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29 September 2009
Justice Department Settlement Will Ensure Accessibility of Donna's Restaurant in BaltimoreRead the Press Release
WASHINGTON - The Justice Department today announced a settlement agreement under the Americans with Disabilities Act (ADA) to make Donna’s, a café and restaurant located in the Mt. Vernon neighborhood of Baltimore accessible to people with disabilities.
The settlement is between the Justice Department and the Palamino Corporation, which owns Donna’s, and the 800 North Charles Street Limited Partnership LLLP, which owns the building in which the restaurant is located. Under the agreement, an inclined platform lift will be installed on the stairs between the first floor lobby and the street level inside the North Charles Street entry. This lift will provide access to Donna’s and another restaurant located on the first floor. In addition, the restrooms, entrance signage and certain elements within the restaurant will be modified to comply with the ADA Standards for Accessible Design.
“The Civil Rights Division of the Justice Department is committed to the full and fair enforcement of the Americans with Disabilities Act,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “We all want to be able to go out for a cup of coffee or a meal, all Americans should have access to civic life. Removing architectural barriers is critical so that people with disabilities can enjoy access to restaurants and businesses and be fully integrated in their communities.”
The ADA protects individuals with disabilities from discrimination by public accommodations, such as restaurants, and requires that such entities remove architectural barriers to make their businesses accessible to persons with disabilities. People interested in finding out more about the ADA or this agreement can call the Justice Department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY), or access its ADA Web site at www.ada.gov.
Indiana and Alabama Hospitals to Pay U.S. over $8 Million to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – Six hospitals in Indiana and Alabama have agreed to pay the United States more than $8 million to settle allegations that the health care facilities submitted false claims to Medicare, the Department of Justice announced today.
The Indiana hospitals include St. Francis Hospital in Beech Grove, Deaconess Hospital in Evansville and St. John’s Hospital System in Anderson. The hospitals have agreed to pay the United States $3,158,629, $2,110,034 and $826,256, respectively.
The Alabama hospitals include St. Vincent’s East Hospital and St. Vincent’s Birmingham Hospital, both located in Birmingham, and Providence Hospital, located in Mobile. These facilities have agreed to pay the United States $1,459,395, $422,748 and $381,713, respectively.
The settlements resolve allegations that, from 2002 to 2008, the six hospitals overcharged Medicare each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as an out-patient surgery, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.
“The Department of Justice is committed to preventing waste, fraud, and abuse in the Medicare program and ensuring that Medicare funds are not expended for unnecessary services,” said Tony West, Assistant Attorney General for the Department’s Civil Division.
“Hospitals that overcharge Medicare drain critical funds from the Medicare program and increase health care costs,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. “This settlement demonstrates the Federal government’s resolve to address this kind of fraudulent conduct.”
The settlements with these Indiana and Alabama facilities follow the government’s June 2009 settlement with three Minnesota hospitals for alleged kyphoplasty-related Medicare fraud claims, as well as the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an in-patient procedure, even though in many cases the minimally-invasive procedure should have been done on an out-patient basis.
“By keeping patients overnight, without regard to medical necessity, hospitals could seek greater reimbursement from Medicare and make much larger profits on kyphoplasty,” said Kathy Mehltretter, U.S. Attorney for the Western District of New York in Buffalo.
This lawsuit was filed in 2008 in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates under the qui tam or whistleblower provisions of the False Claim Act. Under those provisions, a private party, known as “relator,” can file an action on behalf of the United States and receive a portion of any recovery. Mr. Patrick, of Hudson, Wis., is a former reimbursement manager for Kyphon, and Mr. Bates is a former regional sales manager for Kyphon in Birmingham, Ala. The relators will receive approximately $1.4 million as their share of the settlement proceeds.
Assistant Attorney General West acknowledged that these settlement are the result of a coordinated effort between the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of New York, and the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.
Hampton Roads Sanitation District, Virginia, Agrees to Settle Clean Water Act Violations in Chesapeake Bay AreaRead the Press Release
WASHINGTON—Hampton Roads Sanitation District (HRSD), based in Virginia Beach, Va., has agreed to pay a $900,000 civil penalty and to take corrective actions to reduce alleged sanitary sewer overflows from its collection system and nine sewage treatment plants that have polluted the Chesapeake Bay and its tributaries, the Justice Department, U.S. Environmental Protection Agency (EPA), and the Commonwealth of Virginia announced today.
Under a settlement filed today in federal court in Norfolk, Va., HRSD is required to collect data, conduct computer modeling, and, working with the municipalities that it serves, develop a regional plan to ensure that the HRSD sewer system has adequate capacity to handle flows from severe storms and to prevent overflows of sewage. Subsequently, HRSD must implement the regional plan. Since HRSD has not identified the projects pending completion of the plan, the cost of that effort is currently unknown although it is expected to cost millions of dollars.
The settlement also requires HRSD to make major upgrades and improvements to the sewer system infrastructure over the next eight years. These upgrades are estimated to cost at least $140 million. The settlement requires that HRSD evaluate, replace, rehabilitate, or upgrade pipes, pump stations and other infrastructure where inspections and screenings show a material risk of failure. HRSD also must submit and implement a plan to effectively manage, operate and maintain the sanitary sewer system to help prevent future sanitary sewer overflows.
“We’re pleased that the sanitation district has agreed to take these extensive steps to upgrade and improve the sewer systems for Hampton Roads and the surrounding region,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The federal Clean Water Act requires cities to eliminate or reduce their sewage overflows into the nation’s rivers, lakes and oceans. Today’s agreement and the future regional plan will result in a cleaner, safer Chesapeake Bay.”
“Today's settlement represents EPA’s continuing commitment to protect and restore the health of the Chesapeake Bay,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Compliance and Assurance. “EPA’s compliance and enforcement strategy targets sewage treatment plants, concentrated animal feeding operations, storm water runoff and other sources that may contribute significant pollution to the bay.”
“After extensive work on this case at the state and federal levels, we believe we have reached an agreement that represents a fair and comprehensive approach to corrective action,” said David K. Paylor, director of the Virginia Department of Environmental Quality. “This should result in significant reductions of pollutants discharged to Virginia waters.”
In a joint complaint filed by the United States and Virginia, the governments alleged that HRSD illegally discharged nine million gallons of untreated sewage and other wastes from its sewer system and sewage treatment plants into various bodies of water including the Atlantic Ocean and Chesapeake Bay. These discharges allegedly occurred on at least 249 occasions since 2003 and were not authorized under existing wastewater discharge permits. In addition, HRSD allegedly caused or contributed to at least 118 municipal overflows of sewage and other pollutants that occurred from the sewer systems of the municipalities during times when flows into the HRSD sewer system exceeded its capacity and the sewage and other wastes backed up and overflowed from manholes and other locations in the municipalities. The municipalities did not report the volume for most of the 118 violations but it is believed to be substantial.
HRSD treats wastewater for 17 counties and cities in Virginia and serves 1.6 million people. HRSD has the capacity to treat up to 231 million gallons of wastewater per day and includes 13 sewage treatment plants, 81 pumping stations, and over 500 miles of pipes.
Sanitary sewer overflows typically contain harmful pollutants, such as excess amounts of nutrients, microbial pathogens that can lead to disease outbreaks, and toxics. The sanitary sewer overflows around HRSD’s service area may potentially endanger ecologically sensitive areas including unique tidal wetlands, wildlife refuges and nurseries in the Chesapeake Bay. The measures HRSD will take to eliminate sanitary sewer overflows will result in a significant reduction of nitrogen, phosphorous and sediment entering the Chesapeake Bay.
EPA in partnership with the bay states is focusing efforts on protecting and restoring the health of the Chesapeake Bay. The enforcement and compliance strategy targets pollution sources that may significantly contribute nitrogen, phosphorus and sediment to impaired watersheds in the bay. These pollutants come from many sources, including sewage treatment plants, urban storm water runoff, septic systems, agricultural operations and air deposition.
The consent decree, lodged today in the U.S. District Court for the Eastern District of Virginia, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
Formosa Plastics Corp., Texas, and Formosa Plastics Corp., Louisiana, will spend more than $10 million on pollution controls to address air, water, and hazardous waste violations at two petrochemical plants in Point Comfort, Texas, and Baton Rouge, La.Read the Press Release
WASHINGTON – Formosa Plastics Corp., Texas, and Formosa Plastics Corp., Louisiana, will spend more than $10 million on pollution controls to address air, water, and hazardous waste violations at two petrochemical plants in Point Comfort, Texas, and Baton Rouge, La., the Justice Department and the Environmental Protection Agency (EPA) announced today.
The companies also have agreed to pay a civil penalty of $2.8 million to resolve violations under the Clean Air Act (CAA), Clean Water Act (CWA), Resource Conservation and Recovery Act (RCRA) and Emergency Planning and Community Right-to-Know Act (EPCRA).
Under the agreement lodged in the U.S. District Court for the Southern District of Texas, both the Texas and Louisiana facilities will implement a comprehensive CAA enhanced leak detection and repair program, which goes beyond regulatory requirements by requiring more stringent leak definitions, more frequent monitoring and monitoring and repair of additional chemical manufacturing equipment. The leak prevention practices agreed to in the settlement include an innovative program to replace valves with new “low leak” valve technology, which will significantly reduce the likelihood of future leaks of air pollutants. The enhanced program also includes requirements for periodic audits of the companies’ leak prevention practices to ensure compliance going forward.
The enhanced leak detection and repair program will potentially reduce the annual volatile organic compound (VOC) air emissions from the two Formosa facilities by approximately 6,570,000 pounds per year of VOCs, including hazardous air pollutants such as vinyl chloride.
According to EPA, VOCs can contribute to respiratory disorders such as asthma and reduced lung capacity. They can also cause damage to ecosystems and reduce visibility.
The Formosa facilities also will undertake an innovative enhanced vinyl chloride leak detection and elimination program designed to improve the companies’ systems for identifying and addressing leaks of vinyl chloride.Most vinyl chloride is used to make polyvinyl chloride (PVC) plastic and vinyl products. Vinyl chloride is an odorless gas; it is an ozone precursor and known carcinogen that is also linked to neurological disorders.
In addition, the settlement requires both facilities to undertake analyses to prevent future wastewater discharge violations. The Formosa Texas facility will undertake a comprehensive review of its compliance with EPCRA’s toxic release reporting requirements, and the Formosa Louisiana facility will cease improper disposal of certain listed hazardous wastes.
This will be the eighth settlement in a series of cases developed as part of EPA’s enforcement effort to ensure environmental compliance in the PVC manufacturing industry. Since the first PVC civil case was concluded in 2004, EPA has addressed noncompliance across media (air, water, waste) at 13 PVC manufacturing facilities, and will reduce vinyl chloride emissions by a total of 152,000 pounds per year.
“Today’s settlement requires Formosa to institute a comprehensive enhanced leak detection program designed to address serious violations of environmental regulations,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We are pleased that Formosa worked cooperatively with DOJ and EPA to address the violations at issue and agreed to institute innovative programs that will result in significant pollution reductions.”
“This case shows that when a company fails to control leaks of hazardous pollutants, EPA will vigorously enforce the law,” said EPA Acting Regional Administrator Lawrence E. Starfield. “Pollution controls put in place as a result of this more than $10 million settlement will benefit the people living nearby.”
The case was initiated as a result of inspections conducted by EPA’s National Enforcement Investigations Center at Formosa’s Point Comfort and Baton Rouge facilities. During the inspections, EPA identified extensive Clean Air Act leak detection and repair violations, including failing to properly monitor leaking components, failing to include chemical manufacturing equipment in its leak detection and repair program, and failing to timely repair leaking equipment. Inspectors also identified a variety of hazardous waste violations at both facilities.
In addition, the inspectors found that Formosa had violated wastewater discharge limits under its CWA permits, and, at the Texas facility, had failed to comply with the CAA benzene waste operations requirements and to submit correct toxic release reporting information to EPA.
The consent decree is subject to a 30-day comment period and final approval by the court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
28 September 2009
Justice Department Sues to Block Alleged $23 Million Dollar Tax Fraud Scheme Operating in the Los Angeles AreaRead the Press Release
WASHINGTON - The United States has sued Nyla McIntyre and her firm, Approved Financial Services Inc., seeking to bar them from preparing federal tax returns for others, the Justice Department announced today. According to the complaint filed in the case, McIntyre prepares federal income tax returns for customers claiming massive fraudulent tax refunds. The complaint alleges that one of McIntyre’s fraudulent refund requests—for a La Quinta, Calif., couple—exceeded $2.6 million.
The complaint alleges that McIntyre prepares bogus IRS Forms – including Forms 1099-OID, 1096, and Schedule B – to report bogus income tax withholding, and then requests fraudulent refunds based on the fake withholding. The complaint says that McIntyre’s scheme is part of a growing trend of filing frivolous federal tax returns and forms to steal from the U.S. Treasury.
The complaint also explains that while the Internal Revenue Service catches most frivolous refund requests before the refunds are issued, McIntyre’s scheme has actually caused the release of $1.6 million in fraudulent refunds. In 2008 and 2009, McIntyre has claimed approximately $23 million in fraudulent refunds, according to the Government.
On Sept. 9, 2009, a Sacramento court found that tax preparer Teresa Marty had been using the same scheme to generate bogus refunds for her customers, and preliminarily barred her from preparing tax returns for others.
“Taxpayers foolish enough to consider participating in the illegal scheme described in this lawsuit should consider that, in addition to risking criminal prosecution, they also risk incurring civil penalties of as much as 20 percent of the amount of their bogus refund claim,” said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. “For false claims on the scale described in this case, the 20 percent penalty could result in scheme customers losing their savings and their homes.”
In the past decade, the Justice Department’s Tax Division has obtained more than 425 injunctions against tax fraud promoters and dishonest tax return preparers. Information about these cases is available on the Justice Department’s Web site, as is information about the Justice Department’s Tax Division.
Nyla McIntyre Complaint
Justice Department Sues Massachusetts and Its Department of Corrections for Discriminating Against Female Job ApplicantsRead the Press Release
WASHINGTON – The Justice Department announced that it has filed a lawsuit today against the commonwealth of Massachusetts and its Department of Corrections (MDOC), alleging that they engaged in a pattern or practice of discrimination against female applicants for entry-level correctional officer positions, in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute that prohibits employment discrimination on the basis of race, color, sex, national origin and religion.
The department’s complaint, filed in federal court in Boston, alleges that Massachusetts and the MDOC are using an unlawful physical abilities test (PAT) that disproportionately screens out female applicants for entry-level correctional officer jobs, resulting in a significant disparate impact against female applicants. According to the complaint, in 2007 and 2008, female applicants for the entry-level jobs of correctional officer and correctional program officer passed the PAT at a rate of approximately 58.8 percent, while the corresponding pass rate for male applicants was approximately 96.3 percent. Title VII prohibits not only intentional discrimination in employment, but also the use of employment practices, such as physical performance tests, which result in disparate impact, unless the employer can prove that such practices are “job related for the position in question and consistent with business necessity.” The complaint states that the commonwealth and the MDOC’s use of the PAT is not job related and consistent with business necessity and, therefore, violates Title VII.
“Bringing an end to practices that have a discriminatory impact on the basis of sex is a major priority of the Justice Department and the Civil Rights Division. Physical abilities tests, like the one used by Massachusetts and the MDOC, should measure applicants’ ability to do the job without disproportionately screening out large numbers of qualified female applicants,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
The government’s complaint seeks a court order that would require Massachusetts and the MDOC to stop using the challenged PAT, adopt and use a physical fitness test for correctional officer applicants that complies with Title VII and provide remedial relief (including, as appropriate, job offers, retroactive seniority and back pay) to those female applicants who were harmed by the use of the PAT.
The continued enforcement of Title VII is a high priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its Web site at http://www.usdoj.gov/crt/.
Complaint
Justice Department Announced Public Education Campaign Grants to Fight Immigration-Related Employment DiscriminationRead the Press Release
WASHINGTON – The Justice Department today announced that it has awarded $723,000 in grants to twelve groups serving communities throughout the country, to conduct public education programs for workers and employers about federal protections against immigration-related job discrimination.
The grants, which range from $48,000 to $87,000, are being awarded by the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) of the department’s Civil Rights Division. Recipients will assist discrimination victims; conduct seminars for workers, employers and immigration service providers; distribute educational materials in various languages; and place advertisements in local communities through both mainstream and ethnic media to educate workers and employers about their rights.
OSC enforces the anti-discrimination provision of the Immigration and Nationality Act (INA), which protects U.S. and authorized immigrant workers against citizenship and national origin discrimination. As part of its mission, OSC also educates workers and their employers about the anti-discrimination provision.
“Awarding grants to professional and community-based organizations better enables us to educate workers and employers about their rights and responsibilities under federal immigration law,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “Our grant recipients, who are well known and respected in their communities, will collaborate with us to prevent immigration-related discrimination in the workplace.”
The OSC grant recipients are:
Arizona Attorney General’s Office, Civil Rights Division
Asian Pacific American Legal Center of Southern California
Catholic Charities of Dallas
Catholic Charities, Diocese of St. Petersburg, Fla.
Colorado Legal Services
Legal Aid Foundation of Los Angeles (LAFLA)
National Farm Worker Service Center
National Immigration Law Center (NILC)
New York City Human Rights Commission
Texas RioGrande Legal Aid
University of Iowa
Washington Farm Labor AssociationFor more information about protections against job discrimination under federal immigration law, call 800-255-7688, 202-616-5594, email: [email protected] or visit http://www.usdoj.gov/crt/osc
Former Enron Broadband Co-Chief Executive Officer Sentenced for Wire FraudRead the Press Release
WASHINGTON – Joseph Hirko, former co-chief executive officer of Enron Broadband Services (EBS), Enron’s failed telecommunications business, was sentenced today to 16 months in prison, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
In addition to the prison term, U.S. District Court Judge Vanessa Gilmore ordered Hirko, 53, of Portland, Ore., to forfeit approximately $7 million in restitution to victims through the U.S. Securities and Exchange Commission’s Enron Fair Fund, in accordance with the terms of the plea agreement. Hirko pleaded guilty on Oct. 14, 2008, in U.S. District Court in Houston to one count of wire fraud charged in a superseding indictment.
In July 2005, Hirko and four other EBS executives were tried on various charges of conspiracy to commit securities and wire fraud, securities fraud, wire fraud, insider trading and money laundering relating to their employment at Enron. The trial resulted in a mistrial, and Hirko was subsequently charged in a superseding indictment with wire fraud, securities fraud and insider trading. According to the superseding indictment and the plea agreement, Hirko participated in Enron’s annual analyst conference in Houston at which Enron introduced EBS as one of its “core” units. Enron also announced the development of a broadband operating system or “BOS.” According to the plea agreement, the BOS was purported to be an “intelligent” operating system and was described as, among other things, a standard protocol for accessing real-time bandwidth.
As alleged in the superseding indictment, Enron issued a press release on May 15, 2000, announcing the acquisition of Warpspeed Communications. According to Hirko’s guilty plea, the Warpspeed release falsely represented the status of the BOS and implied that it was already embedded and functioning as a part of Enron’s network. Specifically, the Warpspeed release stated that the BOS “allows application developers to dynamically provision bandwidth on demand for the end-to-end quality of service necessary to deliver broadband content.” According to the plea agreement, Hirko reviewed and approved this language even though the Warpspeed release contained material inaccurate representations regarding the BOS’s status. In doing so, Hirko admitted that he acted with reckless indifference to the true facts, including: that the BOS was under development throughout his employment at Enron; that it was never embedded on Enron’s network; and that it could not dynamically provide bandwidth on demand or provide for the end-to-end quality of service necessary to deliver broadband content. According to the plea agreement, Hirko’s approval of the Warpspeed release, as well as other press releases, assisted in maintaining Enron’s overall stock price, thereby improperly maintaining the value of Hirko’s holdings of Enron stock.
This case was prosecuted by Senior Litigation Counsel Jack B. Patrick, Senior Trial Attorney Jonathan E. Lopez and Trial Attorney Liam B. Brennan of the Criminal Division’s Fraud Section.
Charges against the EBS employees were initially brought in March 2003 by the Enron Task Force, a team of federal prosecutors and agents formed to investigate matters related to the collapse of Enron. All remaining Enron Task Force cases are now being handled by the Criminal Division’s Fraud Section, with the investigatory assistance of the FBI.
Detroit-Area Rehabilition Facility Executive Pleads Guilty to $18.2 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – Suresh Chand pleaded guilty today in U.S. District Court in Detroit to participating in multiple conspiracies to defraud the Medicare program and to launder the proceeds of the fraud, 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.
Chand, 44, pleaded guilty before U.S. District Judge Sean F. Cox to one count of conspiracy to commit health care fraud and one count of conspiracy to launder money. At his sentencing, which is scheduled for Jan. 13, 2010, Chand faces a statutory maximum of 30 years in prison and a $750,000 fine.
Chand admitted that in 2003 he owned and controlled a company operating in Warren, Mich., called Continental Rehab Services Inc. (CRS), which purported to provide physical and occupational therapy services to Medicare patients. Chand also admitted that in 2004 he incorporated another physical and occupational therapy services company at the same Warren, Mich., address called Pacific Management Services Inc. (PMS). That company also purported to provide such services to Medicare patients.
Chand acknowledged in his guilty plea that he and his associates at CRS and PMS created false physical and occupational therapy files for Medicare patients when the purported services had not in fact been provided. The false services reflected in the files were billed to Medicare through sham Medicare providers controlled by Chand and others. These sham Medicare providers included multiple Detroit companies including Tri-Star Rehab Services Inc., Manage Care Physical Therapy & Rehab Services Inc., and S.U.B. Rehabilitation and Physical Therapy Center Inc.
In his plea, Chand admitted that in order to create the false therapy files, he and his co-conspirators paid cash kickbacks and other inducements to Medicare patients in exchange for their Medicare numbers and signatures. Chand acknowledged recruiting hundreds of Medicare patients, and paying them with cash and prescriptions for Vicodin and Xanax. Chand admitted that he obtained the prescriptions for these drugs from a physician who had never seen the patients. Chand also admitted that he prepared false prescriptions and files for the physician’s signature. To complete these bogus files, Chand admitted that he and others would obtain signatures from licensed therapists on false progress notes indicating that the therapists had provided therapy, when they had not. Chand admitted that the licensed therapists were paid to help falsify the files.
Chand also admitted that between January 2003 and March 2007, he and his co-conspirators submitted claims to the Medicare program totaling approximately $18,379,300 for unnecessary therapy services that were never rendered. After the proceeds of the fraud were obtained from Medicare, Chand acknowledged that he laundered the funds through a series of transactions using shell companies designed to conceal the nature, source, location, ownership and control of the tainted funds.
The case is being prosecuted by Trial Attorneys John K. Neal and Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The 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 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
26 September 2009
United States Transfers Three Guantanamo Bay Detainees<br />Read the Press Release
WASHINGTON — The Department of Justice today announced that three detainees have been transferred from the detention facility at Guantanamo Bay to the control of the governments of Ireland and Yemen.
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 before their transfer.
Alla Ali Bin Ali Ahmed, a native of Yemen was transferred to the government of Yemen. On May 4, 2009, a federal court ruled that Ahmed may no longer be detained under the Authorization for the Use of Military Force and ordered the government to release him from detention at Guantanamo Bay.
In addition, two additional detainees were transferred to the government of Ireland. Pursuant to a request from the government of Ireland, the identities of these detainees are being withheld for security and privacy reasons.
These transfers were carried out under individual arrangements between the United States and the governments of Yemen and Ireland. 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 detainees.
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.
25 September 2009
UBS Client Pleads Guilty to Failing to Report $6.1 Million in Swiss Bank AccountsRead the Press Release
A Saddle River, N.J., man pleaded guilty today to failure to file a Report of Foreign Bank or Financial Accounts (F-BAR. Juergen Homann appeared today before Judge Stanley R. Chesler in Newark, N.J., and accepted responsibility for concealing more than $5 million in Swiss bank accounts.
According to court documents and statements made in court, Homann failed to file an F-BAR for calendar year 2007. Homann also failed to report his account at UBS AG in Switzerland on his individual income tax return for that year. Additionally, Homann failed to report income earned on his UBS bank account. The UBS account, originally opened in the late 1980's in the name of a Liechtenstein foundation, was transferred into the name of ELM Finance Limited, a nominee Hong Kong corporation. Homann established ELM with the assistance of Swiss lawyer, Matthias Rickenbach, who was indicted in August 2009 for conspiring to defraud the United States. From 2001 through 2008, Homann held approximately $6.1 million in assets in the ELM account at UBS in Switzerland.
According to court documents and statements made in court, in 2005, Homann, with the assistance of Rickenbach and a Swiss banker, conducted a sham loan by transferring $5 million from an account in the name ELM Finance Limited to a second Hong Kong entity in order to obtain financing for Homann’s U.S. business without alerting authorities that he controlled the assets in the ELM at UBS. Further, Rickenbach and a Swiss banker persuaded the defendant not to seek out and enter into the IRS’s Voluntary Disclosure program.
Judge Chesler scheduled sentencing for Jan. 6, 2010. Homann faces a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the amount of financial gain to the defendant or loss to the IRS. Additionally, Homann has agreed to pay a civil F-BAR penalty based on 50% of the highest balance contained in the UBS account.
"As the IRS voluntary disclosure program enters its final few weeks, those 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," said John A DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "Those who think they can ‘stay below the radar’ face a real risk of prosecution and jail if convicted, and they will still owe the taxes due, together with interest and civil penalties."
For those who are not participating in the Voluntary Disclosure Program, we are working very closely with the Tax Division and the IRS to investigate and prosecute cases where individuals have sought to hide assets and income offshore," said Acting U.S. Attorney for the District of New Jersey, Ralph J. Marra, Jr.
"The IRS is serious about pursuing people with hidden offshore accounts, and we are stepping up our international efforts," said IRS Commissioner Doug Shulman. "People should make sure they meet their filing requirements. Failure to do so can carry serious consequences. 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 pursuant to which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain 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., pleaded guilty to failing to report his ownership of and interest in a foreign financial account.
Acting Assistant Attorney General DiCicco and U.S. Attorney Marra commended the IRS agents who investigated the case, as Trial Attorney Michael P. Ben’Ary of the Tax Division and Assistant U.S. Attorney Marc-Philip Ferzan who are 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, U.S. citizens much file an F-Bar with the United States 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/.
Texas Man Pleads Guilty to Advertising and Possessing Child PornographyRead the Press Release
Mark Edwin Cairnes of Jonestown, Texas, pleaded guilty today to advertising and possessing child pornography.
Cairnes, 51, pleaded guilty before U.S. District Judge Sam Sparks in Austin, Texas, to one count of advertising child pornography and one count of possession of child pornography. He was indicted on those charges on July 21, 2009. As part of his plea agreement, Cairnes admitted that he used an Internet bulletin board to seek out images of child pornography and possessed tens of thousands of images of child pornography, including images of children engaged in sadistic and masochistic conduct.
Cairnes 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.
Sentencing has been set for Dec. 18, 2009. At sentencing, Cairnes faces a maximum sentence of 30 years in prison for advertising child pornography and a maximum of 10 years in prison for possessing child pornography. He also faces forfeiture of all seized property, up to a $250,000 fine and the possibility of a lifetime period of supervised release.
The case is being prosecuted by Assistant U.S. Attorney Matthew B. Devlin of the Western District of Texas and Trial Attorney Alecia Riewerts Wolak of the Criminal Division’s Child Exploitation and Obscenity Section. The investigation is being handled by U.S. Immigration and Customs Enforcement.
Seafood Wholesaler and Owner Sentenced in a Conspiracy to Illegally Harvest Rock FishRead the Press Release
WASHINGTON— Robert Lumpkins, owner of Golden Eye Seafood LLC, of St. Mary’s County, Md., was sentenced to 18 months in prison and the company was sentenced today to 3 years probation by U.S. District Judge Peter J. Messitte after a two day sentencing hearing in the District of Maryland, the Justice Department announced.
Additionally, they were sentenced to pay a fine of $36,000 and restitution of $164,040.50 along with a special assessment of $1,600.
Lumpkins and Golden Eye had previously pleaded guilty to conspiring to violate and violating the Lacey Act, by falsely recording the amount and weight of striped bass, also known as rockfish that were harvested by local fishermen and checked-in through Golden Eye from 2003 to 2007.
According to Lumpkins’ plea agreement, from at least 2003 to the present, he was a fish wholesaler, doing business from his residence in Piney Point, Md., under the name Golden Eye Seafood. Lumpkins, through, Golden Eye, acted as a commercial striped bass check-in station for the state of Maryland. Lumpkins admitted that on numerous occasions from 2003 to 2007, he falsely recorded the amount of striped bass that fisherman harvested and failed to record some of the striped bass that was caught or recorded a lower weight of striped bass than was actually caught.
Lumpkins and the fishermen would also falsely inflate the actual number of fish harvested. By under-reporting the weight of fish harvested, and over-reporting the number of fish taken, the records would make it appear that the fishermen had failed to reach the maximum poundage quota for the year, but had nonetheless run out of tags. As a result, the state would issue additional tags that could be used by the fishermen allowing them to catch striped bass above their maximum poundage quota amount. Lumpkins and Golden Eye shipped the majority of the fish to purchasers in Maryland and in other states. Lumpkins also purchased fish that were outside the legal size limit from an undercover agent and sold those fish to purchasers in New York, Virginia, and California.
"This prison sentence sends a strong message to commercial fishermen and wholesalers on the Chesapeake Bay and Potomac River. Those who illegally harvest rockfish will be investigated, prosecuted and face stiff sentences including the possibility of incarceration," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
U.S. Attorney Rod J. Rosenstein stated, "If commercial fishermen obey the rules, we can all enjoy rockfish forever. If they don’t, the rockfish population could be wiped out very quickly. This sentence sends a message that we are serious about protecting the rockfish population in the Chesapeake Bay."
Joseph Peter Nelson Jr., a commercial fisherman licensed in Maryland, pleaded guilty to four felony violations of the Lacey Act for participating in a scheme to illegally over harvest and under report the amount of rockfish he took from the Potomac River. His father, Joseph Peter Nelson Sr., also pleaded guilty to one felony violation of the Lacey Act for assisting in transporting the illegally taken rockfish in interstate commerce. The Nelsons are scheduled to be sentenced on Oct. 22, 2009. Jerry Decatur, Sr. and Jerry Decatur, Jr. both pleaded guilty to violations of the Lacey Act and are scheduled to be sentenced on Oct. 27 and Oct. 28, 2009, respectively.
Additionally, John Evans, a commercial fisherman who operated in St. Mary’s County and the surrounding waters of the Chesapeake Bay, pleaded guilty to a violation of the Lacey Act for overfishing striped bass and was sentenced to three months in prison followed by six months home detention.
Cannon Seafood, a Washington, D.C., fish wholesaler, its owner, Robert Moore Sr. and his son Robert Moore Jr. pleaded guilty to similar charges. Cannon Seafood was ordered to pay restitution of $28,000 and a fine of $80,000. Robert Moore Sr. and Robert Moore Jr., were each sentenced to four months home detention, followed by three years probation, and were ordered to pay restitution of $15,000 and $10,000, and a fine of $40,000 and $30,000, respectively.
Thomas L. Hallock, a commercial fisherman licensed in Maryland, was sentenced to a year and a day in prison, for illegally overfishing rockfish and was ordered to pay restitution of $40,000 and a fine of $4,000. Commercial fisherman Thomas Crowder was sentenced to 15 months in prison, ordered to pay a $5,000 fine and restitution of $96,250 and Charles Quade was sentenced to five months in prison, followed by five months of home detention. Quade was also ordered to pay a $1,000 fine and restitution of $5,000. Keith Collins was sentenced to 13 months in prison and was ordered to pay $70,569 in restitution and a fine of $4,500. Kenneth Dent was ordered to pay $2,905 in restitution and was sentenced to 3 years probation. Crowder, Quade, Collins and Dent all pleaded guilty to Lacey Act violations for overfishing striped bass. All of the restitution is to be paid to the National Fish and Wildlife Foundation to the benefit of the Chesapeake Bay Striped Bass Restoration Account.
As a result of the investigation and prosecution, two fish wholesalers and a total of 15 individuals, including today’s defendants, have been convicted of illegally harvesting and underreporting their catch of striped bass.
These cases resulted from an investigation by an interstate task force formed by the U.S. Fish and Wildlife Service, the Maryland Natural Resources Police and the Virginia Marine Police, Special Investigative Unit in 2003. The task force conducted undercover purchases and sales of striped bass in 2003, engaged in covert observation of commercial fishing operations in the Chesapeake Bay and Potomac River area, and conducted detailed analysis of area striped bass catch reporting and commercial business sales records from 2003 through 2007.
The cases are being prosecuted by Assistant U.S. Attorneys Stacy Dawson Belf and Christen Sproule for the District of Maryland and Senior Trial Attorney Wayne Hettenbach of the Justice Department’s Environmental Crimes Section.
Justice Department Files Lawsuit on Behalf <br /> of Michigan Servicemember Against Security CompanyRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit in federal court in Michigan alleging that Knight Protective Service Inc., willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to promptly and properly reemploy King A. Gatten, a retired Army servicemember, when he returned from military service.
Subject to certain limitations, USERRA requires that individuals who leave their jobs to serve in the military be promptly reemployed by their civilian employers in the same positions, or in positions comparable to the positions that they would have held had they not left to serve in the military. USERRA also requires that civilian employers reemploy returning servicemembers in positions of like pay, status and benefits to the positions the servicemembers would have held if they had been continuously employed by their civilian employers.
The Justice Department’s complaint alleges that Knight unreasonably delayed Gatten’s reemployment for several months after he returned from active military duty and, even after reemploying him, Knight failed to reemploy Gatten as a full-time security guard sergeant – the position he held with Knight before he left to serve in the military. Gatten initially filed a complaint with the Labor Department’s Veterans’ Employment and Training Service, which investigated the matter, determined that the complaint had merit and referred the matter to the Justice Department. In its lawsuit, the Justice Department seeks reemployment for Gatten as a full-time security guard sergeant, the lost wages and benefits he would have received had Knight promptly and properly reemployed him as USERRA requires, and liquidated damages.
"No servicemember should be made to fear for his or her livelihood because he or she answered our country’s call to duty," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is committed to protecting the rights of those who, through their bravery and sacrifice, secure the rights of all Americans."
The Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. This is the 19th USERRA lawsuit the Civil Rights Division has filed in 2009 on behalf of service members. 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 Files Lawsuit Alleging<br /> Retaliation by Franklin County, North CarolinaRead the Press Release
The Justice Department today filed a lawsuit in federal court in Raleigh, N.C., against Franklin County, N.C., alleging 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, after the employee complained about sexual harassment by a co-worker. 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 or for filing a complaint of employment discrimination.
According to the complaint, while Karen Dorrans was employed by the county, she complained to her supervisor and human resources manager about what she believed to be sexual harassment by a co-worker. The county instructed Dorrans that, in order for it to consider her complaint, she first had to confront the alleged harasser. According to the Justice Department’s complaint, since Dorrans did not confront the alleged harasser, and in retaliation for her complaints, 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 Justice Department is seeking an order from the court that the county take remedial steps to ensure a non-retaliatory workplace for its employees and that the county provide Dorrans with remedial relief, including back pay with interest and compensatory damages.
"All workers deserve the freedom to go to work each day without fear of discrimination. Public employers should set an example for others by upholding the law and taking prompt and effective action to stop discrimination and retaliation," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "The Department of Justice will vigorously pursue such violations of Title VII."
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.
Jury Convicts Defense Department Official of Unlawful Communication of Classified Information <br /> and Making False StatementsRead the Press Release
James Wilbur Fondren Jr., was convicted by a federal jury today on charges involving providing classified information to a man working with the People’s Republic of China (PRC) and lying to the FBI about it.
Fondren was convicted of one count of unlawfully communicating classified information to an agent of a foreign government and two counts of making false statements to the FBI. He was acquitted of two unlawful communication of classified information, one count of conspiracy to communicate classified information to an agent of a foreign government and act as an illegal foreign agent, and one count of aiding and abetting an agent of a foreign government.
Fondren faces a maximum of 10 years in prison on the unlawful communication of classified information count and a maximum of five years in prison for each false statement count when he is sentenced on Jan. 22, 2010.
David Kris, Assistant Attorney General for National Security; Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; and Joseph Persichini, Jr., Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement.
Fondren, age 62, worked at the Pentagon and, from August 2001 through Feb. 11, 2008, was the Deputy Director, Washington Liaison Office, U.S. Pacific Command (PACOM). He held a Top Secret security clearance, worked in a Sensitive Compartmentalized Information Facility (SCIF) and had a classified and unclassified computer at his cubicle. He has been on administrative leave with pay since mid-February 2008 and has not performed any duties in or for PACOM since that time.
According to court documents and evidence at trial, from approximately November 2004 to February 2008, Fondren provided certain Defense Department documents and other information to Tai Shen Kuo, a naturalized U.S. citizen from Taiwan.
Fondren was aware that Kuo had maintained a close relationship with an official of the People’s Republic of China (PRC), to whom Kuo introduced Fondren during a trip the two took to the PRC in March 1999. As Kuo well knew, this individual was an official of the PRC government. Fondren and the PRC official exchanged more than 40 email messages between March 1999 and November 2000.
Fondren was accused of providing classified information through Kuo, under the guise of consulting services, using a business that had Kuo as its sole customer. Fondren would incorporate this information into "opinion papers" that he sold to Kuo. He would also provide Kuo with sensitive, but unclassified Defense Department publications. The jury found him guilty of providing Kuo with an opinion paper titled "DoD-PLA Bilateral Military Meetings," which contained information classified "CONFIDENTIAL."
According to court records and evidence at trial, when Fondren was interviewed by FBI agents regarding this investigation, he falsely represented that everything he wrote to Kuo in his opinion papers was based on information from press and media reports and from his experience and that he had not given Kuo a draft copy of an unclassified document on military strategy.
This investigation was conducted by the FBI. The Air Force Office of Special Investigations (OSI) provided substantial assistance and cooperation throughout the course of the investigation.
The prosecution is being handled by Assistant U.S. Attorneys Neil Hammerstrom and James P. Gillis, from the U.S. Attorney’s Office for the Eastern District of Virginia, and Trial Attorney Ryan Fayhee from the Counterespionage Section of the Justice Department’s National Security Division.
Former Oklahoma Official Sentenced for Concealing Violations of Safe Drinking Water ActRead the Press Release
WASHINGTON—The former supervisor of the wastewater treatment facility in Ft. Gibson, Okla., Christopher Neil Gauntt was sentenced today in federal court in Muskogee, Okla., to serve six months home confinement for submitting false statements that concealed violations of the Safe Drinking Water Act, the Justice Department announced. He was also sentenced to pay a $5,000 fine and serve five years probation following the term of confinement.
On April 29, 2009, Gauntt pleaded guilty to a one-count felony information charging him with making false statements in a monthly operational report submitted to the Oklahoma Department of Environmental Quality (DEQ). Gauntt, while serving as the supervisor at the Ft. Gibson Water Treatment Plant, submitted monthly operational reports for drinking water which contained false test entries for water turbidity and residual disinfectant levels. Oklahoma DEQ relies on the accuracy of information from wastewater treatment plant supervisors to ensure that water supplied by the Ft. Gibson Water Treatment Plant is in compliance with the Safe Drinking Water Act and is safe for the public to drink.
Under the federal Safe Water Drinking Act, which is administered and enforced by DEQ, as well as the U.S. Environmental Protection Agency (EPA), the Fort Gibson water treatment plant must provide drinking water that meets standards to ensure that the water is safe for human consumption. Two of the standards that must be met include turbidity and chlorine. If turbidity, the measure of clarity of drinking water, or chlorine levels are not within levels required by the Safe Drinking Water Act, there is a potential risk that the water could retain micro-organisms that carry waterborne diseases including dysentery.
There was no indication that Gauntt’s actions caused any actual harm to individuals who consumed the drinking water from the plant.
"Falsifying environmental reports, especially those dealing with safe drinking water, is unacceptable," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This sentence should remind all of us that violating the public’s trust will result in prosecution and punishment."
"Accurate information about drinking water quality is essential to protect the public health," said Paula Brown, Acting Special Agent-in-Charge of EPA’s criminal enforcement office in Dallas. "Those who submit false reports or bogus data undermine those efforts, and will be vigorously prosecuted. We are extremely pleased that this complaint was brought to our attention through EPA's ‘Report a Violation’ Web site."
"We have little choice but to trust that the water flowing from our taps is safe to drink," said Oklahoma Attorney General Drew Edmondson. "When a treatment facility official falsifies records, that trust is violated. Along with our partners at all levels of government, the Office of the Attorney General stands ready to investigate and prosecute those whose actions place the public health and water safety at risk."
The Ft. Gibson Water Treatment Plant is subject to federal regulations and provisions of the Safe Drinking Water Act as established and implemented by Oklahoma DEQ and enforced by EPA.
The case arose from a criminal investigation undertaken by the EPA-Criminal Investigation Division and the Oklahoma Attorney General’s Office. The case was prosecuted by Senior Trial Attorney Daniel Dooher of the Justice Department’s Environmental Crimes Section.
Florida Limousine Drive Sentenced to Prison<br /> for Securities and Tax FraudRead the Press Release
Eli Goldshor of Boca Raton, Fla.,was sentenced today for conspiracy to commit securities fraud and willfully failing to file tax returns. Goldshor, a self-employed limousine driver, was sentenced by Judge William Zloch in Ft. Lauderdale, Fla., to 18 months in prison.
In January 2008, Goldshor pleaded guilty to conspiracy and failure to file charges. According to the plea agreement and court documents, Goldshor nominally served as president of two subsidiaries of Harvard Learning Centers Inc., a Boca Raton-based corporation whose securities were publicly traded. The company was previously known as American Way Business Development, American Way Home Based Businesses and DCGR International Holdings Inc. Harvard Learning claimed to be involved in several different business ventures.
According to the plea agreement and court documents, from September 2004 through at least March 2007, Goldshor and Donald Platten, who was an officer and sole director of Harvard Learning, engaged in a scheme to cause Harvard Learning to issue stock to Goldshor of which Platten was the true owner. After Goldshor sold the Harvard Learning stock, Goldshor would retain some of the proceeds and use the remainder for Platten’s benefit.
According to the plea agreement and court documents, Platten caused Harvard Learning to issue stock to Goldshor by falsely claiming that the stock was being issued as payment for promissory notes from Harvard Learning to Goldshor. Between May 2005 and February 2006, Goldshor signed promissory note conversion notices to cause Harvard Learning to issue more than 79 million shares of Harvard Learning stock. However, Goldshor knew that the promissory notes were fraudulent in that Harvard Learning only owed him a small portion of the sums referred to in the promissory notes.
According to the plea agreement and court documents, from September 2004 through March 2007, Goldshor transferred some of the Harvard Learning stock that Platten caused to be issued to him to Platten’s future wife, Platten’s sister, as well as other individuals and entities. Goldshor sold the remainder of the Harvard Learning stock in the market for more than $700,000. Goldshor used some of the proceeds to pay his own and Platten’s personal expenses and transferred some of the proceeds to Platten’s family members. In addition, Goldshor failed to file tax returns with the IRS for 2005 and 2006.
In August 2009, Goldshor testified for the government in the trial of Platten for securities and tax violations. Platten was convicted of securities fraud, conspiracy to commit wire fraud, and tax fraud. He is scheduled to be sentenced on Oct. 30, 2009.
John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, commended the agents from IRS Criminal Investigation and the Food and Drug Administration Office of Criminal Investigations who investigated the case, as well as Tax Division trial attorneys Kenneth C. Vert and Steven D. Grimberg who prosecuted the case.
24 September 2009
Two Indiana Men Plead Guilty to Cross BurningRead the Press Release
Richard LaShure, 41, and Aaron Latham, 20, both of Muncie, Ind., pleaded guilty to conspiring to violate the civil rights of an African American family and to interfering with their housing rights by burning a cross in the family’s yard.
According to the charging document, on July 25, 2008, the two men, acting with the assistance of a third participant, built a cross and poured gasoline on it, then set it on fire in the yard of an African-American family who lived in the neighborhood. They will be sentenced on Nov. 5, 2009.
This is the second case in two years in which the Civil Rights Division has brought charges for a cross burning that occurred in Muncie, Ind. Two men were convicted in 2008 for burning a cross at the home of a woman who had biracial children.
"These two men used a despicable and unmistakable symbol of hatred, the burning cross, to intimidate a family because they are African American," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to prosecute this type of illegal, hateful behavior to the fullest extent of the law."
The guilty pleas resulted from an investigation by Special Agent Charlie Rownd from the Muncie Field Office of the FBI and Betsy Biffl from the Civil Rights Division of the United States Department of Justice .
Superseding Indictment in Boyd Matter Charges Defendants with Conspiring to Murder U.S. Military Personnel, Weapons ViolationsRead the Press Release
Today, a federal grand jury returned a superseding criminal indictment in the Daniel Patrick Boyd matter.
While the superseding indictment returned today includes all of the charges alleged in the original indictment of July 22, 2009, it also includes new charges against three defendants, Daniel Patrick Boyd, aka "Saifullah," Hysen Sherifi, and Zakariya Boyd, aka "Zak."
First, the superseding indictment charges Daniel Patrick Boyd, aka "Saifullah," and Hysen Sherifi with conspiring to murder U.S. military personnel, in violation of Title 18, United States Code, Section 1117. The superseding indictment alleges, among other things, that in furtherance of this agreement, Boyd undertook reconnaissance of the Marine Corps Base located in Quantico, Va., and obtained maps of the base in order to plan an attack on Quantico. According to the superseding indictment, Boyd possessed armor piercing ammunition, stating it was "to attack the Americans." A conviction for conspiring to violate Title 18, United States Code, Section 1117 has a maximum penalty of imprisonment for any term of years or life, and/or a $250,000 fine, followed by five years of supervised release.
Second, Boyd, Sherifi, and Zakariya Boyd, aka "Zak," are also charged with possession of weapons in furtherance of a crime of violence, in violation of Title 18, United States Code, Section 924(c). These section 924(c) charges are separate from, and in addition to, the section 924(c) charges alleged in the original indictment. A violation of Title 18, United States Code, Section 924(c), carries a maximum penalty of no less than five years in prison nor more than life, a $250,000 fine or both fine and imprisonment, and up to five years of supervised release following imprisonment. If any of the defendants are convicted for more than one of the section 924(c) charges alleged by the grand jury, the minimum term of imprisonment rises to 25 years, to run consecutively to any other sentence.
Third, Daniel Boyd is also charged with the providing a Ruger mini 14 rifle and, on a separate date, .223 ammunition, to a convicted felon, each in violation of Title 18, United States Code, Section 922(d). If convicted, Boyd faces up to ten years in prison and a $250,000 fine, and three years supervised release on each of these charges.
U.S. Attorney George E.B. Holding commented: "These additional charges hammer home the grim reality that today’s homegrown terrorists are not limiting their violent plans to locations overseas, but instead are willing to set their sights on American citizens and American targets, right here at home."
"The events over the course of the week should serve as a reminder that there are those at home and abroad who continue to plot to cause harm to U.S. citizens. The FBI, U.S. Attorney's Office and our law enforcement and intelligence community partners will continue working tirelessly to prevent that from happening," said Owen D. Harris, Special Agent in Charge of the Charlotte Division of the FBI.
"NCIS investigative efforts in support of the FBI’s investigation centered on protecting Marine Corps personnel assigned to MCB Quantico during Mr. Boyd's alleged activities. These efforts were closely coordinated and supported by MCB Quantico Command to insure the safety of military and civilian personnel aboard the base. This case represents the close coordination between NCIS and FBI in addressing terrorism issues that may impact the operational readiness of the U.S. military."
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Najibullah Zazi Indicted for ConspiracyRead the Press Release
The Justice Department today announced that Najibullah Zazi, 24, a resident of Aurora, Colo., and legal permanent resident of the United States from Afghanistan, has been indicted in the Eastern District of New York on a charge of conspiracy to use weapons of mass destruction (explosive bombs) against persons or property in the United States.
FBI agents in Colorado first arrested Zazi on Sept. 19, 2009 pursuant to a criminal complaint charging him with knowingly and willfully making false statements to the FBI in a matter involving international and domestic terrorism. Zazi made an initial court appearance on those charges in the District of Colorado on Sept. 21, 2009. The government will ask that those charges be dismissed and that Zazi be transferred to New York to face this new charge.
Yesterday, a federal grand jury in the Eastern District of New York returned a one-count indictment alleging that between Aug. 1, 2008 and Sept. 21, 2009, Zazi knowingly and intentionally conspired with others to use one or more weapons of mass destruction, specifically explosive bombs and other similar explosive devices, against persons or property within the United States. The indictment also alleges that, in furtherance of this offense, Zazi and others traveled in interstate and foreign commerce, used email and the Internet, and that this offense and the results of the offense would have affected interstate and foreign commerce.
"The indictment alleges that Najibullah Zazi conspired with others to use explosive devices against persons or property in the United States," said Attorney General Eric Holder. "We are investigating a wide range of leads related to this alleged conspiracy, and we will continue to work around the clock to ensure that anyone involved is brought to justice. We believe any imminent threat arising from this case has been disrupted, but as always, we remind the American public to be vigilant and to report any suspicious activity to law enforcement."
In a detention motion filed in the Eastern District of New York and the District of Colorado, the government stated, "In furtherance of the conspiracy, Zazi received detailed bomb-making instructions in Pakistan, purchased components of improvised explosive devices, and traveled to New York City on September 10, 2009 in furtherance of his criminal plans."
The government’s detention memo further states that "Zazi remained committed to detonating an explosive device up until the date of his arrest, as exemplified by among other things, traveling overseas to receive bomb-making instructions, conducting extensive research on the internet regarding components of explosive devices, purchasing -- on multiple occasions -- the components necessary to produce TATP [Triacetone Triperoxide] and other explosive devices, and traveling to New York City on September 10, 2009 in furtherance of the criminal plan."
The Justice Department will seek to have Zazi transferred from the District of Colorado to the Eastern District of New York to be arraigned on the charge in the Brooklyn indictment. If convicted of the charge in the indictment, Zazi faces a potential sentence of life in prison.
The prosecution is being handled by the U.S. Attorney’s Office for the Eastern District of New York, with assistance from the U.S. Attorney’s Office for the District of Colorado and the Counterterrorism Section of the Justice Department’s National Security Division.
The investigation is being conducted by the New York and Denver FBI Joint Terrorism Task Forces, which combined have investigators from more than fifty federal, state and local law enforcement agencies.
The public is reminded that an indictment contains mere allegations and a defendant is presumed innocent until proven guilty.
Najibullah Zazi Indictment
Najibullah Zazi - Government's detention memo
Justice Department Announces Settlement of Its First Landlord-Tenant Case Under the Servicemembers Civil Relief ActRead the Press Release
WASHINGTON – The Justice Department today announced that it had reached a settlement with a Virginia landlord to resolve allegations that she violated the Servicemembers Civil Relief Act (SCRA). The lawsuit alleged that the landlord failed to return prepaid rent and security deposits to a tenant who had terminated her lease early in order to comply with military orders to relocate from to Georgia.
The SCRA provides certain protections to active duty servicemembers who must terminate residential leases to comply with military orders for a permanent change of station or for deployment. The complaint, which was filed with the settlement, represents the first lawsuit involving a landlord-tenant matter brought by the Justice Department under the SCRA. Under the terms of the settlement, which must be approved in federal court in Virginia, the landlord must pay her former tenant a total of $5,600 in damages and is enjoined from engaging in future violations of the SCRA.
"It is because of our men and women in uniform that we, as a nation, are able to enjoy great personal freedoms," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "It is therefore our duty, and our privilege, to protect the rights of our servicemembers, as they protect us."
The tenant in this lawsuit, colonel Debra Bean, is a highly decorated member of the armed forces. Colonel Bean currently serves as Vice Commander for the 78th Air Base Wing at Robins Air Force Base in Georgia.
The Justice Department’s investigation of this matter originated with a referral to the Civil Rights Division from the U.S. Air Force. The Civil Rights Division received enforcement authority under the SCRA in 2006, and has since reviewed numerous allegations of SCRA violations and resolved investigations in the following areas without the need for litigation: the charging of excess interest over the six percent interest rate cap; the repossession of vehicles without court orders; and the foreclosure on home mortgage loans without court orders.
Servicemembers and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php. Additional information on the Justice Department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov.
Former Choctaw County, Oklahoma, Deputy Sheriff Found Guilty of Civil Rights ViolationsRead the Press Release
WASHINGTON – Former Choctaw County, Okla., deputy sheriff Ben Westley Milner was found guilty today by a federal jury in Muskogee, Okla., of violating the civil rights of three men by assaulting them without legal justification. In one incident, which took place on Oct. 31, 2005, defendant Milner physically abused a truck driver following a traffic stop. In a second incident on Oct. 18, 2007, Milner assaulted two inmates at the Choctaw County Jail. Milner was convicted on three counts of violating the civil rights of his victims and two counts of falsifying official reports. He faces a maximum sentence of ten years in prison for each civil rights offense and 20 years for each obstruction offense.
"The Department of Justice does not tolerate abuse of authority by the people we entrust to enforce our laws," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
"We will continue to prosecute vigorously law enforcement officers who violate the public trust as this defendant did."
"The jury spoke clearly. Jailed inmates are not punching bags or dusty rugs to be beaten by a jailer. Our consistent message has been that we will protect honorable law enforcement officers and legitimate law enforcement actions. Clearly excessive force violates our Constitution, federal law and our standards of decency," said U.S. Attorney Sheldon J. Sperling for the Eastern District of Oklahoma.
The convictions resulted from an investigation by the Oklahoma Division of the FBI, Assistant U.S. Attorney Dean Burris for the Eastern District of Oklahoma and Trial Attorney Ryan McKinstry for the Civil Rights Division.
Former Alaska State Representative Sentenced <br /> for Conspiracy to Commit BriberyRead the Press Release
Former Alaska State Representative Beverly Masek was sentenced today to six months in prison by U.S. District Judge Ralph Beistline in Anchorage, Alaska. Masek, 45, was also ordered to serve three years of supervised release.
Masek pleaded guilty on March 12, 2009, to conspiring with former Alaska businessmen Bill J. Allen and Richard L. Smith to commit bribery. Allen was the chief executive officer of VECO Corporation (VECO), a now-defunct multinational oil field services company, and Smith was a VECO vice president. Both pleaded guilty to multiple federal corruption charges in May 2007 and are awaiting sentencing.
"Citizens must have faith that the officials they elect to represent their best interests will do so without the stain of bribery and corruption," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "Through the diligent work of our public corruption prosecutors, we will continue to hold accountable those government officials who violate the public trust."
According to her plea agreement, in the spring of 2003, Masek received multiple cash payments from Allen and one of his relatives. During the same time, Masek knew that the company for which Allen and Smith worked had matters pending before the Alaska state legislature, and she knew that these matters were important to Allen’s business interests. Specifically, Masek admitted in her plea agreement that she agreed on May 7, 2003, to withdraw a piece of legislation at the request of Allen, one day before she accepted a cash payment of approximately $2,000 from Allen. Masek admitted she knew that Allen gave her the money in part because of her agreement to withdraw the piece of legislation.
The sentencing was handled by Trial Attorneys M. Kendall Day and Marc Levin of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI.
FBI Arrests Jordanian Citizen for Attempting to Bomb Skyscraper in Downtown DallasRead the Press Release
Hosam Maher Husein Smadi, 19, has been arrested and charged in a federal criminal complaint with attempting to use a weapon of mass destruction. Smadi, who was under continuous surveillance by the FBI, was arrested today near Fountain Place, a 60-story glass office tower located at 1445 Ross Avenue in downtown Dallas, after he placed an inert/inactive car bomb at the location. Smadi, a Jordanian citizen in the U.S. illegally, lived and worked in Italy, Texas. He has repeatedly espoused his desire to commit violent Jihad and has been the focus of an undercover FBI investigation.
"The highest priority of the FBI and the Department of Justice remains the prevention of another terrorist attack within the United States," said U.S. Attorney of the Northern District of Texas James T. Jacks. "In that effort, it is the job of the FBI to locate and identify individuals intent upon carrying out any type of attack upon this country and its citizens/residents. Whether as part of a group or acting alone, persons contemplating such acts need to know that all components of the government are working together to ferret out their activities and to insure that such individuals face the full measure of the law. The identification and apprehension of this defendant, who was acting alone, is a sobering reminder that there are people among us who want to do us grave harm," Jacks continued.
Robert E. Casey, Jr., Special Agent in Charge for the Dallas Office of the FBI said, "Today’s arrest of Hosam Maher Husein Smadi underscores the FBI’s unwavering commitment to bring to justice persons who attempt to bring harm to citizens of this country and significant danger to this community. Smadi made a decision to act to commit a significant conspicuous act of violence under his banner of "self Jihad." He will now face justice. The many agents, detectives, analysts and prosecutors who helped to bring about Thursday’s arrest deserve special thanks for their efforts. This case serves as a reminder of the continuing threats of terrorism we face as a nation and the FBI’s resolve to meet those threats. The arrest of Smadi is not in any way related to the ongoing terror investigation in New York and Colorado."
"The criminal complaint alleges that Hosam Smadi sought and attempted to bomb the Fountain Place office tower, but a coordinated undercover law enforcement action was able to thwart his efforts and ensure no one was harmed," said David Kris, Assistant Attorney General for National Security.
Smadi will make his initial appearance tomorrow in U.S. District Court before U.S. Magistrate Judge Irma C. Ramirez.
According to affidavits filed today with the complaint and search warrants:
Smadi was discovered by the FBI espousing his desire to commit significant acts of violence. Smadi stood out because of his vehement intention to actually conduct terror attacks in the U.S.
The FBI developed an investigative plan to determine Smadi’s true intent while also protecting the public’s safety. Smadi made clear his intention to serve as a soldier for Usama Bin Laden and al-Qa’ida, and to conduct violent Jihad. Undercover FBI agents, posing as members of an al-Qa’ida "sleeper" cell, were introduced to Smadi, who repeatedly indicated to them that he came to the U.S. for the specific purpose of committing "Jihad for the sake of God." Smadi clarified that he was interested in "self-Jihad," because it was "the best type of Jiihad." Smadi was interested in violent Jihad against those he deemed to be enemies of Islam. The investigation determined Smadi was not associated with other terrorist organizations.
Throughout the investigation, undercover FBI agents repeatedly encouraged Smadi to reevaluate his interpretation of Jihad, counseling him that the obligations a Moslem has to perform Jihad can be satisfied in many ways. Every time this interaction occurred, Smadi aggressively responded that he was going to commit significant, conspicuous acts of violence as his Jihad.
In June 2009, Smadi identified potential targets in the Dallas area; but in mid-July, he notified an undercover FBI agent that he had changed his mind regarding the targets. On July 21, 2009, Smadi met with an undercover FBI agent and directed the agent to drive them to a Wells Fargo Bank in downtown Dallas. Smadi and the undercover FBI agent then drove to 1445 Ross Avenue where the Fountain Place office tower is located. A Wells Fargo Bank is located in that building. Smadi went into the building where he conducted his own reconnaissance.
In late August 2009, while meeting with one of the undercover FBI agents in Dallas, Smadi discussed the logistics and timing of the bombing, stating that he would have preferred to do the attack on "11 September," but decided to wait until after the month of Ramadan, which ended on September 20, 2009. At the conclusion of the meeting, Smadi decided that a vehicle borne improvised explosive device (VBIED) would be placed at the foundation of the Fountain Place office tower. Unbeknownst to Smadi, the FBI ensured the VBIED contained only an inert/inactive explosive device which contained no explosive materials.
A federal complaint is a written statement of the essential facts of the offenses charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The offense of attempting to use a weapon of mass destruction carries, upon conviction, a maximum statutory sentence of life in prison and a $250,000 fine.
The case is being investigated by the FBI in conjunction with members of the FBI-sponsored North Texas Joint Terrorism Task Force. Assistant U.S. Attorney Dayle Elieson is in charge of the prosecution. The Counterterrorism Section of the Justice Department’s National Security Division is assisting in the prosecution.
Dutch Firm and Two Officers Plead Guilty to Conspiracy to Export Aircraft Components and Other Goods to IranRead the Press Release
A Dutch aviation services company, its director and sales manager pleaded guilty today in the District of Columbia to federal charges related to a conspiracy to illegally export aircraft components and other items from the United States to entities in Iran via the Netherlands, the United Arab Emirates and Cyprus.
The announcement was made by David Kris, Assistant Attorney General for National Security; Channing D. Phillips, Acting U.S. Attorney for the District of Columbia; and Kevin Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement, and Sharon E. Woods, Director of the Defense Criminal Investigative Service. The investigation was conducted by agents from the Department of Commerce’s Office of Export Enforcement, with assistance from the Defense Criminal Investigative Service (DCIS), the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE), and the Federal Bureau of Investigation (FBI).
Aviation Services International, B.V. ("ASI"), an aircraft parts supply company in the Netherlands; Robert Kraaipoel, 66, a citizen of the Netherlands and the director of ASI; and Robert Neils Kraaipoel ("Neils Kraaipoel"),40, a citizen of the Netherlands, the sales manager of ASI and son of Robert Kraaipoel, each entered a plea of guilty to a one-count criminal information in federal court in the District of Columbia.
The information charged each with conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions Regulations by exporting aircraft components and other goods to Iran without obtaining licenses from the Treasury Department’s Office of Foreign Assets Control (OFAC). The two individual defendants each face a potential sentence of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss. ASI has agreed to pay a $100,000 fine and corporate probation for five years.
According to the criminal information, from about October 2005 to about October 2007, the defendants received orders from customers in Iran for U.S.-origin goods that were restricted from being transshipped into Iran. The defendants then contacted companies in the United States and negotiated purchases of materials on behalf of Iranian customers. The defendants provided false end-user certificates to certain U.S. companies to conceal that customers in Iran would be the true recipients of the goods.
In order to conceal these activities from the U.S. government, the defendants caused certain companies in the United States to ship the materials to ASI in the Netherlands or to addresses in other countries, including the United Arab Emirates and Cyprus. Upon arrival in the Netherlands or these other countries, the ordered materials were repackaged and transshipped to Iran.
For example, according to the criminal information, the defendants used these methods to purchase various U.S. electronic communications equipment from a U.S. company between 2005 and 2007. The defendants falsely certified to the company that the equipment, which had potential applications in Unmanned Aerial Vehicles, was being sent to the Polish Border Control Agency, when, in reality, the equipment was being sent to Iran. The defendants arranged for the equipment to be exported from the United States to the Netherlands. Shortly thereafter, the equipment was sent to a customer in Iran.
In another instance, a shipment of aircraft parts from several U.S. companies that was destined for ASI in the Netherlands was detained by officers of U.S. Customs and Border Protection in January 2007. Niels Kraaipoel then called the U.S. Commerce Department and stated that the detained aircraft parts were to be resold in Europe. When asked if any were destined for Iran, he said they were not, that ASI did not have any business dealings with Iran and that he was aware of the U.S. trade restrictions on Iran.
Later in 2007, according to the criminal information, Robert Kraaipoel purchased aluminum sheets and rods from a Florida company for approximately $9,600. Kraaipoel instructed the U.S. company and a freight forwarder to list the Netherlands as the ultimate destination in the shipping documents. ASI attempted to have these goods shipped from the Netherlands to Iran, but Dutch Customs officials detained them on April 20, 2007.
In March 2007, a shipment of polymide film that ASI had purchased from a Kansas company was detained by U.S. officials. According to the criminal information, Robert Kraaipoel later contacted the U.S. freight forwarder and unsuccessfully attempted to have the items shipped to company in the U.A.E. The defendants knew that this particular company in the U.A.E. purchased items for customers in Iran.
Finally, the criminal information states that throughout much of August, September and October 2007 the defendants conducted purchases on behalf of a company in the U.A.E. that they knew supplied Iranian customers. For example, in September 2007, Niels Kraaipoel provided the U.A.E. company with a quotation for more than $200,000 worth of U.S.-origin aircraft parts and supplies.
Under the IEEPA and the Iranian Transaction Regulations, all exports to Iran of U.S.-origin commodities are prohibited absent authorization in the form of an export license from OFAC of the Department of the Treasury. It is also unlawful to ship U.S. origin products to a third country with the am of then diverting them or re-exporting them to Iran without the necessary authorization from OFAC. These prohibitions have been in place since 1995.
"This investigation demonstrates in clear terms the threat we face from the illegal foreign acquisition of U.S. technology. Keeping America’s critical technology from falling into the hands of state sponsors of terror has never been more important," said David Kris, Assistant Attorney General for National Security.
"A business or individual who illegally ships U.S.-origin goods to embargoed countries, such as Iran, undermines our national security," said Acting U.S. Attorney Phillips, Acting U.S. Attorney for the District of Columbia. "This prosecution reflects our commitment to enforcing our export control laws vigorously."
"Combating illegal transshipment of U.S.-origin items to Iran is a significant challenge and one of our top priorities," said Kevin Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement. "Willful violations will be pursued regardless of where the perpetrators may reside."
"Today's pleas represent the culmination of a long-term collaboration effort amongst the investigators and prosecutors in bringing international arms dealers to justice," said Sharon E. Woods, Director of the Defense Criminal Investigative Service.
"As long as there are those who seek to illegally acquire U.S. Military equipment and technology, DCIS will remain committed to thwarting their efforts and to protecting America's Warfighters."Assistant Attorney General Kris, Acting U.S. Attorney Phillips, and Acting Assistant Secretary Delli-Colli, and Director Woods praised Senior Special Agents David Poole and Special Agents Michael Imbrogna and James Brigham from the Department of Commerce Office of Export Enforcement; Special Agent Michael Campion from DCIS, Special Agents Michael McGonigle and Brett Gentrup from ICE, and Special Agent Amanda McDaniel from the FBI.
The prosecution is being handled by Assistant U.S. Attorneys Ann H. Petalas and Denise Cheung from the U.S. Attorney’s Office for the District of Columbia, and Trial Attorneys Ryan Fayhee and Jonathan Poling from the Counterespionage Section of the Justice Department’s National Security Division.
Detroit Clinic Owner and Manager Plead Guilty to Medicare Fraud ChargesRead the Press Release
WASHINGTON – Clinic owners and operators Jose Martinez and Denisse Martinez pleaded guilty today in U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program, Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Terrence Berg of the Eastern District of Michigan and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS) announced.
Jose Martinez, 33, and Denisse Martinez, 27, each pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Victoria Roberts. At sentencing, which is scheduled for Feb. 18, 2010, both defendants face a statutory maximum of 10 years in prison and a $250,000 fine.
According to court documents, Jose Martinez, in September 2006, opened RDM Center Inc., a Canton, Mich., medical clinic purporting to specialize in providing injection and infusion services to Medicare beneficiaries. Jose Martinez’s then-wife, Denisse Martinez, managed and operated the clinic.
In their pleas, both defendants acknowledged that they hired a physician and other employees to work at RDM Center in order to create the appearance that the clinic was a legitimate health care facility providing necessary services to patients, when in fact, everyone working at the clinic knew that it was operated for the sole purpose of defrauding Medicare.
In their pleas, both Jose and Denisse Martinez admitted that d uring the time that the RDM Center was open, the clinic routinely billed the Medicare program for services that were medically unnecessary or never provided. Both defendants admitted that they purchased only a small fraction of the medications for which the clinic billed the Medicare program. Both defendants also admitted that patients were prescribed medications at the clinic based not on medical need, but on which medications were likely to generate Medicare reimbursements.
Denisse Martinez admitted in her plea that, despite having no medical training, she completed the clinic’s patient records by filling in, among other things, the "diagnosis" and "treatment" sections of the patient charts, which were then provided to the physician for his signature.
According to information contained in the plea documents, Medicare beneficiaries were not referred to RDM 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 their kickbacks, the Medicare beneficiaries would visit the clinic and sign false documents indicating that they had received the services billed to Medicare. Kickbacks came in the form of cash and prescriptions for controlled substances.
Jose Martinez stated in his plea that he provided cash to a patient recruiter for the purpose of paying Medicare beneficiaries to sign paperwork indicating that they had received infusion and injection therapy services which they did not in fact receive. Denisse Martinez stated in her plea that she understood the patients at the clinic were induced to visit RDM Center through the payment of kickbacks. Both defendants further admitted to being aware that certain Medicare beneficiaries demanded that they be provided prescription drugs, including Vicodin, in exchange for their participation in the fraudulent scheme and that such drugs were in fact provided.
Both defendants admitted in their pleas that between approximately November 2006 and March 2007, they and their co-conspirators filed $970,631 in false and fraudulent claims with the Medicare program. According to court documents, Medicare actually paid more than $649,000 of those false claims.
The case is being prosecuted by Trial Attorneys John K. Neal and Benjamin D. Singer of the Criminal Division’s Fraud Section and by Special Assistant U.S. Attorney Thomas W. Beimers of the Eastern District of Michigan. The 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 the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since the inception of Strike Force operations in March 2007 – Miami (Phase One), Los Angeles (Phase Two), Detroit (Phase Three) and Houston (Phase Four) – the Strike Force has obtained indictments of 300 individuals and organizations that collectively have 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.
Each of the Medicare Fraud Strike Force teams are led by a federal prosecutor from the Criminal Division’s Fraud Section or the U.S. Attorney’s Office. Each team has an agent from the FBI and HHS-OIG.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team, or "HEAT," go to: www.stopmedicarefraud.gov
23 September 2009
Fraudulent Telemarketer Sentenced to 50 Years in Prison, <br /> Co-Conspirators Also Sentenced for Roles in Fake Sweepstakes SchemeRead the Press Release
Four owners of Costa Rica-based telemarketing call centers, an employee and a Texas-based list broker have been sentenced for their roles in defrauding thousands of U.S. victims of more than $20 million through a phony sweepstakes scheme.
To date, 39 defendants have been convicted for their participation in Costa Rican-based fraudulent telemarketing schemes based on false claims that the victims had won large sweepstakes prizes.
U.S. District Court Judge Frank D. Whitney of the Western District of North Carolina yesterday sentenced Michael Mangarella, 49, of Brooklyn, N.Y., to 50 years in prison; Antonio Carl Testore, 54, of Montreal, Canada, to 97 months in prison; Martin Kalchstein, 63, of Brooklyn, to six years in prison; Jaime Ligator, 68, of Miami, to five years in prison; Michal Zakrzewski, 42, of Montreal, to 126 months in prison; and Trent Nyfeller, 44, of Dallas, to 41 months in prison. In addition, Mangarella was ordered to forfeit $10 million, Testore was ordered to forfeit $1.5 million and Ligator was ordered to forfeit $2.6 million. The defendants, except Kalchstein, also were ordered to pay restitution of $4,291,473, jointly and severally with other defendants. All the defendants were also sentenced to three years of supervised release following their prison terms.
All of the defendants, except Kalchstein, were convicted of conspiring to defraud U.S. residents, most above the age of 55, out of millions of dollars by deceiving them into believing that each had won a large monetary prize in a "sweepstakes contest." According to court documents, calls to victims were made from Costa Rica using computers to make telephone calls through the Internet, disguising the originating location of the calls. Victims were informed that the callers were from the "Sweepstakes Security Commission" and that to receive their "prize," victims had to wire to Costa Rica thousands of dollars for a purported "refundable insurance fee." As long as the victims continued to pay, the co-conspirators continued to solicit more money from them. Mangarella was convicted at trial in September 2008. The remaining defendants all pleaded guilty for their roles in the scheme: Ligator in September 2009; Zakrzewski in June 2009; Testore in August 2008; and Nyfeller in January 2007.
Kalchstein, who had already been convicted in the sweepstakes scheme and sentenced to 90 months in prison, pleaded guilty in June 2009 to failure to report to prison and obstruction of justice as a result of fleeing to Mexico, instead of reporting to prison to serve his sentence.
The case was prosecuted by Senior Trial Attorney Peter B. Loewenberg and Senior Litigation Counsel Patrick M. Donley of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs also provided assistance. The case was investigated by the U.S. Postal Inspection Service; U.S. Department of Commerce, Office of the Inspector General; and U.S. Immigration and Customs Enforcement.
Five Individuals Charged in Scheme to Defraud U.S. Government Agency Related to $9.4 Million LoanRead the Press Release
Donald Daniels, Martin William Washburn, Irina Rebegeneau and Tapani Koivunen have been charged in conjunction with a scheme to defraud the Overseas Private Investment Corporation (OPIC), a government lending agency, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Joseph P. Russoniello for the Northern District of California.
The defendants, who have made initial appearances in federal court in San Francisco, were charged in an indictment returned by a federal grand jury on Aug. 27, 2009, and unsealed Sept. 17, 2009, with conspiracy to commit mail and wire fraud, wire fraud, money laundering conspiracy and substantive money laundering counts. Separately, Sergei Shkurkin was arrested Sept. 16, 2009, based on a criminal complaint and made his initial appearance in federal court last week. Shkurkin was charged in a related extortion conspiracy.
According to the indictment, Daniels, 44, Washburn, 77, Koivunen, 52, and Rebegeneau, 41, allegedly conspired to defraud OPIC, a government agency that provides loans for U.S. sponsored companies to invest in overseas projects. The indictment alleges that the defendants defrauded OPIC in conjunction with a loan to Golden Sierra Partners LLC (GSP) to establish a milling and bakery operation in Estonia. Specifically, the defendants allegedly misrepresented to OPIC that GSP’s members contributed equity to the project and misrepresented equipment costs, to obtain a $9.4 million loan from OPIC and related disbursements. As a result of these alleged misrepresentations and others, OPIC disbursed approximately $8 million.
In addition, according to the complaint against Shkurkin, members of GSP allegedly borrowed funds from Daniels to fake their equity contributions and then Shkurkin and others agreed to threaten certain GSP members to cause them to pay Daniels interest on the loan.
Daniels, Washburn and Rebegeneau were arrested and made their initial appearances in federal court in San Francisco last week. The court ordered them released on bond. Washburn and Rebegeneau will appear before U.S. District Court Judge Marilyn Hall Patel at 9:00 a.m. on Oct. 19, 2009. Daniels is scheduled to appear before U.S. Magistrate Judge Elizabeth D. LaPorte on Sept. 29, 2009, for further bail review. Koivunen was arrested in Chicago and made his initial appearance in federal court there yesterday. He will next appear in federal court in San Francisco. After being arrested and making his initial appearance last week, Shkurkin is scheduled to appear before Judge LaPorte for arraignment on Oct. 6, 2009, at 9:30 a.m. He is currently released on bond.
Daniels and Washburn are each charged with conspiracy to commit mail and wire fraud, wire fraud, money laundering conspiracy and money laundering. Koivunen is charged with conspiracy to commit mail and wire fraud, money laundering conspiracy and money laundering. Rebegeneau is charged with conspiracy to commit mail and wire fraud. Shkurkin is charged with conspiracy to collect an extension of credit by extortionate means.
The charges of wire fraud and conspiracy to commit mail and wire fraud each carry a maximum penalty of 30 years in prison and a $1 million fine. The charges of money laundering and conspiracy to commit money laundering each carry a maximum prison sentence of 20 years and a fine of $500,000 or twice the value of the funds involved in the transfer. The extortion conspiracy charge carries a maximum prison sentence of 20 years and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorneys Christine Wong and Peter B. Axelrod of the Northern District of California and Trial Attorney Krista Tongring of the Criminal Division’s Organized Crime and Racketeering Section. The case is being investigated by the FBI and the Internal Revenue Service.
Criminal Complaint
Indictment
Attorney General Establishes New State Secrets Policies and ProceduresRead the Press Release
Attorney General Eric Holder today issued a memorandum instituting new Department of Justice policies and procedures in order to ensure greater accountability in the government’s assertion of the state secrets privilege in litigation.
"This policy is an important step toward rebuilding the public’s trust in the government’s use of this privilege while recognizing the imperative need to protect national security," Holder said. "It sets out clear procedures that will provide greater accountability and ensure the state secrets privilege is invoked only when necessary and in the narrowest way possible."
Earlier this year, Attorney General Holder ordered senior Justice officials to conduct a review of the Department’s existing state secrets policies and procedures, including an internal evaluation of the pending cases in which the privilege had been invoked. The results of that internal review were shared with an interagency group comprised of officials from the Department and the intelligence community, which provided input into the formulation of the new policies and procedures. The new policy and procedures take effect October 1, 2009.
The Attorney General’s memorandum outlines several aspects of the new administrative process that increases accountability and oversight, including:
Facilitation of Court Review – The policy ensures that before approving invocation of the state secrets privilege in court, the Department must be satisfied that there is strong evidentiary support for it. In order to facilitate meaningful judicial scrutiny of the privilege assertions, the Department will submit evidence to the court for review.
Significant Harm Standard – The policy adopts a more rigorous standard to govern when the Department will defend assertions of the state secrets privilege in new cases. Under the new policy, the Department will now defend the assertion of the privilege only to the extent necessary to protect against the risk of significant harm to national security.
Narrow Tailoring of Privilege Assertions – Under this policy, the Department will narrowly tailor the use of the states secrets privilege whenever possible to allow cases to move forward in the event that the sensitive information at issue is not critical to the case. As part of this policy, the Department also commits not to invoke the privilege for the purpose of concealing government wrongdoing or avoiding embarrassment to government agencies or officials.
State Secrets Review Committee – A State Secrets Review Committee will be formed consisting of senior Department officials designated by the Attorney General who will evaluate any recommendation by the Assistant Attorney General of the relevant Division to invoke the privilege. The Committee would make its recommendation to the Associate Attorney General, who would review and refer to the Deputy Attorney General for a final recommendation to the Attorney General or his designee.
Approval by the Attorney General – The policy requires the approval of the Attorney General prior to the invocation of the states secret privilege, except when the Attorney General is recused or unavailable. Previously, the invocation of the state secrets privilege could be approved by the appropriate Assistant Attorney General
Referral to Inspectors General. The policy implements a referral process to relevant Offices of Inspector General whenever there are credible allegations of government wrongdoing in a case, but the assertion of state secrets privilege might preclude the case from moving forward.
Under the policy, the Department also commits to provide periodic reports on all cases in which the privilege is asserted to the appropriate oversight Committees in Congress.
Policies and Procedures Governing Invocation of the State Secrets Privilege
22 September 2009
Texas Man Sentenced to 76 Months in Prison for Travel with Intent to Engage in Sex with MinorsRead the Press Release
Patrick Cochran, 47, of Lake Jackson, Texas, was sentenced late on Monday in Phoenix to 76 months in prison for travel with intent to engage in sex with minors and possession of child pornography.
In addition to the prison term, Cochran was sentenced to lifetime supervised release by U.S. District Judge Stephen M. McNamee of the District of Arizona.
Cochran was indicted on Dec. 5, 2007, in Phoenix on two counts of travel with intent to engage in a sexual act with a minor. According to allegations contained in the indictment, Cochran paid a deposit and traveled to a pre-arranged meeting spot in Arizona in order to go on what he believed would be a tour of Mexico that would offer him the opportunity to have sexual contact with two boys aged 8 and 13. In reality, the tour was an undercover operation run by the Department of Homeland Security’s Immigration and Customs Enforcement (ICE).
Cochran was indicted on Jan. 20, 2009, in Houston on one count of possession of child pornography and one count of destruction of records. According to court documents, search warrants were executed at Cochran’s residence near Houston and child pornography was discovered on digital media seized from his home. Additionally, according to the court documents, when ICE agents returned to Cochran’s home to recover his computer, he told them he had thrown it away.
The Texas case against Cochran was transferred to Arizona for plea and sentencing. Cochran pleaded guilty on May 5, 2009, to one count of travel with intent to engage in sex with minors and one count of possession of child pornography. According to the plea agreements, Cochran admitted to arranging and paying to be taken to Mexico in order to have sex with two boys. Further, Cochran admitted to possessing more than 600 images of child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Trial Attorney James Silver of CEOS, with assistance from Senior Litigation Counsel Vincent Q. Kirby of the District of Arizona and Assistant U.S. Attorney Robert Stabe of the Southern District of Texas. ICE conducted the investigation.
ICE maintains "Operation Predator," an ongoing initiative to protect children from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers, criminal alien sex offenders and child sex traffickers. ICE encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423. This hotline is staffed around the clock by investigators.
Last Defendant in Tennessee Islamic Center Burning Pleads GuiltyRead the Press Release
WASHINGTON – Eric Ian Baker pleaded guilty today in federal court in Nashville, Tenn., for his role in burning and vandalizing the Islamic Center of Columbia, Tenn., on Feb. 9, 2008. Baker was charged with violating civil rights that protect religious property and for using fire in the commission of a felony. Two other defendants, Michael Corey Golden and Jonathan Edward Stone, had previously pleaded guilty in November 2008 for their roles in the arson.
During the plea hearing, Baker admitted that he, Golden and Stone assembled Molotov cocktail incendiary devices, broke into the Islamic Center, ignited the devices and used them to completely destroy the mosque. He admitted to painting swastikas and the phrase "White Power" on the mosque in the course of the arson and that they acted because of the religious character of the property.
"The law protects the right of all Americans to worship where and how they choose without fear of violence or intimidation," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will vigorously prosecute those who, through acts of terror, attempt to interfere with that right."
"This type of crime strikes at the heart of our civil rights and religious freedoms in America. I am very pleased that through local, state and federal cooperation all defendants responsible for this vile attack have been brought to justice," said U.S. Attorney Edward M. Yarbrough for the Middle District of Tennessee.
"Every Muslim who saw the news photos with the Swastika painted on the burned out Islamic center was victimized by this attack. Today, they can clearly see that American law enforcement stands strongly with them to guarantee their freedoms to worship and assemble," said ATF Nashville Field Division Special Agent in Charge James M. Cavanaugh.
"The FBI is committed to protecting the civil rights of all people through the enforcement of federal civil rights statutes," said FBI Memphis Division Special Agent in Charge My Harrison. "The destruction of any place of worship will not be ignored and the FBI will make every effort to bring those who commit such heinous acts to justice."
A date for Baker’s sentencing hearing will be scheduled at a later time. Stone and Golden are scheduled to be sentenced on Nov. 23, 2009. All three defendants face prison sentences of up to 30 years for damaging religious property and for using fire and an explosive device to commit a federal felony offense.
The case was investigated by the Columbia, Tenn., Police Department and special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Tennessee State Bomb and Arson and the FBI. The case is being prosecuted by Assistant U.S. Attorney Hal McDonough and Civil Rights Division Trial Attorney Jonathan Skrmetti.
Justice Department Obtains $134,000 in DiscriminationSettlement with Mobile Home Park in Daphne, AlabamaRead the Press Release
WASHINGTON – The Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Alabama and the Department of Housing and Urban Development (HUD) today jointly announced an agreement with the owners and managers of Pina’s Mobile Home Park in Daphne, Ala., to settle allegations of discrimination against families with children. Under the consent decree, approved today in federal court in Mobile, Ala., the defendants must pay up to $104,130 to victims of discrimination and an additional $30,000 to the government as a civil penalty.
The lawsuit, in which the U.S. Attorney’s Office served as lead counsel, originated from a charge filed by HUD on behalf of a woman who tried to rent at Pina’s Mobile Home Park, but was told she had too many children (three) to live in the park. Numerous other tenants were charged extra monthly fees for having children in their mobile homes. The complaint alleges that Arthur C. Witherington and Pina D. Witherington violated the Fair Housing Act when they discriminated against applicants and tenants with children under 18.
"Limiting how many children a tenant can have and charging extra fees for children are discriminatory, and families are protected from this kind of discrimination by the Fair Housing Act," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "The Civil Rights Division will vigorously enforce the law to prevent such discrimination."
"This District made Civil Rights litigation one of its highest priorities two years ago. We've assisted the Civil Rights Division on a number of cases and have served as lead litigators on two housing cases at the Division's request," said Acting U.S. Attorney Eugene Seidel for the Southern District of Alabama. "I commend Assistant U.S. Attorney Gary Moore for his skill and hard work as the lead attorney on this case. We will continue to work in cooperation with the Civil Rights Division, protecting the most vulnerable of our citizens is among the most important functions of the Justice Department."
"People do not lose their rights to fair housing because they have children," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. "HUD and the Department of Justice will defend their rights vigorously."
Fighting illegal housing discrimination is a top priority of the Justice Department. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.
More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt/ . Persons who believe they have experienced or witnessed unlawful housing discrimination may call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777. More information about the Fair Housing Act can also be found at http://www.usdoj.gov/crt/housing/ or www.hud.gov/fairhousing.
Department of Justice and Federal Trade Commission to Hold Workshops Concerning Horizontal Merger GuidelinesRead the Press Release
WASHINGTON – The Department of Justice and the Federal Trade Commission (FTC) announced today that they will solicit public comment and hold joint public workshops to explore the possibility of updating the Horizontal Merger Guidelines that are used by both agencies to evaluate the potential competitive effects of mergers and acquisitions.
The goal of the workshops will be to determine whether the Horizontal Merger Guidelines accurately reflect the current practice of merger review at the Department and the FTC as well as to take into account legal and economic developments that have occurred since the last significant Guidelines revision in 1992.
The Horizontal Merger Guidelines outline the merger enforcement policy of the Department and the FTC. The Guidelines describe the analytical framework and specific standards normally used by the agencies in analyzing mergers. The Guidelines are intended to reduce the uncertainty associated with enforcement of the antitrust laws in the merger area. Merger Guidelines were first adopted in 1968 by the Department of Justice. They were substantially revised in 1982 and again in 1992, when they became the Horizontal Merger Guidelines, jointly issued by the Department and the FTC. The section on efficiencies was revised in 1997. The agencies also issued a detailed Commentary on the Horizontal Merger Guidelines in 2006.
The agencies will issue a set of questions about the current Guidelines and possible revisions. Following receipt of public comments and original research addressing those questions or other issues related to the Guidelines, the agencies will host a series of five workshops. The workshops, which are open to the public and press, will take place in December 2009 and January 2010. The first workshop will be held in Washington, D.C., on Dec. 3, 2009, followed by workshops in Chicago, New York City and San Francisco. A final workshop also will be held in Washington, D.C.
"In light of legal and economic developments that have occurred since the last major revision of the guidelines, it is an appropriate time for the antitrust agencies to conduct a review of the guidelines to determine whether any revisions should be made to better protect American consumers and businesses from anticompetitive mergers," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "Having guidelines that offer more clarity and better reflect agency practice provides for enhanced transparency and gives businesses greater certainty when making merger decisions, resulting in a more competitive marketplace that benefits consumers."
"The bulk of the Merger Guidelines is over 17 years old," said FTC Chairman Jon Leibowitz. "The 1992 Guidelines explicitly stated that they would be revised from time to time. We think the time has come to do that."
The FTC will post a set of questions on its Web site later today to begin the discussion on the Guidelines. The agencies are interested in receiving written comments from attorneys, economists, academics, consumer groups, the business community and other interested parties. The questions can be found at: http://www.ftc.gov/bc/workshops/hmg/hmg-questions.pdf.
Horizontal Merger Guidelines topics to be discussed include: the overall method of analysis used by the agencies; the use of more direct forms of evidence of competitive effects; market definition; market shares and market concentration; unilateral effects, especially in markets with differentiated products; price discrimination; geographic market definition; the relevance of large buyers; the distinction between uncommitted and committed entry; the distinction between efficiencies involving fixed and marginal cost savings; the non-price effects of mergers, especially the effects of mergers on innovation; and remedies. Public comments are also invited on whether to incorporate aspects of the 2006 Commentary on the Horizontal Merger Guidelines into the Guidelines themselves.
Additional information about the date, time and exact location of the workshops will be provided at a later date. Speakers at the workshops will be drawn principally from those filing comments with the agencies. Interested parties should submit comments in accord with the procedures and time frame set forth on the FTC’s Web site.
21 September 2009
Justice Department Settles Lawsuit Alleging Race Discrimination<br /> by the City of Bonita Springs, FloridaRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a consent decree with the city of Bonita Springs, Fla., that, if approved in federal court in Fort Myers, Fla., will resolve the department’s allegations that the city discriminated against an African American employee in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits discrimination in employment on the basis of race, color, national origin, sex or religion.
The Justice Department’s complaint, filed in December 2008, alleged that the city subjected Joseph W. Johnson to a hostile work environment when, among other things, his immediate supervisor repeatedly used racial slurs and epithets to refer to Johnson and other minorities using a recreational facility where Johnson works running a youth basketball program. The complaint further alleges that white coworkers also used racial slurs and epithets to refer to Johnson. Despite Johnson’s complaints to city management about racial harassment in his workplace, the city failed to take appropriate action to remedy the situation, according to the complaint.
Under the terms of the consent decree, Bonita Springs must provide Johnson with $25,000 in compensatory monetary relief. The decree also requires the city to modify its anti-discrimination policy to include a specific process governing complaints of discrimination in the workplace. In addtion, the city must train its supervisors to ensure that they properly handle future complaints of racial discrimination.
"Racial slurs and epithets should not be tolerated anywhere, and especially not in the workplace," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Title VII protects employees from having to suffer racially hostile work environments, and employers cannot allow these racially divisive environments to fester. If employers do not put a halt to racially hostile conduct, they will face liability under Title VII."
The Civil Rights Division is committed to the vigorous enforcement of Title VII. Additional information about the Civil Rights Division is available on its Web site at http://www.usdoj.gov/crt/.
Justice Department Asks Court to Bar Nebraska CPA<br /> from Preparing Tax ReturnsRead the Press Release
WASHINGTON - The United States has asked a federal court in Lincoln, Neb., to bar Donald Ondrak, a Lexington, Neb., CPA, from preparing tax returns, the Justice Department announced today. According to the government complaint in the case, Ondrak’s firm, Don Ondrak PC, prepares federal income tax returns for customers that unlawfully understate income and employment tax liabilities by under-reporting income, overstating expenses and claiming improper deductions for non-deductible personal expenses.
The government complaint also accuses Ondrak of helping clients use sham entities and bogus transactions in order to fraudulently understate their tax liabilities. According to the complaint, the Internal Revenue Service has examined approximately 400 returns that Ondrak prepared and found that a significant number of them understated the customer’s tax liability. The complaint estimates that the tax loss from Ondrak’s alleged misconduct between 2004 and 2007 could be in the tens of millions of dollars.
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
Federal Court Bars Georgia Man &<br /> Tax Preparation Businesses from Preparing ReturnsRead the Press Release
WASHINGTON - A federal court has permanently barred Wayne Perry, a Macon, Ga., man, and his tax preparation firms, Premier Choice Inc. and Perry Tax Services, from preparing federal tax returns, the Justice Department announced today. Perry agreed to the injunction.
The government’s complaint alleged that Perry fraudulently claimed fuel tax credits for customers who were not entitled to them. The fuel tax credit is available only to taxpayers who operate farm equipment or off-highway business vehicles. Perry allegedly claimed absurdly large credits by falsely reporting purchases of huge quantities of gasoline where, in most cases, the cost of the gasoline was greater than the customers’ annual income. Perry had prepared over 6,300 federal tax returns since 2004, according to the government.
Fuel credit scams were on last year’s IRS list of the Dirty Dozen Tax Scams. In the past few years the Justice Department has obtained injunctions shutting down many tax preparers who claim the phony credits on customers’ returns.
In the past decade, the Justice Department’s Tax Division has obtained more than 425 injunctions against tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department’s Web site, as is information about the Justice Department’s Tax Division.
Associate Attorney General Announces Funding to Tribal CommunitiesRead the Press Release
Associate Attorney General Tom Perrelli announced today that the Department of Justice is awarding more than $236 million in Recovery Act and Fiscal Year 2009 public safety funding to criminal justice initiatives in Indian Country nationwide. The vital support to tribal communities includes more than $224 million in Recovery Act funding to construct and renovate prisons and jails in Indian Country and nearly $12 million to enhance and improve the juvenile justice systems for American Indian and Alaskan Native youth throughout the country.
The Justice Department official is in Albuquerque for the second of two working sessions with tribal leadership and law enforcement experts leading up to the Attorney General’s Tribal Nations Listening Conference on October 28-29, 2009, part of an ongoing Justice Department initiative to increase engagement, coordination and action on tribal justice in Indian Country.
"This week’s session is another step forward, but we have many steps to go in what I know will be a long partnership with tribal communities as the Department of Justice continues to take action on public safety issues in Indian Country, " said Associate Attorney General Perrelli. "None of these resources will matter if we do not direct them properly and at the issues that matter. The Department may be able to provide funding, but only by working together can we make sure tribal communities get what they need."
More than $224 million will be administered by the Office of Justice Programs (OJP) through the Correctional Facilities on Tribal Lands Program. The program provides resources to allow eligible American Indian tribes and Alaska Native villages to construct or renovate correctional facilities on tribal lands, with consideration given to the detention bed space needs and the violent crime statistics of the applicant tribe or village. A listing of all recipients of the Recovery Act Correctional Facilities on Tribal Lands Awards is available at http://www.ojp.gov/recovery/Tribalcorrectional_Awards.htm .
The 2009 Tribal Youth Program is awarding more than $11.96 million in support of enhanced tribal efforts to prevent and control delinquency and improve the juvenile justice system for American Indian/Alaskan Native youth. A major focus of the program is providing youth with mental health services. A listing of all recipients of the 2009 Tribal Youth Program awards is available at http://www.ojp.gov/funding/FY09Awards.htm .
20 September 2009
Three Arrested in Ongoing Terror InvestigationRead the Press Release
Two individuals in Colorado and one individual in New York have been arrested on charges of making false statements to federal agents in an ongoing terror investigation.
FBI agents in Colorado arrested Najibullah Zazi, 24, a resident of Aurora, Colo., and legal permanent resident from Afghanistan, and his father Mohammed Wali Zazi, 53, a resident of Aurora and a naturalized U.S. citizen from Afghanistan. In addition, FBI agents in New York arrested Ahmad Wais Afzali, 37, a resident of Flushing, N.Y., and a legal permanent resident from Afghanistan.
Each of the defendants has been charged by criminal complaint with knowingly and willfully making false statements to the FBI in a matter involving international and domestic terrorism. Najibullah Zazi and Mohammed Zazi are scheduled to make their initial appearances on Monday in federal court in the District of Colorado. Ahmad Afzali is scheduled to make his initial appearance on Monday in federal court in the Eastern District of New York. If convicted, each faces a potential eight years imprisonment.
"The arrests carried out tonight are part of an ongoing and fast-paced investigation. It is important to note that we have no specific information regarding the timing, location or target of any planned attack. As always, however, the American people should remain vigilant and report any suspicious activities to their local authorities," said David Kris, Assistant Attorney General for National Security. "I would like to thank the many agents, analysts and attorneys who are working extremely hard on this important matter."
According to affidavits filed in support of the three criminal complaints, the FBI is investigating several individuals in the United States, Pakistan and elsewhere, relating to a plot to detonate improvised explosive devices in the United States.
Records from U.S. Customs and Border Protection (CBP) reflect that, on Aug. 28, 2008, Najibullah Zazi flew to Peshawar, Pakistan from Newark International Airport via Geneva, Switzerland and Doha, Qatar. CBP records further reflect that Najibullah Zazi traveled from Peshawar to John F. Kennedy International Airport on or about Jan. 15, 2009.
According to the affidavits, on or about Sept. 9, 2009, FBI agents observed Najibullah Zazi depart his residence in Colorado in a rented car. He drove to New York City, arriving the following day, and spent the night at a residence in Flushing, Queens ("the Queens Residence.")
On Sept. 10, 2009, New York City Police Department (NYPD) detectives met with defendant Afzali, whom the NYPD had utilized as a source in the past. According to the affidavits, the detectives questioned Afzali about Najibullah Zazi and others and showed him photographs of Najibullah Zazi and others. Afzali allegedly told the detectives he recognized Najibullah Zazi and several of the men in the photographs.
According to affidavits, on Sept. 11, 2009, defendant Mohammed Zazi placed a call to Afzali which lasted approximately 20 minutes. That same day, the FBI lawfully intercepted a phone conversation between Mohammed Zazi and his son, Najibullah Zazi. An affidavit alleges that, during the conversation, Mohammed Zazi told his son that he had spoken to Afzali who had informed him about being visited by law enforcement and shown photographs. Mohammed Zazi told his son that Afzali would call him and he advised his son to speak with Afzali "before anything else," according to affidavits.
In the midst of this phone call, Najibullah Zazi allegedly received a call from Afzali, who discussed his meeting with law enforcement the day before. According to a draft summary of the transcription, Afzali allegedly stated: "I was exposed to something yesterday from law enforcement. And they came to ask me about your characters." Afzali also allegedly asked Najibullah Zazi about his last trip to Pakistan and added, "Listen, our phone call is being monitored."
According to the affidavits, in another legally intercepted phone conversation on Sept. 11, 2009, Najibullah Zazi told Afzali that his car had been stolen and that he feared he was being "watched." Afzali allegedly asked if there was any "evidence in his car," and Najibullah Zazi said no.
That same day, FBI agents conducted a legally authorized search of Najibullah Zazi’s rental car, which was parked near the Queens residence. During the search, agents found a laptop computer containing a jpeg image of nine-pages of handwritten notes. According to the affidavits, the notes contain formulations and instructions regarding the manufacture and handling of initiating explosives, main explosives charges, explosives detonators and components of a fuzing system. On Sept. 12, 2009, Najibullah Zazi flew from La Guardia Airport in New York to Denver.
On Sept. 16, 2009, FBI agents interviewed Najibullah Zazi in Denver. According to an affidavit, when he was asked about and shown handwritten notes regarding explosives found on his laptop computer, Najibullah Zazi falsely asserted that he had never seen the document before and stated he had not written the notes.
On Sept. 17 and 18, 2009, Najibullah Zazi was further interviewed by the FBI in Denver. According to affidavits, Najibullah Zazi admitted in the interviews that during his 2008 trip to Pakistan, he attended courses and received instruction on weapons and explosives at an al-Qaeda training facility in the Federally Administered Tribal Areas (FATA) of Pakistan.
The affidavits allege that, on Sept. 17, 2009, Afzali was interviewed by authorities in New York where he falsely asserted in a written statement that he did not tell Najibullah Zazi or Mohammed Zazi that authorities had approached him seeking information about Najibullah Zazi. According to the affidavits, Afzali also falsely asserted that he never told Najibullah Zazi that they were being monitored on the phone and that he never asked Najibullah Zazi about evidence in his car.
The affidavits further allege that, on Sept. 16, 2009, Mohammed Zazi was interviewed by the FBI in Denver where he was asked whether anyone had called him and told him about his son’s activities and any trouble regarding his son. According to the affidavits, Mohammed Zazi falsely stated that he had never called anyone in New York other than his son and he had never received a call from anyone in New York. He allegedly revised his statement to say he had received one call from an individual who informed him that his son had missed his flight. According to the affidavits, Mohammed Zazi was later asked if he knew anyone by the name of Afzali and he said he did not.
These prosecutions are being handled by the U.S. Attorney’s Offices for the Eastern District of New York and the District of Colorado, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division.
The investigation is being conducted by the New York and Denver FBI Joint Terrorism Task Forces, which combined have investigators from more than fifty federal, state and local law enforcement agencies .
The public is reminded that criminal complaints contain mere allegations and a defendant is presumed innocent until proven guilty.
18 September 2009
Justice Department Submits Views on ProposedGoogle Book Search SettlementRead the Press Release
The Department of Justice today advised the U.S. District Court for the Southern District of New York that while it should not accept the class action settlement in The Authors Guild Inc. et al. v. Google Inc. as proposed due to concerns of the United States regarding class action, copyright and antitrust law, the parties should be encouraged to continue their productive discussions to address those concerns. In its statement of interest filed with the court, the Department stated:
"Given the parties’ express commitment to ongoing discussions to address concerns already raised and the possibility that such discussions could lead to a settlement agreement that could legally be approved by the Court, the public interest would best be served by direction from the Court encouraging the continuation of those discussions between the parties and, if the Court so chooses, by some direction as to those aspects of the Proposed Settlement that need to be improved. Because a properly structured settlement agreement in this case offers the potential for important societal benefits, the United States does not want the opportunity or momentum to be lost."
In its filing, the Department proposed that the parties consider a number of changes to the agreement that may help address the United States’ concerns, including imposing limitations on the most open-ended provisions for future licensing, eliminating potential conflicts among class members, providing additional protections for unknown rights holders, addressing the concerns of foreign authors and publishers, eliminating the joint-pricing mechanisms among publishers and authors, and, whatever the settlement’s ultimate scope, providing some mechanism by which Google’s competitors can gain comparable access.
The settlement agreement between Google and the authors and publishers aims to resolve copyright infringement claims brought against Google by the Authors Guild and five major publishers in 2005 raised by Google’s efforts to digitally scan books contained in several libraries and make them searchable on the Internet. The District Court’s hearing on the proposed settlement is scheduled to take place on October 7, 2009.
Cover Letter
Statement of Interest
Justice Department Settles Allegations of ReligionDiscrimination Against Guideone Mutual Insurance Co.Read the Press Release
WASHINGTON – The Justice Department today announced a settlement that, pending court approval, will resolve allegations that the GuideOne Mutual Insurance Company and two authorized agents discriminated because of religion when they advertised special benefits and discounts only to "churchgoers" and "persons of faith." Under the settlement, the defendants must pay a total of $29,500 to three victims of discrimination, an additional $45,000 to the government as a civil penalty and stop the alleged discriminatory practices.
The complaint, filed today in the U.S. District Court for the Western District of Kentucky in conjunction with a proposed consent decree, alleges that the defendants offered a special endorsement to their homeowners and renters insurance policies at no extra charge called FaithGuard, which provides special benefits and discounts only to "churchgoers" and "persons of faith." GuideOne offered the FaithGuard endorsement in at least 19 states and used an application form that included a space for applicants to indicate their "denomination."
"Discrimination on the basis of someone’s religious faith is prohibited by the Fair Housing Act," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "All individuals have the right to secure homeowners and renters insurance without regard to their religious beliefs, and the Civil Rights Division will continue to ensure those rights are protected."
The lawsuit also alleges that the defendants’ conduct constitutes a pattern or practice of discrimination or a denial of rights to a group of persons. The suit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by two individuals, one an atheist and one an agnostic, and by the Lexington Fair Housing Council, a non-profit fair housing organization. After investigating the complaints, HUD issued a charge of discrimination, and after one of the complainants elected to have the case heard in federal court, the case was referred to the Justice Department.
"We thank the Justice Department and the parties for reaching an equitable settlement that advances the principles of equality and non-discrimination in access to homeowners and renters insurance," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity.
The settlement also requires GuideOne to stop selling homeowners and renters insurance policies with the FaithGuard endorsement, train GuideOne insurance agents on their responsibilities under the Fair Housing Act and provide periodic reports to the Justice Department.
The 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.
Eight More Individuals Charged in Casino-cheating ConspiracyRead the Press Release
WASHINGTON – A federal grand jury in San Diego has indicted an additional eight defendants for conspiracy to cheat a total of 11 casinos across the country, Assistant Attorney General for the Criminal Division Lanny A. Breuer and U.S. Attorney for the Southern District of California Karen P. Hewitt announced today.
A one-count indictment, handed up in the Southern District of California on Sept. 1, 2009, and unsealed on Sept. 15, 2009, charges seven defendants each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering. Defendants charged in this indictment include Jason Cavin, Connie Marie Holmes, Brandon Pete Landry, Nedra Fay Landry, Geraldo Montaz, Jesus Rodriguez and Mike Waseleski.
According to the indictment, from approximately March 2002 through July 2006, the defendants and co-conspirators allegedly formed and participated in a conspiracy, defined in the indictment as the "Tran Organization," to cheat at gambling in casinos across the United States. The indictment lists 10 casinos that were allegedly targeted by members of the conspiracy, including five casinos that are owned and operated by Indian tribes.
An additional defendant, Jimmy Ha, was charged in a superseding indictment that was returned in the Southern District of California on Sept. 1, 2009, and unsealed on Sept. 3, 2009, for an alleged conspiracy, defined in the indictment as the "Tran Organization," to cheat the Barona Valley Ranch Casino and Resort in Lakeside, Calif., in 2005. James Root, who was previously indicted in connection with this case, was also charged in the superseding indictment.
If convicted on the conspiracy charge, defendants face a maximum five-year prison sentence.
According to both indictments, the defendants and others executed a "false shuffle" cheating scheme at casinos during blackjack and mini-baccarat games. The indictments allege that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating "slugs" of un-shuffled cards. After tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a "false shuffle," and then members of the group would bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy won thousands of dollars during card games.
There were two previous indictments in connection with the Tran Organization’s alleged casino-cheating conspiracy.
Nineteen alleged members of the Tran Organization were charged in a three-count indictment returned in San Diego on May 22, 2007, and unsealed on May 24, 2007, including Phuong Quoc Truong, Van Thu Tran, Tai Khiem Tran, Anh Phuong Tran, Phat Ngoc Tran, Martin Lee Aronson, Liem Thanh Lam, George Michael Lee, Tien Duc Vu, Son Hong Johnson, Barry Wellford, Willy Tran, Han Truong Nguyen and Ha Thuy Giang. Each were charged with one count of conspiracy to participate in the affairs of a racketeering enterprise, defined in the indictment as the Tran Organization; one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering.
Eleven additional defendants were charged in a separate indictment for conspiring to commit offenses on behalf of the Tran Organization. A one-count indictment, unsealed in the Southern District of California on Sept. 11, 2008, charged Bryan Arce, Don Man Duong, Hogan Ho, Thang Viet Huynh, Outtama Keovongsa, Leap Kong, Qua Le, Khunsela Prom, James Root, Darrell Saicocie, and Dan Thich each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering.
To date, 31 defendants have pleaded guilty to charges relating to the casino-cheating conspiracy including: Phuong Quoc Truong, Tai Khiem Tran, Anh Phuong Tran, Phat Ngoc Tran, Martin Lee Aronson, Liem Thanh Lam, George Michael Lee, Tien Duc Vu, Son Hong Johnson, Barry Wellford, John Tran, Willy Tran, Tuan Mong Le, Duc Cong Nguyen, Han Truong Nguyen, Roderick Vang Thor, Sisouvanh Mounlasy, Navin Nith, Renee Cuc Quang, Ui Suk Weller, Phally Ly, Khunsela Prom, Hop Nguyen, Hogan Ho, Darrell Saicocie, Bryan Arce, Qua Le, Outtama Keovongsa, Leap Kong, Thang Viet Huynh, and Don Man Duong. These defendants admitted to targeting, with the aid of co-conspirators, a combined total of approximately 26 casinos in the United States and Canada during the course of the conspiracy, including:
1) Beau Rivage Casino in Biloxi, Miss.; 2) Casino Rama, in Orillia, Ontario, Canada; 3) Foxwoods Resort Casino in Ledyard, Conn.; 4) Gold Strike Casino in Tunica, Miss.; 5) Horseshoe Casino in Bossier City, La.; 6) Horseshoe Casino and Hotel in Tunica, Miss.; 7) Isle of Capri Casino in Westlake, La.; 8) Majestic Star Casino in Gary, Ind.; 9) Mohegan Sun Resort Casino in Uncasville, Conn.; 10) Palace Station Casino in Las Vegas; 11) Resorts East Chicago Hotel and Casino in East Chicago, Ind.; 12) Sycuan Casino in El Cajon, Calif.
13) Cache Creek Indian Bingo and Casino in Brooks, Calif.; 14) Emerald Queen Casino in Tacoma, Wash.; 15) Imperial Palace Casino in Biloxi, Miss.; 16) Argosy Casino in Baton Rouge, La.; 17) Trump 29 Casino in Coachella, Calif.; 18) Isle of Capri Casino in Bossier City, La.; 19) Agua Caliente Casino in Rancho Mirage, Calif.; 20) Spa Resort Casino in Palm Springs, Calif.; 21) Pechanga Resort and Casino in Temecula, Calif.; 22) L'Auberge du Lac Casino in Lake Charles, La.; 23) Nooksack River Casino in Deming, Wash.; 24) Barona Valley Ranch Casino and Resort in Lakeside, Calif.; 25) Caesars Indiana Hotel and Casino in Elizabeth, Ind.; 26) Monte Carlo Resort and Casino in Las Vegas.Two other defendants, Ha Thuy Giang and Tammie Huynh, pleaded guilty to tax offenses stemming from the investigation, and Khai Hong Tran admitted to the offenses alleged in the 2007 U.S. indictment when he pleaded guilty to casino cheating offenses in Canada.
The prosecution of the case is led by the Criminal Division’s Organized Crime and Racketeering Section. Department of Justice Trial Attorneys Joseph K. Wheatley and Robert S. Tully are prosecuting the case in San Diego. The case is being investigated by the FBI’s San Diego Field Office, the Internal Revenue Service-Criminal Investigation, the San Diego Sheriff’s Department and the California Department of Justice’s Bureau of Gambling Control. The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario, Canada, Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission and the Washington State Gambling Commission.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Anyone with information relating to the investigation may contact the FBI’s San Diego Field Office at (858) 565-1255.
Indictment
Superseding Indictment
Indictment
17 September 2009
Wife of Alleged Gang Leader Sentenced, Alleged Leader’s Brother Re-enters Guilty Plea <br /> in Drug Conspiracy CaseRead the Press Release
Almighty Latin King and Queen Nation (ALKQN) member Marie Chavez, aka "Shorty," wife of an alleged ALKQN leader, Jose Nava, aka "Chino," was sentenced today, while her brother-in-law Luis Nava, aka "Flaco," re-entered a guilty plea to a superseding indictment that charged them and 14 others with various offenses related to alleged narcotics and weapons trafficking, as well as violent activities throughout Texas.
Marie Chavez, 28, of Lubbock, Texas, was sentenced today to 188 months in prison by U.S. District Judge Sam R. Cummings in U.S. District Court in Lubbock. Chavez pleaded guilty on June 15, 2009, to the superseding indictment, which charged her with one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana, as well as one count of possession with intent to distribute 500 grams or more of cocaine. Chavez has been in custody since her arrest in December 2008.
Luis Nava today re-entered his guilty plea to the superseding indictment, which charged 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 was scheduled to be sentenced on Aug. 28, 2009, after previously pleading guilty on May 21, 2009. During that sentencing hearing, the court granted a request by Nava to withdraw his guilty plea and scheduled a trial for Oct. 5, 2009. With today’s re-entered plea, Nava’s sentencing is now scheduled for Oct. 2, 2009. Nava has been in custody since his arrest in December 2008.
According to documents filed in court, Chavez and Nava admitted they were members of a conspiracy that included Jose Robledo Nava; Reynaldo Nava, aka "Rat;" Robert Allen Ramirez, aka "Nesyo;" Carol Ann Rivas Nava; Cecily Dominique Juarez; Jesus Martinez, aka "Solid;" David Hellums, aka "Cutthroat;" James Johnathan Cole, aka "Blitz;" Eduardo Daniel Mares, aka "Pitt;" Gabriel Lee Gonzales; Michael Conde, aka "Psycho;" John Guzman; 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.
Chavez and Nava admitted that the overall scope of the conspiracy involved at least five kilograms of cocaine and 100 kilograms of marijuana. Chavez and Nava 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, Texas, for further distribution.
Aside from these two defendants, 13 defendants have also entered guilty pleas, with three sentenced thus far. The five remaining defendants, including Jose Robledo Nava, the alleged ALKQN leader in Texas, are pending trial. Jose Robledo Nava, along with James Johnathan Cole, Robert Allen Ramirez, Gabriel Lee Gonzales and Eduardo Daniel Mares, are charged in the indictment with the May 4, 2008, murders of Valerie Garcia and Michael Cardona in Big Spring.
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; Lubbock County Sheriff’s Office; and the Howard County District Attorney’s Office.
Trial Attorneys Cody L. Skipper and Joseph A. Cooley of the 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.
Manager of Bogus Foreign Currency Exchange Ponzi Scheme <br /> Pleads Guilty to Obstruction of JusticeRead the Press Release
WASHINGTON - Teresa Vogt, a resident of Anaheim, Calif., pleaded guilty on Sept. 15, 2009, to one count of obstruction of justice before U.S. District Court Judge Dale S. Fischer in Los Angeles, the Justice Department and Internal Revenue Service (IRS) announced.
Vogt and eight co-defendants were indicted in May 2005 on tax fraud, conspiracy, money laundering and other charges related to the operation of the Genesis Fund. According to the indictment, Vogt and her co-defendants operated the fund, a bogus foreign currency exchange investment fund that operated as a Ponzi scheme from May 1998 to June 2002. The Genesis Fund received millions of dollars of investments.
The defendants, as well as Genesis Fund literature, falsely claimed that investors received returns of 4% monthly; however, investments were actually used to make "profit" distributions to the defendants and early investors. Vogt worked as the fund’s primary administrator and later as its manager.
According to the plea agreement, Vogt has agreed to cooperate with the government and is expected to testify at a trial of her co-defendants. Vogt admitted that she and others received a grand jury subpoena and that some records which should have been produced were not. Specifically, Vogt and others shipped nineteen boxes of documents to Costa Rica and did not produce these records to the government.
Vogt faces a maximum prison sentence of ten years and a $250,000 fine. Judge Fischer set the sentencing for March 22, 2010.
The trial of the remaining five defendants on tax fraud and conspiracy charges is set to begin before Judge Fischer on Oct. 21, 2009. A second trial on additional charges related to the Ponzi scheme is scheduled to begin in March 2010.
In August 2009, co-defendant Victor Preston, an attorney, pleaded guilty to conspiring to defraud the United States in relation to the scheme. According to the plea agreement, Preston, formerly of Costa Rica, admitted to assisting two investors in the Genesis Fund evade income taxes related to the sale of their business. Preston further admitted that he did not accurately report all of his individual income on his tax returns.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division thanked the IRS’s Criminal Investigation Division who investigated the case, as well as Tax Division trial attorneys Lori A. Hendrickson, Ellen M. Quattrucci and Danny N. Roetzel who are prosecuting the case. Mr. DiCicco also thanked the U.S. Attorney’s Office in Los Angeles for their assistance in the prosecution.
Los Angeles Area Tax Defier Convicted of Criminal Contempt<br /> for Violating InjunctionRead the Press Release
WASHINGTON - James A. Mattatall, of Torrance, Calif., was convicted Tuesday of criminal contempt by a federal district court in Los Angeles, the Justice Department announced. Mattatall’s conviction relates to his violations of a 2004 permanent injunction that barred him from preparing tax returns for others and representing persons before the IRS.
During trial, the government presented evidence showing that Mattatall violated the injunction by continuing to prepare tax returns and represent customers before the Internal Revenue Service (IRS). Additionally, Mattatall attempted to evade detection by not signing the returns as the paid preparer and by using an alias when representing customers.
At trial, Mattatall argued that the terms "taxpayer" and "representation" were vague in the injunction and that he did not willfully violate it. However, U.S. District Court Judge Dean Pregerson, having labeled Mattatall as a "tax protestor" in his previous orders, rejected Mattatall’s defense, finding that he was playing word games and taking citations from the federal tax code out of context.
The court found that its injunction was clear, that Mattatall was well aware of it, and that he willfully violated it. At the conclusion of the trial, the judge cautioned Mattatall to re-evaluate his positions on the tax laws, warning him that he faces the possibility of a very tragic turn in his life if he continues down his current path.
Sentencing is set for Nov. 23, 2009, in Los Angeles. Mattatall faces a maximum sentence of six months in prison.
"The court’s guilty verdict shows there are serious criminal consequences to violating an injunction," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "The Justice Department is committed to prosecuting enjoined tax preparers and promoters who violate the terms of their injunction."
Acting Assistant Attorney General DiCicco thanked Justice Department trial attorney Michael Pahl and Assistant U.S. Attorney Robert Conte, who jointly handled the case.
Delaware Man Found Guilty of Sex TourismRead the Press Release
Thomas S. Pendleton of Wilmington, Del., was found guilty today of traveling in foreign commerce to engage in illicit sexual conduct with a minor under the age of 16.
Pendleton, 66, was convicted by a federal jury after a three-day trial. He was indicted on the charge on July 24, 2008, after being deported back to the United States from Germany in January 2008.
Pendleton was convicted on April 15, 2009, by a separate jury sitting in the District of Delaware for failing to register as a sex offender. The Honorable Chief Judge Gregory M. Sleet presided over both trials and is scheduled to sentence Pendleton on Dec. 17, 2009. He faces up to 30 years in prison on the sex tourism charge and up to 10 years in prison for failing to register as a sex offender.
Evidence introduced at trial established that Pendleton traveled from the United States to Germany in November 2005, where he befriended the 14-year-old victim, who at the time was living in an orphanage. During the next several weeks, the defendant cultivated a friendship with the victim and made arrangements to go biking with him in May 2006, just after the victim turned 15 years old. Testimony at trial established that while on the bike trip, the victim woke up to find Pendleton fondling him. The victim and a witness from the German camp site where the crime occurred traveled to the United States to testify.
The jury was also allowed to hear testimony from a former victim of Pendleton who was similarly abused on two biking trips that took place in Virginia and New Jersey in 1989, when that victim was 12. In addition to hearing testimony from the now 32-year-old victim, the jury also learned that the defendant was convicted of the offense committed in New Jersey.
This case was investigated by U.S. Immigration and Customs Enforcement and the U.S. Marshals Service. A computer forensic specialist from the High Tech Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) performed an analysis of a computer and other digital media seized from the defendant, and provided expert testimony at trial regarding his findings.
The case was prosecuted by Assistant U.S. Attorney Ilana Eisenstein of the U.S. Attorney’s Office for the District of Delaware and CEOS Trial Attorney Jennifer Toritto Leonardo.
City of Jeffersonville, Indiana, Agrees to Upgrade Sewer Systems to Comply with Clean Water ActRead the Press Release
WASHINGTON—The city of Jeffersonville, Ind., has agreed to make extensive improvements to its sewer systems that will significantly reduce the city’s longstanding sewage overflows into the Ohio River in a comprehensive Clean Water Act settlement with federal and state government, the Justice Department, the U.S. Environmental Protection Agency (EPA) and the state of Indiana announced today.
According to a consent decree filed today in federal court, the city is required to develop and implement a comprehensive plan to reduce, and where feasible, eliminate overflows into the Ohio River from its combined sewers by calendar year 2020 or 2025, depending on Jeffersonville’s financial health; implement a plan with specific actions to improve the capacity, management, operation, and maintenance of its sanitary sewer system to eliminate overflows of untreated sewage; and eliminate all discharge points within its sanitary sewer system.
According to the investigation, throughout the year, Jeffersonville’s sewer system is overwhelmed by rainfall, resulting in discharges of untreated sewage and overflows of sewage combined with storm water into the Ohio River, totaling millions of gallons each year. Under this settlement, the city will improve its sewer system to minimize, and in many cases, eliminate those overflows at a cost likely between $100 and $150 million.
"The federal Clean Water Act requires cities like Jeffersonville to eliminate or reduce their sewage overflows into the nation’s rivers, lakes and oceans," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This settlement requires Jeffersonville to take steps to prevent sewage spills and overflows into the Ohio River. We’re pleased that the city has agreed to take these important steps that will improve water quality in the Ohio River and protect public health."
"EPA is committed to protecting health and the environment by bringing aging sewer systems into compliance with the Clean Water Act," said Bharat Mathur, EPA’s Acting Region 5 Administrator. "We are pleased that the city of Jeffersonville has committed to make improvements that will significantly improve water quality in the Ohio River."
"This was not an easy settlement to reach, but the agreement is fair to all sides. It has been very frustrating to all that wastewater flowed into the Ohio River and nearby streams after heavy rains because of aging infrastructure inadequate to the capacity," Indiana Attorney General Greg Zoeller said. "Violations of the Clean Water Act were all too frequent. The city is agreeing to uphold its environmental responsibilities, and ultimately the public – those who live and work near the Ohio River – will in the long run benefit from these improvements."
"IDEM partnered with U.S. EPA, the U.S. Attorney’s office, the Indiana Attorney General’s office and the city of Jeffersonville to reach an effective agreement for eliminating pollutants from Jeffersonville’s combined sewer system," said Commissioner Thomas Easterly of the Indiana Department of Environmental Management. "That agreement includes green infrastructure provisions, such as installing pervious pavers and a rain garden along the river front, which will serve as a model for other cities around the nation. This agreement will improve the quality of life for their community and others downstream."
In addition to improving its sewer system, Jeffersonville has agreed to pay the United States a civil penalty of $49,500 and the state of Indiana a civil penalty of $8,250, provided that Jeffersonville implements two environmental projects identified in the settlement that are designed to improve water quality in the city at a cost of more than $248,000.
The city of Jeffersonville is located in Clark County, Ind., on the north bank of the Ohio River, directly across the river from Louisville, Ky. Jeffersonville has a population of approximately 30,000. Of Jeffersonville’s total sewered area, 15 percent is served by combined sewers while 85 percent is served by separate sanitary sewers. The combined sewers are located in the older, downtown portion of Jeffersonville and lack sufficient capacity to transport all of the combined sewage that it receives to Jeffersonville’s wastewater treatment plant during rainfall events. As a result, Jeffersonville commonly discharges the combination of sewage and storm water through one or more of its 13 combined sewer overflow outfalls that discharge to the Ohio River.
In the past, the United States has reached similar agreements with numerous municipal entities across the country including Nashville, Tenn.; Mobile, Ala.; Knoxville, Tenn.; Toledo, Ohio; Hamilton County (Cincinnati), Ohio; Louisville, Ky.; Indianapolis, Ind.; Fort Wayne, Ind.; Ironton, Ohio; and the Sanitation District No. 1 in northern Kentucky.
The consent decree, lodged in the U.S. District Court for the District of Indiana, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
16 September 2009
Ohio Man Sentenced to 15 Years in Prison for <br /> Child Pornography Charges and Violation of the Adam Walsh ActRead the Press Release
Timothy L. Lantz was sentenced today to 15 years in prison for transporting child pornography in interstate commerce and failing to update his sex offender registration in violation of the Adam Walsh Act.
Lantz, 57, was also sentenced by U.S. District Judge George C. Smith in Columbus, Ohio, to lifetime supervised release following his prison term, and was ordered to pay a $10,000 fine. Lantz pleaded guilty to the charges on May 4, 2009.
According to his plea agreement, Lantz, a convicted sex offender, fled the Columbus area in January 2007, days after members of the FBI Cybercrime Task Force searched his West Columbus apartment and seized multiple computers, hard drives and other media. Forensic analysis uncovered more than 9,000 images and 1,200 videos of child pornography on the computers and storage media.
An international search for Lantz ended in the Philippines in June 2008, when Philippine Immigration and Philippine National Police authorities arrested him without incident in the remote Kolambugan, Lanao Del Norte region. Philippine authorities turned Lantz over to the U.S. Department of State’s Diplomatic Security Service in Manila, and Deputy U.S. Marshals returned him to the United States, where he has since been in custody.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Deborah Solove of the Southern District of Ohio and CEOS Trial Attorney Mi Yung C. Park. The case was investigated by the U.S. Marshals Service, the FBI Columbus Cybercrime Task Force, the State Department’s Diplomatic Security Service and U.S. Embassy staff in Manila, as well as CEOS’ High Technology Investigative Unit.
Federal Court Shuts Down Nevada Tax Return PreparerRead the Press Release
WASHINGTON - A federal court has permanently barred Francis Kenneth (Frank) Albert of Sparks, Nev., from preparing federal income tax returns for others, the Justice Department announced today. The court found that Albert repeatedly engaged in fraudulent or deceptive conduct in preparing returns.
According to the government complaint in the case, Albert engaged in several different schemes while preparing returns. These included inventing fake businesses, fabricating expense deductions and fabricating charitable contribution deductions. The complaint alleged that Internal Revenue Service audits have revealed that Albert’s schemes have cost the government at least $1.1 million.
Since 2001, 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.
Brooklyn Resident Sentenced to Prison for Conspiracy to File False Claims for Tax RefundsRead the Press Release
WASHINGTON – Odell Folks, of Brooklyn, N.Y., was sentenced to prison today by District Judge Carol Bagley Amon of the Eastern District of New York for his participation in a false tax return scheme, the Justice Department and Internal Revenue Service (IRS) announced. Folks, who pleaded guilty in March 2009 to mail fraud, a false claims conspiracy, and making and subscribing a false return, was sentenced to 77 months in prison and ordered to pay restitution of $489,292.
Folks, along co-defendants Tanya Smith, Keith Terry, and Sharon Smith, was indicted in November 2008 for a scheme to file false claims for refund with the IRS using names of clients of the New York City Human Resources Administration (HRA) and the Center for Employment Opportunities (CEO). According to the indictment, between approximately May 2003 and February 2005, the defendants participated in a scheme to defraud the IRS by submitting false income tax returns requesting refunds in the names of individuals who had not earned sufficient income to trigger the filing requirement.
According to the indictment and court records, Folks obtained the personal identifying information of individuals receiving public assistance and, without their knowledge, submitted to the IRS false returns claiming refunds in their names. Folks had the refund checks sent to the addresses of individuals who he paid to receive and provide him with the checks. Folks and Sharon Smith were employed as job counselors at CEO. HRA offers a wide range of social service programs to individuals receiving public assistance. CEO provides comprehensive employment services for persons with criminal records, including temporary jobs for individuals recently released from prison.
According to the indictment and court records, Tanya Smith and Keith Terry received the checks from Folks and Sharon Smith and deposited them into their personal bank accounts. Tanya Smith and Terry received a fee ranging from approximately $500 to $700 for each check that they negotiated. Folks and Terry failed to report the income that they received from the scheme on their own individual income tax returns.
Sharon Smith, of Bronx, N.Y., who pleaded guilty in April 2009 to the false claims conspiracy and mail fraud, is scheduled to be sentenced by Judge Amon on Oct. 14, 2009.
In August 2009, Judge Amon sentenced Tanya Smith, who pleaded guilty to the false claims conspiracy, to a term of imprisonment of 60 days and to three years supervised release with four months under monitored home detention. Tanya Smith was also ordered to pay restitution of $144,348.88. In August 2009, Judge Amon sentenced Keith Terry, who pleaded guilty to the false claims conspiracy and to filing a false tax return, to four years of probation with four months under monitored home detention and ordered him to pay restitution in the amount of $209,653.00.
John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division thanked the IRS Criminal Investigation Division office in Bridgeport, Conn., and the United States Postal Inspection Service in New Haven, Conn., who investigated the case, as well as Tax Division trial attorney Mark F. Daly and Assistant United States Attorney Shreve Ariail of the Eastern District of New York who prosecuted the case.