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5 February 2010
Justice Department to Monitor Election in LouisianaRead the Press Release
WASHINGTON – The Justice Department today announced that it will monitor the Feb.6, 2010, municipal primary election in the city of New Orleans to ensure compliance with the anti-discrimination requirements of the Voting Rights Act of 1965. The Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group. Attorneys from the department’s Civil Rights Division will coordinate the federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from the Office of Personnel Management, as well as departmental staff, to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931.
Visit http://www.justice.gov/crt/voting/index.htm for more information about the Voting Rights Act and other federal voting laws.
4 February 2010
Two New Jersey Executives Each Sentenced to 27 Months in Jail<br /> for Roles in Nationwide Scheme to Defraud the Federal E-rate ProgramRead the Press Release
WASHINGTON – Former co-owners of a New Jersey-based computer services provider were each sentenced to 27 months in jail for participating in a conspiracy to defraud the federal E-Rate program, the Department of Justice announced today.
Benjamin Rowner and Jay H. Soled, former owners of DeltaNet Inc., were also each sentenced to pay $271,716 in restitution, jointly and severally, to the Universal Service Administrative Company (USAC). They were sentenced by U.S. District Court Judge Blanche M. Manning in Chicago. Rowner and Soled pleaded guilty on July 10, 2008, to one count each of criminal conspiracy. According to court documents, Rowner and Soled, together with their co-conspirator, Leonard Douglas "Doug" LaDuron, conspired to defraud the E-Rate program by submitting false and misleading statements and concealing material facts from the USAC, a non-profit corporation. In some instances, these false statements were submitted by wire transmission, e-mail and U.S. mail. The department said that the conspiracy, which began in 1999 and ran at least until 2003, affected at least 13 schools across the country.
Rowner and Soled’s co-conspirator, LaDuron, former owner of Kansas area companies Serious ISP Inc., Myco Technologies Inc. and Elephantine Corporation, pleaded guilty in the U.S. District Court in Kansas City, Kan., on June 29, 2009, to one count of conspiracy to defraud the E-Rate program and one count of making a false statement to the U.S. Department of Housing and Urban Development. LaDuron was sentenced on Dec. 16, 2009, to serve 57 months in jail and to pay $238,607 in restitution.
The E-Rate program was created by Congress in the Telecommunications Act of 1996 and is administered by the USAC, under the auspices of the Federal Communications Commission (FCC). The program provides subsidies to economically disadvantaged schools and libraries. Depending on the financial needs of applicant schools, the program pays 10 to 90 percent of the cost for Internet access and telecommunications services, as well as internal computer and communications networks.
Today’s sentencing is a result of an investigation conducted by the Antitrust Division’s Chicago Field Office, the FBI and the FCC with assistance from the U.S. Attorney’s Office for the District of Kansas. Anyone with information concerning violations of the E-Rate program or other related anticompetitive conduct is urged to call the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit http://www.justice.gov/atr/contact/newcase.htm.
Taiwan Exporter Arrested on Charges of Exporting <br /> Missile Components from the United States to IranRead the Press Release
David Kris, Assistant Attorney General for National Security, Jeffrey H. Sloman, U.S. Attorney for the Southern District of Florida, Michael Johnson, Special Agent in Charge, U.S. Department of Commerce, Office of Export Enforcement, Anthony V. Mangione, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Investigations, and James M. Foster, Special Agent in Charge, U.S. Department of State, Diplomatic Security Service, announced that defendant Yi-Lan Chen, aka "Kevin Chen," 40, a Taiwan passport holder, was arrested on Feb. 3, 2010, on charges of illegally exporting commodities for Iran’s missile program.
More specifically, the complaint charges defendant Chen with exporting and attempting to export U.S. commodities to Iran in violation of the International Emergency Economic Powers Act (IEEPA) and the United States Iran Embargo (the Embargo). The Embargo prohibits the exportation from the United States to Iran of any goods, technology, or services, with limited exceptions, unless authorized by the Department of Treasury, Office of Foreign Assets Controls (OFAC). The Embargo is enforced through the IEEPA.
According to the affidavit filed in support of the criminal complaint, Chen facilitated the purchase and export of various dual use goods from the U.S. to Iran by way of Taiwan and Hong Kong. "Dual use" goods are goods and technologies that have commercial application, but also could make a significant contribution to the military or nuclear potential of other nations and could be detrimental to the foreign policy or national security of the United States.
U.S. Attorney Jeffrey H. Sloman stated, "Keeping our nation safe is the number one priority of the Department of Justice. To that end, we will vigorously investigate and prosecute individuals who export items to prohibited entities such as the Islamic Republic of Iran. Iran has been designated a state sponsor of terrorism and remains subject to United States, United Nations and European Union economic sanctions and export controls because of its continued involvement in terrorism and its nuclear weapons ambitions. The dual use items allegedly exported in this case could easily be used in missile development and other military components. Such conduct poses a serious threat to our national security, and will not be tolerated."
"Today's arrest is the result of ongoing cooperation between government agencies to combat the illegal transshipment of U.S.-origin items to Iran," said Michael Johnson, Special Agent in Charge, U.S. Department of Commerce's Miami Office of Export Enforcement. "We will continue to work together to pursue willful violators no matter where they set up their networks and protect our national security."
"This investigation is another fine example of how effective these law enforcement partnerships can be at ensuring that the sale and distribution of dual-use technology is done lawfully," said Anthony V. Mangione, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Investigations in Miami. "This case will send a message to those individuals who attempt to profit by illegally supplying improper dual-use technology to other countries. ICE will continue to aggressively pursue those who violate U.S. export laws."
The complaint alleges that Chen caused dual use goods to be exported from the U.S., including P200 Turbine Engines and spare parts, MIL-S-8516 Sealing Compound, Glass to Metal Pin Seals, and Circular Hermetic Connectors (Model MIL-C-81703). P200 Turbine Engines are designed for use as model airplane engines but can also be used to operate unmanned aerial vehicles and military target drones. MIL-S-8516 Sealing Compound is an accelerated, synthetic, rubber sealing compound used for sealing low-voltage electrical connectors, wiring and other electrical equipment against moisture and corrosion. This particular sealant is designed to military specifications and has numerous applications in military, aerospace, and automotive industries. It is also considered a hazardous material for shipping purposes.
Glass to Metal Pin Seals are commonly used to seal a conductor pin in a metal feed thru in an electrical device. These have many applications, such as vacuum components, sensor or transducer housings, feedthroughs for harsh environments and battery headers. The pin seals exported by Chen were designed with the nickel alloy known as "Alloy 52" and have dual applications in aerospace industries, thermal imaging devices, chemical agent monitors, and weapons systems. Circular Hermetic Connectors are designed to facilitate the flow of electrical current across two devices and can be mechanically coupled to, or uncoupled from, another connection. These connectors are designed to military specifications and have aerospace, defense, industrial and petrochemical applications.
As alleged in the complaint affidavit, federal agents learned of Chen’s efforts to obtain and export U.S. goods and commodities after Chen attempted to export detonators through a California company using unsatisfactory information in documents regarding Chen’s ultimate customers. The investigation revealed that Chen’s ultimate customers for the dual use exports listed in the complaint are all in Iran.
The investigation also revealed that Chen’s customers included buyers for Electro SANAM Industries. According to www.iranwatch.org, part of the Wisconsin Project on Nuclear Arms Control, Electro SANAM Industries is a known front company for Aerospace Industries Organization ("AIO") in Iran and has been linked to Iranian ballistic missile programs. AIO conducts research and development on ballistic missiles and is a leading industrial and military subsidiary of the Ministry of Defense and the Ministry of the Armed Forces Logistics of Iran. In addition, Electro SANAM Company is listed in annex IV of U.N Security Council Resolution 1803, dated March 3, 2008, for links to nuclear proliferation activities.
The complaint also alleges that another customer for receipt of the dual goods listed in the complaint is the owner of the Noavaran Sooyab Sanat Co. in Tehran, Iran. Sooyab Sanat Co. was founded in 1989 as an instrumentation division of Jahad Engineering Research Center. Jahad Engineering Research Center is one of many names used by the Engineering Research Center for the Construction Crusade (Jihad-e Sazandegi), located in Tehran, Iran, which has been linked to chemical research and development facilities. According to www.iranwatch.org, part of the Wisconsin Project on Nuclear Arms Control, in 2006, Jahad Engineering Research Center has been listed as an entity of concern by the British government regarding the procurement of weapons of mass destruction.
According to the complaint affidavit, customers in Iran sent orders by e-mail to Chen for specific U.S.-manufactured goods. Chen then requested quotes, usually by e-mail, from U.S. businesses and made arrangements for the sale and shipment of the goods to one of several freight forwarders in Hong Kong and Taiwan. Once in Hong Kong or Taiwan, the goods were then shipped to Iran.
If convicted, Chen faces a statutory maximum sentence of up to 20 years in prison, and possible fines of up to $1 million. Chen was arrested in Guam on the outstanding arrest warrant from the Southern District of Florida. This morning, Chen appeared before a Magistrate Judge in Guam for his initial appearance. At the initial appearance, Chen waived removal, was taken into custody and was ordered to appear in the Southern District of Florida. No date has been set for Chen’s first appearance in the Southern District of Florida.
Mr. Sloman commended the U.S. Department of Commerce, Office of Export Enforcement, U.S. Immigration and Customs Enforcement, Office of Investigations, and the U.S. Department of State, Diplomatic Security Service, for their work on this investigation. Mr. Sloman also thanked the Office of Foreign Assets Control (OFAC) for their assistance in this matter. The case is being prosecuted by Assistant U.S. Attorney Melissa Damian.
A complaint is only an accusation, and a defendant is presumed innocent unless and until proven guilty.
NFL Players Association Joins Justice Department Effort <br /> to Raise Awareness Around Violence Against WomenRead the Press Release
The Justice Department today announced that the National Football League Players Association (NFLPA) has joined its year-long campaign to commemorate the 15 year anniversary of President Bill Clinton signing the Violence Against Women Act (VAWA) into law. The NFLPA has "Joined the List," a group of more than 100 celebrities including actors, musicians and athletes, who have lent their names to raise awareness with their fans, through Web and fan sites, and social networking profiles.
In addition to the NFLPA, 16 players – including New Orleans Saints quarterback Drew Brees and Indianapolis Colts linebacker Gary Brackett, both of whom will play in the Super Bowl on Sunday – have lent their names to this initiative.
Today, the NFLPA also announced its partnership with the Family Violence Prevention Fund (FVPF), a grantee of the Justice Department’s Office on Violence Against Women (OVW), on their "Callout Card" contest as part of their That’s Not Cool teen initiative. The contest is designed to engage youth and invites teens to create "callout cards" that can be used to raise awareness of teen dating abuse. The contest’s grand prize winner will receive a trip to Washington, D.C., to attend the NFL PLAYERS Gala, and will have a chance to walk the red carpet and meet with top NFL stars. Four runners-up will receive autographed NFL memorabilia, such as a jersey or helmet. Ten honorable mention winners will receive That’s Not Cool t-shirts and NFLPA hats. The contest, for teenagers ranging in age from 13 to 18, continues through March 15. For more information, go to: www.thatsnotcool.com/contest.
This initiative is especially focused on the use of new technology to harass and abuse. One in four teens in a relationship say they have been harassed or put down by their partner through their cell phone and texting, and more than 60 percent of teens have been pressured to engage in "sexting."
To commemorate the 15th anniversary of VAWA, the Department of Justice is working to raise public awareness on issues around violence against women, to build and renew coalitions among federal, state, local and tribal law enforcement and victim services communities, and to end stalking, sexual assault, domestic and dating violence for men, women and children across the country. A list of celebrities who have "Joined the List" is below:
Aaron Eckhar - Actor
Alexis Bledel - Actress
Amanda Beard - Olympic Gold-Medal Swimmer
Amber Heard - Actress
Amy Poehler - Actress, Comedienne
Ashley Judd - Actress
Barbara Walters - Journalist, Writer, Television Hostess
Brian White - Actor
Chamique Holdsclaw - Atlanta Dream, WNBA
Chrisette Michele - Singer-songwriter
Christina Ricci – Actress
Cristian De la Fuente – Actor
Cuba Gooding, Jr. - Actor
Curtis Granderson - New York Yankees, MLB
Cynthia Cooper - Former American basketball player, Former NCAA and WNBA Coach, WNBA Hall of Fame Inductee
Debbie Allen - Actress, Choreographer, Director, Producer
Diane Keaton - Actress, Director, Producer
Dominique Dawes - Olympic Gold Medal Gymnast
Ellen DeGeneres - Talk Show Hostess, Comedienne, Actress
Elisabeth Hasselbeck -Television Hostess
Emily Blunt - Actress
Emmy Rossum- Actress, Singer-songwriter
Erin Brockovich - Lawyer
Eva Mendes - Actress
Faith Hill - Singer, Actress
Fiona Apple - Singer-songwriter
Garcelle Beauvais-Nilon - Actress
Ginuwine - Singer
Idris Elba - Actor
Irene Bedard - Actress
Jaime Pressly - Actress
James Carville - Political Advisor
Jason Bateman - Actor
Jenna Fischer - Actress, Writer
Jennifer Love Hewitt - Actress, singer-songwriter
Joe Torre - Manager of the Los Angeles Dodgers, Founder of the Joe Torre Safe at Home Foundation
Joey Fatone - Singer
John Lithgow - Actor
Joy Behar - Actress, Comedienne, Writer, Television Hostess
Judy Blume - Author
Kevin Spacey - Actor
Kristina Guerrero - Television Hostess
Kyra Sedgwick - Actress
Linda Fairstein - Author
Leeza Gibbons - Talk Show Host
Leslie Morgan Steiner - Author
Lisa Leslie - Los Angeles Sparks, WNBA, Olympic Gold Medal Basketball Player
LisaRaye McCoy-Misick - Actress
Marcus Johnson -Musician
Mariska Hargitay - Actress, Founder and President of the Joyful Heart Foundation
Martina McBride - Singer-Songwriter
Matt Dillon - Actor
MC Lyte - Emcee-Songwriter, Actress
Melissa Joan Hart - Actress
Meryl Streep - Actress
Michael Bolton - Singer
Michelle Pfeiffer - Actress
Michelle Williams - Actress
Mira Sorvino - Actress
Nastia Liukin - Olympic Gold Medal Gymnast
The NFL Players Association, including:Adalius Thomas - New England Patriots, NFL
Brandon Moore - New York Jets, NFL
Darrell Green - Washington Redskins, NFL (Retired)
Drew Brees - New Orleans Saints, NFL
Erik Coleman - Atlanta Falcons, NFL
Gary Brackett - Indianapolis Colts, NFL
George Wilson - Buffalo Bills, NFL
Hank Fraley - Cleveland Browns, NFL
Jay Feely - New York Jets, NFL
Jerricho Cotchery - New York Jets, NFL
Kareem McKenzie - New York Giants, NFL
LaDainian Tomlinson - San Diego Chargers, NFL
Muhsin Muhammad - Carolina Panthers, NFL
Nate Kaeding - San Diego Chargers, NFL
Quintin Mikell - Philadelphia Eagles, NFL
Shaun O’Hara - New York Giants, NFL
Steve Hutchinson - Minnesota Vikings, NFL
Tony Dungy – Former Coach for the Indianapolis Colts, AuthorThe National Hockey League (NHL)
Nia Long - Actress, Director
Nicole Kidman - Actress
Omar Epps - Actor
Patti LaBelle - Singer, Songwriter, Actress
Paula Zahn - Newscaster
Phylicia Rashad - Actress
Rebecca Romijn - Actress, Model
Ricky Martin - Singer
Robin Givens - Actress
Rosie Perez - Actress, Dancer, Choreographer
S. Epatha Merkerson - Actress
Salma Hayek - Actress, Director, Producer
Sally Field - Actress, Producer, Director, Screenwriter
Sam Jones III - Actor
Scarlett Johansson - Actress, Singer-songwriter
Sherri Shepherd - Television Hostess, Actress, Comedienne
Steve Buscemi – Actor, Director
Stockard Channing - Actress
Susan Sarandon - Actress
Teresa Weatherspoon - Los Angeles Sparks, WNBA (Retired), Coach of Louisiana Tech Women’s Basketball
Tom Arnold - Actor
Tony Hawk – Skateboarder
U.S. National Women’s Soccer Team
Vivica A. Fox - Actress
Washington Mystics
Whoopi Goldberg - Television Hostess, Actress, Comedienne
Wynton Marsalis - Musician
Zoe Saldana – ActressJustice Department Submits Views on Amended Google Book Search SettlementRead the Press Release
WASHINGTON – The Department of Justice today advised the U.S. District Court for the Southern District of New York that despite the substantial progress reflected in the proposed amended settlement agreement in The Authors Guild Inc. et al. v. Google Inc., class certification, copyright and antitrust issues remain. The department also said that the United States remains committed to working with the parties on issues concerning the scope and content of the settlement.
In its statement of interest filed with the court today, the department stated, "Although the United States believes the parties have approached this effort in good faith and the amended settlement agreement is more circumscribed in its sweep than the original proposed settlement, the amended settlement agreement suffers from the same core problem as the original agreement: it is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the court in this litigation."
On Sept. 18, 2009, the department submitted views to the court on the original proposed settlement agreement. At that time, the department proposed that the parties consider changes to the agreement that might help address the United States’ concerns, including imposing limitations on the most open-ended provisions for future licensing, eliminating potential conflicts among class members, providing additional protections for unknown rights holders, addressing the concerns of foreign authors and publishers, eliminating the joint-pricing mechanisms among publishers and authors, and providing a mechanism by which Google’s competitors can gain comparable access.
In today’s filing, the department recognized that the parties made substantial progress on a number of these issues. For example, the proposed amended settlement agreement eliminates certain open-ended provisions that would have allowed Google to engage in certain unspecified future uses, appoints a fiduciary to protect rightsholders of unclaimed works, reduces the number of foreign works in the settlement class, and eliminates the most-favored nation provision that would have guaranteed Google optimal license terms into the future. However, the changes do not fully resolve the United States’ concerns. The department also said that the amended settlement agreement still confers significant and possibly anticompetitive advantages on Google as a single entity, thereby enabling the company to be the only competitor in the digital marketplace with the rights to distribute and otherwise exploit a vast array of works in multiple formats.
The department continues to believe that a properly structured settlement agreement in this case offers the potential for important societal benefits. The department stated that it is committed to continuing to work with the parties and other stakeholders to help develop solutions through which copyright holders could allow for digital use of their works by Google and others, whether through legislative or market-based activities.
The settlement agreement between Google and the authors and publishers aims to resolve copyright infringement claims brought against Google by The Authors Guild and five major publishers in 2005 arising from Google’s efforts to digitally scan books contained in several libraries and to make them searchable on the Internet. The district court’s hearing on the proposed amended settlement agreement is scheduled to take place on Feb. 18, 2010.
Justice Department Settles Lawsuit Against<br /> MasTec Advanced Technologies to Enforce the<br /> Employment Rights of Army Reserve MemberRead the Press Release
WASHINGTON — The Justice Department announced today that it has reached a settlement in its lawsuit against MasTec Advanced Technologies on behalf of Eugene C. Burress, a U.S. Army Reserve member, alleging that MasTec willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
The settlement, embodied in a consent decree that must still be approved in the U.S. District Court for the Northern District of West Virginia, calls for MasTec to provide Burress with $5,760 in backpay and interest.
The Justice Department’s complaint, filed in November 2009, alleges that in January 2008, Burress, then a field technician supervisor at MasTec’s Martinsburg, W.Va., office, was called to active duty in the U.S. Army and notified his supervisor of his upcoming military service. His supervisor previously had informed Burress that the site manager position at the office would be vacant soon and offered the position to Burress when it became available. Burress accepted. However, in October 2008, while Burress was engaged in military service, MasTec promoted another MasTec employee to site manager. Burress filed a complaint with the Labor Department’s Veterans’ Employment and Training Service, which investigated and attempted to resolve Burress’s USERRA complaint before referring it to the Justice Department for litigation.
"Members of our military make great sacrifices on behalf of our nation. Upon their return from active duty, they have the right to know they will not be denied a promotion because of their service," said Thomas E. Perez, Assistant Attorney General for Civil Rights.
USERRA prohibits civilian employers from denying servicemembers promotions because of their membership in or obligations to perform service in the U.S. military, and also requires that servicemembers who leave their jobs to serve in the U.S. military be timely reemployed by their civilian employers in the same position, or in a comparable position to the position that they would have held had they not left to serve in the military.
The Civil Rights Division is committed to the vigorous enforcement of servicemembers’ rights under USERRA. Additional information about USERRA can be found on the Justice Department Web site at www.servicemembers.gov and www.justice.gov/crt/emp, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Former UBS Client Pleads Guilty to Hiding $10 Million<br /> in Offshore Bank AccountsRead the Press Release
WASHINGTON - Jack Barouh of Golden Beach, Fla., pleaded guilty today to filing a false tax return, the Justice Department and Internal Revenue Service (IRS) announced. Sentencing has been set for April 16, 2010, before U.S. District Judge Adalberto Jordan in Miami. The defendant remains free on a $1 million bail pending sentencing. He faces a maximum sentence of three years in prison.
According to court documents and statements made in court, Barouh admitted to filing a false tax return for 2007 in which he failed to report that he had an interest in or a signature authority over financial accounts at UBS AG, one of Switzerland’s largest banks. He also failed to report income earned on his UBS Swiss bank accounts. The UBS accounts were opened in the names of Domilou S.A., a nominee Panamanian corporation, and Similen Investments Limited, a nominee British Virgin Island corporation. For years 2002 through 2007, the tax loss associated with the Domilou and Similen accounts at UBS is approximately $736,269.
In addition to the Domilou and Similen accounts, the defendant owned and controlled several additional offshore bank accounts located at banks other than UBS, including accounts in Switzerland and Hong Kong.
According to court documents, the defendant owned and operated several businesses that manufactured and sold watches. Beginning in 1976, the defendant skimmed income from his watch businesses and deposited the proceeds into his undeclared UBS bank accounts. The defendant also deposited unreported sales commissions into the accounts.
According to court documents, beginning in 2007, the defendant attempted to withdraw his funds from Switzerland and repatriate all of the money into the United States. However, a Swiss attorney persuaded the defendant to transfer the money from Switzerland to a newly created bank account in Hong Kong in the name of a nominee Hong Kong corporation. The Swiss attorney then told the defendant to pay himself an annual "consulting fee" until all of the funds were brought into the United States. The Swiss attorney knew the defendant was not going to perform any consulting work.
As part of his plea agreement, the defendant agreed to pay a 50 percent penalty for the one year with the highest balance in his offshore accounts in order to resolve his civil liability for failing to file Reports of Foreign Bank and Financial Accounts, Forms TD F 90-22.1. The highest balance of all of the assets the defendant owned and controlled offshore was approximately $10,017,613. The defendant also must pay any additional taxes, interest and penalties he may owe.
"Today’s guilty plea is the latest success in our crackdown on illegal offshore tax evasion," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "The Justice Department and U.S. Attorneys’ Offices will continue our investigations and prosecutions of individuals who utilize offshore accounts in Switzerland and elsewhere."
"Skimming from one’s business and placing the assets in a secret offshore bank account is a classic example of tax evasion," said Jeffrey H. Sloman, U.S. Attorney for the Southern District of Florida. "With tax day looming, today’s guilty plea is a reminder that those who violate the tax laws will be held accountable."
"Hiding money in foreign bank accounts to evade paying taxes is a crime," said Victor S. O. Song, Chief, IRS Criminal Investigation. "The IRS will continue our efforts to bring non-compliant taxpayers into the tax system either through the voluntary disclosure program or criminal prosecution."
Acting Assistant Attorney General John DiCicco and U.S. Attorney Jeffrey H. Sloman commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsel Kevin M. Downing and Trial Attorney Mark F. Daly of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman, who are prosecuting the case.
In February 2009, UBS entered into a deferred prosecution agreement pursuant to which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain United States customers of UBS’s cross-border business. Jack Barouh is the seventh former client of UBS to plead guilty to a tax felony.
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, United States citizens much file a Report of Foreign Bank and Financial Accounts, or F-Bar, with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
Detroit Clinic Manager Sentenced to 63 Months in Prison for Role in $2.3 Million Medicare Infusion Fraud SchemeRead the Press Release
Miami-Dade County resident Dulce Briceño was sentenced today to 63 months in prison for her role in a $2.3 million Medicare fraud scheme, announced Assistant Attorney General Lanny Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services, Office of the Inspector General’s (HHS-OIG), Chicago Regional Office.
U.S. District Judge Ursula Ungaro in the Southern District of Florida also ordered Briceño to pay $1.8 million in restitution. Briceño was originally charged by indictment in the Eastern District of Michigan, but after her arrest in Miami, she consented to have her case transferred to the Southern District of Florida for her plea and sentencing.
Briceño pleaded guilty on Oct. 9, 2009, at which time she admitted that in approximately September 2006, she agreed with the owners of X-Press Center to manage the clinic on a day-to-day basis in exchange for a percentage of the profits the clinic generated. Briceño also admitted that during the time the clinic was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or were never provided. Briceño admitted that she and her co-conspirators at the clinic had purchased only a small fraction of the medications that the clinic billed the Medicare program for providing.
Briceño admitted that Medicare beneficiaries were not referred to X-Press Center by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks. In exchange for those kickbacks, Briceño admitted that the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare. Kickbacks paid to Medicare beneficiaries at the clinic, according to plea documents, came in the form of cash and prescriptions for narcotic drugs.
Briceño also admitted that between approximately September 2006 and March 2007, she and her co-conspirators at X-Press Center caused the submission of approximately $2.3 million in false and fraudulent claims to the Medicare program for services purportedly provided at X-Press Center. Medicare paid approximately $1.8 million on those claims.
The case was prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Benjamin D. Singer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG. 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 Eastern District of Michigan.
Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $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
Alligator Hunting Guides Sentenced for Knowingly Attempting to Acquire Protected AlligatorRead the Press Release
WASHINGTON—Travis Dardenne and Jeffery Brown of Plaquemine, La., were both sentenced today in U.S. District Court in Baton Rouge, La., to pay a $2,000 fine and serve one year of probation for violations of the Lacey Act for knowingly attempting to acquire an American alligator in violation of the federal Endangered Species Act and Louisiana law, the Justice Department announced.
Additionally, during their probation, both Dardenne and Brown are prohibited from hunting or guiding anywhere in the world.
On Sept. 8, 2006, Dardenne, a licensed alligator hunter, and Brown, a licensed alligator helper, guided an out-of-state alligator sport hunter to an area for which Dardenne and Brown did not have appropriate state authorization to hunt. The sport hunter killed a trophy-sized alligator in the unapproved area.
Louisiana strictly regulates the hunting of alligators in the wild. Licensed alligator hunters, like Dardenne, are required to have hide tags for each alligator killed. Each tag specifies an area where alligator hunting is to occur. Licensed alligator helpers, like Brown, do not receive hide tags but they hunt with licensed alligator hunters and are expected to know what the licensed alligator hunter’s hide-tags provide. It is illegal to kill an alligator in an area for which the licensed hunter does not have hide tags.
In addition to being listed as a threatened species on the United States’ list of Threatened and Endangered Species, the American alligator also is listed as a crocodilian species on Appendix II of the Convention on International Trade in Endangered Species (CITES). To better regulate trade in crocodilian species, the parties to CITES agreed to a program of requiring a uniquely numbered tag to be inserted into the skin of each animal immediately after it is killed. The tag is to remain with the skin as it travels in interstate or international commerce until it is manufactured into a final consumer product. The Secretary of the Interior issued special rules for American alligators that implement the CITES tagging program and regulate the harvest of alligators within the United States.
The case was prosecuted by the Justice Department’s Environmental Crimes Section with assistance from the U.S. Attorney’s Office of the Middle District of Louisiana. The case was investigated by the Law Enforcement Division of the Louisiana Department of Wildlife and Fisheries and the U. S. Fish and Wildlife Service’s Office of Law Enforcement.
3 February 2010
Serial Sex Offender Sentenced to 30 Years in Prison on Sex Tourism and Failure to Register Charges in DelawareRead the Press Release
Thomas S. Pendleton, 66, was sentenced today by Chief U.S. District Judge Gregory M. Sleet in Wilmington, Del., to the statutory maximum of 30 years in prison and a lifetime of supervised release for traveling to Germany to have sex with a minor, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney David C. Weiss for the District of Delaware. Pendleton was also sentenced today to a concurrent term of 10 years in prison for failing to register as a sex offender, in violation of the Adam Walsh Child Protection and Safety Act of 2006.
In September 2009, a federal jury in Wilmington found Pendleton guilty following a three-day trial of violating the Prosecutorial Remedies and Other Tools to End the Exploitation of Children Today (PROTECT) Act of 2003, which makes it a crime for U.S. citizens to travel abroad and commit illicit sexual acts with minors. Evidence introduced at trial established that Pendleton traveled from Philadelphia to Germany in November 2005, where he met his victim, a 14-year-old boy, who at the time was living in an orphanage. According to evidence presented at trial, during the next several months, Pendleton cultivated a friendship with the victim and made arrangements to go biking with him in May 2006, just after the victim turned 15. Testimony at trial established that, while on the bike trip, the victim woke up to find Pendleton fondling him. The victim and a witness from the camp site where the crime occurred traveled to the United States to testify at the trial.
Pendleton had been previously convicted by a German court of "sexual abuse of persons incapable of resistance," stemming from this incident. The defendant remained in German custody until Jan. 21, 2008, when he was deported to the United States. On July 24, 2008, Pendleton charged by a federal grand jury in the District of Delaware for violating the PROTECT Act.
Pendleton was also convicted in April 2009, in a separate trial for failing to register as a sex offender. According to information presented at the sentencing hearing, Pendleton has three prior convictions for sexually molesting or assaulting children aged nine through 13-years-old in two U.S. states and in Latvia, in addition to his conviction in Germany. Pendleton was convicted in 1981 of fourth degree criminal contact in a Michigan state court in a case involving the molestation of an 11-year-old, while Pendleton was serving as a church camp counselor at the victim’s church.
According to information also presented at the sentencing hearing, Pendleton was convicted in New Jersey state court in 1992 of sexual assault, attempted aggravated sexual assault of a minor and endangering the welfare of a child in a case involving sexual abuse of a 12-year-old boy on biking trips in Virginia and New Jersey. Pendleton received a seven year sentence for that offense. The jury heard testimony from the now 32-year-old victim of that prior offense at the September 2009-trial for the sex tourism charge.
Approximately three years after his release from New Jersey prison, Pendleton was convicted in the Republic of Latvia of sexually abusing a 9-year-old child and a 13-year-old child between June and November 2001, and was sentenced to three and a half years in prison. He was released from Latvian prison and deported back to the United States on March 20, 2005.
He has been in federal custody since March 10, 2008, when the U.S. Marshals Service arrested him on the failure to register charge.
In sentencing the defendant, the court cited Pendleton’s history of sexually abusing children, his failure to accept responsibility for his crimes, and the fact that the defendant’s past prison sentences had failed to deter him. Chief Judge Sleet found that this sentence would protect children from "further acts of depravity" perpetrated by the defendant.
The case was prosecuted by Assistant U.S. Attorney Ilana Eisenstein of the U.S. Attorney’s Office for the District of Delaware and Trial Attorney Jennifer Toritto Leonardo of the Child Exploitation and Obscenity Section (CEOS). These cases were investigated by special agents from U.S. Immigration and Customs Enforcement and by deputy marshals of the U.S. Marshals Service. A computer forensic specialist from CEOS’s High Tech Investigative Unit performed an analysis of a computer and other digital media seized from the defendant.
Justice Department Obtains $160,000 Settlement in Discrimination Lawsuit Against Atlanta Area RealtorsRead the Press Release
WASHINGTON — Atlanta real estate firms Coldwell Banker Joe T. Lane Realty Inc., Coldwell Banker Bullard Realty Company Inc. and Rodney Lee Foreman, one of their former real estate agents, have agreed to pay $160,000 to settle allegations that they illegally steered prospective homebuyers toward and away from certain neighborhoods based on race and color, the Justice Department announced today.
The agreement, subject to approval by a federal court in Atlanta, resolves the Justice Department’s Jan. 25, 2009, lawsuit which originated from a complaint filed by the National Fair Housing Alliance (NFHA) with the U.S. Department of Housing and Urban Development (HUD). Testing conducted by NFHA of Coldwell Banker Joe T. Lane Realty Inc. in 2003 and 2004 revealed that Foreman had steered white testers towards areas that are predominately white and away from areas that are predominately African-American because of race or color, in violation of the Fair Housing Act.
According to the complaint, before showing the tester any homes, Foreman told the tester that he did not know where to take the tester because he could not tell from talking on the telephone whether the tester was white. Foreman said words to the effect that "I didn’t know if you were a Caucasian or not over the phone." After an investigation, HUD found reasonable cause to believe that unlawful discrimination had occurred and referred the matter to the Justice Department.
"People have the right to make fully informed housing choices. Unlawful steering by real estate agents frustrates this right and perpetuates segregated communities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The work undertaken by NFHA and HUD is critical to our efforts to eliminate such discrimination. Real estate agents nationwide should take note that the Department of Justice works vigilantly to combat this type of discrimination."
"This case demonstrates that racial steering is not a relic of the past. Effective civil rights law enforcement, including testing, can and must put an end to housing discrimination," said John Trasviña, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity.
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 http://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 http://www.justice.gov/crt/housing/fairhousing/ or www.hud.gov/fairhousing.
Attorney General Letter to Senators on Detention, Interrogation of Umar Farouk AbdulmutallabRead the Press Release
Attorney General Eric Holder sent a letter today to Senate Minority Leader Mitch McConnell. An identical copy was sent to Senators Bond, Coburn, Collins, Cornyn, Graham, Grassley, Hatch, Kyl, McCain and Sessions, each of whom had written the Attorney General requesting information on the detention and interrogation of Umar Farouk Abdulmutallab.
A copy of the letter is available here .
2 February 2010
South Dakota Man Sentenced for Smuggling Big Game Leopard Hide into the United StatesRead the Press Release
WASHINGTON—Wayne D. Breitag of Aberdeen, S.D., was sentenced in federal court in Aberdeen yesterday to pay a $20,000 fine and serve six months of home confinement for smuggling the hide of a leopard into the United States in violation of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), the Justice Department announced today.
The leopard was hunted and killed in South Africa illegally and then smuggled into Zimbabwe to obtain a false CITES-permit for shipment to the United States.
Breitag was also sentenced to serve three years of supervised release during which time he cannot hunt or accompany anyone on a hunt and must forfeit the hide. He was convicted by a jury on Oct. 30, 2009, for violations of the Lacey Act, the federal wildlife statute that makes CITES enforceable.
Leopards (Panthera pardus) are listed on Appendix I of CITES. CITES requires that prior to the transport of any part of an Appendix I species from one country to another, an export permit from the country of origin (or a re-export certificate), and an import permit from the country to which the specimen will be shipped, must be obtained and accompany the shipment. The CITES authorities in South Africa set a yearly quota on the number of export permits issued by that country for Appendix I species, such as leopards. These permits are only issued for leopards which have been killed with a valid hunting permit.
Breitag was found guilty of traveling to South Africa in August 2002 to hunt leopards while guided by a South African outfitter named Jan Groenewald Swart doing business as "Trophy Hunting Safaris." Breitag shot and killed a leopard at that time.
Swart arranged to have the hide smuggled from South Africa into Zimbabwe, where he purchased a fraudulent CITES export permit for the leopard hide. Breitag then submitted applications to the U.S. Fish and Wildlife Service (USFWS) falsely claiming that he hunted and killed the leopard in Zimbabwe. On Nov. 5, 2004, USFWS inspectors seized a shipment of five leopard hides and three leopard skulls at the Denver International Airport, which included the hide of the leopard that Breitag killed illegally in South Africa in 2002.
On May 21, 2007, Jan Groenewald Swart pleaded guilty to smuggling charges in the U.S. District Court for the District of Colorado for his role in the illegal hunts. Swart served an 18-month prison sentence, has since been released and deported.
The investigation of this case was lead by the USFWS. The case was prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorneys’ Offices for the District of South Dakota and Colorado.
Man Pleads Guilty to International Child Sex TourismRead the Press Release
WASHINGTON – Isidro Hinojosa Benavides, 77, a U.S. citizen extradited from Argentina, pleaded guilty today in U.S. District Court in Washington, D.C., to engaging in illicit sexual conduct in foreign places, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the District of Columbia Channing D. Phillips.
Benavides was indicted in 2005 for traveling to the Republic of Chile and engaging in sexual conduct with a female child. Benavides has been held in custody without bond since his extradition from Argentina in 2009.
During the plea hearing, Benavides admitted to maintaining several residences in Santiago, Chile. Benavides admitted that he met the 12-year-old victim in 2002 when he was 70-years-old. He admitted he invited her on numerous occasions to his various residences and supplied her and other young girls with food, drinks and glue to inhale. Benavides admitted to fondling the 12-year-old victim, showing her pornographic images and movies, and having her engage in sexual activity with him. Afterwards, Benavides admitted he gave the victim between $5 and $10 dollars. Benavides admitted that he abused the victim until she was 13-years-old.
Sentencing is scheduled for April 14, 2010.
The prosecution was handled by Assistant U.S. Attorney Angela Schmidt of the U.S. Attorney’s Office for the District of Columbia, former Criminal Division Trial Attorney Myesha Braden and Michael Yoon of the Criminal Division’s Child Exploitation and Obscenity Section. The Criminal Division’s Office of International Affairs provided significant assistance in this matter. The case was investigated by U.S. Immigration and Customs Enforcement and the Chilean Policia de Investigation.
Justice Department Enters Agreement with Alameda County, California, Sheriff to Guarantee Effective Communication for Persons Who Are Deaf, Hard of Hearing or Deaf-BlindRead the Press Release
WASHINGTON – The Justice Department announced today that it has reached a settlement agreement with the Alameda County, Calif., Sheriff’s Office, under which it will provide sign language interpreters and other auxiliary aids and services to arrestees, detainees, suspects, victims, witnesses, complainants and visitors who are deaf, hard of hearing or deaf-blind at two jails. The agreement covers Santa Rita Jail and Glynn E. Dyer Jail in Dublin, Calif., and Oakland, Calif., respectively.
"Effective communication in law enforcement is critical to ensure all parties have equal access to the information regarding their rights," said Thomas E. Perez, Assistant Attorney General in charge of the Justice Department’s Civil Rights Division. "This agreement requires Alameda County’s law enforcement officers to take the steps necessary to effectively communicate with individuals who are deaf-blind in their community."
The Americans with Disabilities Act (ADA) requires "public entities," such as the sheriff’s office, to ensure effective communication with qualified individuals with disabilities. Under this agreement, a person who is deaf or hard of hearing will be able to benefit from the same services as every other arrestee, detainee, suspect, victim, witness, complainant and visitor. In tactile interpreting (also known as deaf-blind interpreting) persons who are deaf-blind place their hands over the hands of the interpreter, in order to read signs through touch and movement.
The agreement requires the Alameda County Sheriff’s Office to:
- Establish nondiscriminatory policies for providing effective communication for people with communication disabilities, including the provision of sign language interpreters;
- Post a notice of the policy in its waiting rooms;
- Train staff on the policies; and
- Ensure that appropriate auxiliary aids and services, including qualified interpreters, and specifically tactile interpreters, are made available to all individuals who are deaf, hard of hearing, or deaf-blind.
The Justice Department's investigation of the sheriff’s office was in response to a complaint filed by a man who is deaf and blind, after the office failed to provide him with a tactile interpreter when the man was arrested and during his two-day incarceration. In his complaint, he alleged that a tactile interpreter was never provided to him during his incarceration when it was necessary to achieve effective communication with him.
More information about the ADA or this agreement is available at the Justice Department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY) and at www.ada.gov.
Department of Justice Officials, Actress Mariska Hargitay Urge Team Response to End Violence Against WomenRead the Press Release
Deputy Associate Attorney General Karol V. Mason, Acting Director for the Office on Violence Against Women (OVW) Catherine Pierce, and actress and advocate Mariska Hargitay addressed nearly 300 attendees today at theServices-Training-Officers-Prosecutors (STOP) Conference in San Francisco. The four-day conference, which began Sunday, brings together STOP grant administrators representing the offices of the governor, attorney general, or other state criminal justice agency from every state government and territory in the nation. Also in attendance are domestic violence and sexual assault coalition representatives from every state and territory.
"The Justice Department is committed to working with federal, state, local and tribal partners to ensure that all communities – particularly those that have been chronically neglected – are given the resources and support they need," said Deputy Associate Attorney General Mason. "We need your help to not only raise awareness, but to truly make change. Each community must take an active role in defining their response to violence against women."
"In the past 15 years since the Violence Against Women Act (VAWA) was signed into law, countless lives have been saved, the voices of survivors have been heard, and families have been protected. But there is still much more to be done. We have federal resources and we have a strong commitment from this administration, but that is not enough. We need to work together to bring about a significant shift in our culture," said Acting Director Pierce.
"I have seen survivors find their way back to lives of possibility, hope and joy, and I am so proud to be part of a movement that will change the way we talk about and behave around these epidemics," said Hargitay, best known for her role on NBC’s Law and Order: Special Victim’s Unit, and president and founder of the Joyful Heart Foundation. "Through your work, you strengthen the possibility of healing for a survivor because you are acknowledging, responding to, and giving your all to do something about the violence and injustice they have suffered. That is why I am so moved by your collective commitment: because it has the power to heal."
The Justice Department announced Monday that President Obama’s FY2011 budget request provides $461 million for OVW to provide communities with resources to combat sexual assault and violence against women. This includes $30 million for the Sexual Assault Services Program and $50 million for the Legal Assistance for Victims Program. An additional $100 million is also allocated within the Crime Victims Fund, which is administered through the Department’s Office for Victims of Crime, to specifically aid victims of violence against women.
STOP grant administrators serve as the liaison between OVW and the states, oversee the administration of STOP funding and provide statewide leadership on violence against women intervention efforts. The STOP formula grant program, the largest single funding stream administered by OVW, promotes a coordinated, multidisciplinary approach to enhancing advocacy and improving the criminal justice system’s response to violent crimes against women. It encourages the development and improvement of effective law enforcement and prosecution strategies to address violent crimes against women and of advocacy and services in cases involving violent crimes against women.
The Justice Department has launched a year-long commemoration of the 15th anniversary of VAWA, working to raise public awareness on issues around violence against women, to build and renew coalitions among federal, state, local and tribal law enforcement and victim services communities, and to end stalking, sexual assault, domestic and dating violence for men, women and children across the country. As part of this effort, the department has encouraged the more than 100 celebrity allies, including Hargitay, who have lent their names in support of the department’s "Join the List" initiative to raise awareness with their fans, through Web and fan sites, and social networking profiles.
Atricure to Pay U.S. $3.76 Million to Resolve<br /> Medicare Fraud AllegationsRead the Press Release
WASHINGTON – Atricure Inc., a medical device manufacturer, has agreed to pay the United States $3.76 million to resolve civil claims in connection with the alleged promotion of its surgical ablation devices, the Justice Department announced today. Surgical ablation devices use focused energy to create controlled lesions or scar tissue on a patient’s heart or other organs.
The settlement resolves allegations that the West Chester, Ohio-based company marketed its medical devices to treat atrial fibrillation (the most common cardiac arrhythmia or abnormal heart rhythm), a use that is not approved by the U.S. Food and Drug Administration (FDA). Atricure also allegedly promoted expensive heart surgery using the company’s devices when less invasive alternatives were appropriate, advised hospitals to up-code surgical procedures using the company’s devices to inflate Medicare reimbursement, and paid kickbacks to health care providers to use its devices. The United States asserted that by engaging in this conduct, Atricure knowingly violated the Food, Drug, and Cosmetic Act and caused the submission of false and fraudulent claims in violation of the False Claims Act.
"This settlement reflects our commitment to enforce the Food, Drug, and Cosmetic Act and protect Medicare from the improper marketing practices of Atricure and other medical device manufacturers," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will continue to work with our partners at the Department of Health and Human Services Inspector General’s Office and the FDA Office of Chief Counsel to preserve the integrity of our public health programs."
The allegations were made against Atricure in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens, called "relators," to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment. The relator will receive a total of $625,000 as the statutory share of the current settlement.
"The misuse of medical devices has the potential of exposing patients to dangerous procedures and taxpayers to payment of unwarranted claims against Medicare," said Tim Johnson, United States Attorney for the Southern District of Texas. "This settlement demonstrates the government’s commitment to maintaining safe and affordable health care for its citizens."
Assistant Attorney General West noted that the settlement with Atricure resulted from a coordinated effort by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Texas, the Department of Health and Human Services’ Office of Inspector General, and the FDA Office of Chief Counsel.
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 approximately $2.2 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 $3 billion.
Arlington, Texas, Couple Convicted of Forced Labor and Other Crimes for Holding Nigerian Woman in Domestic ServitudeRead the Press Release
WASHINGTON – A federal jury has convicted an Arlington, Texas, husband and wife, Emmanuel and Ngozi Nnaji, of engaging in a nine-year scheme to compel the labor of a Nigerian victim as their domestic servant, the Justice Department announced today. The jury found the defendants guilty of conspiracy, forced labor, document servitude, alien harboring and false statements. Ngozi and Emmanuel Nnaji each face a maximum sentence of up to 55 years in prison.
According to the evidence at trial, Emmanuel Nnaji and Ngozi Nnaji enticed a widowed Nigerian mother of six to come to the United States to be their domestic servant by falsely promising a salary and support for her children, who she was struggling to support.
" Holding other human beings in servitude against their will is a violation of human rights that will not be tolerated in our free society, " stated Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. " This prosecution demonstrates our commitment to combating human trafficking in all its forms, vindicating the rights of trafficking victims and bringing human traffickers to justice. "
James T. Jacks, U.S. Attorney for the Northern District of Texas, said, "We are pleased that this North Texas jury was able to return such a swift verdict, validating the hard work of the Civil Rights Division and the Federal Bureau of Investigation."
FBI, Dallas Division Special Agent in Charge Robert Casey said, "The crimes proven in this case underscore the importance of enforcing the nation's Civil Rights laws, and the FBI is firmly committed to that enforcement. The FBI's pursuit of this investigation should send a clear message to those who would hold another human being in criminal servitude."
The defendants procured fraudulent immigration documents, confiscated the victim’s documents, harbored her in their home, compelled her to work long hours with no days off for little or no pay, used a scheme to isolate her and restrict her communications, withheld her documents and pay, and refused her requests to return home or be paid. The defendants also failed to provide support for the victim’s six children in Nigeria, limited and monitored contact with her family in Nigeria, isolated her from normal society in the United States, and refused to allow her to regularly attend church. According to the evidence at trial, Emmanuel Nnaji sexually assaulted the victim and made her fearful to call the police.
This case was investigated by the FBI and prosecuted by Trial Attorney Susan L. French and Michael J. Frank of the Civil Rights Division’s Human Trafficking Prosecution Unit.
1 February 2010
U.S./EU Agreements on Mutual Legal Assistance and Extradition Enter into ForceRead the Press Release
New agreements regarding extradition and mutual legal assistance between the European Union (EU) and the United States enter into force today, the Department of Justice announced. The agreements represent a milestone in cooperation on criminal matters between the EU, along with its Member States, and the United States. The agreements will further strengthen common efforts in the fight against terrorism and transnational crime by enabling the use of modern tools of cooperation between U.S. and EU Member States’ authorities.
The negotiations for the agreements were initiated following the Sept. 11, 2001, terrorist attacks as a means to improve the cooperation in criminal matters between the EU Member States and the United States. In addition to the two overarching agreements with the EU, the United States and each of the EU Member States have either entered into new agreements or adopted changes to current extradition and mutual legal assistance agreements to meet the new requirements. In total, 56 new treaties were negotiated, and the U.S. Senate gave advice and consent to them in fall 2008. After EU Member States completed their ratifications, Attorney General Eric Holder and the Swedish Minister of Justice Beatrice Ask, representing the Swedish Presidency of the EU, exchanged the instruments of ratification on behalf of the United States and the EU, respectively, at the U.S. and EU Justice and Home Affairs Ministerial meeting in Washington on Oct. 28, 2009. The agreements, by their terms, enter into force today.
The agreement on extradition, among other things: replaces lists of offenses that are deemed extraditable with a modern dual criminality standard; contains measures to streamline the exchange of information and transmission of documents; sets rules for determining priority in competing requests for surrender of a fugitive; and contains a provision allowing extradition to be conditioned on non-application of the death penalty.
The agreement on mutual legal assistance enhances and modernizes law enforcement and judicial cooperation by, among other things allowing prompt identification of financial account information in criminal investigations; permitting the acquisition of evidence, including testimony, by means of video conferencing; and authorizing the participation of U.S. criminal investigators and prosecutors in joint investigative teams in the EU.
Six Individuals with Alleged Ties to Aryan Brotherhood Arrested and Charged with Murder of Two People in Nacogdoches County, TexasRead the Press Release
WASHINGTON - Six alleged members or associates of the Aryan Brotherhood of Texas (ABT) have been indicted and arrested for their alleged roles in the 2007 murder of two people in Nacogdoches County, Texas, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney John M. Bales of the Eastern District of Texas.
The indictment, returned by the federal grand jury on Jan. 21, 2010, and unsealed today, charges the six defendants with violent crimes in aid of racketeering activity. These activities include conspiracy to commit murder and murder. Additional charges of carrying a firearm during and in relation to a crime of violence and accessory after the fact in the murders were also filed against several individuals.
According to the indictment, the ABT is a powerful race-based state-wide organization that operates inside and outside of state and federal prisons throughout Texas and the United States. The ABT was established in the early 1980’s within the Texas prison system. It modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960’s. According to the indictment, previously the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism. Over time, the ABT has expanded its focus more towards a criminal enterprise to include illegal activities for profit.
The ABT enforces its rules and promotes discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, assault, robbery and threats against those who violate the rules or pose a threat to the enterprise. Members, and oftentimes associates, are required to follow the orders of higher-ranking members, often referred to as a “direct orders.”
The indictment alleges that a member of the Aryan Brotherhood, David Clyde Mitchamore Jr., aka “Super Dave,” and his girlfriend, Christie Rochelle Brown, were murdered by Charles Cameron Frazier, aka “Mojo,” and Brent Nicholas Stalsby, aka “Twist,” because Mitchamore failed to repay an outstanding debt he allegedly owed to Carl Richard Carver, an alleged general in the Aryan Brotherhood. The indictment alleges that after Mitchamore was killed, Frazier and Stalsby murdered Brown because they did not want to leave any witnesses to Mitchamore’s killing. The bodies of Mitchamore and Brown were discovered in Nacogdoches County on Aug. 10, 2007.
The following individuals were taken into custody today without incident.
- Carl Richard Carver, aka “C.C.”, 43, of Lufkin, Texas, is charged with conspiracy to commit murder and murder;
- Charles Cameron Frazier, aka “Mojo”, 28, of Nacogdoches, Texas, is charged with conspiracy to commit murder, two counts of murder, two counts of carrying a firearm during a crime of violence and being a felon in possession of a firearm;
- Brent Nicholas Stalsby, aka “Twist”, 29, of Lufkin, is charged with conspiracy to commit murder, two counts of murder, two counts of carrying a firearm during a crime of violence and being a felon in possession of a firearm;
- Terry Lynn Stalsby, aka “Peaches”, 28, of Lufkin, is charged with two counts of accessory after the fact;
- April Nicole Flanagan, 30, of Lufkin, is charged with conspiracy to commit murder, murder and accessory after the fact;
- Carrie Christine Wood, 37, of Lufkin, is charged with conspiracy to commit murder, and murder.
Carver, Frazier and Brent Stalsby appeared today before U.S. Magistrate Judge Keith Giblin. Wood, Flanagan and Terry Stalsby will make their initial appearances tomorrow before Judge Giblin. The punishment range for these offenses includes life in prison or the death penalty.
The case is being prosecuted by the U.S. Attorney’s Office for the Eastern District of Texas – Lufkin Office and the Criminal Division’s Gang Unit, in full cooperation with the Nacogdoches County District Attorney’s Office. This case is being investigated by the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Drug Enforcement Administration; the National Gang Targeting, Enforcement & Coordination Center (Gang-TECC); the National Gang Intelligence Center; the Nacogdoches Sheriff's Department; the Nacogdoches Police Department; the Angelina County, Texas, Sheriff's Department; the Lufkin Police Department; the Texas Department of Public Safety; and the Texas Rangers.
An indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Redding, Calif., Man Convicted of Child Pornography OffensesRead the Press Release
A California man was found guilty on Jan. 29, 2010, of one count of possessing and three counts of receiving child pornography, Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Benjamin B. Wagner of the Eastern District of California announced today. Elden Ray Cibart, 60, was found guilty by Senior U.S. District Court Judge William B. Shubb after an eight-day bench trial.
Evidence presented at trial showed that Cibart had been downloading and saving child pornographic images and videos from Internet news groups to his computers since before 2001. On Jan.18, 2006, officers from the Redding, Calif., Police Department went to Cibart’s home to investigate allegations that Cibart was involved in such activity. According to trial evidence, Cibart allowed the police officers to search one of his computers and they found child pornography. Forensic evidence offered at trial revealed that in addition to possessing images on Jan. 18, 2006, Cibart had downloaded pornographic video files to his computer hard drive on three separate days just before law enforcement officers visited his house.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Laurel White of the Eastern District of California and Trial Attorney Mi Yung C. Park of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The case was investigated by the Redding Police Department, U.S. Immigration and Customs Enforcement and CEOS’s High Technology Investigative Unit.
Owners of Los Angeles-area Medical Equipment Company<br /> Sentenced to Prison for Medicare FraudRead the Press Release
The owners and operators of a Los Angeles-area durable medical equipment (DME) company were sentenced to prison today in connection with an approximately $1 million power wheelchair fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; George S. Cardona, Acting U.S. Attorney for the Central District of California; Steven Martinez, Assistant Director In Charge of the FBI’s Los Angeles Field Office; and Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS).
Gevork Kartashyan, 45, and Eliza Shubaralyan, 42, were each sentenced to serve two years in prison by U.S. District Judge Stephen V. Wilson of the Central District of California. In addition, Kartashyan and Shubaralyan were ordered to serve three years of supervised release following their prison terms and to pay $400,000 in restitution, jointly and severally.
Kartashyan and Shubaralyan, who are married, were convicted at a July 2009 trial in federal court in Los Angeles. Kartashyan was found guilty of conspiracy to commit health care fraud and health care fraud, and Shubaralyan was found guilty of health care fraud. At trial, the evidence showed that Kartashyan and Shubaralyan, through their company CHH Medical Supply, billed Medicare $949,859 and were paid $597,750 as a result of the billing. According to evidence presented at trial, virtually all the billing was for medically unnecessary power wheelchairs and wheelchair accessories.
At trial, elderly Medicare beneficiaries testified about how they were recruited into the scheme. According to testimony, the beneficiaries were taken to Los Angeles-area medical clinics, where they turned over their Medicare numbers and other personal identifying information. Some beneficiaries testified that they were promised vitamins, diabetic shoes and other items that they never received, in return for providing their beneficiary numbers. According to evidence presented at trial, these clinics were in the business of generating fraudulent power wheelchair prescriptions that could be sold to DME company owners, who then billed Medicare for the wheelchairs. Many of the beneficiaries did not know they were getting a power wheelchair until it was delivered by CHH Medical Supply. All of the beneficiaries testified that they did not need or use the power wheelchairs.
Five physicians testified at trial that they never authorized or approved the power wheelchair prescriptions written under their names. Three of these physicians testified that they never worked at the clinics listed on the phony prescription pads.
According to testimony at trial, Kartashyan regularly purchased power wheelchair prescriptions. The evidence also showed that after the power wheelchairs were delivered, Kartashyan generated phony forms stating that the beneficiaries’ homes were appropriate for the use of a power wheelchair, even though no home assessment was conducted.
The case was prosecuted by Assistant Chief John S. (Jay) Darden and Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Central District of California and the Criminal Division’s Fraud Section, with investigatory assistance from the FBI, HHS-OIG and the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse. Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $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
Department of Justice FY 2011 Budget RequestRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today that President Obama’s Fiscal Year (FY) 2011 budget proposal totals $29.2 billion for the Department of Justice (DOJ) to increase support for the department’s national security and traditional law enforcement missions, renewed focus on economic crime and financial fraud, while strengthening state, local and tribal public safety efforts. The request represents a 5.4 percent increase in budget authority and an increase of 2,880 positions over the FY 2010 enacted appropriation.
“The President’s budget request demonstrates a strong commitment to protect America and ensure the safety, security and rights of its citizens. The budget provides the department with the means necessary to protect our national security, bolster our traditional missions, and prevent and reduce crime in tandem with our state, local, tribal and community partners,” said Attorney General Holder. “We have an obligation to protect our country in smart, reliable ways at every level, be it federal, state, local or tribal. We will be aggressive in our fight against global terrorism while maintaining our collective vigilance in fighting crime and enforcing civil rights and the rule of law."
The $29.2 billion budget request funds base operations and activities for all DOJ components and includes program enhancements totaling $2 billion. The program increases address President Obama’s and Attorney General Holder’s key priorities. The budget provides critical funding for the department’s essential national security and counterintelligence programs, as well as support for its vigorous efforts to prevent, investigate and prosecute financial, mortgage and health care fraud, and its prosecutor-led, intelligence-driven strategy to combat the Mexican drug cartels and protection of the southwest border. The budget also provides funding for an expansion of the Community Oriented Policing Services (COPS) hiring program and resources for the department’s efforts to ensure that prison and detention programs are adequately funded and effective prisoner re-entry programs are provided.
FY 2011 program increases and key priorities include:- $300.6 million increase to strengthen national security and counter the threat of terrorism;
- $234.6 million increase to defend the interests of the United States, including fighting financial fraud;
- $121.9 million increase to reduce violent crime and drug trafficking;
- $722.5 million increase to assist state, local and tribal law enforcement, including the Adam Walsh Act;
- $19.8 million increase to protect civil rights and vulnerable populations;
- $15 million increase to combat international organized crime;
- $527.5 million increase to maintain prisons, detention and parole services and judicial and courthouse security;
- $11 million increase to enforce immigration laws; and
- $448.8 million in total resources to ensure public safety in Indian Country.
Strengthen National Security and Counter the Threat of Terrorism
The FY 2011 Budget requests a $300.6 million increase, including 440 new positions (126 agents and 15 attorneys), to strengthen national security and counter the threat of terrorism. This represents a five percent increase in counterterrorism funding and a nine percent increase in intelligence resources over the FY 2010 levels. Overall, the FY 2011 budget request dedicates 15 percent of the department’s total discretionary budget authority to national security efforts. These funds are needed to allow the department to identify, track and defeat terrorists operating in the United States and overseas, and to fortify our intelligence analysis capabilities.
Continued advances in high speed telecommunications, computers and other technologies are creating new opportunities for terrorists and criminals. New vulnerabilities and challenges in law enforcement, including the need to ensure cyber security, require substantial investment in technology and human capital. This request will enable the department to address emerging threats and maintain the security of the nation.
For more information, view the Strengthen National Security and Counter the Threat of Terrorism Fact Sheet at http://www.justice.gov/jmd/2011factsheets/
Defend the Interests of the United States including Aggressive Pursuit of Financial Fraud and other Economic Crimes
The FY 2011 Budget requests a $234.6 million increase, including 708 new positions (143 agents and 157 attorneys), to restore confidence in our markets, protect the federal treasury and defend the interests of the U.S. Government. This includes an additional $96.8 million for economic fraud enforcement, which is a 23 percent increase over the FY 2010 level. This increase will continue the department’s efforts to aggressively pursue traditional law enforcement and litigation activities ranging from mortgage fraud, corporate fraud and other economic crimes, to other mission-critical activities that support the overall functioning and efficiency of the department.
In addition, the Department of Health and Human Services’ (HHS) budget requests a $60.2 million increase specifically for DOJ components involved in the investigation and litigation of health care fraud cases. This increase will further the efforts of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced last year by Attorney General Holder and HHS Secretary Kathleen Sebelius.
The department’s improved ability to collect debts, enforce tax laws and prosecute fraud will likely have high rates of return on the federal government’s investment of resources through the American Recovery and Reinvestment Act of 2009. This request will enable the department to help protect American savers and investors, the national financial market, and the U.S. Treasury.
For more information, view the Restore Confidence in our Markets, Protect the Federal Fisc, and Defend the Interests of the United States Fact Sheet at http://www.justice.gov/jmd/2011factsheets/
Reduce Violent Crime and Drug Trafficking
The FY 2011 Budget requests a $121.9 million increase, including 60 new positions (28 agents and 6 attorneys), to reduce the threat, incidence and prevalence of violent crime and drug trafficking. Approximately $5 billion, or 17 percent, of the department’s total budget is dedicated to target these growing problems, including $1 billion for federal law enforcement to help address violent crime and $4 billion for federal drug enforcement and prosecution efforts. In addition, resources to assist DOJ’s state, local and tribal law enforcement partners combat violent crime and drugs are requested within the department’s grant programs.
This increase includes funding for several programs to protect the southwest border, including a significant expansion of and investment in the Organized Crime Drug Enforcement Task Force Program, which is the centerpiece of the department’s drug enforcement and counternarcotics efforts. It also includes funding for Project Gunrunner, the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) southwest border firearms trafficking enforcement program; expanded operational capability at the Drug Enforcement Agency’s (DEA) El Paso Intelligence Center; improved intelligence exploitation ability along the southwest border and expanded drug enforcement operations in Mexico.
For more information, view the Reduce the Threat, Incidence and Prevalence of Violent Crime and Drug Trafficking Fact Sheet at http://www.justice.gov/jmd/2011factsheets/
Assist State, Local and Tribal Law Enforcement, including the Adam Walsh Act
The FY 2011 Budget requests a $722.5 million increase for state, local and tribal law enforcement assistance, bringing total program funding to $3.4 billion, which represents 12 percent of the department’s total budget authority. These funds will allow the department to substantially increase support to state, local and tribal police agencies that fight violent crime, combat violence against women and support victim programs. While a decrease of $188 million (five percent) is presented for state, local and tribal assistance compared to the FY 2010 enacted funding level, the FY 2011 Budget does not maintain funding for earmarks, as they bypass the competitive and formula grant processes designed to ensure that those states, communities and organizations most in need of assistance will receive it. Without $487 million in FY 2010 earmarks, state, local and tribal law enforcement assistance represents a 10 percent increase ($300 million) above the FY 2010 funding level.
The department’s request includes an additional $302 million for the COPS hiring program, bringing total program funding to $600 million. These funds, in the form of competitive grants, will enable state and local police agencies to increase the number of officers available for targeted patrol and other proven strategies designed to prevent and reduce crime.
The department requests a total of $461 million for the Office on Violence Against Women in order to provide communities with resources to combat sexual assault and violence against women. This request includes a total of $30 million for the Sexual Assault Services Program and a total of $50 million for the Legal Assistance for Victims Program.
The department requests a total of $2.2 billion for the Office of Justice Programs. This request includes $40 million for a new Byrne Criminal Justice Innovation Program; $10 million for a smart policing initiative; $10 million to promote smart probation initiatives; $20 million to continue implementation of the Adam Walsh Act of 2006, which established national standards for sex offender registration and notification; $37 million to assist children exposed to violence; and over $25 million, as well as a three percent grant set-aside ($55.8 million), to expand criminal justice research and statistical data gathering efforts.
For more information, view the Assist State, Local and Tribal Law Enforcement Fact Sheet at http://www.justice.gov/jmd/2011factsheets/
Protect Civil Rights and Vulnerable Populations
The FY 2011 Budget requests a $19.8 million increase, including 99 new positions (4 agents and 43 attorneys), to protect civil rights and vulnerable populations. This increase will allow the department to strengthen its focus on enforcing fair lending and housing laws, preventing employment discrimination, protecting voting rights, and prosecuting hate crimes. It will also expand resources for protecting children from exploitation, tracking convicted sex offenders, recovering missing and abducted children, and combating sex tourism.
This request will enable the department to reinforce its work in protecting civil rights and vulnerable populations by investigating and litigating cases of discrimination, supporting community outreach programs and training efforts, and providing guidance to state, local and tribal agencies.
For more information, view the Protecting Civil Rights and Vulnerable Populations Fact Sheet at http://www.justice.gov/jmd/2011factsheets/
Combat International Organized Crime
The FY 2011 Budget requests a $15 million increase, including 18 new positions (3 agents and 7 attorneys), to combat international organized crime through continued implementation of the International Organized Crime Strategy. The Law Enforcement Strategy to Combat International Organized Crime was implemented by the Attorney General’s Organized Crime Council in April 2008 to modernize law enforcement’s approach to international organized crime. This request supports a unified strategy to dismantle international criminal organizations that have become exponentially more sophisticated.
This request will enable the department to combat the many threats posed by international organized crime entities, including cyber and intellectual property crimes and efforts to manipulate our financial, securities and commodities markets.
For more information, view the Combat International Organized Crime Fact Sheet at http://www.justice.gov/jmd/2011factsheets/
Maintain Prisons and Judicial Security
The FY 2011 Budget requests a $527.5 million increase to maintain prison, detention and parole functions, as well as to provide judicial and courthouse security. This request includes increases for the Bureau of Prisons (BOP), the Office of the Federal Detention Trustee (OFDT), the U.S. Parole Commission (USPC) and the U.S. Marshals Service (USMS).
This increase will enable these agencies to continue to confine offenders in the controlled environments of prisons and contract- or community-based facilities. It also funds self-improvement opportunities for offenders to help them become law-abiding citizens as well as increased funding for Second Chance Act initiatives and re-entry programs to reduce recidivism. Second Chance Act initiatives include expanded transitional housing, BOP inmate correctional programs, and the District of Columbia Recidivism Reduction and Re-entry Enhancement, a new program the USPC will implement in FY 2011.
This request will enable the department to maintain and strengthen its focus on the traditional missions of law enforcement, the judicial process and federal prison and detention systems. Overall, the FY 2011 Budget requests $9 billion of the Department’s total budget authority for these efforts.
For more information, view the Maintain Prisons, Detention, Parole and Judicial and Courthouse Security Fact Sheet at http://www.justice.gov/jmd/2011factsheets/
Enforce Immigration Laws
The FY 2011 Budget requests an $11 million increase, including 125 new positions (31 attorneys), to enforce immigration laws, primarily through the Executive Office for Immigration Review (EOIR). This increase will fund 21 immigration judge teams and 10 Board of Immigration Appeals attorneys, which will allow EOIR to keep pace with the caseload emanating from the Department of Homeland Security. These resources are necessary to ensure that the nation’s approach to immigration enforcement is reasonable, effective and humane.
For more information, view the Enforce Immigration Laws Fact Sheet at http://www.justice.gov/jmd/2011factsheets/
Ensure Public Safety in Indian Country
The FY 2011 President’s Budget requests $448.8 million in total resources for public safety initiatives for tribal communities. New investments include significant grant resources for addressing a broad range of criminal justice issues and additional FBI agents and forensic support to help tribal communities combat illegal drug use, trafficking and violent crime. There are over 56 million acres of Indian Country and more than 560 federally-recognized Indian tribes. The Major Crimes Act provides federal criminal jurisdiction over certain specified major crimes if the offender is Indian, while tribal courts retain jurisdiction for conduct that might constitute a lesser offense. Thus, federal investigation and prosecution of felonies in Indian Country cannot be deferred to a local jurisdiction and therefore federal law enforcement is both the first and only avenue of protection for the victims of these crimes.
For more information, view the Indian Country Public Safety Initiatives Information Sheet at http://www.justice.gov/jmd/2011factsheets/Attorney General Holder Appoints Three New U.S. Attorneys <br /> to Advisory CommitteeRead the Press Release
Attorney General Eric Holder today announced the appointment of three new U.S. Attorneys to serve on the Attorney General’s Advisory Committee (AGAC): Sanford Coats of the Western District of Oklahoma; Steven M. Dettelbach of the Northern District of Ohio; and Jim Letten of the Eastern District of Louisiana.
“I welcome the addition of these U.S. Attorneys to the AGAC, which plays a critical role in the department. I will rely heavily on them as we work to further the department’s efforts to reduce violent crime and gang violence, promote civil rights, ensure fairness in the marketplace and above all, preserve our national security,” said Attorney General Holder.
The AGAC, chaired by U.S. Attorney for the District of Minnesota B. Todd Jones, was created in 1973. The committee, which reports to the Attorney General through the Deputy Attorney General, represents the voice of the U.S. Attorneys and provides advice and counsel to the Attorney General on policy, management and operational issues impacting the Offices of the U.S. Attorneys.
A brief bio on each appointee is below:
Sanford Coats was presidentially appointed U.S. for the Western District of Oklahoma on Dec. 30, 2009. Prior to his appointment he served as an Assistant U.S. Attorney for the Western District of Oklahoma (2004-2009); Assistant U.S. Attorney on detail for the Eastern District of Louisiana (2007), and an associate attorney with Fellers, Snider, Blankenship, Bailey & Tippens (1999-2003).
Steven Dettelbach was presidentially appointed U.S. Attorney for the Northern District of Ohio on Sept. 17, 2009. He previously served as a partner with Baker & Hostetler LLP (2006-2009); Assistant U.S. Attorney for the Northern District of Ohio (2003-2006); Counsel to the Committee on the Judiciary, U.S. Senate (2001-2003); Assistant U.S. Attorney (1997-1999) and Deputy Chief for the Southern Division, (1997-2001), District of Maryland; trial attorney (1992-1996) and Acting Deputy Chief (1996-1997), Civil Rights Division, Department of Justice; and Special Assistant U.S. Attorney, District of Columbia (1993). Dettelbach serves as Chair of the AGAC’s Civil Rights Subcommittee.
Jim Letten was presidentially appointed U.S. Attorney for the Eastern District of Louisiana in 2005 by then-President George W. Bush. He was the court appointed U.S. Attorney from August 2001-2005, and Attorney General appointed from April - August 2001. Letten served as First Assistant U.S. Attorney for the Eastern District of Louisiana (1994-2001), and Assistant U.S. Attorney and Chief of the Organized Crime Strike Force Unit (1990-1994). In 2005, Letten was awarded the 2005 U.S. Attorney General’s Medallion for Distinguished Service recognizing his leadership following the devastation of Hurricane Katrina. Letten serves on the AGAC’s Terrorism and National Security Subcommittee, Violent and Organized Crime Subcommittee and Environmental Issues Working Group.
The full Committee is listed below:
B. Todd Jones, U.S. Attorney, District of Minnesota, Chair
Paul J. Fishman, U.S. Attorney, District of New Jersey, Vice Chair
Preet Bharara, U.S. Attorney, Southern District of New York
Dennis Burke, U.S. Attorney, District of Arizona
Sanford C. Coats, U.S. Attorney, Western District of Oklahoma
Steven M. Dettelbach, U.S. Attorney, Northern District of Ohio
Jenny Durkan, U.S. Attorney, Western District of Washington
Patrick J. Fitzgerald, U.S. Attorney, Northern District of Illinois
Jim Letten, U.S. Attorney, Eastern District of Louisiana
Neil H. MacBride, U.S. Attorney, Eastern District of Virginia
Peter F. Neronha, U.S. Attorney, District of Rhode Island
Joyce White Vance, U.S. Attorney, Northern District of Alabama
Channing D. Phillips, Acting U.S. Attorney, ex officio, District of Columbia
John S. Davis, Criminal Chief, Eastern District of Virginia
Gretchen Witt, Civil Chief, District of New Hampshire
29 January 2010
Justice Department Files for Immediate Relief<br /> Regarding Conditions in Georgia’s HospitalsRead the Press Release
WASHINGTON – The Justice Department’s Civil Rights Division today announced that it has filed a motion for immediate relief to protect individuals confined in seven state-run psychiatric hospitals in Georgia from the imminent and serious threat of harm to their lives, health and safety. The motion, filed late yesterday, seeks appointment of a monitor who will set binding targets and timetables for reducing the number of residents at the hospitals and expanding appropriate community based services.
A year ago, the state of Georgia and the Justice Department entered into an agreement to ensure that individuals in the hospitals were served in the most appropriate integrated settings and that unlawful conditions in the hospitals were remedied. The agreement was filed in United States v. Georgia, and the parties asked U.S. District Judge Charles A. Pannell Jr. to approve the agreement. However, the court has not yet approved the agreement.
The Justice Department has been monitoring conditions in the hospitals and has found that the facilities continue to be dangerous and that hundreds of individuals who could and should be served in the community remain institutionalized and continue to be exposed to dangerous conditions. Georgia continues to fail to serve patients in the most integrated setting appropriate to their needs, and preventable deaths, suicides and assaults continue to occur with alarming frequency in the hospitals.
"States responsible for the care of individuals living in state run facilities have a duty to protect them from harm. Individuals in Georgia’s hospitals are being subjected to a widespread pattern of violence and are not being protected from preventable deaths," said Thomas E. Perez, Assistant Attorney General in charge of the Civil Rights Division. "We need quick action to protect these individuals."
More than a decade ago, in Olmstead v. L.C., the Supreme Court found that Georgia Regional Hospital in Atlanta was impermissibly segregating two individuals with disabilities in that hospital when they could have been served in more integrated settings. The Supreme Court ordered states to serve individuals with disabilities in the most integrated settings appropriate to their needs. In the same hospital involved in that landmark case, and the other six run by Georgia, the state continues to impermissibly segregate hundreds of individuals.
In addition to the unlawful segregation, individuals in the hospitals are exposed to egregious harm. Some examples include:
- In 2009, the state failed to adequately supervise an individual who had killed previously. The individual assaulted and killed another individual in the hospital.
- In 2008, hospital staff failed to intervene in a fight between individuals. One of the individuals was knocked unconscious and died a few days later from blunt force trauma to the head.
- In 2009, staff failed to adequately supervise an individual who raped another individual.
- In 2009, an individual committed suicide by tipping his bed up and hanging himself from the upended bed. The Justice Department’s experts had repeatedly warned hospital staff during on-site visits of the dangers posed by these beds that were not bolted to the floor.
- This month, the state failed to adequately supervise an individual who expressed suicidal thoughts the day before she committed suicide.
The seven hospitals include East Central Regional Hospital, Georgia Regional Hospital at Savannah, Georgia Regional Hospital at Atlanta, Southwestern State Hospital, Central State Hospital, West Central Georgia Regional Hospital and Northwest Georgia Regional Hospital.
The Civil Rights Division is authorized to conduct investigations under the Civil Rights of Institutionalized Persons Act (CRIPA) and the Americans with Disabilities Act (ADA). CRIPA authorizes the Attorney General to investigate conditions of confinement in certain institutions owned or operated by, or on behalf of, state and local governments. In addition to psychiatric hospitals, these institutions include nursing homes, residential facilities serving persons with developmental disabilities, jails, prisons and juvenile correctional facilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems. The ADA authorizes the Attorney General to investigate whether a state is serving individuals in the most integrated settings appropriate to their needs. Please visit http://www.justice.gov/crt to learn more about CRIPA, the ADA and other laws enforced by the Justice Department’s Civil Rights Division.
The motion for immediate relief was filed by Mary Bohan, Timothy Mygatt, Robert Koch and Emily Gunston, Trial Attorneys in the Special Litigation Section of the Civil Rights Division.
First Extradition from El Salvador to the United States Brings Salvadoran National Back to Serve Prison Sentence on Texas State Sexual Assault ChargesRead the Press Release
WASHINGTON - Jose Marvin Martinez, a Salvadoran national, was surrendered to U.S. authorities today in the first extradition from El Salvador to the United States, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Martinez was convicted on March 30, 2006, in Brazoria County, Texas, of one count of sexual assault on a child and one count of indecency with a child. According to the evidence presented at trial, in March 2004 Martinez sexually assaulted his daughter, who was 14-years-old at the time. The day after his conviction, a Texas jury sentenced Martinez to eight years in prison on the sexual assault charge and 10 years of community supervision on the indecency charge. Martinez, who had been free on bond during the trial, fled before the jury began deliberations.
Martinez fled to El Salvador where he was arrested on Jan. 11, 2008, by Salvadoran law enforcement authorities based on a provisional arrest warrant for his extradition. On Dec. 22, 2009, the Supreme Court of El Salvador voted 10 to 5 to extradite Martinez to the United States to serve his sentence for the sexual assault charge. The Salvadoran Supreme Court denied extradition on the indecency with a child conviction because there is no similar Salvadoran offense and it was also not listed in the U.S./El Salvador Bilateral Extradition Treaty.
In July 2000, El Salvador amended its constitution to allow for the extradition of Salvadoran nationals. This case marks the first extradition by El Salvador of a Salvadoran national to the United States in modern times.
"Today’s extradition brings a criminal to justice and paves the way forward in our law enforcement partnership with El Salvador," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "This first extradition from El Salvador to the United States marks a turning point in our continued efforts to strengthen our joint efforts to hold criminals accountable. The long arm of the law reaches farther with every successful extradition to and from the United States, as we work with our partners around the world to make sure criminals cannot find safe haven from justice."
The extradition announced today is the result of close cooperation between the FBI; U.S. Immigration and Customs Enforcement; the Brazoria County, Texas, Sheriff's Office; the Brazoria County District Attorney’s Office; the U.S. Embassy in San Salvador and Salvadoran law enforcement authorities. The Department of Justice Attaché in San Salvador and the Criminal Division’s Office of International Affairs were instrumental in achieving this extradition.
28 January 2010
Three Indicted for False Labeling, Smuggling and Misbranding of Seafood ProductsRead the Press Release
WASHINGTON–A federal grand jury in Mobile, Ala., today returned a 28-count indictment against three individuals for conspiring to falsely label, smuggle and misbrand more than 325,000 pounds of seafood in order to avoid paying tariffs and defraud customers, the Justice Department announced.
According to the indictment, Karen L. Blyth of Paradise Valley, Ariz., was the co-owner and president of two companies, CSE Inc., in Phoenix and RF Inc., in Pensacola, Fla., that traded in a variety of seafood products. David H. M. Phelps of Scottsdale, Ariz., co-owned CSE and RF and served as a vice president. John J. Popa of Pensacola, co-owned RF with Blyth and Phelps and served as the company’s vice president.
The indictment alleges that the three used CSE to supply RF, among others, with falsely labeled fish that were in turn sold to RF’s customers in Alabama and the Florida panhandle. RF sold the mislabeled seafood and substituted cheaper product for more expensive seafood. As part of the conspiracy, the three caused the fish from the boxes that were correctly labeled to be removed and placed into boxes that bore no description or falsely labeled the fish.
Blyth and Phelps also arranged for CSE to purchase hundreds of thousands of pounds of frozen fillets of catfish through a company in Vietnam knowing that the catfish would be mislabeled to avoid import tariffs. A January 2003, anti-dumping tariff was placed on all imports of Vietnamese catfish into the United States because the Vietnamese catfish was being marketed at a significantly lower price than was market rate at the time. That initial anti-dumping order imposed a duty of up to 63.88 percent on fish subject to the order.
In order to do this, the two provided the Vietnamese company false shipping labels and generated purchase orders and other false documentation to conceal the product. Blyth, Phelps and Popa then had RF purchase the falsely labeled fish in small increments from CSE to sell to its Alabama and Florida customers.
Specifically, Blyth, Phelps and Popa were charged with conspiracy to:
- falsely label fish and shellfish, including a type of catfish commonly called basa, swai or sutchi; Lake Victoria perch; grouper; oysters and shrimp, in violation of the Lacey Act;
- receive, buy, sell and transport merchandise after importation, specifically frozen fillets of fish of the genus Pangasius, a type of catfish, commonly called basa, swai and sutchi, knowing it to have been imported contrary to law; and
- misbrand seafood products, including a type of catfish commonly called basa, swai or sutchi, Lake Victoria perch, grouper, oysters, and shrimp sold in interstate commerce with the intent to defraud and mislead. The charge describes over 325,000 pounds of falsely labeled seafood involved in a conspiracy spanning from Jan. 1, 2004, to Nov. 8, 2006.
Blyth and Phelps were also charged with six felony counts of false labeling of approximately 283,500 pounds of imported Pangasius fillet, a type of catfish, as sole, in violation of the Lacey Act; two felony counts of the receipt, sale, and transportation of this falsely labeled fish, which was imported falsely labeled and without applicable tariffs having been paid; and one felony count of misbranding of this catfish as sole.
In addition, Blyth, Phelps, and Popa were charged with:
- one felony count of falsely labeling and purchasing or selling approximately 34,100 pounds of imported catfish fillet as sole, in violation of the Lacey Act;
- one felony count of the receipt, sale and transportation of this falsely labeled fish, which was imported contrary to law; and one felony count of misbranding of this fish as sole.
- two felony counts for purchasing and creating false labels describing approximately 2,800 pounds of imported Pangasius fillet as grouper; and one felony count for misbranding this fish as grouper.
- five felony counts of falsely labeling and selling to customers in southern Alabama and the Florida panhandle region approximately 18,350 pounds of an imported catfish as grouper and sole, in violation of the Lacey Act; and two felony counts of misbranding of this catfish as grouper and sole.
- three felony counts of falsely labeling and selling Lake Victoria perch as grouper and/or snapper to customers in Alabama and the Florida panhandle region, in violation of the Lacey Act, and one felony count for the misbranding of this falsely labeled fish.
Finally, Popa was charged with three felony counts of falsely labeling live and shucked oysters in violation of the Lacey Act, resulting from his changing the harvest date on the oyster tags and labels to falsely indicate a more recent harvest date.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty in a court of law.
The maximum penalty for each smuggling count is up to 20 years in prison and a $250,000 fine. The maximum penalty for each violation of the Lacey Act includes up to five years in prison and a $250,000 fine. The maximum penalty for each misbranding count includes up to three years in prison and a $250,000 fine.
The case was investigated by the National Oceanic and Atmospheric Administration, Office of Law Enforcement; the Department of Homeland Security, Immigration and Customs Enforcement; the U.S. Air Force Office of Special Investigations; the Department of Defense, Defense Criminal Investigative Service. The case is being prosecuted by the Environmental Crimes Section of the Department of Justice and the U.S. Attorney’s Office for the Southern District of Alabama.
Texas Company Pleads Guilty and Is Sentenced for Environmental CrimeRead the Press Release
WASHINGTON—Economy Cash & Carry Inc., pleaded guilty today in U.S. District Court in El Paso, Texas, to a misdemeanor violation of the Plant Protection Act related to the falsification of a required certificate stamp, the Justice Department and the Department of Agriculture (USDA) announced.
Previously Michael Sayklay, the former vice president of Economy Cash & Carry, pleaded guilty to a felony charge for falsifying stamps that certified wood pallets were heat-treated to prevent infestation, and were suitable for use in international transportation. In March 2006, Sayklay had the false stamp affixed to Economy Cash & Carry wood pallets, which were used to carry products back and forth across the U.S.-Mexican border.
At the hearing, Economy Cash & Carry was sentenced to pay a fine of $22,000. A sentencing date for Sayklay has not been set by the court.
USDA requires the heat treatment of wood pallets used in international transactions. The requirement is to prevent parasites and plant diseases from entering the United States in wood packaging materials. USDA began implementation of the heat treatment requirement of wood packing material in September 2005. Wood pallets that carry products transported within the United States are not required to be heat treated. This was the first criminal conviction under the new regulation.
Economy Cash & Carry utilizes wood pallets to transport food products and pharmaceuticals it sells in both the United States and Mexico. Sayklay was the warehouse manager for the El Paso-based company, and was expected to direct the transfer of products destined for Mexico from untreated pallets to treated pallets.
Instead, Sayklay created a copy of a stamp certification utilized by a legitimate wood pallet treating company. Sayklay had hundreds of untreated domestic pallets falsely stamped as if they were treated, saving the time to transfer products between pallets as well as the cost of treatment. However, the falsified stamp Sayklay used was smaller than the legitimate stamp.
Subsequently, other companies who received the fraudulently stamped pallets from Mexico, sent them to the legitimate stamp owner for repair. The legitimate stamp owner noticed the falsification and notified the government. A follow-up investigation by the USDA resulted in the seizure of fraudulently stamped pallets at the U.S.-Mexican border.
The investigation was conducted by USDA. It was prosecuted by the Justice Department’s Environmental Crimes Section, and the U.S. Attorney’s Office for the Western District of Texas.
Texas Attorney Convicted for Role in Pump-and-dump <br /> Stock Manipulation SchemesRead the Press Release
A securities attorney was convicted today by a federal jury in Alexandria, Va., for participating in multi-million dollar pump-and-dump stock manipulation schemes, Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia announced.
Phillip Windom Offill Jr., 51, of Dallas, was indicted on March 12, 2009, and today was found guilty of one count of conspiracy to commit registration violations, securities fraud and nine counts of wire fraud.
“It is a sad day when a former U.S. Securities and Exchange Commission (SEC) attorney uses what he learned in the government to later defraud the investing public,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “As this case shows, individuals who illegally manipulate our securities markets to line their own pockets will be brought to justice.”
“As a former SEC lawyer, Mr. Offill knew the law – and he intentionally broke it and tried to hide his crimes,” said U.S. Attorney Neil H. MacBride of the Eastern District of Virginia. “He and his co-conspirators made millions while innocent investors were left with stock in worthless companies. We are committed to pursuing these cases aggressively to protect the public and the integrity of the securities market.”
According to court records and evidence at trial, Offill, an attorney in Dallas and a former attorney with the SEC, was retained by David Stocker, a Phoenix attorney who pleaded guilty in March 2009 in the Eastern District of Virginia to conspiracy to commit securities fraud. According to the indictment, from approximately March 2004 through October 2004, Offill and Stocker evaded federal securities registration requirements and provided co-conspirators with millions of unregistered and “free-trading” shares of nine companies’ common stock that the co-conspirators could not have otherwise legally obtained. Many of the shares were subsequently sold by co-conspirators to investors in the general public. By evading the registration requirements, the co-conspirators were able to hide from the investing public the actual financial condition and business operations of the companies. The companies included Emerging Holdings Inc.; MassClick Inc.; China Score Inc.; Auction Mills Inc.; Custom-Designed Compressor Systems Inc.; Ecogate Inc.; Media International Concepts Inc.; Vanquish Productions Inc.; and AVL Global Inc.
In connection with Emerging Holdings, MassClick and China Score, evidence at trial showed that Offill knowingly participated in a conspiracy known as a “pump-and-dump” scheme to manipulate the price of these companies’ securities. Co-conspirators falsely manipulated the price and volume of some of the companies’ stock by making materially false and misleading statements in press releases and in spam e-mails to tens of millions of e-mail addresses throughout the United States in an effort to create artificial demand for the three companies’ stock. After fraudulently “pumping” the market price and demand for the companies’ stock, co-conspirators “dumped” shares by selling them for large profits to the general investing public in the over-the-counter market through listings on Pink Sheets, an inter-dealer electronic quotation and trading system. These shares were purchased by unsuspecting investors, including investors in the Eastern District of Virginia, and were often rendered virtually worthless.
Offill, who was immediately remanded by U.S. District Judge Liam O’Grady, faces a maximum penalty of five years in prison on the conspiracy charge and 20 years in prison for each charged count of wire fraud. He will also be subject to up to $15 million in forfeiture. Sentencing has been scheduled for April 16, 2010, at 9 a.m., before Judge O’Grady.
Ten other defendants have pleaded guilty and eight of them have been sentenced in federal court in Alexandria, Va., for their roles in related stock manipulation schemes. David B. Stocker will be sentenced on March 8, 2010. Kenneth Owen pleaded guilty to conspiracy to commit securities fraud and will be sentenced in federal court in Los Angeles on Aug. 25, 2010. Michael R. Saquella was sentenced to 10 years in prison; Justin Medlin was sentenced to six years in prison; Steven P. Luscko and Gregory A. Neu were each sentenced to five years in prison; Lawrence Kaplan was sentenced to three years in prison; Brian G. Brunette was sentenced to a one year in prison; Anthony Tarantola was sentenced to six months in prison; and Henry “Hank” Zemla was sentenced to three months in prison.
The case, which was referred by the Market Regulation Department of Financial Industry Regulatory Authority (FINRA), was investigated by the FBI and the U.S. Postal Inspection Service, with assistance from FINRA’s Criminal Prosecution Advisory Group. The case is being prosecuted by Trial Attorney Patrick Stokes of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ed Power of the Eastern District of Virginia. The Department of Justice acknowledges the substantial assistance of FINRA and the SEC in its investigation. It would also like to thank the Virginia State Corporation Commission, Division of Securities and Retail Franchising, for its assistance.
Justice Department Resolves Lawsuit Alleging Disability-Based Housing Discrimination in Davenport, IowaRead the Press Release
WASHINGTON – The Justice Department today announced a settlement of a lawsuit alleging that those involved in the design and construction of two multifamily housing complexes in Davenport, Iowa, violated the Fair Housing Act. The complexes at issue are Kimberly Ridge Manor and Jersey Ridge Manor.
The case began when the Davenport Civil Rights Commission filed fair housing complaints with the U.S. Department of Housing and Urban Development (HUD). After investigating, HUD referred the matter to the Justice Department, which filed the lawsuit in September 2009. Under the settlement, which must still be approved by the U.S. District Court for the Southern District of Iowa, the defendants will pay all costs related to making the complexes accessible to persons with disabilities and pay up to $40,000 to compensate individuals harmed by the inaccessible housing. The settlement also requires all the defendants to undergo training on the requirements on the Fair Housing Act and to provide periodic reports to the government.
"Accessible housing is not just a civil right for individuals with disabilities, it is a basic necessity," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This settlement ensures that persons with physical disabilities have an equal opportunity to live in and visit these complexes."
"Designing accessible housing is a simple step that can have a big impact on the lives of persons with disabilities," said Nicholas A. Klinefeldt, U.S. Attorney for the Southern District of Iowa. "We are committed to the principle that all Americans, including those with disabilities, deserve the opportunity to enjoy fair housing in their community."
"Ensuring that homes are designed and built to provide access for people with disabilities is the law. Today’s settlement demonstrates what can be done when government and private actors work together to enforce the law and produce results," stated John Trasviña, HUD Assistant Secretary for Fair Housing & Equal Opportunity.
The defendants responsible for payments and retrofits are Portzen Construction Inc., GNZ Properties Inc. and Sodarock Properties LLC. In addition, defendants Design Center Associates Inc. and Jerry L. Anderson are responsible for funding the retrofits. The retrofits include creating accessible routes to building entrances, providing accessible parking for residents and guests, widening inaccessible narrow doorways, and reconfiguring bathrooms and kitchens to accommodate persons who use wheelchairs.
Persons who believe they may have been harmed by the lack of accessible housing at one of the complexes involved in this matter should contact the Justice Department at 1-800-896-7743, and select menu option 9992.
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 HUD at 1-800-669-9777.
Fair housing enforcement is a priority of the Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.
Former Willbros International Executives Sentenced to Prison<br /> for Their Roles in $6 Million Foreign Bribery SchemeRead the Press Release
Two former executives of Willbros International Inc. (WII), a subsidiary of Houston-based Willbros Group Inc. (Willbros), were sentenced today for their roles in a conspiracy to pay more than $6 million in bribes to government officials of the Federal Republic of Nigeria and officials from a Nigerian political party, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Acting Assistant Director in Charge John G. Perren of the FBI’s Washington Field Office.
Jason Edward Steph, 40, was sentenced today to 15 months in prison by U.S. District Court Judge Simeon T. Lake III in Houston. In addition to the prison sentence, Judge Lake ordered Steph to serve two years of supervised release following his prison term and to pay a $2,000 fine. The court acknowledged at the sentencing hearing the assistance Steph provided in ongoing investigations.
Jim Bob Brown, 48, was sentenced today to 12 months and one day in prison by Judge Lake. In addition to the prison sentence, Judge Lake ordered Brown to serve two years of supervised release following his prison term and to pay a fine of $1,000 per month while Brown is on supervised release. The court acknowledged at the sentencing hearing the assistance Brown provided in ongoing investigations.
Steph and Brown both had pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) before Judge Lake in U.S. District Court for the Southern District of Texas. In pleading guilty, Steph and Brown admitted that Willbros, a publicly traded company that provides construction, engineering and other services in the oil and gas industry, conducted its international operations through WII and that they were both employees of WII. Steph admitted that beginning in approximately late 2003, he conspired with others to make a series of corrupt payments totaling more than $6 million to various Nigerian officials and officials from a Nigerian political party to assist Willbros in obtaining and retaining the Eastern Gas Gathering System (EGGS) Project, which was valued at approximately $387 million.
Steph also admitted that in early 2005, he, along with former WII executive Brown and others, arranged for the payment of approximately $1.8 million in cash to government officials in Nigeria to further the conspiracy. Steph admitted that in order to make these payments, he obtained $550,000 in cash from another co-conspirator, for the purpose of paying that money to Nigerian government officials. He also admitted that he obtained approximately $350,000 from a petty cash account, which was raised over several weeks by falsely inflating petty cash funding requests transmitted to Willbros and by covering the inflated amounts with invoices from fictitious vendors representing purportedly legitimate business expenses.
Brown admitted that in early 2005, he conspired with others to pay bribes to government officials in Nigeria for the purpose of retaining the EGGS Project. Brown admitted that to further this conspiracy, he, with the assistance of others, obtained a suitcase filled with $1 million in cash from a WII’s German construction company partner, which Brown then paid to another co-conspirator for the purpose of forwarding that money to Nigerian government officials.
Brown also admitted that in at least 1996 and continuing through at least 2004, he conspired with others to negotiate lower federal and state tax obligations in exchange for corrupt, "under the table" payments to Nigerian revenue officials, including officials responsible for auditing and enforcing taxes for the purpose of obtaining or retaining business and for securing an improper advantage. Brown admitted he also conspired with others to make corrupt payments to officials of the Nigerian judicial system in exchange for favorable action on pending cases, for the purpose of obtaining or retaining business and for securing an improper advantage.
Additionally, Brown admitted to making at least $300,000 in corrupt payments to Ecuadorian government officials affiliated with PetroEcuador and PetroCommercial, for the purpose of obtaining and retaining business for Willbros, WII and others, including the Proyecto Santo Domingo project. In connection with the Ecuador transaction, Brown and others agreed to pay $150,000 to the Ecuadorian officials up front and $150,000 at the project’s conclusion.
To date, in addition to Steph and Brown, the prosecution in this matter also includes:
- On Nov. 12, 2009, former WII consultant Paul Novak pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA, in connection with his role in paying bribes to Nigerian government officials. Novak’s sentencing is currently scheduled for July 9, 2010.
- On Dec. 19, 2008, an indictment was unsealed against former Willbros executive Kenneth Tillery, charging him with conspiring to make more than $6.3 million in bribe payments to Nigerian and Ecuadoran officials; two individual counts of violating the FCPA in connection with the authorization of specific corrupt payments to officials in those countries; and one count of conspiring to launder the bribe payments through purported consulting companies. He remains a fugitive.
- On May 14, 2008, Willbros entered into a deferred prosecution agreement and agreed to pay a $22 million criminal penalty, in connection with the company’s payment of bribes to government officials in Nigeria and Ecuador.
This case was prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Laura N. Perkins of the Criminal Division’s Fraud Section and investigated by the FBI’s Washington Field Office squad that specializes in investigations of FCPA violations.
- On Nov. 12, 2009, former WII consultant Paul Novak pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA, in connection with his role in paying bribes to Nigerian government officials. Novak’s sentencing is currently scheduled for July 9, 2010.
Former Army Staff Sergeant Pleads Guilty to Money LaunderingRead the Press Release
WASHINGTON – A former staff sergeant in the U.S. Army pleaded guilty today to a one-count criminal information charging her with money laundering arising from a scheme involving the fraudulent awarding and administration of U.S. government contracts in Iraq, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Theresa Russell, 40, of Pleasanton, Texas, pleaded guilty in federal court in San Antonio. According to court documents, from January 2004 through October 2004, Russell was deployed to Logistical Support Area (LSA) Anaconda, a U.S. military installation near Balad, Iraq. As part of the plea, Russell admitted that from April 2004 to February 2005, she received more than $30,000 in cash from John Rivard, a former major in the U.S. Army Reserves. Russell admitted that she knew the money she received from Rivard was the proceeds of bribery.
In July 2007, Rivard pleaded guilty to bribery, among other offenses, in connection with his service as an Army contracting officer at LSA Anaconda. According to court documents, from April 2004 to August 2005, Rivard conspired with a government contractor to steer federally-funded contracts to the contractor’s company in exchange for hundreds of thousands of dollars in illicit bribe payments.
According to court documents, Rivard instructed Russell to divide the payments she received from him into several smaller monetary bank deposits, which she admitted she did, in an effort to avoid the detection of law enforcement authorities. Russell admitted that she subsequently used the criminal proceeds to purchase, among other things, a car, cosmetic surgery, and household furnishings and goods.
The maximum penalty for the money laundering charge is 10 years in prison, a $250,000 fine and three years of supervised release following the prison term. Sentencing is scheduled for May 21, 2010.
This case is being prosecuted by Trial Attorneys Daniel A. Petalas and Justin V. Shur of the Criminal Division’s Public Integrity Section, as well as Trial Attorney Ann C. Brickley. This case is being investigated by Army Criminal Investigation Command; Defense Criminal Investigative Service; the FBI; Internal Revenue Service-Criminal Investigation; Special Inspector General for Iraq Reconstruction; and U.S. Immigration and Customs Enforcement.
Federal Court Permanently Blocks Tennessee Womanfrom Preparing Federal Tax Returns for OthersRead the Press Release
WASHINGTON – A federal court has issued a permanent injunction barring Karen Liane Miller of Nashville, Tenn., from preparing federal income tax returns for others, the Justice Department announced today. U.S. District Court Judge Aleta Trauger entered the order and judgment, which also bars Miller from assisting others with preparing federal tax returns. Miller consented to the entry of the permanent injunction against her. The court had previously entered a preliminary injunction against Miller.
According to the government’s filings, Miller repeatedly prepared federal income tax returns claiming bogus refunds in "astonishing" amounts, based on a tax fraud scheme known as the "redemption" scheme. The court previously found that Miller prepared and filed 41 income tax returns for customers in 2009 claiming more than $8.3 million in fraudulent refunds. The court said that the redemption scheme is based on a frivolous theory that the federal government maintains secret accounts for its citizens, and that taxpayers can gain access to funds in those accounts by issuing IRS 1099-OID forms to their creditors.
The case against Miller was one of seven lawsuits the Justice Department filed across the nation in October 2009, all of which seek permanent injunctions against tax preparers who allegedly promote the redemption scheme. The defendants in those cases allegedly prepared tax returns fraudulently requesting a total of $562.4 million in refunds.
The Internal Revenue Service catches the vast majority of fraudulent redemption-scheme tax refund claims without issuing any refund. Taxpayers who submit the claims face substantial civil monetary penalties and possible criminal prosecution.
John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Justice Department trial attorney Brian H. Corcoran for handling the case, and also thanked Shauna Henline of the IRS’s Small Business Self-Employed Division, who conducted the investigation.
In the past decade, the Justice Department’s Tax Division has obtained more than 435 injunctions against dishonest tax-return preparers and tax fraud promoters. Information about these cases is available on the Justice Department Web site.
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Attorney General Holder, Secretary Sebelius Convene National Summit on Health Care Fraud, <br /> Unveil Historic Commitment to Fighting Fraud in President’s FY 2011 BudgetRead the Press Release
Attorney General Eric Holder and U.S. Department of Health and Human Services Secretary Kathleen Sebelius today joined private sector leaders, law enforcement personnel and health care experts for a landmark National Summit on Health Care Fraud. The summit is the first national gathering on health care fraud between law enforcement and the private and public sectors and is part of the Obama Administration’s coordinated effort to fight health care fraud.
"Health care fraud affects all Americans and demands a coordinated, national response," said Attorney General Holder. "HEAT (the Health Care Fraud Prevention & Enforcement Action Team) has proven that better collaboration is the key to combating these crimes, recovering stolen resources, and protecting essential Medicare and Medicaid dollars. We welcome the private sector’s participation in this work – together, I’m confident we can make great strides in identifying, preventing, and punishing health care fraud."
"The Obama Administration has zero tolerance for health care fraud and abuse," said Secretary Sebelius. "Building on the work we have accomplished through HEAT, I am pleased to announce here at the National Summit on Health Care Fraud that the President’s FY 2011 Budget being unveiled next week will include historic support for anti-fraud efforts that will save billions over 10 years. He will call for increased investments in programs that have a proven record of preventing fraud, reducing payment errors and returning funds to the Trust Funds."
The National Summit features discussions of innovative ways to eliminate fraud and abuse in the U.S. health care system. The morning program includes remarks from Attorney General Holder, Secretary Sebelius, Congressman Ron Klein and James Roosevelt Jr. CEO of Tufts Health Care, who will address the important role of the private sector in fighting fraud. Later, officials from the Departments of Justice and Health and Human Services will participate in a panel discussion about methods being used to prevent and crack down on health care fraud.
In the afternoon, workgroups will focus on the:
- Use of technology to prevent and detect health care fraud and improper payments.
- Role of states in preventing health care fraud.
- Development of effective prevention policies and methods for insurers, providers and beneficiaries.
- Effective law enforcement strategies.
- Measuring health care fraud, assessing recoveries and determining resource needs.
Summaries of the workgroup discussions will be compiled in a publicly available report that will help strengthen the federal government and private sector’s work to deter health care fraud.
"Health care fraud isn’t just a government problem. Criminals don’t discriminate and they are stealing from Medicare, Medicaid and private companies at an unacceptable rate," said Sebelius. "We have a shared interest in stopping these crimes and today’s summit brought us together to discuss how we can all work together to fight fraud."
The National Summit is the latest initiative of HEAT, which was announced by Attorney General Holder and Secretary Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid fraud through enhanced cooperation. Expansion of the Medicare Fraud Strike Force operations is a key component of the HEAT taskforce. Strike Force Teams initially began in Miami in 2007 and expanded to Los Angeles in 2008. Since the formation of HEAT, the Strike Force has expanded to Detroit; Houston; Brooklyn, N.Y.; Baton Rouge, La. and Tampa, Fla..
To date, Strike Force Teams have obtained indictments of more than 500 individuals and organizations that collectively have falsely billed the Medicare program for more than one billion dollars.
For more information on the National Summit, visit www.healthcarefraudsummit.com.
Associate Attorney General Perrelli, Senators Announce Passage of Teen Dating Violence Awareness Month ResolutionRead the Press Release
Associate Attorney General Tom Perrelli joined Senators Mike Crapo (R-Idaho), Sheldon Whitehouse (D-R.I.) and Joseph Lieberman (I-Conn.) today to announce the Senate’s passage of Resolution 373, which designates February 2010 as "National Teen Dating Violence Awareness and Prevention Month."
Since 2004, Congress has designated the first full week in February as "National Teen Dating Violence Awareness and Prevention Week." However, this year the Justice Department worked with the Senate to designate the entire month of February as "National Teen Dating Violence Awareness and Prevention Month." This provides parity to the three other crimes included in the Violence Against Women Act (VAWA) – sexual assault, domestic violence and stalking, each of which has a designated month for public education and awareness activities.
"For the first time, this crime is being commemorated as ‘National Teen Dating Violence Awareness and Prevention Month,’ instead of a week. This is no small feat, and I commend the Senate for its unanimous passage," said Associate Attorney General Perrelli. "The department will continue to raise awareness regarding teen dating violence, and will use federal resources to assist schools and communities in stopping such violence."
This year marks t he 15 year anniversary of President Bill Clinton signing VAWA into law and the creation of the Office on Violence Against Women (OVW). Today’s event is another installment in the department’s year-long effort to raise public awareness, build stronger coalitions among federal, state, local and tribal communities, and redouble efforts to end domestic and teen dating violence, sexual assault and stalking for men, women and children across the country.
27 January 2010
Sewerage & Water Board of New Orleans Agrees to Reinstate Program to Improve Sewage System Damaged by Hurricane KatrinaRead the Press Release
WASHINGTON—The Sewerage & Water Board of New Orleans has agreed to reinstate its comprehensive program – stalled for several years in the aftermath of Hurricane Katrina – to make extensive improvements to reduce or eliminate sewage overflows into the Mississippi River, Lake Pontchartrain and its storm drainage canal system, the Justice Department and U.S. Environmental Protection Agency announced today.
According to a Clean Water Act settlement filed today that modifies a 1998-agreement, the Sewerage & Water Board, which operates the publicly owned treatment works that serves the citizens of New Orleans, has agreed to continue to repair its antiquated sewage collection system. Prior to 1998, the system had been overwhelmed causing overflows of raw sewage into waterways and streets of New Orleans. Those efforts were put on hold for several years due to Hurricane Katrina in 2005.
"For many years, until Hurricane Katrina, the Sewerage & Water Board was making great strides in repairing its outdated collection system in compliance with the 1998 agreement," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We are pleased that, despite the devastating effects of the hurricane, the board has agreed to continue its aggressive remediation program in order to protect the public health and make the waterways safe for the people of New Orleans."
"We have agreed on an aggressive plan which will greatly help New Orleans’ system deliver better service to residents while it protects the environment," said EPA Regional Administrator Al Armendariz. "Protecting America’s waters is a priority at EPA. We are pleased the Sewage & Water Board shares our strong commitment to clean water."
As part of its ongoing remediation program, estimated to cost more than $400 million from its inception in 1998, the board has agreed to repair all of its 62 pump stations damaged by the hurricane, as well as any other hurricane damage in the portions of the collection system served by those pump stations. By no later than July 2015, the board will complete additional studies required by EPA and make all necessary repairs and upgrades to its collection system, including measures designed to provide dependable electrical services at its treatment plant in the event of a future catastrophic event.
The board will also design and implement a new preventive maintenance plan to inspect and clean its sewer lines and pump stations to prevent sewage overflows, and will continue efforts under its sewage overflow action plan designed to minimize the impact of such overflows on the environment.
In addition, now that the system serves only about 60 percent of people that it served before Katrina hit, the board has agreed to report each year on population changes and to evaluate any need for increased capacity for its pump stations, force mains and treatment plant.
The 1998 agreement resolved a 1993 lawsuit brought by the United States alleging violations of the Clean Water Act including effluent overflows at the East Bank treatment plant and unauthorized discharges from the East Bank Collection System. A coalition of citizens groups under the direction of the Tulane Law Clinic has joined the government in the action and is part of the modified settlement. The state of Louisiana also has participated in this settlement.
The modified consent decree, lodged today in the U.S. District Court for the Eastern District of Louisiana, is subject to 30-day public comment period and approval by the court. A copy of the consent decree is available on the Justice Department web site at http://www.justice.gov/enrd/Consent_Decrees.html.
Los Angeles Business Owner Pleads Guilty to Submitting Nearly <br /> $1 Million in False and Fraudulent Claims to MedicareRead the Press Release
The owner and operator of a Los Angeles durable medical equipment (DME) company pleaded guilty today to submitting nearly $1 million in false claims to Medicare, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Acting U.S. Attorney George S. Cardona for the Central District of California.
Ajibola Adekeunle Sadiqr, 51, pleaded guilty today before U.S. District Court Judge John F. Walter in the Central District of California. Sadiqr, the owner of Cooper Medical Supply, admitted that between January 2006 and September 2009, he conspired with Leonard Nwafor, the owner of another DME supply company who was convicted of Medicare fraud in September 2008, and others to purchase fraudulent prescriptions and medical documents. Sadiqr then used those documents to submit false claims to Medicare for expensive power wheelchairs and DME. Sadiqr admitted that he knew the beneficiaries did not need the DME. Sadiqr also admitted that he knew the doctor and beneficiary information contained in the fraudulent prescriptions and medical documents came from fraudulent medical clinics and marketers. As a result of this scheme, Sadiqr admitted that he submitted or caused the submission of approximately $950,000 in false and fraudulent claims to Medicare through Cooper Medical Supply.
At sentencing, scheduled for April 12, 2010, Sadiqr faces a maximum penalty of 10 years in prison and a $250,000 fine for defrauding Medicare.
The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kerry C. O’Neill of the Central District of California. The case is being investigated by the California Department of Justice. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.
Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1 billion. In addition, the U.S. Department of Health and Human Services’ (HHS) Centers for Medicare and Medicaid Services, working in conjunction with the HHS Office of the Inspector General 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
Justice Department Settlement with Nashville, Tennessee, Public Schools Will Improve Security on School Buses for Students with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced that it has entered into a settlement agreement with the Metropolitan Government of Nashville, Tenn., and Davidson County, Tenn., to enhance the security of students with disabilities on public school buses. The settlement is the result of a lawsuit stemming from episodes of peer-on-peer sexual harassment on buses designated for students with disabilities.
The United States intervened in this lawsuit, Lopez & U.S. v. Metropolitan Government of Nashville and Davidson County, et al., to address systemic deficiencies that resulted in episodes of sexual assault and harassment of students with disabilities on special education buses operated by the school district. These acts of harassment violated Title IX of the Education Amendments of 1972, which prohibits discrimination and harassment based on sex.
The agreement, in the form of a consent decree and subject to approval by Judge Robert Echols, obligates the Nashville Public School District to take substantial steps to enhance the security of students with disabilities on its public school transportation system. These steps include staffing bus monitors to assist drivers on all special education buses; implementing comprehensive screening procedures to ensure that students with disabilities are not assigned to buses where they would be at risk of harassment; expediting the investigation of suspected acts of sexual harassment involving students with disabilities; and ensuring open lines of communication between transportation officials and school-based personnel.
As part of this settlement, $1.475 million will be paid to a nine-year old autistic child who was assaulted on an unmonitored special education school bus and compelled to perform oral sex on a nineteen-year old student with known proclivities for sexually predatory behavior. The victim developed severe post-traumatic stress disorder in the aftermath of the assault and was subsequently institutionalized.
"While all victims of sexual assault suffer emotionally and psychologically, sexual assault can have a particularly devastating impact on children with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We will act decisively to enforce federal anti-discrimination laws against school districts that are deliberately indifferent to circumstances that threaten the safety and security of students with disabilities."
"This case is a sad reminder that children with disabilities need the protection of their governments from harassment, assault and maltreatment by others. The Justice Department and this U.S. Attorney’s Office will deal strictly with those who fail to protect the vulnerable members of our society and will make every effort to prevent such disgusting incidents from occurring in the future," said Edward M. Yarbrough, U.S. Attorney for the Middle District of Tennessee.
The enforcement of Title IX in school districts is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its Web site at http://www.justice.gov/crt.
Houston-Area Patient Recruiter Convicted of Health Care FraudRead the Press Release
Sylvia Smith, 64, a retired nurse, was convicted today of conspiracy to commit health care fraud and health care fraud, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Tim Johnson of the Southern District of Texas; and Special Agent-in-Charge Mike Fields of the Dallas Regional Office of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG).
At trial, Noel Jhagroo, owner of Trucare Medical Equipment Services (Trucare), a Houston-area durable medical equipment company, testified that he entered into a kickback arrangement with Smith, whereby he agreed to pay her 10 percent of what Medicare paid Trucare for each patient Smith referred. Jhagroo and Smith submitted claims to Medicare for enteral nutrition supplies and for bundles of orthotics, referred to as "artho kits." Jhagroo also testified that he paid Smith a kickback of $300 per patient in this scheme. In total, Jhagroo and Smith submitted $747,258 in phony claims to Medicare.
In order to bill Medicare for enteral nutrition supplies, Medicare regulations require that a beneficiary have a feeding tube. The forms supplied by Smith indicated that the beneficiaries she referred had such a feeding tube. The evidence at trial, however, showed that none of the patients referred by Smith had a feeding tube. The evidence also showed that Smith provided Jhagroo with high-dollar Medicare codes for specialized enteral food supplements. In fact, Smith and Jhagroo supplied patients with over-the-counter supplements, one of which stated on the bottle that it was "not for tube feeding."
The evidence at trial showed that Smith also provided Jhagroo with a product list of inexpensive, soft, over-the-counter supplements to be included in the artho kit. The evidence showed that Smith provided Jhagroo with Medicare codes to be used for billing purposes that were actually for expensive, rigid, high-end orthotics, in contrast to the inexpensive products that were actually delivered. After refusing the inexpensive artho kits initially, two Medicare beneficiaries testified that Smith offered them $100 if they would agree to accept the kits.
In addition to referring patients, the evidence at trial showed that Smith supplied Jhagroo with phony certificates of medical necessity signed by a Houston-area physician, so that Trucare could submit claims to Medicare. A Medicare beneficiary testified at trial that she had never heard of the physician who signed the form supplied by Smith to Trucare.
Smith’s sentencing is scheduled for May 12, 1010. Smith faces a maximum prison sentence of 10 years for the conspiracy count, as well as 10 years in prison for each of the six counts of health care fraud for which she was convicted. Smith also faces a maximum fine of $250,000 per count. 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. Jhagroo pleaded guilty on Nov. 2, 2009, to conspiracy to commit health care fraud for his role in the scheme.
The case was prosecuted by Assistant Chief John S. (Jay) Darden and Trial Attorneys Katherine Houston and Jennifer L. Saulino of the Criminal Division’s Fraud Section, and was investigated by the FBI, HHS-OIG and the Railroad Retirement Board.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section. Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $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
Businessman Convicted for Evading $1.9 Million in Taxes on Sales of Ozone-Depleting Greenhouse GasesRead the Press Release
WASHINGTON— Dov Shellef, a businessman from Great Neck, N.Y., was convicted today on 86 counts, following a five-week jury trial, for conspiring to defraud the Internal Revenue Service in the collection of approximately $1.9 million in excise taxes due on sales of the ozone-depleting greenhouse gas known as CFC-113, the Justice Department announced.
The jury sitting in Central Islip, N.Y., also convicted Shellef for subscribing to false corporate tax returns, wire fraud and money laundering.
According to facts presented at trial, Shellef represented to manufacturers that he was purchasing CFC-113 for export, allowing manufacturers to sell it to him tax-free. He then sold the product in the domestic market without notifying the manufacturers or paying the excise tax.
As of 1996, the Clean Air Act banned the importation and production of CFCs in the United States, but allowed manufacturers to sell and export CFCs that had been stockpiled prior to the ban. CFCs, used primarily as refrigerants and industrial solvents, migrate upon release into the upper atmosphere and destroy ozone, thus permitting more harmful ultraviolet radiation to reach the earth.
In addition, CFC-113 is a significant contributor to climate change. These chemicals are subject to a substantial excise tax imposed to discourage their use and to promote the transition to more ozone-friendly products. This excise tax applied to domestic sales of stockpiled CFCs, but not to sales for export.
Shellef faces a maximum prison sentence of five years for the conspiracy, three years for the false corporate tax return, 20 years for the wire fraud convictions and 20 years for the money laundering convictions. He faces a fine of up to $250,000 for conspiracy, false tax return and wire fraud, and a fine of $500,000 or twice the property involved in the offenses for money laundering. Shellef also faces forfeiture of more than $1 million involved in the money laundering offenses.
Shellef and his business partner, William Rubenstein, were previously convicted by a jury in July 2005 on 130 counts, including conspiracy to defeat the excise taxes on ozone-depleting chemicals, money laundering, wire fraud and a variety of tax violations. These convictions were reversed by the U.S. court of appeals in March 2008 on grounds that some of them should have been tried separately. Prior to the start of the second trial, Rubenstein pleaded guilty to the conspiracy violation but has not yet been sentenced.
The government’s case was prosecuted by the Justice Department’s Environment and Natural Resources Division and the Tax Division. The case was investigated by special agents of the Internal Revenue Service, with assistance from the Environmental Protection Agency.
26 January 2010
United States Transfers Guantanamo Bay Detainee to SwitzerlandRead the Press Release
The Department of Justice today announced that a detainee has been transferred from the detention facility at Guantanamo Bay to the Government of Switzerland for resettlement in Switzerland. The Swiss Government, with the support of the Canton of Geneva, accepted an Uzbek national for resettlement and his transfer was carried out according to arrangements between the governments of the United States and Switzerland.
As directed by the President’s Jan. 22, 2009, Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of the case. As a result of that review, which examined a number of factors, including security issues, the detainee was approved for transfer by unanimous consent among all the agencies involved in the Task Force. In accordance with congressionally-mandated reporting requirements, the Administration informed Congress of its intent to transfer the detainee at least 15 days before his transfer.
The identity of the individual is being withheld at the request of the Swiss government, in the interest of protecting the individual’s privacy and facilitating his transition to life in Switzerland. The United States is grateful to the Government of Switzerland and the Canton of Geneva for their willingness to support U.S. efforts to close the Guantanamo Bay detention facility.
Since 2002, more than 570 detainees have departed Guantanamo Bay for other destinations, including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Hungary, Iran, Iraq, Ireland, Italy, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Palau, Portugal, Russia, Saudi Arabia, Somalia, Spain, Sweden, Switzerland, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
Today, 192 detainees remain at Guantanamo Bay.
Six Members of MS-13 Gang Convicted of Racketeering, Murder, Drug and Firearms ChargesRead the Press Release
Six members of a racketeering enterprise, called La Mara Salvatrucha, or MS-13, were convicted today by a jury in U.S. District Court in Charlotte, N.C., of criminal charges that include racketeering, murder, attempted murder, assault, cocaine trafficking and numerous related federal firearms offenses, the Department of Justice announced. The jury convicted the defendants after two weeks of trial and five hours of deliberations. The six defendants were members and leaders of the MS-13 gang, a national and international criminal enterprise, who were originally charged along with 20 additional defendants in the first indictment.
"Today, law and justice have prevailed. As we saw from this trial, the MS-13 gang is violent and dangerous. It brings lawlessness and fear into far too many communities in this country and across our borders. But with the kind of international cooperation demonstrated by this case, we will continue to identify, prosecute, and bring to justice the leaders and organizers of this violent gang," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "Each and every day, the Criminal Division’s Gang Unit and U.S. Attorneys’ Offices throughout the United States are working to take violent offenders off the streets and out of our neighborhoods."
U.S. Attorney Edward R. Ryan for the Western District of North Carolina said of today’s verdict, "Our community is a wonderful place to live, raise a family and seek a peaceful and prosperous life. These defendants and their gang clearly had criminal designs to rule this community through fear and violence for their own unjust benefit. A coalition of federal, state, local and international law enforcement joined together to meet this threat. We are very pleased with the victory that today’s verdict represents."
"Gangs are poisonous to our communities–they feed on weakness and force people to live in fear. These convictions prove gang members can’t operate in hiding and escape getting caught," said Owen D. Harris, Special Agent in Charge of the FBI’s Charlotte Division. "The FBI Safe Streets Gang Task Force will not stop dismantling the hierarchy of MS-13, even if they try to rebuild. We can’t afford to let them eat away at our society–and we won’t let them."
ATF Special Agent in Charge, Zebedee T. Graham, stated, "ATF simply will not tolerate violent crime. The message with this verdict is clear: if you use a gun to further your criminal activity or terrorize our communities, we will go after you with all of our resources and law enforcement partners."
Julio Cesar Rosales Lopez, 24, of Guilford County, N.C.; and, Juan Gilberto Villalobos, 42; Elvin Pastor Fernandez Gradis, 34; Carlos Roberto Figeroa-Pineda, 26; Johnny Elias Gonzalez, 21; and Santos Anibal Caballero Fernandez, 24, all of Charlotte, were all convicted of conspiring to engage in a racketeering enterprise in the Western District of North Carolina, El Salvador and elsewhere, beginning at least in January 2003 and continuing through July 27, 2009. The evidence at trial proved that the MS-13 enterprise planned and committed various criminal acts, including robbery and extortion, obstruction of justice, tampering with witnesses, conspiring to distribute and possessing cocaine and marijuana, distributing and possessing with intent to distribute cocaine, illegally using communication facilities and conspiring to commit murder. Testimony and evidence introduced during the trial showed that the enterprise also communicated with its leadership in El Salvador, protected its territory, enforced discipline among members, and collected debts through a pattern of racketeering activities that included the murders of four people, attempted murder, assaults and threats of violence.
Fernandez-Gradis was convicted of two charges involving the shooting and killing of Ulisses Mayo-De La Torre in South Charlotte, N.C., on April 12, 2008. Evidence at trial showed that Fernandez-Gradis killed Mayo-De La Torre over a red shirt worn by a relative of the victim. Eyewitnesses to the murder testified that there were other incidents involving the defendant and people wearing red that day, before the murder. Caballero Fernandez, who the evidence at trial showed was present at the shooting, was convicted of being an accessory after the fact to the murder. The evidence at trial showed that Caballero Fernandez helped Fernandez-Gradis escape and took the murder weapon the next day. Caballero Fernandez was found with the murder weapon approximately one month after the murder. Both Fernandez-Gradis and Caballero Fernandez were also convicted of unlawful possession of a firearm by an illegal alien, as well as other charges.
Rosales Lopez, one of the gang’s leaders whom the evidence showed was sent by MS-13 leaders in El Salvador to run what members called "The Program" in the Charlotte area, was convicted of robbing a victim whom he suspected of dealing drugs in a Charlotte nightclub controlled by MS-13. Rosales Lopez was also convicted of being an accessory after the fact to a double homicide perpetrated by another MS-13 member in a restaurant in Greensboro, N.C., in 2007. In addition, Rosales Lopez was convicted of conspiracy to commit extortion.
Villalobos, whom the evidence at trial showed was the keeper of some of the gang’s guns, was convicted of a variety of drug and gun crimes in connection with his MS-13 membership, as well as conspiracy to commit extortion. The evidence at trial showed that Villalobos "controlled" the Mi Cabana and El Vaquero nightclubs in Charlotte on behalf of MS-13.
Gonzalez was convicted of a RICO conspiracy. In connection with that charge, the jury found that Gonzalez participated in what the evidence at trial showed was a robbery-murder of Yonni Alexander Morales Maradiaga, who was shot and killed by another MS-13 member during the robbery in East Charlotte in early August 2005. Finally, Figueroa Pineda was convicted of a RICO conspiracy, drug conspiracy, two different counts of possession with intent to distribute marijuana and possessing a gun during one of those drug crimes.
The defendants face a variety of possible sentences based on their convictions, including for some, life in prison. The defendants have been in federal custody since their arrests on the original indictment in June 2008.
Evidence presented at trial also showed that the long-term investigation of the four murders was initiated by the FBI’s "Safe Streets" Gang Task Force from North Carolina when a witness came forward and explained how the killings were part of the violent operation of a single MS-13 cell operating out of the Charlotte area. The Task Force is composed of the FBI, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), U.S. Immigration and Customs Enforcement (ICE), the Charlotte-Mecklenburg Police Department, and the Gastonia, N.C., Police Department. The FBI’s MS-13 National Gang Task Force played a significant role in coordinating the international aspects of the investigation, and additional critical assistance was provided by the Transnational Anti-Gang (TAG) Center. Additional law enforcement investigative support was provided by the North Carolina State Bureau of Investigation, as well as the Greensboro Police Department and the Durham Police Department. Substantial assistance has been afforded by the U.S. Marshals Service for the Western District of North Carolina, especially with regard to security during the two-week jury trial. The investigation of the wide-sweeping enterprise led to the prosecution of 26 alleged MS-13 members. In addition to the six defendants convicted today, 19 other co-defendants have pleaded guilty to the racketeering charges in the indictment. One defendant remains in custody in El Salvador. No sentencing dates have been set by the court at this time.
The case was prosecuted by Assistant U.S. Attorneys Kevin Zolot, Jill Rose and Adam Morris from the U.S. Attorney’s Office for the Western District of North Carolina, and Trial Attorney Sam Nazzaro from the Criminal Division’s Gang Unit.
Alejandro Enrique Ramirez Umana, also known as "Wizard," 25, currently awaits trial for the murder of Ruben Garcia Salinas on Dec. 8, 2007, in Guilford County, on the charge of aid of the enterprise engaged in racketeering activity. The capital trial is currently set for April 2010 in U.S. District Court in Charlotte.
Oklahoma Man Pleads Guilty to Aiding and Abetting the Solicitation of a Kickback in Connection with a Government Contract in AfghanistanRead the Press Release
WASHINGTON — An Oklahoma man pleaded guilty today for his role in a scheme to solicit a kickback in connection with the award of a private security services subcontract to protect U.S. government personnel and contractors in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Assistant Attorney General Christine Varney of the Antitrust Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
Ryan Scott McMonigle, 38, of Ponca City, Okla., pleaded guilty today before U.S. District Court Judge T.S. Ellis III, in the Eastern District of Virginia to one count of aiding and abetting the solicitation of a kickback.
According to court documents, the U.S. Agency for International Development (USAID) is the principal federal U.S. agency that extends assistance to countries recovering from disaster, trying to escape poverty and engaging in democratic reforms. The agency works to support long-term and equitable economic growth and to advance U.S. foreign policy objectives.
In August 2006, USAID awarded a $1.4 billion contract known as the Afghanistan Infrastructure Rehabilitation Project (the AIRP contract). The AIRP contract required the award of numerous subcontracts, including for the provision of security services to protect AIRP workers. According to court documents, from approximately February 2009 through May 2009, McMonigle was employed in Kabul, Afghanistan, by Civilian Police International, a Virginia-based company that provides law enforcement training internationally. McMonigle admitted that he assisted others in the solicitation of a kickback from a private security vendor in return for favorable treatment for this potential bidder in connection with the award of one or more subcontracts. According to court documents, the subcontracts provided for private security services to protect USAID personnel and contractors in Afghanistan operating under the AIRP contract.
The charge of aiding and abetting the solicitation of a kickback carries a maximum penalty of 10 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. McMonigle is scheduled to be sentenced on Nov. 5, 2010.
Bryan Lee Borrows, who was also employed in Kabul by Civilian Police International, pleaded guilty on Sept. 2, 2009, to conspiring with others to solicit kickbacks from private security vendors in return for favorable treatment for those potential bidders in connection with the award of one or more subcontracts. Burrows was sentenced on Dec. 19, 2009, to 12 months and one day in prison for his role in the scheme.
In addition, Scott Anthony Walker, of Australia, pleaded guilty on Nov. 16, 2009, to one count of conspiracy to solicit a kickback, related to his role in the scheme. Walker was arrested in the United States on Nov. 11, 2009, and is scheduled to be sentenced on Feb. 5, 2010.
The case is being prosecuted by Trial Attorney Bradford Geyer of the Criminal Division’s Fraud Section, Trial Attorneys Kimberly A. Justice and Joseph Muoio of the Antitrust Division’s Philadelphia Field Office and Assistant U.S. Attorney Timothy D. Belevetz of the U.S. Attorney’s Office for the Eastern District of Virginia. The investigation is being conducted by USAID’s Office of Inspector General as well as members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. 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, including in Afghanistan, Iraq and Kuwait.
Californian Pleads Guilty to False Tax Refund ConspiracyRead the Press Release
WASHINGTON – Haroon Amin of Upland, Calif., pleaded guilty Monday to conspiracy to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced today.
In December 2008, Amin and Ather Ali of Diamond Bar, Calif., were indicted by a federal grand jury in Riverside, Calif., on charges of engaging in a scheme to file false returns with the IRS using the names and Social Security numbers of deceased individuals. Ali is scheduled to begin trial on March 2, 2010. According to the indictment, in 2002 and 2003 Amin and Ali filed at least 250 fraudulent tax returns, falsely stating that the deceased individuals earned wages from which income tax was withheld. These false returns claimed more than $2 million in income tax refunds. Although the IRS rejected the bulk of these refund claims, a number of refund checks were issued and delivered to addresses controlled by Amin, Ali and their co-conspirators, including to various mailboxes opened by Ali using false forms of identification. Most of these refund checks were then delivered overseas to be deposited in bank accounts in Armenia and Pakistan.
Amin admitted that he was a knowing participant in this scheme. According to the indictment and statements made at the plea hearing, Amin and his co-conspirators obtained deceased individuals’ Social Security numbers and other identification information from the Internet. The returns filed as part of the scheme had fictitious Form W-2 wage and tax statements as attachments. Amin created fake W-2 Forms using employer identification numbers that he had obtained from an acquaintance who was a certified public accountant.
Judge Robert H. Whaley scheduled Amin’s sentencing for June 22, 2010. Amin faces a maximum sentence of five years in prison and a maximum fine of $250,000.
John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division commended the efforts of agents from the IRS Criminal Investigation Division in Laguna Niguel, Calif, as well as Assistant U.S. Attorney Charles E. Pell and Tax Division trial attorney Joseph A. Rillotta, who are prosecuting the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax.
25 January 2010
Westar Energy to Spend Approximately $500 Millionto Settle Clean Air Act ViolationsRead the Press Release
WASHINGTON—Westar Energy has agreed to spend approximately $500 million to significantly reduce harmful air pollution from a Kansas power plant and pay a $3 million civil penalty, under a settlement to resolve violations of the Clean Air Act, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today. As part of the settlement, Westar will also spend $6 million on environmental mitigation projects.
The agreement, filed in federal court in Kansas, resolves violations of the Clean Air Act’s New Source Review requirements at the company’s Jeffrey Energy Center, a coal-fired power plant near St. Marys, Kan.
"This settlement will lower harmful sulfur dioxide and nitrogen oxide emissions by thousands of tons each year, and will benefit air quality in Kansas and downwind areas," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The Justice Department will continue to vigorously enforce violations of the Clean Air Act’s New Source Review provisions at coal-fired power plants and other sources of excess emissions across the country."
"Today’s settlement sets the most stringent limit for sulfur dioxide emissions ever imposed on a coal-fired power plant in a federal settlement," said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. "EPA is committed to protecting clean air for communities by making sure coal-fired power plants comply with the law."
Under the settlement, Westar will install and operate pollution control equipment at the Jeffrey Energy Center that is expected to reduce combined emissions of sulfur dioxide and nitrogen oxides by roughly 78,600 tons per year, which is 85 percent below 2007 emissions. In addition, Westar will surrender surplus sulfur dioxide allowances. These allowances cannot be used again resulting in their permanent removal from the environment. Westar will also rebuild and optimize controls to reduce particulate matter emissions.
The settlement also requires Westar to spend $6 million on projects to benefit the environment and mitigate the adverse effects of the alleged violations including:
- Retrofitting diesel engines on vehicles owned by or operated for public entities in Kansas with emission control equipment;
- Installing new wind turbines that will result in the reduction of criteria pollutants and greenhouse gases, and provide electricity for the benefit of a school or nonprofit;
- Installing advanced truck stop electrification to reduce harmful emissions from idling trucks;
- Installing plug-in hybrid infrastructure to facilitate the use of plug-in hybrid vehicles; and
- Converting vehicles in Westar’s fleet to reduce pollution by retrofitting diesel vehicles and purchasing hybrid vehicles.
In the complaint filed in February 2009, the government alleged that Westar modified all three units at the Jeffrey Energy Center, its largest coal-fired electric generating station, without installing required pollution control equipment or complying with applicable emission limits in violation of the Clean Air Act. The government discovered the violations through an information request submitted to Westar.
The settlement is part of the EPA’s enforcement initiative to control harmful emissions from coal-fired power plants under the Clean Air Act’s New Source Review requirements. The total combined sulfur dioxide and nitrogen oxide emission reductions secured from these settlements is more than 2 million tons each year once all the required pollution controls are installed and implemented.
Sulfur dioxide and nitrogen oxides can cause severe harm to human health and the environment. After being emitted from power plants, they are converted to fine particles of particulate matter that can lodge deep in the lungs, causing a variety of health impacts including premature death. Sulfur dioxides and nitrogen oxides are also significant contributors to acid rain, smog, and haze. Air pollution from power plants can drift significant distances downwind and degrade air quality in nearby areas.
Westar Energy, based in Topeka, Kan., generates and distributes electricity to more than 684,000 customers in Kansas. It owns and operates three coal-fired electrical generating stations in Kansas. This settlement applies to all three units at the Jeffrey Energy Center, which comprise 2,160 mega-watts, or 73 percent, of Westar’s coal fleet.
The state of Kansas recently intervened in the case and joined the federal government in the settlement.
The proposed settlement was lodged today in the U.S. District Court for the District of Kansas and is subject to a 30-day public comment period and final court approval. A copy of the consent decree will be available on the Department of Justice Web site at http://www.justice.gov/enrd/Consent_Decrees.html.
More information: http://www.epa.gov/compliance/resources/cases/civil/caa/coal/index.html
United States Transfers Three Guantanamo Bay Detainees to SlovakiaRead the Press Release
The Department of Justice today announced that three detainees have been transferred from the detention facility at Guantanamo Bay to the Government of Slovakia.
As directed by the President’s Jan. 22, 2009, Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of each of these cases. As a result of that review, which examined a number of factors, including security issues, the detainees were approved for transfer by unanimous consent among all the agencies involved in the Task Force. In accordance with Congressionally-mandated reporting requirements, the Administration informed Congress of its intent to transfer the detainees at least 15 days before their transfer.
Yesterday, the three detainees were transferred to the Government of Slovakia. The identities of these three individuals are being withheld at the request of the Government of Slovakia for security and privacy reasons. The United States is grateful to the Government of Slovakia for its willingness to support U.S. efforts to close the Guantanamo Bay detention facility.
These transfers were carried out under individual arrangements between the United States and the Government of Slovakia. The United States coordinated with the government of Slovakia to ensure the transfers took place under appropriate security measures and consultations regarding these individuals will continue.
Since 2002, more than 570 detainees have departed Guantanamo Bay for other destinations, including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Hungary, Iran, Iraq, Ireland, Italy, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Palau, Portugal, Russia, Saudi Arabia, Somalia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
Physical Therapist Pleads Guilty in Connection with Detroit <br /> Home Health Care Fraud SchemeRead the Press Release
Detroit-area resident Jessica Vigil pleaded guilty today for her role in a Detroit-area home health care fraud scheme, announced Assistant Attorney General Lanny Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services, Office of the Inspector General’s (HHS-OIG) Chicago Region.
Vigil, 34, pleaded guilty today to one count of conspiracy to commit health care fraud before U.S. District Court Judge Denise Page Hood of the Eastern District of Michigan. At sentencing, scheduled for May 27, 2010, Vigil faces a maximum sentence of 10 years in prison and a $250,000 fine.
According to plea documents, Vigil, a licensed physical therapist, admitted that she began working in approximately September 2008 as a therapist at All American Home Care Inc., and associated entities (All American). All American purported to provide home health services to Medicare beneficiaries in the Detroit area, including physical and occupational therapy services. Vigil admitted that she and other co-conspirators created fictitious therapy files, appearing to document physical and occupational therapy services provided to Medicare beneficiaries, when in fact no such services had taken place.
Vigil admitted that her role in the conspiracy was to sign documents, including start of care packages, recertification forms and discharge papers that facilitated All American’s ability to bill Medicare for home health visits. These documents allowed All American to commence, continue or conclude the purported treatment of patients and the Medicare billing cycle. Vigil admitted that she was paid between $80 and $100 by the owners of All American for each form she signed. In total, Vigil was paid more than $127,000 for signing the forms. In the course of the scheme charged in the indictment, Vigil signed documents used to justify approximately $2.375 million in home health claims paid by Medicare to All American for patients Vigil either never saw or for whom home health services were medically unnecessary. Vigil admitted that she knew the files she helped falsify were used to justify fraudulent billings to Medicare.
This case is being prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division’s Fraud Section. The case is being investigated by the FBI and the HHS Office of the Inspector General (HHS-OIG). 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 Eastern District of Michigan.
Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $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
Justice Department Requires Ticketmaster Entertainment Inc. to Make Significant Changes to Its Merger with Live Nation Inc.Read the Press Release
WASHINGTON – The Department of Justice announced today that it will require Ticketmaster Entertainment Inc. to license its ticketing software, divest ticketing assets and subject itself to anti-retaliation provisions in order to proceed with its proposed merger with Live Nation Inc. The department said that the proposed settlement will protect competition for primary ticketing, which will in turn maintain incentives for innovation and discounting. The department said that the merger, as originally proposed, would have substantially lessened competition for primary ticketing in the United States, resulting in higher prices and less innovation for consumers.
The Department of Justice’s Antitrust Division, along with 17 state attorneys general, filed a civil antitrust lawsuit today in the U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department and the states’ Attorneys General filed a proposed settlement that, if approved by the court, would resolve the competitive concerns in the lawsuit. The state attorneys general offices are: Arizona; Arkansas; California; Florida; Illinois; Iowa; Louisiana; Massachusetts; Nebraska; Nevada; Ohio; Oregon; Pennsylvania; Rhode Island; Tennessee; Texas; and Wisconsin.
The Department of Justice cooperated closely with the Canadian Competition Bureau throughout the course of its investigation, and the two agencies worked together to obtain the same remedy that preserves competition in both the United States and Canada.
Under the proposed settlement, Ticketmaster must license ticket software and divest ticketing assets to two different companies —Anschutz Entertainment Group (AEG) and either Comcast-Spectacor or another buyer suitable to the department, respectively —allowing both companies to compete head-to-head with Ticketmaster. Ticketmaster will also subject itself to court-ordered restrictions on its behavior.
"The Department of Justice’s proposed remedy promotes robust competition for primary ticketing services and preserves incentives for competitors to innovate and discount, which will benefit consumers," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The proposed settlement allows for strong competitors to Ticketmaster, allowing concert venues to have more and better choices for their ticketing needs, and provides for anti-retaliation provisions, which will keep the merged company in check."
As part of the proposed settlement, Ticketmaster must license a copy of its primary ticketing software to AEG, the nation’s second-largest concert promoter and operator of some of the most important concert venues in the country. With a copy of the Ticketmaster software, AEG will be able to market a ticketing system that is an attractive choice to venues. AEG will have incentives similar to Live Nation to provide better services at lower prices. Within five years, AEG can purchase the Ticketmaster ticketing software, decide to create its own software, or partner with a ticketing company other than Ticketmaster. The department said that this remedy enhances short and long term competition in the primary ticketing market.
Ticketmaster must divest Paciolan Inc., a ticketing company that it currently owns, within 60 days to either Comcast-Spectacor, which has already signed a letter of intent to purchase the assets, or some other buyer suitable to the department. Comcast-Spectacor is a sports and entertainment company with management relationships with a number of concert venues and ticketing experience with its New Era Tickets company. Paciolan is used by hundreds of venues to sell tickets including major concert venues around the country. Venues that contract with Paciolan have greater flexibility to lower the ticket service fees that are charged to consumers who buy tickets. The department said that divesting Paciolan to Comcast-Spectacor, or another suitable buyer, in conjunction with the AEG license, will replace the competitive pressure on Ticketmaster lost as a result of the merger.
Under the settlement, the merged firm will be forbidden from retaliating against any venue owner that chooses to use another company’s ticketing services or another company’s promotional services, including restrictions on anticompetitive bundling. The merged firm must also allow any client that leaves and chooses to use another primary ticketing service to take a copy of the ticketing data related to that client’s sales. The settlement also sets up firewalls that protect confidential and valuable competitor data by preventing the merged firm from using information gleaned from its ticketing business in its day-to-day operations of its promotions or artist management business. Additionally, the merged firm must provide notice of any other acquisitions of a ticketing company so that the department may investigate the competitive effect of such an acquisition.
Together, these remedies will preserve the competition that Ticketmaster faced from Live Nation, a new ticketing entrant, the department said. Prior to its proposed merger with Ticketmaster, Live Nation had established incentives to reduce service fees to sell more tickets. Today’s settlement offers a new competitor comparable incentives to ensure ticket sales are maximized for the benefit of consumers, the department said.
Ticketmaster is a Delaware corporation headquartered in West Hollywood, Calif. Ticketmaster is the world’s largest ticketing company. In 2008, Ticketmaster sold more than 141 million tickets valued at more than $8.9 billion on behalf of more than 10,000 clients worldwide and earned approximately $1.4 billion in gross revenues.
Live Nation is a Delaware corporation headquartered in Beverly Hills, Calif. It is the world’s largest promoter of live concerts, with 2008 worldwide gross revenues of $4 billion. Live Nation also owns or operates more than 75 concert venues of various sizes in the United States.
AEG, headquartered in Los Angeles, is one of the leading sports and entertainment presenters in the world. AEG, a wholly owned subsidiary of the Anschutz Company, owns or controls a collection of venues, such as the Staples Center (Los Angeles), Prudential Center (Newark, N.J.), Sprint Center (Kansas City, Mo.) and Citizen’s Business Bank Arena (Ontario, Canada). The company’s live entertainment division, AEG Live, is one of the world’s leading concert promotion and touring companies with 15 regional offices that has recently promoted national tours on behalf of artists such as Prince, Usher, Kenny Chesney, Rod Stewart, Paul McCartney, Yanni, The Eagles, George Strait, Justin Timberlake, Christina Aguilera, Dixie Chicks, Hannah Montana and American Idol. AEG is also a 50 percent owner of Wright Entertainment Group, which manages major artists such as the Jonas Brothers, Justin Timberlake, Janet Jackson and ‘N Sync.
Comcast-Spectacor, headquartered in Philadelphia, has more than $1 billion in annual sales. It is a joint venture between a private investor and Comcast Corp., a leading provider of cable, Internet and phone services in the United States. Comcast-Spectacor owns a national ticketing services company, owns and operates major venues and sport franchises, manages approximately 90 public assembly facilities, and runs a major North American food and beverage concessions company.
As required by the Tunney Act, the proposed 10-year settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to John R. Read, Chief, Litigation III Section, 450 Fifth Street, N.W., Suite 4000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Former Los Angeles Medical Center Owners Agree to $10 Million Consent Judgment for Medicare and Medi-Cal Fraud SchemeRead the Press Release
WASHINGTON – The United States has obtained a $10 million consent judgment against Los Angeles businessman Robert Bourseau and Dr. Rudra Sabaratnam for a Medicare and Medi-Cal fraud scheme arising from their former ownership of the Los Angeles City of Angels Medical Center, the Justice Department announced today. The consent judgment, in which the state of California also joined, resolves a civil lawsuit filed against Bourseau and Sabaratnam by the United States and California in the U.S. District Court for the Central District of California.
The government’s complaint alleged that Bourseau and Sabaratnam directed a scheme in which City of Angels paid "recruiters" employed at homeless shelters in the skid row area of the city to deliver their homeless clients by ambulance to the hospital for medical treatment regardless of whether their clients in fact needed or requested such treatment. The City of Angels would then bill the Medicare and Medi-Cal programs for a variety of medical services allegedly rendered to the homeless patients, many of which were not medically necessary. This scheme violated the False Claims Act.
The government further alleged that payments City of Angels made to its recruiters constituted illegal inducements, or kickbacks, in violation of the federal Anti-Kickback Statute, which prohibits certain types of remuneration intended to induce the referral of patients for health services paid for by the federal government. In its complaint, the government maintained that prohibitions against illegal kickbacks are important to insure that financial motives do not undermine the integrity of the medical judgment of physicians and other health care workers.
"Performing unnecessary medical procedures just to take money from taxpayers’ pockets is bad enough, but to prey on homeless people struggling to survive day to day is particularly reprehensible," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We won’t tolerate illegal conduct and we will continue to hold companies, institutions and individuals accountable for health care fraud."
In addition to the civil judgment, both Bourseau and Sabaratnam have pleaded guilty to criminal charges for violating the Anti-Kickback Statute. Each defendant is awaiting sentencing. A former senior executive of City of Angels, as well as two of the medical center’s recruiters, have also pleaded guilty to similar charges in connection with the scheme.
Assistant Attorney General West applauded the cooperation between federal and state officials that resulted in the judgment against Bourseau and Sabaratnam. The Justice Department’s Civil Division, the U.S. Attorney’s Office for the Central District of California, the California Attorney General’s Office, and the Office of Inspector General of the Department of Health and Human Services together handled the investigation and civil lawsuit.
The consent judgment in this matter is the most recent example 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 Department of Justice has used to recover approximately $2.2 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 $3 billion.
22 January 2010
United States Transfers Two Guantanamo Bay Detainees to AlgeriaRead the Press Release
Two Algerian detainees, Hasan Zemiri and Adil Hadi al Jazairi Bin Hamlili, have been transferred from the detention facility at Guantanamo Bay to the custody and control of the Government of Algeria.
As directed by the President’s Jan. 22, 2009 Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of these cases. As a result of that review, which examined a number of factors, including the potential threat posed by each individual and the receiving country’s demonstrated capabilities to mitigate potential threats posed by the individuals in their home country, each detainee was approved for transfer. The transfers were approved by unanimous consent among all the agencies involved in the review -- including the Office of the Director of National Intelligence, the Joint Chiefs of Staff, as well as the Departments of Defense, State, Justice and Homeland Security.
In accordance with Congressionally-mandated reporting requirements, the Administration informed Congress of its intent to transfer these detainees at least 15 days before their transfer. These transfers were carried out under an arrangement between the United States and the Government of Algeria. The United States coordinated with the Government of Algeria to ensure the transfers took place under appropriate security measures.
Since 2002, more than 570 detainees have departed Guantanamo Bay for other destinations, including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Hungary, Iran, Iraq, Ireland, Italy, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Palau, Portugal, Russia, Saudi Arabia, Somalia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
Eight detainees were transferred from Guantanamo Bay to Algeria under the previous Administration. Today, 196 detainees remain at Guantanamo Bay.