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14 October 2009
United States Reaches Agreementin Livestock Trespassing LawsuitRead the Press Release
WASHINGTON— The United States has reached a settlement with ranchers in a longstanding dispute over livestock trespasses on public lands in Nye and Esmeralda Counties, Nev., the Justice Department and Bureau of Land Management (BLM) announced today.
As part of the settlement, Benjamin J. Colvin and Colvin Cattle Company acknowledged past unauthorized grazing on federal government lands and agreed to comply with federal grazing laws and regulations in the future.
The settlement partially resolves a lawsuit, filed in August 2007 in U.S. District Court for the District of Nevada, that alleged the Estate of E. Wayne Hage, Wayne N. Hage, Benjamin J. Colvin and Colvin Cattle Co. intentionally grazed cattle on multiple occasions on federally managed lands and that the Estate of E. Wayne Hage and Wayne N. Hage also placed livestock "leased" from other ranchers onto lands owned by the United States for grazing purposes.
"After many years of disputes and litigation over unauthorized livestock grazing on federal lands in Nevada, we are pleased to reach a settlement that will protect the federal lands from such unauthorized uses in the future," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"The BLM is very pleased that a settlement was reached to resolve the government’s claims against Ben Colvin," said Jerry Smith, District Manager of the Battle Mountain BLM District.
Under the settlement Colvin also paid a fine of $34,000 to fully resolve past grazing and realty trespass damages, and agreed to remove his range improvements from the public lands. Upon Colvin’s compliance with these requirements, the federal government agreed that it will consider Mr. Colvin as it would any other grazing permit applicant in the future.
As a result of the agreement, on Oct 14, 2009, the U.S. District Court for the District of Nevada granted a jointly filed motion for partial dismissal, which dismisses Benjamin J. Colvin and the Colvin Cattle Company from the federal lawsuit as well as a counterclaim filed by Colvin Cattle Company. No settlement has yet been reached with the remaining defendants in this case.
The Bureau of Land Management has the authority to manage, administer, and protect federal lands including regulating grazing under the Taylor Grazing Act of 1934 and the Federal Land Policy and Management Act of 1976.
German National Pleads Guilty to Smuggling Coral from the PhilippinesRead the Press Release
WASHINGTON—Gunther Wenzek, a German national, pleaded guilty today before District Judge Anna J. Brown, of the U.S. District Court for the District of Oregon, to one count of smuggling coral into the United States at the port of Portland, Ore., the Justice Department announced.
A grand jury in Portland indicted Wenzek in July 2008. Law enforcement officials arrested Wenzek in February 2009 when he entered the United States at Dulles airport outside of Washington, D.C., en route to a pet exposition in Orlando, Fla. Wenzek has been detained under a third party custodian release agreement since February. Sentencing is scheduled for Jan. 5, 2010 at 1:30 p.m. PT.
Wenzek owns a company named CoraPet, based in Essen, Germany that sells various coral products to retailers in the United States. Customs agents seized two full containers of coral shipped by Wenzek to a customer in Portland. These two shipments made up a total of over 40 tonsof coral.
The corals seized have been identified as corals from the scientific order Scleractinia, genera Porites, Acropora, and Pocillopora, common to Philippine reefs. Due to the threat of extinction, stony corals, such as those seized in this case are protected by international law. Philippine law specifically forbids exports of all coral. Moreover, the Convention on International Trade in Endangered Species (CITES) bars importation of the coral Wenzek tried to import to customers in the United States, without filling out proper customs forms or permits.
The removal of dead coral and live rock is of major concern for coral reefs, including those reefs protecting coastal communities from storms. These corals are the fundamental building blocks of the coral reef ecosystem. Unsustainable collection of coral frequently results in the loss of important nursery areas, feeding grounds, refuge for fish and invertebrates, and increased erosion of reef systems.
"This guilty plea is one example of the United States’ coordinated efforts, including the work of multiple law enforcement agencies, to protect coral reefs and marine ecosystems both domestically and internationally," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Preventing the further decline of coral reefs through strong enforcement of our nation’s environmental laws is paramount in preserving marine environments and fisheries."
"We will not allow criminals to profit from the illegal devastation of the world’s coral reefs," said Kent Robinson, Acting United States Attorney for the District of Oregon. "The assistance of the Philippine government was absolutely critical to the success of this case, and we thank the government and people of the Philippines for their vital help in protecting marine resources."
"This activity has an immeasurable negative impact on our shrinking resources in the world," said Paul Chang, Special Agent in Charge of Law Enforcement for the U.S. Fish and Wildlife Service's Pacific Region, based in Portland.
"Our national and the international marine resources are important to all of us and this is a fine example of federal agencies working together to protect those resources," said Special Agent in Charge Vicki Nomura, National Marine Fisheries Service, Office of Law Enforcement.
The case was investigated by the U.S. Fish and Wildlife Service, U.S. Immigration and Customs Enforcement, and the National Marine Fisheries Service. The case is being prosecuted by Assistant United States Attorney, Dwight Holton from the District of Oregon and Senior Trial Attorney J. Ronald Sutcliffe of the Justice Department’s Environmental Crimes Section, with assistance from the Southern District of Florida, AUSA, Tom Watts-FitzGerald.
13 October 2009
Minneapolis Packaged-Ice Company Agrees to Plead Guilty to Customer Allocation ConspiracyRead the Press Release
WASHINGTON – A packaged-ice company, headquartered in St. Paul, Minn., has agreed to plead guilty and to pay a $9 million criminal fine for allocating customers, the Department of Justice announced today. In addition, three of the company’s former executives pleaded guilty for their roles in the conspiracy to allocate customers.
According to a one-count felony charge filed under seal on Sept. 10, 2009, and unsealed today in the U.S. District Court in Cincinnati, Arctic Glacier International Inc. engaged in a conspiracy to suppress and eliminate competition by allocating packaged-ice customers in the Detroit metropolitan area and southeastern Michigan, beginning Jan. 1, 2001, and continuing until at least July 17, 2007. Under the plea agreement, which must be approved by the court, Arctic Glacier has agreed to cooperate with the Department’s ongoing investigation.
According to separate one-count felony charges, also filed under seal on Sept. 10, 2009, and unsealed today in the U.S. District Court in Cincinnati, Frank Larson, Arctic Glacier’s former senior vice president of operations, and Keith Corbin, the company’s former vice president of sales and marketing, participated in the same conspiracy beginning at least as early as March 1, 2005, and continuing at least until July 17, 2007. According to an additional one-count felony charge filed under seal on Sept. 10, 2009, in the U.S. District Court in Cincinnati and unsealed today, Gary Cooley, the company’s former vice president of sales and marketing, also participated in the conspiracy from at least as early as June 1, 2006, until July 17, 2007. Under the three separate plea agreements, which must be approved by the court, the former executives have agreed to cooperate with the Department’s ongoing investigation.
In court documents, the Department said that the three former executives and Arctic Glacier, conspired with another packaged-ice competitor to allocate packaged-ice customers in southeastern Michigan and the Detroit metropolitan areas. As a part of the conspiracy, Arctic Glacier, its former executives and other co-conspirators exchanged information for the purpose of monitoring and enforcing adherence to the agreed customer allocations and refrained from competing for the allocated customers.
Arctic Glacier, Larson, Corbin and Cooley are each charged with allocating packaged-ice customers in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals and a $100 million fine for corporations. The maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either of those amounts is greater than the Sherman Act maximum fines.
These charges stem from an ongoing antitrust investigation into the packaged-ice industry. As a part of the same investigation, Home City Ice Company pleaded guilty on June 17, 2008, for its participation in a conspiracy to allocate customers and territories in the packaged-ice industry. The investigation is being conducted by the Antitrust Division’s Cleveland Field Office and by FBI offices in Ann Arbor, Mich.; Indianapolis, Ind.; Dallas, Texas; and Cincinnati and Toledo, Ohio.
Anyone with information concerning customer or territorial allocation agreements, or other anticompetitive conduct in the packaged-ice industry, should contact the Cleveland Field Office of the Antitrust Division at 216-687-8400.
Maryland Tax Preparer Sentenced to 70 Months <br /> in Prison for Preparing False Tax Returns for ClientsRead the Press Release
WASHINGTON – Marcel J. Toto-Ngosso of Silver Spring, Md., was sentenced to 70 months in prison today for preparing and filing false tax returns in connection with a scheme to generate fraudulent tax refunds for his clients, the Justice Department and Internal Revenue Service (IRS) announced. U.S. District Judge Roger W. Titus also ordered Toto-Ngosso to pay $238,788.25 in restitution.
In June 2009, following a four-day trial in Greenbelt, Md., Toto-Ngosso was convicted of 17 counts of aiding and assisting in the preparation and filing of false tax returns. According to the indictment and evidence introduced during trial, Toto-Ngosso ran a tax preparation business from his home. From at least 1998 through 2007, Toto-Ngosso prepared false tax returns for clients claiming fraudulent deductions and adjustments, including false dependents, inflated charitable contributions, and false unreimbursed employee expenses, such as vehicle expenses, which he knew his clients were not entitled to claim.
According to evidence introduced at trial, Toto-Ngosso obtained the names and social security numbers of individuals, which he later sold to his clients as dependents and qualifying persons for $500 to $800 each. Toto-Ngosso then used these names and social security numbers on his clients’ tax returns to secure larger refunds.
According to evidence introduced at trial, after Toto-Ngosso learned he was under investigation by the IRS, he attempted to obstruct the investigation by telling his clients to lie about the information that he reported on their tax returns.
"As today’s sentence shows, fraudulent tax return preparers face serious consequences, including jail time," said John A. DiCicco, Acting Assistant Attorney General of the Tax Division. "This case also demonstrates why taxpayers should carefully review their individual income tax returns before signing and filing their returns with the IRS."
"Tax return preparers help Americans with one of their biggest financial transactions each year. We must ensure that all preparers are ethical and provide good service," said IRS Criminal Investigation Chief Eileen Mayer. "Today’s sentence signals our determination to ensure the tax preparation industry is on board with our overall goals to strengthen the tax system."
Two associates of Toto-Ngosso, Maude H. Veney and Francois B. Zame, testified for the government at his trial. Veney pleaded guilty to conspiracy to file false claims and was sentenced to 18 months of probations by Judge Titus in September 2009. Zame pleaded guilty to aiding or assisting in filing a false tax return and was sentenced by Judge Titus to five months in prison in September 2009.
Acting Assistant Attorney General DiCicco thanked the U.S. Attorney’s Office in Greenbelt, Md., and commended IRS Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Jorge Almonte and Tino Lisella who prosecuted the case.
Louisiana Man Convicted of Federal Hate Crime for Burning His Neighbors’ HomeRead the Press Release
WASHINGTON – A Louisiana man pleaded guilty today to firing three shots from a shotgun at the home of three Hispanic men and, after they fled, entering the home and setting a fire that burned it to the ground, the Justice Department announced. Johnny D. Mathis, 46, of Lecompte, La., entered his plea minutes before a jury trial was set to begin before U.S. District Judge Dee Drell in Alexandria, La.
Mathis pleaded guilty to all three counts in the pending indictment: criminal interference with the right to fair housing; use of fire to commit a felony; and use of a firearm during a crime of violence. Each count carries a maximum penalty of ten years in prison, a $250,000 fine, or both. Furthermore, the ten year penalties for use of fire to commit a felony and use of a firearm during a crime of violence are mandatory, meaning that Mathis now faces a maximum sentence of 30 years and a mandatory minimum of 20 years in prison. Sentencing is scheduled for Jan. 13, 2010.
Testimony at today’s guilty plea hearing established that on June 15, 2008, Mathis fired three shots from a shotgun at the home of three Hispanic men who shared the residence in a rural area of western Louisiana. Mathis’ home was across the street from the victims’ house. After hearing two shots, the victims fled their house. Once outside, the victims watched as Mathis fired a third shot into the trees and then entered the house, left briefly, and then returned. Minutes later, the house was engulfed in flames as Mathis exited the house. Subsequent investigation determined that the fire started in the kitchen where the victims had seen Mathis. Mathis admitted that his crime was motivated by the victims’ race and national origin and was intended to interfere with their right to live in their home.
"Motivated by hate, the defendant fired a shotgun at a home that he later entered and burned down. No one should have to endure such an abhorrent act of criminal violence," said Assistant Attorney General Thomas E. Perez of the Civil Rights Division. "The Justice Department will vigorously prosecute cases of bias motivated violence to the full extent of the law."
U.S. Attorney Donald Washington stated: "These victims were targeted and subjected to acts of violence for no other reason than their race and national origin. We will continue to vigorously enforce federal laws that guarantee the civil rights of all people."
This matter was investigated jointly by the FBI and the Rapides Parish, La., Sheriff’s Office. The case was prosecuted by Michael J. Frank, a Trial Attorney with the Justice Department’s Civil Rights Division, and Assistant U.S. Attorney Mary J. Mudrick of the U.S. Attorney’s Office for the Western District of Louisiana.
Justice Department Requires Divestitures in AT&T’s Acquisition<br /> of CentennialRead the Press Release
WASHINGTON – The Department of Justice announced today that it will require AT&T Inc. (AT&T) to divest assets in eight areas in Louisiana and Mississippi in order to proceed with its $944 million acquisition of Centennial Communications Corp. (Centennial). The Department said that the transaction, as originally proposed, would substantially lessen competition to the detriment of consumers of mobile wireless telecommunications services in those areas, and likely would result in higher prices, lower quality and reduced network investments. The divestitures cover portions of southwestern and central Louisiana and southwestern Mississippi.
The Department’s Antitrust Division, along with the Attorney General of Louisiana, filed a civil lawsuit today in U.S. District Court for the District of Columbia to block the proposed acquisition of Centennial by AT&T. At the same time, the Department and the Louisiana Attorney General filed a proposed settlement that, if approved by the court, would resolve the competitive concerns in the lawsuit.
"These divestitures are necessary to preserve the benefits of competition for wireless customers in these areas of Louisiana and Mississippi," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division.
According to the complaint, AT&T and Centennial are each other’s closest competitor for a significant set of customers in eight Cellular Marketing Areas (CMAs), as defined by the Federal Communications Commission (FCC). The complaint alleges that the proposed transaction would substantially reduce competition for mobile wireless telecommunications services in each of these areas. The proposed settlement requires divestitures in these areas to eliminate the competitive concerns.
AT&T is the second largest mobile wireless telecommunications services provider in the United States as measured by subscribers, serving almost 80 million subscribers throughout all 50 states. In 2008, AT&T earned mobile wireless telecommunications services revenues of approximately $44 billion. Centennial is the eighth largest mobile wireless telecommunications services provider in the United States as measured by subscribers, and provides mobile wireless telecommunications services to approximately 1.1 million wireless subscribers in six states, Puerto Rico, and the U.S. Virgin Islands. In 2008, Centennial earned approximately $1 billion in total revenues.
The transaction also is subject to review by the FCC. The Department has cooperated with the FCC’s separate review of this matter.
As required by the Tunney Act, the proposed settlement, along with the Department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Nancy M. Goodman, Chief, Telecommunications and Media Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
AT&T Missouri Agrees to Settle False Claims Act Lawsuit <br /> Involving E-Rate ProgramRead the Press Release
WASHINGTON – AT&T Missouri (formerly known as Southwestern Bell Telephone L.P.) has agreed to pay the United States $1.4 million as part of a settlement of a civil lawsuit alleging that the company violated the False Claims Act in connection with the Federal Communications Commission's E-Rate program, the Justice Department announced today.
The E-Rate program, which Congress created in the Telecommunications Act of 1996, provides funding for needy schools and libraries to connect to and utilize the Internet. Under the program, which is supported by fees collected from telephone users, schools apply for funds to pay for hardware and monthly connectivity service fees.
The United States contended that AT&T Missouri provided false information to the E-Rate program and otherwise violated the program’s requirements by engaging in non-competitive bidding practices for E-Rate contracts. The United States further alleged that AT&T Missouri employees colluded with officials in the Kansas City, Mo., School District to award contracts to the company, extended contracts in violation of E-Rate rules and provided meals and other inducements to school district employees. The United States previously filed suit against and settled with the Kansas City, Mo., School District.
These allegations arose from a False Claims Act lawsuit filed in Missouri federal court by American Fiber Systems Inc., which submitted an unsuccessful bid to the Kansas City, Mo., School District for the E-Rate contracts that were awarded to AT&T Missouri. The False Claims Act allows private parties to bring fraud claims on behalf of the United States and to share in the proceeds of any recovery. American Fiber Systems Inc.’s share of the settlement will amount to $195,000.
"The E-Rate program provides critical support for Internet access to the most under-served schools in the nation," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division. "Working with our partners at the FCC’s Office of the Inspector General, the Department of Justice is committed to ensuring that this important program, which benefits our neediest children, not be misused by those seeking to defraud the public."
The Justice Department’s Civil Division, with assistance from the FCC’s Office of the Inspector General, handled the investigation and settlement of this matter. The case is entitled U.S. ex rel. American Fiber Systems, Inc. v. Southwestern Bell Telephone Co. (d/b/a AT&T Missouri), Case No.: 06-0389 – CV – W – HFS (W.D. Mo.).
9 October 2009
United States Transfers Two Guantanamo Bay Detainees to Kuwait and BelgiumRead the Press Release
WASHINGTON — The Department of Justice today announced that two detainees have been transferred from the detention facility at Guantanamo Bay to the control of the governments of Kuwait and Belgium.
As directed by the President’s Jan. 22, 2009 Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of each of these cases. As a result of that review, these detainees were approved for transfer 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.
Khalid Abdullah Mishal al Mutairi, a native of Kuwait, was transferred to the Government of Kuwait. On July 29, 2009, a federal court ruled that al Mutairi may no longer be detained under the Authorization for the Use of Military Force (AUMF) and ordered the government to release him from detention at Guantanamo Bay.
Another detainee was transferred from Guantanamo Bay to the Government of Belgium. Pursuant to a request from the Government of Belgium, the identity of this individual is being withheld for privacy reasons.
These transfers were carried out under individual arrangements between the United States and the governments of Kuwait and Belgium. The United States has coordinated with the governments of each of these nations to ensure the transfers take place under appropriate security measures and will continue to consult with these governments regarding these matters.
Since 2002, more than 550 detainees have departed Guantanamo for other countries including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Iran, Iraq, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Portugal, Russia, Saudi Arabia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
Justice Department Sues to Bar Kansas Man <br /> from Preparing Tax ReturnsRead the Press Release
WASHINGTON– The United States has asked a federal court in Kansas City, Kan., to bar Carlos Cruz, aka Carlos Ruano-Cruz, from preparing tax returns for others, the Justice Department announced today. According to the government complaint, Cruz’s business, Carlos Income Tax Services, prepares federal income tax returns for customers in the Kansas City metropolitan area that unlawfully understate income tax liabilities by under-reporting income, inflating business expenses and claiming improper deductions for nondeductible personal expenses.
The government complaint accuses Cruz of providing false advice regarding the deductibility of personal and business expenses, and unlawfully advising customers to fabricate business income in order to maximize tax refunds. According to the complaint, the Internal Revenue Service has audited at least 81 returns prepared by Cruz and found that 95 percent of those examined required adjustments to the federal income taxes owed. The complaint estimates that the tax losses from Cruz’s alleged misconduct between 2003 and 2007 could exceed $25 million.
In the past decade, the Justice Department has obtained injunctions against more than 425 tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department’s Tax Division Web site.
Detroit Clinic Owner, Doctor and Office Manager Indicted in Medicare Infusion Fraud SchemeRead the Press Release
WASHINGTON – Three Miami-Dade County, Fla., residents have been indicted in connection with an alleged $2.3 million Medicare fraud scheme operated out of X-Press Center, a Detroit-area clinic that purported to specialize in providing injection and infusion therapies, Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the Eastern District of Michigan Terrence Berg and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS) announced today. In addition, a former manager at X-Press Center pleaded guilty to one count of conspiracy to commit health care fraud in connection with her management of the clinic.
Juan De Oleo, 49, Rosa Genao, M.D., 50, and Ingrid Mazorra, 35, were each indicted by a grand jury in Detroit with conspiracy to commit health care fraud and five counts of substantive health care fraud. Genao and Mazorra were also charged with one count of destroying records relevant to a federal investigation. In addition, De Oleo was charged with two counts of money laundering. The superseding indictment unsealed today added De Oleo, Genao and Mazorra to a pending indictment unsealed on June 24, 2009, charging seven defendants with alleged crimes related to their involvement with X-Press Center.
According to the superseding indictment, De Oleo was a part owner of X-Press Center, Genao was a physician employed at X-Press Center, and Mazorra was the clinic’s office manager. The indictment alleges that De Oleo and his co-conspirators agreed to open a fraudulent infusion and injection therapy clinic, and to split the proceeds of fraud among themselves. According to the indictment, Medicare beneficiaries received kickbacks in return for visiting the clinic and signing forms indicating that they received treatments that were medically unnecessary or never provided. The indictment also alleges that Genao and Mazorra altered, falsified and destroyed patient records to attempt to justify the medically unnecessary services that were purportedly being provided at the clinic.
The indictment alleges that De Oleo, Genao, Mazorra and their co-conspirators caused approximately $2.3 million in fraudulent billing to the Medicare program for services at X-Press Center that were medically unnecessary or never provided.
The charges of health care conspiracy and health care fraud carry a maximum sentence of 10 years in prison and a $250,000 fine, per count. The charge of destroying records carries a maximum sentence of 20 years in prison and a $250,000 fine. The money laundering charges carry a maximum penalty of 10 years in prison and a $500,000 fine, per count.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
Also today, Dulce Briceno, 57, pleaded guilty before U.S. District Judge Ursula Ungaro in the Southern District of Florida to one count of conspiracy to commit health care fraud. In pleading guilty , Briceno admitted that in approximately September 2006, she agreed to manage the clinic on a day-to-day basis in exchange for a percentage of the profits the clinic generated. Briceno admitted that during the time the clinic was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or were never provided. Briceno admitted that she and her co-conspirators at the clinic had purchased only a small fraction of the medications that the clinic billed the Medicare program for providing.
Briceno admitted that Medicare beneficiaries were not referred to X-press Center by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks. In exchange for those kickbacks, Briceno admitted that 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 paid to Medicare beneficiaries at the clinic were made in the form of cash and prescriptions for narcotic drugs.
Briceno also admitted that between approximately September 2006 and March 2007, she and her co-conspirators at X-Press Center caused the submission of approximately $2.3 million in false and fraudulent claims to the Medicare program for services purportedly provided at X-Press Center. Medicare paid approximately $1.8 million on those claims.
At her sentencing, scheduled for Jan. 15, 2010, Briceno faces a maximum of 10 years in prison and a $250,000 fine. Briceno was originally charged in the Eastern District of Michigan, but after her arrest in Miami, she consented to have her case transferred to the Southern District of Florida for her plea and sentence.
The cases are being prosecuted by Trial Attorneys John K. Neal and Benjamin D. Singer of the Criminal Division’s Fraud Section. The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation. The cases were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, Strike Force operations in four districts have obtained indictments of 300 individuals who collectively have falsely billed the Medicare program for more than $680 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.
Indictment
8 October 2009
Oregon White Supremacist Indicted for ThreateningOhio Civil Rights Leader by Mailing a NooseRead the Press Release
WASHINGTON – Daniel Lee Jones, of Portland, Ore., has been indicted and arrested for allegedly mailing a hangman’s noose to the Lima, Ohio, chapter of the National Association for the Advancement of Colored People, the Justice Department announced today.
At the time he mailed the noose for the purpose of threatening Jason Upthegrove, Jones, 32, was a regional director of a group that advocated white supremacist ideology, according to the indictment unsealed following Jones’ arrest late yesterday in Portland. Prior to mailing the noose, Jones sent hate literature to residents of Lima regarding the shooting of an African American woman by an officer employed by the Lima Police Department. Meanwhile, Upthegrove was advocating at community assemblies and to the media for equal police services for African Americans and speaking out against the hate flyers.
The indictment alleges that Jones used the U.S. Postal Service to send a package that included the noose to Upthegrove’s home for the purpose of intimidating him and interfering with his right to engage in public advocacy for equal police services for African Americans. The two-count federal indictment charges the defendant with interference with federally protected activities and mailing threatening communications. Upthegrove received the noose on Feb. 14, 2008.
"A noose is an unmistakable symbol of hatred and violence in our nation, conjuring up images of a despicable period in our history. Mailing a noose to an individual who advocates for racial equality sends a clear threat of violence," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.
"In our country, the law must protect the rights of free speech and peaceful assembly. When anyone resorts to threats of violence to abridge those sacred rights, the Department of Justice will be there," said U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio.
"The FBI works tenaciously to pursue those who, by their hate-filled actions, threaten the civil rights of our citizens. The mailing of a noose into this community warranted every resource the FBI had to offer, including the outstanding work of our Laboratory Division. The people of Lima should be assured that incidents like this will not be tolerated," said C. Frank Figliuzzi, Special Agent-in-Charge of the FBI’s Cleveland Division.
If found guilty of mailing a threatening communication, Jones faces a maximum punishment of five years in prison and a potential fine of up to $250,000. If found guilty of interfering with federally protected activities, he faces a maximum punishment of one year in prison and a fine of up to $100,000.
The case was investigated by Special Agent Brian Russ of the FBI, in conjunction with Assistant U.S. Attorney David Bauer for the Northern District of Ohio, and Special Legal Counsel Barry Kowalski and Trial Attorney Shan Patel from the Justice Department’s Civil Rights Division.
The charges set forth in an indictment are merely accusations and the defendant is presumed innocent until proven guilty.
Oklahoma Man Indicted in Kickback Scheme in Connection with Government Contract in AfghanistanRead the Press Release
WASHINGTON - Ryan Scott McMonigle, 37, of Ponca City, Okla., was indicted today for his alleged role in a scheme to solicit kickbacks in connection with the award of a security services subcontract to protect U.S. government personnel and contractors in Afghanistan, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, Assistant Attorney General of the Antitrust Division Christine A. Varney and U.S. Attorney for the Eastern District of Virginia Neil H. MacBride.
The U.S. Agency for International Development (USAID) is the principal federal U.S. agency that extends assistance to countries that are recovering from disaster, are trying to escape poverty and are engaging in democratic reforms. The agency works to support long-term and equitable economic growth and advance U.S. foreign policy objectives.
In August 2006, USAID awarded a $1.4 billion contract known as the Afghanistan Infrastructure Rehabilitation Project (the AIRP contract). The AIRP contract required the award of numerous subcontracts, including for the provision of security services to protect AIRP workers.
According to the indictment, McMonigle was employed from approximately February 2009 until May 2009 in Kabul, Afghanistan, by Civilian Police International, a Virginia-based company that provides law enforcement training internationally. The indictment alleges that McMonigle, Bryan Lee Burrows and others conspired to solicit kickbacks from security vendors in return for favorable treatment for those potential bidders in connection with the award of a subcontract to provide security services to protect USAID personnel and contractors in Afghanistan operating under the AIRP contract.
McMonigle is charged with one count of conspiracy to solicit a kickback and one count of aiding and abetting the solicitation of a kickback.
Burrows pleaded guilty on Sept. 2, 2009, to conspiring with others to solicit kickbacks from the security vendors in return for favorable treatment for those potential bidders in connection with the award of a security services subcontract.
If convicted, McMonigle faces up to 10 years in prison on the kickback solicitation charge and an additional five years in prison on the conspiracy charge, as well as a fine of $250,000 for each charge. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
The case is being prosecuted by Trial Attorney Bradford L. Geyer of the Criminal Division’s Fraud Section, Trial Attorneys Kimberly A. Justice and Joseph Muoio of the Antitrust Division’s Philadelphia Field Office and Assistant U.S. Attorney Timothy D. Belevetz of the U.S. Attorney’s Office for the Eastern District of Virginia. The investigation is being conducted by USAID’s Office of Inspector General as well as members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.
Justice Department Commemorates National Disability Employment Awareness MonthRead the Press Release
WASHINGTON – Assistant Attorney General Thomas E. Perez of the Civil Rights Division issued the following statement today in commemoration of National Disability Employment Awareness month.
"The Civil Rights Division is committed to ensuring that the millions of Americans with disabilities are able to live full, productive lives through access to employment and all aspects of civic life. Unfortunately, myths and falsehoods about disabilities make it far too difficult for many individuals with disabilities to secure a job," said Assistant Attorney General Perez. "The Justice Department today renews its vigilance to fairly and judiciously enforcing federal civil rights laws that prohibit discrimination on the basis of a disability. By protecting the rights of all individuals so that they can contribute to our society, we strengthen our communities and our nation as a whole. I am honored to join President Obama to commemorate National Disability Employment Awareness Month on the occasion of my return to the Justice Department."
Additionally, in recognition of National Disability Employment Awareness Month, the Civil Rights Division will:
- Join the U.S. Equal Employment Opportunity Commission (EEOC) to hold four Town Hall meetings throughout the nation to share information about the proposed ADA Amendments Act regulations and to gather comments on them. All Town Hall meetings will consist of two sessions - one for disability advocates and one for the employer community. These sessions will be completed by November 20th. The four locations are Philadelphia, Chicago, San Francisco and New Orleans.
- Release a video produced by its Disability Rights Section that will identify and respond to a number of common myths held by employers about workers with disabilities.
October is National Disability Employment Awareness Month. For more information about the Civil Rights Division and the laws that it enforces, please visit http://www.justice.gov/crt.
Harborside Healthcare to Pay U.S. $1.375 Million to Resolve Allegations of Kickbacks and Sham Durable Medical ServicesRead the Press Release
WASHINGTON – Harborside Healthcare and HHC Nutrition Services will pay the United States $1.375 million to resolve False Claims Act allegations that the company received kickbacks and assistance under the guise of a sham durable medical equipment (DME) provider, the Justice Department announced today. The government alleged that McKesson Corp., and its affiliate MediNet Corp provided the kickbacks and assistance and, in return, Harborside purchased its DME, such as non-enteral supplies, from McKesson. As part of today’s settlement, Harborside also agreed to forego $498,000 in DME claims that they had not yet been billed to Medicare.
Today’s settlement resolves allegations of the United States that this conduct violated the Anti-Kickback Statute and the False Claims Act. There is a related action pending against McKesson and MediNet in the Northern District of Mississippi that remains ongoing. In addition, the United States’ investigation of similar conduct involving other DME providers and nursing home chains is continuing.
"It is critical that Medicare providers base their DME purchasing decisions on what is in the best interests of their patients," stated Tony West, Assistant Attorney General for the Civil Division. "The Justice Department will work vigorously to ensure that these decisions about patient care are not tainted by kickbacks."
The settlement was the result of an ongoing investigation by the Justice Department’s Civil Division, the Office of Inspector General at the U.S. Department of Health and Human Services, and the U.S. Attorney’s Office for the Northern District of Mississippi.
"Our Medicare system depends upon fair competition by medical service providers. We are always vigilant to thwart sham operators, like HHC Nutrition Services," said Jim M. Greenlee, U.S. Attorney for the Northern District of Mississippi.
This action was initiated by the filing of a qui tam or whistleblower suit by Tommy Jamison. Under the False Claims Act, a private individual may bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement. Mr. Jamison will receive $275,000 as his share of the government’s recovery.
Carpinteria, California, Man Sentenced for <br /> Mailing Child PornographyRead the Press Release
WASHINGTON - Donald Collier, 45, was sentenced today to nine years in prison for mailing child pornography, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and Acting U.S. Attorney for the Central District of California George S. Cardona.
Collier of Carpinteria, Calif., was also sentenced today by U.S. District Court Judge George H. Wu of the Central District of California to lifetime supervised release following his prison term, and was ordered to pay a $25,000 fine.
Collier pleaded guilty on June 1, 2009, to one count of mailing child pornography. As part of his plea agreement, Collier admitted that he twice traveled to Europe in 2006, and during these trips participated in pre-arranged photo shoots during which he took pictures of seven girls who were between seven- and 14-years-old. The photo sessions were arranged by an individual in Italy who sold videos of child pornography through a Web site. Collier admitted that prior to these trips, he purchased a number of videos through this Web site. Through his plea agreement, Collier admitted that the videos he ordered and the photos he produced depicted girls either partially or fully nude and in provocative poses.
Collier also admitted that upon his return to the United States from the second European trip, he mailed a CD containing the images he produced to an individual in Europe.
Collier was identified through Operation Joint Hammer, the U.S. component of an ongoing global enforcement operation targeting transnational rings of child pornographers. The operation already has led to the arrest of more than 60 people in the United States involved in the trade of child pornography.
Operation Joint Hammer was initiated through evidence developed by European law enforcement and shared with U.S. counterparts by Europol and Interpol. The European portion of this global enforcement effort, Operation Koala, was launched after the discovery of a handful of people in Europe who were molesting children and producing photographs of that abuse for commercial gain. Further investigation unveiled a number of online child pornography rings – some of which hosted dangerous offenders who not only traded child pornography, but who themselves sexually abused children.
Law enforcement has determined that the customers of the Web site were located in nearly 30 countries around the world, including the United States.
The case was investigated by U.S. Immigration and Customs Enforcement and the U.S. Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorney Karen I. Meyer of the U.S. Attorney’s Office for the Central District of California and Trial Attorney Alexandra R. Gelber of the Criminal Division’s Child Exploitation and Obscenity Section.
7 October 2009
Superseding Indictment Returned Against Defense ContractorRead the Press Release
WASHINGTON — A federal grand jury in Oklahoma City returned a superseding indictment against a former manager of a U.S. Department of Defense (DOD) contractor in Iraq, charging him with conspiracy to commit bribery, bribery and failing to appear in court, the Department of Justice announced today.
Elie Samir Chidiac, who is currently a fugitive, is the former Iraq site manager for Raman Corporation, a Lebanese company with an affiliate, Raman International Inc., located in Texas. According to the indictment, Chidiac participated in two conspiracies in which he bribed Army Major Theresa Jeanne Baker in connection with contracts awarded at Camp Victory, Iraq. Today’s indictment supersedes an indictment returned on Jan. 22, 2008, which charged Chidiac with two counts of conspiracy to commit bribery. Chidiac was arrested on those charges on Jan. 25, 2008, and was placed under home confinement pending trial. On May 22, 2008, Chidiac failed to report to authorities in Austin, Texas, as required by the terms of his home confinement and has not been seen by law enforcement since that time. He failed to appear for his scheduled trial date in the U.S. District Court for the Western District of Oklahoma on June 9, 2008.
According to the indictment, from at least in or about July 2006 until at least in or about March 2007, Raman and Chidiac gave money and other items to Baker in return for the award of DOD contracts at Camp Victory. In a second conspiracy, which took place from in or about November 2006 until at least in or about March 2007, Baker canceled contracts that were awarded to third party contractors and fraudulently re-awarded them to Chidiac. Baker then authorized Chidiac to receive cash payments for those contracts, despite the fact that Chidiac had neither delivered any goods nor performed any services. In return, Chidiac gave a portion of the money back to Baker.
A violation of the conspiracy statute carries a maximum sentence of five years in prison for each count and a fine of $250,000 for an individual. A violation of the bribery statute carries a maximum sentence of 15 years in prison for each count and a $250,000 fine or three times the value of the thing of value. Failure to appear for a court appearance, as applied in this case, carries a maximum sentence of five years to run consecutive to any sentence of prison imposed for another offense.
Today’s charges are examples of the Department’s commitment to protect U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative announced in October 2006 is designed to promote the early detection, investigation, and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section (NCES), along with special agents from the Defense Criminal Investigative Service (DCIS), Tulsa Resident Agency and the U.S. Army Criminal Investigations Division (Army CID), Dallas Resident Agency. The Criminal Division’s Office of International Affairs and agents from the U.S. Immigrations and Customs Enforcement and the U.S. Postal Inspection Service are providing additional assistance to the investigation. Anyone with information concerning bid rigging, bribery or other criminal conduct in the procurement of goods or services in Iraq is urged to contact NCES at 202-307-6694; DCIS at 800-424-9098 or [email protected]; or Army CID at www.cid.army.mil.
Rhode Island Machine Shop Owner Sentenced to Prison<br /> for Tax CrimesRead the Press Release
WASHINGTON - Bruce Lapierre of Pascoag, R.I., was sentenced to 51 months in prison today for tax evasion and conspiracy to defraud the United States, the Department of Justice and Internal Revenue Service (IRS) announced. Chief Judge Mary M. Lisi of the District of Rhode Island also ordered Lapierre to pay $463,988 in restitution. Judge Lisi ordered that Lapierre to begin serving his sentence on Oct. 28, 2009.
In March 2009, Lapierre and his co-defendants, Albert and Lorraine Martin, were convicted of conspiracy and two counts each of tax evasion. According to the indictment and evidence introduced during the eight-day trial, Lapierre and Albert Martin owned and operated Classic Machine, a Woonsocket, R.I.-based machine shop, from which they earned substantial income.
From 1997 to 2004, the defendants engaged in an elaborate scheme to conceal income from the IRS they earned through Classic Machine, and thus avoid paying taxes on that income. Rather than open business accounts for depositing business receipts and income, they used Lorraine Martin's personal account to conceal business receipts, as well as an anonymous "private" banking service designed to conceal income from the IRS.
The evidence also showed that the defendants, in order to further conceal their assets and income from the IRS, used multiple business names, such as Banner Technologies, Circle Machine, Preferred Enterprises and Royal Enterprises, to conduct the machine shop business. The defendants also made extensive use of cash and money orders. For example, they cashed checks under $10,000 in order to avoid federal Currency Transaction Reports, which are required for currency transactions of $10,000 or more.
According to evidence presented at trial, Lapierre tried to obstruct an IRS investigation of the machine shop's income by renaming business assets, by sending false and frivolous letters to the IRS claiming he was not required to file tax returns or pay taxes, and by directing a financial institution not to comply with an IRS summons for records.
Sentencing for Albert and Lorraine Martin is scheduled for Nov. 18, 2009. Each defendant faces a maximum of fifteen years in prison and a maximum fine of $750,000.
Acting Assistant Attorney General John A. DiCicco commended the IRS Special Agents who investigated the case, as well as Tax Division Trial Attorneys John Kane and Jorge Almonte who prosecuted the case.
Moldovan National Pleads Guilty to Forced Labor TraffickingRead the Press Release
WASHINGTON – A Moldovan national pleaded guilty today in federal court in Kansas City, Mo., for his role in a forced labor trafficking scheme that victimized workers in 14 states, the Justice Department announced.
Alexandru Frumusache, 24, a citizen of the republic of Moldova residing in Kansas City, pleaded guilty before U.S. District Judge Ortrie D. Smith this afternoon to the charge contained in a May 6, 2009, federal indictment.
In or around September 2008, Frumusache began working for Giant Labor Solutions in Kansas City. According to the court documents, between September 2008 and the end of April 2009, he knowingly aided and abetted others in a scheme to cause foreign workers (including nationals of the Phillippines, Dominican Republic and Jamaica) to believe that if they failed or refused to work where and when ordered, they would be deported, their H2B work visas would be cancelled, or they or their family members would be penalized with a $5,000 to $10,000 fee.
Frumusache is subject to a sentence of up to 20 years in federal prison without parole, as well as a fine of up to $250,000 and an order of restitution. A sentencing hearing is scheduled for Feb. 25, 2010.
This case is being prosecuted by Assistant U.S. Attorneys Gene Porter, William L. Meiners and Cynthia L. Cordes and Trial Attorney Jim Felte with the Civil Rights Division’s Human Trafficking Prosecution Unit. It was investigated by U.S. Immigration and Customs Enforcement; the FBI; the Labor Department; OIG – Office of Labor Racketeering and Fraud Investigations; IRS – Criminal Investigation; the Kansas Department of Revenue – Criminal Investigations; U.S. Citizenship and Immigration Service and the Independence, Mo., Police Department.
Indianapolis Man Sentenced for Transportation <br /> and Possession of Child PornographyRead the Press Release
Michael Wildridge, 41, pleaded guilty today to transportation and possession of child pornography and was sentenced to 10 years in prison.
Wildridge, a resident of Indianapolis, was also sentenced today by U.S. District Court Judge Sarah Evans Barker to lifetime supervised release following completion of his prison term and was ordered to pay a $1,000 fine.
During today’s plea and sentencing hearing, Wildridge admitted to sending child pornography to other individuals using the Internet and to possessing thousands of visual depictions of prepubescent minors engaging in sexually explicit conduct, including images depicting sadistic and masochistic conduct. Wildridge also admitted to collecting child pornography for nine years.
The case against Wildridge was prosecuted by Assistant U.S. Attorney Steven D. DeBrota of the Southern District of Indiana and Trial Attorney Bonnie L. Kane of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The case was investigated by ICE Indianapolis, the Hamilton County Internet Crimes Against Children Task Force, the Indiana State Police, the Indianapolis Metropolitan Police Department, the FBI Miami Field Office and CEOS’s High Technology Investigative Unit.
Indiana Man Pleads Guilty to Cross BurningRead the Press Release
WASHINGTON – Bruce Mikulyuk, 50, of Mishawaka, Ind., pleaded guilty today to interfering with the housing rights of a white woman and an African American man by burning a cross in their yard and later returning with a knife and threatening the man if he did not leave, the Justice Department announced.
According to the plea agreement filed with the court, Mikulyuk used racial slurs and threatened the male victim on Sept. 27, 2007. Later that evening, Mikulyuk built a cross, took it to the victims’ home and set it on fire several feet from the home while the victims and two young children were inside. Mikulyuk later returned with a hunting-style knife and again threatened the male victim. Mikulyuk admitted that he burned the cross and threatened the victims because of race in order to intimidate them and interfere with their housing rights.
The defendant will be sentenced on Dec. 22, 2009.
"The defendant used a burning cross, an unmistakable and despicable symbol of hatred, to intimidate the victims because of their race. These crimes have no place in America," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to prosecute this type of illegal and hateful behavior."
Mikulyuk is the third Indiana man to plead guilty to a cross burning in the past two weeks. Richard LaShure and Aaron Latham, both from Muncie, Ind., pleaded guilty on Sept. 24 to charges of interference with housing rights and conspiracy against rights for burning a cross in the yard of an African American family in July 2008.
The guilty plea results from an investigation by Special Agent Art Grist from the Merrillville Field Office of the FBI and Betsy Biffl from the Civil Rights Division of the Justice Department.
Attorney General and Education Secretary Call for National Conversation on Values and Student ViolenceRead the Press Release
Attorney General Eric Holder and Education Secretary Arne Duncan today joined with Chicago city officials to call for a national conversation on values to address youth violence in the wake of the fatal beating of a Chicago high school student. The announcement followed meetings with City officials, community leaders, students, and parents.
"Youth violence isn’t a Chicago problem, any more than it is a black problem or a white problem. It’s something that affects communities big and small, and people of all races and colors. Today is the beginning of what will be a sustained, national effort on behalf of this entire administration to address youth violence and to make our streets safe for everyone," Holder said.
"Chicago will not be defined by this incident but rather by our response to it – so we came here today to join with you and with communities all across America – to call for a national conversation on values. It’s a conversation that must happen every place in America where violence, intolerance, and discrimination exists," Duncan said.
Today’s meeting continues President Obama’s and the Administration’s strong commitment to combating violence:
- In August, the Attorney General joined mayors from across the nation at a White House Gang Violence Prevention and Crime Control Conference.
- The Recovery Act provided $4 billion for state and local law enforcement assistance, crime prevention, victims of crime, and funding to address violence against women. Through the Recovery Act, the City of Chicago received over $13 million in funding from the Office of Community Oriented Policing Services COPS) to hire 50 officers to help combat crime and violence.
- The President’s budget includes a request of $298 million in additional funding for hiring additional police officers to help meet the Administration’s commitment to hire 50,000 officers nationwide.
- The Administration requested $114 million within the Department of Justice to fund programs designed to reduce criminal recidivism and help end the revolving door from corrections to reoffending, as well as $115 million in reentry-related programs funded within the Department of Labor.
- The President’s budget requested $25 million to support successful community-based partnerships designed to end violent youth crime – partnerships like the successful model implemented by Operation Ceasefire in Chicago.
The Department of Justice will today release a study on children’s exposure to violence. Among other findings, the study shows that more than 60 percent of the children surveyed were exposed to violence in the past year, either directly or indirectly. Nearly half of children and adolescents were assaulted at least once, and more than one in 10 were injured as a result. Nearly one-quarter were the victims of robbery, vandalism or theft, and one in 16 were victimized sexually. The study can be found at www.ojjdp.ncjrs.gov after 2 p.m. ET.
"These numbers are astonishing, and they are unacceptable. We simply cannot stand for an epidemic of violence that robs our youth of their childhood and perpetuates a cycle in which today’s victims become tomorrow’s criminals," Holder said.
Duncan announced that the Department of Education is working with Chicago Public Schools (CPS) to award a $500,000 grant to help Fenger High School and the elementary and middle schools that feed into Fenger HS, restoring learning environments following the death of 16-year-old Derrion Albert. His fatal beating, outside a Roseland community center several blocks from the high school, was captured on a cell phone video. Funds for this grant are coming from a grant program entitled Project SERV – School Emergency Response to Violence. This program is designed to help restore the learning environment in school districts that have been impacted by a significant traumatic event. SERV grants also were provided to school districts in New Jersey, Massachusetts, and New York in 2009.
Duncan emphasized, however, "This is not about the money. Money alone will never solve this problem. It’s about our values. It’s about who we are as a society. And it’s about taking responsibility for our young people to teach them what they need to know to live side-by-side and deal with their differences without anger or violence."
The grant from the Department of Education will enable CPS to facilitate safe passage for students to and from school, offer training to enable teachers to better manage their classrooms and engage students in learning, and it can be used to collaborate with community organizations to expand and increase student-centered support programs. The grant also can be used to strengthen the school support network with crisis response training for teachers, and to provide additional, extensive mental health services to students and the school community.
6 October 2009
Indiana Man Sentenced on Child Pornography ChargesRead the Press Release
James M. Tanksley, 52, pleaded guilty today to two counts of receipt of child pornography and one count of possession of child pornography and was sentenced to 80 months in prison.
Tanksley, a resident of Indianapolis, was also sentenced today by U.S. District Court Judge Sarah Evans Barker to lifetime supervised release following completion of his prison term.
During today’s plea and sentencing hearing before Judge Barker, Tanksley admitted to being a member of two Internet-based bulletin board groups dedicated to the trading of child pornography. The groups, comprised of members from around the world, could only be accessed using a unique username and password. The groups had very detailed rules for behavior, including requiring all members to post only pornographic images or videos depicting minors under the age of 18. Members were also required to post their images or videos in pre-established categories based on the type of material, such as hardcore videos or individual images of girls aged 0-6.
Tanksley admitted he was an active participant on both bulletin boards and that his involvement dated from June 2006 to May 2007. Tanksley also admitted that on some occasions he commented on the quality of the child pornography he received from other members; expressed his gratification upon seeing the images or videos; and described the sexual acts the children, some younger than approximately 6 years old, engaged in. Through his plea, Tanksley also admitted to possessing child pornography.
Tanksley was identified through "Operation Joint Hammer," the U.S. component of an ongoing global enforcement operation targeting transnational rings of child pornographers. The operation has led to the arrest of more than 60 people in the United States involved in the trade of child pornography. Operation Joint Hammer was initiated through evidence developed by European law enforcement and shared with U.S. counterparts by Europol and Interpol. The European portion of this global enforcement effort, "Operation Koala," was launched after the discovery of the activities of several people in Europe who were abusing children and producing photographs of the abuse for commercial gain. Further investigation unveiled a number of online child pornography rings.
The case was prosecuted by Assistant U.S. Attorney Steven D. DeBrota of the Southern District of Indiana and Trial Attorney Alecia Riewerts Wolak of the Criminal Division’s Child Exploitation and Obscenity Section. The investigation was handled by the U.S. Postal Inspection Service, which was assisted by the U.S. Secret Service, U.S. Immigration and Customs Enforcement, the FBI and the Indiana State Police.
Hunting Guides Plead Guilty for Knowingly Attempting to Acquire Protected AlligatorRead the Press Release
WASHINGTON—Travis Dardenne and Jeffery Brown of Plaquemine, La., each pleaded guilty today in U.S. District Court in Baton Rouge, La., to a violation of the Lacey Act for knowingly attempting to acquire an American alligator in violation of the federal Endangered Species Act and Louisiana law, the Justice Department announced.
According to statements made in court, on Sept. 8, 2006, Dardenne, a licensed alligator hunter, and Brown, a licensed alligator helper, guided an out-of-state alligator sport hunter to an unapproved area, that is, an area for which Dardenne and Brown did not have appropriate state authorization to hunt. The sport hunter killed a trophy-sized alligator in the unapproved area.
Louisiana strictly regulates the hunting of alligators in the wild. Licensed alligator hunters, like Dardenne, are required to have hide, or CITES, tags for each alligator killed. Each tag specifies an area where alligator hunting is allowed. Licensed alligator helpers, like Brown, do not receive hide tags but they hunt with licensed alligator hunters and are expected to know what the licensed alligator hunter’s hide tags provide. It is illegal to kill an alligator in an area for which the licensed hunter does not have hide tags.
In addition to being listed as a threatened species on the United States’ list of Threatened and Endangered Species, the American alligator also is listed as a crocodilian species on Appendix II of the Convention on International Trade in Endangered Species (CITES). To better regulate trade in crocodilian species, the parties to CITES agreed to a program of requiring a uniquely numbered tag to be inserted into the skin of each animal immediately after it is killed. The tag is to remain with the skin as it travels in interstate or international commerce until it is manufactured into a final consumer product. The Secretary of the Interior put into effect special rules for American alligators that implement the CITES tagging program and regulate the harvest of alligators within the United States.
"American alligators are listed as threatened species and are given greater protection under the Endangered Species Act," said John C. Cruden, Acting Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. "Licensed alligator guides are expected to comply with the law and individuals who choose to ignore it will be prosecuted."
Dardenne and Brown each face a maximum sentence of one year in prison and a $100,000 fine.
The case is being prosecuted by Claire Whitney of the Justice Department’s Environmental Crimes Section. The case was investigated by the Law Enforcement Division of the Louisiana Department of Wildlife and Fisheries and the U. S. Fish and Wildlife Service’s Office of Law Enforcement.
Federal Court Bars Texas Woman from Preparing Tax ReturnsRead the Press Release
WASHINGTON - A federal district court in Texas has permanently enjoined Ludivina Salinas of Mission, Texas, from preparing federal income tax returns for others, the Justice Department announced today. According to a government complaint filed in the case, Salinas claimed improper credits on customers’ federal income tax returns. Salinas agreed to the injunction without admitting the allegations in the complaint.
The complaint alleges that Salinas claimed Earned Income Tax Credits (EITCs) on customers’ tax returns without conducting or documenting the investigation all return preparers must conduct under Treasury regulations before claiming the EITC. According to the government filing, Salinas’s firm, EZ Tax Services, also knowingly helped a customer claim a First-Time Homebuyer credit even though the customer had not purchased a home. The credit is available only to taxpayers who have purchased their first home.
The complaint also alleges that Salinas knowingly allowed customers to evade self-employment taxes by reporting self-employment income as wages or other income. Salinas allegedly asked her customers to sign form letters acknowledging that the client would not be paying self-employment taxes on their income from self-employment.
The suit alleges that Salinas prepared over 1,100 federal income tax returns in 2009 and claimed refunds on 99 percent of them.
In the past decade, the Justice Department has obtained injunctions against more than 425 tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department Web site.
Colorado Man Sued by the Justice Department for Promoting <br /> Alleged Tax Fraud SchemesRead the Press Release
WASHINGTON – The United States has asked a federal court in Denver to bar Curtis Morris, an Elizabeth, Colo., tax return preparer, and his business, Numbers & Beyond, from preparing tax returns, the Justice Department announced today. Morris prepares fraudulent federal income tax returns seeking large refunds for customers, including one refund claim for $1.7 million, according to the government’s complaint.
The complaint alleges that Morris prepares returns that report bogus income tax withholding based on false claims of receiving Internal Revenue Service (IRS) Form 1099 income. The returns allegedly request fraudulent refunds based on the fake reported withholding. The complaint states that Morris’s scheme is part of a growing trend of filing frivolous federal tax returns and forms to steal from the U.S. Treasury.
According to the government complaint, the IRS catches most frivolous refund requests before reimbursements are issued, but Morris’s scheme has caused the IRS to issue $1.9 million in erroneous refunds. Morris has allegedly sought over $55 million in fraudulent refunds for more than 140 customers in Colorado, California, Arizona, and New Mexico.
"Taxpayers tempted to consider participating in an illegal tax refund scheme should think twice before taking the risk," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. "In addition to risking criminal prosecution, they also risk incurring civil penalties of as much as 20 percent of the amount of their fraudulent refund claim. For a $1.9 million bogus claim like the one alleged in this suit, that’s a penalty of $380,000, and it applies even if, as usually happens, the IRS detects the fraudulent claim but doesn’t issue the refund."
In the past decade, the Justice Department has obtained injunctions against more than 425 tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department’s Tax Division Web site.
Attorney General Eric Holder Welcomes Thomas E. Perez <br /> as Assistant Attorney General for the Civil Rights DivisionRead the Press Release
WASHINGTON – Attorney General Eric Holder today welcomed the confirmation of Thomas E. Perez as the new Assistant Attorney General for the Justice Department’s Civil Rights Division. Perez was confirmed today by the U.S. Senate.
"I am very pleased to welcome Tom Perez back to the Justice Department," said Attorney General Eric Holder. "One of my highest priorities as Attorney General has been to ensure that the Civil Rights Division will again continue to advance the interests of justice and equal protection for all Americans. Tom is an exceptional lawyer and both the Department and the nation will benefit from his leadership and legal expertise."
The mission of the Civil Rights Division is to enforce federal statutes prohibiting discrimination on the basis of race, sex, handicap, religion and national origin. Since its establishment in 1957, the Civil Rights Division has grown dramatically both in size and responsibility. It enforces the Civil Rights Acts of 1957, 1960, 1964, and 1968; the Voting Rights Act of 1965, as amended in 1970, 1975 and 1982; the Equal Credit Opportunity Act; the Americans with Disabilities Act; the Civil Rights of Institutionalized Persons Act of 1980; and additional civil rights provisions contained in other laws and regulations. These laws prohibit discrimination in education, employment, credit, housing, public accommodations and facilities, voting, and certain federally funded and conducted programs. The division also prosecutes actions under several criminal civil rights statutes designed to preserve personal liberties.
Perez returns to the Civil Rights Division, where he worked from 1988 to 1999. He began as a career prosecutor in the Division’s Criminal Section and rose to become Deputy Assistant Attorney General. He served on detail from the department as special counsel to U.S. Senator Edward M. Kennedy from 1995 to 1998. Perez was director of the U.S. Department of Health and Human Services Office of Civil Rights from 1999 to 2001.
Since 2007, Perez was the state of Maryland’s Secretary of Labor, Licensing and Regulation. From 2002 until 2006, he was a member of the Montgomery County, Md., Council. He was a professor at the University of Maryland School of Law from 2001 to 2007.
Perez began his law career as a clerk for U.S. Judge Zita Weinshienk of the U.S. District Court of Colorado from 1987 to 1989. He received his J.D. from Harvard Law School in 1987. He received his M.P.P from the John F. Kennedy School of Government at Harvard University in 1987 and his A.B. from Brown University in 1983.
5 October 2009
Sulfuric Acid Manufacturer Agrees to Resolve Clean Air ViolationsRead the Press Release
WASHINGTON – Mosaic Fertilizer will spend approximately $30 million on air pollution controls that are expected to eliminate harmful emissions from its sulfuric acid production plant in Uncle Sam, La., the Justice Department and U.S. Environmental Protection Agency announced. The company will also pay a civil penalty of $2.4 million to resolve alleged Clean Air Act violations.
Under a settlement filed today in federal court in New Orleans, Mosaic will install state-of-the-art pollution control equipment, upgrade existing controls and make multiple modifications to its operating procedures to meet new, lower sulfur dioxide emission limits at its Uncle Sam facility. In addition, Mosaic agreed that it will permanently cease sulfuric acid production at its Mulberry sulfuric acid plant in Bartow, Fla. It also will not use the emission reduction credits associated with that shut down to enable increased emissions at other facilities. These measures are expected to eliminate more than 7,600 tons of sulfur dioxide annually from the two plants.
"We are pleased to reach this agreement which will bring Mosaic into compliance with the law and have a meaningful effect on the environment and community," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"This settlement represents another important step by EPA as we address non-compliance with the Clean Air Act by sulfuric acid manufacturers," said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. "The more than 7,000 tons per year of sulfur dioxide reductions secured by this settlement will produce significant and measurable public health benefits for downwind communities."
The government’s complaint, filed concurrently with the consent decree, alleged that Mosaic made modifications to its Uncle Sam facility that increased emissions of sulfur dioxide without first obtaining pre-construction permits and installing required pollution control equipment. The Clean Air Act requires major sources of air pollution to obtain such permits before making changes that would result in a significant emissions increase of any pollutant. The government discovered the modifications through a request for information to the company.
Mosaic produces sulfuric acid and combines it with phosphate rock to produce phosphoric acid, which in turn is combined with ammonia to produce fertilizer. Sulfuric acid production results in emissions of sulfur dioxide.
High levels of sulfur dioxide cause respiratory problems and contribute to childhood asthma. Sulfur dioxide also contributes to acid rain, haze, and impairs visibility in national parks. Emissions from sulfuric acid plants can be carried significant distances downwind, causing air quality problems in nearby states.
This settlement is the sixth nationwide compliance agreement in a Clean Air Act initiative to improve compliance among acid production manufacturers. Earlier this year, settlements were announced with Chemtrade Logistics, Chemtrade Refinery Services, and Marsulex. Under all of the acid plant settlements to date, the companies are expected to spend a combined total of about $254 million on pollution control technology, remit almost $12 million in penalties, and eliminate approximately 44,340 tons of sulfur dioxide emissions per year.
Mosaic Fertilizer, based in Plymouth, Minn., is a subsidiary of the Mosaic Company, one of the world’s largest producers of concentrated phosphate and potash.
The state of Louisiana joined the federal government in the complaint and settlement, and will receive $600,000 of the penalty.
The consent decree, lodged in the U.S. District Court for the Eastern District of Louisiana, is subject to a 30-day federal and 45-day Louisiana public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
More information on the Mosaic settlement: www.epa.gov/compliance/resources/cases/civil/caa/mosaicfertilizer.html
Seattle Area UBS Client Pleads Guilty<br /> to Filing a False Tax ReturnRead the Press Release
WASHINGTON – Roberto Cittadini of Bellevue, Wash., pleaded guilty today to filing a false tax return, the Justice Department and Internal Revenue Service (IRS) announced. Cittadini appeared today before Magistrate Judge Mary Alice Theiler in Seattle and accepted responsibility for concealing nearly $2 million in Swiss bank accounts. According to court documents and statements made in court, Cittadini, a retired sales manager for Boeing, failed to report income from bank accounts under his control at UBS AG in Switzerland on his individual income tax returns from 2001 through 2003. Additionally, Cittadini failed to file a Report of Foreign Bank and Financial Accounts (F-BAR) for each of these years.
According to court documents and statements made in court, Cittadini initially opened an account with UBS in the early 1990s in his own name. In approximately 2001, Swiss banker Hansruedi Schumaker, who was indicted in August 2009 for conspiring to defraud the United States, assisted Cittadini in transferring the assets from his UBS account to an account held in the name Mataropa Finance Limited, a nominee Hong Kong corporation. Cittadini transferred his assets to the Hong Kong entity to evade U.S. reporting and withholding requirements. Additionally, Swiss lawyer Matthias W. Rickenbach, who also was indicted in August 2009, acted as the director of the Hong Kong nominee corporation. From 2001 through 2003, Cittadini held as much as $1.86 million in assets in the Mataropa Finance Limited account at UBS in Switzerland.
Magistrate Judge Theiler scheduled sentencing for Jan. 8, 2010. Cittadini faces a maximum sentence of three years in prison and a maximum fine of $250,000. Additionally, Cittadini agreed to pay a civil F-BAR penalty based on 50 percent of the highest account balance from 2001 to 2007.
"Today’s guilty plea in Washington state follows guilty pleas in New Jersey, California and Florida," said John A DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "Individuals all over the country who are hiding income and assets in offshore accounts would be well-advised to promptly come in and come clean before the government learns about their accounts through other channels."
"This is a time of reckoning for those who thought they had found a safe haven for cheating," said United States Attorney Jenny A. Durkan. "People who avoid paying their fair share hurt all of us who follow the law and conscientiously pay our taxes."
"The IRS continues its pursuit of those hiding their income and assets in offshore accounts," said IRS Chief Criminal Investigation, Eileen Mayer. "People must meet their filing requirements and pay the taxes they owe, or they face potential criminal prosecution. We encourage people who have been hiding money offshore to come forward by Oct. 15 to take advantage of the special provisions in our voluntary disclosure effort."
In February 2009, UBS entered into a deferred prosecution agreement in which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain U.S. customers of UBS’s cross-border business.
In June 2009, UBS client Steven Michael Rubinstein, a Boca Raton, Fla., accountant, pleaded guilty to filing a false tax return. In April 2009, another UBS client, Robert Moran, a Ft. Lauderdale, Fla., yacht broker, pleaded guilty to filing a false tax return. In July 2009, UBS client Jeffrey Chernick, of Stanfordville, N.Y., pleaded guilty to filing a false tax return. In August 2009, UBS client John McCarthy, a resident of Malibu, Calif., agreed to plead guilty to failing to report his ownership of and interest in a foreign financial account. In September 2009, UBS client Juergenn Homann of Saddle River, N.J. pleaded guilty to failure to file a F-BAR.
Acting Assistant Attorney General DiCicco and U.S. Attorney Durkan commended the IRS agents who investigated the case, as well as Trial Attorney Michael J. Watling of the Tax Division who is prosecuting the case.
United States citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, American citizens much file an F-BAR with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
2 October 2009
Three Gang Members Plead Guilty to Murder and Drug Conspiracy Charges; Two Others Sentenced on Drug ChargesRead the Press Release
Three members of the violent gang known as the Almighty Latin King and Queen Nation (ALKQN)pleaded guilty today to charges related to their participation in a drive-by shooting and a drug conspiracy, and two other members were sentenced for their roles in a drug conspiracy.
Robert Allen Ramirez, aka "Nesyo," 27, of Big Spring, Texas; Eduardo Daniel Mares, aka "Pitt," 21, of Seminole, Texas; and Gabriel Lee Gonzales, 21, of Fort Stockton, Texas, each pleaded guilty in the U.S. District Court for the Northern District of Texas, Lubbock Division, to two counts of using a firearm to commit murder in relation to a drug trafficking crime and one count of a conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana.
Each defendant faces a maximum statutory sentence of life in prison. U.S. District Judge Sam R. Cummings ordered a pre-sentence investigation with a sentencing date to be scheduled after that investigation is completed.
Luis Nava, aka "Flaco," 25, of Midland, Texas, was sentenced today to 22 years in prison by Judge Cummings. Nava pleaded guilty on Sept. 17, 2009, to a superseding indictment charging him with conspiring to distribute and possess with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana. Nava has been in custody since his arrest in December 2008.
Michael Conde, aka "Psycho," 24, of Lamessa, Texas, was also sentenced today to 15 years in prison by Judge Cummings. Conde pleaded guilty to a superseding indictment June 29, 2009, charging him with conspiring to distribute and possess with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana. Conde has been in custody since his arrest in May 2009.
According to court documents, Ramirez, Mares, Gonzales, Nava and Conde admitted that they were members of a conspiracy that included Jose Robledo Nava, aka "Chino;" Reynaldo Nava, aka "Rat;" Marie Chavez, aka "Shorty;" Carol Ann Rivas Nava; Cecily Dominique Juarez; Jesus Martinez, aka "Solid;" David Hellums, aka "Cutthroat;" James Johnathan Cole, aka "Blitz;" John Guzman; Hiluterio Chavez, aka "Zeus;" Guerrero Olivas, aka "Screech;" Eliseo Perez, aka "Wicked;" and others, and that from 2001 until December 2008, they directly or indirectly agreed to distribute, and possess with intent to distribute, cocaine and marijuana.
Ramirez, Mares, Gonzales, Nava and Conde admitted that the overall scope of the conspiracy involved at least five kilograms of cocaine and 100 kilograms of marijuana. Ramirez, Mares, Gonzales, Nava and Conde also admitted that they and their co-defendants intentionally and knowingly possessed with the intent to distribute cocaine and marijuana, and distributed cocaine and marijuana to others. According to the indictment, they acquired the cocaine and marijuana from Mexico and brought it to the South Texas region, where it was packaged, stored and transported to Big Spring, Lubbock and Midland for further distribution.
Ramirez, Mares and Gonzales also admitted to their involvement in a drive-by shooting that occurred in Big Spring on May 4, 2008. Six people were shot, resulting in the deaths of two people, a man and woman who was 26 weeks pregnant.
The case is being investigated by the National Gang Targeting, Enforcement and Coordination Center; the Organized Crime Drug Enforcement Task Force; the U.S. Drug Enforcement Administration; the FBI; U.S. Immigration and Customs Enforcement; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the El Paso Intelligence Center; U.S. Customs and Border Protection; the U.S. Marshals Service; the Texas Department of Public Safety; the Police Departments of Lubbock, Midland, Houston, San Antonio and Big Spring, Texas; the Lubbock County, Texas, Sheriff’s Office; and the Howard County, Texas, District Attorney’s office.
Trial Attorneys Cody L. Skipper and Joseph A. Cooley of the Department of Justice’s Criminal Division’s Gang Unit and Assistant U.S. Attorney Jeffrey R. Haag of the Lubbock, Texas, U.S. Attorney’s Office are prosecuting the case.
Southern Union Company Is Penalized $18 Million for Illegally Storing Mercury at a Rhode Island SiteRead the Press Release
WASHINGTON—A federal judge today assessed the Southern Union Company $18 million for illegally storing mercury at a company-owned site in Pawtucket. The sentence imposed in federal court includes a $6 million criminal fine and $12 million in payments to community initiatives including the Rhode Island Foundation, the Rhode Island Department of Environmental Management (DEM) Emergency Response Fund and Hasbro’s Children’s Hospital.
John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, U.S. Attorney Peter F. Neronha and Michael E. Hubbard, Special Agent in Charge of the Boston Area Office of the Environmental Protection Agency, Criminal Investigation Division (EPA-CID), jointly announced the sentence, which U.S. District Court Judge William E. Smith imposed in U.S. District Court in Providence, R.I.
"Companies that handle hazardous chemicals like mercury need to follow the law designed to protect the public and the environment. This $18 million penalty is an indication that environmental crimes will not be taken lightly and violators will be held accountable," said Acting Assistant Attorney General Cruden.
"This is a significant penalty for what was a significant hazard to Pawtucket residents," U.S. Attorney Neronha said. "We are particularly pleased with the creative way in which Judge Smith fashioned the penalty, directing $12 million to benefit the people of Pawtucket."
"Today’s sentence should serve as proof that EPA’s Criminal Investigation Division will vigorously pursue those whose criminal conduct puts the American public and environment at risk," said Special Agent in Charge Hubbard.
In October 2008, a jury in Providence found Southern Union guilty of illegally storing mercury for several years at a site off Tidewater Street, near the Seekonk River. The Houston-based company owned New England Gas for several years.
During the trial in 2008, the government presented evidence that, in 2001, Southern Union began removing from customers’ homes gas regulators that contained mercury. Southern Union employees brought the regulators to a facility on Tidewater Street in Pawtucket, where the regulators, and later loose mercury, were stored in a shed. Southern Union initially hired an environmental services company to prepare the mercury for shipment to a processing facility in Pennsylvania.
The recycling and reclamation ceased at the end of 2001. However, gas company technicians continued to remove regulators from customers’ homes, and the company continued to store at Tidewater Street both loose liquid mercury – in containers such as glass jars and a plastic jug – and regulators that still contained mercury. A local company official drafted proposals to renew the removal project, but the company never finalized those proposals or put them out to bid.
In September 2004 three youths broke into the mercury storage building and took several containers of liquid mercury. They broke some of them, spilling mercury around the facility’s grounds, and took some of the mercury to a nearby apartment complex, where it was also spilled.
For about three weeks, spilled mercury remained undetected at the Tidewater facility and at the apartment complex. After the contamination was discovered, the apartment complex was evacuated, and its 150 tenants were displaced for two months while the mercury was cleaned up.
In addition to fining Southern Union $6 million, Judge Smith put the company on two years probation. As a condition of probation, he ordered the company to pay $11 million to the Rhode Island Foundation for the establishment of environmental remediation and education projects and children’s health initiatives. He also ordered that the company pay $1 million in $200,000 increments to the Rhode Island chapter of the American Red Cross, Hasbro’s Children’s Hospital and the DEM Environmental Response Fund. Judge Smith stayed the fine and other assessments while the company appeals the conviction.
The investigation that led to the prosecution was a joint effort of the Environmental Protection Agency, Criminal Investigation Division; the DEM, Office of Criminal Investigation; the DEM Office of Emergency Response and the DEM Office of Compliance and Inspection.
The case is being prosecuted by the Justice Department’s Environment and Natural Resources Division and the U.S. Attorney’s office for the District of Rhode Island.
Owner of Alabama Tire Store Sentenced to Prison <br /> for Tax EvasionRead the Press Release
WASHINGTON - Timothy Smith, a resident of Cullman, Ala., was sentenced today to 30 months in prison for tax evasion by Judge R. David Proctor, the Justice Department and Internal Revenue Service (IRS) announced. As part of the plea agreement, Smith agreed to a binding sentence of thirty months in prison and agreed to pay $170,380 in restitution to the IRS, including a lump sum payment of $50,000, which was paid prior to sentencing.
In April 2009, Smith, who is the owner of College Tire in Hanceville, Ala., pleaded guilty to one count of tax evasion. According to the indictment, plea agreement and other court records, Smith diverted customer receipts from his tire business into two personal bank accounts. Smith also used, or directed others to use, cash and cashiers’ checks to make substantial principal payments on the mortgage for his vacation home in North Carolina and his vacation home in Pensacola, Fla. In total, Smith diverted more than $430,000 from his tire business to his personal bank accounts and his mortgages. Smith also purchased real estate in North Carolina near his vacation home with $68,100 in cash.
According to court records, Smith concealed the funds that were diverted to his personal accounts and his mortgages from his bookkeeper, who prepared both Smith’s business tax returns as well as Smith’s joint personal tax returns. Smith also took substantial fraudulent tax deductions for a purported farm at his personal residence. As a result, Smith filed false personal and business tax returns for tax years 2000 through 2003.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division thanked the special agents from IRS-Criminal Investigation who investigated the case, as well as Tax Division trial attorneys Jed M. Silversmith and Matthew J. Mueller, and Assistant U.S. Attorney Michael Whisonant, who prosecuted the case.
Justice Department Seeks to Shut Down Georgia Tax PreparerRead the Press Release
WASHINGTON - The United States has sued a tax return preparer in Marietta, Ga., seeking to bar him from preparing federal tax returns for others, the Justice Department announced today. According to the Government complaint, Robert Knupp of Marietta prepares federal income tax returns for customers, claiming large fraudulent tax refunds. Court papers filed in the case allege that Knupp prepared a tax return in which he claimed a fraudulent refund for one customer of more than $2 million.
The suit alleges that Knupp employs a tax fraud scheme that relies on false IRS Forms 1099-OID claims to report fictitious tax withholding on his customers’ returns and then claims refunds of huge amounts. The complaint further alleges that the scheme is part of a growing trend among tax defiers to file frivolous tax returns and forms in an attempt to escape their federal tax obligations and steal from the U.S. Treasury.
While the Internal Revue Service (IRS) detects and stops most fraudulent refund claims, Knupp’s fraudulent tax return preparation has resulted in the IRS’s issuance of over $65,000 in erroneous refund payments to his customers. The government alleges that the total amount of fraudulent refunds requested on the returns Knupp prepared or filed in 2009 was approximately $11 million.
Customers who participate in this tax fraud scheme may be subject to sizeable penalties for filing returns with excessive refund claims including a penalty equal to 20% of the amount improperly claimed. The penalty applies even if, as usually happens, the IRS detects the false claim and blocks a tax refund. Thus a taxpayer improperly claiming a $2 million refund could be liable for a $400,000 penalty as well as other penalties and possible criminal prosecution.
"Taxpayers should report any tax preparer who suggests reporting fictitious tax withholding on a tax return by following instructions available at www.irs.gov," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. "These schemes carry a high price steep civil penalties and, where appropriate criminal prosecution for preparers who promote them and for their customers who sign false tax returns."
In the last decade, the Justice Department has obtained injunctions against more than 425 tax return preparers and tax fraud promoters. Information about these cases is available on the Justice Department Web site.
1 October 2009
Justice Department Observes October as Domestic Violence Awareness MonthRead the Press Release
In honor of Domestic Violence Awareness Month, the Department of Justice today reaffirmed its commitment to ending violence against women. The month of October is observed as Domestic Violence Awareness Month around the country by advocates, victim service providers, law enforcement, the judiciary, prosecutors and survivors to raise public awareness about domestic violence. President Obama made the official announcement in a proclamation distributed today and available at: http://www.whitehouse.gov/the_press_office/Presidential-Proclamation-National-Domestic-Violence-Awareness-Month/
On September 14, 2009, the Department of Justice marked the fifteenth anniversary of the Violence Against Women Act (VAWA) and the creation of its Office on Violence Against Women (OVW). The department has kicked-off a year-long effort to raise public awareness, build stronger coalitions among federal, state, local and tribal communities, and redouble efforts to end domestic and dating violence, sexual assault and stalking for men, women and children across the country.
"We know domestic violence is an epidemic that affects communities across this country regardless of age, race or socio-economic background," said Attorney General Eric Holder. "We will continue to provide the resources necessary to help our law enforcement partners protect our neighborhoods against violence, and we stand ready to work with victim service providers who do so much to assist the survivors, families and children affected by this tragic crime."
"Domestic Violence Awareness Month is an important moment to recognize that we can all be agents of social change and end violence against women," said OVW Acting Director Catherine Pierce. "In the fifteen years since the Violence Against Women Act was signed into law, countless lives have been saved, the voices of survivors have been heard and families have been protected. We are proud of how far we have come but keenly aware that there is much to do. The Office on Violence Against Women is proud to join our partners and grantees throughout the country to observe October as Domestic Violence Awareness Month."
OVW, a component of the Department of Justice, provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of VAWA and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking.
For more information, please visit www.ovw.usdoj.gov
Justice Department Announces Success in Battle Against Firearms Trafficking and Recovery Act Funds to Build on Project GunrunnerRead the Press Release
HOUSTON – Deputy Attorney General David W. Ogden and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Acting Director Kenneth E. Melson today announced the results of ATF’s Gun Runner Impact Team (GRIT) initiative, a 120-day deployment of ATF resources to the Houston Field Division to disrupt illegal firearms trafficking by Mexican drug cartels. The Justice Department officials also outlined the $10 million in American Recovery and Reinvestment Act funds that have been allocated to support the initiative going forward.
GRIT was developed to aggressively target and disrupt groups and organizations responsible for trafficking firearms to Mexico. The GRIT initiative was a component of Project Gunner, ATF’s comprehensive firearms trafficking strategy along the Southwest Border.
"The Department of Justice has pledged its unconditional commitment to better protect the Southwest Border with initiatives such as Project Gunrunner, by targeting the source of the violence -- the illegal firearms traffickers," said Ogden. "The Department of Justice is using the vital funding from the Recovery Act to continue to build an infrastructure to combat violent crime and firearms trafficking along our southwest border as part of Project Gunrunner."
"This concentration of additional personnel accomplished more in four months than we were able to achieve in almost three years in some areas along the border," said Melson. "The temporary deployment of veteran ATF special agents and industry operations investigators (IOIs) to the Houston Field Division has made enormous inroads into stemming the firearms-related violent crime in the United States and along the Mexican border. We have begun to flush out firearms trafficking schemes and routes, producing tangible results in the form of open investigations, arrests, seizures and criminal case referrals."
The GRIT initiative brought 100 experienced ATF personnel from around the country to southern Texas. The special agents investigated more than 1,000 criminal leads and seized more than 440 illegal firearms, 141,440 rounds of ammunition, $165,000 in U.S. currency, 1,500 pounds of marijuana, and additional drugs and explosive devices. The IOIs conducted nearly 1,100 federal firearms licensee compliance inspections involving 70,000 firearms and resulting in 440 violations.
ATF’s GRIT special agents opened 276 federal firearms trafficking-related criminal cases in just four months.
ATF received $10 million through the Recovery Act to continue to build an infrastructure to further the accomplishments of Project Gunrunner. As part of the $10 million, ATF is hiring 25 new special agents, six industry operations investigators, three intelligence research specialists and three investigative analysts. The funding will establish three permanent field offices, dedicated to firearms trafficking investigations, in McAllen, Texas; El Centro, Calif.; and Las Cruces, N.M.; and a satellite office in Roswell, N.M.
For more information on Project Gunrunner or other ATF programs, please visit www.atf.gov.
Former New Jersey Firefighter Sentenced to Prison<br /> for Tax EvasionRead the Press Release
WASHINGTON - Matthew Fox, a former Atlantic City, N.J., firefighter, was sentenced today to 18 months in prison by U.S. District Court Judge Jerome B. Simandle in Newark, N.J., the Justice Department and Internal Revenue Service (IRS) announced. Fox was also sentenced to three years of supervised release and was ordered to pay the IRS tax due in the amount of $110,465 plus interest and penalties as a condition of his supervised release.
Following a jury trial in July 2007, Fox was convicted of five counts of tax evasion for failing to report more than $400,000 in income from 1998 through 2002. According to court documents and evidence presented at trial, Fox fraudulently avoided reporting cash income he earned as a bouncer and manager at an exotic dance club in Atlantic City. Initially, Fox received cash tips and hourly pay for the time he worked at the dance club as a bouncer. Then, in approximately August 1999, when he became a manager, Fox received wages from the club, and also continued to receive cash tips from the exotic dancers. Fox failed to report all or a substantial amount of income received from the exotic dance club for years 1998 through 2002.
Acting Assistant Attorney General John A. DiCicco commended Special Agents with IRS Criminal Investigation for their work on the case, as well as Tax Division trial attorney Michael P. Ben’Ary who prosecuted the case.
30 September 2009
Polembros Shipping LTD. Pleads Guilty to Crimes Related to Pollution from Cargo Ship Traveling to New OrleansRead the Press Release
WASHINGTON—Polembros Shipping LTD., a ship management company headquartered in Greece, pleaded guilty today in federal court in New Orleans for violating anti-pollution laws, ship safety laws, and making false statements during a U.S. Coast Guard investigation of the M/V Theotokos, the Justice Department announced.
According to the plea agreement, Polembros will pay a $2.7 million criminal fine and a separate $100,000 community service payment to the Smithsonian Environmental Research Center, a subunit of Smithsonian Institute. The money will be used to research and mitigate the effects of marine invasive species suspected to be transported in ballast waters of ocean-going vessels. Invasive species can threaten native species and damage the ecosystems of the United States.
As part of the plea agreement, Polembros will also serve three years probation. As a condition of the probation, all ships owned or managed by Polembros (currently 20 vessels) will be barred from entering U.S. ports and territorial waters for three years.
“Today’s guilty plea carries with it a requirement, pending court review, that will prevent the company from participating in economic activity that takes place in territorial ports and waterways of the United States,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The industry should take heed that the Justice Department and our investigative counterparts will continue to prosecute and seek penalties for those who violate our nation’s environmental laws.”
“This case is historic in that it is the first prosecution under the Nonindigenous Aquatic Nuisance Prevention and Control Act. As a component of the Coast Guard’s maritime stewardship mission we are committed to the prevention and abatement of environmental crimes including those which may fall under the Nonindigenous Aquatic Nuisance Prevention and Control Act,” said Rear Admiral Mary E. Landry, Commander of the Eighth Coast Guard District.
Polembros pleaded guilty to violating two counts of the Act to Prevent Pollution from Ships, one count in connection with failing to maintain an accurate oil record book for the cargo ship M/V Theotokos and the other concerning the carrying of fuel oil in a tank forward of the collision barrier; violating the Nonindigenous Aquatic Nuisance Prevention and Control Act, by failing to maintain accurate ballast water records; violating the Ports of Waterways Safety Act, by failing to report hazardous condition of the crack on the rudder stem of the ship; and making false statements by concealing the fact that fuel oil was leaking into the forepeak ballast tank.
According to court documents, the ship’s master reported the rudder stem crack by phoning Polembros’ technical department (part of the land-based management) shortly after the crack was seen following a cargo unloading operation in China. Polembros and its employees knew about that crack prior to the vessel arriving in New Orleans, but the defendant and its employees did not notify or disclose the aft crack to the U.S. Coast Guard until the Theotokos crew was confronted by Coast Guard inspectors on Oct. 1, 2008. The company and its employees knew that before coming to the United States that it was under a legal obligation to notify the Coast Guard of any hazardous condition. A crack on the rudder stem, especially one that allows for the ingress and egress of water, is of particular concern. Prior to the detention of the vessel by the Coast Guard, no repairs were undertaken for the rudder stem crack at sea, or otherwise, prior to arriving in New Orleans.
With regard to the oil record book violation, bilge waste accumulates in deep spaces and is also held in bilge tanks. Under the International Convention for the Prevention of Pollution from Ships, bilge wastes may be discharged overboard into the ocean only if they contain less than 15 parts per million of oil. The principal technology utilized to lower the petroleum content of oil-contaminated water is a centrifugal separation machine, also known as an oil water separator. At some point, the ship’s oil water separator ceased functioning properly. During the voyage from Korea to Panama, the chief engineer contacted Polembros’ land-based management regarding the problems with the oil water separator.
During the ship’s operation, bilge waste accumulated and needed to be disposed of to keep the system from overflowing. Because the oil water separator was not functioning properly, the chief engineer directed the engineering crew to bypass the oil water separator and discharge bilge waste directly overboard. The primary overboard outlet for the oily mixtures was through the overboard sewage discharge valve. None of these discharges were recorded, as required, in the vessel’s oil record book, even though the chief engineer was responsible for maintaining its accuracy with regard to machinery space operations.
The investigation into the M/V Theotokos led to the first criminal prosecutions under the Nonindigenous Aquatic Nuisance Prevention and Control Act, both the first individual and organization charged under the statute. The false statement charge related to the crew’s attempt to conceal the fact that fuel oil was leaking into the forepeak ballast tank.
Polembros is set to be sentenced on Dec. 9, 2009.
Additionally, on July 15, 2009, Panagiotis Lekkas, the master and highest ranking officer aboard the ship, pleaded guilty to obstruction of justice and violations of environmental and ship safety laws. Charles P. Posas, the vessel’s chief officer, pleaded guilty to one count of false statement and one count of violating the Nonindigenous Aquatic Nuisance Prevention and Control Act. Lekkas and Posas are scheduled to be sentenced on Oct. 14, 2009, and Oct. 1, 2009, respectively. In another related case, the chief engineer of the Theotokos, Georgios Stamou, pleaded guilty to one count of false statements and one count of violating the Act to Prevent Pollution from Ships. Stamou is scheduled to be sentenced on Nov. 5, 2009.
The case was investigated by the U.S. Coast Guard Investigative Service with assistance from inspectors from Sector New Orleans as well as legal assistance from U.S. Coast Guard in New Orleans and at Headquarters in Washington, D.C. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section along with Dorothy Taylor of the U.S. Attorney’s Office in New Orleans.
Owner of Tennesse Salvage and Demolition Company Pleads Guilty to Environmental CrimesRead the Press Release
WASHINGTON—The owner of a Chattanooga, Tenn., salvage and demolition company, Watkins Street Project LLC, pleaded guilty today in federal court in Chattanooga, Tenn., for conspiring to violate the Clean Air Act and to defraud the United States.
Gary Fillers of Chattanooga, Tenn., pleaded guilty before U.S. District Judge Collier for the Eastern District of Tennessee to one criminal felony count for conspiring to violate the Clean Air Act’s “work practice standards” related to the proper stripping, bagging, removal and disposal of asbestos.
According to the charges, Fillers and other indicted and unindicted co-conspirators, engaged in a year-long scheme in which substantial amounts of regulated asbestos containing materials was removed from the former Standard Coosa Thatcher Plant without following the Clean Air Act and the regulations governing Environmental Protection Agency (EPA) notification requirements; removing all asbestos prior to demolition; and stripping, bagging, removal and disposal of such asbestos.
“Work practice standards under the Clean Air Act are designed to protect workers from the harmful effects of asbestos,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Conspiring to violate these work practice standards will not be tolerated and those who do can expect to be prosecuted.”
“Exposure to asbestos can cause cancer and other serious respiratory diseases,” said Maureen O'Mara, Special Agent-in-Charge of EPA’s criminal enforcement program in Atlanta. “Those who put the public health at risk will be vigorously prosecuted.”
Fillers faces up to five years in prison and a fine of up to $250,000 or twice the gross gain or loss to the victims. Today’s plea is related to the indictment of Watkins Street Project LLC, Mathis Companies Inc., Donald Fillers, James Mathis and David Wood. All of these defendants pleaded not guilty to related conspiracy, Clean Air Act, false statements and obstruction of justice charges on Sept. 14, 2009. Trial is currently set to begin on Nov.18, 2009, before Judge Collier.
Asbestos has been determined to cause lung cancer, asbestosis and mesothelioma, an invariably fatal disease. EPA has determined that there is no safe level of exposure to asbestos.
This case was investigated by EPA special agents and investigators with Chattanooga-Hamilton County Air Pollution Control Bureau. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Morris and Todd W. Gleason, of the Justice Department’s Environmental Crimes Section.
New OCDETF Strike Force Site Unveiled, Successes of Phoenix Operation HighlightedRead the Press Release
PHOENIX – Deputy Attorney General David W. Ogden, along with U.S. Attorney Dennis K. Burke, Acting Director of the Bureau of Alcohol, Tobacco and Firearms Kenneth Melson, Drug Enforcement Administration Deputy Chief of Operations Dave Gaddis, and other federal and local officials today officially unveiled the new Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force site in Phoenix.
The Phoenix Strike Force is housed in the offices of the DEA Phoenix Division. The OCDETF Strike Force functions as a cohesive unit by bringing together representatives of the partner agencies to more effectively focus on specific investigative targets. Federal, state, and local agencies represented include the DEA; ATF; the Federal Bureau of Investigation (FBI); the U.S. Marshals Service (USMS); the Criminal Division of the Internal Revenue Service (IRS); U.S. Immigration and Customs Enforcement (ICE); the Arizona Department of Public Safety; the Maricopa County Sheriff’s Office; and the Phoenix, Mesa, and South Tucson Police Departments.
“OCDETF Strike Forces, like the one here in Phoenix, reflect the kind of collaborative law enforcement approach that allows us to most effectively combat the vicious drug trafficking organizations such as the Sinaloa Cartel that contribute to violence and other crime in neighborhoods here and across this country,” said Ogden. “Now in its 27th year, the OCDETF program has been a model of interagency coordination, innovation, and teamwork. This strategy recognizes that the most successful way to fight these intricate criminal networks is by combining the strengths, resources, and expertise of federal, state and local agencies.”
“By concentrating experts from so many agencies in one place, the strike force model allows for real-time sharing of intelligence and deployment of strategy,” stated U.S. Attorney for the District of Arizona, Dennis K. Burke. “That advantage allows strike force agents to react more decisively to interdict the actions of large, sophisticated and violent drug trafficking organizations. Coordination leads to better intelligence, quicker reaction and more convictions.”
The Phoenix Field Division formed an OCDETF Strike Force in August 2008 that focuses completely on investigations of command and control elements of the Sinaloa Cartel and Arizona-based distribution cells associated with the Cartel.
Since its inception, the Phoenix Strike Force has indicted a Sinaloa Cartel associated CPOT (Consolidated Priority Organization Target) and RPOT (Regional Priority Organization Target), conducted in excess of 80 wire taps of Sinaloa Cartel related Drug Trafficking Organizations, and has been directly or indirectly responsible for the seizure of over $150 million dollars in U.S. currency, associated assets, and financial instruments. In addition, information provided by the Phoenix Strike Force has led to the seizure of over $29 million in cash and assets in Mexico and 93 arrests in the United States.
“DEA is successfully striking back at the Mexican Cartels that use Phoenix as a major transshipment point for their drug trafficking operations,” said DEA Acting Administrator Michele M. Leonhart. “In coordination with the Calderon Administration, we are targeting and arresting major drug traffickers impacting Arizona, disrupting their operations both in Mexico and the United States. This multi-agency Strike Force, which has already helped take down significant Sinaloa Cartel leadership, is a proven law enforcement tool for tackling the challenges we face along the Southwest Border.”
“Within the OCDETF arena, ATF maintains its focus on major drug traffickers who use firearms to further their trade and violate firearms-trafficking laws, as well as laws relating to explosives,” said ATF Acting Director Kenneth Melson. “Firearms often serve as a form of payment for drugs and, together with explosives and arson, are used as tools by drug organizations for purposes of intimidation, enforcement, and retaliation against their own members, rival organizations, or the community in general. ATF’s jurisdiction and expertise make it a well-suited partner in the OCDETF program.”
Based on the success of the Phoenix Strike Force Group, an additional Strike Force Group was formed in the Phoenix Field Division’s Tucson District Office in June 2009. The Tucson Strike Force Group is comprised of law enforcement personnel from DEA, ATF, ICE, FBI and the South Tucson Police Department. Both Strike Force Groups will continue to pursue OCDETF case designations for federal prosecution and will work in a complementary role with the Arizona HIDTA (High-Intensity Drug Trafficking Area).
New Jersey Hospital to Pay $8.3 Million for Alleged Kickbacks and Causing Submission of False Claims to MedicareRead the Press Release
WASHINGTON - The University of Medicine and Dentistry of New Jersey (UMDNJ) has agreed to pay the government $8.3 million to settle allegations that it illegally paid kickbacks to cardiologists and caused the submission of false claims to Medicare, the Justice Department announced today.
UMDNJ’s University Hospital, which is located in Newark, N.J., is a state-licensed Level 1 Trauma Center. To maintain funding and accreditation from the state, University Hospital was dependent on the annual performance of a certain number of cardiac procedures, including cardiac catheterizations and cardiothoracic surgery.
The government alleged that beginning in 1995, University Hospital was experiencing a decline in these procedures, and to remedy the problem, embarked on a program to bring in more cardio surgery patients through part-time employment contracts with a number of community cardiologists. The government alleges that those employment contracts served as vehicles to pay illegal kickbacks to the cardiologists for their referrals.
“Today’s settlement reflects the Justice Department’s ongoing commitment to protect the integrity of the doctor-patient relationship,” said Tony West, Assistant Attorney General for the Civil Division. “Patients must have confidence that the medical advice and treatments they are getting from their doctors are for the right reasons.”
In 2008, the government reached settlements with six of the cardiologists who had allegedly received kickbacks through their employment contracts with UMDNJ. Two other cardiologists pleaded guilty to criminal embezzlement charges in connection with the employment contract scheme. The government has also filed a civil suit against two other cardiologists who had allegedly illegal employment contracts with UMDNJ.
“The Department of Justice continues to pursue those who make referrals based on financial, rather than patient health, considerations,” said Marc Larkins, 1st Assistant U.S. Attorney for the District of New Jersey.
The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the District of New Jersey, Affirmative Civil Enforcement Unit; the Commercial Litigation Branch of the Justice Department’s Civil Division; the FBI; and the U.S. Department of Health and Human Services, Office of Inspector General.
Man Indicted for Civil Rights Violations in Connection with Cross-Burning in Athens, LouisianaRead the Press Release
WASHINGTON – Daniel Earl Danforth, 30, of Minden, La., has been indicted by a federal grand jury for hate crime violations and obstruction of justice charges stemming from a cross-burning in Athens, La., last year near the home of an interracial couple. Danforth was arrested today following the return of the indictment on Sept. 25, 2009, announced Acting Assistant Attorney General for Civil Rights Division Loretta King and U.S. Attorney Donald W. Washington for the Western District of Louisiana.
Danforth was charged with one count of interfering with the housing rights of another person; one count of conspiring to interfere with another person’s civil rights; one count of using fire during the commission of a felony; and one count of obstructing justice by destroying evidence. If convicted, he faces a maximum punishment of 10 years for each of the civil rights counts, 10 additional years for the use of fire and 20 years for the obstruction of justice count.
According to the indictment, between Oct. 23 and Oct. 26, 2008, Danforth agreed with at least one other person to build, erect and burn a cross near the home of an interracial couple and relatives who were believed to approve of the interracial relationship. After attempting to recruit others to join the conspiracy, Danforth and his co-conspirator used small pine trees to form a cross, which they then transported to an area adjacent to the victims’ home and where they set the cross on fire in order to intimidate the couple. The indictment also alleges that several days later, after the defendant learned that the FBI was investigating this crime as a potential civil rights violation, he returned to the area and removed the cross to prevent the FBI from discovering it.
This case was investigated by the FBI. The case will be prosecuted by Assistant U.S. Attorney Mary J. Mudrick for the Western District of Louisiana and Trial Attorney Erin Aslan from the Justice Department’s Civil Rights Division.
The charges set forth in an indictment are merely accusations and the defendant is presumed innocent until proven guilty.
Justice Department Settles Lawsuit Against Indianapolis Law Firm to Enforce the Employment Rights of Indiana National GuardsmanRead the Press Release
WASHINGTON – The United States has entered into a consent decree with the Indianapolis law firm of Mike Norris & Associates that, if approved in federal court in Indianapolis, will resolve the Justice Department’s March 16, 2009, complaint on behalf of an Indiana National Guardsman alleging that the law firm violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), the Justice Department announced today. Under the terms of the consent decree, the law firm must provide the National Guardsman, Mathew B. Jeffries, with $40,000 to compensate him for his lost wages and accrued interest.
Subject to certain limitations, USERRA requires that servicemembers who leave their jobs to serve in the U.S. military be timely reemployed by their civilian employers in the same position, or in a comparable position to the position that they would have held had they not left to serve in the military. In its complaint, the department alleged that in February 2003, Jeffries, a staff attorney with Mike Norris & Associates, was called to active duty and deployed to serve in Operation Enduring Freedom in Iraq. Upon his completion of active duty in April 2004, Jeffries contacted the law firm seeking reemployment. According to the complaint, the law firm refused to reemploy Jeffries, so he filed a complaint with the Labor Department’s Veterans’ Employment and Training Service (VETS). VETS investigated the matter, determined that Jeffries’ claim had merit and, upon failure of conciliation efforts, referred the matter to the Justice Department.
“Individuals who sacrifice to serve our Country in the military deserve to know, at the very least, that they can return to their civilian jobs after military service,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “This consent decree demonstrates again our commitment to vigorously enforcing federal laws that protect the employment rights of men and women serving in the military. We are pleased that Mike Norris & Associates has chosen to resolve this lawsuit and abide by the requirements of USERRA.”
The Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. The Civil Rights Division has filed 19 USERRA lawsuits in 2009 on behalf of servicemembers. Additional information about USERRA can be found on the Justice Department’s Web sites, http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, as well as on the Labor Department’s Web site at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Reaches Settlement with First United Security Bank of Thomasville, Alabama, Regarding Alleged Discrimination in LendingRead the Press Release
WASHINGTON – First United Security Bank of Thomasville, Ala., will invest more than $600,000, open a new branch in an African-American neighborhood in west central Alabama and take other steps as part of a settlement to resolve allegations that it engaged in a pattern of discrimination on the basis of race, the Justice Department announced.
The settlement was filed today in conjunction with the department’s complaint in federal court in Mobile, Ala. The complaint alleges that the bank charged African-American borrowers higher rates than similarly-situated white borrowers on home mortgage-related loans. The complaint also alleges that the bank has unlawfully failed to provide its lending products and services on an equal basis to majority African-American areas in west central Alabama, a practice known as redlining. The lawsuit is brought under the federal Fair Housing Act and the Equal Credit Opportunity Act.
Under the agreement, which remains subject to court approval, First United Security Bank is prohibited from discriminating on the basis of race or color in any aspect of a residential real estate-related or credit transaction.
“Every person deserves the comfort of knowing they will not be subjected to discrimination because of their race when they borrow money to buy a home or another major purchase. A lending institution must treat all potential borrowers equally, regardless of their race or the racial composition of their neighborhood, when deciding to offer its loan services and in determining the rates charged on its loans,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “We commend First United Security Bank on working cooperatively with the department on today’s settlement, which will ensure fair treatment of African-American borrowers and neighborhoods.”
“For families and small businesses in the Southern District of Alabama, having access to credit on terms available to the general public is vital to confront everyday challenges, let alone those made more acute in this economic environment. This office will respond robustly to protect a person’s access to fair credit,” said Acting U.S. Attorney Eugene Seidel for the Southern District of Alabama.
Under the settlement, First United Security Bank will open one new branch and expand existing operations in majority African-American areas of west central Alabama. The bank will also invest $500,000 in a special financing program, and spend more than $110,000 for outreach to potential customers, promotion of its products and services and consumer financial education in these areas.
The lawsuit originated from a referral from the Federal Deposit Insurance Corporation (FDIC), the bank's regulator, regarding the pricing discrimination issue. First United Security Bank cooperated fully with the department’s investigation into its lending practices and agreed to settle this matter without contested litigation. A copy of the complaint against First United Security Bank and the Agreed Order for Resolution between the United States and the Bank, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department Web site at http://www.usdoj.gov/fairhousing.
Justice Department Files Lawsuit Challenging Conditions at Two Erie County, New York, Correctional FacilitiesRead the Press Release
WASHINGTON – The United States has filed a lawsuit alleging that conditions at the Erie County Holding Center, a pre-trial detention center in Buffalo, N.Y., and the Erie County Correctional Facility, a correctional facility in Alden, N.Y, routinely and systematically deprive inmates of constitutional rights, the Justice Department announced. The lawsuit was filed in the U.S. District Court for the Western District of New York.
The lawsuit follows a nearly two year investigation, the findings of which were detailed in a letter sent to Erie County Executive Chris Collins on July 15, 2009. That letter documented evidence of numerous constitutional violations, including staff-on-inmate violence; inmate-on-inmate violence; sexual misconduct between staff and inmates; sexual misconduct among inmates; an inadequate system to prevent suicide and self-injurious behavior; inadequate medical and mental health care; and serious deficiencies in environmental health and safety.
The department’s investigation revealed evidence of a number of serious violations of constitutional rights at the jail. For example, Erie County fails to protect inmates against known suicide risks and to provide constitutionally required mental health care. Since 2003, nine inmates have committed suicide, and at least 15 inmates have attempted to commit suicide or have taken steps that demonstrated suicidal ideation. Between 2007 and 2008, there were three suicides and at least 10 attempted suicides.
“Jails must provide for the basic medical and mental health needs of inmates and must keep them safe from attacks by other inmates and excessive force by staff. We have repeatedly sought the county’s cooperation in working toward an amicable resolution in this matter, and we regret that the county’s failure to cooperate compels us to litigate,” said Loretta King, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. “In light of the severity of the conditions, including multiple suicides and beatings, we must take action to ensure that the constitutional rights of those persons detained at the facilities, many of whom have not been convicted of any crime, are protected.”
Kathleen M. Mehltretter, U.S. Attorney for the Western District of New York, stated, “Our purpose in bringing this action is to ensure that the facilities consistently maintain policies, procedures and practices that protect the well being and health of the inmates. Due to the county's lack of cooperation, we must seek court intervention to resolve these issues.”
The Civil Rights Division is authorized to conduct such investigations under the Civil Rights of Institutionalized Persons Act of 1980 (CRIPA). This statute allows the federal government to identify and root out systemic abuses such as those discovered in Erie County. Under CRIPA, the Justice Department has investigated the conditions at nursing homes, mental health facilities, residences for persons with developmental disabilities, and juvenile justice facilities, as well as similar institutions.
The United States’ findings letter to Erie County Executive Chris Collins is available at http://www.usdoj.gov/crt/split/documents/Erie_findlet_redact_07-15-09.pdf. Additional information about the Special Litigation Section of the Justice Department’s Civil Rights Division can be found at www.usdoj.gov/crt/split/index.html.
Justice Department Files Lawsuit Alleging Auto Lending Discrimination in Los AngelesRead the Press Release
WASHINGTON – The United States has filed a lawsuit alleging that a bank and two automobile dealerships in Los Angeles violated the Equal Credit Opportunity Act by charging non-Asian-American customers higher interest rate mark-ups for a period of at least two years, the Justice Department announced today. Nara Bank, one of the three defendants, has agreed to pay up to $410,000 to resolve the allegations against it.
The department’s complaint, filed in federal court in Los Angeles, alleges that Nara Bank and two dealerships, Union Mitsubishi and Han Kook Enterprises, charged higher dealer overages (aka interest rate markups) on car loan interest rates to non-Asian-American customers, many of whom were Latino, than to similarly-situated Asian-American customers. In the auto industry, it is common practice for banks and other lenders to set a base interest rate or “buy rate” and then for the auto dealership to “mark up” the interest rate to the final rate on the loan for the car. The complaints allege that the defendants charged non-Asian-American customers higher interest rate mark-ups than similarly situated Asian-American customers from at least 2004-2006.
The settlement between the Justice Department and Nara Bank is in the form of a partial consent decree filed in conjunction with the complaint. Under the agreement, which remains subject to court approval, Nara Bank is prohibited from discriminating on the basis of race or national origin in any aspect of its automobile lending. The case against Union Mitsubishi and Han Kook Enterprises has not been resolved.
“Every individual deserves the comfort of knowing they can pursue credit without fear of discrimination based on their race or national individual. Our nation’s civil rights laws were created to combat this kind of discrimination,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division vigorously enforces federal laws that prevent discrimination in credit and lending services. We commend Nara Bank for working cooperatively with the Justice Department in reaching an appropriate resolution.”
Nara Bank is not currently in, and has no plans to re-enter, the business of automobile lending. Under the partial consent decree, Nara Bank will pay up to $410,000 to non-Asian-American customers who were charged higher overages or markups than similarly-situated Asian-American customers and will continue to invest at least $100,000 per year in consumer financial education efforts. If Nara re-enters the business of consumer automobile lending, it will implement clear guidelines for dealer overages; monitor dealerships within its automobile lending network to ensure that all customers are treated equally in the terms of automobile loans; and enhance its existing fair lending training program.
This case resulted from a referral by the Federal Reserve Board. A copy of the complaint against Nara Bank, Union Mitsubishi and Han Kook Enterprises and the consent order between the United States and Nara Bank, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department Web site at http://www.usdoj.gov/fairhousing.
Justice Department Files Fair Housing Lawsuit Against Columbus, IndianaRead the Press Release
WASHINGTON – The United States has filed a lawsuit against the city of Columbus, Ind., for violating the Fair Housing Act by refusing to grant a nonprofit organization a permit to operate a group home for 11 men recovering from drug and alcohol addiction, the Justice Department announced today. The lawsuit, filed in the U.S. District Court for the Southern District of Indiana, charges that the Columbus Board of Zoning Appeals refused a permit because of discriminatory attitudes toward recovering addicts among neighboring property owners.
“The Fair Housing Act guarantees individuals with disabilities the right to live in communities of their choice. We will continue to enforce the law vigorously to ensure the rights of persons with disabilities are protected,” said Loretta King, Acting Assistant Attorney General for the Justice Department's Civil Rights Division.
“We must make sure that local zoning actions further fair housing and don’t impede it,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Individuals struggling to put their lives together shouldn’t have that effort derailed by unlawful discrimination.”
This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by Addiction Counseling Treatment Services, the agency that wanted to establish the group home, to be called Bethesda House. HUD referred the cases to the Justice Department after conducting an investigation.
The suit seeks a court order prohibiting future discrimination by the city and requiring the city to grant the requested permit, revise its procedures to assure fair treatment for future housing projects for people with disabilities, pay monetary damages to compensate victims and pay 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.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line (1-800-896-7743), email the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Former U.S. Army Reserve Major Sentenced to 70 Months in Prison for Conspiracy and Bribery ChargesRead the Press Release
WASHINGTON – A former U.S. Army Reserve Major was sentenced to serve 70 months in prison and to pay $825,000 in restitution to the United States after pleading guilty to conspiracy and bribery charges involving U.S. Department of Defense (DOD) contracts at Camp Victory, Iraq, the Department of Justice announced today.
Theresa Jeanne Baker pleaded guilty to the charges on Dec. 22, 2008. According to the charging document, Baker participated in two separate conspiracies. In the first conspiracy Baker received money and other items from Elie Samir Chidiac and Raman International Inc., which does business as Raman Corporation. In return, Baker conveyed sensitive information and fraudulently awarded military contracts to Raman. Upon performance of these contracts, Chidiac received payment from the DOD on Raman’s behalf and kicked back a portion of that profit to Baker. In the second conspiracy, Baker canceled military contracts for various telecommunications items that were awarded to third party contractors and fraudulently re-awarded them to Chidiac. Baker then authorized Chidiac to receive cash payments for those contracts, despite the fact that Chidiac neither delivered any goods nor performed any services. In return, Chidiac gave a portion of the money back to Baker.
Chidiac was charged with two counts of conspiracy to commit bribery in an indictment unsealed on Jan. 28, 2008, in U.S. District Court for the Western District of Oklahoma. Raman was charged in the same indictment with one count of conspiracy to commit bribery. Raman pleaded guilty to the charges on June 3, 2008, and was sentenced to pay a $500,000 criminal fine on Jan. 30, 2009. Charges remain pending against Chidiac, who is currently a fugitive.
Today’s proceedings are an example of the Department of Justice’s commitment to protect U.S. taxpayers from procurement fraud through the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section (NCES), along with Special Agents from the Defense Criminal Investigative Service (DCIS), Tulsa Resident Agency and the U.S. Army Criminal Investigation Division (Army CID), Dallas Resident Agency. The Criminal Division’s Office of International Affairs and agents from the U.S. Immigrations and Customs Enforcement and the U.S. Postal Inspection Service are providing additional assistance to the investigation. Anyone with information concerning bid rigging, bribery or other criminal conduct in the procurement of goods or services in Iraq is urged to contact the NCES at 202-307-6694; DCIS at 800-424-9098 or [email protected]; or Army CID atwww.cid.army.mil.
Florida Man Indicted in Alleged Fraudulent Lobbying and Fund Raising SchemeRead the Press Release
WASHINGTON – A Florida doctor was charged today by a federal grand jury in Ft. Lauderdale, Fla., with allegedly orchestrating a fraudulent political fund raising and lobbying scheme through which he secretly diverted to himself more than $350,000 from contributions to political organizations he controlled, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. Alan D. Mendelsohn, 51, of Hollywood, Fla., is also charged with fraudulently concealing an additional $274,000 in payments he allegedly directed his lobbying clients to make to third parties on his behalf, including tuition payments to his children’s schools, in an effort to circumvent lobbying disclosure rules and other reporting requirements.
The 32-count indictment charges Mendelsohn with mail and wire fraud, aiding and abetting mail and wire fraud, and making false statements to federal agents. Mendelsohn will make his initial appearance today at 11 a.m. before U.S. Magistrate Judge Lurana Snow in Ft. Lauderdale.
According to the indictment, beginning in approximately 1999, Mendelsohn, a practicing physician, was involved in lobbying members of the Florida legislature and other state officials for legislation and budget expenditures of importance mainly to ophthalmologists. The indictment alleges that in approximately late 2002, Mendelsohn was asked by various lobbyists and businesspeople if he would use his political connections to assist their clients in obtaining and defeating legislation and in obtaining other favorable government action. According to the indictment, beginning in approximately 2002, Mendelsohn allegedly created a series of political organizations and corporations for the purpose of soliciting and then transferring contributions between the entities in ways that would be difficult to trace.
Beginning in approximately 2002, through a pattern of false representations and promises, Mendelsohn allegedly solicited and received more than $2 million in donations to the political organizations he controlled from persons for whom he agreed to provide lobbying and other services. According to the indictment, Mendelsohn allegedly represented to the contributors that their funds would be used for media and other campaigns on political issues of importance to them and to support political candidates. In fact, the indictment alleges that Mendelsohn secretly diverted more than $350,000 in contributed funds to his personal use and benefit through payments made in ways that were misrepresented or concealed entirely in required public disclosure reports for the political organizations. The indictment alleges that Mendelsohn used the diverted funds, in part, to purchase a residence and a car, to pay for tutors and tuition for his children, to pay his personal credit card bills, and to pay bonuses to an employee of his medical practice.
The indictment also alleges that Mendelsohn falsely represented to a contributor that he secured bribery agreements with senior government officials. During 2003 and 2004, the indictment alleges that Mendelsohn falsely represented to the contributor that he had brokered an agreement with senior government officials to close an ongoing criminal investigation by state officials in Florida of the contributor and others in exchange for campaign donations and other payments totaling more than $1 million. The indictment also alleges that in subsequent conversations in 2007, Mendelsohn falsely told the contributor that senior government officials had agreed to exert pressure on federal prosecutors investigating the contributor to close the investigation in exchange for $400,000 in contributions. As a result of Mendelsohn’s false representations, the contributor caused more than $1 million in payments to be made, as directed by Mendelsohn. The indictment states that, in fact, no such unlawful agreements to close any investigations had been made with any public officials.
The indictment alleges that in order to increase his power and influence as a lobbyist so that he could obtain more contributions and consequently more funds for himself, Mendelsohn made approximately $87,000 in payments to a now-former public official. These payments, which were made from the political organizations Mendelsohn controlled, were disguised as payments for consulting services rendered by an intermediary to whom the checks were written. In addition, the indictment alleges that Mendelsohn undertook or directed others to undertake actions to conceal the true source of certain campaign contributions. The indictment also alleges that Mendelsohn caused income and expense amounts to be falsely characterized or omitted in the books and records of political organizations and corporations he controlled and from public disclosure reports that required the accurate reporting of income and expenditures.
Mendelsohn also allegedly made several material false statements to federal agents investigating these allegations beginning in late May 2007. For example, according to the indictment, Mendelsohn falsely denied that he had represented to one of the contributors that he had secured an agreement with senior government officials to terminate the state investigation involving the contributor. Mendelsohn also falsely claimed that he did not receive any personal benefit from using his political connections. In addition, the indictment alleges he falsely denied that he ever received any financial benefit from the political organizations for which he solicited contributions and controlled.
An indictment is merely an accusation. All defendants are innocent until proven guilty.
The charges of mail and wire fraud each carry a maximum penalty of 20 years in prison and a $250,000 fine. The charges of false statements each carry a maximum penalty of five years in prison and a $250,000 fine.
This case is being prosecuted by Senior Trial Attorney Mary K. Butler and Trial Attorneys Justin V. Shur and Eric G. Olshan of the Criminal Division’s Public Integrity Section, headed by William M. Welch, II, Chief. This case is being investigated by the FBI’s Miami Field Office.
Indictment
Five Detroit Residents Plead Guilty to Health Care Fraud ChargesRead the Press Release
WASHINGTON – Detroit residents Dierdre Teagen, Robert Wynn, Ernest Neal, James Harris and Steve Sherman pleaded guilty in U.S. District Court in Detroit this week for their roles in various Medicare fraud schemes, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the Eastern District of Michigan Terrence Berg and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS).
Dierdre Teagan, 51, today pleaded guilty to destroying the patient records of X-Press Center, a Detroit-area clinic that purported to specialize in providing injection and infusion services to Medicare beneficiaries. Teagan admitted that she destroyed the records upon learning that the government was investigating X-Press for Medicare fraud. Teagan also admitted that she worked as a medical assistant at X-Press while the clinic was purporting to provide injection and infusion services, and she assisted in creating new patient records for the clinic that would purportedly support the clinic’s prior Medicare claims. Teagan acknowledged that she falsified and destroyed the patient records with the intent to impede, obstruct and influence a Medicare investigation.
Robert Wynn, 61, and Ernest Neal, 54, pleaded guilty on Sept. 28, 2009, to one count of conspiracy to commit health care fraud. James Harris, 53, pleaded guilty on Sept. 29, 2009, to one count of conspiracy to commit health care fraud, and Steve Sherman, 62, pleaded guilty today to one count of conspiracy to commit health care fraud.
Wynn, Neal, Harris and Sherman admitted to defrauding the Medicare program by participating in schemes to bill the program for services that were never provided. Specifically, Wynn, Neal, Harris and Sherman acknowledged that they provided their Medicare numbers and identifications to clinic owners and patient recruiters in exchange for kickbacks, for the purpose of submitting false claims to Medicare. Each admitted that they signed false paperwork indicating that they had received services when none of them received any services. Each acknowledged that their signatures were used to create fictitious therapy files to justify billings to Medicare.
Wynn, Neal, Harris and Sherman admitted that in exchange for their signatures and Medicare cards, they were paid kickbacks in the form of cash or prescriptions for controlled substances. Collectively, Medicare was billed more than $200,000 between 2003 and 2007 for services purportedly provided to these four defendants, when in fact, no such services were provided.
At sentencing, which is scheduled for Jan. 28, 2010, Teagan faces a statutory maximum term of 20 years in prison and a $250,000 fine.
Wynn, Neal, Sherman and Harris each face statutory maximum terms of 10 years in prison and a $250,000 fine. Wynn is scheduled for sentencing on Feb. 10, 2010. Neal’s sentencing hearing is scheduled for Dec. 16, 2009, and Harris and Sherman are scheduled for sentencing on Jan. 13, 2010.
The cases are being prosecuted by Trial Attorneys John K. Neal, Benjamin D. Singer and Gejaa Gobena of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The FBI and the HHS Office of Inspector General (HHS-OIG) conducted the investigation.
The case was brought as part of the Medicare Fraud Strike Force, supervised by Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and U.S. Attorney Terrence Berg of the Eastern District of Michigan. Since their inception in March 2007, Strike Force operations in four districts have resulted in indictments of 300 individuals who collectively have falsely billed the Medicare program for more than $680 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
AGCO Corp. to Pay $1.6 Million in Connection with Payments to the Former Iraqi Government Under the U.N. Oil-For-Food ProgramRead the Press Release
WASHINGTON – AGCO Corp., a U.S. corporation based in Duluth, Ga., has agreed to pay a $1.6 million penalty for illegal kickbacks paid to the former government of Iraq, Assistant Attorney General of the Criminal Division Lanny A. Breuer announced today.
AGCO agreed to the payment as part of a deferred prosecution agreement with the Department of Justice. The matter is part of the Department’s ongoing investigation into the United Nations (U.N.) Oil-for-Food Program.
A criminal information was filed today against AGCO’s wholly owned U.K. subsidiary, AGCO Ltd., in U.S. District Court for the District of Columbia, charging AGCO Ltd. with one count of conspiracy to commit wire fraud and to violate the books and records provisions of the Foreign Corrupt Practices Act. AGCO, an international manufacturer of agricultural machinery and equipment, has acknowledged responsibility for improper payments made by its subsidiaries’ officers, employees and agents to the former government of Iraq in order to obtain contracts with the Iraqi Ministry of Agriculture to sell agricultural equipment and parts. The deferred prosecution agreement requires that AGCO and its subsidiaries, including AGCO Ltd., cooperate fully with the Justice Department’s ongoing investigation.
According to the agreement and the information, between 2000 and 2003, AGCO Ltd. paid approximately $553,000 to the former government of Iraq to secure three contracts by inflating the price of the contracts by 13 to 21 percent before submitting the contracts to the U.N. for approval. The company concealed from the U.N. that the price of the contracts had been inflated and then used the additional funds to pay a kickback to the former Iraqi Ministry of Agriculture.
In recognition of AGCO’s thorough review of the improper payments and the company’s implementation of enhanced compliance policies and procedures, the Justice Department has agreed to defer prosecution of AGCO Ltd. for three years. If AGCO and AGCO Ltd. abide by the terms of the agreement for the three-year term, the Justice Department will dismiss the criminal information at that time.
The Oil-for-Food Program was established by the U.N. to enable Iraq to sell its oil for humanitarian purposes in the context of an extensive international sanctions regime. The program mandated that the proceeds of oil sales be deposited in a U.N. bank account and that those proceeds be used by the Iraqi government only to purchase humanitarian goods and services approved by the U.N., such as food, medicine, and other necessary infrastructure items. Beginning in 2000, the former government of Iraq began requiring companies wishing to sell humanitarian goods to government ministries to pay a kickback, often mischaracterized as an “after sales services fee,” to the government in order to be granted a contract. The amount of that fee was usually 10 percent of the contract price. Such payments were not permitted under the Oil-for-Food Program or other sanction regimes then in place.
In a related matter, AGCO reached a settlement today with the U.S. Securities and Exchange Commission (SEC) under which it has agreed to pay a civil penalty of $2.4 million and approximately $16 million in disgorgement and prejudgment interest relating to 16 Oil-for-Food contracts.
Also today, AGCO agreed to a disposition resolving an ongoing investigation by the Danish State Prosecutor for Serious Economic Crime. The charges were based on two Oil-for-Food contracts executed by AGCO’s Danish subsidiary, AGCO Danmark A/S. AGCO agreed to pay approximately $630,000 in disgorgement of profits in connection with those charges.
AGCO will pay a combined total of more than $20 million in fines, penalties, and disgorgement of profits in connection with the cases brought by the Department of Justice, the SEC and the Danish State Prosecutor’s Office.
This case is being prosecuted by Fraud Section Senior Trial Attorney Stacey Luck.
The Justice Department acknowledges and expresses its appreciation of the significant, ongoing assistance provided by the Enforcement Division of the SEC in the Department’s Oil- for-Food investigations and the Danish State Prosecutor’s Office for Serious Economic Crime.
AGCO Information
AGCO Plea Agreement
29 September 2009
Justice Department Settles Lawsuit Alleging Retaliation by Franklin County, North CarolinaRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a consent decree with Franklin County, N.C., that, if approved in federal court in Raleigh, N.C., will resolve the department’s allegation that the county retaliated against a former employee in its Department of Public Utilities, in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits employment discrimination on the basis of race, color, national origin, sex and religion; Title VII also prohibits retaliation against employees for opposing employment practices that they reasonably believe are discriminatory under Title VII or for filing a complaint of employment discrimination.
The department’s complaint, which was filed on Sep. 25, 2009, alleges that the county retaliated against Karen Dorrans because she complained about what she believed to be sexual harassment by a co-worker, and because she did not confront the alleged harasser about his conduct after the county instructed her to do so. According to the complaint, the county disciplined Dorrans by extending her probationary period of employment by six months, denying her a salary increase, issuing her a disciplinary “final warning” and significantly lowering her quarterly job performance ratings. The department’s complaint does not allege that Dorrans, in fact, was subjected to sexual harassment in violation of Title VII; but, rather, that the county’s retaliatory response to her harassment complaint violated Title VII.
The consent decree prohibits the county from engaging in any act or practice that retaliates against any county employee. The consent decree also requires the county to implement and disseminate a policy that prohibits retaliation and to provide mandatory training regarding the law of equal employment opportunity and prohibited harassment and retaliation to all supervisory employees. The decree further requires the county to provide Dorrans with $17,500 in compensatory monetary relief.
Prior to filing its complaint, the Justice Department was engaged in discussions with the county. Those discussions led to the filing of the consent decree only four days after the complaint was filed.
“All workers deserve the basic right of going to a workplace each day that is free of discrimination and retaliation. We are pleased that the county will promptly implement new policies and procedures that comply with Title VII,” said Acting Assistant Attorney General Loretta King. “The Department of Justice will continue to vigorously enforce the right of all employees to be free of retaliation in the workplace.”
The enforcement of Title VII is a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its Web sites at http://www.usdoj.gov/crt/ and http://www.usdoj.gov/crt/emp/.