastern District of Virginia. The case was investigated by the FBI.
El Secretario de Justicia de los Estados Unidos Eric Holder Convoca al Consejo Inaugural de Reincorporación del Nivel de GabineteRead the Press Release
WASHINGTON - El Secretario de Justicia de los Estados Unidos Eric Holder convocó hoy a la reunión inaugural del "Consejo de Reincorporación" del nivel del Gabinete en Washington para identificar y promover estrategias eficaces de seguridad pública y reincorporación de prisioneros.
Además del Secretario de Justicia de los Estados Unidos, el consejo incluye al Secretario del Departamento de Educación Arne Duncan; la Secretario de Salud y Servicios Humanos Kathleen Sebelius; el Secretario de Agricultura Tom Vilsack; el Secretario del Interior Ken Salazar; el Secretario de Vivienda y Desarrollo Urbano Shaun Donovan; la Secretaria de Trabajo Hilda Solis; y el Secretario de Asuntos de Veteranos Eric Shinseki. Los miembros también incluyen al Comisionado de la Administración del Seguro Social, Michael Astrue; el Director de la Oficina de Política Nacional de Control de Drogas, R. Gil Kerlikowske; la Directora del Consejo de Políticas Domésticas de la Casa Blanca, Melody Barnes; el Director Ejecutivo de la Oficina de Asociados Religiosos y de Vecindarios de la Casa Blanca, Joshua DuBois; y la Presidente de la comisión de Igualdad de Oportunidades en el Empleo de EE.UU., Jacqueline Berrien.
El consejo tratará de objetivos de corto y largo plazo a través de la comunicación, la coordinación y la colaboración optimizadas entre dependencias federales. La misión del consejo tiene tres partes: hacer que las comunidades sean más seguras al reducir la reincidencia y la victimización; ayudar a los que regresen de la prisión y la cárcel a que se vuelvan ciudadanos productivos que pagan sus impuestos; y ahorrar dinero de los contribuyentes al reducir los costos directos y colaterales del encarcelamiento.
"La reincorporación a la sociedad provee una mejor oportunidad de reducir la recurrencia, ahorrar dinero de los contribuyentes y lograr comunidades más seguras", dijo el Secretario de Justicia de los Estados Unidos Holder. "Más de dos millones de personas están encarceladas y el 95 por ciento de las mismas serán liberadas y devueltas a sus comunidades. Al desarrollar programas de reincorporación eficaces y comprobados, podemos mejorar la seguridad pública y el bienestar comunitario".
Entre sus objetivos, el Consejo de Reincorporación se reunirá dos veces al año para apalancar recursos entre dependencias para reducir la recurrencia y la victimización; identificar prácticas comprobadas que ayuden a promover la misión del consejo; promover cambios a leyes, políticas y prácticas federales que se concentran en reducir la delincuencia; e identificar oportunidades de políticas federales y barreras existentes que impiden mejorar los resultados para la comunidad de reincorporación.
El consejo contará con el apoyo de un equipo interdependencias de 16 departamentos y oficinas federales. Desde su primera reunión en septiembre de 2010, el grupo ha producido un "Inventario de recursos federales concentrado en la reinserción de prisioneros en los ámbitos estatales y locales" conjunto y ha trabajado con un subsidiado del Departamento de Justicia, el Centro Nacional de Recursos de Reinserción, para mapear brevemente las diversas inversiones dedicadas a la población de reinserción de todo el gobierno (www.nationalreentryresourcecenter.org/national-criminal-justice-initiatives-map).
En el año fiscal 2010, el Departamento de Justicia ha otorgado 100 millones de dólares para 178 subsidios para la reinserción estatal y local para la provisión de una amplia gama de servicios.
Para obtener más información sobre temas de reincorporación a la sociedad, visite nationalreentryresourcecenter.org/.
Attorney General Eric Holder Convenes Inaugural Cabinet-Level Reentry CouncilRead the Press Release
WASHINGTON – Attorney General Eric Holder today convened the inaugural meeting of the Cabinet-level "Reentry Council" in Washington to identify and to advance effective public safety and prisoner reentry strategies.
In addition to the Attorney General, the council includes Departments of Education Secretary Arne Duncan; Health and Human Services Secretary Kathleen Sebelius; Agriculture Secretary Tom Vilsack; Interior Secretary Ken Salazar; Housing and Urban Development Secretary Shaun Donovan; Labor Secretary Hilda Solis; and Veterans Affairs Secretary Eric Shinseki. Members also include Commissioner of the Social Security Administration, Michael Astrue; Director of the Office of National Drug Control Policy, R. Gil Kerlikowske; Director of the White House Domestic Policy Council, Melody Barnes; Executive Director of the White House Office of Faith-Based and Neighborhood Partnerships, Joshua DuBois; and Chair of the U.S. Equal Employment Opportunity Commission, Jacqueline Berrien.
The council will address short-term and long-term goals through enhanced communication, coordination and collaboration across federal agencies. The mission of the council is threefold: to make communities safer by reducing recidivism and victimization; to assist those returning from prison and jail in becoming productive, tax paying citizens; and to save taxpayer dollars by lowering the direct and collateral costs of incarceration.
"Reentry provides a major opportunity to reduce recidivism, save taxpayer dollars and make our communities safer," said Attorney General Holder. "More than two million people are behind bars, and 95 percent of them will be released back into their communities. By developing effective, evidence-based reentry programs, we can improve public safety and community well-being."
Among its goals, the Reentry Council will meet semi-annually to leverage resources across agencies to reduce recidivism and victimization; identify evidence-based practices that advance the council’s mission; promote changes to federal statutes, policies and practices that focus on reducing crime; and identify federal policy opportunities and barriers to improve outcomes for the reentry community.
The council will be supported by an interagency staff group from 16 federal departments and office. Since first convening in September 2010, the group has produced a collaborative "Inventory of Federal Resources Focusing on Prisoner Reentry at the State and Local Levels" and has worked with Justice Department grantee, the National Reentry Resource Center, to succinctly map out the various investments directed to the reentry population from across the administration (www.nationalreentryresourcecenter.org/national-criminal-justice-initiatives-map).
In Fiscal Year 2010, the Department of Justice awarded $100 million to support 178 state and local reentry grants to provide a wide range of services.
More information about reentry issues is at nationalreentryresourcecenter.org/ .
4 January 2011
Seven Hospitals in Six States to Pay U.S. More Than $6.3 Million to Resolve False Claims Act Allegations Related to KyphoplastyRead the Press Release
WASHINGTON – Seven hospitals located in Florida, Mississippi, Texas, South Carolina, North Carolina and Alabama have agreed to pay the United States a total of more than $6.3 million to settle allegations that the health care facilities submitted false claims to Medicare, the Justice Department announced today.
The settlements resolve allegations that these hospitals overcharged Medicare between 2000 and 2008 when performing kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as a less costly out-patient procedure, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.
"Hospitals that participate in the Medicare program must bill for their services accurately and honestly," said Tony West, Assistant Attorney General for the Department’s Civil Division. "The Department of Justice is committed to ensuring that Medicare funds are expended appropriately."
"These settlements show the continuing commitment by the U.S. Attorney’s Office to investigate and recover any improper billings for kyphoplasty procedures which the hospitals inappropriately classified as inpatient, rather than outpatient," said William J. Hochul Jr., U.S. Attorney for the Western District of New York. "These actions not only protect taxpayers and the integrity of the Medicare program in the short term, they will in the long run help ensure optimal care for Medicare beneficiaries, by insisting that medicine, and not money, be used to determine the best course medical decision for a given case."
The settling facilities include the following: Lakeland Regional Medical Center, Lakeland, Fla. ($1,660,134.49); The Health Care Authority of Morgan County – City of Decatur dba Decatur General Hospital, Decatur, Ala. ($537,892.88); St. Dominic-Jackson Memorial Hospital, Jackson, Miss. ($555,949.35); Seton Medical Center, Austin, Texas ($1,232,955.91); Greenville Memorial Hospital, Greenville, S.C. ($1,026,764.01); Presbyterian Orthopaedic Hospital, Charlotte, N.C.($637,872.57); and The Health Care Authority of Lauderdale County and the City of Florence, Ala., dba the Coffee Health Group, fka Eliza Coffee Memorial Hospital ($676,038.00).
The settlements with these facilities follow the settlements that the government reached in May 2009, September 2009, and May 2010 with 18 other hospitals for kyphoplasty-related Medicare claims, as well as the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to resolve allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an in-patient procedure, even though the minimally-invasive procedure should have been done in many cases as an out-patient procedure.
All of the settling facilities were named as defendants in a lawsuit filed under the False Claims Act in 2008 in federal district court in Buffalo, New York by Craig Patrick and Charles Bates. The qui tam, or whistleblower, provisions of the Act permit private citizens, called "relators," to file lawsuits on behalf of the United States and share in any recovery. Mr. Patrick of Hudson, Wis., is a former reimbursement manager for Kyphon, and Mr. Bates was formerly a regional sales manager for Kyphon in Birmingham, Ala. The relators will receive a total of approximately $1.1 million as their share of the settlement proceeds.
"Hospitals overcharging Medicare take critically needed resources necessary to provide quality care and drive up health care costs," said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. "When Medicare and taxpayers' dollars are threatened, OIG and its federal partners will hold perpetrators accountable."
Assistant Attorney General West noted that the settlements with these hospitals were the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of New York, and the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and 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 approximately $4.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 have topped $6.8 billion.
MS-13 Gang Member in San Francisco Pleads Guilty to Racketeering ChargesRead the Press Release
WASHINGTON – A member of La Mara Salvatrucha or MS-13 pleaded guilty today in federal court in San Francisco to racketeering (RICO) conspiracy and conspiracy to commit murder in aid of racketeering, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Melinda Haag for the Northern District of California.
Wilbert Castillo, aka "Cypress," 29, admitted in his guilty plea that he has been associated with or a member of MS-13 since approximately 2004. Castillo admitted that he agreed with others that a conspirator would commit crimes to further the goals of the gang, including attacking and killing rival Norteño gang members and others who defied or challenged MS-13. Castillo also admitted that in September 2004, he was driving other MS-13 members in San Francisco when one of the other MS-13 members directed Castillo to stop because he saw some Norteños on the street. Castillo did as directed, and the other MS-13 member exited the vehicle with a gun and fired several shots. Later, Castillo drove onto a freeway, where the same MS-13 gunman riding in Castillo’s car fired several shots at a nearby car he believed was being driven by a Norteño gang member.
On Nov. 15, 2010, two other MS-13 members — Walter Chinchilla-Linar, aka "Demonio," 24, and Cesar Alvarado, aka "Momia," 20 — pleaded guilty to RICO conspiracy and conspiracy to commit murder in aid of racketeering. Chinchilla-Linar and Alvarado each admitted to being part of a group of MS-13 gang members who went "hunting," or looking for, Norteño gang members during the early morning of July 31, 2008. The group of MS-13 members eventually found and surrounded three teenagers in the vicinity of Persia and Madrid Streets in San Francisco’s Excelsior District. Alvarado admitted that he and others surrounded
the three teenagers and held them at knife point, questioning two of the teenage boys about their gang affiliation and checking them for gang symbols , while Chinchilla-Linar admitted to acting as a look-out. Chinchilla-Linar and Alvarado both admitted that one teenager then ran away and that two of their fellow MS-13 members pursued the teenager, caught up with him, and then stabbed and killed him.The maximum penalty for the RICO conspiracy charge is life in prison and a $250,000 fine. The maximum penalty for the conspiracy to commit murder in aid of racketeering is 10 years in prison and a $250,000 fine. Sentencing for Chinchilla-Linar and Alvarado is scheduled for Feb. 8, 2011. Sentencing for Castillo is scheduled for March 29, 2011.
These guilty pleas are the most recent in a series of pleas by MS-13 gang members 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. Castillo, Chinchilla-Linar and Alvarado 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. Sixteen defendants are still pending trial, 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 Wong, and Trial Attorney Theryn G. Gibbons of the Criminal Division’s Gang Unit. The case was investigated by ICE Homeland Security Investigations.
Houston Doctor Sentenced to 41 Months in Prison for Role in Medicare Fraud SchemeRead the Press Release
WASHINGTON – Houston-area residents Dr. Howard Grant, Obisike Nwankwo and John Lachman were sentenced today to 41 months in prison, 21 months in prison, and 26 months in prison, respectively, for their roles in a multi-million dollar durable medical equipment (DME) Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced today.
In addition to the prison terms, U.S. District Court Judge Nancy Atlas in the Southern District of Texas sentenced Grant, Nwankwo and Lachman each to three years of supervised release. Grant was ordered to pay $121,742 in restitution jointly and severally with co-defendants. Nwankwo was ordered to pay $29,052 in restitution jointly and severally with co-defendants. Lachman was ordered to pay $1.14 million in restitution jointly and severally with co-defendants.
Grant and Nwankwo were both convicted by a federal jury after a two-week trial in the Southern District of Texas in May and June 2010. Grant was convicted of two counts of health care fraud and one count of conspiracy to commit health care fraud and Nwankwo was convicted of one count of conspiracy to commit health care fraud . Lachman pleaded guilty prior to the trial to one count of conspiracy to commit health care fraud.
Evidence at trial established that Onward Medical Supply, a Houston-area DME company, billed Medicare for fraudulent DME, including power wheelchairs and orthotic devices, beginning in 2003 and continuing until late 2009. In addition to the three co-conspirators sentenced today, one additional individual was convicted at trial, and seven individuals have pleaded guilty for their participation in various parts of Onward’s Medicare fraud scheme, including Onward’s owner, Doris Vinitski.
According to evidence presented at trial, Vinitski worked with Medicare biller and co-defendant John Nasky Okonkwo and others in late 2008 and early 2009 to submit fraudulent claims to Medicare identifying Dr. Howard Grant as the prescribing physician for the DME. The claims were submitted in several groups in November 2008. Evidence presented at trial showed that Grant learned about the fraudulent prescriptions prior to Onward’s submission of the claims to Medicare. Evidence at trial also showed that, upon learning of the prescriptions, Grant asked Vinitski for $10,000 in exchange for allowing the fraud scheme to continue. Okonkwo agreed to plead guilty for his participation in the scheme. Following the verdict, U.S. District Court Judge Nancy Atlas ordered Grant to surrender his medical license and his Drug Enforcement Administration (DEA) number and to stop all billing to Medicare and Medicaid.
Evidence at trial established that Nwankwo acted as a delivery driver for Onward and several other DME companies and that he delivered DME such as power wheelchairs and orthotics for Onward to beneficiaries who did not want or need the equipment. One beneficiary testified at trial that when Nwankwo tried to deliver a power wheelchair to her, she told him to get off her front step or she would call the police.
Lachman managed the Onward fraud scheme in the early years, until the end of 2006. During that time, he created fraudulent patient files, managed payments of kickbacks to recruiters and delivery drivers, and operated the day-to-day business of Onward.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Richard C. Powers, Special Agent-in-Charge of the FBI’s Houston office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of the HHS Office of Inspector General (OIG), Office of Investigations; and Texas Attorney General Greg Abbott on behalf of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The cases were prosecuted by Trial Attorneys Jennifer L. Saulino, O. Benton Curtis III and Nicola J. Mrazek of the Criminal Division’s Fraud Section. The cases were investigated by the FBI, HHS-OIG and MFCU.
The cases were brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section. Since their inception in March 2007, Strike Force operations in 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.
American Samoa Department of Education Official Pleads Guilty to Bribery ConspiracyRead the Press Release
WASHINGTON - The director of the school bus division of the U.S. Territory of American Samoa’s Department of Education pleaded guilty today to conspiracy to commit federal program bribery, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Gustav Nauer, 46, a resident of American Samoa, pleaded guilty to one count of conspiracy to commit federal program bribery before U.S. Magistrate Judge Barry M. Kurren of the U.S. District Court for the District of Hawaii.
As part of his guilty plea, Nauer admitted to participating in a scheme that began in late 2002 involving other American Samoa Department of Education employees as well as the owner and operator of a company that sold school bus parts to the American Samoa government. As part of the scheme, Nauer and other government officials arranged to order "phantom" bus parts that were never received by the government, as well as bus parts at inflated prices, from the company. In exchange, Nauer admitted that he and other government officials were paid approximately $300,000 in bribes from January 2003 until October 2006.
Nauer faces a maximum of five years in prison and a $250,000 fine on the conspiracy charge. A sentencing date has not been scheduled.
This case is being prosecuted by Trial Attorneys Timothy J. Kelly and Kathryn H. Albrecht of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI, the Office of Inspector General for the U.S. Department of the Interior, and the Office of Inspector General for the U.S. Department of Education.
3 January 2011
Henry G. Hobbs Jr. Appointed Acting U.S. Trustee for Louisiana, MississippiRead the Press Release
WASHINGTON - Henry G. Hobbs Jr. has been appointed by Attorney General Eric Holder as Acting U.S. Trustee for Louisiana and Mississippi (Region 5), effective immediately, the Executive Office for U.S. Trustees announced today. Mr. Hobbs replaces R. Michael Bolen, who retired after 22 years of service with the U.S. Trustee Program (USTP).
Mr. Hobbs has headed the USTP's office in Austin, Texas, as Assistant U.S. Trustee since 1992. From 2005 to 2007, he was detailed to the Executive Office for U.S. Trustees in Washington, D.C., as Acting Chief of the USTP's new Credit Counseling and Debtor Education (CCDE) Unit. In 2006 Mr. Hobbs received the Attorney General's Award for Distinguished Service along with several others who helped develop the CCDE Unit. Before joining the USTP, Mr. Hobbs engaged in the private practice of law for 11 years in Shreveport, La. He received his law degree from Louisiana State University Law Center in Baton Rouge, La., and his undergraduate degree from Louisiana State University in Baton Rouge.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 5 is headquartered in New Orleans, La., with additional offices in Shreveport, La., and Jackson, Miss.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Former Wealth Manager Pleads Guilty to Causing a Presidential Campaign Committee to Submit False Statements to the Federal Election CommissionRead the Press Release
WASHINGTON - A former principal of a wealth management firm pleaded guilty today in U.S. District Court for the District of Columbia to causing the Hillary Clinton for President Committee unwittingly to submit false statements to the Federal Election Commission (FEC), announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. The guilty plea was accepted by U.S. District Judge Paul L. Friedman.
Evan Snapper, 46, of Fairfield, Conn., was charged in a one-count criminal information filed on Dec. 3, 2010, which alleged that he knowingly and willfully caused the committee unwittingly to file materially false reports with the FEC. The information charged that those reports falsely showed that 21 individuals known to Snapper had contributed $2,300 each to the committee when, as Snapper admitted, the contributions had actually been made by one individual.
According to court documents, the individual was a client of the firm where Snapper had served as a principal. In that capacity, Snapper had authorized access to bank accounts associated with the individual. Snapper admitted that in March 2008, he informed the individual that Elton John was scheduled to perform a concert in New York City on April 9, 2008, and that the proceeds from the ticket sales would be contributed to support the committee. Snapper admitted knowing that the individual supported the candidate and that when the individual asked Snapper what could be done to help the committee, Snapper suggested that the individual could find people to buy tickets to the concert. According to court documents, the individual suggested that the individual would call family members and friends and reimburse them for the tickets that they purchased for the concert. Snapper admitted that when this suggestion was made, he knew that reimbursements of political contributions violated campaign finance regulations.
Snapper admitted that he and 20 people agreed to purchase a ticket to the concert, with the understanding that they would be reimbursed by the individual. Snapper admitted having direct or indirect contact with all of these people to coordinate the ticket purchases and reimbursements. Snapper admitted that, believing he was authorized to do so, he caused the 21 reimbursements to be made from the funds of the individual. He admitted that he took steps on his own initiative to conceal the true purpose of the payments as reimbursements for political contributions. These steps included causing some of the reimbursements to be made in amounts that were not multiples of $2,300; to be made in part by check and in part by cash; and to be misrepresented in the individual’s financial account ledgers as payments for purposes other than reimbursements for political contributions. In total, Snapper caused the source of $48,300 in individual contributions to the committee to be falsely reported to the FEC.
In addition, Snapper admitted that in 2007, at the individual’s request, he and his wife made total contributions in the amount of $4,600 and $9,200 to the Jim Gilmore for President Committee and the Gilmore for Senate Committee, respectively. Snapper admitted that, believing he was authorized to do so, he caused reimbursements for those contributions to be made from the individual’s funds. In total, Snapper admitted that he caused the source of $13,800 in individual contributions to the Gilmore Committees unwittingly to be falsely reported to the FEC.
At sentencing, scheduled for Apr. 7, 2011, Snapper faces a maximum penalty of five years in prison and a $250,000 fine.
This case is being prosecuted by Trial Attorneys Daniel A. Petalas and Edward T. Kang of the Criminal Division’s Public Integrity Section. This case is being investigated by the FBI.
Former Colombian Maritime Training Instructor and Co-Conspirator Plead Guilty to U.S. Drug ChargesRead the Press Release
WASHINGTON – A former Colombian maritime training instructor and a co-conspirator have pleaded guilty to conspiring to transport thousands of kilograms of cocaine from various ports along the coast of Colombia to waiting vessels that transported the cocaine to the United States and other countries, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Wilson Jesus Torres-Torres, a Colombian maritime training instructor, and Baudilio Vivero-Cardenas each pleaded guilty on Dec. 30, 2010, before U.S. District Judge Ellen S. Huvelle in the District of Columbia to one count of conspiracy to violate the Maritime Drug Law Enforcement Act.
Torres-Torres and Vivero-Cardenas were charged in a one-count indictment returned in the District of Colombia on Feb. 24, 2009. They were arrested in Colombia on Sept. 30, 2009. Vivero-Cardenas was extradited to the United States on Sept. 2, 2010, and Torres-Torres was extradited to the United States on Sept. 23, 2010.
According to court documents, from September 2005 to February 2009, Torres-Torres and Vivero-Cardenas were members of a Colombian drug trafficking organization based in Buenaventura, Colombia, that transported large quantities of cocaine for various other drug trafficking organizations. The defendants admitted that they used fishing vessels and "go-fast" boats to transport thousands of kilograms of cocaine from various ports along the coast of Colombia to waiting transport vessels on the high seas, which would transport the cocaine to the United States and other countries. According to court documents, the vessels involved in the conspiracy were equipped with high frequency radios, global positioning system devices, satellite phones, large amounts of fuel, and multiple outboard motors to facilitate the transport of cocaine over long distances on the high seas until the destination or off-loading rendezvous point was reached.
Torres-Torres faces a maximum statutory penalty of life in prison and a $4 million fine for the charge of conspiracy to manufacture, distribute or possess five kilograms or more of controlled substances on vessels; however as part of the extradition request, the United States provided assurances to the government of Colombia that it would not seek a life term in prison. Vivero-Cardenas faces up to 40 years in prison and a $2 million fine for the charge of conspiracy to manufacture, distribute or possess 500 grams or more of controlled substances on vessels. Sentencing for both defendants is scheduled for March 25, 2011, at 11 a.m.
The case is being prosecuted by Trial Attorneys Charles D. Griffith Jr., Meredith A. Mills and Tritia L. Yuen of the Criminal Division’s Narcotic and Dangerous Drug Section. The investigation was led by the Drug Enforcement Administration’s Miami Field Division; Washington, D.C., Office; Cartagena, Colombia, Resident Office; and the Special Operations Division. Significant assistance was provided by the U.S. Coast Guard in interdicting and recovering more than 21,000 kilograms of cocaine.
Former Assisted Living Facility Chain Ceo Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
WASHINGTON – Ronald E. Burrell, former chief executive officer of Caremerica Inc., pleaded guilty today to conspiring to defraud the Internal Revenue Service (IRS), the Justice Department announced. His sentencing hearing is scheduled for April 9, 2012. Burrell is a resident of Wilmington, N.C.
According to the charging document, Burrell co-owned and operated a chain of assisted living facilities (ALFs) in North and South Carolina. The ALFs were managed by Caremerica Inc., a company based in Leland, N.C., that Burrell also partly owned and operated. Burrell was the president and CEO for Caremerica, the Caremerica ALFs and other related companies. As a corporate officer, Burrell was responsible for ensuring that the Caremerica companies collected, reported and paid over federal employment taxes to the IRS. However, with Burrell at the helm, the Caremerica companies accrued more than $4.5 million in employment tax liabilities between approximately 2003 and 2006. Among other things, Burrell filed, or caused to be filed, false IRS forms that reported full payment of the employment taxes due, when in fact only a small fraction of the taxes, or none at all, were paid.
The charging document further alleges that in 2003, Burrell acquired partial ownership of Partners Pharmacy Services Inc. (PPS), which provided prescription drug and related services to the Caremerica ALFs. In April 2005, Burrell sold PPS to a subsidiary of Omnicare Inc. At the closing, Burrell received $1.6 million. The PPS sale proceeds were disbursed at a time when the IRS was attempting to collect unpaid employment taxes from the Caremerica companies, as well as from Burrell personally. To prevent the IRS from discovering the PPS proceeds, Burrell took active steps to conceal them.
At his hearing before Judge James C. Fox, sitting in Wilmington, Burrell agreed that he should be ordered to pay restitution of $4.8 million.
This case was investigated by IRS-Criminal Investigation. It is being prosecuted by Trial Attorneys Adam Hulbig, Todd Ellinwood and Kevin Lombardi of the Justice Department’s Tax Division.
Ex instructor de entrenamiento marítimo colombiano y coconspirador se declaran culpables de cargos estadounidenses de narcotráficoRead the Press Release
Un ex instructor de entrenamiento marítimo colombiano y un coconspirador se han declarado culpables de conspirar para transportar miles de quilos de cocaína de diversos puertos a lo largo de la costa de Colombia a barcos que transportaron la cocaína a los Estados Unidos y otros países, anunció el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal.
Wilson Jesús Torres-Torres, un instructor de entrenamiento marítimo colombiano y Baudilio Vivero-Cardenas se declararon culpables el 30 de diciembre de 2010, ante la Juez Federal de Distrito Ellen S. Huvelle en el Distrito de Columbia de un cargo cada uno de conspiración para violar la Ley Marítima Antidrogas.
Torres-Torres y Vivero-Cardenas fueron acusados en una acusación formal de un cargo emitida en el Distrito de Columbia el 24 de febrero de 2009. Fueron arrestados en Colombia el 30 de septiembre de 2009. Vivero-Cardenas fue extraditado a los Estados Unidos el 2 de septiembre de 2010, y Torres-Torres fue extraditado a los Estados Unidos el 23 de septiembre de 2010.
De acuerdo con el expediente judicial, de septiembre de 2005 a febrero de 2009, Torres-Torres y Vivero-Cardenas fueron miembros de una organización colombiana de narcotráfico con sede en Buenaventura, Colombia, que transportó grandes cantidades de cocaína para diversas otras organizaciones de narcotráfico. Los demandados admitieron que utilizaron barcos pesqueros y barcos rápidos para transportar miles de quilos de cocaína de diversos puertos a lo largo de la costa de Colombia a barcos de transporte en alta mar, los que a su vez transportaron la cocaína a los Estados Unidos y otros países. De acuerdo con el expediente judicial, los barcos involucrados en la conspiración estaban equipados con radios de alta frecuencia, dispositivos de sistemas de posicionamiento global, teléfonos satelitales, grandes cantidades de combustible y motores fuera de borda múltiples para facilitar el transporte de la cocaína distancias largas en alta mar hasta su destino o hasta el lugar de descarga.
Torres-Torres enfrenta una pena legal máxima de prisión perpetua y una multa de 4 millones de dólares por el cargo de conspiración para fabricar, distribuir o poseer cinco quilos o más de sustancias controladas en barcos; sin embargo, como parte de la solicitud de extradición, los Estados Unidos aseguraron al gobierno colombiano de que no pedirían la pena de prisión perpetua. Vivero-Cardenas enfrenta hasta 40 años en prisión y una multa de 2 millones de dólares por el cargo de conspiración para fabricar, distribuir o poseer 500 gramos o más de sustancias controladas en barcos. La lectura de la sentencia de ambos demandados está programada para el 25 de marzo de 2011, a las 11 a.m.
Están a cargo de la acusación en el caso los Abogados Litigantes Charles D. Griffith Jr., Meredith A. Mills y Tritia L. Yuen de la Sección de Narcóticos y Drogas Peligrosas de la División de lo Penal. La investigación fue encabezada por la División Local de Miami de la Administración de Control de Drogas; Oficina de Washington, D.C.; Oficina de Residentes en Cartagena, Colombia; y la División de Operaciones Especiales. La Guardia Costera de EE.UU. brindó asistencia significativa en el interdicto y la recuperación de más de 21,000 quilos de cocaína.
Daniel M. McDermott to Serve as U.S. Trustee for Tennessee and Kentucky for Interim PeriodRead the Press Release
WASHINGTON - Daniel M. McDermott, U.S. Trustee for Michigan and Ohio (Region 9), has been designated by Attorney General Eric Holder to also serve as the U.S. Trustee for Tennessee and Kentucky (Region 8) for an interim period, effective immediately, the Executive Office for U.S. Trustees announced today. He replaces Richard F. Clippard, who retired.
Mr. McDermott was appointed U.S. Trustee for Region 9 in 2008, after heading the Cleveland office of the U.S. Trustee Program (USTP) as Assistant U.S. Trustee from 1991 through July 2008. In 1999, Mr. McDermott was recognized with the Director's Award for Management Excellence. Prior to joining the USTP in 1988, Mr. McDermott held positions as a Bankruptcy Administrator for the U.S. Bankruptcy Court for the Northern District of Ohio and as a bank officer and assistant counsel.
Mr. McDermott received his law degree from Cleveland-Marshall College of Law in Cleveland, Ohio, and his undergraduate degree from Villanova University in Villanova, Pa.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 8 is headquartered in Memphis, Tenn., with additional offices in Chattanooga and Nashville, Tenn., and Lexington and Louisville, Ky.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Attorney General Eric Holder Welcomes James Cole as Deputy Attorney GeneralRead the Press Release
WASHINGTON – Attorney General Eric Holder today welcomed James Cole as the Department of Justice’s new Deputy Attorney General. Cole was sworn in Monday by the Attorney General following President Obama’s recess appointment of Cole.
"I am pleased to welcome Jim back to the Department of Justice," said Attorney General Holder. "He will be critical in our work to keep the American people safe, ensure the fairness and integrity of our financial markets, and restore the traditional missions of the Department."
The Deputy Attorney General advises and assists the Attorney General in formulating and implementing departmental policies and programs and in providing overall supervision and direction to all organizational units of the Department. In the absence of the Attorney General, the Deputy Attorney General acts as the Attorney General.
Cole first joined the department in 1979 as part of Attorney General’s Honors Program and served there for 13 years – first as a trial attorney in the Criminal Division, and later as the Deputy Chief of the Division's Public Integrity Section, the office that handles investigation and prosecution of corruption cases against both Democratic and Republican elected and appointed officials at all levels of government.
He entered private practice in 1992 and has been a partner with Bryan Cave LLP since 1995, specializing in white collar defense. He served as a court-appointed independent monitor to businesses to establish and oversee corporate compliance programs and ensure they adhere to laws and regulations. He also counseled businesses on securities, regulatory, and criminal law issues.
While in private practice in 1995, Cole was tapped to serve as Special Counsel to the U.S. House of Representatives Committee on Standards of Official Conduct. In that role, he led an investigation into allegations that former House Speaker Newt Gingrich had improperly used tax-exempt money for partisan purposes and misled the Committee in its inquiry. His investigation led to a bipartisan resolution that was approved by an overwhelming majority of the full House, and required Speaker Gingrich to pay penalties.
In 2005, Cole was appointed to serve as an independent monitor at the insurance company AIG to review five years of transactions following a settlement with regulators involving allegations the company was setting up sham transactions to hide losses. His role there led to another appointment involving AIG in 2006, in which he was charged with developing financial reporting and regulatory compliance programs.
Cole has been a member of the adjunct faculty at Georgetown University Law Center, teaching courses on public corruption law and legal ethics, and has lectured at Harvard University’s Kennedy School of Government. He is a former chair of the American Bar Association (ABA) White Collar Crime Committee and serves as the First Vice-Chair of the ABA Criminal Justice Section.
He received his B.A. from the University of Colorado and his J.D. from the University of California-Hastings.
Attorney General Appoints Gary G. Grindler Chief of StaffRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today that he has appointed Gary G. Grindler to be chief of staff to the Attorney General, effective Jan. 17, 2011. Grindler will replace Kevin Ohlson, who will be resuming his career service with the department.
"Kevin Ohlson has been an extraordinary public servant through a long career at the department, and while I am sorry to lose him from my office, I am grateful for his tireless work leading my staff the past two years," Attorney General Eric Holder said. "As he has throughout his career, Gary Grindler showed remarkable leadership under difficult circumstances as Acting Deputy Attorney General over the past year, and I could not be more pleased that he has agreed to continue that service in this new role as my chief of staff. He will continue to be a key leader in our work to protect the American people, ensure the fairness and integrity of our financial markets, and invigorate the traditional missions of the department."
Grindler served as Acting Deputy Attorney General from Feb. 5, 2010, until today. He rejoined the department in 2009 as Deputy Assistant Attorney General in the Criminal Division after previously serving in a number of roles, including as Principal Associate Deputy Attorney General and Counselor to the Attorney General, Deputy Assistant Attorney General in the Civil Division, and as an Assistant U.S. Attorney in the Southern District of New York and the Northern District of Georgia.
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, in 1990 he was awarded the Bronze Star for his service during the Persian Gulf War.
30 December 2010
Detroit Medical Center Pays U.S. $30 Million to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – Detroit Medical Center, a non-profit company that owns and operates hospitals and outpatient facilities in Detroit, has agreed to pay the United States $30 million to settle allegations that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute, by engaging in improper financial relationships with referring physicians, the Justice Department announced today.
The Stark Statute and the Anti-Kickback Statute restrict the financial relationships that hospitals may have with doctors who refer patients to them. Most of the relationships at issue in this matter involved office lease agreements and independent contractor relationships that were either inconsistent with fair market value or not memorialized in writing.
"Improper financial relationships between health care providers and their referral sources can corrupt a physician's judgment about the patient's true healthcare needs," said Tony West, Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a substantial recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."
The government learned of the statutory violations from Detroit Medical Center, itself, which discovered improper financial relationships with a number of physicians as it prepared for the sale to Vanguard. "We applaud the hospital leadership’s decision to come forward voluntarily to disclose these issues to the government," said U.S. Attorney Barbara McQuade.
Detroit Medical Center is in the process of selling its facilities to Vanguard Health Systems Inc., a company headquartered in Nashville, Tenn., that owns and operates healthcare facilities in five states. Vanguard also signed today’s settlement.
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Michigan, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services.
29 December 2010
Justice Department Settles Allegations of Immigration-Related Unfair Employment Practices in Oregon and North CarolinaRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a settlement agreement with Collins Management Corporation, a forestry products company in Oregon, to resolve allegations that it unlawfully fired and later refused to rehire a lawful permanent resident in violation of the anti-discrimination provision of the Immigration and Nationality Act (INA).
According to the department’s findings, Collins insisted that a lawful permanent resident present an unexpired permanent resident card (also known as a "green card") for Form I-9 purposes, even though the individual had already presented his driver’s license and unrestricted Social Security card to the employer. The department further found that the company fired the individual when he was unable to present an unexpired green card and refused to consider him for re-hire two months later because the company believed he did not possess proper documentation.
As part of the settlement agreement, Collins agreed to pay $15,000 in back pay to the former employee and a $600 civil penalty to the federal government. The company also agreed to train its managers and human resources representatives regarding compliance with the anti-discrimination provision of the INA.
In addition, earlier this month, the department entered into a settlement agreement with Oakwood Healthcare Inc. to settle allegations that its Ashville, N.C., facility unlawfully discriminated against a lawful permanent resident by rejecting her employment eligibility verification documents and rescinding an offer of employment. As part of the settlement, Oakwood agreed to compensate the individual for lost wages totaling $732, pay a $1,100 civil penalty and train its human resources employees regarding compliance with the anti-discrimination provision.
"The INA’s anti-discrimination provision protects all authorized workers from unfair documentary requests during the Form I-9 process," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department is committed to stopping workplace discrimination against citizens and work-authorized non-citizens alike."
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the INA anti-discrimination provision. For more information about protections against employment discrimination under federal immigration law, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired); 1-800-255-8255 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired); 202-616-5594; email [email protected]; or visit www.usdoj/gov/crt/osc .
27 December 2010
Justice Department Settles Disability Discrimination Case Against Property Management Company for $1.25 MillionRead the Press Release
WASHINGTON – The Justice Department today announced a $1.25 million agreement with Warren Properties Inc., Warren Village (Mobile) Limited Partnership and Frank R. Warren to settle allegations that the defendants violated the Fair Housing Act by refusing to grant a tenant’s requests for a reasonable accommodation. This settlement is the largest ever obtained by the department in an individual housing discrimination case.
The lawsuit, filed on April 29, 2009, in the U.S. District Court for the Southern District of Alabama, alleges that the defendants failed to permit a tenant with a mobility impairment to move to a ground-floor apartment near the front of the building in a 196-unit apartment complex in Mobile, Ala., owned by Warren Village (Mobile) Limited Partnership. The suit also alleges that the tenant suffered severe injuries as a result of falling down the stairs.
Under the consent decree, the defendants must pay $1,195,000 to compensate the tenant, along with an additional $55,000 in fees and costs to the government. The defendants must hire a reasonable accommodation facilitator to handle requests for reasonable accommodations from more than 11,000 housing units in 85 properties managed by Warren Properties Inc. in 15 states. The defendants must also attend fair housing training, implement a non-discrimination policy, and comply with notice, monitoring and reporting requirements.
“Property owners and managers have no excuse for violating our nation’s fair housing laws by refusing to accommodate people with disabilities,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “Equal access to housing in the United States is a fundamental right, and this nation will not tolerate discrimination in housing.”
Kenyen R. Brown, U.S. Attorney for the Southern District of Alabama, stated, “This is the second major settlement of a housing discrimination case engineered by our office in the last year. We will continue to make civil rights and housing litigation a major priority of this office.”
“Persons with disabilities have a right to the reasonable accommodations they need to function and live as others do,” said John Trasviña, Department of Housing and Urban Development(HUD) Assistant Secretary for Fair Housing and Equal Opportunity. “Denying them that right violates the Fair Housing Act and HUD and the Department of Justice are committed to ensuring that property owners meet their responsibility to comply with the law.”
The lawsuit arose as a result of a complaint filed by the tenant with HUD. After an investigation of the complaint, HUD issued a charge of discrimination and the complainant elected to have the case heard in federal court. This case was litigated primarily by Assistant U.S. Attorneys Gary Moore and Deidre Colson, and Paralegal Specialist Regina Dickerson in the U.S. Attorney’s Office in Mobile with assistance from Elizabeth Singer, Director of the U.S. Attorneys’ Fair Housing Program in the Civil Rights Division’s Housing and Civil Enforcement Section in Washington, D.C.
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.
Alcatel-Lucent S.A. and Three Subsidiaries Agree to Pay $92 Million to Resolve Foreign Corrupt Practices Act InvestigationRead the Press Release
WASHINGTON – Alcatel-Lucent S.A. and three of its subsidiaries have agreed to pay a combined $92 million penalty to resolve a Foreign Corrupt Practices Act (FCPA) investigation into the worldwide sales practices of Alcatel S.A. prior to its 2006 merger with Lucent Technologies Inc., the Department of Justice announced.
As part of the agreed resolution, the department today filed a criminal information in U.S. District Court for the Southern District of Florida charging Alcatel-Lucent with one count of violating the internal control provisions of the FCPA, and one count of violating the books and records provisions of the FCPA. The department and Alcatel-Lucent agreed to resolve the charges by entering into a deferred prosecution agreement for a term of three years.
The department also filed a criminal information charging three subsidiaries: Alcatel-Lucent France S.A., formerly known as Alcatel CIT S.A.; Alcatel-Lucent Trade International A.G., formerly known as Alcatel Standard A.G.; and Alcatel Centroamerica S.A., formerly known as Alcatel de Costa Rica S.A. The three subsidiaries were each charged with conspiring to violate the anti-bribery, books and records, and internal controls provisions of the FCPA. Each of the three subsidiaries has agreed to plead guilty to the charges.
"Foreign bribery weakens economic development, erodes confidence in the marketplace and distorts competition," said Mythili Raman, Principal Deputy Assistant Attorney General of the Criminal Division. "The resolutions announced today and our related prosecutions of corporate executives demonstrate our sustained commitment to combating such conduct wherever we find it."
In addition to the $92 million penalty, Alcatel-Lucent and its three subsidiaries agreed to implement rigorous compliance enhancements. Alcatel-Lucent also agreed to retain an independent compliance monitor for a three-year period to oversee the company’s implementation and maintenance of an enhanced FCPA compliance program and to submit yearly reports to the Department of Justice. The charging documents and penalty reflect, among other things, that there was limited and inadequate cooperation by the company for a substantial period of time, but that after the merger, Alcatel-Lucent substantially improved its cooperation with the department’s investigation. In addition, the charging documents also credit Alcatel-Lucent for, on its own initiative and at a substantial financial cost, making an unprecedented pledge to stop using third-party sales and marketing agents in conducting its worldwide business.
According to court documents, Alcatel-Lucent was formed in late 2006 after Lucent Technologies merged with Alcatel, a French telecommunications equipment and services company. Starting in the 1990s and continuing through late 2006, Alcatel pursued many of its business opportunities around the world through subsidiaries like Alcatel CIT and Alcatel de Costa Rica using third-party agents and consultants who were retained by Alcatel Standard. This business model was shown to be prone to corruption, as consultants were repeatedly used as conduits for bribe payments to foreign officials and business executives of private customers to obtain or retain business in many countries.
Alcatel-Lucent’s three subsidiaries paid millions of dollars in improper payments to foreign officials for the purpose of obtaining and retaining business in Costa Rica, Honduras, Malaysia and Taiwan. In addition to the improper payments, Alcatel-Lucent also admitted that it violated the internal controls and books and records provisions of the FCPA related to the hiring of third-party agents in Kenya, Nigeria, Bangladesh, Ecuador, Nicaragua, Angola, Ivory Coast, Uganda and Mali. Overall, Alcatel-Lucent admitted that the company earned approximately $48.1 million in profits as a result of these improper payments.
Specifically, Alcatel CIT won three contracts in Costa Rica worth a combined total of more than $300 million as a result of corrupt payments to government officials and from which Alcatel reaped a profit of more than $23 million, according to court documents. Alcatel CIT wired more than $18 million to two consultants in Costa Rica, which had been retained by Alcatel Standard, in connection with obtaining business in that country. According to court documents, more than half of this money was then passed on by the consultants to various Costa Rican government officials for assisting Alcatel CIT and Alcatel de Costa Rica in obtaining and retaining business. As part of the scheme, the consultants created phony invoices that they then submitted to Alcatel CIT. According to court documents, senior Alcatel executives approved the retention of and payments to the consultants despite obvious indications that the consultants were performing little or no legitimate work.
In addition, according to court documents, Alcatel Standard hired a consultant in Honduras who was a perfume distributor with no experience in telecommunications. The consultant was retained after being personally selected by the brother of a senior Honduran government official. Alcatel CIT executives knew that a significant portion of the money paid to the consultant would be paid to the family of the senior Honduran government official in exchange for favorable treatment of Alcatel CIT. As a result of these payments, Alcatel CIT was able to retain contracts worth approximately $47 million and from which Alcatel earned $870,000.
In addition, according to court documents, Alcatel Standard retained two consultants on behalf of another Alcatel subsidiary in Taiwan to assist in obtaining an axle counting contract worth approximately $19.2 million. Alcatel and its joint venture paid these two consultants more than $950,000 despite the fact that neither consultant had telecommunications experience. In fact, according to court documents, Alcatel Standard’s purpose for hiring the consultants was so that Alcatel SEL could funnel payments through the consultants to Taiwanese legislators who had influence in the award of the contract. Alcatel earned approximately $4.34 million from this contract.
In a related case, two former Alcatel executives, Christian Sapsizian, a French citizen and Alcatel CIT executive, and Edgar Valverde Acosta, a Costa Rican citizen and president of Alcatel de Costa Rica, were charged in March 2007 with conspiring to violate the FCPA, making corrupt payments in violation of the FCPA, and laundering the bribe payments through a third-party. Sapsizian was arrested in Miami in late 2006 and pleaded guilty on June 6, 2007, to FCPA violations. He was sentenced on Sept. 23, 2008, in the U.S. District Court for the Southern District of Florida to 30 months in prison. Sapsizian admitted that from February 2000 through September 2004, he conspired with Valverde and others to make millions of dollars in bribe payments to Costa Rican officials in order to obtain a telecommunications contract on behalf of Alcatel. Valverde remains a fugitive, and is considered innocent until proven guilty in a court of law.
In a related matter, the U.S. Securities and Exchange Commission (SEC) reached a settlement filed today in which Alcatel-Lucent consented to the entry of a permanent injunction against FCPA violations and agreed to pay $45,372,000 in disgorgement and prejudgment interest. Alcatel-Lucent also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program.
In January 2010, Alcatel-Lucent also agreed to pay $10 million to settle a corruption case brought by the government of Costa Rica arising out of the bribery of Costa Rican officials by the company. The settlement marked the first time in Costa Rica’s history that a foreign corporation agreed to pay the government damages for corruption.
The case is being prosecuted by Deputy Chief Charles E. Duross and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section. The department also acknowledges the significant contributions to this investigation by Assistant U.S. Attorney Mary K. Dimke, formerly of the Fraud Section. Significant assistance was provided by the SEC’s Miami Regional Office, the Criminal Division’s Office of International Affairs, the U.S. Attorney’s Office for the Southern District of Florida, the FBI, U.S. Immigration and Customs Enforcement, the Office of the Attorney General in Costa Rica, the Fiscalia de Delitos Economicos, Corrupcion y Tributarios in Costa Rica, the French Ministry of Justice, the Tribunal de Grande Instance de Paris, and Service Central de Prévention de la Corruption.
23 December 2010
Moses Lake Settlement Funds Cleanup and Ends LitigationRead the Press Release
WASHINGTON— Parties responsible for contamination at the Moses Lake Wellfield Superfund Site have reached a settlement that provides the funding necessary to clean up the site. Cleanup of TCE (trichloroethylene), an industrial solvent, and other contaminants was initiated by the U.S. Army Corps of Engineers and will be completed by the Environmental Protection Agency (EPA). Under the consent decree lodged today in federal district court in Yakima, Wash., the federal government has pledged to provide an estimated $55 million in cleanup funds. Other cleanup funding, in the amount of $3.25 million, will be provided by The Boeing Company, Lockheed Martin and the city of Moses Lake.
"This settlement will ensure the cleanup of TCE from groundwater at the Moses Lake Superfund Site." said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The Justice Department expects those responsible for pollution to pay for cleanup. This settlement shows the federal government’s willingness to live up to that standard when it is responsible for pollution."
The settlement will fund the cleanup actions selected by EPA in September 2008. "EPA’s cleanup will ensure that residents in and around the city of Moses Lake are protected from contaminants in the groundwater," said Dan Opalski, Director of EPA’s Office of Environmental Cleanup for Washington, Oregon, Idaho and Alaska.
"Our state’s strong partnership with the Department of Justice means that a large area of contamination will, at long last, be cleaned up," said Washington Attorney General Robert M. McKenna. "Our office is proud to provide the legal work that plays a critical role in improving the quality of natural resources in the state of Washington."
"We are pleased to be part of this agreement, and we look forward to working with EPA to clean up groundwater on this site," said Jim Pendowski, the Washington Department of Ecology’s Toxics Cleanup Program manager.
The settlement resolves a lawsuit brought by the city of Moses Lake as well as potential lawsuits by the federal government and the state of Washington.
The consent decree, lodged in the U.S. District Court for the Eastern District of Washington, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at http://www.justice.gov/enrd/Consent_Decrees.html.
Former Bell, California, Police Officer Sentenced to Nine Years on Federal Civil Rights Charge for Sexual AssaultRead the Press Release
WASHINGTON – A judge sentenced Feliciano Sanchez, a former officer with the Bell, Calif., Police Department, to nine years in federal prison and three years of supervised release for sexually assaulting a female motorist and violating her civil rights, the Justice Department announced.
Sanchez, 35, of Pico Rivera, Calif., pleaded guilty last year to violating the female victim’s civil rights when he forced her to perform oral sex after stopping her for a traffic violation. Sanchez admitted in court that on May 16, 2007, he took the victim in his patrol car to an isolated parking lot away from the traffic stop. During the assault, Sanchez placed his hand on his duty weapon and forced the victim to perform the sex act.
According to evidence presented in court and in documents filed by prosecutors, Sanchez forced the victim to commit the sex act while armed and in his full police uniform. After the incident, Sanchez twice went to the victim’s workplace to tell her that he would be watching her, which caused her to quit her job.
"These actions not only brutalized the victim, but undermined the public’s trust in its law enforcement officers," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Department will aggressively prosecute law enforcement officers who violate the rights of the people they have sworn to protect and disregard the laws they have pledged to uphold."
“This former police officer violated his oath to serve and protect the community by committing a crime that was particularly offensive, dehumanizing and harmful,” said U.S. Attorney André Birotte Jr. “In this case, Mr. Sanchez committed an egregious assault, caused incalculable pain and suffering to the victim, and damaged the honor of the thousands of men and women in law enforcement who serve us every day.”
This case was investigated by agents from the FBI’s Los Angeles Field Office. The case was prosecuted by former Assistant U.S. Attorney Tammy Spertus of the U.S. Attorney’s Office for the Central District of California, and Trial Attorney Karen Ruckert Lopez and former Trial Attorney Christine Dunn of the Justice Department’s Civil Rights Division.
Beacon, New York, Police Department Enters into Agreement with the United States to Reform Its Policies and PracticesRead the Press Release
NEW YORK – The Justice Department announced today an agreement with the Beacon, N.Y., Police Department (BPD) to resolve the department’s investigation of the BPD, in accordance with the Violent Crime Control and Law Enforcement Act of 1994. That law authorizes the attorney general to file suit to reform police departments that may be engaging in a pattern or practice of violating citizens’ federal rights.
"Communities must be able to trust their police departments to protect and promote public safety," said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. "This agreement will ensure that residents of Beacon can feel confident that their police department will always act in their best interest and will improve the department’s operations that will protect the community."
"We are pleased that the Beacon Police Department has concluded a cooperative effort to improve its policies and procedures regarding use of force, review of officer conduct and citizen complaints so that they may better protect all of the people of Beacon," said U.S. Attorney for the Southern District Preet Bharara. "We will continue to monitor and enforce the civil rights laws."
Today’s agreement concludes the investigation without any finding that the BPD violated the law, but implements a series of reforms and improvements designed to improve the operation of the BPD. On June 21, 2005, and Nov. 14, 2008, the department’s Civil Rights Division Special Litigation Section and the U.S. Attorney’s Office issued technical assistance letters to the BPD. The agreement, signed today by the department, implements those recommendations. Under the terms of the agreement finalized today, the BPD has agreed to, among other things:
- Revise its use of force policy to emphasize verbal de-escalation techniques, and specifically prohibit the use of the carotid hold absent exigent circumstances;
- Specifically limit the type of ammunition allowed and mandate the exact amount of ammunition officers must carry;
- Revise its OC spray policies to ensure that OC spray is appropriately used and that all uses are reported;
- Revise its policies requiring the review and/or investigation of all uses of force, beyond unresisted handcuffing, to be consistent as to the requirements for investigation and review of uses of force;
- Develop standards for its vehicle pursuit/roadblock policy to clarify the circumstances in which pursuits should be authorized;
- Implement a formal, structured, and consistent system for handling complaints from members of the public;
- Create a policy development committee and, where appropriate, seek input from the community on new policies; and
- Develop a risk assessment and management system that will examine and review officer conduct on a regular basis as a proactive measure to minimize and detect misconduct, and to identify training and policy issues.
The agreement will remain in place for two years, provided that the parties agree that the BPD has maintained substantial compliance with its terms.
The relevant provision of the Violent Crime Control and Law Enforcement Act of 1994, known by its statutory provision as "Section 14141," requires the Department of Justice to focus on systemic problems in police departments rather than individual, isolated problems. The department may enforce the statute through the filing of a federal court complaint or, as here, by voluntary compliance agreement.
Special Litigation Section Trial Attorney Cathleen Trainor and Assistant U.S. Attorney David J. Kennedy of the Southern District of New York are handling the case.
Attorney General Eric Holder Welcomes Drug Enforcement Administrator and U.S. Marshals Service DirectorRead the Press Release
WASHINGTON – Attorney General Eric Holder welcomed the confirmation of the new Director of the U.S. Marshals Service (USMS), Stacia A. Hylton, and Administrator of the Drug Enforcement Administration (DEA), Michele M. Leonhart. Hylton and Leonhart were confirmed yesterday by the U.S. Senate.
“These two highly experienced individuals will help lead the department with dedication, sound judgment and integrity,” said Attorney General Holder. “I am pleased that Stacia Hylton will return to the U.S. Marshals Service to build upon 29 years of distinguished service at the department. With more than 30 years of exemplary service at the Department of Justice, I look forward to continuing to work with Michele Leonhart in her new role at the DEA.”
The mission of the USMS is to enforce federal laws and provide support to virtually all elements of the federal justice system by providing for the security of federal court facilities and the safety of judges and other court personnel; apprehending criminals; exercising custody of federal prisoners and providing for their security and transportation to correctional facilities; executing federal court orders; seizing assets gained by illegal means and providing for the custody, management and disposal of forfeited assets; assuring the safety of endangered government witnesses and their families; and collecting and disbursing funds.
Stacia A. Hylton will return to USMS after operating her own consulting company, Hylton Kirk & Associates. Hylton has a long history with the Department of Justice, having served in federal law enforcement within the department for 29 years. Previously, she served as the Federal Detention Trustee from 2004-2010. Prior to that, she served in a number of leadership positions within USMS from 1980-2004, including Acting Deputy Director, Assistant Director of Prisoner Operations, Chief Deputy in the District of South Carolina and Chief of Judicial Security Programs.
She is a recipient of the Attorney General’s Edmund J. Randolph Award and the Presidential Rank Award for Distinguished Service. Hylton attended Northeastern University where she earned her Bachelor’s of Science degree in Criminal Justice in 1983.
The mission of the DEA is to enforce the controlled substances laws and regulations of the United States. Using the agency’s unique operational and intelligence capabilities, DEA successfully identifies, investigates, disrupts, and dismantles major drug trafficking organizations around the globe.
Michele Leonhart has more than 30 years of law enforcement experience. She is the first female DEA Special Agent to rise through the ranks of the agency to become its Administrator, and only the second woman to lead the agency. She was unanimously confirmed by the Senate on March 8, 2004, to serve as DEA Deputy Administrator and became the Acting Administrator in 2007.
Throughout her career at the department, Special Agent Leonhart served in senior management roles in DEA headquarters as well as Field Divisions across the United States. She first joined the DEA in 1980 as a Special Agent in Minneapolis and St. Louis until promoted to DEA’s supervisory ranks in San Diego in 1988. She became the first woman to lead a DEA field division as a Special Agent-in-Charge when she directed the DEA’s San Francisco Field Division in 1997, and later commanded DEA’s Los Angeles Field Division. Prior to becoming a DEA Special Agent, she was a police officer with the Baltimore Police Department.
Attorney General Eric Holder Announces Acting Director for the Executive Office for Immigration ReviewRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced the appointment of Juan Osuna as Acting Director for the Executive Office for Immigration Review (EOIR).
“Juan has been with the department for more than a decade and has developed an extensive knowledge of immigration litigation, and earned a reputation as a diligent and thoughtful advocate and manager,” said Attorney General Holder. “I am confident he will lead the office with the highest standards of professionalism, integrity and dedication.”
The Executive Office for Immigration Review (EOIR) was created on Jan. 9, 1983, through an internal department reorganization which combined the Board of Immigration Appeals (BIA) with the Immigration Judge function previously performed by the former Immigration and Naturalization Service (INS) (now part of the Department of Homeland Security). The Office of the Chief Administrative Hearing Officer (OCAHO) was added in 1987.
EOIR is headed by a Director who is responsible for the supervision of the Chairman of the Board of Immigration Appeals (BIA), the Chief Immigration Judge, the Chief Administrative Hearing Officer and all agency personnel.
Since earlier this year, Osuna has worked as an Associate Deputy Attorney General working on immigration policy, Indian country matters, pardons and commutations, and other issues. Prior to that, he worked in the department’s Civil Division, where, in addition to handling immigration policy, he also oversaw civil immigration-related litigation in the federal courts. Previously he served as chairman of the BIA, where he managed the highest administrative tribunal on immigration matters in the United States, comprised of 250 employees, including 15 Board Members, 135 attorneys and support personnel. He was first appointed to the BIA in 2000 and became the chairman in 2008.
While at the BIA, Osuna put in place a number of reforms and oversaw the Attorney General’s 2006 reform plan, which increased the quality and transparency of the Board’s decisions, and he adjudicated hundreds of appeals from decisions of Immigration Judges made in removal proceedings.
Osuna also teaches immigration policy at George Mason University School of Law in Arlington, Va.
Osuna received a B.A. from George Washington University, a law degree from American University’s Washington College of Law and a master’s degree in law and international affairs from American University’s School of International Service.
Attorney General Announces Appointment of Robin C. Ashton as Head of the Office of Professional ResponsibilityRead the Press Release
WASHINGTON — Attorney General Eric Holder today announced the appointment of Robin C. Ashton to serve as head of the Office of Professional Responsibility (OPR) at the Department of Justice.
“As a veteran career prosecutor, Robin is uniquely qualified to serve as Counsel for Professional Responsibility, and I am confident she will lead the office with the highest standards of professionalism, integrity and dedication,” said Attorney General Holder.
The Office of Professional Responsibility is responsible for investigating allegations of professional misconduct involving department attorneys.
Ashton has worked in the U.S. Attorney’s Office for the District of Columbia since 1991, serving most recently as the Executive Assistant U.S. Attorney for Management where she managed and directed the oversight of significant civil and criminal cases and special operations.
She served as Deputy Director in the Executive Office for U.S. Attorneys (EOUSA) at the department from 2001 to 2005, where she worked closely with the 94 U.S. Attorneys’ Offices and provided oversight of the litigation divisions and operational components.
Prior to joining EOUSA, Ashton served as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the District of Columbia for over a decade where she handled numerous complex appeals in the D.C. Circuit and the D.C. Court of Appeals, prosecuted over 50 felony jury trials and supervised hundreds of grand jury investigations. Ashton began her career at the department in the litigation section of the Antitrust Division.
She was awarded both the Attorney General’s Award for Outstanding Leadership in Management and the United States Attorney’s Award for Meritorious Service in 2010, and EOUSA’s Director’s Award for Executive Achievement in 2004.
Ashton received her B.A. in English from the University of Michigan and her J.D. from the College of William and Mary, Marshall-Wythe School of Law.
22 December 2010
U.S. Clean Water Act Settlement in Northeast Ohio to Protect Lake Erie, Revitalize Neighborhoods and Create Green JobsRead the Press Release
WASHINGTON – A comprehensive Clean Water Act settlement with the Northeast Ohio Regional Sewer District (NEORSD) will address the flow of untreated sewage into Cleveland area waterways and Lake Erie, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today. The settlement will safeguard water quality and protect human health by capturing and treating more than 98 percent of wet weather flows entering the combined sewer system, which services the city of Cleveland and 59 adjoining communities.
"We are pleased that NEORSD has decided through this consent decree to take the steps necessary to dramatically reduce its overflows in order to attain compliance with the Clean Water Act," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resource Division of the Department of Justice. "This settlement – which incorporates green infrastructure, major combined sewer overflow control measures, increases in treatment plant capacity, and the possibility of transforming vacant brownfields located in minority and low income residential areas into valuable community assets – will be a model for the future."
"Today’s landmark settlement will advance environmental justice and revitalize Cleveland communities by investing in green infrastructure," said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. "This commitment will not only protect human health and the environment, it will ensure that Cleveland residents are protected from raw sewage and have access to clean water, beaches and communities."
NEORSD discharges nearly five billion gallons of untreated, raw sewage approximately 3,000 to 4,000 times per year into Lake Erie and nearby rivers. Today’s settlement will require NEORSD to spend approximately $3 billion to install pollution controls, including the construction of seven tunnel systems ranging from two to five miles in length that will reduce the discharges of untreated, raw sewage to approximately 537 million gallons per year.
"This approach will provide the opportunity for the Northeast Ohio Regional Sewer District to use this settlement to leverage and strengthen partnerships with community land banks to utilize brownfields and vacant properties for green water infrastructure," said Mathy Stanislaus, EPA’s OSWER Assistant Administrator. "This will revitalize adjacent neighborhoods and communities and residents will benefit from the transformation of these under utilized lands into new community assets."
Today’s settlement will also significantly advance the use of large scale green infrastructure projects to control wet weather sewer discharges by requiring NEORSD to invest at least $42 million in green infrastructure projects. These projects will capture an additional 44 million gallons of wet weather flow beyond what the tunnels and other traditional infrastructure construction improvements will capture. Green infrastructure involves the use of properties to store, infiltrate, and evaporate stormwater to prevent it from getting into the combined sewer system. Examples of potential green infrastructure projects include wetlands, troughs, cisterns, or other formations to store water, and rain gardens, urban croplands, and permeable pavement to allow for greater infiltration of water into the ground.
The settlement will also provide NEORSD with the opportunity to propose larger uses of green infrastructure in exchange for reductions in the scope of traditional infrastructure projects. NEORSD would have the potential to use legal and financial mechanisms such as the Cleveland and Cuyahoga County land banks to transform the area’s numerous vacant or abandoned properties to productive use -- helping to revitalize disadvantaged communities and resulting in cleaner air and green space. NEORSD will collaborate with local community groups, including those representing minority and/or low-income neighborhoods in selecting the locations and types of green infrastructure projects to propose. These pioneering green infrastructure portions of the settlement will further the Department of Justice and EPA’s work to advance environmental justice.
In addition to installing controls and investing in green infrastructure, NEORSD will spend $1 million to operate a hazardous waste collection center. The center will provide communities in Cuyahoga County with a permanent location to drop off household hazardous waste. The collection center is expected to collect and dispose of one million pounds of hazardous waste per year. NEORSD will also spend approximately $800,000 to improve other water resources.
Today’s settlement also requires the district to pay a penalty of $1.2 million which will be distributed evenly between the United States and the State of Ohio. The settlement, lodged in the U.S. District Court for the Northern District of Ohio, is subject to a 30-day public comment period and final court approval.
A copy of the consent decree lodged today is available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html. More information on the settlement: www.epa.gov/compliance/resources/cases/civil/cwa/neorsd.htmlToday’s settlement is the latest in a series of Clean Water Act settlements that will reduce the discharge of raw sewage and contaminated stormwater into United States’ rivers, streams and lakes. Raw sewage contains pathogens that threaten public health, leading to beach closures and public advisories against fishing and swimming. This problem particularly affects older urban areas, where minority and low-income communities are often concentrated. Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of EPA’s National Enforcement Initiatives for 2011to 2013. The Initiative will focus on reducing discharges from sewer overflows by obtaining cities’ commitments to implement timely, affordable solutions to these problems, including the increased use of green infrastructure and other innovative approaches.
Justice Department Sues to Shut Down Chicago Tax Return PreparerRead the Press Release
WASHINGTON – The United States has sued a Chicago tax return preparer to bar her from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction suit filed in the Northern District of Illinois alleges that Martha A. Jones claims bogus tax deductions on her customers’ federal income tax returns. Jones allegedly includes deductions for fabricated charitable contributions, employee business expenses and other items. According to the government complaint, the Internal Revenue Service examined 56 of the returns that Jones prepared for tax years between 2005 and 2008 and found that all of them contained inaccuracies. The complaint also alleges that Jones fails to sign her customers’ returns and has continued to do so even after being advised that she is legally required to sign the tax returns that she prepares.
The complaint estimates that the tax losses to the United States from Jones’s misconduct could exceed $1 million.
In the past 10 years, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website.
Georgia Hospital Pays U.S. $13.9 Million to Resolve Medicaid False Claims Act AllegationsRead the Press Release
WASHINGTON – John D. Archbold Memorial Hospital Inc. has paid the United States a total of $13.9 million to settle allegations that the hospital submitted false claims to the state of Georgia’s Medicaid program, the Justice Department announced today.
The settlement resolves allegations that between November 2002 and July 2008, the Thomasville, Ga.-hospital made false representations to the Georgia Department of Community Health, the state agency that administers the Medicaid program in Georgia, that it was a public hospital for Medicaid purposes in order to increase the amount of Medicaid funds provided to the hospital. Under Medicaid rules, only public hospitals may participate in the Medicaid Upper Payment Limit (UPL) program. In addition, public hospitals receive additional Disproportionate Share Hospital (DSH) program funds that are not available to private hospitals. Contrary to its certification to the Georgia Department of Community Health, Archbold Memorial was in fact a private hospital, and as a result received millions of dollars in UPL and DSH funds to which it was not entitled.
"We are committed to protecting the integrity of the Medicaid program and ensuring that health care providers do not game the system to the detriment of the poor, disabled, and young people served by this important program," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.
"The U.S. Attorney’s Office will continue to use the False Claims Act to protect programs like Medicaid, which rely on the honesty and accuracy of information provided by program providers to determine the amount of money paid by the United States," said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia in Atlanta. "Any false statements made in order to increase the amount of money the federal government spends to provide health care to its beneficiaries will be ferreted out and the funds recovered."
The civil settlement resolves a lawsuit filed in federal court in the Northern District of Georgia under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblower – Wesley Simms, M.D.– will receive $695,151 from the settlement amount.
This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 now approach $6.8 billion.
The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of Georgia, the Commercial Litigation Branch of the Justice Department’s Civil Division, and the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.
Former UBS Banker Pleads Guilty to Helping American Client Conceal Assets OffshoreRead the Press Release
WASHINGTON - Renzo Gadola, 44, has pleaded guilty to conspiring to defraud the United States, the Justice Department announced today. Gadola, a former UBS banker, was arrested in Miami after meeting with a client at a Miami hotel and attempting to persuade that client to not disclose to the United States that the client owned and controlled a bank account at Basler Kantonalbank, a regional bank headquartered in Basel, Switzerland. Gadola is scheduled to be sentenced on March 10, 2011, by U.S. District Judge James L. King. He faces a maximum of five years in prison.
According to court documents, Gadola, a citizen and resident of Switzerland, was a registered investment advisor with the U.S. Securities and Exchange Commission (SEC). From approximately 1995 through August of 2008, Gadola was employed as a private banker by UBS AG, Switzerland’s largest bank. In February 2009, Gadola began working in Switzerland as an independent investment advisor, doing business under the name RG Investment Partner AG.
According to court documents, Gadola worked closely with a fellow former UBS banker who was not registered with the SEC and who had indicated that he was afraid of traveling to the United States for fear of being arrested because of his cross-border banking activities. Hence, the two arranged that Gadola would travel to the United States and meet with the clients to discuss their investments in undeclared accounts.
According to court documents, on Nov. 6, 2010, Gadola met with a client in a Miami hotel. The meeting was recorded. This client owned and controlled an undeclared account at Basler Kantonalbank. The undeclared account was funded when the client provided Gadola’s partner, the former UBS banker, with approximately $445,000 in cash. The client gave the cash to Gadola’s partner during two meetings at a hotel in New Orleans.
According to court documents, during the Nov. 6, 2010, meeting, Gadola attempted to persuade the client to not disclose the Basler Kantonalbank account to United States authorities. Gadola told the client that there was a "99.9 %" chance the client had nothing to worry about because the "likelihood . . .that they will somehow. . . find out about the account is practically zero percent." Further, Gadola told the client that there was no "paper trail" associated with the undeclared account.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Acting Assistant Attorney General for the Tax Division John DiCicco, and IRS Special Agent in Charge Daniel W. Auer commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsel Kevin M. Downing, Trial Attorney Mark F. Daly, Trial Attorney Michelle M. Petersen of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman, who are prosecuting the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.justice.gov/tax/ .
21 December 2010
Outlaws Motorcycle Gang Members Found GuiltyRead the Press Release
WASHINGTON – The national president and three members of the American Outlaw Association (Outlaws) motorcycle gang have been found guilty of participating in a violent criminal organization by a federal jury in the Eastern District of Virginia.
U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; and Edgar A. Domenech, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division announced the verdict after it was accepted by U.S. District Judge Henry E. Hudson.
“Today’s conviction of the Outlaw’s national president strikes a crippling blow to his violent motorcycle gang,” said U.S. Attorney MacBride. “Riding a Harley doesn’t make you a criminal – but you cross the line when your motorcycle gang engages in violent criminal activity as a way of doing business. Virginia is a safe place today because ATF agents put their lives on the line to bring this case. Thanks to their sacrifice, the leadership of this gang has been brought to justice, along with the enforcers who carried out his orders.”
“Today, a Virginia jury struck back against the violence that the Outlaws motorcycle gang has been spreading in our communities,” said Assistant Attorney General Breuer. “In obtaining convictions against the gang’s national president and other members, the Justice Department is sending a strong message to organized criminal enterprises of all stripes that we will not allow them to operate without repercussion. We are committed to bringing significant prosecutions against the leaders of the country’s most notorious and violent groups.”
“This investigation would not have been a success without the dedicated and hard working agents and prosecutors that devoted several years to this undercover operation,” said ATF Special Agent in Charge Edgar Domenech. “This is another example of how our agents work day in and day out to build cases against violent criminals.”
Today, the jury found Jack Rosga, aka “Milwaukee Jack,” 53, guilty of conspiring to engage in racketeering activities and conspiring to commit violence in aid of racketeering. Rosga is the national president of the Outlaws organization and is also a member of the Gold Region, Milwaukee Chapter. He faces a maximum of 20 years in prison for the racketeering charge and a maximum of three years in prison for the violence charge.
The other members of the Outlaws who were convicted today include:
- Mark Jason Fiel, aka “Jason,” 37, a former Outlaws member in the Copper Region and a former leader in the Manassas/Shenandoah Valley Chapter. Fiel was convicted of conspiring to engage in racketeering activities and conspiring to commit violence in aid of racketeering.
- Harry Rhyne McCall, 53, an Outlaws member in the Copper Region, Lexington, N.C., Chapter. McCall was convicted of conspiring to engage in racketeering activities, conspiring to commit violence in aid of racketeering, violence in aid of racketeering, and possession of firearms in furtherance of a crime of violence. The violence in aid of racketeering charge carries a maximum penalty of 20 years in prison, while the firearm charge carries a consecutive sentence of five years up to life in prison.
- Christopher Timbers, aka “Alibi,” 38, an Outlaws member in the Manassas/Shenandoah Valley Chapter of the Copper Region. Timbers was convicted of conspiring to engage in racketeering activities, conspiring to commit violence in aid of racketeering, and violence in aid of racketeering. Timbers was acquitted of one count of possession of firearms in furtherance of a crime of violence.
Also today, Dennis Haldermann, aka “Chew Chew,” 46, a member of the Pagans Motorcycle Club from Chesterfield, Va., was acquitted of a violence in aid of racketeering charge.
Sentencing for Rosga, Fiel, McCall and Timbers is scheduled for April 8, 2011.
Evidence at trial showed that the Outlaws motorcycle gang is a highly organized criminal enterprise with a defined, multi-level chain of command that is ultimately overseen by Rosga, the national president. Leaders and members of the Outlaws in multiple states including Wisconsin, Maine, Montana, North Carolina, Tennessee, South Carolina and Virginia are charged in a June 2010 indictment. Under Rosga’s leadership, the enterprise is alleged to have engaged in violent racketeering activities with the intent to expand its influence and to control various parts of the country against rival motorcycle gangs, particularly the Hell’s Angels.
According to evidence at trial, the Outlaws planned multiple acts of violence against rival motorcycle gangs, including shows of force at the Cycle Expo in Henrico County, Va., in 2006; Dinwiddie Racetrack in Virginia in 2008; the Cockades Bar in Petersburg, Va., in 2009; Daytona Bike Week in Florida in 2009; and the Easyrider Bike Expo in Charlotte, N.C., in 2010. The indictment alleges that in the Cockades Bar show of force, members of the Pagans Motorcycle Club joined the Outlaws in the assault against rival gangs.
In addition, the evidence at trial showed that in 2008, the Outlaws established a clubhouse in Rock Hill, S.C., in territory traditionally controlled by the Hell’s Angels. The Outlaws understood that this act would create violent friction between the two organizations.
Evidence at trial also established that in September 2009, two members of the Outlaws were assaulted in Connecticut by members of the Hell’s Angels. This caused the Outlaws to increase their already violent approach to the Hell’s Angels in retaliation. In October 2009, this led to the alleged attempted murder of a Hell’s Angels member outside the Hell’s Angels’ clubhouse in Canaan, Maine. The victim was seriously injured from gunshot wounds to his neck.
In addition, the evidence showed that on April 17, 2010, Outlaw members of the Milwaukee and other Wisconsin chapters in the Gold Region, participated in a charitable event known as the Flood Run, crossing from Wisconsin into Minnesota where they brutally beat members of the Hell’s Angels and stole their club patches, also known as “colors.”
Witnesses at the trial also testified that the Outlaws regularly used and distributed narcotics and regularly used firearms or other dangers weapons.
The four men convicted today are among 27 individuals indicted in June 2010 as a result of a long-term investigation into criminal activities of the Outlaws motorcycle gang. To date, 17 of those indicted have pleaded guilty and one was previously convicted in an earlier trial.
The case was investigated by the ATF’s Washington Field Division; the FBI’s Washington Field Office; the Virginia State Police; the Chesterfield County Police Department; the Maine State Police, and numerous other law enforcement partners throughout the country. The prosecution was handled by Assistant U.S. Attorneys Dennis Fitzpatrick and Peter S. Duffey, Special Assistant U.S. Attorney Sam Kaplan, and Trial Attorney Theryn G. Gibbons of the Justice Department’s Criminal Division’s Gang Unit.
Justice Department Requires Lucasfilm to Stop Entering into Anticompetitive Employee Solicitation AgreementsRead the Press Release
WASHINGTON — The Department of Justice announced today that it has reached a settlement with Lucasfilm Ltd. that prevents it from entering into agreements restraining employee recruitment. The department said that the agreement between Lucasfilm and Pixar eliminated important forms of competition to attract highly skilled employees and, overall, significantly diminished competition to the detriment of affected employees who were likely deprived of information and access to better job opportunities.
The Department of Justice’s Antitrust Division filed a civil antitrust complaint today in U.S. District Court for the District of Columbia, along with a proposed settlement that, if approved by the court, would resolve the lawsuit.
Today’s complaint arose out of a larger investigation by the Antitrust Division into employment practices by high tech companies. In September 2010, the Antitrust Division reached a settlement with Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar that prevented the companies from entering into no solicitation agreements for employees.
According to today’s complaint, Lucasfilm and Pixar agreed not to cold call each other’s employees; agreed to notify each other when making an offer to an employee of the other company; and agreed, when offering a position to the other company’s employee, not to counteroffer with compensation above the initial offer.
The department said that Pixar is not a named defendant in today’s complaint because the relief the department obtained in the previous settlement is sufficient to prevent Pixar from entering into these types of agreements.
"The agreement between Lucasfilm and Pixar restrained competition for digital animators without any procompetitive justification and distorted the competitive process," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The proposed settlement resolves the department’s antitrust concerns."
The digital animation sector faces strong demand for employees with advanced or specialized skills. A principal means by which digital animation companies recruit these employees is their direct solicitation, referred to as "cold calling." Savvy employees can use these companies’ tactics to extract multiple rounds of bidding, thus increasing their eventual salaries. These forms of competition, when unrestrained, result in better career opportunities, the department said.
The complaint alleges that the companies’ actions reduced their ability to compete for digital animation workers and interfered with the proper functioning of the price-setting mechanism that otherwise would have prevailed in competition for employees. None of the agreements was limited by geography, job function, product group or time period.
The proposed settlement, which if accepted by the court will be in effect for five years, prohibits the companies from engaging in anticompetitive agreements relating to employee hiring and retention. Although the complaint alleges only that the companies agreed to certain practices, the proposed settlement more broadly prohibits the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting or otherwise competing for employees. The companies will also implement compliance measures tailored to these practices.
Lucasfilm Ltd. is a California corporation with its principal place of business in San Francisco.
The proposed settlement, along with the department’s competitive impact statement, will be published in The Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to James J. Tierney, Chief, Networks & Technology Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street N.W., Suite 7100, Washington D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Harris County, Texas, Commissioner and Local Real Estate Developer Indicted for Alleged Bribery ConspiracyRead the Press Release
WASHINGTON– A Harris County, Texas, commissioner and a Houston-based real estate developer have been charged with bribery conspiracy in an indictment returned yesterday by a federal grand jury in the Southern District of Texas, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
The indictment, unsealed today, charges Gerald R. Eversole, 67, and Michael D. Surface, 50, each with one count of conspiring to commit federal program bribery, and each with one count of federal programs bribery. Eversole was also charged with two counts of making a false statement on his federal tax return by failing to report things of value allegedly provided to him by Surface.
According to the indictment, from August 2000 through October 2007, Surface provided Commissioner Eversole with a series of things of value both directly and indirectly, including checks written directly to Commissioner Eversole, cashier’s checks provided to Commissioner Eversole, payments made to third parties, a loan guarantee, and travel and entertainment expenses. The indictment alleges that during the same time period Commissioner Eversole was accepting these things of value, Surface sought and obtained at least five lucrative Harris County contracts. These included contracts to house Harris County offices, as well as a construction maintenance contract. The indictment alleges that Commissioner Eversole repeatedly voted to award contracts to Surface and entities controlled by Surface, as well as used his official position to ensure funding for these contracts.
The indictment also alleges that Commissioner Eversole repeatedly voted to appoint Surface as chairman of the board of the Harris County Sports and Convention Corporation, a quasi-governmental organization charged with overseeing Reliant Stadium and Reliant Park.
The indictment alleges that Eversole and Surface sought to conceal their relationship by, among other things, using cashier’s checks and payments to third parties. The indictment alleges that Surface also actively sought to conceal his presence in two of the contracts so as to avoid scrutiny, and that Eversole concealed his acceptance of the things of value by filing false financial disclosure forms with the Harris County clerk.
The maximum penalty for the conspiracy charge is five years in prison and a $250,000 fine. The charge of federal program bribery carries a maximum penalty of 10 years in prison and a $250,000 fine. Each count of making a false statement carries a maximum penalty of three years in prison and a $100,000 fine.
An indictment is merely an accusation, and defendants are presumed innocent unless proven guilty in a court of law.
This case is being prosecuted by Senior Trial Attorney Mary K. Butler and Trial Attorney John P. Pearson of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI and the Internal Revenue Service–Criminal Investigation.
Former Construction Company Executive Doing Business in Colorado Pleads Guilty to Providing an Illegal GratuityRead the Press Release
WASHINGTON — A former managing executive of a construction company that had substantial business at Fort Carson, a U.S. Army installation in Colorado Springs, Colo., pleaded guilty to providing an illegal gratuity to a contracting officer, the Department of Justice announced today.
According to a one-count felony charge filed on Dec. 2, 2010, in U.S. District Court in Denver, Wendel P. Torres provided an illegal gratuity to William T. Armstrong, the former chief of the construction division of the Fort Carson Directorate of Contracting, who was authorized to award contracts for construction projects on behalf of the U.S. Army.
According to the court documents, prior to April 2007, Armstrong had awarded multiple construction contracts at Fort Carson to Torres’ company. Armstrong contacted Torres in approximately April 2007 regarding construction materials he needed for his home. After some discussion, in May of 2007, Torres arranged for delivery of the construction materials to Armstrong’s home. Torres informed Armstrong that he did not need to pay for the materials and Armstrong did not pay for the materials. On Sept. 2, 2010, Armstrong pleaded guilty to providing a false statement to the U.S. Army when he did not report the receipt of the materials in his annual financial disclosure report. The department said that Torres has agreed to cooperate with the department’s ongoing investigation related to anticompetitive conduct at Fort Carson.
Torres faces a maximum sentence of two years in prison and a $250,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s plea arises from an ongoing investigation related to the award of construction contracts at Fort Carson. This investigation is being conducted jointly by the Department of Justice Antitrust Division’s Chicago Field Office, the U.S. Army Criminal Investigation Command and the Defense Criminal Investigative Service, with the assistance of the U.S. Attorney’s Office in Denver.
Anyone with information concerning suspicious activity relating to the award of construction contracts at Fort Carson or other military bases should contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
20 December 2010
Pharmaceutical Manufacturer to Pay $280 Million to Settle False Claims Act CaseRead the Press Release
WASHINGTON – Dey Inc., Dey Pharma L.P. (formerly known as Dey, L.P.) and Dey L.P. Inc. have agreed to pay $280 million to settle False Claims Act allegations, the Department of Justice announced today. This settlement resolves claims by the United States that the defendants engaged in a scheme to report false and inflated prices for numerous pharmaceutical products, knowing that federal health care programs relied on those reported prices to set payment rates. The actual sales prices for the Dey products were far less than what Dey reported.
The United States alleged that Dey reported false prices for the following drugs: Albuterol Sulfate, Albuterol MDI, Cromolyn Sodium and Ipratropium Bromide. The difference between the resulting inflated government payments and the actual price paid by health care providers for a drug is referred to as the “spread.” The larger the spread on a drug, the larger the profit for the health care provider or pharmacist who is reimbursed by the government. The government alleges that Dey created artificially inflated spreads to market, promote and sell the drugs to existing and potential customers. Because payment from the Medicare and Medicaid programs was based on the false inflated prices, the government alleged that Dey caused false and fraudulent claims to be submitted to federal health care programs and, as a result, the government paid millions of claims for far greater amounts than it would have if Dey had reported truthful prices.
This is the fourth such settlement with pharmaceutical manufacturers that the Department of Justice has announced this month. On Dec.7, 2010, the Department announced settlements totaling $421.1 million involving similar allegations against three other manufacturers: Abbott Laboratories Inc., B. Braun Medical Inc. and Roxane Laboratories Inc.
“With this settlement, the Department of Justice has now recovered over $2 billion dollars from pharmaceutical manufacturers arising from similar unlawful drug pricing schemes. As the department alleged in its complaint against Dey, by offering customers one price and then falsely reporting inflated prices to the lists the government uses when calculating how much to pay for the drugs, pharmaceutical companies created an incentive for the purchase of their drugs by allowing buyers to pocket the difference between the actual price of the drug and the inflated government payment,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “ Taxpayer-funded kickback schemes like this not only cost federal health care programs millions of dollars, they threaten to undermine the integrity of the choices health care providers make for their patients.”
United States Attorney Carmen M. Ortizofthe District of Massachusetts said, “Our federally-funded health care programs pay for prescription drugs based in part on pricing information reported by pharmaceutical companies. When a company reports falsely inflated prices for the purpose of increasing its sales and profits, it undermines the integrity of our health care system. Drug companies must understand that they risk substantial liability if they report false drug pricing information.”
The settlement resolves a whistleblower action filed under the False Claims Act by Ven-A-Care of the Florida Keys Inc., a Florida home-infusion company, and its principals, entitled United States of America ex rel. Ven-a-Care of the Florida Keys Inc. v. Dey Laboratories, et al., Civil Action No. 05-11084-PBS (D. Mass). The False Claims Act’s qui tam provisions allow private persons with knowledge of fraud to file suit on behalf of the United States and share in any recovery. As part of this settlement, the Ven-A-Care whistleblowers will receive a share of approximately $67.2 million.
“This settlement with Dey highlights the Office of the Inspector General’s decade-long commitment to protecting against artificially inflated drug prices,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “Our analyses of drug price reporting practices – including the use of ‘Average Wholesale Price’ – have consistently identified excessive Medicare and Medicaid payments resulting from these practices.”
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Massachusetts and the Office of Inspector General of the Department of Health and Human Services.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and 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 $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 now approach $6.8 billion.
Justice Department Settles with Cosmetology School in Puerto Rico on Allegations of HIV DiscriminationRead the Press Release
WASHINGTON – The Justice Department today announced the settlement of an Americans with Disabilities Act (ADA) complaint against Modern Hairstyling Institute Inc. in Bayamón, Puerto Rico.
The Justice Department initiated its investigation in response to an allegation that Modern Hairstyling Institute Inc. discriminated against an HIV-positive applicant by denying her enrollment. Modern Hairstyling Institute Inc.’s cooperation in arriving at this agreement was an important factor in resolving the matter promptly, the department said.
Under the terms of the settlement agreement, Modern Hairstyling Institute Inc. made an offer of enrollment to the complainant, will cease requesting information about HIV/AIDS status from future applicants and will provide training to all employees about discrimination on the basis of disability. Modern Hairstyling Institute Inc. will also pay a $5,000 civil penalty to the United States and $8,000 in damages to the complainant.
“It is critical that we continue to work to eradicate discriminatory and stigmatizing treatment towards individuals with HIV based on unfounded fears and stereotypes,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The ADA clearly protects individuals with HIV and other disabilities from this kind of exclusion or marginalization.”
Title III of the ADA prohibits public accommodations, such as Modern Hairstyling Institute Inc. from excluding people with disabilities, including people with HIV, from enjoying the services, goods and accommodations provided. Those interested in learning out 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.
Justice Department Settles Housing Discrimination Lawsuit Against South Dakota Apartment OwnersRead the Press Release
WASHINGTON - The Justice Department today announced that South Dakota property owner TK Properties L.L.C. and one of its principals, Scott Terveen, have agreed to pay $30,000 in monetary damages and civil penalties to settle a Fair Housing Act lawsuit against them. The lawsuit alleges that they discriminated against three families who lived at Lakeport Village Apartments, a 48-unit apartment complex in Sioux Falls, S.D., that TK Properties and Terveen previously managed.
Today’s settlement, which must still be approved by the U.S. District Court for the District of South Dakota, partially resolves a lawsuit filed by the Department in October 2010 against TK Properties, Terveen, and two employees, Ann Wagner and Corey Anderson. The United States’ lawsuit alleged that defendants, through the actions of Wagner and Anderson, created a hostile housing environment for one African American family and two white families who associated with the African American family while they were tenants at Lakeport Village. The tenants eventually moved out as a result of the defendants’ conduct. Today’s settlement resolves the claims against TK Properties and Scott Terveen. The settlement does not resolve the United States’ claims against Wagner and Anderson, who no longer work for TK Properties. Wagner and Anderson did not respond to the complaint and the court entered a judgment of default against them in July 2010.
“No person or family should be denied the right to equal treatment in housing because of their race or because of the race of their friends or relatives,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This settlement illustrates the Department’s commitment to protecting equal housing opportunities for all.”
“This settlement helps ensure that equal housing opportunities required by law are available to all South Dakotans. Our office will not tolerate discrimination against persons based upon their race,” said U.S. Attorney for the District of South Dakota Brendan Johnson.
“Treating a family differently because of their race, and then to retaliate against another family for standing up for their neighbors’ fair housing rights, violates the law and is unacceptable in a nation founded on the principles of justice and equality,” said John Trasviña, Department of Housing and Urban Development (HUD) Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice will continue to work together to end all forms of housing discrimination.”
The lawsuit originated as a result of complaints the three families filed with HUD. After an investigation, HUD found reasonable cause to believe that unlawful discrimination had occurred and referred the matter to the Justice Department.
Under the settlement, TK Properties will pay $26,000 to the three families and $4,000 to the United States as a civil penalty. The settlement also requires TK Properties and Terveen to adopt non-discrimination policies at their rental properties, participate in fair housing training and require their employees to receive training. TK Properties and Terveen also admit the United States’ factual allegations about the discriminatory conduct carried out by Wagner and Anderson against the three families.
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 .
Former Senior Executives of Latin Node Inc. Charged with Bribing Honduran Officials and Money LaunderingRead the Press Release
WASHINGTON – Jorge Granados and Manuel Caceres, the former chief executive officer and the vice president of business development, respectively, for Miami-based telecommunications company Latin Node Inc. (LatiNode) have been indicted for allegedly paying more than $500,000 in bribes to government officials in Honduras, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; John V. Gillies, Special Agent in Charge of the FBI’s Miami Division, and Anthony V. Mangione, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Miami Field Office.
Granados, 54, and Caceres, 64, are charged with criminal violations of the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA), and international money laundering. The 19-count indictment, returned by a federal grand jury in Miami on Dec. 14, 2010, was unsealed today. The defendants were arrested today in Miami and made initial appearances in U.S. District Court for the Southern District of Florida.
“Foreign bribery, like domestic corruption, breeds instability and undermines democratic processes,” said Assistant Attorney General Breuer. “As this indictment and the previous guilty plea by LatiNode show, the department is committed to holding accountable individuals and companies alike for alleged foreign bribery schemes.”
“This new indictment represents the FBI’s commitment to investigating not just the corrupt acts of a corporate entity, but the individuals who are behind it,” said John V. Gillies, Special Agent in Charge, FBI Miami Division.”
“Anyone who believes paying bribes in foreign countries is just the cost of doing business should think about the repercussions – whether it is worth going to prison,” said Anthony V. Mangione, special agent in charge of ICE Homeland Security Investigations in Miami. “ICE HSI’s Foreign Corruption Investigative group will continue to provide resources and support to our international partners in this public corruption battle in an effort to maintain fair and honest business practices between our country and other nations.”
According to court documents, LatiNode provided wholesale telecommunications services using Internet protocol technology to countries throughout the world, including Honduras. In December 2005, LatiNode learned that it was the sole winner of an “interconnection agreement” with Empresa Hondureña de Telecomunicaciones (Hondutel), the wholly state-owned telecommunications authority in Honduras. The agreement permitted LatiNode to use Hondutel’s telecommunications lines in order to establish a network between Honduras and the United States and provide long distance services between the two countries. LatiNode was required to pay Hondutel a set rate per minute for calls to Honduras.
According to the indictment, soon after winning the contract with Hondutel, the defendants sought a reduction in the rates payable to Hondutel. The defendants also learned that a newly elected high-ranking government official’s friend had been made a manager of Hondutel, who considered rescinding the agreement with LatiNode. Caceres allegedly informed Granados and another LatiNode executive by e-mail that “it would be necessary to ‘give’ something to the [Hondutel] general manager [ ]. I will try this with [the manager].” Caceres said that he would “meet with these criminals,” adding “But I will solve this problem for you, I promise. Not only will we get a PP rate (preferential of preferentials) but the capacity we need. I have some things to reveal to them in exchange for what I’m going to ask of them.”
According to the indictment, the defendants and other LatiNode executives agreed to a secret deal to pay bribes to the manager, as well as to a senior attorney for Hondutel who acted as the manager’s “straw man,” and to a minister of the Honduran government who became a representative on the Hondutel Board of Directors. The alleged bribes were paid in exchange for keeping the interconnection agreement in place and receiving reduced rates and other economic benefits from Hondutel. Between September 2006 and June 2007, the defendants allegedly paid more than $500,000 in bribes to the officials, concealing many of the payments by laundering the money through LatiNode subsidiaries in Guatemala and to accounts in Honduras controlled by the Honduran government officials.
As the payments grew, according to the indictment, the defendants allegedly became concerned about the rising costs of the scheme and the possibility of detection. On one occasion, according to the indictment, Caceres forwarded to Granados an e-mail from the senior attorney, identifying four bank accounts to receive the bribe payments. Caceres told Granados, “I recommend sending [the manager] $100,000 tomorrow to the bank accounts and in the amounts according to the instructions in [the senior attorney’s] e-mail. We have stretched the rope to the maximum, but we are reaching the limit and we don’t want to break it. This payment will create tolerance for any late payments to Hondutel, avoiding the removal of capacity; on the contrary, it will help to get them to increase it for us.” According to the indictment, Granados approved the payments, and another LatiNode executive facilitated the wire transfers.
In early 2007, according to public filings, eLandia International Inc., announced an agreement to acquire LatiNode. The indictment alleges that t he defendants took additional measures to conceal the illicit payments during the acquisition due diligence process. Specifically, according to the indictment, Granados allegedly urged Caceres to formalize the secret rate reduction deal with the Honduran officials, as the issue could cause a “HUGE” problem during the process. The defendants also allegedly urged the Honduran officials to sign fraudulent “consulting contracts” that would disguise the true nature of the relationship. Caceres explained to the officials in an e-mail that, “[n]o government official (from Hondutel or from the government) can appear” on the consulting contract, and that future payments “will come from eLandia through Servicios IP, a firm of ours in Guatemala.”
On April 7, 2009, LatiNode pleaded guilty to a one-count information charging the company with a criminal violation of the FCPA. As part of the plea agreement, LatiNode agreed to pay a $2 million fine. The resolution of the criminal investigation of LatiNode reflected, in large part, the actions of eLandia in disclosing potential FCPA violations to the department after eLandia’s acquisition of LatiNode and discovery of the improper payments.
The conspiracy to commit violations of the FCPA carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000, or twice the value gained or lost. The conspiracy to commit money laundering count and the money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000, or twice the value of the monetary instrument or funds involved in the offense. The indictment also gives notice of criminal forfeiture.
The case is being prosecuted by Senior Litigation Counsel Jeffrey H. Knox and Trial Attorney Amanda Aikman of the Criminal Division’s Fraud Section. The case was investigated by the FBI’s Miami Field Office and HSI Foreign Corruption Investigations Group in Miami.
Former Alabama State Lobbyist Pleads Guilty in Wide-Ranging Conspiracy to Influence and Corrupt Votes Related to Electronic Bingo LegislationRead the Press Release
WASHINGTON – A former Alabama state lobbyist pleaded guilty today before U.S. Magistrate Judge Wallace Capel Jr. to his role in conspiring to bribe legislators in exchange for their favorable votes on pro-gambling legislation, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Special Agent in Charge Timothy J. Fuhrman of the FBI’s Mobile Field Office.
Jarrod D. Massey, 39, of Montgomery, Ala., pleaded guilty to one count of conspiracy to commit federal program bribery and five counts of federal program bribery. Massey and his 10 co-defendants were charged in a 39-count indictment returned by a federal grand jury on Oct. 1, 2010, with a variety of criminal offenses for their alleged roles in the bribery scheme. The remaining 10 defendants include two current Alabama state legislators, two former Alabama state legislators, two lobbyists, two business owners and one of their employees, and an employee of the Alabama legislature.
“Jarrod Massey has admitted that he bribed members of the Alabama state legislature in exchange for their votes in favor of electronic bingo gambling legislation,” said Assistant Attorney General Breuer. “In a democracy, votes should be cast on the merits and in the best interests of constituents, and not influenced by bribes and the possibility of personal gain. Mr. Massey has admitted his wrongdoing, and will now face the consequences of his corrupt conduct.”
“Today’s plea by Mr. Massey is another step in the investigation and prosecution of this significant public corruption matter,” said Special Agent in Charge Timothy J. Fuhrman of the FBI’s Mobile Field Office. “The FBI remains committed to continuing this investigation wherever the facts may lead and will devote all necessary investigative techniques, resources and efforts to its final resolution.”
According to information contained in court documents and presented during the plea hearing, Massey was employed from April 2006 until May 2010 as a registered lobbyist and consultant with Mantra Governmental, a lobbying firm he owned in Montgomery. Massey’s largest client was Ronald E. Gilley, who owned a controlling interest in Country Crossing, an entertainment and gambling development in Houston County, Ala., which also sought to offer electronic bingo gambling machines to the public. Milton E. McGregor owned a controlling interest in Macon County Greyhound Park Inc., also known as Victoryland, in Macon County, Ala., and Jefferson Country Racing Association in Jefferson County, Ala. He also had an ownership interest in other entertainment and gambling facilities in Alabama, including Country Crossing, which offered or sought to offer electronic bingo gambling machines to the public.
According to court documents, during the 2009 and 2010 Alabama state legislative sessions, McGregor and Gilley, along with others, allegedly promoted the passage of pro-gambling legislation that would have been favorable to the business interest of individuals operating electronic bingo facilities in Alabama, including themselves.
Massey admitted, among other things, that he offered former State Senator James E. Preuitt $1 million and that he authorized former employee and lobbyist Jennifer Pouncy to offer Preuitt substantial assistance in his reelection campaign, including telling Pouncy that they had up to $2 million of Gilley’s money to use in obtaining Preuitt’s vote on the pro-gambling legislation. Pouncy pleaded guilty on Sept. 28, 2010, for her role in the bribery scheme, and is scheduled to be sentenced on Aug. 11, 2011. In her guilty plea, Pouncy admitted to offering $2 million to Preuitt in exchange for his favorable vote on the pro-gambling legislation. Massey also admitted that he and others discussed purchasing a large number of vehicles from Preuitt’s auto dealership in exchange for Preuitt’s vote.
Massey also admitted that he conspired with others to bribe a member of the Alabama House of Representatives during the 2009 legislative session, promising hundreds of thousands of dollars in campaign support in exchange for the legislator’s favorable vote on pro-gambling legislation. Similarly, Massey admitted that in 2010, he and his co-conspirators sought to bribe a member of the Alabama Senate, offering the legislator $1 million per year, to use at the legislator’s discretion. Massey admitted that the illegal monies were to be disguised as payment for work on a public relations job.
During his plea, Massey also admitted he was involved with bribe payments to former State Senator Larry P. Means, who abstained from an earlier vote on the pro-gambling legislation in 2010, but after allegedly soliciting bribes, voted in favor of the legislation. In addition, Massey admitted that he gave $5,000 to State Senator Quinton T. Ross Jr. for his vote in favor of the pro-gambling legislation, and that Ross solicited an additional $25,000 from Massey for his reelection campaign in the weeks leading up to the vote. Ross ran unopposed in the election. Finally, Massey admitted that he gave State Senator Harri Anne Smith more than $13,000 between December 2009 and March 2010, in return for her vote in favor of the pro-gambling legislation.
At sentencing, scheduled for Sept. 26, 2011, Massey faces a maximum penalty of five years in prison and a $250,000 fine on the conspiracy charge. Each count of federal program bribery carries a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Senior Deputy Chief Peter J. Ainsworth and Trial Attorneys Eric G. Olshan, Barak Cohen and E. Rae Woods of the Criminal Division’s Public Integrity Section; Senior Litigation Counsel Brenda K. Morris of the Criminal Division; and Assistant U.S. Attorneys Louis V. Franklin and Steve P. Feaga of the Middle District of Alabama. The case is being supervised by the Criminal Division’s Public Integrity Section, and is being investigated by the FBI’s Mobile Field Office.