Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
13 November 2009
Departments of Justice and Defense Announce Forum Decisions for Ten Guantanamo Bay DetaineesRead the Press Release
WASHINGTON – The Departments of Justice and Defense today announced forum decisions for ten detainees at Guantanamo Bay whose cases were previously charged in military commissions, including five detainees accused of conspiring to commit the Sept. 11, 2001 terror attacks and a detainee accused of orchestrating the attack on the USS Cole.
“Today we announce a step forward in bringing those we believe were responsible for the 9/11 attacks and the attack on the USS Cole to justice,” said Attorney General Eric Holder. “For over two hundred years, our nation has relied on a faithful adherence to the rule of law to bring criminals to justice and provide accountability to victims. Once again we will ask our legal system to rise to that challenge, and I am confident it will answer the call with fairness and justice.”
"Bringing terrorists to justice is an integral part of our national security,” said Defense Secretary Robert Gates. “The reform of Military Commissions and today's announcement are important steps in that direction."
The Attorney General, in consultation with the Secretary of Defense, has determined that the United States government will pursue a prosecution in federal court against five detainees who are currently charged in military commissions with conspiring to commit the Sept. 11, 2001 terror attacks, which killed nearly 3,000 individuals. These detainees are Khalid Sheikh Mohammed, Walid Muhammad Salih Mubarak Bin ‘Attash, Ramzi Binalshibh, Ali Abdul Aziz Ali and Mustafa Ahmed Adam al Hawsawi.
The Department of Justice intends to pursue a prosecution against these five individuals in the Southern District of New York as soon as possible. Prosecution of these detainees will be co-managed by teams from the Southern District of New York and the Eastern District of Virginia. These detainees will be transferred to the United States for trial after all legal requirements, including a 45-day notice and report to Congress, are satisfied, and consultations with state and local authorities have been completed. The detainees will be housed in a federal detention facility in New York, which includes maximum security units that have securely held terrorism suspects in the past. Once federal charges are brought against these detainees, military commission charges now pending against them will be withdrawn.
The Attorney General has also determined, in consultation with the Secretary of Defense, that the prosecutions of five other Guantanamo Bay detainees who were charged in military commissions may be resumed in that forum. These detainees include the detainee accused of orchestrating the October 2000 attack on the USS Cole, which killed 17 U.S. sailors and injured dozens of others, and a detainee who is accused of participating in an al-Qaeda plot to blow up oil tankers in the Straits of Hormuz.
The Attorney General and the Secretary of Defense are confident that detainees now held at Guantanamo Bay can be detained securely in U.S. detention facilities and that their trials can be conducted effectively and safely in the United States, whether in federal court or in a military commission.
Over the past decade, the Department of Justice has successfully prosecuted many terrorism defendants in our federal courts. Today, there are more than 200 inmates who have a history of or nexus to international terrorism, who have been convicted in federal courts, and are now housed securely in Bureau of Prisons facilities. The Department has already transferred one former Guantanamo Bay detainee, Ahmed Ghailani, to the Southern District of New York to face trial for his alleged role in the 1998 East Africa Embassy bombings.
With regard to military commissions, the reforms Congress recently adopted to the Military Commissions Act will ensure that commission trials are fair, effective, and lawful. Military commissions have been used by the United States to try those who have violated the law of war for more than two centuries. Further, the U.S. Supreme Court recognized in Hamdan v. Rumsfeld Congress’ power to determine the need for military commissions and to provide their jurisdiction and procedures, and this Congress has recently reiterated its support for commissions in adopting important reforms to the Military Commissions Act.
Finally, the Attorney General and the Secretary of Defense understand and share the concern of the victims of terrorist attacks about the length of time it has taken to bring the perpetrators to justice. Justice has been delayed far too long. Prosecutors in both departments are committed to moving forward with all these cases as quickly as possible and to working together to see that justice is served, consistent with our nation’s values.
City of Akron, Ohio, Agrees to Improve Sewer System to Resolve Clean Water Act ViolationsRead the Press Release
WASHINGTON—The city of Akron, Ohio, has agreed to make extensive improvements to its sewer system to reduce or eliminate sewage overflows that have long polluted the Cuyahoga River and its tributaries, the Justice Department, U.S. Environmental Protection Agency (EPA) and state of Ohio announced today.
According to a Clean Water Act settlement lodged today in federal court, the city is required to develop and implement a comprehensive plan to reduce or eliminate (i) untreated overflows of sanitary sewage and storm water from its combined sewer system; and (ii) bypasses around secondary treatment at the wastewater treatment plant. The city’s sewage and wastewater discharges flow into the Cuyahoga River, the Little Cuyahoga River, the Ohio Canal and their tributaries and contribute to the impairment of water quality in those waterways. The Cuyahoga River, an American Heritage River, flows through Cuyahoga Valley National Park and the Cleveland metropolitan area, to Lake Erie.
Over the course of the next year, the city will perform extensive analyses to identify appropriate methods of controlling or eliminating these discharges. After an opportunity for public participation, the federal and state governments will evaluate the results and require the city to implement appropriate improvements at various milestones, achieving full operation no later than Oct. 15, 2028.
In addition to the projects identified through the year-long analysis, over the next six years, the city will expand capacity at its wastewater treatment plant to allow for treatment of at least an additional 20 million gallons of wastewater per day. Also, over the next eight years, the city will construct separate sewer lines for five combined sewer outfall points. Finally, the city will engage in comprehensive capacity, maintenance and emergency response programs to improve sewer system performance and to eliminate releases from the sewer collection system, including basement backups, releases into buildings, and onto property.
As part of the settlement, the city will pay a $500,000 civil penalty and provide $900,000 to fund the removal of the Brecksville (Route 82) Dam on the Cuyahoga River, as a state supplemental environmental project. EPA estimates that the dam removal will contribute to a significant improvement in water quality in the Lower Cuyahoga River.
"The federal Clean Water Act requires that cities act to eliminate or reduce their sewage overflows into the nation’s rivers, lakes and oceans," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We are pleased that the city of Akron has agreed to take the steps necessary to upgrade its sewer system. These steps will improve water quality in the Cuyahoga River and its tributaries, protect public health, and enhance recreation and other public uses of the River."
"Through this agreement, Akron has shown a serious commitment to address its long-standing sewage overflow problems," said Bharat Mathur, Acting EPA Region 5 Administrator. "The numerous steps and milestones required in the years ahead will ensure improved water quality for the people of Akron."
"This settlement will lead to significant improvement in the quality of the water flowing into the Cuyahoga River," said Ohio Attorney General Richard Cordray. "It’s a credit to all parties involved that we were able to resolve this difficult problem, but I especially commend the city of Akron for their commitment to improve the environment and the health of the public."
The settlement resolves a lawsuit brought by the federal government against the city in February 2009, which the State of Ohio later joined. In that lawsuit, the federal and state governments alleged that the city of Akron illegally discharged from its aging combined sewer system and treatment plant more than one billion gallons of untreated combined sewage and wastewater each year into the Cuyahoga River, the Little Cuyahoga, the Ohio Canal and their tributaries. Among other things, the governments further alleged that on several hundred occasions over the past seven years, failures in the City’s sewer system resulted in releases of sewage into individuals’ homes and property.
The consent decree, lodged in the U.S. District Court for the Northern District of Ohio, is subject to a 60-day public comment period and approval by the federal court. A copy of the consent decree and a summary of the agreement are available on the Justice Department Web site at http://www.justice.gov/enrd/Consent_Decrees.html.
12 November 2009
Oregon Hospice Pays U.S. $1.83 Million <br /> to Settle False Claims Act LiabilityRead the Press Release
WASHINGTON — Kaiser Foundation Hospitals - Kaiser Sunnyside Medical Center, Kaiser Foundation Health Plan of the Northwest and Northwest Permanente P.C., Physicians & Surgeons (collectively, Kaiser NW) has agreed to pay the United States $1,830,322.41 to settle False Claims Act liability, the Justice Department announced today. The United States contends that Kaiser NW billed Medicare between 2000 and 2004 for hospice services that had been provided by the Kaiser Northwest Region Hospice without obtaining written certifications of terminal illness required under the federal health care program.
Medicare hospice care providers like Kaiser Northwest Region Hospice must obtain written certifications of terminal illness for each hospice beneficiary’s initial certification period (the first 90 days of care) from the medical director of the hospice and the individual beneficiary’s attending physician, if the beneficiary has one. Medicare requires a hospice to obtain these certifications prior to billing Medicare in order to help ensure that hospice care is medically necessary.
In June 2005, Kaiser NW submitted a report to the Department of Health and Human Service’s Office of Inspector General disclosing that between October 2000 and March 2004, there were instances in which Kaiser NW did not obtain written certifications of terminal illness for hospice beneficiaries prior to billing Medicare for the beneficiaries’ initial certification period. The settlement announced today resulted from the company’s disclosure.
"By requiring that health care providers comply with Medicare’s standards, we ensure that beneficiaries receive hospice care that is medically necessary and meets appropriate medical standards," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "We encourage disclosures of this nature and we consider them essential to ensuring the protection of the Medicare Trust Fund."
"This settlement furthers the strong public interest in protecting the integrity of the Medicare program and ensuring the appropriateness of hospice care for Medicare beneficiaries," said Kent Robinson, Acting U.S. Attorney for the District of Oregon.
The case was handled by the Justice Department’s Civil Division, the Acting U.S. Attorney for the District of Oregon and the Office of Inspector General of the Department of Health and Human Services.
Justice Department Files Fair Housing Lawsuit in Missouri Against Owner and Managers of Federally-Subsidized Property for Race and Sex DiscriminationRead the Press Release
WASHINGTON – The Justice Department announced it has filed a lawsuit today in federal court for the Eastern District of Missouri alleging a pattern or practice of violations of the Fair Housing Act by the owner and managers of Forum Manor Apartments, a federally-subsidized apartment complex, for refusing to rent to African-Americans and males, refusing to allow tenants to have African-American visitors, sexually harassing female tenants and retaliating against tenants who complained about such discrimination.
The lawsuit alleges that Roger Harris, the manager of Forum Manor Apartments, refused to rent to African-Americans. According to the court documents, Harris told a prospective tenant, "I don't rent to people who look like you," or words to that effect. The suit further alleges that Harris repeatedly sexually harassed and intimidated female tenants and refused to rent to males. The suit also names as defendants Hediger Enterprises Inc., Forum Manor Associates L.P., and Forum Manor LLC, which jointly own and manage Forum Manor.
"No one should be denied an apartment because of their race or sex, nor should a woman have to fear harassment by the landlord who holds a key to her home," said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. "The Justice Department will vigorously enforce the nation’s civil rights laws to combat all types of discrimination."
This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by four tenants. After an investigation of the complaint, HUD issued a charge of discrimination and, after complainants elected to have the case heard in federal court, referred the case to Justice Department. The suit alleges that the defendants engaged in a pattern or practice of discrimination and seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions and a civil penalty.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777.
Former Willbros International Consultant<br /> Pleads Guilty to $6 Million Foreign Bribery SchemeRead the Press Release
WASHINGTON – A former consultant for Willbros International Inc. (WII), a subsidiary of Houston-based Willbros Group Inc. (Willbros), pleaded guilty today to engaging 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 Assistant Director Joseph Persichini Jr., of the FBI’s Washington Field Office.
Paul G. Novak, 43, pleaded guilty before U.S. District Judge Simeon T. Lake III in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one substantive count of violating the FCPA. Sentencing has been scheduled for Feb. 19, 2010.
"The use of intermediaries to pay bribes will not escape prosecution under the FCPA," said Assistant Attorney General Lanny A. Breuer. "The Department will continue to hold accountable all the players in an FCPA scheme – from the companies and their executives who hatch the scheme, to the consultant they retain to carry it out."
"The FBI is committed to investigating and weeding out corruption that inhibits honest business practices around the globe," said Assistant Director Persichini.
In his plea, Novak admitted that from approximately late-2003 to March 2005, he conspired with others to make a series of corrupt payments totaling more than $6 million to various Nigerian government 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. The EGGS project was a natural gas pipeline system in the Niger Delta designed to relieve existing pipeline capacity constraints.
According to information contained in plea documents, Novak, along with alleged co-conspirators Kenneth Tillery, Jason Steph, Jim Bob Brown, three employees from a German construction company based in Mannheim, Germany agreed to make the corrupt payments to, among others, government officials from the Nigerian National Petroleum Corporation (NNPC), the National Petroleum Investment Management Services (NAPIMS), a senior official in the executive branch of the federal government of Nigeria, members of a Nigerian political party and officials from the Shell Petroleum Development Company of Nigeria Ltd. (SPDC). According to court documents, the bribes were paid to assist in obtaining and retaining the EGGS project and additional optional scopes of work.
According to information contained in plea documents, to secure the funds for those corrupt payments, Steph and others caused Willbros West Africa Inc. (WWA), a subsidiary of Willbros, to enter into so-called "consultancy agreements" with two consulting companies Novak represented in exchange for purportedly legitimate consultancy services. In reality, those consulting companies were used to facilitate the payment of bribes. Specifically, the consulting companies would invoice WWA for purported consulting services and would receive payment from WII’s bank account in Houston to the consulting companies’ bank accounts in Lebanon. Novak would then use money from the Lebanese bank accounts to pay bribes to the various Nigerian officials.
In addition to Novak, to date, two Willbros employees have pleaded guilty for their roles in the EGGS bribery scheme and Willbros has entered into a deferred prosecution agreement:
- On Sept. 14, 2006, Jim Bob Brown, a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract and in connection with his role in making corrupt payments in Ecuador. Brown’s sentencing is currently scheduled for Jan. 28, 2010.
- On Nov. 5, 2007, Jason Steph, also a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract. Steph’s sentencing is also scheduled for Jan. 28, 2010.
- On May 14, 2008, Willbros Group Inc. and Willbros International Inc. 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.
Kenneth Tillery was charged, along with Novak, for his alleged role in the bribery scheme in an indictment unsealed on Dec. 19, 2008. According to the indictment, Tillery was a WII employee and executive from the 1980s through January 2005. From 2002 until January 2005, Tillery served as executive vice president and, later, as president of WII. Tillery remains a fugitive. The charges against Tillery are merely accusations, and he is presumed innocent unless and until proven guilty.
This case is being 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.
Former Missouri Sheriff’s Deputy Pleads Guilty to Sexually Abusing a Teenage Girl While She Was DetainedRead the Press Release
WASHINGTON – Steven W. Burgess, a former Jackson County, Mo., sheriff’s deputy, pleaded guilty in federal court today to violating the civil rights of a teenage girl whom he sexually assaulted in his patrol car, the Justice Department announced.
Burgess, 35, of Independence, Mo., pleaded guilty before U.S. District Judge Ortrie D. Smith to the charge contained in an April 7, 2009, federal indictment. As part of his plea, Burgess admitted that while he was a deputy sheriff with the Jackson County Sheriff’s Department, he deprived a 15-year-old girl of her Constitutional rights by sexually assaulting her while she was in his custody.
Under the terms of today’s plea agreement, the government and Burgess agree that a sentence of 14 years in federal prison without parole is appropriate in this case. A sentencing hearing will be scheduled after the completion of a pre-sentence investigation by the United States Probation Office.
Burgess, then on-duty and in uniform as a deputy sheriff, encountered the victim (identified as "C.B.") and some friends in Haynes Park in Sibley, Mo., on July 24, 2007. Burgess told her friends to leave the park and ordered C.B. to stay at the park with him. Burgess then put C.B. in handcuffs and, while patting her down, inappropriately touched her in a sexual manner. Burgess removed the handcuffs and compelled her to perform oral sex on him.
Burgess violated the victim’s right not to be deprived of liberty without due process of law, which includes the right to bodily integrity. Burgess used force against his victim and placed her in fear of death, serious bodily injury and kidnaping.
"A law enforcement officer who abuses his authority by sexually assaulting a child not only violates the law, but also the child’s civil rights and the public trust," Assistant Attorney General Thomas E. Perez for the Civil Rights Division said. "The Civil Rights Division will aggressively prosecute any person who, while purporting to act as a law enforcement officer, violates the most basic Constitutional rights of our citizens."
"Law enforcement officers have a sworn duty to uphold the law, but in this case a uniformed officer violated both his oath and the law by sexually assaulting a 15-year-old girl while she was in his custody," U.S. Attorney Matthew J. Whitworth for the Western District of Missouri said. "We will not tolerate such a heinous offense, especially by an officer abusing his position of authority. A violation of one person’s civil rights is a crime against the entire community. A long prison term will hold him accountable for his repugnant behavior and make it clear that nobody is above the law."
This case is being prosecuted by Assistant U.S. Attorney K. Michael Warner and Civil Rights Division Trial Attorney Eric L. Gibson. It was investigated by the Jackson County, Mo., Sheriff’s Department and the FBI.
11 November 2009
Connecticut Investor Frederic Bourke Sentenced to Prison for Scheme to Bribe Government Officials in AzerbaijanRead the Press Release
Frederic A. Bourke Jr., of Greenwich, Conn., was sentenced today in U.S. District Court in Manhattan to one year and one day in prison.
Following a six-week trial, Bourke, 63, was found guilty on July 10, 2009, of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and related prohibitions, and of making false statements to the FBI. The FCPA makes it a crime to pay or offer to pay foreign government officials in order to obtain or retain business. In addition to the prison term, U.S. District Judge Shira A. Scheindlin ordered Bourke to pay a $1 million fine and serve three years of supervised release following the prison term.
According to evidence presented at trial, Bourke participated in a scheme to bribe senior government officials in Azerbaijan with several hundred million dollars in shares of stock, cash and other gifts, to ensure that those officials would privatize the State Oil Company of the Azerbaijan Republic (SOCAR) in a rigged auction that only Bourke, fugitive Czech investor Viktor Kozeny and members of their investment consortium could win, to their massive profit. Kozeny is under indictment in the Southern District of New York for his alleged role in the scheme.
Under the privatization program, citizens of Azerbaijan could use free government-issued vouchers to bid for shares of state-owned industries that were to be privatized. Privatization vouchers were bearer instruments that were freely tradable, and they typically were bought and sold using U.S. currency. Foreigners could also participate in Azerbaijan’s privatization program and own vouchers, but only if they purchased a government-issued "option" for each voucher they held. The vouchers and options were largely purchased with millions of dollars of cash flown into Azerbaijan on private planes, and were intended to be exercised by Oily Rock Ltd., a company Kozeny allegedly controlled.
According to trial evidence, Bourke, a friend and neighbor of Kozeny’s in Aspen, Colo., invested approximately $8 million in Oily Rock, on behalf of himself, family members and friends. Bourke also obtained directorships, salary and stock options with related companies that Kozeny allegedly set up and funded.
The takeover of SOCAR, however, could only take place if the president of Azerbaijan issued a decree directing SOCAR’s privatization. Beginning in August 1997 through fall 1998, Bourke and others conspired to pay or cause to be paid millions of dollars worth of bribes to Azeri government officials to ensure that their investment consortium would gain, in secret partnership with the Azeri officials, a controlling interest in SOCAR and its substantial oil reserves.
For example, in August 1997, Kozeny allegedly agreed to transfer to corrupt Azeri officials two-thirds of the vouchers and options Oily Rock purchased, and to give them two-thirds of all of the profits arising from his investment consortium’s participation in SOCAR’s privatization. In June 1998, Bourke knew that Kozeny allegedly arranged for Oily Rock to increase its authorized share capital from $150 million to $450 million so that the additional $300 million worth of Oily Rock shares could be transferred to one or more of the Azeri officials as a further bribe payment. Bourke also arranged for two of the corrupt officials to receive medical treatment in New York City on different occasions in 1998, for which Oily Rock paid. Thereafter, in interviews with the FBI in April and May of 2002, Bourke falsely stated that he was not aware that Kozeny allegedly had made payments to the Azeri officials.
The charges against Kozeny remain merely accusations, and he is presumed innocent unless and until proven guilty.
The case against Bourke and the related case pending against Kozeny are being prosecuted by Deputy Chief Mark F. Mendelsohn and Assistant Chief Robertson Park of the Criminal Division’s Fraud Section, and Assistant U.S. Attorneys Harry A. Chernoff and Iris Lan of the U.S. Attorney’s Office for the Southern District of New York.
10 November 2009
Settlement Reached to Clean up Idaho’s St. Maries Creosote Superfund SiteRead the Press Release
WASHINGTON—Two companies and the city of St. Maries, Idaho, have agreed to clean up a superfund site in St. Maries at a cost estimated more than $12 million, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today.
Carney Products Co. Ltd., the general partners of B.J. Carney & Co. LP, along with the city have agreed to clean up the St. Maries Creosote Superfund site in a settlement agreement filed late yesterday in federal court in Boise, Idaho. The site, a former wooden utility pole treatment plant, is located along the banks of the St. Joe River on the Coeur d’ Alene Tribe reservation. The tribe joined with the federal government in signing the settlement.
"Today’s settlement demonstrates our commitment to make sure that parties responsible for Superfund sites foot the bill for cleaning the pollution," said John C. Cruden, Acting Assistant Attorney General in charge of the Justice Department’s Environment and Natural Resources Division. "We are pleased to reach this agreement with the city and these two companies which will ultimately result in the cleanup of contamination on private land and in the St. Joe River within the Coeur d’ Alene Tribe reservation."
"This is good news for both the community and the Coeur d’Alene Tribe," said Michelle Pirzadeh, EPA’s Acting Regional Administrator in Seattle. "With this agreement, we are another step closer to finishing the cleanup and putting the land back into productive use. It's a ‘win’ for the local economy, public health and the environment."
According to a complaint filed simultaneously with the agreement, the United States alleged that the three entities were responsible under the Superfund law to clean up the site according to EPA’s plan announced in July 2007. The agreement that resolves the complaint also includes a payment to the United States of $555,951.23 for EPA’s past clean up and oversight costs, and a $5,000 payment to the tribe for its past oversight costs. The tribe also will be able to review, inspect and comment on the plans and work being completed at the site.
B.J. Carney & Co. owned the now-defunct plant from 1960 through the early 1980s, demolishing site structures and re-grading contaminated soil from 1960 through 1965. Although the creosote operation ended, and B.J. Carney & Co. sold its interests to Carney Products, Ltd., from 1982 until 2003 Carney Products peeled, sorted, and stored poles at the facility. The creosote operation and demolition process polluted the land, river bank and river sediments. EPA’s cleanup plan calls for excavation and thermal treatment of more than 70,000 cubic yards of creosote-contaminated soil and river sediment. During the thermal treatment, the contaminated soils and sediments will be heated to a temperature that turns the contaminants into gas and thereby removes the contaminants.
The settlement includes provisions that will provide additional assurance of the responsible parties’ obligations. The responsible parties entered into a confidential guarantee agreement under which an environmental engineering company guarantees that it will complete essentially all of the cleanup work. The engineering company has signed and will be bound by the consent decree. The responsible parties remain obligated to complete the work should the engineering company fail to do so.
The consent decree, which was filed in U.S. District Court in for the District of Idaho, is subject to a 30-day comment period and final approval by the court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.htm.
Korean Businessman Sentenced to Five Years in Prison for Role<br /> in $206 Million Contract Fraud SchemeRead the Press Release
A South Korean businessman was sentenced today in U.S. District Court for the Northern District of Texas to five years in prison for his role in a bribery conspiracy involving a $206 million telecommunications contract and employees of the Army and Air Force Exchange Service (AAFES).
In addition to the prison term, U.S. District Judge Ed Kinkeade also ordered Gi-Hwan Jeong to pay a $50,000 fine. Jeong pleaded guilty on June 11, 2009, to a five-count indictment, charging him with one count of conspiracy, two counts of honest services wire fraud and two counts of bribery.
AAFES is a federal entity that provides billions of dollars worth of goods and services annually to U.S. Armed Forces service members and their families around the world. According to court documents, Jeong conspired between 2001 and 2006 with two AAFES officials, Henry Lee Holloway and Clifton Choy, and others, to commit bribery and honest services wire fraud when he agreed to make payments to the officials in the form of cash, travel, entertainment expenses and other things of value in exchange for their aid in securing and maintaining a $206 million telecommunications contract for his company, Samsung Rental Ltd. (SSRT).
In prior plea proceedings, Jeong admitted to providing approximately $80,000 in cash, entertainment and other things of value from October 2001 to August 2005 as bribes to Choy, an AAFES services program manager for the Pacific region, in exchange for Choy’s use of official action to benefit SSRT. Specifically, according to court documents, prior to AAFES’ award of the telecommunications contract to SSRT in 2001, Choy used his official position to gain access to confidential bid proposal information that competing bidders had submitted to AAFES and passed the information to Jeong, who used it to ensure that SSRT submitted the winning bid. Shortly after AAFES awarded the contract to SSRT, Jeong admitted paying $20,000 in cash to Choy, who passed away in 2008.
Jeong also admitted in prior plea proceedings to providing approximately $70,000 in cash, entertainment, travel expenses, stock options and other things of value as bribes to Holloway from May 2003 to April 2005, in exchange for Holloway’s use of official action to benefit SSRT. Jeong admitted making payments to curry favor with Holloway, who, as an AAFES general store manager for several U.S. military bases in Korea, was in a position to seek termination of AAFES’ contract with SSRT following allegations of performance-related problems relating to SSRT’s contractual obligations. After Jeong began paying Holloway, according to court documents, Holloway used official acts and influence to support the contractual relationship between SSRT and AAFES.
On April 21, 2009, Holloway, 42, of Hamilton, Ga., pleaded guilty before Judge Clay D. Land in the Middle District of Georgia for his role in the conspiracy and for not reporting the bribes he admitted he accepted on his income tax returns. Holloway’s sentencing is scheduled for Dec. 16, 2009.
The case is being prosecuted by Senior Trial Attorney Richard C. Pilger and Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section. The Criminal Division’s Office of International Affairs provided assistance in this matter. The case was investigated by the Air Force Office of Special Investigations, the FBI’s Dallas Field Office and the Internal Revenue Service Criminal Investigation.
Justice Department Signs Agreement with Wilmington, North Carolina, to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced a settlement agreement with the city of Wilmington, N.C., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under "Project Civic Access," a Justice Department initiative to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 171st reached under Project Civic Access and the tenth this year.
Project Civic Access was initiated to ensure that people with disabilities have an equal opportunity to participate in civic life. As part of the project, department investigators, attorneys, and architects survey state and local government facilities and programs throughout the country to identify modifications necessary to comply with ADA requirements. Depending on the circumstances in each community, the agreements address specific areas where access must be improved.
"Civic access is a basic right guaranteed to all, and today’s agreement illustrates Wilmington’s commitment to improving access for all of its residents and visitors with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We applaud Wilmington for entering into this agreement that will further the rights and opportunities of individuals with disabilities."
The city of Wilmington, also known as the Port City, is located in the southeastern corner of North Carolina between the Cape Fear River and the Atlantic Ocean. Wilmington has become a popular location for filming movies and TV shows. More than 15,400 individuals with disabilities call Wilmington home, and the percentage of Wilmington residents who have a disability is higher than the national average.
Under the agreement announced today, the city of Wilmington will take several steps to improve access for individuals with disabilities, such as:
- Making physical modifications to its facilities so that parking, routes into the buildings, entrances, public telephones, restrooms, service counters, and drinking fountains are accessible to persons with disabilities;
- Posting, publishing and distributing a notice to inform members of the public of the provisions of the ADA and their applicability to the city’s programs, services, and activities;
- Adopting a grievance procedure to deal with complaints of disability discrimination;
- Amending its employment policies, as necessary, to comply with the regulations of the U.S. Equal Employment Opportunity Commission implementing the Americans with Disabilities Act;
- Implementing a plan that will provide accessible sidewalks and curb ramps throughout Wilmington;
- Ensuring that the city’s official website is accessible to persons with disabilities, including individuals who are blind or have low vision;
- Providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs; and
- Installing signs at any inaccessible entrance to a city facility directing members of the public to an accessible entrance or to information about other accessible facilities where services can be obtained.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement will remain in effect for three years. The department will monitor compliance with the agreement until required actions have been completed.
People interested in finding out more about the ADA, today’s agreement with Wilmington, N.C., or the department’s Project Civic Access initiative may find this information on the ADA Web site at http://www.ada.gov or may call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Alleged International Hacking Ring <br /> Caught in $9 Million FraudRead the Press Release
Sergei Tsurikov, 25, of Tallinn, Estonia; Viktor Pleshchuk, 28, of St. Petersburg, Russia; Oleg Covelin, 28, of Chisinau, Moldova; and a person known only as "Hacker 3;" have been indicted by a federal grand jury in Atlanta, Ga., on charges of hacking into a computer network operated by the Atlanta-based credit card processing company RBS WorldPay, which is part of the Royal Bank of Scotland.
Igor Grudijev, 31, Ronald Tsoi, 31, Evelin Tsoi, 20, and Mihhail Jevgenov, 33, each of Tallinn, Estonia, have also been indicted by a federal grand jury in Atlanta, Ga., for access device fraud.
The 16-count indictment charges Tsurikov, Pleshchuk, Covelin and "Hacker 3" with conspiracy to commit wire fraud, wire fraud, conspiracy to commit computer fraud, computer fraud, access device fraud and aggravated identity theft. The indictment alleges that the group used sophisticated hacking techniques to compromise the data encryption that was used by RBS WorldPay to protect customer data on payroll debit cards. Payroll debit cards are used by various companies to pay their employees. By using a payroll debit card, employees are able to withdraw their regular salaries from an ATM.
Once the encryption on the card processing system was compromised, the hacking ring allegedly raised the account limits on compromised accounts, and then provided a network of "cashers" with 44 counterfeit payroll debit cards, which were used to withdraw more than $9 million from more than 2,100 ATMs in at least 280 cities worldwide, including cities in the United States, Russia, Ukraine, Estonia, Italy, Hong Kong, Japan and Canada. The $9 million loss occurred within a span of less than 12 hours.
The hackers then allegedly sought to destroy data stored on the card processing network in order to conceal their hacking activity. The indictment alleges that the "cashers" were allowed to keep 30 to 50 percent of the stolen funds, but transmitted the bulk of those funds back to Tsurikov, Pleshchuk and other co-defendants Upon discovering the unauthorized activity, RBS WorldPay immediately reported the breach.
International cooperation was a significant factor in the resolution of this case. In a joint investigation with U.S. law enforcement authorities, Estonian Central Criminal Police apprehended Tsurikov, Ronald Tsoi, Evelin Tsoi and Jevgenov in Estonia earlier this year. Each is facing related charges in Estonia. Tsurikov is also in custody in Estonia and is pending extradition to the United States. Federal prosecution of the Estonian defendants has been closely coordinated with the Estonian Office of the Prosecutor General. Furthermore, cooperation between the Hong Kong Police Force and the FBI also led to a parallel investigation in Hong Kong, resulting in the identification and arrest of two individuals who were responsible for withdrawing RBS WorldPay funds from ATMs there. The Netherlands Police Agency National Crime Squad High Tech Crime Unit and the Netherlands National Public Prosecutor’s Office also provided significant assistance.
Tsurikov, Pleshchuk, Covelin and "Hacker 3" each face a maximum sentence of up to 20 years in prison for conspiracy to commit wire fraud and each wire fraud count; up to five years in prison for conspiracy to commit computer fraud; up to five or 10 years in prison for each count of computer fraud; a two-year mandatory minimum sentence for aggravated identity theft; and fines up to $3.5 million dollars. The charges against Grudijev, the Tsois and Jevgenov carry a maximum of up to 15 years in prison for each count and a fine of up to $250,000. The indictment also seeks criminal forfeiture of $9.4 million from the defendants.
"The charges brought against this highly sophisticated international hacking ring were possible only because of unprecedented international cooperation with our law enforcement partners, particularly between the United States and Estonia. Through our close cooperation, both nations have demonstrated our commitment to identifying sophisticated attacks on U.S. financial networks that are directed and operated from overseas and our commitment to bringing the perpetrators to justice," said Assistant Attorney General of the Criminal Division Lanny A. Breuer.
"Last November, in just one day, an American credit card processor was hacked in perhaps the most sophisticated and organized computer fraud attack ever conducted. Today, almost exactly one year later, the leaders of this attack have been charged. This investigation has broken the back of one of the most sophisticated computer hacking rings in the world. This success would not have been possible without the efforts of the victim, and unprecedented cooperation from various law enforcement agencies worldwide," said Acting U.S. Attorney Sally Quillian Yates of the Northern District of Georgia.
"Through the diligent efforts of the victim company and multiple law enforcement agencies within the United States and around the world, the leaders of a technically advanced computer hacking group were identified and indicted in Atlanta, sending a clear message to cyber-criminals across the globe, said FBI Atlanta Field Office Special Agent-in-Charge Greg Jones. "Justice will not stop at international borders, but continue with the on-going cooperation between the FBI and other agencies such as the Estonian Central Criminal Police and the Netherlands Police Agency."
This case is being prosecuted by Assistant U.S. Attorneys Lawrence R. Sommerfeld and Gerald Sachs of the U.S. Attorneys Office for the Northern District of Georgia and by Senior Counsel Kimberly Kiefer Peretti of the Criminal Division’s Computer Crime and Intellectual Property Section. Treaty assistance was provided by the Criminal Division’s Office of International Affairs counsels Betsy Burke, Blair Berman, Roman Chaban, Judith Friedman, Deborah Gaynus, Linda McKinney and Mary McLaren.
This case is being investigated by the FBI. Assistance was provided by international law enforcement partners. The U.S. Secret Service also participated in the investigation. RBS World Pay immediately reported the crime and has assisted in the investigation.
9 November 2009
Justice Department Sues to Close Dallas-area Tax PreparerRead the Press Release
WASHINGTON – The United States has asked a federal court to shut down a Dallas-area tax return preparer, the Justice Department announced today. The government complaint filed in U.S. District Court in Dallas alleges that Travis Nicholas Stenline of Seagoville, Texas, operates a business he calls Nick Tax or Nick’s Taxes that prepares fraudulent returns for customers.
The government complaint alleges that Stenline prepared and filed about 250 federal income tax returns claiming improper refunds exceeding $880,000. Examples of alleged fraud cited in the complaint include bogus claims for telephone excise tax credits, fuel tax credits, and the earned income tax credit.
Return preparer fraud and bogus fuel tax credits are identified by the IRS on its Web site as two of the 2009 "Dirty Dozen" tax scams.
Over the past decade, the Justice Department’s Tax Division has obtained more than 430 injunctions to stop tax fraud promoters and dishonest tax preparers. Information about these cases is available on the Justice Department Web site .
Federal Court Permanently Enjoins Iowa Tax Preparation FirmRead the Press Release
WASHINGTON - A federal judge in Sioux City, Iowa, today barred a Humboldt, Iowa, woman, Gayle Lemmon, and her tax preparation business from claiming improper deductions on federal income tax returns. The court’s order, which Lemmon agreed to, also prohibits her from representing customers before the IRS and requires her to attend government-approved tax training classes.
According to the government compaint in the civil injunction case, Lemmon’s firm, Gayle’s Bookkeeping and Tax Service, Inc., prepared federal income tax returns for customers that unlawfully understated tax liabilities by claiming improper deductions for the business use of the home and for non-deductible personal expenses. The suit also alleged that Lemmon claims improper deductions for charitable contributions and employee business expenses.
According to the complaint, the IRS examined approximately 243 returns that Lemmon prepared and found that 224 of them understated the customers’ tax liabilities. The complaint alleges that the tax loss from Lemmon’s alleged misconduct between 2003 and 2008 could be as much as $17 million.
In the past decade the Justice Department has obtained injunctions against more than 430 tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department Tax Division’s Web site.
Eighth Person Pleads Guilty to Illegally Accessing <br /> Confidential Passport FilesRead the Press Release
An eighth individual pleaded guilty today to illegally accessing numerous confidential passport application files. Susan Holloman, 58, of Washington, pleaded guilty before U.S. Magistrate Judge Alan Kay in the District of Columbia to a one-count criminal information charging her with unauthorized computer access. Holloman is scheduled to be sentenced on Jan. 21, 2010.
According to court documents, Holloman has worked full-time for the State Department since November 1980 as a file assistant in the Bureau of Consular Affairs. In pleading guilty, Holloman admitted that she had access to official State Department computer databases in the regular course of her job, including the Passport Information Electronic Records System (PIERS), which contains all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
Holloman admitted that between Feb. 13 and Dec. 5, 2007, she logged onto the PIERS database and repeatedly searched for and viewed the passport applications of 70 celebrities and their families, actors, professional athletes, musicians and other individuals identified in the press. Holloman admitted that she had no official government reason to access and view these passport applications, but that her sole purpose in accessing and viewing these passport applications was idle curiosity.
Holloman is the eighth current or former State Department employee or contractor to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing nearly 200 confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing more than 150 confidential passport files. Cross was sentenced on March 23, 2009, to 12 months of probation and ordered to perform 100 hours of community service. On Jan. 27, 2009, Gerald R. Lueders, a former Foreign Service Officer, watch officer and recruitment coordinator, pleaded guilty to unlawfully accessing more than 50 confidential passport files. Lueders was sentenced on July 8, 2009, to 12 months of probation and ordered to pay a $5,000 fine. On July 10, 2009, William A. Celey, a file assistant, pleaded guilty to unlawfully accessing more than 75 confidential passport files. Celey was sentenced on Oct. 23, 2009, to 12 months of probation and ordered to perform 50 hours of community service. On Aug. 17, 2009, Kevin M. Young, a contact representative, pleaded guilty to unlawfully accessing more than 125 confidential passport files. Young is scheduled to be sentenced on Dec. 9, 2009. On Aug. 26, 2009, Karal Busch, a former citizens services specialist, pleaded guilty to unlawfully accessing more than 65 confidential passport files. Busch is scheduled to be sentenced on Dec. 15, 2009. On Oct. 28, 2009, Yvette M. Burrison, a passport specialist, pleaded guilty to unlawfully accessing nearly 100 confidential passport files. A sentencing date has not yet been scheduled for Burrison.
These cases are being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section. The cases are being investigated by the State Department Office of Inspector General.
Attorney General Eric Holder Welcomes Laurie Robinson <br /> as Assistant Attorney General in Office of Justice ProgramsRead the Press Release
WASHINGTON – Laurie O. Robinson was sworn in today as Assistant Attorney General in the U.S. Department of Justice’s Office of Justice Programs (OJP).
"Laurie’s commitment, leadership, experience, and knowledge of criminal justice issues will ensure that the Department of Justice works in partnership with the justice community to develop innovative, evidence-based strategies to prevent and reduce crime," Attorney General Holder said. "I look forward to once again working with Laurie."
The Office of Justice Programs provides federal leadership in developing the nation's capacity to prevent and control crime, administer justice, and assist victims. OJP has five component bureaus: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; and the Office for Victims of Crime. Additionally, OJP has two program offices: the Community Capacity Development Office, which incorporates the Weed and Seed strategy, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART).
Ms. Robinson, who was confirmed by the United States Senate on November 5, 2009, previously served as the Assistant Attorney General of OJP from 1993 to February, 2000. Since 2004, Ms. Robinson has been the director of the Master of Science Program in the University of Pennsylvania's Department of Criminology. Also, since 2001, she has served as a Distinguished Senior Scholar in the University's Jerry Lee Center of Criminology, and as Executive Director of its Forum on Crime and Justice.
She has published numerous articles in criminal justice and legal periodicals, and has spoken at hundreds of criminal justice-related conferences and forums. Ms. Robinson is a magna cum laude graduate of Brown University and a member of Phi Beta Kappa.
Antitrust Division Issues Statement on the European Commission’s Decision Regarding the Proposed Transaction Between Oracle and SunRead the Press Release
WASHINGTON – Deputy Assistant Attorney General Molly Boast of the Department of Justice’s Antitrust Division issued the following statement today after the European Commission (EC) issued a statement of objections regarding Oracle Corporation’s proposed acquisition of Sun Microsystems Inc.:
"After conducting a careful investigation of the proposed transaction between Oracle and Sun, the Department’s Antitrust Division concluded that the merger is unlikely to be anticompetitive. This conclusion was based on the particular facts of the transaction and the Division’s prior investigations in the relevant industries. The investigation included gathering statements from a variety of industry participants and a review of the parties’ internal business documents. At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the Commission’s jurisdiction.
"Several factors led the Division to conclude that the proposed transaction is unlikely to be anticompetitive. There are many open-source and proprietary database competitors. The Division concluded, based on the specific facts at issue in the transaction, that consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products. The Department also concluded that there is a large community of developers and users of Sun’s open source database with significant expertise in maintaining and improving the software, and who could support a derivative version of it.
"The Department and the European Commission have a strong and positive relationship on competition policy matters. The two competition authorities have enjoyed close and cooperative relations. The Antitrust Division will continue to work constructively with the EC and competition authorities in other jurisdictions to preserve sound antitrust enforcement policies that benefit consumers around the world."
7 November 2009
Statement of Attorney General Eric Holder on the Death of Dr. Eduardo CaraveoRead the Press Release
"My thoughts and deepest sympathies are with the family of Dr. Eduardo Caraveo, a Bureau of Prisons psychologist who was killed Thursday at Ft. Hood, as well as to all those who are grieving the loss of loved ones in this tragic event. No words can ease the pain they are feeling today.
"Department of Justice personnel can be found answering the call to service in communities throughout the world every day. I applaud and honor each of them for their dedication, and we will continue to stand by them as they work to protect the country."
6 November 2009
United States Sues Kaman Dayron, Inc., Under False Claims ActRead the Press Release
WASHINGTON – The United States has filed a lawsuit against Kaman Dayron Inc., alleging that the Orlando, Fla., defense contractor violated the False Claims Act by knowingly substituting non-conforming parts in fuzes (sophisticated ignition devices incorporating mechanical and/or electronic components) supplied to the military for use in "bunker buster" bombs, the Justice Department announced today. The suit was filed today in U.S. District Court in Orlando.
The allegations relate to FMU-143 fuzes for use in hard target penetration warheads, colloquially referred to as "bunker buster" bombs. The government alleges that Kaman Dayron knowingly substituted non-conforming bellows motors for the specified parts in three lots of fuzes supplied to the military, and that the non-conforming parts could cause the fuzes to fire prematurely, creating a hazard for military personnel and causing misfires of the warheads. The military discovered the parts substitution and has quarantined the defective fuzes.
"I take seriously the Department of Justice’s obligation to pursue allegations that a defense contractor is creating a safety risk to our military," said Assistant Attorney General Tony West, in charge of the Department’s Civil Division. "We owe it to our military personnel to ensure that contractors know that this type of misconduct will not be tolerated."
This case is being prosecuted as part of a National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force 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 Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community, and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrate the Justice Department’s commitment to helping ensure the integrity of the government procurement process.
Regional Home Builder Agrees to Clean Water Act SettlementRead the Press Release
WASHINGTON—John Wieland Homes and Neighborhoods Inc., and John Wieland Homes and Neighborhoods of the Carolinas Inc., based in Atlanta, Ga., have agreed to pay a $350,000 civil penalty to resolve alleged violations of the Clean Water Act, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.
The companies have also agreed to implement company-wide storm water compliance programs at their construction sites that go beyond current regulatory requirements. EPA estimates that the agreement will keep approximately 37 million pounds of sediment from polluting the nation’s waterways each year.
"The Clean Water Act requires environmental controls in order to protect nearby waterways from pollutants that commonly are found on construction sites," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This settlement requires these companies now to take steps beyond the law to protect public health and the environment."
"Failure to properly control storm water runoff at construction sites can have serious consequences for the environment," said Stan Meiburg, EPA Region 4 Acting Regional Administrator. "This agreement will result in better management practices that will ultimately lead to greater protection of rivers, lakes and streams across the Southeast."
John Wieland Homes and Neighborhood, Inc., and John Wieland Homes and Neighborhoods of the Carolinas, Inc., primarily build homes in the Southeast including Georgia, North Carolina, South Carolina and Tennessee.
Along with the federal government, the state of Tennessee has joined the settlement. The state will receive a portion of the penalties based on the number of sites located within the state.
The government complaint alleges a common pattern of violations that was discovered by reviewing documentation submitted by the companies and through federal site inspections. The alleged violations include not obtaining permits until after construction had begun or failing to obtain the required permits at all. At the sites that did have permits, violations included failure to prevent or minimize the discharge of pollutants, such as silt and debris, in storm water runoff.
The settlement requires the companies to develop improved pollution prevention plans for each site, increase site inspections and promptly correct any problems that are detected. The companies must properly train construction managers and contractors, and are required to have trained staff present at each construction site. They also must implement a management and internal reporting system to improve oversight of on-the-ground operations and submit annual reports to EPA.
Improving compliance at construction sites is one of EPA’s national enforcement priorities. Construction projects have a high potential for environmental harm because they disturb large areas of land and significantly increase the potential for erosion. Without onsite pollution controls, sediment-laden runoff from construction sites can flow directly to the nearest waterway and degrade water quality. In addition, storm water can pick up other pollutants, including concrete washout, paint, used oil, pesticides, solvents and other debris. Polluted runoff can harm or kill fish and wildlife and can affect drinking water quality.
The Clean Water Act requires that construction sites have controls in place to prevent pollution from being discharged with storm water into nearby waterways. These controls include basic pollution prevention techniques such as silt fences, phased site grading, and sediment basins to prevent common construction contaminants from entering the nation’s waterways.
This settlement is the latest in a series of enforcement actions to address storm water violations from construction sites around the country. Similar consent decrees have been reached with companies like Home Depot and multiple home building companies.
The consent decree, lodged in the U.S. District Court for the Middle District of Tennessee, is subject to a 30-day public comment period and approval by the federal court. The companies are required to pay the penalty within 30 days of the court’s approval of the settlement. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html .
Justice Department Resolves Lawsuit AllegingDisability-Based Housing Discrimination at 11 MultifamilyHousing Complexes in Tennessee, Louisiana, Alabama and TexasRead the Press Release
WASHINGTON – The Justice Department today announced a settlement of its lawsuit alleging that those involved in the design and construction of 11 multifamily housing complexes discriminated on the basis of disability. The complexes are located in four states and contain more than 800 units covered by the Fair Housing Act’s accessibility provisions.
Under the settlement, which must still be approved by the U.S. District Court for the Western District of Tennessee, 11 defendants will pay all costs related to making the complexes for which they were responsible accessible to persons with disabilities and pay up to $117,000 to compensate individuals harmed by the inaccessible housing. The settlement requires all the defendants to undergo training on the requirements of the Fair Housing Act and provide periodic reports to the government.
"The Fair Housing Act requires equal access to housing for persons with disabilities," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This comprehensive settlement ensures that these multifamily housing complexes will be retrofitted to comply with the Fair Housing Act, thus allowing persons with physical disabilities an equal opportunity to live in and visit these complexes."
The complaint was originally filed in Memphis, after the United States Attorney received a copy of a survey conducted by the Memphis Center for Independent Living of three of the Memphis properties indicating violations of the Fair Housing Act. In jointly announcing the filing of the Consent Order U.S. Attorney Lawrence J. Laurenzi said, "This Consent Order is an example of our office’s commitment to enforcing the civil rights of all people and in particular highlights the high degree of cooperation between our office and the Civil Rights Division in enforcing the rights of individuals with disabilities."
The defendants responsible for the payments and retrofits are Steve Bryan, Bryan Construction Company, Patton & Taylor Construction Co., Taylor Gardner Architects, Looney-Ricks-Kiss Architects, Richard A. Barron, The Reaves Firm, Smith Engineering Firm, David W. Milem, Belz/South Bluffs and HT Devco. Two defendants, Steve Bryan and Bryan Construction Co., will also pay a civil penalty of $12,000 to vindicate the public interest. The defendants will retrofit the following complexes in Alabama, Tennessee, Louisiana and Texas:
- Sunset Bay at Bon Secour, Condominiums, Gulf Shores, Ala.
- South Bluffs Apartments, 4 Riverview Drive West, Memphis, Tenn.
- Island Park Apartments, 1440 Island Park Drive, Memphis, Tenn.
- The Apartments on Harbor Town Square, Memphis, Tenn.
- The Horizon, 717 Riverside Drive, Memphis, Tenn.
- Grand Pointe Apartments, 3606 Kaliste Saloom Road, Lafayette, La.
- Highlands of Grand Pointe, 3601 Kaliste Saloom Drive, Lafayette, La.
- Ashford Place Apartments, 107 Ashford Drive, West Monroe, La.
- Island Park Apartments, 1105 Island Park Boulevard, Shreveport, La.
- Reflections of Island Park, 2600 Celebration Cove, Shreveport, La.
- Cumberland Place, 2088 Blue Mountain Blvd, Tyler, Texas
The retrofitting includes modifying walkways to eliminate steps, excess slopes and level changes, providing accessible curb ramps, and providing accessible parking and routes to site amenities, such as clubhouses, pools, mailboxes and trash facilities. The settlement also provides for the replacement of inaccessible knob door hardware, the widening of inaccessible narrow doorways, and the reconfiguration of 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 996.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at [email protected]. Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
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.
Justice Department Obtains $131,500 in Discrimination Settlement with Chattanooga, Tennessee, Apartment ComplexRead the Press Release
WASHINGTON – The United States has reached a settlement resolving a housing discrimination lawsuit in Tennessee concerning discrimination against families with children, the Justice Department announced. Under the consent decree, filed today in federal court in Chattanooga, Tenn., defendants Fountainbleau Apartments L.P., Clark W. Taylor Inc., Clark W. Taylor, Jane McElroy, Elizabeth Foster and CWT Management Inc. will pay $131,500 in monetary relief to 15 identified victims and the United States.
The Department’s complaint alleged that the owners, property managers, and management company violated the Fair Housing Act by refusing to rent apartments to persons with children, discouraging persons with children from renting dwellings owned and managed by the defendants, steering persons with children to another apartment complex and making statements that discriminated on the basis of familial status.
"The Fair Housing Act ensures that families searching for a home are protected from discrimination," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department will continue to vigorously protect the civil rights of families in Tennessee and across the country."
Under the consent decree, which must be approved by the federal court in Chattanooga, the defendants must pay $116,500 to 15 identified victims of discrimination and an additional $15,000 to the government as a civil penalty. The settlement also calls for numerous corrective measures, including training, a nondiscrimination policy, record keeping and monitoring.
The Department conducted its investigation using fair-housing testers – individuals who pose as renters for purposes of gathering information about possible discriminatory practices in the rental of apartments.
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/ or http://www.hud.gov/fairhousing .
Former Military Officer Sentenced to 97 Months in Prison for Participating in Scheme to Steal Fuel from U.S. Army in IraqRead the Press Release
WASHINGTON – Robert Young, 57, a former captain in the U.S. Army, was sentenced today to 97 months in prison for his participation in a scheme to steal approximately 10 million gallons of fuel from the U.S. Army in Iraq, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
Young, a U.S. citizen who resided in the Philippines until his arrest in connection with this case, was sentenced today by U.S. District Court Judge Claude M. Hilton in the Eastern District of Virginia. Judge Hilton also sentenced Young to three years of supervised release to follow his prison term, and ordered him to pay $26,276,427 in restitution. Young was also ordered to forfeit $1 million in personal profits he made from the scheme.
Young pleaded guilty on July 24, 2009, to both counts of a two-count superseding indictment charging him and Robert Jeffery with conspiracy and theft of government property.
In his plea, Young admitted that in October 2007, while serving as a contractor in Iraq, he and other co-conspirators agreed to participate in a scheme to steal fuel from the U.S. Army. Between October 2007 and May 2008, he and his co-conspirators, purportedly representing Department of Defense contractors in Iraq, used fraudulently obtained documents to enter the Victory Bulk Fuel Point (VBFP) in Camp Liberty, Iraq, and presented false fuel authorization forms to steal aviation and diesel fuel from the VBFP for subsequent sale on the black market. The United States owns and operates the VBFP in support of Operation Iraqi Freedom. The VBFP supplies fuel to both military units and U.S. Government contractors operating in and around the Victory Base Complex. To retrieve and transport the stolen fuel from the VBFP, Young admitted that he and his co-conspirators employed several individuals to serve as drivers and escorts of the trucks containing the stolen fuel. During Young’s participation in the scheme, he received approximately $1 million in personal profits.
In related cases, Robert Jeffery was convicted on Aug. 11, 2009, after a two-day jury trial, of one count of conspiracy and one count of theft of government property for his role in the fuel theft. The evidence at trial showed that Jeffery served as an escort for the fuel trucks and retrieved hundreds of thousands of gallons of fuel from the VBFP. Sentencing for Jeffery is scheduled for Dec. 11, 2009.
Lee William Dubois pleaded guilty on Oct. 7, 2008, to participating in the same scheme. In his plea, Dubois admitted that he obtained government-issued common access cards for the drivers and escorts of the trucks and also presented false documents to the VBFP authorizing his co-conspirators to draw fuel. Dubois admitted that he received at least $450,000 in personal profits from the scheme. On Aug. 25, 2009, Dubois was sentenced to three years in prison.
Michel Jamil pleaded guilty on July 27, 2009, in connection with his role in the theft scheme. Jamil admitted that in March 2007, he and two of his co-conspirators arranged for the creation of a false fuel authorization form authorizing individuals to draw fuel from the VBFP. Jamil also admitted to serving as an escort for the fuel trucks to retrieve the fuel from the VBFP. Jamil admitted he received between $75,000 and $87,500 in personal profits from the scheme. Jamil’s sentencing is scheduled for Feb. 12, 2010.
The case is being prosecuted by Special Assistant U.S. Attorney Steve Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorneys Andrew Gentin and Brigham Cannon. The investigation of this case was conducted by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service, the FBI and 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.
Court Bars Milwaukee Heating Contractor from Making Disbursements Before Paying Federal Payroll TaxesRead the Press Release
A federal court in Milwaukee, Wis., today issued a preliminary injunction ordering a Milwaukee heating contractor and its owner and president to comply with federal employment tax payment requirements. The preliminary injunction order, signed by U.S. District Judge J.P. Stadtmueller, was entered against Dykeman Family Corp. and its owner, Michael K. Dykeman. The order bars the company from disbursing any funds after wages are paid to employees until the taxes withheld from those wages have been paid to the Internal Revenue Service. Violations of an injunction can lead to civil and criminal sanctions, including fines and imprisonment.
The Justice Department filed the suit in September, seeking to enjoin defendants from continuing to run up unpaid payroll tax liabilities. The complaint alleges that defendants have failed to comply with their tax obligations since 2002. According to the complaint, the business failed to pay over $870,000 in federal employment and unemployment taxes between 2002 and 2007.
"When a business withholds taxes from employees’ wages, it is required by law to turn those taxes over promptly to the IRS," said John A. DiCicco, Assistant Attorney General for the Justice Department’s Tax Division. "Failure to pay withheld taxes is a serious matter that can lead not only to an injunction, but also to substantial civil and criminal penalties."
More information about the Justice Department and its efforts to enforce federal tax laws is available on the Justice Department Web site.
Attorney General Eric Holder Welcomes Ignacia S. Moreno as Assistant Attorney General <br /> for the Environment and Natural Resources DivisionRead the Press Release
WASHINGTON—Attorney General Eric Holder today welcomed the confirmation of Ignacia S. Moreno as the new Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. Moreno was confirmed by the U.S. Senate late yesterday.
"I am pleased to welcome Ignacia back to the Department and the Environment and Natural Resources Division," said Attorney General Holder. "Reinvigorating the traditional missions of the Justice Department, including protecting our nation’s environment, has been one of my top priorities since taking office. Ignacia is a talented and experienced attorney who will bring strong leadership to this important division. I hope for rapid consideration of the other Justice Department nominees pending before the Senate."
The Environment and Natural Resources Division handles litigation under more than 150 federal statutes, such as the Clean Air Act, Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act (Superfund), the Endangered Species Act, and the National Environmental Policy Act.
The Division’s work includes affirmative civil suits to stop polluters and recover clean-up costs, prosecution of environmental and wildlife crimes, defense of federal agencies and their programs, including management of federal lands and other natural resources, defense of federal environmental regulations, litigation relating to tribes and Indian lands, and condemnation of land for congressionally authorized public use. The Division was created on Nov. 16, 1909, by Attorney General George Wickersham through a two-page order creating "The Public Lands Division." It celebrates its 100th anniversary in less than a month.
Moreno returns to the Environment and Natural Resources Division where she served from January 1994 until January 2001 as Special Assistant and then as Counsel and Principal Counsel to the Division’s Assistant Attorney General.
Since September 2006, Moreno has been an in-house counsel at the General Electric Company.
Arkansas Man Sentenced on Civil Rights Charges in Cross Burning ConspiracyRead the Press Release
Dustin Nix of Donaldson, Ark, was sentenced today in federal court in Fort Smith, Ark, on federal civil rights charges related to a conspiracy to drive a woman and her children from their home because they associated with African-Americans. Nix was sentenced to 12 months and one day in prison, three years of post-incarceration supervision, a fine of $5,000, and a $200 special assessment.
Nix pleaded guilty on July 10, 2009, to two felony civil rights charges for conspiring to violate, and violating, the civil rights of the victims. In the plea proceedings and documents filed in court, Nix admitted that in June 2008, he conspired with others to force the victims to leave Donaldson because they associated with African-Americans. Specifically, on June 15, 2008, Nix and the others agreed to construct a cross and burn it in front of the victims’ home. Nix was present for and aided in the construction of the cross. Then, on June 21, 2008, Nix and others drove the cross to the victims’ home. Nix and the others erected the cross in front of the victims’ home and attempted to set it on fire. Nix admitted that he understood that the purpose of burning the cross was to threaten and intimidate the victims, and that it was not intended as a joke or prank.
Nix’s co-conspirators, Jacob A. Wingo, Richard W. Robins, Clayton D. Morrison and Darren E. McKim, pleaded guilty in September 2009, for their roles in the conspiracy. Sentencing for Wingo, Robins, Morrison and McKim has been scheduled for Dec. 7, 2009.
"Driven by bigotry and hate, the defendants in this case threatened a young family with violence simply because they associated with persons of another race. Threats of this kind have no place in America," said Assistant Attorney General Perez. "Aggressive prosecution of hate crimes is a top priority for the Civil Rights Division, and the defendant’s conviction should send a message to others who would carry out similar criminal acts that they will be brought to justice."
Special Agents from the FBI’s Little Rock Field Office investigated this matter. The case was prosecuted by Assistant U.S. Attorney Matthew Quinn for the Western District of Arkansas, along with Special Litigation Counsel Gerard Hogan and Trial Attorney Benjamin Hawk of the Civil Rights Division of the Justice Department.
5 November 2009
U.S. Sues Former Army Officer & Three Contracting Firms<br /> in Connection with Bribery SchemeRead the Press Release
A civil lawsuit was filed today against a former U.S. Army officer and three contracting firms related to an alleged bribery scheme in connection with the awarding of contracts for services in Kuwait. Former Army officer John Cockerham Jr., who is named as a defendant in the lawsuit, previously pleaded guilty to criminal charges along with another former officer, James Momon Jr.
The government’s complaint alleges that from 2004 to 2006, several Kuwaiti companies, including Green Valley Co., Palm Springs General Trading and Contracting Establishment and Jireh Springs General Trading and Contracting Establishment, engaged in a bribery scheme with Cockerham and Momon in exchange for their promises to award Blanket Purchase Agreements (BPAs) for the purchase of bottled water, tents and wastewater removal services from Kuwaiti-based Army camps. A BPA is a simplified acquisition method that federal agencies use to fill anticipated repetitive needs for supplies or services.
The suit, filed in the U.S. District Court for the Western District of Texas, alleges that defendant Saud Al Tawash provided payments to Cockerham’s sister, Carolyn Blake, in exchange for BPAs awarded to or performed by Green Valley, Palm Springs and Jireh Springs, companies which he owned, controlled, or had an interest, according to the complaint. The complaint also alleges Mohammed Howaiji, Green Valley’s assistant manager, and Joseph E. Nakouzi, its head supervisor, agreed to pay Cockerham $300,000 in exchange for the BPAs. According to the complaint, Cockerham awarded the BPAs to Green Valley at inflated prices. The complaint charges that after Momon replaced Cockerham as the Army’s contracting officer, he also took over the bribery scheme and received $510,000 from Green Valley.
The government’s complaint further alleges that Jamal Al Dhama, the manager of Jireh Springs, promised Cockerham $1.5 million to award a BPA to that firm. Saud Al Tawash, acting on behalf of Jireh Springs, later offered Momon a bribe for Momon’s assistance in obtaining payment for Jireh Springs on a bottled water delivery, according to the lawsuit.
"The Department of Justice will vigorously protect taxpayer funds from fraud, especially where the fraud impacts contracts intended to support our troops," said Tony West, Assistant Attorney General for the Civil Division. "This case demonstrates our commitment to bring civil lawsuits to recover government losses from individuals and companies who defraud the U.S. Treasury."
The government is seeking treble damages under the False Claims Act, and a number of other remedies.
Cockerham previously pleaded guilty to conspiracy to defraud the United States, bribery and money laundering conspiracy. Momon pleaded guilty to bribery and conspiracy to commit bribery. Neither has been sentenced yet.
Justice Department Settles Lawsuit Against Knight Protective Services to <br /> Enforce the Employment Rights of Retired Army Service MemberRead the Press Release
The United States has reached a settlement that will resolve its suit filed on behalf of retired Army service member King A. Gatten against Knight Protective Service Inc. The department’s complaint, filed in September 2009, alleges that Knight willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to promptly and properly reemploy Gatten upon his return from active military duty in the position he would have held had Gatten’s employment not been interrupted by his military service.
Under the terms of the settlement, embodied in a consent decree that has been submitted for approval to the federal court in Michigan, Knight must provide Gatten with $7,839.61 to compensate him for lost wages resulting from delay in restoring him to his proper reemployment position.
In its complaint, the department alleged that Knight unreasonably delayed Gatten’s reemployment for several months after he returned from active military duty and, even after reemploying him, Knight failed to reemploy Gatten as a full-time security sergeant – the position he held with Knight before he left to serve in the military. Subject to certain limitations, USERRA requires that individuals who leave their jobs to serve in the military be promptly reemployed by their civilian employers in the same positions, or in comparable positions, as the positions that they would have held had they not left to serve in the military.
"The brave men and women who serve our country in uniform deserve at least to know that they are not sacrificing their jobs to do so," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "This settlement demonstrates the Civil Rights Division’s strong commitment to ensuring that service members’ rights under are upheld."
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. During 2009, the Civil Rights Division has filed 21 USERRA lawsuits on behalf of service members. Additional information about USERRA can be found on the Department of Justice Web site http://www.servicemembers.gov, and on the Labor Department Web site http://www.dol.gov/vets/programs/userra/main.htm.
Director of Singapore Firm Sentenced for Illegally Exporting <br /> Controlled Aircraft Components to IranRead the Press Release
Laura Wang-Woodford, a U.S. citizen who served as a director of Monarch Aviation Pte Ltd., a Singapore company that imported and exported military and commercial aircraft components for more than 20 years, was sentenced today in federal court in Brooklyn to 46 months in prison for conspiring to violate the U.S. trade embargo by exporting controlled aircraft components to Iran. Wang-Woodford was also ordered to forfeit $500,000 to the U.S. Treasury Department.
Wang-Woodford was arrested on Dec. 23, 2007, at San Francisco International Airport after arriving on a flight from Hong Kong, and has remained incarcerated since then. She and her husband, Brian D. Woodford, a U.K. citizen who served as chairman and managing director of Monarch, were originally charged in a 20-count indictment returned in the Eastern District of New York on Jan. 15, 2003. Brian Woodford remains a fugitive. A superseding indictment charging Wang-Woodford with operating Jungda International Pte Ltd., a Singapore-based successor to Monarch, was returned on May 22, 2008.
According to the superseding indictment, between January 1998 and December 2007, the defendants exported controlled U.S. aircraft parts from the United States to Monarch and Jungda in Singapore and Malaysia and then re-exported those items to companies in Tehran, Iran, without obtaining the required U.S. government licenses. As part of the charged conspiracy, the defendants falsely listed Monarch and Jungda as the ultimate recipients of the parts on export documents filed with the U.S. government. The aircraft parts illegally exported to Iran include aircraft shields, shears, "o" rings and switch assemblies. The superseding indictment further charged that the defendants arranged for the illegal export of U.S. military aircraft components, designed for use in Chinook military helicopters, to Monarch in Singapore.
At the time of her arrest in San Francisco, Wang-Woodford possessed catalogues from a Chinese company, the China National Precision Machinery Import and Export Corporation (CPMIEC), containing advertisements for military technology and weaponry. The products advertised included surface-to-air missile systems and rocket launchers. CPMIEC has been sanctioned by the U.S. Treasury Department, Office of Foreign Assets Control, based, in part, on CPMIEC’s history of selling military hardware to Iran. All U.S. persons and entities are prohibited from engaging in business with CPMIEC.
"As today’s sentence demonstrates, those who export restricted American technology in violation of our laws will be held accountable for their actions. Keeping sensitive U.S. technology from falling into the wrong hands is a top priority for the Justice Department," said Assistant Attorney General Kris.
"We are committed to protect the American public from the national security threat posed by those who would personally profit from the illegal export of U.S. military technology," said U.S. Attorney Campbell. Mr. Campbell thanked the Department of Commerce Bureau of Industry and Security (BIS) and the Department of Homeland Security, U.S. Immigration and Customs Enforcement (ICE), the agencies responsible for conducting the government’s investigation.
"Shutting down diverters like Monarch Aviation to protect our national security is our top priority, said Acting Assistant Secretary of Commerce for Export Enforcement Delli-Colli. "This case illustrates a successful, coordinated effort to stop the illegal shipment of controlled aircraft parts to Iran."
"The illegal sale of military parts is not only a threat to our national security, but to U.S. soldiers and allies," said Assistant Secretary of Homeland Security for U.S. Immigration and Customs Enforcement Morton.
The government’s case was prosecuted by Assistant U.S. Attorneys Daniel S. Silver, Cristina M. Posa and Claire Kedeshian.
Defendants Sentenced to Prison for Role in Counterfeit Pipe Coupling SchemeRead the Press Release
Hayden B. Greene, 32, of Tulsa, Okla., and James Robert Roy, 42, of Tomball, Texas, were sentenced today to 30 months and 15 months in prison, respectively, for conspiring to manufacture and sell counterfeit pipe couplings.
Greene and Roy were each also sentenced to three years of supervised release following their respective prison terms and ordered to pay $10,901 in restitution, jointly and severally with their co-defendant. Greene and Roy each pleaded guilty on Aug. 12, 2009, before U.S. District Judge Keith P. Ellison in Houston to one count of conspiracy to traffic in counterfeit goods and commit fraud.
In their plea agreements, Greene and Roy admitted that they and a co-defendant conspired in a counterfeiting scheme to manufacture and sell oilfield pipe couplings stamped with a certification mark owned and registered by the American Petroleum Institute (API), without a license or authorization to do so.
API’s certification program is a quality-control program designed to insure against injury and catastrophic loss from substandard, unsafe products. The API monogram certifies that products and equipment used in the exploration and production of petroleum and natural gas meet certain API standards, specifications and recommended practices. Couplings that do not meet the API standards are sold for limited service applications at substantially lower prices than API-certified products. Only manufacturers licensed by API after meeting strict quality control standards, and who are subject to continued monitoring by API, are authorized to manufacture and sell products containing an API certification mark.
According to their plea agreements, Greene and Roy acknowledged that they and their co-defendant not only manufactured and sold couplings containing an API certification mark without a license, but profited at the expense of customers by manufacturing many of those couplings using substandard materials.
Greene and Roy’s pleas are the second and third pleas arising from this prosecution. On June 24, 2009, Ronald Adams was sentenced to eight months in prison and three years of supervised release for his role in the scheme.
This case is being investigated by the FBI’s Houston Field Office and is being prosecuted by Trial Attorney Richard Green of the Criminal Division’s Computer Crime and Assistant U.S. Attorney Mark McIntyre of the U.S. Attorney’s Office for the Southern District of Texas.
4 November 2009
United States Intervenes in False Claims Act Suit<br /> Against Virginia Medicaid ProvidersRead the Press Release
WASHINGTON – The United States and the Commonwealth of Virginia have intervened in a False Claims Act suit in the Western District of Virginia against the Medicaid providers Universal Health Services Inc., Keystone Marion LLC and Keystone Education and Youth Services LLC, the Justice Department announced today. They did business as the Keystone Marion Youth Center, a residential facility in Marion, Va., that receives Medicaid funds to provide psychiatric counseling and treatment for boys ages 11-17.
This False Claims Act lawsuit was filed by several former therapists who worked at the Marion residential facility. The suit alleges that defendants provided sub-standard care to adolescents in violation of federal and state Medicaid requirements, falsified records to cover up their serious violations and filed false Medicaid claims. Under the False Claims Act, a health care provider that submits false or fraudulent claims to a federal health care program is liable for three times the government’s damages, plus a civil penalty for each false claim.
"The Department of Justice is committed to ensuring that Medicaid recipients, particularly troubled adolescents in need of psychiatric services, receive the appropriate care and treatment they require," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We must protect Medicaid from fraudulent practices that deprive beneficiaries of the quality health care they deserve."
"The Medicaid program was designed to ensure that the most vulnerable members of our society receive quality medical care. The intervention in this suit demonstrates our commitment in the Western District of Virginia to protecting the integrity of Medicaid funds and holding those who violate the law accountable," said U.S. Attorney Timothy J. Heaphy.
Assistant Attorney General West acknowledged the efforts made by the Civil Division of the Justice Department, the U.S. Attorney’s Office for the Western District of Virginia, the Virginia Attorney General’s office, the Department of Health and Human Services’ Office of the Inspector General and the Commonwealth of Virginia’s Medicaid Fraud Control Unit.
Former Memphis, Tennessee, Police Officer Sentenced to 27 Months in Prison for Civil Rights ViolationsRead the Press Release
WASHINGTON – Judge S. Thomas Anderson sentenced Carlton Moore, formerly an officer with the Memphis, Tenn., Police Department, to 27 months in prison and one year of supervised release after Moore pleaded guilty to stealing money from motorists while acting under color of law, the Justice Department today announced.
When he entered his guilty plea in June 2009, Moore admitted that on March 1, March 14, and on May 4, 2009, he surreptitiously stole cash from three Hispanic drivers he pulled over while on duty as a Memphis police officer. During these stops, Moore ordered the victims out of their vehicles, patted them down and removed personal items from them during the search. He then stole money from the victims before returning their personal items and releasing them.
"We place in police officers a great deal of trust, and the Civil Rights Division will aggressively prosecute those officers who violate the rights of others, and the public trust, for personal gain," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
"Officer Moore dishonored his badge and his fellow officers when he chose to steal from innocent people during traffic stops. Protecting the rights of every person from abuse committed by public officials is of the highest priority of this office," said Larry Laurenzi, U.S. Attorney for the Western District of Tennessee.
"Our citizens have a right to ethical treatment from all law enforcement officers and we, as civil servants, must never forget that we have sworn an oath to serve and protect them," said My Harrison, Special Agent in Charge of the FBI Memphis Field Office.
"We have a responsibility to our citizens, visitors and the outstanding members of the Memphis Police Department. We will not tolerate those who dishonor our badge by criminal activity. Mr. Moore admitted to robbing Hispanic members of our community while on-duty, in uniform and in a marked squad car," said Larry A. Godwin, Director of the Memphis Police Department. "After initiating this investigation, we worked in conjunction with the FBI to capture Moore as he committed the crime. We police our own and criminals wearing our badge will be aggressively pursued just as any other criminal in Memphis."
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit the willful use of excessive force or other acts of misconduct by law enforcement officials.
This case was investigated by the FBI and the Memphis Police Department. Assistant U.S. Attorney Steve Parker from the U.S. Attorney’s Office in Memphis and Trial Attorney Jonathan Skrmetti from the Civil Rights Division prosecuted the case.
3 November 2009
Three Idaho Men Sentenced for Federal Hate Crime AssaultRead the Press Release
WASHINGTON – Michael Bullard, Richard Armstrong and James Whitewater were sentenced today in federal court in Boise, Idaho, for hate crime and conspiracy charges in connection with the racially-motivated assault of an African-American man outside of a Wal-Mart store in July 2008, the Justice Department announced today.
U.S. District Judge Edward J. Lodge sentenced Bullard, of Middleton, Idaho, to 51 months in prison, three years of supervised release, 80 hours of community service and a $200 special assessment. Armstrong, of Nampa, Idaho, was sentenced to 46 months in prison, three years of supervised release, 80 hours of community service and a $200 special assessment. Whitewater, of Nampa, was sentenced to 18 months in prison, three years of supervised release and a $100 special assessment. Bullard, 23, and Armstrong, 24, were convicted by a jury in July 2009. Whitewater, 23, pleaded guilty before trial and testified against the other two defendants.
"Driven by bigotry and hate, the defendants brutally assaulted a man for no other reason than his race. Abhorrent acts of violence such as this have no place in America," said Assistant Attorney General Thomas E. Perez of the Civil Rights Division. "Aggressive prosecution of hate crimes is a top priority for the Civil Rights Division, and today’s sentences should send a message to others who would carry out similar acts of violence that they will be brought to justice."
Evidence at trial revealed that on July 4, 2008, as the victim, a 24-year-old African-American man, walked out of a Wal-Mart store in Nampa, he was ambushed, chased and beaten by three men who used racial slurs as they carried out the attack. Witnesses testified that Bullard, Armstrong and Whitewater all participated in the assault, while a fourth person, a girlfriend of one of the defendants, held their belongings and cheered them on. The girlfriend, Jennifer Hartpence, was initially charged as a co-defendant, but her case was dismissed before it reached the jury.
After four hours of deliberation, the jury convicted the two remaining defendants of conspiring to violate the federally-protected rights of the victim and of actually violating the victim’s protected rights by engaging in the racially-motivated assault.
U.S.Attorney Tom Moss for the District of Idaho said, "These convictions mean that racial crimes will not be tolerated… not in this Country … not on any day. Idaho, like most other parts of this Nation, has had inglorious moments in its past when people endured oppression and criminal acts merely because of their skin color, race, national origin, gender or religion. We are long past that time. Thanks to the FBI and Nampa PD for their outstanding work in bringing this case forward. The United States Attorney’s Office also thanks the Civil Rights Division of DOJ for its help and collaboration."
"One cannot help but note the irony that the terrible acts of which these two defendants were convicted occurred on the 4th of July, last year," said Timothy J. Fuhrman, Special Agent in Charge of the FBI’s Salt Lake City Field Office. "The initial aggressive investigation by Nampa Police Department in this matter led to their indictment and conviction. In this day and age, law enforcement will not tolerate hate crimes. The FBI is committed to investigating these incidents aggressively and without hesitation. The prosecutors from the U.S Attorney’s Office and the Civil Rights Division handled this difficult case with great skill and dedication."
This case was investigated by the FBI and the Nampa Police Department. It was prosecuted by Assistant U.S. Attorney Wendy Olson and Civil Rights Division Trial Attorney Erin Aslan.
Nation’s Largest Nursing Home Pharmacy and Drug Manufacturer to Pay $112 Million to Settle False Claims Act CasesRead the Press Release
WASHINGTON — The nation’s largest nursing home pharmacy, Omnicare Inc. of Covington, Kentucky, will pay $98 million, and drug manufacturer, IVAX Pharmaceuticals of Weston, Florida, will pay $14 million to resolve allegations that Omnicare engaged in kickback schemes with several parties, including IVAX, the Justice Department announced today. Approximately $68.5 million of the settlement proceeds will go to the United States, while $43.5 million has been allocated to cover Medicaid program claims by participating states.
At the same time, the United States announced that it has intervened and filed a complaint against two large nursing home chains, Mariner Health Care Inc. and SavaSeniorCare Administrative Services LLC, both of Atlanta, and their principals, Leonard Grunstein, Murray Forman, and Rubin Schron, for accepting a kickback from Omnicare in return for pharmacy services contracts.
The settlement with Omnicare – the nation’s largest pharmacy that specializes in providing drugs to nursing home patients – resolves allegations that the company solicited or paid a variety of kickbacks. The company allegedly solicited and received kickbacks from a pharmaceutical manufacturer, Johnson & Johnson (J&J), in exchange for agreeing to recommend that physicians prescribe Risperdal, a J&J antipsychotic drug, to nursing home patients. J&J’s kickbacks to Omnicare took multiple forms, including rebates that were conditioned on Omnicare engaging in an "Active Intervention Program" for Risperdal and payments disguised as data purchase fees, educational grants, and fees to attend Omnicare meetings. The government further alleged that Omnicare regularly paid kickbacks to nursing homes by providing consultant pharmacist services at rates below the company’s cost and below the fair market value of such services in order to induce the homes to refer their patients to Omnicare for pharmacy services. The government also alleged that Omnicare solicited, and IVAX paid, $8 million in kickbacks in exchange for Omnicare’s agreement to purchase $50 million in drugs from IVAX. These allegations against Omnicare and IVAX, now a subsidiary of Teva Pharmaceuticals Industries, Ltd., are detailed in a complaint unsealed today and originally filed under the qui tam or whistleblower provisions of the False Claims Act in the District of Massachusetts.
"These defendants broke the law to take advantage of our nation’s most vulnerable citizens – the elderly and the poor," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Illegal conduct like this can undermine the medical judgments of health care professionals, lead to patients being prescribed medications they do not need, and drive up the costs of health care." Assistant Attorney General West thanked the collaborative efforts of the Department of Justice’s Civil Division, the U.S. Attorney for the District of Massachusetts, the Office of Inspector General of the Department of Health and Human Services, the Food and Drug Administration Office of Criminal Investigations, and the Federal Bureau of Investigation.
"Omnicare and other nursing home pharmacies specialize in providing drugs to elderly patients who are often suffering from Alzheimer’s Disease or dementia and who have little or no control over the drugs they receive," said Michael Loucks, Acting U.S. Attorney for the District of Massachusetts. "Today’s settlement provides a strong message to these pharmacies, as well as to pharmaceutical companies and nursing homes, that the government will not tolerate the payment of kickbacks which can distort proper medical judgment and put profits ahead of good medical care."
As part of the settlement, Omnicare and IVAX have agreed to enter into separate corporate integrity agreements with the Office of Inspector General of the Department of Health and Human Services. Those agreements provide for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to these matters.
In a separate action, the United States alleges that Omnicare, Mariner Health Care, SavaSenior Care, Grunstein, Forman, and Schron conspired to arrange for Omnicare to pay the nursing home chains $50 million in exchange for the right to continue providing pharmacy services to the nursing homes, which together constituted one of Omnicare’s largest customers. According to the government’s complaint, these defendants attempted to disguise the $50 million kickback as a payment to acquire a small Mariner Health Care business unit that had only two employees and was worth far less than $50 million. After they became aware of the government’s investigation, Grunstein, Forman, and Schron allegedly created backdated documents in a further attempt to hide the kickback. These allegations are detailed in a separate complaint that was unsealed today. Today’s settlement resolves the allegations against Omnicare and IVAX; the United States will proceed with its case against the Mariner Health Care defendants, which was originally filed as a whistleblower action.
Justice Department Sues Colorado Attorney for Disability DiscriminationRead the Press Release
WASHINGTON – The United States has filed a lawsuit against Patric LeHouillier, an attorney based in Colorado Springs, Colo., alleging that he violated the Americans with Disabilities Act (ADA) by denying a woman with a service animal access to his offices, the Justice Department announced. The complaint, filed today in federal court in Denver, alleges that the attorney denied access to a woman, her husband and her attorney because the woman was accompanied by her service animal, an Australian Shepherd dog trained to provide disability-related assistance.
"The Americans with Disabilities Act ensures that individuals with disabilities are guaranteed the same rights and access granted to everyone, and it has prohibited discrimination against individuals who use service dogs for almost 20 years," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department is committed to enforcing the ADA to protect the rights of persons with disabilities and to ensuring that all services providers understand their obligation to provide equal access."
A service animal is individually trained to work or perform tasks for the benefit of an individual with a disability. Service animals – most commonly dogs – perform a wide variety of functions. Examples of these functions include guiding persons who are blind or have low vision; alerting individuals who are deaf or hard of hearing to sounds; warning persons about impending seizures or other medical conditions; performing a variety of tasks for persons with psychiatric disabilities and picking up items, opening doors, flipping switches, providing physical support and pulling wheelchairs for individuals with mobility disabilities.
Title III of the ADA prohibits discrimination by lawyers, doctors, hospitals, restaurants, hotels, retail stores, private transportation providers and other private businesses and nonprofit organizations that provide services to the public. Title II of the ADA prohibits discrimination by public entities, including state and local governments and public transportation providers. All of these entities are prohibited from excluding individuals with disabilities from their facilities, services and programs because they use service animals. If any of these entities has a rule excluding pets or other animals, it must make an exception to that rule and permit an individual with a disability to be accompanied by a service animal.
More information about today’s lawsuit, the ADA and ADA rights and responsibilities relating to service animals is available on the ADA home page at http://www.ada.gov. This information includes two publications specifically addressing service animal access: "ADA Business Brief: Service Animals" and "Commonly Asked Questions About Service Animals in Places of Business." Those interested in obtaining copies of these documents or additional information can also call the Justice Department’s toll-free ADA Information Line (800) 514-0301 or (800) 514-0383 (TTY).
Justice Department Obtains Record $2.725 Million Settlement of Housing Discrimination LawsuitRead the Press Release
WASHINGTON – The Justice Department announced today the largest monetary payment ever obtained by the department in the settlement of a case alleging housing discrimination in the rental of apartments. Los Angeles apartment owner Donald T. Sterling has agreed to pay $2.725 million to settle allegations that he discriminated against African-Americans, Hispanics and families with children at apartment buildings he controls in Los Angeles. The settlement must be approved by U.S. District Judge Dale S. Fischer.
"Housing is a basic human need, and yet decades after passage of the Fair Housing Act, far too many still encounter barriers like discrimination. Particularly in times of economic distress and rising foreclosures, we must remain vigilant to ensure all individuals have equal access to housing," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The magnitude of this settlement should send a message to all landlords that we will vigorously pursue violations of the Fair Housing Act."
The lawsuit, filed by the Justice Department in August 2006, alleged that the defendants, Donald T. Sterling, his wife Rochelle Sterling and the Sterling Family Trust, engaged in discriminatory rental practices on the basis of race, national origin and familial status (having children under 18) at various apartment buildings that they own and manage in Los Angeles. Among other things, the suit alleged that the defendants discriminated against non-Korean tenants and prospective tenants at buildings the defendants owned in the Koreatown area of Los Angeles.
In court filings, for example, the United States presented evidence that the defendants’ employees prepared internal reports that identified the race of tenants at properties the defendants purchased in Koreatown. Additionally, the defendants made statements to employees at Koreatown buildings indicating that African-Americans and Hispanics were not desirable tenants. The United States also presented expert analysis in court filings showing that the defendants rented to far fewer Hispanics and African-Americans in Koreatown which than would be expected based on income and other demographic characteristics.
The defendants, who manage their apartments under the name Beverly Hills Properties, own and manage approximately 119 apartment buildings comprising over 5,000 apartments in Los Angeles County. The settlement would also resolve two related lawsuits filed by former tenants at one of the properties. The two families, an African-American family and an interracial married couple with bi-racial children, alleged that the defendants demolished the private yards that had been part of their apartment and took other actions against them because of their race.
The settlement, which is memorialized in a proposed consent order that the parties have submitted to the court for approval, would require the defendants to pay a $100,000 civil penalty to the United States. Under the settlement, the defendants would also pay $2.625 million into a fund that would be used to pay monetary damages to persons who were harmed by the defendants’ discriminatory practices, including the tenants in the two related lawsuits discussed above. Any money left over would go to further fair housing education or enforcement in Los Angeles. The terms of the distribution of the $2.625 million will be determined in a separate disbursement order that will be submitted by the United States for approval to the Court.
In addition to the payments in damages and civil penalties, the proposed consent order would require the defendants to take various steps to ensure non-discriminatory practices at their Los Angeles County rental properties. Among other things, the proposed consent order would:
* Enjoin the defendants from discriminating on the basis of race, national origin, and familial status;
* Require the defendants to implement a self-testing program over the next three years to monitor their employee’s compliance with fair housing laws at their Los Angeles County properties. The testing would be conducted by an independent contractor that would report the results to the defendants and the United States;
* Require the defendants to maintain non-discriminatory practices and procedures; and
* Require the defendants to obtain fair housing training through an independent contractor for their employees who participate in renting, showing or managing apartments at the Los Angeles County properties.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at [email protected]. Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
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.
2 November 2009
Michigan Attorney and Client Sentenced for Tax Crimes in Connection with a Fraudulent Insurance Tax ShelterRead the Press Release
WASHINGTON - John A. Campbell, a resident of Portage, Mich., was sentenced to 60 months in prison today by the Honorable Janet T. Neff of the U.S. District Court in the Western District of Michigan for conspiring to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. In April 2008, Campbell, who is a former partner in and resident director of the Kalamazoo, Mich., office of the law firm of Miller, Canfield, Paddock & Stone P.L.C., pleaded guilty to one count of conspiring to defraud the United States.
Campbell’s client, Oskar René Poch, a resident of Hickory Corners, Mich., was sentenced today to one year of probation and ordered to pay restitution of $217,830.44 and a fine of $100,000. Poch, who owned and operated Trillium Staffing, an employee-leasing company in Kalamazoo, pleaded guilty to corruptly endeavoring to obstruct the administration of the Internal Revenue laws in April 2008 and cooperated with the government’s investigation.
According to statements made in court and public documents, Campbell admitted that from at least 1999 through at least 2006 he agreed with the four principals and associates of an insurance company in the U.S. Virgin Islands known as Security Trust Insurance Company to market, promote, sell and implement fraudulent tax shelters, including so-called "loss of income" or "general business risk" insurance policies. The purpose of the tax shelters that Campbell and the others promoted and sold was to defraud the United States and impede the lawful functions of the IRS in computing the income taxes of the defendants’ U.S. taxpayer clients. Three of the tax shelter promoters, Peter J. Peggs of Prides Crossing, Mass.; Robert D. Larsen of Winter Park, Colo.; and Craig M. Stone, formerly of Fort Pierce, Fla., were convicted of conspiracy and other tax crimes in October 2009 after a four week jury trial before Judge Neff. The fourth tax shelter promoter, Anthony G. Merlo, a former resident of Fort Worth, Texas, and the U.S. Virgin Islands, pleaded guilty to conspiracy in May 2009 and is scheduled for sentencing later this month.
According to statements made in court and public documents, Campbell admitted that he conspired with the tax shelter promoters to sell these purported insurance policies to U.S. taxpayers as a tax deductible product, with the understanding that the purchasers would have most of their premiums returned to them in a non-taxable manner, such as through the use of "loans" from offshore foreign corporations which the defendants helped the U.S. taxpayers set up in tax haven countries like Nevis and the Bahamas. Campbell also admitted that he and the tax shelter promoters agreed to conceal from the IRS several key facts about the returned funds, and that they agreed to alter, conceal and destroy documents regarding the program as well.
According to statements made in court and public documents, after Campbell introduced Poch to the product, Poch caused his companies to purchase more than $3.9 million of this insurance product in the years 1999, 2000 and 2001. Poch improperly deducted the premiums as a business expense, fraudulently saving over $1.63 million in taxes for the three year period. Finally, Poch paid Campbell’s firm to set up a foreign corporation and trust in Nevis and later the Bahamas, through which Poch later had access to over $3 million of his insurance premiums. As part of the conspiracy, Campbell arranged for Poch to receive millions in the form of "loans" to Poch and his businesses, which were never repaid by Poch.
According to statements made in court and public documents, Poch knowingly provided misleading, incomplete and false answers to IRS revenue agents during a June 2002 interview conducted in a civil audit of his 1999 tax return. Poch admitted that he provided these answers in order to obstruct the IRS audit. However, Poch cooperated with the government’s investigation and testified at the trial of Campbell’s co-conspirators. Since pleading guilty, Poch has repaid the $1.63 million in taxes to the IRS, using, in part the funds left in the foreign corporation’s bank account.
Acting Assistant Attorney General John A. DiCicco thanked U.S. Attorney Donald A. Davis and the U.S. Attorney’s Office for the Western District of Michigan for their assistance in the prosecution of this case. Acting Assistant Attorney General DiCicco also thanked Tax Division trial attorneys Richard M. Rolwing, Patrick J. Murray and Jessica Nuzzelillo who prosecuted the case, as well as the IRS-Criminal Investigation agents who investigated the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax .
Medical Equipment Company Owner Pleads Guilty to Fraud Scheme Involving Nutritional Supplies and “Arthritis Kits”Read the Press Release
WASHINGTON – The owner and operator of a Houston-area durable medical equipment (DME) company today pleaded guilty to defrauding the Medicare program, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney Tim Johnson of the Southern District of Texas and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS).
Noel Wayne Jhagroo, 47, pleaded guilty to conspiracy to commit health care fraud before U.S. District Judge Vanessa Gilmore in the U.S. District Court in Houston. In his plea, Jhagroo admitted that he owned and operated a DME company called Trucare Medical Equipment Services (Trucare), and that he billed Medicare for equipment and supplies that were in most instances medically unnecessary, or were never actually provided to Medicare beneficiaries. Sentencing has been scheduled for Feb. 23, 2010.
Jhagroo admitted that beginning in April 2004 and continuing through July 2009, he conspired with others to submit approximately $962,000 in fraudulent claims to Medicare. Specifically, Jhagroo admitted that he billed Medicare for enteral nutrition products that, according to Medicare regulations, were only to be used for patients who had feeding tubes inserted or surgically implanted in their noses, mouths or stomachs. Only one of the numerous Medicare beneficiaries for whom Jhagroo submitted bills to Medicare for such nutrition products had such a tube. Jhagroo also admitted to actually delivering only a fraction of the products for which he billed Medicare.
In addition, Jhagroo admitted to billing Medicare for medically unnecessary orthotic devices, many of which were components of so-called Arthritis Kits, or "Artho Kits." These kits, which included braces for both sides of the body as well as related accessories such as heating pads, were purportedly to be used for the treatment of arthritis-related conditions, even though the defendant admitted that he knew the kits were not medically appropriate for such conditions.
Jhagroo admitted to billing Medicare approximately $4,000 per kit, and to providing beneficiaries with inferior kits consisting of less expensive, lightweight neoprene sleeves, which were often of an improper size for the beneficiary.
In his plea, Jhagroo admitted that in August of 2004, he and a codefendant agreed to a kickback arrangement whereby he would pay the codefendant in exchange for the referral of Medicare beneficiaries for whom he would supply DME, and then bill Medicare for the equipment through Trucare. Jhagroo admitted that the codefendant would recruit Medicare beneficiaries for the purpose of filing claims with Medicare for DME that was medically unnecessary or was not provided.
The case is being prosecuted by Trial Attorney Katherine Houston of the Criminal Division’s Fraud Section, and was investigated by the FBI and HHS, Office of the Inspector General.
The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and U.S. Attorney Tim Johnson of the Southern District of Texas.
Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three) and Houston (Phase Four) – the Strike Force has obtained indictments of 331 individuals and organizations that collectively have billed the Medicare program for more than $720 million. 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 .
Each of the Strike Force teams across the separate phases is led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office. Each team has an agent from the FBI and HHS-OIG.
Justice Department to Monitor Elections in Massachusetts, Michigan, New Jersey, New York and PennsylvaniaRead the Press Release
WASHINGTON- On Nov. 3, 2009, the Justice Department will monitor elections in the following jurisdictions to ensure compliance with the Voting Rights Act of 1965 and other federal voting rights statutes: the cities of Lowell and Springfield, Mass.; the city of Hamtramck, Mich.; Middlesex County and the borough of Penns Grove, N.J.; Orange County and Queens, N.Y., and the city of Philadelphia.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management (OPM) to send federal observers to areas that are certified by the Attorney General or by a federal court order. Federal observers will be assigned to monitor polling place activities by court order in Springfield and Penns Grove. Both cities are required to provide Spanish-language assistance at the polls to voters according to the minority language provisions of the Voting Rights Act. The observers will watch and record activities during voting hours at polling locations in these cities.
In addition, Justice Department personnel will monitor elections in Lowell, Hamtramck, Middlesex County, Orange County, Queens and Philadelphia for compliance with the Voting Rights Act.
In all of these jurisdictions, Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
Each year, the Justice Department deploys hundreds of federal observers from OPM, 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 Justice Department’s Civil Rights Division at 1-800-253-3931.
Visit http://www.usdoj.gov/crt/voting/index.htm for more information about the Voting Rights Act and other federal voting laws.
Justice Department Signs Agreement with Glynn County, Georgia, to Ensure Civic Access for Persons with DisabilitiesRead the Press Release
WASHINGTON - The Justice Department today announced a settlement agreement with Glynn County, Ga., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under "Project Civic Access," a Justice Department initiative to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). The Glynn County agreement is the 170th reached under Project Civic Access and the ninth this year.
Project Civic Access was initiated to ensure that people with disabilities have an equal opportunity to participate in civic life. As part of the project, department investigators, attorneys and architects survey state and local government facilities and programs in various locations throughout the country to identify modifications to programs and facilities necessary to comply with ADA requirements. Depending on the circumstances in each community, the agreements address specific areas where access can be improved.
"Recognizing that civic access is a civil right, Glynn County has agreed to make improvements that will provide the full array of civic opportunities to county residents and visitors with disabilities," said Thomas E. Perez, Assistant Attorney General of the Civil Rights Division. "We applaud Glynn County for entering into this agreement that will further the rights and opportunities of individuals with disabilities."
Glynn County is located in the southeast corner of Georgia. More than 11,000 of the county’s 73,000 residents are individuals with disabilities. The county seat is in Brunswick, and the county also includes St. Simons Island, Blythe Island and Jekyll Island. As a coastal city, Glynn County offers many outdoor recreational opportunities for residents and visitors, including boating, hiking, biking and bird watching.
Under the agreement, the county will:
- Make physical modifications to its facilities so that parking, routes into buildings, entrances, public telephones, restrooms, service counters and drinking fountains are accessible to people with disabilities;
- Continue to ensure that the 9-1-1 emergency service TTY calls are answered as quickly and effectively as other calls;
- Ensure that the county’s official Web site is accessible to persons with disabilities, including individuals who are blind or have low vision;
- Ensure equal access to all aspects of the county’s emergency management programs for persons with disabilities, including emergency preparation, notification, evacuation, sheltering, response and recovery; and
- Implement a plan regarding the accessibility of sidewalks and curb ramps throughout the county.
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement will remain in effect for five years or until the parties agree that all actions required by the agreement have been completed, whichever is later.
People interested in finding out more about the ADA, today’s agreement with Glynn County, or the department’s Project Civic Access initiative can access the ADA home page at http://www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Former Federal Corrections Officer Indicted on Civil Rights Charges Related to Fatal AssaultRead the Press Release
WASHINGTON – A federal grand jury in Orlando, Fla., has indicted a former Federal Bureau of Prisons corrections officer on charges related to a fatal assault on an inmate in March 2005. Michael Kennedy was charged with one count of conspiring with others to violate the federal civil rights of inmate Richard Delano and one count of violating Delano’s civil rights by arranging for another inmate to assault Delano. The indictment was unsealed today in conjunction with Kennedy’s initial appearance in court.
Each count carries a sentence of up to life imprisonment and a $250,000 fine. A trial has not yet been scheduled.
The grand jury charged that on Feb. 28, 2005, Kennedy and a co-conspirator, fellow Bureau of Prisons corrections officer Erin Sharma, agreed to move Delano into the cell of another inmate at the Coleman Federal Correctional Complex in Coleman, Fla. The indictment alleges that Kennedy and Sharma knew that the inmate was likely to assault Delano, that the move was in retaliation for a prior altercation between Delano and Sharma, and that Sharma encouraged the inmate to assault Delano. According to the indictment, Kennedy moved Delano into the inmate’s cell on March 1, 2005, and the inmate assaulted Delano three days later. Delano later died from the injuries he suffered during that assault.
On July 29, 2009, a federal jury in Orlando found Sharma guilty of federal civil rights charges related to this incident, and on Oct. 26, 2009, she was sentenced to life in prison in connection with her conviction on those charges.
The case will be prosecuted by Assistant U.S. Attorney Bruce Ambrose from the U.S. Attorney’s Office, and Trial Attorney Douglas Kern from the Civil Rights Division of the U.S. Department of Justice.
An indictment is merely an accusation, and defendants are presumed innocent unless proven guilty.
1 November 2009
Mexico Extradites 11 Fugitives to the United StatesRead the Press Release
The Mexican government has extradited 11 defendants to face trial in the United States. The defendants are accused of various crimes, including murder, sex offenses, drug trafficking and moneylaundering in Texas, Washington, Florida, Indiana, California and Maryland.
With the arrival of these 11 individuals, Mexico has now extradited 100 defendants to the United States in 2009, the highest yearly number of extraditions from Mexico to date. The extradition of 95 defendants in 2008 was the previous record number of extraditions for one year from Mexico.
"The extradition of these 11 defendants exemplifies the strong cooperative relationship between the United States and Mexico," said Attorney General Eric Holder. "Each year since 2001, Mexico has increased the number of defendants it extradites to the United States. By ensuring that alleged criminals are held accountable, we send a strong message that fleeing across the border does not mean you will escape justice. I am looking forward to meeting Attorney General Chavez tomorrow and discussing additional ways we as law enforcement partners can work together to hold such defendants, particularly alleged leaders and associates of drug cartels, accountable."
The defendants arrived in the United States on Saturday, Oct. 31, 2009, and will be transferred to the jurisdictions in which they face charges. The extradited defendants, and the charges they face, are listed below:
DISTRICT OF COLUMBIA
Victor Manuel Contreras Soltero and Arturo Casas Vasquez are Mexican citizens indicted by the Criminal Division’s Narcotics and Dangerous Drugs Section in the U.S. District Court for the District of Columbia for conspiracy to import and to distribute cocaine and distribution of cocaine. Contreras Soltero and Casas Vasquez are alleged to have directed the importation of tons of cocaine from Mexico into the United States between 2002 and 2005.
SOUTHERN DISTRICT OF FLORIDA
Leonardo Vasquez Estrada, a Mexican citizen, was charged in the U.S. District Court for the Southern District of Florida with conspiracy to commit money laundering and 12 counts of money laundering. Vasquez Estrada is alleged to have been a member of an organization that laundered money from drug sales in the United States through Mexican banks from 2003 to 2007.
SOUTHERN DISTRICT OF TEXAS
Jesus Emilio Rivera Piñon is a Mexican citizen charged in the U.S. District Court for the Southern District of Texas with conspiracy to possess with the intent to distribute cocaine, possession with the intent to distribute cocaine and money laundering. Rivera Piñon is alleged to have been involved in 1989 with an organization responsible for distributing thousands of pounds of cocaine in the United States. In 1995, he became the first Mexican citizen ordered extradited to the United States by a Mexican court. His return was delayed while he served a prison sentence for a conviction in Mexico.
STATE OF INDIANA
Francisco Contreras is a Mexican citizen charged in Marion County, Indiana, with five counts of sexual offenses against a minor for allegedly molesting a young girl repeatedly in 2002.
STATE OF TEXAS
Rodolfo Villela Tovar is a Mexican citizen charged in Travis County, Texas, with murder. Villela Tovar allegedly shot his ex-girlfriend to death on May 28, 2008.
Jesus Manuel Garza is a Mexican citizen charged in Sutton County, Texas, with murder and other crimes. On the night of Jan. 13, 2008, Garza allegedly shot a co-worker to death, stole the co-worker’s wallet and truck, and fled to Mexico.
Cesar Pacheco is a Mexican citizen charged in El Paso, Texas, with attempted murder, sexual assault and other crimes. On the night of May 5, 2005, Cesar and another man allegedly broke into the home of Cesar’s aunt and raped her. The two are alleged to have stabbed her multiple times and attempted to suffocate her with a plastic bag after she recognized her assailants.
STATE OF CALIFORNIA
Gabriel Cabrera Lopez is a Mexican citizen, charged in Riverside County, Calif., for sex offenses against a child. Beginning in the early 1990s and ending in 2005, Lopez is alleged to have molested and raped his young daughter and a niece.
Arnoldo Vargas Esteves is a Mexican citizen charged in Riverside County, Calif., with murder. Esteves allegedly shot and killed a member of a rival gang during a fight on Dec. 18, 1998.
STATE OF MARYLAND
Joel Nunez Valles
has been charged in Howard County, Md., with murder and robbery. In October 2005, Nunez Valles allegedly stabbed his brother 19 times after his brother refused to lend him money. Nunez Valles then allegedly stole $2,000 and fled to Mexico.
31 October 2009
United States Transfers Six Uighur Detainees from Guantanamo Bay to PalauRead the Press Release
Six detainees who are Chinese nationals of Uighur ethnicity have been transferred from the detention facility at Guantanamo Bay to the control of the Republic of Palau.
Ahmad Tourson, Abdul Ghappar Abdul Rahman, Edham Mamet, Anwar Hassan, Dawut Abdurehim and Adel Noori were resettled in Palau earlier today.
These detainees, who were subject to release from Guantanamo Bay as a result of court orders, had been cleared for release by the prior Administration, which determined that it would no longer treat them as enemy combatants. As directed by the President’s Jan. 22, 2009 Executive Order, the interagency Guantanamo Review Task Force subsequently conducted a comprehensive review of each of the detainees. As a result of that review, these detainees were approved for transfer or release from Guantanamo Bay.
In accordance with Congressionally-mandated reporting requirements, the Administration informed Congress of its intent to transfer each of these detainees at least 15 days in advance.
These transfers were carried out under an arrangement between the United States and the Republic of Palau. The United States has coordinated with the Republic of Palau to ensure the transfers take place under appropriate security measures and will continue to consult with the Republic of Palau regarding the individuals.
"As we near the completion of our review of detainees at Guantanamo Bay, we will continue to work closely with the Department of State to implement transfer decisions, and we are grateful to the Republic of Palau for its assistance in the resettlement of these individuals," said Matthew Olsen, Executive Director of the Guantanamo Review Task Force.
Since 2002, more than 550 detainees have departed Guantanamo Bay for other destinations, including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Iran, Iraq, Ireland, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Portugal, Russia, Saudi Arabia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
30 October 2009
U.S. Sues Canadian Company and U.S. Subsidiary<br /> for False Claims Act AllegationsRead the Press Release
WASHINGTON - The United States today sued Lincoln Fabrics Ltd., a Canadian company, and Lincoln Fabrics Inc., aka Lincoln Textiles Inc., its American subsidiary, under the False Claims Act in connection with the companies’ weaving and sale of defective Zylon fabric which was used as the key ballistic material in bullet-proof vests, the Justice Department announced.
The United States alleges that the companies were aware that the woven Zylon degraded quickly over time, especially in hot and humid conditions, and that the companies knew that this degradation rendered bullet-proof vests containing woven Zylon unfit for use. The government further alleges that, despite this knowledge, the companies did not inform the United States or stop selling woven Zylon for ballistic applications.
"Companies that knowingly sell the government defective bullet-proof vests not only submit false claims, they put the lives of our law enforcement personnel at risk," said Tony West, Assistant Attorney General for the Department’s Civil Division. "The United States takes very seriously allegations that these two companies knowingly participated in the manufacture and sale of defective bullet-proof vests."
The United States is already pursuing lawsuits against Toyobo Co., the manufacturer of the Zylon fiber; Honeywell International Inc., the manufacturer of a Zylon laminate product called Z Shield; two body armor manufacturers - Second Chance Body Armor Inc. (now SCBA Liquidation Inc.) and First Choice Armor Inc., as well as several executives of the two companies. The government has previously settled for more than $47 million with five other entities that were involved in the manufacture or sale of defective Zylon vests, including two other weavers of ballistic Zylon.
Assistant Attorney General West acknowledged the contributions of the many government agencies assisting the government’s ongoing investigation of those who participated in the manufacture and sale of Zylon vests, including the Justice Department’s Civil Division; U.S. Attorney’s Office for the District of Columbia; General Services Administration Office of the Inspector General; Department of Homeland Security, Office of Inspector General; Department of the Treasury’s Inspector General for Tax Administration; Defense Criminal Investigative Service; U.S. Army Criminal Investigative Division; Air Force Office of Special Investigations; Department of Energy Office of the Inspector General; U.S. Agency for International Development Office of the Inspector General; Federal Bureau of Investigation; and Defense Contracting Audit Agency.
Texas Hospital Group Pays U.S. $27.5 Million<br /> to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – A hospital group based in McAllen, Texas, has agreed to pay the United States $27.5 million to settle claims that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute between 1999 and 2006, by paying illegal compensation to doctors in order to induce them to refer patients to hospitals within the group, the Justice Department announced today. McAllen Hospitals L.P., d/b/a/ South Texas Health System, is a subsidiary of Universal Health Services Inc., a company based in Pennsylvania that owns hospitals and other health care centers around the country.
The settlement announced today involved allegations that the defendants had entered into financial relationships with several doctors in McAllen in order to induce them to refer patients to the defendants’ hospitals. The government alleged that these payments were disguised through a series of sham contracts, including medical directorships and lease agreements. Under the Stark Statute, Medicare providers are prohibited from billing Medicare for referrals from doctors with whom the providers have a financial relationship, unless that relationship falls within certain exceptions.
"Improper financial relationships between health care providers and their referral sources can corrupt a physician's judgment about the patient's true healthcare needs," said Tony West, the Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a substantial recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."
The settlement resolves allegations raised against both the parent and the subsidiary in a qui tam or whistleblower lawsuit filed in 2005 by Bruce Moilan, a former employee of the defendants, United States ex rel. Moilan v. McAllen Hospitals, L.P., et al., Case No. M-05-CV-263 (S.D. Tex.). Under the False Claims Act, private citizens can bring suit on behalf of the government and share in any amounts that are obtained through that legal action. Mr. Moilan will receive $5.5 million from the proceeds of the settlement."Payment by hospitals to doctors for patient referrals violates federal law and carries the inherent risk that the independent judgment of doctors regarding the best facility for the treatment and care for a particular patient may be adversely influenced; the patient and his medical needs should always be foremost," said Tim Johnson, U.S. Attorney for the Southern District of Texas. "Our district will continue in its joint effort with our law enforcement partners to enforce these federal laws that protect the public."
As part of the agreement, South Texas Health Systems will enter into a 5-year Corporate Integrity Agreement that requires it to establish procedures for tracking and evaluating financial arrangements between its health care facilities and their referral sources. The agreement also requires specific training for South Texas Health System representatives involved with financial arrangements, an independent third-party’s annual review of the health system’s compliance with certain Corporate Integrity Agreement obligations involving financial arrangements, and a report to the Office of Inspector General by the independent third-party reflecting the results of the review.
"Improper financial arrangements like these can increase the cost of health care by shifting provider attention to the quantity of treatments, rather than keeping it focused on the quality of care," said Department of Health and Human Services Inspector General Daniel R. Levinson. "The CIA is important because it requires South Texas Health System to put systems in place to prevent this conduct from happening in the future."
Of the $27.5 million to be paid by the defendants, the federal government will receive $25,208,333 and the state of Texas will receive $2,291,667 for claims submitted to the state Medicaid program.
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Texas, the Texas Attorney General’s Office and the Office of Inspector General of the Department of Health and Human Services.
South Dakota Man Found Guiltyfor Smuggling a Leopard Hide into U.S.Read the Press Release
WASHINGTON —A federal jury in Aberdeen, S.D., has found a South Dakota man guilty for smuggling the hide of a leopard into the United States in violation of the Convention on International Trade in Wild Flora and Fauna (CITES), an international treaty that regulates international shipments of listed species, to which the United States and 172 other countries are members. The leopard allegedly was hunted and killed in South Africa illegally. Wayne D. Breitag of Aberdeen, S.D., was also found guilty for violations of the Lacey Act, a federal wildlife statute.
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.
According to the August grand jury indictment, Breitag traveled 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 hides smuggled from South Africa into Zimbabwe, where he purchased fraudulent CITES export permits 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.
Smuggling is punishable by up to 20 years in prison and up to a $250,000 fine, while the Lacey Act violations are punishable by up to 5 years in prison and up to a $250,000 fine.
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 eighteen-month prison sentence, has since been released and deported.
The investigation of this case was lead by Special Agents of the U.S. Fish and Wildlife Service. The case is being prosecuted by the Environmental Crimes Section of the U.S. Department of Justice and the U.S. Attorneys’ Offices for the District of South Dakota and Colorado.
Justice Department Releases ADA Employment VideoRead the Press Release
WASHINGTON -- The Justice Department announced today the release of a new video aimed at educating employers about the employment provisions of the Americans with Disabilities Act. Ten Employment Myths: Information about the Americans with Disabilities Act uses a question-and-answer format to express common misconceptions, fears and false assumptions that many employers have about employees with disabilities. The video refutes these unfounded myths, explains the ADA in common sense terms and highlights the advantages of hiring qualified persons with disabilities.
"With more students with disabilities attending colleges and universities than ever before, employers should update their thinking about this highly qualified labor pool. Ten Employment Myths will help employers understand how unfair it is when employees with disabilities are denied jobs because of employers’ misconceptions and unfounded assumptions," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
October is Disability Employment Awareness Month.
This fully accessible seventeen-minute video can be used for ADA training as well as for presentation to local Chambers of Commerce, Rotary Clubs, merchants associations, and similar organizations. Single copies in DVD format can be ordered through the toll-free ADA Information Line at 800-514-0301 (voice) or 800-514-0383 (TTY). An online streaming version will be available soon on the ADA Web site at www.ada.gov.
The new video is a companion to Ten Small Business Mistakes, which dispels common misunderstandings that many small businesses have about title III of the ADA. Both videos were produced for the Justice Department’s ADA Technical Assistance Program, which educates the public about the ADA to increase voluntary compliance and is an integral component of the Department’s overall ADA enforcement efforts.
The ADA guarantees individuals with disabilities equal access to employment, state and local government services, and services that businesses provide to the public. Those interested in finding out more can call the ADA Information Line or access the ADA Web site.
Former Promoter of Abusive Trusts Sentenced for Tax EvasionRead the Press Release
WASHINGTON - Roderick Prescott, a resident of Orem, Utah, and a former principal of National Trust Services (NTS) in San Jose, Calif., and later Selma, Ore., has been sentenced to 30 months in prison for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today.
In June 2009, Prescott pleaded guilty to tax evasion and admitted to evading at least $550,000 in personal income taxes for 1998 and 1999. According to the indictment, the plea agreement and the government’s trial brief, Prescott and his former business partner Leroy Fritts (now deceased) earned significant income from the nationwide promotion and sale of abusive trusts through NTS, which they founded in 1988. Prescott and Fritts deposited approximately $3.5 million into various bank accounts through the sale of such trusts. They also earned income from recruiting clients of NTS to invest in Fountainhead Global Trust (FGT), a purported offshore investment that promised returns as high as 50 percent per year.
According to the government’s trial brief, FGT was a Ponzi scheme which collected approximately $20 million in investors’ funds from 1995 through 1999. FGT transferred some of the money to an offshore account in the Cayman Islands at the Bank of Bermuda, ostensibly to be invested in high-interest debt through a Florida entity called "Cash 4 Titles." Prescott and Fritts then funneled part of the money in the account back to themselves. They also took large sums of investors’ funds without ever sending the money offshore. The government asserts that instead, they spent the funds often by direct payments from FGT bank accounts on luxury goods and real estate. Eventually the scheme broke down and the vast majority of investors lost their full investments.
According to the government’s trial brief, despite making significant income from NTS and FGT, neither Prescott nor Fritts filed any individual federal income tax returns for 1998 or 1999. Prescott last filed a tax return in 1991. Prescott and Fritts used FGT money to purchase, among other items, a nearly $3 million ranch near Grants Pass, Ore., on which they began construction of two custom-built luxury log homes. The construction budget was approximately a combined $2 million, and they spent over $465,000 before halting construction in 1999. Prescott and Fritts also purchased solar panels for the ranch for over $328,000, frozen food in anticipation of a year 2000 apocalypse for over $1.1 million and numerous vehicles and other personal items.
According to the government’s trial brief, Prescott and Fritts used an array of purported trusts and related bank accounts, including numerous offshore bank accounts at the Bank of Bermuda in the Cayman Islands, to conceal their income from the IRS. Prescott and Fritts also used false or fictitious taxpayer identification numbers and offshore credit cards in fake names issued to them by the Bank of Bermuda in the Cayman Islands.
In June 2003, a federal court in San Diego Prescott and his business, Trust Educational Services, from selling trust schemes falsely claiming that personal expenses incurred by customers could be paid through a trust in order to obtain tax benefits not available to individuals. Prescott agreed to the court order and was required to give the Justice Department records showing the names of customers who attended his workshops or used his "trust system. According to papers filed by the Justice Department in the case, Prescott’s bogus trusts encouraged purchasers to under report their income and claim improper deductions on their tax returns, resulting in an estimated $135 million revenue loss to the U.S. Treasury.
Acting Assistant Attorney General John A. DiCicco commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Jay Nanavati and Timothy Stockwell who prosecuted the case.
Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Enforcement Web site. Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.
Detroit Clinic Owner Pleads Guilty in Medicare Fraud SchemeRead the Press Release
Miami resident Daisy Martinez pleaded guilty today in U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program.
Martinez, 50, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Gerald Rosen. At her sentencing, which is scheduled for Feb. 11, 2010, Martinez faces a maximum penalty of 10 years in prison and a $250,000 fine.
In her guilty plea, Martinez admitted that in approximately March 2006 she devised a scheme with co-conspirator Jose Rosario to open a clinic that purported to specialize in infusion and injection therapy services in Michigan. Martinez admitted that the sole purpose of the clinic was to defraud Medicare. Martinez and her co-conspirators opened Sacred Hope Medical Center Inc. in Southfield, Mich., in October 2006. According to court documents, Martinez was an owner of the clinic, and she also managed the clinic on a day-to-day basis. Martinez and Rosario recruited various co-conspirators into their scheme, including an office manager, Lill Vargas-Arias, to help run the clinic; a physician, purportedly to treat patients at the clinic; and recruiters/drivers who were in charge of bringing Medicare beneficiaries to the clinic. Rosario pleaded guilty for his role in the scheme on Aug. 18, 2009. Vargas-Arias pleaded guilty to her role on Sept. 2, 2009.
Martinez admitted in her guilty plea that during the time Sacred Hope was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or were never provided. Martinez admitted she was aware that the clinic had purchased only a small fraction of the medications for which it had billed Medicare. Martinez also admitted that patients were prescribed medications at the clinic based not on medical need, but on what medications were likely to generate Medicare reimbursements. Martinez, along with Rosario, admitted to helping falsify medical files maintained by the clinic to make the treatments purportedly being given there appear legitimate, when in fact they were not.
Martinez admitted that Medicare beneficiaries were not referred to Sacred Hope 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, Martinez admitted, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare. According to court documents, kickbacks came in the form of cash and prescriptions for narcotic drugs. Martinez admitted to knowing that co-conspirator Arnaldo Rosario, who also pleaded guilty in the same case on Aug. 18, 2009, oversaw and facilitated the payment of cash kickbacks to the Medicare beneficiaries.
Martinez also admitted that beginning in approximately November 2006, she and other co-conspirators opened another infusion and injection clinic, Xpress Center Inc. (XPC), in Livonia, Mich. As with Sacred Hope, XPC’s sole purpose was to defraud Medicare. Martinez admitted that she and her co-conspirators used the same fraudulent practices to open and then operate XPC as Sacred Hope, including creating fictitious patient files to cover up fraudulent billings to Medicare. As at Sacred Hope, Martinez admitted she was fully aware that XPC routinely billed the Medicare program for services that were medically unnecessary and in many instances were never provided. As at Sacred Hope, Martinez admitted to knowing that the purpose of the clinic was not to provide legitimate health care to patients, but rather to defraud the Medicare program.
Martinez’s part-ownership of Sacred Hope and XPC was not her first involvement with Detroit-area clinics that purported to specialize in infusion and injection therapy In her plea, Martinez admitted that in approximately March 2006, she became involved in a scheme to recruit Medicare beneficiaries to visit Dearborn Medical Rehab Center (DMRC), a Dearborn, Mich., clinic that operated in much the same manner as Sacred Hope and XPC. Martinez, along with other co-conspirators, agreed to recruit and pay Medicare beneficiaries at DMRC in exchange for a percentage of the Medicare reimbursements the beneficiaries would generate. Martinez admitted that she and her co-conspirators sent Arnaldo Rosario to Detroit to oversee the payment of the patients, and she and her partners provided the cash to pay the kickbacks. As at Sacred Hope and XPC, DMRC routinely billed the Medicare program for services that were medically unnecessary and, in many instances, never provided.
Martinez admitted that between approximately March 2006 and March 2007, she and her co-conspirators caused the submission of approximately $15,312,000 in false and fraudulent claims to the Medicare program for services purportedly provided at Sacred Hope, XPC and DMRC. Medicare paid approximately $10,765,000 on those claims.
The case was investigated by the Detroit offices of the FBI and HHS Office of Inspector General (HHS-OIG). The case is being prosecuted by Trial Attorneys John K. Neal and Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. 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 the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three) and Houston (Phase Four) – the Strike Force has obtained indictments of 331 individuals and organizations that collectively have billed the Medicare program for more than $720 million. 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
Each of the Strike Force teams across the separate phases is led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office. Each team has an agent from the FBI and HHS-OIG.
29 October 2009
U.S. Citizen Indicted in Florida for Traveling to <br /> the Philippines for Sex TourismRead the Press Release
Donald Mathias, 64, has been indicted for allegedly traveling to the Philippines in 2007 and 2008 to engage in sexual conduct with minors .
Mathias, whose last known residence is in the Southern District of Florida, was arraigned today before Magistrate Judge Barry S. Seltzer in U.S. District Court in Fort Lauderdale, Fla.
Mathias was charged in an indictment filed on Oct. 27, 2009, with one count of conspiring to engage in illicit sexual conduct in a foreign place and traveling in foreign commerce for the purpose of engaging in illicit sexual conduct; six counts of offering to buy a child in order to depict the child in child pornography; six counts of coercion and enticement of a minor to engage in sexual activity; three counts of traveling in foreign commerce for the purpose of engaging in illicit sexual conduct; and four counts of engaging in illicit sexual conduct in a foreign place.
Mathias allegedly arranged with the mother of two minor females in the Philippines to travel to the Philippines in April 2007 and December 2007 to engage in sexual conduct with the minors and did so. Mathias also allegedly arranged to travel again to the Philippines in December 2008 to engage in sexual conduct with the minors. However, Philippine authorities received information about the arrangements and rescued the children before they met Mathias again.
If convicted, Mathias faces up to life in prison and a fine of up to $250,000.
Charges in an indictment are merely accusations and a defendant is presumed innocent unless and until proven guilty.
The case was investigated by U.S. Immigration and Customs Enforcement and the U.S. Postal Inspection Service, with assistance from the Philippines Department of Justice. This case is being prosecuted by Trial Attorney Anitha Ibrahim of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Marlene Rodriguez of the U.S. Attorney’s Office for the Southern District of Florida.
Financial Products and Services Firm, Two Executives and One Former Executive Indicted for Roles in Conspiracies Involving Proceeds of Municipal BondsRead the Press Release
WASHINGTON — A Beverly Hills, Calif.-based financial products and services firm, two of its executives and one former executive were indicted today for their participation in bid-rigging and fraud conspiracies related to contracts for the investment of municipal bond proceeds and other related municipal finance contracts, the Department of Justice announced. Today’s charges are the first to be filed in the Department’s ongoing antitrust investigation into the municipal bonds industry.
The nine-count indictment was filed today in the U.S. District Court for the Southern District of New York in Manhattan. The indictment charges Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products Inc. (CDR); David Rubin, the owner and president of CDR; Zevi Wolmark, also known as Stewart Wolmark, CDR’s former chief financial officer and managing director; and Evan Andrew Zarefsky, CDR’s vice president, with engaging in separate bid-rigging and fraud conspiracies with companies that provide a type of contract, known as an investment agreement, to state, county and local governments and agencies throughout the United States. These public entities were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds that they had issued to raise money for, among other things, public projects.
In addition, CDR, Rubin, Wolmark and Zarefsky are charged with participating in two separate wire fraud schemes. Rubin, Wolmark and CDR are charged with a third wire fraud scheme. The two executives and former executive are also charged with obstructing the Internal Revenue Service (IRS). Zarefsky is charged with making a false statement to government agents. Rubin is charged with receiving a kickback through a fraudulent bank transaction. According to the indictment, the various crimes took place at different times from approximately 1998 until at least November 2006.
"The Justice Department is committed to protecting the competitive process and will hold accountable individuals and companies who participate in illegal and anticompetitive conduct," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division.
According to the indictment, CDR was hired by public entities that issue municipal bonds to act as their broker and conduct what was supposed to be a competitive bidding process primarily for contracts for the investment of the money raised when municipal bonds are issued. Competitive bidding for those contracts is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds, which gives the Treasury the right to a portion of the earnings from a municipality’s investment agreement under certain circumstances. Compliance with the regulations is monitored by the IRS.
The indictment charges that CDR, Rubin, Wolmark and Zarefsky secretly manipulated and controlled the competitive bidding process in numerous ways to enrich themselves and the co-conspirator providers of the investment agreements, at the expense of the municipalities, the IRS, or both.
As a part of the bid-rigging conspiracy alleged in the indictment, CDR, Rubin, Wolmark, Zarefsky and other co-conspirators designated in advance which co-conspirator provider would be the winning bidder for certain investment agreements. According to the indictment, they also submitted or caused to be submitted to CDR intentionally losing bids. The indictment also alleges that co-conspirator providers paid kickbacks to CDR in the form of fees that were inflated or unearned in exchange for CDR’s assistance in controlling the bidding process and ensuring that certain providers won bids they were allocated.
As part of the fraud conspiracies alleged in the indictment, CDR, Rubin, Wolmark and Zarefsky gave particular co-conspirator providers information about the prices, price levels or conditions in competitors’ bids, a practice known as a "last look," which is explicitly prohibited by the Treasury regulations. In exchange, CDR received kickbacks from these providers and relied on them to submit intentionally losing bids when requested. The efforts by CDR and the three executives to control and manipulate the bidding for investment contracts, and the execution of a variety of certifications that covered up their scheme, also obstructed the IRS’s ability to monitor compliance with the Treasury regulations and to determine whether municipal issuers had correctly accounted for any money that was owed to the Treasury.
The charges announced today resulted from an ongoing investigation that is being conducted by the Antitrust Division’s New York Field Office, the FBI and IRS Criminal Investigation. The Division is coordinating its investigation with the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
"This case is fundamentally about collusion, the illegal rigging of a purportedly competitive bidding process," said Joseph M. Demarest Jr., Assistant Director-in-Charge of the FBI in New York. "The result was lower rates of return on the investment of bond proceeds for the state and local governments that hired CDR. In a climate of economic austerity, the conduct of the defendants and co-conspirators seems particularly predatory."
"IRS Criminal Investigation agents are working every day with our partners to follow financial leads to the source of criminal activity," said Patricia J. Haynes, Special Agent in Charge, IRS Criminal Investigation New York Field Office. "We will continue to pursue individuals and companies who defraud the IRS."
The bid-rigging conspiracy that Rubin, Wolmark and Zarefsky are charged with carries a maximum penalty of 10 years in prison and a $1 million fine. The fraud conspiracies that Rubin, Wolmark and Zarefsky are charged with carry a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charges against the three individuals each carries a maximum penalty of 20 years in prison and a $1 million fine. The false statement charge against Zarefsky carries a maximum penalty of five years in prison and a $250,000 fine. The fraudulent bank transaction charge against Rubin carries a maximum penalty of 30 years in prison and a $1 million fine. The obstruction of the IRS charge against the three individuals carries a maximum penalty of three years in prison and a $5,000 fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
CDR faces a maximum fine of $100 million for the bid-rigging charge, $500,000 for each of the fraud conspiracies, and $500,000 for each of the wire fraud charges. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-264-0390 or the FBI at 212-384-5000.