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13 August 2009
Four Puerto Rico Police Officers Convicted<br /> of Federal Civil Rights Charges Related to Fatal AssaultRead the Press Release
WASHINGTON – A federal jury in San Juan, Puerto Rico, found four San Juan Municipal Police Officers guilty today of felony federal civil rights charges related to the fatal beating of Jose Antonio Rivera Robles, announced Loretta King, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division, Rosa Emilia Rodríguez Vélez, U.S. Attorney for Puerto Rico, and Luis S. Fraticelli, Special Agent in Charge of the FBI’s San Juan Field Office.
On July 20, 2003, Aaron Vidal Maldonado, Juan Morales Rosales and Carlos Pagan Ferrer, along with other officers, aided and abetted each other in the brutal assault of Rivera Robles during an arrest in Carolina, Puerto Rico, evidence at trial showed.
Vidal Maldonado, a supervisor and sergeant at the time of the beating, was convicted on four charges: one for violating the victim’s civil rights by aiding and abetting others who beat him and another for violating his civil rights by failing to keep him from harm, both of which resulted in bodily injury and death; obstructing justice by providing false statements during the local investigation of the assault; and a felony charge for providing a false statement to the FBI.
Juan Morales Rosado was convicted on four charges: a civil rights charge for assaulting Rivera Robles, resulting in bodily injury; an obstruction of justice charge for providing false statements in the local investigation; a felony charge for lying to the FBI; and a fourth count for committing perjury before a federal grand jury investigating the assaults.
Carlos Pagan Ferrer was convicted on three charges: one federal civil rights charge for assaulting Rivera Robles, resulting in bodily injury; an obstruction of justice charge for providing false statements during the local investigation; and a third felony charge for making a false statement to the FBI.
A fourth defendant, Jose Pacheco Cruz, was acquitted of violating Rivera Robles’ civil rights, but was convicted of one felony count of obstruction of justice for providing false statements during the local investigation and one felony count for making a false statement to the FBI.
"Police officers are given tremendous power to serve and protect the public. For those rogue officers who abuse that power and violate the public trust, today’s verdict should send a strong message that they will be prosecuted and face justice in a court of law," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "I congratulate the team of investigators and prosecutors who worked tirelessly to secure this important conviction."
"The U.S. Attorney’s Office is committed to protecting the civil rights of the people of Puerto Rico. It is unconscionable that those called upon to protect the public and enforce the law should violate their oath of office and abuse their position to deprive people of their most basic civil liberties. People need to have confidence in the fundamental fairness of our law enforcement agencies and in the rights bestowed upon them by our Constitution," said U.S. Attorney for Puerto Rico Rosa Emilia Rodríguez Vélez.
The civil rights charges for the defendants’ conduct that resulted in Rivera Robles’ death are punishable by sentences of up to life in prison and a $250,000 fine. The other civil rights charges are punishable by sentences of up to 10 years in prison and a fine of $250,000. A sentencing hearing has not yet been scheduled.
Co-defendants Eliezer Rivera Gonzalez and Elias Perocier Morales previously pleaded guilty to felony federal civil rights charges for participating in the assaults, including acknowledging that those assaults caused bodily injury and death. Sentencing hearings for those co-defendants have been set for Sept. 18, 2009.
The case was prosecuted by Senior Litigation Counsel Antonio R. Bazan of the U.S. Attorney’s Office for the District of Puerto Rico, and Senior Litigation Counsel Gerard Hogan and Trial Attorney Avner Shapiro from the Civil Rights Division of the Justice Department. The case was investigated by the FBI’s San Juan Field Office.
Former Tamimi Global Executive Convicted<br /> of Witness Tampering Following Reinstatement of ChargesRead the Press Release
Mohammad Shabbir Khan, the former director of operations in Kuwait and Iraq for Tamimi Global Company, a Saudi Arabian company, has been convicted of witness tampering and conspiracy to commit witness tampering. The verdict followed a one-day bench trial before U.S. District Judge Joe B. McDade in the Central District of Illinois on Aug. 10, 2009. Sentencing will be scheduled at a later date.
In June 2006, a grand jury returned a 16-count indictment charging Khan with 12 counts of wire fraud, and one count each of money laundering, making a false statement, witness tampering conspiracy and witness tampering. On June 26, 2006, based on a written plea agreement, Khan pleaded guilty to all counts except the two pertaining to witness tampering. On Dec. 8, 2006, Khan was sentenced to 51 months in federal prison and, based on the plea agreement, the two witness tampering counts were dismissed on the government’s motion.
On Oct. 29, 2008, the government filed a motion with the court to void the plea agreement alleging that Khan had breached the terms of the plea agreement. In the motion, the government alleged that Khan transferred several million dollars from foreign bank accounts in Dubai, United Arab Emirates, and elsewhere, to his brother in Pakistan rather than to his attorney in Chicago as was required by his plea agreement. Terms of the plea agreement required Khan to transfer assets valued at $5,000 or more that he owned or otherwise controlled outside the United States into the trust and control of his attorney in the United States.
On April 1, 2009, Judge McDade reinstated the two witness tampering counts of the indictment after finding that the government had proven that Khan substantially breached the terms of the plea agreement by causing the transfer of the funds in his Dubai bank accounts to his brother’s account in Pakistan.
Khan had previously admitted to paying kickbacks of $133,000 to a Kellogg, Brown & Root Services Inc. (KBR) employee to secure two military dining subcontracts valued at $21.8 million for Tamimi Global Company: a $14.4 million subcontract at Camp Arifjan, Kuwait; and a $7.4 million subcontract at a palace in Baghdad, Iraq. Khan had also pleaded guilty to the money laundering conspiracy and false statement offenses related to a scheme by Khan and another former Tamimi manager to cover up the kickback payments Khan had made to the former KBR employee. Stephen Seamans, the former KBR employee, previously pleaded guilty in the Central District of Illinois for crimes related to this matter.
Evidence presented by the government at trial on Aug. 10, 2009, included a meeting on Oct. 28, 2005, in London, England, between Khan; the other Tamimi manager, Zubair Khan; and Seamans. During the meeting, Seamans was provided with a story to cover up the kickback payments previously paid to him that was consistent with what the Tamimi employees had previously told federal authorities. Zubair Khan remains a fugitive.
The Logistics Civil Augmentation Program (LOGCAP) is a U.S. Army program that uses civilian contractors to support the logistical needs of U.S. military forces. As part of the program, the U.S. Army Operations Support Command, with headquarters at the Rock Island Arsenal in Rock Island, Ill., awarded the LOGCAP III prime contract to KBR in December 2001. The Army Field Support Command, also at the Rock Island Arsenal, administered the contract.
The case was prosecuted by Trial Attorney Joseph A. Capone of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Matthew J. Cannon of the Central District of Illinois.The case was investigated by the FBI’s Springfield, Ill., Division; Internal Revenue Service Criminal Investigation, Chicago Field Office; New Scotland Yard Metropolitan Police Service; the Defense Criminal Investigative Service, Central Field Office, St. Louis, Mo.; the U.S. Army Criminal Investigation Command, North Central Fraud Field Office, Detroit, Mich.; and members of the National Procurement Fraud Task Force.
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.
Federal Court Permanently Enjoins Founder of <br /> the “Global Prosperity” Tax SchemeRead the Press Release
WASHINGTON – A federal court in Seattle has permanently barred Daniel Andersen from promoting fraudulent tax schemes, the Justice Department announced today. Documents the government filed on August 11 requested that the court enjoin Andersen, arguing that he was a founding member of the Institute for Global Prosperity, an entity that promoted both its own fraudulent tax scheme and the fraudulent tax schemes of others.
According to papers filed with the court, Andersen and David Struckman founded Global Prosperity in 1996, and Lorenzo Lamantia joined their scheme as "founder" in 1998. By 2002, Global Prosperity had sold its products to over 44,000 customers and had earned over $50 million in the process. Global Prosperity charged customers $1,250 for a 12-part audio course containing multiple erroneous theories about federal income taxes, which the government described as "nonsense."
The government’s request that the court enjoin Andersen explains that Andersen is currently in federal prison in Lompoc, Calif., in connection with his promotion of the Global Prosperity scheme. The court papers explain that other tax fraud vendors sold their schemes at conferences Global Prosperity organized, and that many of these vendors have been sentenced to prison for federal tax crimes, including Johnny "Liberty" Van Hove, Keith Anderson, and Dennis Poseley. Global Prosperity charged as much as $37,000 to attend such conferences.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Tax Division trial attorney Robert Fay and IRS Revenue Agents Terry Martin and Cynthia Zambito for their efforts in obtaining the injunction.
Since 2001, the Justice Department’s Tax Division has obtained injunctions against more than 410 tax fraud promoters and unscrupulous tax preparers. Information about these cases is available on the Justice Department website.
Exxon-Mobil Pleads Guilty to Killing Migratory Birds in Five StatesRead the Press Release
WASHINGTON – Exxon-Mobil Corporation, the world’s largest publicly traded oil and gas company, pleaded guilty in U.S. District Court in Denver to violating the federal Migratory Bird Treaty Act (MBTA) in five states during the past five years, the Justice Department announced today.
The company has agreed to pay fines and community service payments totaling $600,000 and will implement an environmental compliance plan over the next three years aimed at preventing bird deaths on the company’s facilities in the affected states. According to papers filed in court, the company has already spent over $2.5 million to begin implementation of the plan.
The charges stem from the deaths of approximately 85 protected birds, including waterfowl, hawks and owls, at Exxon-Mobil drilling and production facilities in Colorado, Wyoming, Oklahoma, Texas and Kansas between 2004 and 2009. According to the charges and other information presented in court, most of the birds died after exposure to hydrocarbons in uncovered natural gas well reserve pits and waste water storage facilities at Exxon-Mobil sites in Colorado, Wyoming, Kansas, Oklahoma and Texas.
The company has entered into a plea agreement with the government, calling for guilty pleas to the five charges and a sentence of $400,000 in fines and $200,000 in community service payments. The fines will be deposited into the federally-administered North American Wetlands Conservation Fund. The community service payments will be made to a non-profit waterfowl rehabilitation foundation in Colorado and the congressionally-chartered National Fish and Wildlife Foundation, designated for waterfowl preservation work in each of the affected states. During a three-year probationary period, Exxon-Mobil must also implement an "environmental compliance plan" designed to keep birds from coming into contact with oily waters at its facilities in the five affected states.
"The environmental compliance plan that Exxon-Mobil has agreed to in this multi-district plea agreement is an important step in protecting migratory birds in these five states,"said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"We are all responsible for protecting our wildlife, even the largest of corporations," said Colorado U.S. Attorney David M. Gaouette. "An important part of this case is the implementation of an environmental compliance plan that will help prevent future migratory bird deaths."
The Migratory Bird Treaty Act, enacted in 1918, implements this country’s commitments under avian protection treaties with Great Britain (for Canada), Mexico, Japan and Russia. The Act creates a misdemeanor criminal sanction for the unpermitted taking of listed species by any means and in any manner regardless of fault. The maximum penalty for a corporate taking under the MBTA is $15,000, or twice the gross gain or loss resulting from the offense, and five years probation. The birds killed in the five cases include ducks, grebes, ibis, passerines, shorebirds, owls, martin and a hawk. None of these species is listed as endangered or threatened under federal law.
Migratory birds often land on open wastewater ponds at oil and gas facilities and become coated with, or ingest, fatal amounts of hydrocarbons discharged into the water during drilling or production operations. Such killings can be prevented by scrubbing the water of contaminants before discharge, removing the ponds, placing an obstruction such as netting or plastic "bird balls" over the water to prevent contact, or installing commercially-manufactured electronic hazing devices which detect incoming flights of migratory birds and deploy noise and lights to scare them away from the area. Exxon-Mobil’s environmental compliance plan will employ these techniques, tailored to each facility, to prevent future mortality.
The cases were investigated by Special Agents of the U.S. Fish and Wildlife Service and are being prosecuted by Senior Trial Attorney Robert S. Anderson of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorney Michael Carey of the District of Colorado.
Dynamics Research Corporation to Pay $15 Millionto Resolve Allegations of Kickbacks and False ClaimsRelated to Air Force ContractsRead the Press Release
WASHINGTON - The Department of Justice announced today that Dynamics Research Corporation (DRC), a defense contractor based in Andover, Mass., has agreed to pay the United States $15 million plus interest to settle allegations that two of its former executives engaged in a fraudulent kickback scheme in connection with two technical services contracts with the Air Force.
The contracts, first awarded in 1996, sought DRC’s expertise in procuring computer equipment and services for the Theater Battle Management Core Systems (TBMCS) program at Hanscom Air Force Base in Massachusetts. The TBMCS program provides the military with an integrated system to plan and execute air battle plans for operations and intelligence personnel at the force and unit levels. The contracts required DRC’s employees to certify that neither they nor their spouses had financial interests that would interfere with their ability to deliver unbiased advice while performing the contracts. DRC failed to obtain the certificates from former vice presidents Paul Arguin and Victor Garber, who headed the project.
According to the settlement agreement, from 1997 to 2000, DRC, through Mr. Arguin and Mr. Garber, steered Air Force contracts for computer equipment and services to companies owned by themselves, Mr. Arguin’s wife, and others, in exchange for kickbacks and inflated contract prices that produced windfall profits for the two DRC executives. In one of the schemes, Arguin and Garber allegedly substituted inexpensive memory modules for those required by the contract, causing the Air Force to overpay for the nonconforming modules.
The United States filed a civil suit against DRC in federal district court in Boston, seeking damages and penalties under the Anti-Kickback Act, the False Claims Act, and for breach of contract. The settlement agreement announced today resolves that lawsuit.
"The law requires government contractors to be honest and unbiased when providing services to our men and women in uniform," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "The government will aggressively pursue contractors who scheme to take advantage of the military and taxpayers alike."
Acting United States Attorney Michael K. Loucks for the District of Massachusetts noted, "This case demonstrates that we will continue to hold the government’s contractors responsible for providing honest and unbiased services to the United States. Kickbacks of the type at issue in this case, undermine the integrity of government programs and we will continue to pursue such schemes aggressively against both individuals and the contractors responsible for their employees’ behavior."
Assistant Attorney General West and Acting U.S. Attorney Loucks also thanked the Defense Criminal Investigative Service, the Air Force Office of Special Investigations, the General Services Administration’s Office of Inspector General, and the Defense Contract Audit Agency for their assistance with the investigation that led to this settlement.
In related criminal proceedings in 2001, Mr. Arguin and Mr. Garber pleaded guilty to conspiring to defraud the government. Both received prison sentences and were ordered to pay restitution.
DOJ, DHS and Mexico Announce Arrangement to Bolster Investigative Cooperation on International Firearms Trafficking CasesRead the Press Release
WASHINGTON - Department of Homeland Security (DHS) Secretary Janet Napolitano, Mexican Attorney General Eduardo Medina-Mora, Mexican National Public Security System Executive Secretary Jorge Tello Peón, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Acting Director Kenneth E. Melson and U.S. Immigration and Customs Enforcement (ICE) Assistant Secretary John Morton today signed a Letter of Intent to develop a coordinated and intelligence-driven response to the threat of cross border smuggling and trafficking of weapons and ammunition.
"The Letter of Intent illustrates our unconditional commitment to improve public safety in the United States and Mexico, and strengthens our determination to investigate and share intelligence to combat international firearms trafficking and violent crime," said Deputy Attorney General David W. Ogden. "Law enforcement agencies in both nations recognize the importance of tracing every crime gun recovered on the Southwest Border to help determine trafficking patterns and potential traffickers of illicit firearms. ATF is committed to its strong partnership with ICE in working collaboratively to reduce firearms-related violent crime as we stem the diversion of firearms to international criminal markets."
"Enforcing our laws at the border requires close collaboration with our international and domestic allies to ensure our mutual security," said Secretary Napolitano. "This arrangement signifies our continued commitment to working with Mexico to stop violence and deter criminal activity that threatens safety on both sides of the border."
The letter signed today, supported by President Obama and Mexican President Felipe Calderón, will leverage the combined investigative capabilities of ICE, ATF and Mexico’s Procurador General de la Republica to combat violence and criminal activity along the U.S.-Mexico border.
The Letter of Intent recommends a joint strategic implementation plan to develop cooperative protocols to investigate weapons and ammunition trafficking in the United States and Mexico and improve information sharing between the two countries to better identify smuggling and trafficking trends and support bilateral investigation efforts.
DOJ and DHS recently enhanced coordination between ATF and ICE to combat international firearms trafficking and between DEA and ICE to disrupt and dismantle drug trafficking organizations.
Cosco Busan Operator Admits Guilt in Causing Oil SpillRead the Press Release
WASHINGTON— Fleet Management Ltd., a Hong Kong-based ship management firm, pleaded guilty today to a criminal violation of the Oil Pollution Act of 1990 for its role in negligently causing the discharge of more than 50,000 gallons of fuel oil into San Francisco Bay from the Cosco Busan when the vessel struck the San Francisco Bay Bridge in dense fog on Nov. 7, 2007. Fleet Management also pleaded guilty today to felony obstruction of justice and false statement charges for creating false and forged documents after the crash at the direction of shore-based supervisors with an intent to deceive the U.S. Coast Guard.
Today’s guilty pleas were made as part of a plea agreement with the government that is subject to approval by Judge Susan Illston of the U.S. District Court for the Northern District of California. If the plea terms are approved by the Court, Fleet has agreed to pay a total $10 million criminal penalty. Of this amount, $2 million would be devoted to fund marine environmental projects in San Francisco Bay.
The plea agreement, should the court accept it, also calls for Fleet to implement a comprehensive compliance plan that would include heightened training and voyage planning for ships engaged in trade in the United States. The training will focus on better preparing masters for command of Fleet’s vessels, providing classroom and shipboard navigation training to those who navigate Fleet’s vessels, and ensuring that all Fleet vessels calling in U.S. ports create a thorough plan for how they will navigate in those ports. The new training and voyage planning requirements will be subject to auditing and the court’s supervision.
"Today’s guilty plea by Fleet, combined with the recent sentencing of the ship’s pilot, sends a signal to the maritime industry that the government recognizes that navigation of large vessels is a serious undertaking and that those who fail to adequately train, execute and supervise their responsibilities will be held accountable," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Fleet engaged in criminal conduct when shore-based supervisors directed the fabrication of false and forged documents to deceive investigators and hide its own culpability."
"This criminal prosecution emphasizes that vessel managers have the responsibility to train and supervise its crews and to follow required procedures," said Joseph P. Russoniello, U.S. Attorney for the Northern District of California. "Fleet failed to meet its obligation under international law to ensure the crew was adequately trained on navigation procedures and equipment. Vessel operators cannot abdicate their responsibilities to ensure safety and environmental protection without suffering serious consequences."
As part of the plea agreement, Fleet Management admitted "that it was a cause of a discharge of a harmful quantity of oil into the navigable waters of the United States, that it acted negligently, and that its negligence was a proximate cause of the discharge of oil into San Francisco Bay on Nov. 7, 2007." According to the factual statement signed by Fleet, the crew of the vessel:
- was not adequately familiar with certain ship-specific navigational equipment,
- did not engage in a berth-to-berth passage planning process or prepare written berth-to-berth passage plans,
- did not conduct an adequate Master – Pilot exchange of information,
- did not fully utilize or operate the ship’s radar and electronic chart system, and
- did not take fixes during the voyage.
In pleading guilty, Fleet admitted that after the ship hit the Bay Bridge, it concealed ship records and created materially false, fictitious and forged documents with an intent to influence the Coast Guard’s investigation. In particular, a false berth-to-berth passage plan for the day of the crash was created after the incident at the direction of shore-side supervisors known as superintendents and with the knowledge of the ship’s master. Additionally, a ship officer falsified the ship’s official navigational chart to show fixes that were not actually recorded during the voyage. Other records including false passage planning checklists were also created after the fact.
Sentencing has been scheduled for Dec. 11, 2009 at 11:00 a.m. PT.
The pilot of the Cosco Busan, Captain John Cota, was recently sentenced to 10 months in prison, one year of supervised release and 200 hours of community service for his role in causing the Cosco Busan collision and discharge of oil and deaths of migratory birds.
The collision caused a gash measuring approximately 150 feet long by 12 feet high on the port side of the ship, puncturing two of the ship’s fuel tanks and damaging the fendering system on the Delta tower of the bridge, and resulting in a significant environmental clean-up. At least 2,000 migratory birds died, including Brown Pelicans, Marbled Murrelets and Western Grebes. The Brown Pelican is a federally endangered species and the Marbled Murrelet is a federally threatened species and an endangered species under California law.
The criminal investigation was conducted by the Coast Guard Investigative Service; the EPA Criminal Investigation Division; the Federal Bureau of Investigation; the U.S. Fish and Wildlife Service; Silicon Valley Regional Computer Forensics Laboratory; and the California Department of Fish and Game, Office of Spill Prevention and Response. The investigation also received technical assistance from other Coast Guard offices including District 11 Legal Office, Sector San Francisco, Office of Investigations and Analysis, Office of Maritime and International Law, Office of Vessel Activities, Electronics Support Unit, Alameda and the Marine Safety Laboratory. In announcing the plea agreement, the U.S. Attorney and Assistant Attorney General thanked federal and state investigators and offices for their assistance in the prosecution.
The criminal case is being prosecuted by Assistant U.S. Attorneys Jonathan Schmidt and Stacey Geis, and Special Assistant U.S. Attorney Christopher Tribolet of the U.S. Attorney’s Office for the Northern District of California, and Richard A. Udell, Senior Trial Attorney with the Justice Department’s Environmental Crimes Section.
Under the Crime Victims’ Rights Act, crime victims are afforded certain statutory rights including the opportunity to attend all public hearings and provide input to the prosecution. Those adversely impacted by the oil spill are encouraged to visit http://www.usdoj.gov/usao/can/community/Notifications/index.html to learn more about the case and the Crime Victims’ Rights Act.
Boeing Company to Pay U.S. $25 Million to Resolve Allegations<br /> Related to Defective Work on KC-10 Aerial Refueling AircraftRead the Press Release
WASHINGTON – The Boeing Company will pay the United States $25 million to resolve allegations that the company performed defective work on the entire KC-10 Extender fleet, the Justice Department announced today. The KC-10 Extender is a mainstay of the Air Force’s aerial refueling fleet in the Iraq and Afghanistan war theaters.
The lawsuit alleged that Boeing defectively installed insulation blanket kits in KC-10 aircraft while performing depot maintenance at the Boeing Aerospace Support Center in San Antonio, Texas. The settlement also settles allegations that Boeing overcharged the government for installation of the blanket kits.
The blanket kit is a critical component in the KC-10 Extender and consists of several thousand blankets resembling the insulation installed in the walls of a house. These blankets are installed on all inside surfaces of the aircraft and serve the critical functions of providing a thermal barrier to maintain temperature inside the aircraft during flight, reducing noise in the aircraft and providing a vapor barrier to reduce corrosion caused by moisture buildup on the inside surface of the skin of the aircraft.
The case was originally filed in U.S. District Court for the Western District of Texas by two former Boeing employees, Anthony Rico and Fernando de la Garza, under the qui tam or whistleblower provisions of the False Claims Act. Under the qui tam statute, a private party, known as a "relator," can file an action on behalf of the United States and receive a portion of the recovery. Mr. Rico and Mr. de la Garza will receive $2,625,000 as their share of the proceeds of the settlement.
During the investigation of the allegations of faulty installation, the government also found that Boeing overcharged for the installation. Auditors found that Boeing inflated estimates of the number of hours needed to perform the blanket kit work and charged an excessive hourly rate for the work.
"Companies that do business with the United States must deal honestly with the government," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "The Department of Justice will vigorously pursue cases under the False Claims Act against those contractors who provide shoddy work."
The $25 million settlement consists of a cash payment by Boeing of $18,400,000 and $6,600,000 worth of repair work to be done at the aircraft manufacturer’s expense on the defective blankets. The settlement resolves Boeing’s potential liability under the False Claims Act.
"Defense contractors will be held to high standards, particularly when their work could potentially impede mission critical functions of our armed forces," said John E, Murphy, Acting U.S. Attorney for the Western District of Texas. "The pursuit and favorable settlement of this civil litigation demonstrates that the Department of Justice will work closely with investigative agencies in order to enforce these standards."
The settlement negotiations were conducted by the U.S. Attorney's office in San Antonio and the Department's Civil Division. The allegations were investigated by the Defense Criminal Investigative Service, the Air Force Office of Special Investigations and the Defense Contract Audit Agency.
12 August 2009
Two Defendants Plead Guilty in Counterfeit Pipe Coupling SchemeRead the Press Release
Hayden B. Greene, 31, of Tulsa, Okla., and James Robert Roy, 42, of Tomball, Texas, pleaded guilty today to conspiring to manufacture and sell counterfeit pipe couplings.
Greene and Roy pleaded guilty before U.S. District Judge Keith P. Ellison in Houston to one count of conspiracy to traffic in counterfeit goods and commit fraud. They each face up to five years in prison. Sentencing is scheduled for Nov. 5, 2009.
In their plea agreements, Greene and Roy admitted that they conspired with another co-defendant in a counterfeiting scheme to manufacture and sell oilfield pipe couplings stamped with a certification mark owned and registered by the American Petroleum Institute (API), without a license or other authorization to do so.
API’s certification program is a quality-control program designed to insure against injury and catastrophic loss from substandard, unsafe products. The API monogram certifies that products and equipment used in the exploration and production of petroleum and natural gas meet certain API standards, specifications and recommended practices. Couplings that do not meet the API standards are sold for limited service applications at substantially lower prices than API-certified products. Only manufacturers licensed by API after meeting strict quality control standards, and who are subject to continued monitoring by API, are authorized to manufacture and sell products containing an API certification mark.
According to the plea agreement, Greene and Roy acknowledged that they not only manufactured and sold couplings containing an API certification mark without a license, but profited at the expense of customers by manufacturing many of those couplings using substandard materials.
This case is being prosecuted by Trial Attorney Richard Green of the Criminal Division’s Computer Crime and Intellectual Property Section, with assistance from Assistant U.S. Attorney Mark McIntyre of the U.S. Attorney’s Office for the Southern District of Texas. It is being investigated by the FBI’s Houston Field Office.
Atlanta Defendant Found Guilty of Supporting TerroristsRead the Press Release
A federal jury has found Ehsanul Islam Sadequee, 23, of Roswell, Ga., guilty on all four counts of an indictment charging him with supporting terrorists and a foreign terrorist organization, after a trial that lasted seven days. The jury deliberated for approximately five hours before reaching the guilty verdicts. U.S. District Judge William S. Duffey, Jr. presided over the trial.
David Kris, Assistant Attorney General for National Security, said, "This investigation and the two resulting trials of Mr. Sadequee and Mr. Ahmed underscore the importance of international and domestic cooperation in combating terrorism. The agents, analysts and prosecutors involved in these cases and in related investigations around the world deserve a special thanks for their efforts."
U.S. Attorney for the Northern District of Georgia David E. Nahmias said, "With this guilty verdict, a long and successful international counter-terrorism investigation comes to a close. Defendants in the United States, the United Kingdom, Bosnia, and elsewhere - all of whom conspired together to provide material support to violent jihad - are now safely behind bars. For that, we can be thankful. This case remains, however, a sobering reminder that terrorism and its supporters are not confined to distant battlefields in Iraq and Afghanistan. As recent events further demonstrate, there are still some American citizens willing to take up arms against the United States, our people, our allies, and our interests. In the face of this clear threat, federal law enforcement must and will remain vigilant, seeking to disrupt future terrorist networks before a timer is ticking or a trigger is pulled. I commend the many law enforcement agents, prosecutors, and support staff who have worked so hard for so long to gather and present the evidence that led to today's guilty verdict and all the other terrorism convictions around the world that were part of this case."
Atlanta FBI Special Agent in Charge Gregory Jones said, "The FBI continues to investigate a growing number of cases involving U.S. citizens providing material support to terrorists. However, as we move further away from the tragic events of September 11, 2001, there also seems to be a growing public perception that such conduct is harmless, especially since no bombs were exploded and no one was killed. This defendant, like many others we have investigated, tried to argue that his criminal conduct and activities were protected by the First Amendment of the U.S. Constitution. The FBI does not buy that argument and today the jury agreed." Jones added, "I would like to thank our law enforcement and intelligence community partners, domestic and international, who provided tremendous assistance to the Atlanta FBI Joint Terrorism Task Force throughout the investigation and prosecution of Sadequee, Syed Haris Ahmed, and their co-conspirators."
According to U.S. Attorney Nahmias and the evidence presented during the trial, which began on August 3, 2009: Sadequee was born in Fairfax, Va., in 1986. He attended school in the United States, Canada, and Bangladesh. In December 2001, while living in Bangladesh, he sent an email seeking to join the Taliban, to help them in their fight against United States and coalition forces in Afghanistan. Several years later, in late 2004 and early 2005, Sadequee, having returned to the United States to his family home in Roswell, entered an illegal agreement - a conspiracy - with others to provide material support to terrorists engaged in violent jihad.
The evidence indicated that the material support consisted of (1) Sadequee; his co-defendant, Syed Haris Ahmed, who was convicted after a bench trial in June 2009; and other individuals who intended to provide themselves as personnel to engage in violent jihad abroad and in the United States, and (2) property, namely, short videos of symbolic and infrastructure targets for potential terrorist attacks in the Washington, D.C., area, including the U.S. Capitol, the World Bank, the Masonic Temple, and a fuel tank farm -- all of which were taken by Sadequee and Syed Haris Ahmed to be sent to "the jihadi brothers" abroad.
At trial the government presented evidence that Sadequee and his co-conspirators used the internet to develop relationships and maintain contact with each other and with other supporters of violent jihad in the United States, Canada, the United Kingdom, Pakistan, Bosnia and elsewhere. In support of the conspiracy, in March 2005, Sadequee traveled with Syed Haris Ahmed to Toronto, Canada, to meet with other co-conspirators, including Fahim Ahmed, one of the "Toronto 18" suspects now awaiting a terrorism trial in Canada. While in Canada, Sadequee and his co-conspirators discussed their plans to travel to Pakistan in an effort to attend a paramilitary training camp operated by a terrorist organization, such as Lashkar-e-Tayyiba (LET), as preparation for engaging in violent jihad abroad or in the United States. They also discussed potential targets for terrorist attacks in the United States.
In April 2005, Sadequee and Syed Haris Ahmed drove to the Washington, D.C., area to take the casing videos, which the government’s evidence showed they made to establish their credentials with other violent jihad supporters as well as for use in violent jihad propaganda and planning. Sadequee later sent several of the video clips to Younis Tsouli, aka "Irhabi007" (Arabic for "Terrorist 007"), a propagandist and recruiter for the terrorist organization Al Qaeda in Iraq, and to Aabid Hussein Khan, aka "Abu Umar," a facilitator for the Pakistan-based terrorist organizations LET and Jaish-e-Mohammed (JEM). Both Tsouli and Khan have since been convicted of terrorism-related offenses in the United Kingdom and are imprisoned there.
During the trial, the government’s evidence showed that Sadequee and Khan, using a members-only violent jihadist web forum known as At-Tibyan Publications, also tried to recruit at least two other individuals to participate in violent jihad. One, a self-identified 17-year-old American convert, was praised by Sadequee for his "capacity of fulfilling [his] largest obligations in [his] native land."
The government also presented evidence at trial that in July 2005, Syed Haris Ahmed traveled from Atlanta to Pakistan in an attempt to enter a training camp and then engage in violent jihad. While in Pakistan, Syed Haris Ahmed met with Aabid Hussein Khan and the two discussed Ahmed’s intention of joining a camp. However, Ahmed’s family and others convinced him to postpone that effort. The day before Syed Haris Ahmed returned to Atlanta, Sadequee departed Atlanta for Bangladesh, carrying with him, hidden in the lining of his suitcase, an encrypted CD; a map of Washington, D.C., that included all of the targets he and Syed Haris Ahmed had cased; and a scrap of paper with Khan’s mobile phone number in Pakistan.
Once in Bangladesh, Sadequee began to conspire more closely with Younis Tsouli and Mirsad Bektasevic, a Swedish national of Serbian origins. Specifically, Tsouli, Bektasevic, Sadequee and others formed a violent jihadist organization known as "Al Qaeda in Northern Europe." The group was to be based in Sweden and focus on terrorist attacks in Europe. The evidence at trial showed that in October 2005, Sadequee sought a visa that would allow him to relocate from Bangladesh to Sweden. Bektasevic was arrested in Sarajevo, Bosnia and Herzegovina, on Oct. 19, 2005. He and a co-conspirator were found in possession of over 20 pounds of plastic explosives, a suicide belt containing plastic explosives and a detonator, and a firearm with a silencer. Bektasevic also had in his pocket a cassette containing a video demonstrating how to make detonators; displaying an arsenal of semi-automatic weapons, grenades, explosives and other arms, and announcing they were for use in Europe; and depicting Bektasevic and others placing a grenade booby trap in a forest near Sarajevo. Sadequee had been in electronic and telephonic contact with Bektasevic as recently as three days before Bektasevic’s arrest, discussing the silencer and explosives Bektasevic had acquired for the group and the making of Bektasevic’s video. Bektasevic has since been convicted of terrorism offenses in Bosnia and Herzegovina, and is imprisoned there.
Meanwhile, after returning to Atlanta to resume his studies at Georgia Tech in August 2005, Syed Haris Ahmed remained in contact with Sadequee, expressed regret at his failure to join violent jihadists in Pakistan, conducted Internet research on topics such as high explosives and defeating Special Operations troops, and discussed his intent to make another attempt to enter a training camp. In March 2006, Ahmed was approached by FBI agents and agreed to a series of voluntary, non-custodial interviews over the course of eight days. Amid efforts to deny his illegal activities and mislead the agents, Ahmed made increasingly incriminating statements. Efforts by the FBI to obtain Ahmed’s cooperation in the ongoing international terrorism investigation ended after the FBI discovered that Ahmed was surreptitiously contacting Sadequee, who was still in Bangladesh, to advise him of the FBI investigation and warn him not to return to the United States.
Sadequee was arrested by the FBI on April 20, 2006, in Bangladesh, on charges arising out of false statements he made in an August 2005 interview with the FBI at JFK Airport in the Eastern District of New York (EDNY). Sadequee was indicted in this district on July 19, 2006, and transferred to Atlanta in August of that year, after the charges in EDNY were dismissed at the Government’s request.
At trial, Sadequee elected to represent himself, with stand-by counsel present to assist him as requested.
Sadequee was convicted today of (1) conspiring to provide material support to terrorists; (2) attempting to provide and providing material support to terrorists; (3) conspiring to provide material support to Lashkar-e-Tayyiba (LET), a designated foreign terrorist organization; and (4) attempting to provide material support to LET. The material support for terrorists consisted of personnel and property (the Washington casing videos). The material support for LET consisted of personnel. Sadequee could receive a maximum sentence of 60 years in prison, followed by a term of supervised release up to life, and a fine of up to $1,000,000. In determining the actual sentence, the court will consider the U.S. Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. Sentencing for Sadequee and Ahmed is scheduled before Judge Duffey on Oct. 15, 2009, at 9:30 a.m.
(MEDIA NOTE: After the jury's verdict in the Sadequee trial today, Judge Duffey unsealed his detailed written findings supporting the guilty verdict against Syed Haris Ahmed after his bench trial in June. Copies of the findings are available upon request.)
This case is being investigated by agents and officers of the Atlanta Joint Terrorism Task Force (JTTF), which is led by the FBI’s Atlanta Division, with assistance from law enforcement agencies in several other countries.
Assistant U.S. Attorneys Robert McBurney and Christopher Bly and U.S. Department of Justice Counterterrorism Section Trial Attorney Alexis Collins are prosecuting the case.
Arizona Man Sentenced to Five Years in Prison <br /> for Receipt of Child PornographyRead the Press Release
Charles Brown, 54, of Mesa, Ariz., was sentenced today to five years in prison and lifetime supervised release following his prison term for receiving child pornography.
Brown was indicted on May 8, 2008, on charges of receipt and possession of child pornography. The charges arose after Brown responded to an advertisement offering child pornography videos that had been placed on the Internet by a U.S. Postal Inspector working undercover. After Brown selected and paid for a video, Postal Inspectors obtained an anticipatory search warrant. On the day that the video was delivered to Brown’s home, the inspectors executed the warrant and searched Brown’s computer, finding additional child pornography.
Brown pleaded guilty on March 10, 2009, to one count of receipt of child pornography. As part of the plea agreement, Brown admitted to ordering from the undercover inspector a video containing 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 CEOS Trial Attorney James Silver, with assistance from Senior Litigation Counsel Vincent Q. Kirby and Assistant U.S. Attorney Sharon K. Sexton of the District of Arizona. The U.S. Postal Inspection Service conducted the investigation.
11 August 2009
Ohio Edison Agrees to Repower <br /> Power Plant with Renewable Biomass FuelRead the Press Release
WASHINGTON—Ohio Edison Company, a subsidiary of FirstEnergy Corp., has agreed in a consent decree to repower one of its coal-fired power plants using primarily renewable biomass fuels, the Justice Department and U.S. Environmental Protection Agency announced today.
In the agreement, filed in federal court in Columbus, Ohio and joined by the states of New York, New Jersey and Connecticut, Ohio Edison will repower the R.E. Burger Units 4 and 5 near Shadyside, Ohio with biomass fuel. The consent decree modifies a 2005 consent decree requiring Ohio Edison to reduce emissions of sulfur dioxide (SO2) and nitrogen oxide (NOx) at several of its coal-fired plants.
The modified consent decree will substantially reduce emissions of SO2 and NOx from Burger’s current levels and also reduce carbon dioxide (CO2) emissions from current levels by more than 1.3 million tons a year. Burger will be the largest coal-fired electric utility plant in the country to repower with renewable biomass fuels and the first such plant at which greenhouse gas emissions will be reduced under a Clean Air Act consent decree.
The original 2005 consent decree resolved a lawsuit filed in 1999 under the New Source Review provisions of the Clean Air Act regarding Ohio Edison’s W. H. Sammis plant and required that the company reduce SO2 emissions not only at Sammis but also at several of its smaller plants, including Burger. That agreement gave Ohio Edison three options to reduce Burger’s SO2 emissions: shut down the plant, install a scrubber, or repower with natural gas. Under the modified agreement, Ohio Edison will repower Burger beginning in 2012 with mostly biomass fuels, co-firing with not more than 20 percent low sulfur coal, including natural wood from waste tree trimmings and dedicated sustainable nurseries, agricultural crops, grasses and vegetation waste or products.
Following a year of initial operation and optimization, the Burger plant will be subject to enforceable emissions rates for SO2, NOx and particulate matter (PM). Reductions from current levels of SO2 emissions are expected to be as much as 14,000 tons a year; for NOx, as much as 1300 tons a year; and for PM, as much as 700 tons a year.
As a result of this agreement, conversion to biomass fuel combustion is expected to approach "carbon neutrality," meaning that CO2 emissions released by burning biomass fuel will be offset by the amount of CO2 absorbed from the atmosphere by the wood and vegetation grown to produce the fuel. After offset, Burger is expected to emit approximately 400,000 tons of CO2 emissions a year, based on 20 percent coal co-firing, versus more than 1.7 million tons from coal-fired combustion prior to repowering with biomass fuel.
The adverse effects on the environment of CO2 emissions, particularly from coal-fired power plants, are well-documented. Last April, EPA issued the "Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases under the Clean Air Act," which identified the dangers of the current and projected concentrations of the six key greenhouse gases, the most significant being carbon dioxide. In addition, sulfur dioxides, nitrogen oxides and particulate mattercause severe respiratory problems and contribute to childhood asthma. They are also significant contributors to acid rain, smog and haze, which impair visibility in national parks.
"This is a great result for the health and the environment of the nation," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We are pleased that Ohio Edison has chosen to significantly reduce greenhouse gases and other pollutants from the Burger plant and hope that Ohio Edison will become the standard-bearer for other companies considering conversion to renewable biomass fuels under the auspices of the EPA and state environmental agencies."
"Today's settlement improves air quality for the local community and reduces greenhouse gas emissions by requiring the use of a renewable, carbon-neutral fuel to generate electricity," said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance
Assurance. "EPA will seek similar commitments from companies to replace coal-fired electric generation with cleaner, renewable energy in future Clean Air Act settlements."
The consent decree, lodged in the U.S. District Court for the Southern District of Ohio, 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 Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
Leader of Colombian Drug Cartel and Former FBI Top-Ten Fugitive Pleads Guilty to Drug, Murder and Racketeering ChargesRead the Press Release
WASHINGTON – Diego Montoya Sanchez, 48, one of the leaders of the Norte Valle Colombian drug cartel and a former FBI Top Ten Fugitive, pleaded guilty today in Miami to drug trafficking, murder and racketeering charges, the Justice Department announced.
The pleas were announced by Acting U. S. Attorney Jeffrey H. Sloman for the Southern District of Florida, Acting U.S. Attorney Lev L. Dassin for the Southern District of New York, Assistant Attorney General Lanny A. Breuer of the Criminal Division, FBI Executive Assistant Director Thomas J. Harrington and Acting Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration.Montoya Sanchez appeared before U.S. District Judge Cecilia M. Altonaga in Miami, where he pleaded guilty in two pending federal cases. In the first case, which was indicted in the Southern District of Florida by the U.S. Attorney’s Office, Montoya pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States and one count of obstruction of justice by murder.
In the second case, which was indicted in the District of Columbia jointly by the U.S. Attorney’s Office for the Southern District of New York (SDNY) and the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS), Montoya Sanchez pleaded guilty to one count of conspiracy to engage in a pattern of racketeering activity. The SDNY/NDDS indictment was transferred to the Southern District of Florida for the guilty plea.
Following the decline of the Cali Cartel in the mid-1990s, the Norte Valle Cartel emerged to become Colombia’s most prolific cocaine trafficking cartel. Based upon FBI estimates, at its peak the Norte Valle Cartel was responsible for 60 percent of the cocaine exported from Colombia to the United States. According to the SDNY/NDDS indictment, between 1990 and 2004, the Norte Valle Cartel exported more than 1.2 million pounds, or 500 metric tons, of cocaine worth more than $10 billion from Colombia to the United States.
According to the statement of facts submitted in conjunction with today’s hearing, Montoya Sanchez was a high-level Colombian drug trafficker for more than two decades. In the mid-1980s, Montoya Sanchez ran cocaine laboratories that served many significant traffickers. In the late 1980s, Montoya Sanchez expanded his organization’s operations into smuggling plane loads of cocaine from Colombia to Mexico. According to the statement of facts, by the early 1990s, Montoya Sanchez had switched to maritime smuggling. During the course of the next 15 years, Montoya Sanchez’s organization routinely smuggled cocaine loads between 1,000 and 6,000 kilos at a time using go-fast boats and fishing boats, among other methods.
By the late 1990s, Montoya Sanchez and Wilber Varela emerged to become the Norte Valle Cartel’s two leading kingpins. Mounting tensions between the Montoya and Varela organizations led to a two-year war between the organizations in which each targeted the other’s members for murder. The Montoya-Varela war, which lasted from fall 2003 until fall 2005, resulted in hundreds of deaths, including those of innocent civilians.
At today’s hearing, Montoya Sanchez admitted that his organization’s practices included using violence and murder against people his organization feared were cooperating with law enforcement. Montoya Sanchez specifically admitted to the August 2003 murder of a one-time organization member who was believed to have been cooperating with authorities.
In May 2004, the FBI added Montoya Sanchez to its list of ten most wanted fugitives. On Sept. 10, 2007, Colombian authorities mounted an operation on a believed Montoya hide-out at a ranch in a rural area outside of Zarzal, Valle del Cauca, Colombia, and captured Montoya Sanchez hiding in a creek-bed approximately 700 yards from the ranch. Montoya Sanchez was extradited from Colombia to Miami on Dec. 12, 2008.
Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida, stated, "From the prosecution and conviction of the leaders of the Cali Cartel, to the conviction of Ze’ev Rosenstein and an Israel-based Ecstasy network, to today’s dismantling of the Norte Valle Cartel, the Southern District of Florida has had a long and successful history in the war on drugs. We will continue to focus our energy, and the expertise of our prosecutors, to help our law enforcement partners stem the tide of drugs flooding our streets and poisoning our society."
"Diego Montoya Sanchez was the leader of a dangerous, violent drug organization," said Thomas J. Harrington, Executive Assistant Director of the FBI. "Outstanding cooperation between Colombia and the United States was key to his capture, the capture of others, and the effective dismantling of the Norte Valle Cartel. The FBI and its law enforcement partners, both here and overseas, will continue to work together to eliminate other international organized crime threats."
"The prosecution of Montoya Sanchez is a milestone in the efforts to dismantle the Norte Valle Cartel, one of the world’s most powerful and dangerous drug-trafficking cartels," said Acting U.S. Attorney Lev L. Dassin for the Southern District of New York. "Montoya Sanchez’s arrest and extradition marked the end of his long campaign of violence and corruption. We are grateful to our partners at the DEA and in the Colombian government for their tireless work in this investigation."
"Montoya Sanchez’s path to the top of the Norte Valle Cartel was marked by decades of extreme violence. That path has now ended in a prison cell, where the man who personally helped direct multi-ton shipments of addictive and destructive narcotics into American cities and towns will be held for his crimes," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "This conviction is a major victory in the joint effort by Colombia and the United States to disrupt and dismantle these drug trafficking organizations, made possible through extensive cooperation with our partners in the Southern District of Florida, the Southern District of New York, the DEA and the FBI."
"This notorious leader of the extremely violent Norte Valle Cartel is where he belongs: behind bars for murder, drug trafficking and racketeering," said Acting DEA Administrator Michele M. Leonhart. "Due to the skilled and brave work by the men and women of DEA and the Colombian National Police, justice has been served for the many victims of his cartel’s extreme violence and the tons of cocaine that ended up on American streets. Now he is in prison, no longer able to use his power to destroy others or benefit from his ill-gotten gains."
Montoya Sanchez is the fourth member of his family to be convicted as part of the case out of the Southern District of Florida. In January 2009, Montoya Sanchez’s brother, Eugenio Montoya Sanchez, pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States and one count of obstruction of justice by murder and was subsequently sentenced to 30 years in prison. In November 2005, Montoya Sanchez’s brother, Juan Carlos Montoya Sanchez, and his cousin, Carlos Felipe Toro Sanchez, both pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States. They were sentenced to terms of 262 and 235 months in prison, respectively.
According to in-court statements during the hearing, Diego Montoya Sanchez agreed to serve a 45-year prison term for the crimes outlined in the court documents. Sentencing has been scheduled for Oct. 21, 2009, at 8:30 a.m. before Judge Altonaga.
The Southern District of Florida indictment is being prosecuted by the U.S. Attorney’s Office and was investigated by the FBI. The SDNY/NDDS indictment was the result of a multi-district investigation and is being prosecuted jointly by SDNY and NDDS, and was investigated by the DEA. The Criminal Division’s Office of International Affairs and NDDS Judicial Attachés in Bogota, Colombia provided significant assistance in both cases. U.S. law enforcement received invaluable assistance in its prosecution of Diego Montoya Sanchez from the Government of Colombia, the Colombian National Police and the Colombian Army.
Factual Basis
Former Navy Master Chief Petty Officer Convicted<br /> of Stealing Large Amounts of Fuel from U.S. Army in IraqRead the Press Release
Robert Jeffery, 55, was convicted today by a federal jury in Alexandria, Va., for his role in a scheme to steal fuel worth approximately $39.6 million from the U.S. Army in Iraq.
Jeffery, a former master chief petty officer in the U.S. Navy, was convicted after a two-day trial on one count of conspiracy and one count of theft of government property. According to the evidence presented at trial, from February 2008 through May 2008, Jeffery and his co-conspirators, purportedly representing Department of Defense contractors in Iraq, used fraudulently obtained documents to enter the Victory Bulk Fuel Point (VBFP) in Camp Liberty, Iraq. Evidence showed that Jeffery and his co-conspirators presented false fuel authorization forms to steal large quantities of aviation and diesel fuel from the VBFP for subsequent sale on the black market.
The evidence at trial showed that Jeffery served as an escort for the fuel trucks and retrieved hundreds of thousands of gallons of fuel from the VBFP. The United States owns and operates the VBFP in support of Operation Iraqi Freedom. The VBFP supplies aviation fuel and diesel fuel to both military units and U.S. government contractors operating in and around the VBFP.
Jeffery is a U.S. citizen who, until his arrest in connection with this case, resided in the Philippines. At sentencing, Jeffery faces a maximum of 15 years in prison. Sentencing is scheduled for Dec. 11, 2009.
In related cases, Lee William Dubois, Robert Young and Michel Jamil each pleaded guilty to participating in the same scheme. In his guilty plea on Oct. 7, 2008, Dubois admitted that he obtained government-issued common access cards for the drivers and escorts of the trucks and also presented false documents to the VBFP authorizing his co-conspirators to draw fuel. Dubois admitted that he and his co-conspirators stole approximately 10 million gallons of fuel, and that he received at least $450,000 in personal profits from the subsequent sale of the fuel on the black market. Sentencing for Dubois is scheduled for Aug. 28, 2009.
Young, 56, a former captain in the U.S. Army, pleaded guilty on July 24, 2009. In his guilty plea, Young admitted that between October 2007 and May 2008, he and his co-conspirators used fraudulently-obtained documents to enter the VBFP and presented false fuel authorization forms to steal aviation and diesel fuel from the VBFP for subsequent sale on the black market. As a result of the scheme, Young received approximately $1 million in personal profits. Sentencing for Young is scheduled for Oct. 30, 2009.
Jamil, 59, pleaded guilty on July 27, 2009, for his role in the scheme. Jamil admitting that in March 2007, he and two of his co-conspirators arranged for the creation of a false Memorandum for Record (MFR) authorizing individuals to draw fuel from VBFP, purportedly on behalf of a company serving as a contractor to the U.S. government. Jamil admitted that he and his co-conspirators used this false MFR and others to steal large quantities of fuel from the U.S. Army for subsequent sale on the Iraqi black market. As a result of the scheme, Jamil admitted he received between $75,000 and $87,500 in profits. Sentencing is scheduled for Nov. 13, 2009.
The case is being prosecuted by Special Assistant U.S. Attorney Steve Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorneys Andrew Gentin and Brigham Cannon. The investigation of this case was conducted by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service, the FBI and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.
10 August 2009
Justice Department Signs Agreement with Port St. Lucie, Florida, to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced an agreement with the city of Port St. Lucie, Fla., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under the Department’s Project Civic Access initiative to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 168th under Project Civic Access and the seventh this year.
"Port St. Lucie officials recognize that civic access is a civil right and I applaud them for committing to ensure that residents and visitors with disabilities have equal access to city programs, services and facilities," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
Under today’s agreement, the city will:
- Make physical modifications to its facilities so that parking, routes into buildings, entrances, assembly areas, public telephones, restrooms, service counters, drinking fountains, elevators, routes within parks, and picnic pavilions are accessible to persons with disabilities;
- Implement a plan for the accessibility of sidewalks and curb ramps throughout the city;
- Ensure that the city’s official website is accessible to individuals with disabilities, including persons who are blind or have low vision;
- Continue to train staff in using telephone relay services to place and receive calls to ensure effective communication with persons who are deaf, are hard of hearing, or have speech impairments;
- Amend its employment policies, as necessary, to comply with ADA requirements; and
- Install signs at any inaccessible entrance to a facility directing users to an accessible entrance or to information about other accessible facilities.
Project Civic Access was initiated to ensure that people with disabilities have an equal opportunity to participate in civic life. As part of the project, Department investigators, attorneys, and architects conduct on-site surveys of state and local government programs and facilities across the country in order to identify modifications needed for compliance with ADA requirements. The agreements contain a plan setting out the specific steps a community will take to improve access for persons with disabilities.
People interested in finding out more about the ADA, today’s agreement with the city of Port St. Lucie, Fla., or the Department’s Project Civic Access initiative may find this information on the ADA Web site at http://www.ada.gov or may call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
ICE and DOJ Sign Agreements to Share Information on Drug Trafficking and Organized CrimeRead the Press Release
U.S. Immigration and Customs Enforcement (ICE) and the U.S. Department of Justice (DOJ) signed two Memoranda of Understanding (MOUs) on Thursday, Aug. 6, 2009, to foster increased communication between participating agencies at the Organized Crime Drug Enforcement Task Force (OCDETF) Fusion Center and the International Organized Crime Intelligence and Operations Center (IOC-2).
“The OCDETF Fusion Center and IOC-2 are founded on the principle that we can accomplish more together than we can separately,” said Deputy Attorney General David W. Ogden. “By bringing together the agencies and personnel with existing resources and expertise we can work more effectively as partners to shut down organized crime networks, seize assets and save taxpayer dollars in the process. This agreement, coupled with recent agreements between ICE, DEA and ATF will allow new levels of cooperation and intelligence sharing.”
“These additional agreements we’ve signed with our Department of Justice law enforcement partners help us all better combat the worst criminal offenders,” said Homeland Security Assistant Secretary for ICE John Morton. “By combining our resources, we expect to stop more drug smugglers and organized crime across the country.”By becoming an active participate in the OCDETF Fusion Center as outlined in one MOU, ICE will be adding more than 25 million records, including reports of investigation, wiretap intercept information and financial investigative material, from its drug-related investigations and drug-related financial investigations to the Fusion Center. ICE will also gain access to the additional agency information available through the Fusion Center. This increased partnership will further help in the joint fight against drug trafficking organizations by all of the other Fusion Center agencies, including the FBI, the U.S. Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The ability of all participating Fusion Center agencies to develop target profiles and actionable investigative leads to disrupt and dismantle significant drug traffickers is enhanced by the increase of information collected at the Fusion Center. In addition to sharing in one collection of information, coordinating with the Fusion Center allows participating law enforcement agencies to “de-conflict” their investigations. De-confliction ensures that two or more agencies are not duplicating resources or that one agency’s investigation will not have a negative impact on another agency’s investigation.
DOJ and ICE also signed an MOU regarding ICE participation in the newly-created IOC-2, which marshals the resources and information of nine U.S. law enforcement agencies, as well as federal prosecutors, to collectively combat the threats posed by international criminal organizations to domestic safety and security. It allows partner agencies to join together in a task force setting, combine data and produce actionable leads for investigators and prosecutors working nationwide to combat international organized crime, and to coordinate the resulting multi-jurisdictional investigations and prosecutions. ICE’s new membership in IOC-2 will allow all the partner agencies to draw on data that now ICE will provide, while allowing ICE to work investigations with other agencies that may be targeting the same syndicates.
These latest MOUs follow closely on the heels of two additional agreements DEA and ATF, respectively, signed recently with ICE. Together, these agreements show a significant level of partnership and cooperation within the federal law enforcement agencies to target major criminal organizations.
7 August 2009
Two Individuals Plead Guilty to Offering to Bribe <br /> U.S. Army Contracting Official in AfghanistanRead the Press Release
Two dual Afghan/U.S. citizens today pleaded guilty for their roles in a scheme to offer $1 million in bribes to a U.S. Army contracting official in Afghanistan.
Rohullah Farooqi Lodin, 48, from Irvine, Calif., and Hashmatullah Farooqi, 38, from New York City, pleaded guilty to one count of offering to bribe a public official before Judge Liam O’Grady in U.S. District Court for the Eastern District of Virginia.
The U.S. Army in Afghanistan is responsible for the Commander’s Emergency Response Program (CERP), which enables U.S. Army commanders in Afghanistan to use U.S. monies to fund humanitarian relief and reconstruction projects, including road construction, in that country. According to court documents, in 2009, the U.S. Army solicited bids from contractors to design and build a road in Logar Province, Afghanistan (the Logar Road Contract). The U.S. Army received numerous bids on the Logar Road Contract, including $18 million bids each from National General Construction Company (NGCC) and Hamed Lais Group (Hamed Lais), both general contracting firms in Afghanistan that Lodin and Farooqi claimed to represent.
On at least four occasions in May 2009, Lodin and Farooqi admitted they met with an Army captain who was the public official responsible for managing the CERP in Logar Province. Lodin and Farooqi admitted they told the Army captain that they represented NGCC and Hamed Lais, and were interested in securing the Logar Road Contract. Lodin and Farooqi admitted they offered the Army captain $1 million in bribes if he agreed to assist in disqualifying lower bidders on the Logar Road Contract and influence the award of the contract to NGCC and Hamed Lais.
Lodin and Farooqi admitted they stated they had political connections, and that to facilitate the award of the Logar Road Contract to Hamed Lais and NGCC, they could arrange for the blacklisting of lower priced bidders currently ranked ahead of their bid. Lodin and Farooqi admitted they had numerous conversations with the Army captain and discussed the following options for paying him to influence the award of the Logar Road Contract: they stated they could wire the Army captain $1 million through Dubai or Bangkok to a bank account; they offered to pay the Army captain $500,000 out of the first payment under the contract and $500,000 at the conclusion of the contract; and they offered to pay the Army captain $200,000 of the $1 million in cash before the award of the contract.
The bribery charge carries a maximum penalty of 15 years in prison and a fine of $250,000 or up to three times the value of the bribe, whichever is greater. Sentencing is scheduled for Oct. 16, 2009.
The case is being prosecuted by Special Assistant U.S. Attorney Steve A. Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorney James J. Graham. The investigation is being conducted by the FBI; the U.S. Army Criminal Investigative Division; the Special Inspector General for Afghanistan Reconstruction (SIGAR); the Defense Criminal Investigative Service; and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.
Former U.S. Army Contracting Official Pleads Guilty <br /> to Accepting BribesRead the Press Release
A former U.S. Army contracting official pleaded guilty today to accepting more than $80,000 in bribes in exchange for providing contract work to two Afghan trucking companies.
James Paul Clifton, 35, of Newport News, Va., waived his right to an indictment and pleaded guilty to a one-count criminal information in the Eastern District of Virginia. The information charges Clifton with corruptly steering service contracts, in his capacity as a public official, to Afghan International Trucking (AIT) and Afghan Trade Transportation (ATT) in exchange for bribe payments. Clifton is scheduled to be sentenced on Oct. 23, 2009.
The U.S. Army operates the Bagram Airfield in support of military operations in Afghanistan. According to court documents, the U.S. Army assigns a contracting officer representative (COR) to review all transportation requests and transportation providers. The Army assigned Clifton, a staff sergeant, to be the COR at the Bagram Airfield in February 2008. Clifton’s duties included overseeing the companies providing ground transportation to and from the Airfield and objectively determining whether the companies’ service had been adequate.
According to the plea agreement, employees for AIT, a trucking company operating at Bagram Airfield, began to offer Clifton gifts almost immediately after he was assigned to his position. Despite initially refusing the gifts, Clifton admitted he accepted a cell phone in May 2008, paid for by AIT. According to court documents, AIT then began to make payments to Clifton at a rate of $20,000 a month. In exchange for the payments, Clifton admitted he agreed to assign one extra day of trucking service to the company. Clifton also admitted that later in the month, another Afghan trucking company, ATT, entered into a similar illegal agreement with him. In exchange for bribe payments of $15,000 a month, Clifton admitted he assigned ATT an additional day of trucking service a month. Between May and October 2008, Clifton admitted ATT and AIT made $87,000 in payments to him. According to court documents, affiliates of both companies wired the payments from Dubai, United Arab Emirates, to Clifton’s then-girlfriend in Newport News. According to the terms of their agreement, the companies had agreed to pay Clifton an additional $10,000, although he never received the payments.
The bribery count carries a maximum penalty of 15 years in prison and a fine of the greatest of either $250,000, three times the monetary value of the bribe, twice the gross gain or twice the gross loss.
The case is being prosecuted by Special Assistant U.S. Attorney Steve A. Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorney Liam Brennan. The investigation is being conducted by Defense Criminal Investigative Service, the FBI and members of the National Procurement Fraud Task Force.
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.
Federal Judge Sentences Defendants Who Perpetrated $10.9 Million Medicare Fraud HIV Infusion SchemeRead the Press Release
Miami physician Keith Russell, 65, and physician’s assistant Jorge Luis Pacheco, 50, were each sentenced to 97 months in prison, and physician’s assistant Eda Marietta Milanes, 43, was sentenced to 63 months in prison, for their roles in fraud schemes that involved billing Medicare for $10,903,509 worth of unnecessary HIV infusion treatments.
Russell, Pacheco and Milanes were also ordered to pay more than $3.1 million in restitution to the Medicare program during their sentencing hearings before U.S. District Judge Ursula Ungaro.
Russell, Pacheco and Milanes were convicted by a jury of conspiracy to commit health care fraud and multiple counts of health care fraud on March 17, 2009, after a two-week trial in Miami.
"Medical professionals serve as the gatekeepers of the Medicare system, and their single most important duty is to determine the best care for their patients," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "Physicians and their assistants who choose instead to abuse the public trust and enrich themselves by gaming Medicare will be vigorously prosecuted, and we will continue to expand our strike force operations to stamp out this kind of blatant fraud."
"The infusion clinic in this case was established for the sole purpose of defrauding Medicare – these doctors saw no patients, administered no legitimate medical services, and paid a cash kickback to patients for each visit," said Acting U.S. Attorney Jeffrey H. Sloman of the Southern District of Florida. "In this way, the defendants bilked Medicare out of millions of dollars in false claims. The U.S. Attorney’s Office in South Florida is committed to prosecuting these frauds, in the hopes of helping to restore the integrity of our health care system."
"This case illustrates the profound consequences to the Medicare program and its beneficiaries when trusted health care professionals conspire to defraud the program by participating in sham medical operations," said HHS Inspector General Daniel R. Levinson. "Our agents are working tirelessly with our Strike Force partners to investigate these spurious operations, bring perpetrators to justice, and recover stolen funds for the Medicare program."
Trial evidence established that Russell, Pacheco and Milanes served as the medical staff for M&P Group of South Florida Inc. (M&P Group) and Tendercare Medical Center Inc. (Tendercare), which purported to specialize in the treatment of Human Immunodeficiency Virus (HIV).
Russell was the medical director for both M&P Group and Tendercare during their operations. Pacheco and Milanes worked as medical assistants for Russell at both clinics. One of the owners of the clinics, Tony Marrero, testified at trial that the clinics were established for the sole purpose of defrauding Medicare. Marrero testified that the scheme was to submit claims for medically unnecessary HIV infusion and injection treatments.
Evidence at trial showed that the conspirators billed Medicare for $10,903,509 and were paid in excess of $3.1 during approximately two years of operations. Trial witnesses testified that the unnecessary medicines were not administered, and that the clinics were only operated to create the appearance of legitimacy. Marrero stated that he had an arrangement with a pharmaceutical wholesale company, Lifecare Medical, to buy invoices showing the purchase of large amounts of medications, when only minor amounts were actually bought.
Marrero also testified that he paid Milanes and the M&P group extra money to manipulate patients’ blood samples so the lab results would appear to support the fraudulent claims. Another physician’s assistant, Luz Borrego, testified how those samples were manipulated, and Borrego also stated that she would not give the medications because she knew the medications could hurt HIV patients if actually provided.
Trial testimony established that every patient who went to the clinics was paid a cash kickback of up to $200 per visit. Four patients testified at trial that they took bribes and never received medication at the clinics. One patient testified that he used his payments from the clinics to support his cocaine addiction. Another patient testified that he did not even have HIV, notwithstanding clinic documents showing he was being infused with medication to treat HIV.
Trial evidence established that Russell, Pacheco and Milanes worked at Tendercare and M&P Group at the same time. Further, patients testified at trial that they would received cash and bogus treatments from both clinics.
At sentencing, Milanes acknowledged that she was paid extra by Marrero to manipulate blood samples to justify the false claims. Marrero testified that Pacheco worked directly for him to determine what drugs would be falsely billed to Medicare.
On March 14, 2009, prior to the jury verdict and while trial was ongoing, Pacheco attempted to flee the United States, according to evidence presented in court. He was apprehended heading south on Krome Ave. in Miami-Dade County with $12,600 in cash and a false Florida driver’s license in the name of Jose Luis Falcon. Evidence presented to the court proved that prior to his apprehension, Pacheco cut off his ankle monitor in violation of the terms of his pre-trial release. Documents seized from Pacheco at the time of his apprehension contained multiple contacts in the Dominican Republic. According to evidence presented at court, Pacheco stated to officers that he was "going fishing." Pacheco was a licensed physician in Cuba before coming to the United States.
This case was investigated by the Department of Health and Human Services, Office of Inspector General, Office of Investigations (HHS-OIG) and the FBI . The work of the Homestead, Fla., Police Department was instrumental in the apprehension of Pacheco when he attempted to flee during trial.
The case was tried by Kirk Ogrosky, John S. (Jay) Darden and Charles D. Reed of the Criminal Division’s Fraud Section, with the investigative assistance of HHS-OIG and the FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and Acting U.S. Attorney Sloman of the Southern District of Florida,
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 more than 293 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 Strike Force teams across the separate phases 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 HEAT team, go to: www.hhs.gov/stopmedicarefraud
6 August 2009
Union Pacific Railroad Company Agrees to Settle Clean Water Act Violations in NevadaRead the Press Release
WASHINGTON—Union Pacific Railroad Company (UP) has agreed to settle alleged violations of the Clean Water Act in Nevada by restoring 122 acres of mountain-desert streams and wetlands, implementing storm water controls at its construction sites, and paying a civil penalty, the Justice Department and U.S. Environmental Protection Agency announced today.
As part of the settlement, UP will restore 21 sections of Clover Creek and Meadow Valley Wash, in Clark and Lincoln Counties, Nev., and will monitor eight major restoration areas for at least five years. The work will include removal of illegal fill, restoration, monitoring, maintenance, re-vegetation, and invasive species removal, at an estimated cost of $31 million. UP will also pay $800,000 in civil penalties.
"This settlement will restore Clover Creek and Meadow Valley Wash," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We are pleased that this agreement will result in the restoration of important mountain-desert streams and habitat for the state of Nevada."
"Meadow Valley Wash and Clover Creek are valuable, sensitive water resources which provide habitat to many fish species and endangered wildlife, such as the desert tortoise and southwestern willow flycatcher. Union Pacific’s long term restoration will restore Meadow Valley Wash and Clover Creek," said Laura Yoshii, Acting Regional Administrator for the Pacific Southwest region. "This significant settlement underscores EPA’s commitment to protect valuable water resources in Nevada."
The settlement resolves a complaint filed today by the United States against UP for alleged violations of the Clean Water Act stemming from the railroad’s activities in Clover Creek and Meadow Valley Wash in 2005. In January 2005, UP railroad tracks sustained significant damage following a flood in southern Nevada. The company made time-critical actions to repair damage.
However, UP also conducted extensive non-emergency construction and stream alteration work without obtaining the required Clean Water Act permits, which could have minimized and compensated for the damage to the streams. UP's unauthorized discharges included the construction of massive structures to control stream flows, such as dikes, berms, levees and diversions within the stream systems. The structures ranged from five to 15 feet high, and from 20 to thousands of feet long.
The Clean Water Act requires anyone engaged in construction within waters of the United States to obtain permits when altering waterways. The Corps of Engineers issues permits to discharge fill in water bodies. The state of Nevada is authorized to issue National Pollutant Discharge Elimination System permits for the discharge of pollutants in storm water from construction sites.
The proposed consent decree, lodged in the U.S. District Court in Las Vegas, is subject to a 30-day comment period and final court approval. A copy of the proposed consent decree is available on the Justice Department Web site at www.usdoj.gov/enrd/Consent_Decrees.html.
For more information, go to: http://www.epa.gov/region09/water/wetlands/index.html and http://www.epa.gov/region9/water/npdes/stormwater.html.
Ready-Mix Concrete Producer Agreesto Resolve Clean Water Act ViolationsRead the Press Release
WASHINGTON—Aggregate Industries - Northeast Region Inc., will pay a $2.75 million civil penalty and implement a regional evaluation and compliance program to resolve numerous violations of the Clean Water Act at 23 facilities in Massachusetts and New Hampshire, the Justice Department and U.S. Environmental Protection Agency announced today.
The penalty is the largest ever assessed to a nationwide ready-mix concrete company for storm water violations under the Clean Water Act. The settlement is the latest in a series of federal enforcement actions to address storm water violations from industrial facilities and construction sites around the country.
Under the terms of the consent decree, the company will implement pollution control measures, such as closed-loop water recycling systems, to eliminate discharges into surface waters. These measures will result in the elimination of approximately 158,854 pounds of sediment, 2,106 pounds of oil and grease and 1,143 pounds of iron from the environment, as well as significant reductions in nitrate and nitrogen, by the end of 2009.
"We are committed to seeing that owners and operators of industrial facilities undertake the actions necessary to comply with storm water regulations," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This settlement will result in better management practices and a robust compliance program at multiple facilities in the northeast to prevent harmful storm water run-off."
"Storm water run-off from industrial facilities such as these can carry sediment, debris, and other pollutants into surrounding waterways," said Ira W. Leighton, Acting Regional Administrator of EPA’s New England office. "This settlement is an important step in protecting our waters -- and we expect others in the industry to assess the adequacy of their own storm water controls."
The settlement also requires that the company perform comprehensive compliance evaluations at each of its 43 facilities in New England, as well as any facilities acquired in the next three years, to ensure that the facilities are in compliance with the Clean Water Act. The settlement also requires that the company conduct additional monitoring and reporting of storm water discharges, to hire personnel certified in storm water management to oversee compliance at all facilities where storm water permits are required, and to provide training in storm water management for all operational employees.
The complaint, filed in federal court with the settlement, alleges a pattern of violations since 2001 that were discovered after several federal inspections at the company’s facilities. The alleged violations included failure to document routine facility inspections and failure to perform quarterly monitoring and annual evaluations. In addition, the company allegedly discharged process waste waters, sanitary waste waters and storm water without proper permits from several facilities. Process waters include waters from sand-and-gravel and concrete production manufacturing operations such as vehicle and equipment cleaning, aggregate processing and washing, and concrete truck washout.
At the facilities where permits were in place, the complaint alleges the company failed to implement best management practices such as having proper drainage, failed to perform pavement sweeping and failed to clean and maintain catch basins. The runoff, which contained total suspended solids, oil and grease, metals, and caustics detrimental to aquatic life and water quality, flowed into wetlands, streams and brooks that flowed into tributaries of the Atlantic Ocean.
The Clean Water Act requires that industrial facilities, such as ready-mix concrete plants, sand and gravel facilities and asphalt batching plants, have controls in place to prevent pollution from being discharged with storm water into nearby waterways. Each site must have a storm water pollution prevention plan that sets guidelines and best management practices that the company will follow to prevent runoff from being contaminated by pollutants.
Since being notified of the violations by EPA, the company has made significant improvements to its storm water management systems.
Without onsite controls, runoff from ready-mix concrete and sand and gravel facilities can flow directly to the nearest waterway and can cause water quality impairments such as siltation of rivers, beach closings, and fishing restrictions, and habitat degradation. As storm water flows over these sites, it can pick up pollutants, including sediment, used oil, pesticides, solvents and other debris. Polluted runoff can harm or kill fish and wildlife and can affect drinking water quality.
Aggregate-NE, a fully owned subsidiary of Aggregate Industries, Inc., a Delaware corporation with facilities in several regions throughout the United States, operates approximately 43 facilities in New England. The company is one of the largest producers of aggregates (crushed stone, sand and gravel), asphalt batching, and ready-mixed concrete in New England.
The consent decree, lodged in the U.S. District Court for Massachusetts, 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 Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
Aggregate-NE is required to pay the penalty within 30 days of the court’s approval of the settlement.
Oregon Man Indicted for Dumping Hazardous WasteRead the Press Release
WASHINGTON—Dennis Beetham and his company, D.B. Western Inc., have been indicted on both federal and state charges alleging that he illegally dumped hazardous and other industrial waste in Crook County, Ore., the Justice Department announced. The defendants are scheduled to be arraigned on the federal charges today, Aug. 6, 2009, at 1:30 p.m. PT, at the U.S. Courthouse in Portland, Ore.
The federal charges allege that Beetham and his company unlawfully mishandled several hazardous wastes. First, the defendants are charged with dumping hazardous polymerized liquid formaldehyde into a cinder cone, a geological formation, on a ranch Beetham owned in Powell Butte, Ore. Second, the defendants are charged with dumping nitric acid into the same cinder cone. Finally, Beetham and his company are charged with storing hazardous polymerized liquid formaldehyde waste at the ranch.
The federal charges each allege a violation of the Resource Conservation and Recovery Act (RCRA). RCRA regulates the handling of hazardous wastes from "cradle to grave" – that is, from the creation of a waste through its disposal. RCRA prohibits the treatment, storage and disposal of any hazardous waste without interim status or a permit. The RCRA charges are felonies. Each of the four counts carries a maximum prison term of five years.
Formaldehyde is a chemical used in a variety of products ranging from textiles to wood products. When discarded, formaldehyde qualifies as a hazardous waste under RCRA.
Nitric acid is used in many industrial settings. However, nitric acid is extremely corrosive, and is considered a hazardous waste under RCRA when discarded.
The state charges against Beetham and D.B. Western were filed in Crook County following an investigation by District Attorney Daina Vitolins. The state indictment alleges that the defendants unlawfully created air pollution, disposed of solid waste without a permit, unlawfully created water pollution and failed to complete a clean-up of a waste site. These charges stem from the defendants’ alleged dumping of vast quantities of non-hazardous industrial waste and household waste into the cinder cone on the Powell Butte ranch; burning the waste; and failing to complete clean-up of the site as directed by the state Department of Environmental Quality.
The federal investigation was undertaken jointly by the U.S. Attorney’s Office for the District of Oregon, the Justice Department’s Environment and Natural Resources Division and the Crook County District Attorney, with investigative leadership by the Environmental Protection Agency Criminal Investigations Division and the Oregon Department of Environmental Quality. District Attorney Daina Vitolins was designated as a Special Assistant U.S. Attorney to assist in the federal investigation.
An indictment is only an accusation of a crime, and a defendant is presumed innocent until proven guilty.
Assistant U.S. Attorney Dwight C. Holton, Special Assistant U.S. Attorney Daina Vitolins for the District of Oregon and Senior Trial Attorney J. Ronald Sutcliffe of the Department of Justice are prosecuting the federal case.
5 August 2009
Justice Department and USDA to Hold Public Workshops to Explore Competition Issues in the Agriculture IndustryRead the Press Release
WASHINGTON – Attorney General Eric Holder and Agriculture Secretary Tom Vilsack announced today that the Department of Justice and the U.S. Department of Agriculture (USDA) will hold joint public workshops to explore competition issues affecting the agriculture industry in the 21st century and the appropriate role for antitrust and regulatory enforcement in that industry. These are the first joint Department of Justice/USDA workshops ever to be held to discuss competition and regulatory issues in the agriculture industry.
The joint Department of Justice/USDA workshops will address the dynamics of competition in agriculture markets including, among other issues, buyer power (also known as monopsony) and vertical integration. They will examine legal doctrines and jurisprudence and current economic learning, and will provide an opportunity for farmers, ranchers, consumer groups, processors, the agribusinesses, and other interested parties to provide examples of potentially anticompetitive conduct. The workshops will also provide an opportunity for discussion for any concerns about the application of the antitrust laws to the agricultural industry.
The goals of the workshops are to promote dialogue among interested parties and foster learning with respect to the appropriate legal and economic analyses of these issues, as well as to listen to and learn from parties with real-world experience in the agriculture sector.
"Maintaining a robust agricultural sector is crucial to the strength of the American economy and to who we are as a nation," said Attorney General Holder. "Through the dialogue established in these workshops and, ultimately through our actions, we are committed to ensuring that competition and regulatory actions benefit all American consumers and businesses."
"It is important to have a fair and competitive marketplace that benefits agriculture, rural economies and American consumers," said Agriculture Secretary Vilsack. "The joint workshops between the Department of Justice and USDA will allow a dialogue on very important issues facing agriculture today."
The first workshop will be held in early 2010. While some of the workshops may be held in Washington, D.C., others will be held regionally. The Department of Justice and USDA are soliciting public comments from lawyers, economists, agribusinesses, consumer groups, academics, agricultural producers, agricultural cooperatives, and other interested parties.
"For the first time ever, farmers, ranchers, consumers groups, agribusinesses and the federal government will openly discuss legal and economic issues associated with competition in the agriculture industry,"said Christine A. Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. ‘This is an important step forward in determining the best course of action to address the unique competition issues in agriculture."
The Department of Justice and USDA are interested in receiving comments on the application of antitrust laws to monopsony and vertical integration in the agricultural sector, including the scope, functionality and limits of current or potential rules.
The Department and USDA are also inviting input on additional topics that might be discussed at the workshops, including the impact of agriculture concentration on food costs, the effect of agricultural regulatory statutes or other applicable laws and programs on competition, issues relating to patent and intellectual property affecting agricultural marketing or production, and market practices such as price spreads, forward contracts, packer ownership of livestock before slaughter, market transparency, and increasing retailer concentration.
The public and press are invited to attend the hearings. Additional information about the date, time and location of the workshops will be provided at a later date. Interested parties should submit written comments in both paper and electronic form to the Department of Justice no later than Dec. 31, 2009. All comments received will be publicly posted. Two paper copies should be addressed to the Legal Policy Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 11700, Washington, D.C. 20001. The Department’s Antitrust Division is requesting that the paper copies of each comment be sent by courier or overnight service, if possible. The electronic version of each comment should be submitted to [email protected]. Detailed agendas and schedules for the workshops will be made available on the Antitrust Division’s web site at www.usdoj.gov/atr.
Justice Department Signs Agreement with Fayette County, Pennsylvania, <br /> to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced an agreement with Fayette County, Pa., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under the Department’s Project Civic Access initiative, which aims to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 167th under Project Civic Access.
The Project Civic Access initiative was created to ensure that people with disabilities have an equal opportunity to participate in civic life. As part of the project, Department investigators, attorneys, and architects conduct on-site surveys of state and local government programs and facilities throughout the country to identify modifications needed for compliance with ADA requirements. The agreements contain a plan setting out the specific steps a community will take to improve access for persons with disabilities.
"Civic access is a basic civil right guaranteed to all, and today’s agreement illustrate’s Fayette County’s commitment to improving access for its residents and visitors with disabilities," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "County officials are to be commended for working to ensure equal access to its programs, services and facilities for all residents, including persons with disabilities."
Fayette County is located in western Pennsylvania, close to Virginia. According to census data, approximately 145,651 residents make it their home and more than 23 percent of those individuals have a disability. Founded in 1783, Fayette County’s seat is Uniontown.
Under its agreement, the county will:
- Make physical modifications to facilities so that parking, routes into and inside buildings, restrooms and drinking fountains are accessible to people with disabilities;
- Ensure effective communication in its programs and services for persons who are deaf, hard of hearing, blind or have low vision;
- Provide accessible polling places;
- Provide access to sidewalks for persons with mobility disabilities by installing curb ramps;
- Provide equal access to its emergency management program and services;
- Officially recognize the Pennsylvania relay service and train staff in using the relay service and a TTY;
- Ensure that the county’s official website is accessible to people with disabilities, including individuals who are blind or have low vision;
- Post, publish and distribute a notice to inform members of the public of the provisions of title II of the ADA and their applicability to the county’s programs, services, and activities;
- Provide information to the public concerning the existence and location of the county’s accessible services, activities and programs; and
- Install signs at any inaccessible entrance to a facility directing persons with disabilities to an accessible entrance or to information about other accessible facilities.
People interested in finding out more about the ADA, today’s agreement with Fayette County, Pa., or the Department’s Project Civic Access initiative can find this information on the ADA Web site at http://www.ada.gov or may call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Justice Department Seeks to Bar Couple’s “Asset-protection” Scheme Allegedly Operated from Florida and BahamasRead the Press Release
WASHINGTON – The United States has filed a lawsuit to bar a married couple’s alleged nationwide tax fraud scheme involving so-called asset protection, the Justice Department announced today. The civil injunction lawsuit, filed in U.S. District Court in the Southern District of Florida, alleges that Byron Denver Hatcher and his wife, Kim Reinhart, helped customers hide their assets and business income through multiple transactions using a series of sham foreign trusts, sham foreign corporations and sham trustees.
The scheme allegedly created the illusion that a customer’s business was based and owned overseas, when in fact the customer continued to operate and own the business in the United States. The lawsuit alleges that Hatcher and Reinhart falsely told customers that these transactions made the customers’ income not subject to U.S. income tax.
According to the complaint, at least 40 current scheme participants located all over the United States, and in Canada, Europe, Asia and Australia use the asset-protection scheme to hide their income and assets. Defendants’ customers allegedly include a motorcycle-parts business in Hollister, Calif.; an air-pollution-control-systems business in Elkton, Fla.; two auto-repair businesses in Ferndale, Wash.; two backyard deck and spa businesses in Fort Pierce, Fla. and Chicago; a medical receivables business in California; a race-horse business in Nevada; and two Internet pornography businesses based in Illinois and Michigan.
The suit further alleges that between 2000 and 2005, these participants funneled approximately $28 million through defendants’ scheme, causing an estimated $4.3 million loss to the U.S. Treasury. The government asked the court to require the defendants to stop the scheme and turn over financial records documenting scheme transactions. The suit says that for Hatcher and Reinhart, the term "asset protection" is a euphemism for "tax fraud."
"The Justice Department and Internal Revenue Service are working vigorously to stop tax fraud schemes and detect those who use them," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division.
According to the government complaint, Hatcher and Reinhart reside in and operate the scheme from both Florida and the Bahamas.
The complaint states the couple were convicted of bank fraud in a Florida state court in 1993. A Florida federal judge found the couple in contempt of court in 2002 for helping a Rockford, Ill., man violate an injunction that barred him from sending spam advertising for his cyberporn business to America Online subscribers.
In the past decade the Tax Division has obtained injunctions against more than 410 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
Husband of Former Army Officer Pleads Guilty to Laundering Money Stolen from IraqRead the Press Release
A New Jersey accountant pleaded guilty today to laundering portions of more than $300,000 stolen from the Coalition Provisional Authority (CPA) in the Republic of Iraq and brought back to the United States by his wife, a former U.S. Army lieutenant colonel.
William Driver, 45, of Trenton, N.J., pleaded guilty before U.S. District Court Judge Mary L. Cooper in the District of New Jersey, Trenton Division. At the plea hearing, Driver admitted that his wife, former Lt. Col. Debra Harrison, was assigned to the CPA - South Central Region (CPA-SC) as the deputy comptroller and acting comptroller from April though June 2004. He admitted that Harrison stole money from the CPA-SC and then transported it back to their home in Trenton. Driver admitted that he contacted a home improvements company to build a deck on their home, and from October through December 2004, he and Harrison made four payments of $9,000 each to the contractor using the stolen cash. Harris admitted he and his wife made the payments in cash to evade transaction reporting requirements when the contractor deposited the funds at a bank. Sentencing is scheduled for Dec. 3, 2009.
"By abusing their positions and those of family members, these defendants chose personal profit over their duty to their fellow citizens and soldiers," said Assistant Attorney General Lanny A. Breuer. "The plea entered today by William Driver proves our dedication to unraveling networks of bribery and money laundering to ensure all those involved are held accountable."
"These individuals lined their pockets with someone else’s money but thanks to the career agents, analysts and prosecutors from several agencies who worked together to trace the international money trail, this scheme of fraud and corruption was halted," said Joseph Persichini Jr, Assistant Director of the FBI’s Washington Field Office.
"ICE commends the outstanding law enforcement efforts carried out with our federal partners to include the Special Inspector General for Iraq Reconstruction, the FBI, and the Internal Revenue Service in combating this deplorable offense of public corruption," said James A. Dinkins, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Office of Investigations in Washington, D.C.
"These former senior CPA officials, their associates and a corrupt contractor betrayed their fellow U.S. citizens and the people of Iraq," added Stuart Bowen, Special Inspector General for Iraq Reconstruction (SIGIR). "The extensive criminal investigation and prosecution efforts in this case, which originated from a SIGIR audit, demonstrate our continuing, coordinated commitment to detect and prosecute those who would defraud the U.S. efforts to rebuild Iraq."
"IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money," stated Eileen Mayer, Chief, Internal Revenue Service (IRS) Criminal Investigation.
Driver is the seventh defendant convicted as part of a multi-agency investigation into fraud and corruption involving U.S. military and civilian employees detailed to the CPA-SC in Al-Hillah, Iraq. Harrison pleaded guilty on July 28, 2008, to one count of honest services wire fraud for her role in the scheme. At her plea hearing, Harrison admitted that she took more than $300,000 from the CPA-SC while deployed there and that she used some of the stolen money to make improvements at her home. Harrison also admitted that in August 2004 she received a Cadillac Escalade from Philip Bloom, a contractor at the CPA-SC.
On Jan. 29, 2007, co-conspirator Robert Stein was sentenced to nine years in prison for related charges of conspiracy, bribery and money laundering, as well as weapons possession charges, for his role in the same scheme. Stein was also ordered to forfeit $3.6 million for his role in the bribery and money laundering scheme.
On Feb. 16, 2007, co-conspirator Philip Bloom was sentenced to 46 months in prison on related charges of conspiracy, bribery and money laundering for his role in the scheme. Bloom was also ordered to forfeit $3.6 million for his role in the bribery and money laundering scheme.
On June 25, 2007, co-conspirator Lt. Col. Bruce Hopfengardner was sentenced to 21 months in prison for conspiracy and money laundering related to this scheme. Hopfengardner was also ordered to forfeit $144,500.
Driver was initially charged on Feb. 1, 2007, in a 25-count indictment along with Harrison, Col. Curtis Whiteford, Lt. Col. Michael Wheeler and civilian Seymour Morris Jr. Whiteford was the second-most senior official and highest ranking military officer at CPA-SC and Wheeler was an adviser and project officer for CPA reconstruction projects. Whiteford and Wheeler were convicted by a jury on Nov. 7, 2008, of conspiracy to commit bribery and interstate transportation of stolen property. Morris was acquitted at trial.
These cases are being prosecuted by Trial Attorneys John P. Pearson and Kevin Driscoll of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II, as well as Section Trial Attorney Ann C. Brickley. The cases are being investigated by IRS Criminal Investigation, SIGIR, ICE and the FBI’s Washington Field Office.
Former Congressman William J. Jefferson <br /> Convicted of Bribery, Racketeering, Money Laundering <br /> and Other Related ChargesRead the Press Release
A federal jury today convicted former United States Congressman William J. Jefferson, 62, of New Orleans, La., of using his office to corruptly solicit bribes, the Justice Department announced.
After hearing evidence for more than one month in a federal court in Alexandria, Va., a jury found Jefferson guilty on 11 charged counts, including solicitation of bribes, honest services wire fraud, money laundering, racketeering and conspiracy. Jefferson was acquitted on three counts of honest services wire fraud, an obstruction of justice charge and of violating the Foreign Corrupt Practices Act. U.S. District Judge T.S. Ellis III accepted the verdict and scheduled sentencing for Oct. 30, 2009. Jefferson faces a maximum penalty of 150 years in prison and the jury will reconvene tomorrow to address whether he will additionally face forfeiture of up to $456,000 plus stock certificates.
"We have been reminded today that we are a nation of laws, and not men," said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia . "It should be a clear signal that no public official – and certainly not a U.S. Congressman – can put their office up for sale and betray that office. It cannot be tolerated. It cannot just be another cost of doing business. And today, a jury of his peers held Congressman Jefferson accountable for his actions."
"Trust and integrity in public officials is at the heart of our democracy," said Joseph Persichini Jr., Assistant Director of the Washington Field Office of the FBI. "What a better way to ensure those virtues, than to expose those who breach that trust. I am proud of the fantastic team of career prosecutors, agents and analysts who worked long hours to provide the facts and evidence which resulted in this just conclusion today."
According to evidence at trial, from August 2000 to August 2005 Jefferson used his position as an elected member of the U.S. House of Representatives to corruptly seek, solicit and direct that things of value be paid to himself and his family members in exchange for his performance of official acts to advance the interests of people and businesses who offered him the bribes. The things of value, according to evidence at trial, included hundreds of thousands of dollars worth of bribes in the form of payments from monthly fees or retainers, consulting fees, percentage shares of revenues and profits, flat fees for items sold and stock ownership in the companies seeking his official assistance.
Evidence at trial showed that Jefferson performed a wide range of official acts in return for things of value, including leading official business delegations to Africa, corresponding with U.S. and foreign government officials, and utilizing congressional staff members to promote businesses and businesspersons. The business ventures that Jefferson sought to promote included telecommunications deals in Nigeria, Ghana and elsewhere; oil concessions in Equatorial Guinea; satellite transmission contracts in Botswana, Equatorial Guinea and the Republic of Congo; and development of different plants and facilities in Nigeria.
Others involved in this scheme included Vernon L. Jackson, a Louisville, Ky., businessman who was sentenced to 87 months in prison after pleading guilty to charges of conspiracy to commit bribery and the payment of bribes to a public official; and Brett M. Pfeffer, a former Jefferson congressional staff member who was sentenced to 96 months in prison after pleading guilty to charges of conspiracy to commit bribery and aiding and abetting the solicitation of bribers by a member of Congress.
This case is being prosecuted by Mark D. Lytle and Rebeca H. Bellows, Assistant U.S. Attorneys for the Eastern District of Virginia and Trial Attorney Charles E. Duross of the Criminal Division’s Fraud Section. The case is being investigated by the FBI’s Washington Field Office, with assistance of the Financial Crimes Enforcement Network.
Former Border Patrol Agent Sentenced for Attempting to Receive Protected Leopard TortoisesRead the Press Release
WASHINGTON—Rene Soliz of Alice, Texas, was sentenced today in U.S. District Court in Corpus Christi, Texas, to serve three years of supervised probation, 250 hours of community service and pay a $1,500 fine for violating the Lacey Act by attempting to receive 15 Tanzanian leopard tortoises that were transported into the United States, the Justice Department announced.
Prior to his sentencing and as part of a plea agreement with the government, Soliz resigned his position as a Border Patrol agent.
Soliz pleaded guilty to the Lacey Act violation on April 14, 2009. The Lacey Act prohibits the knowing attempt to receive or acquire wildlife that was transported in violation of a law or treaty of the United States.
"Today’s sentence and Mr. Soliz’s resignation as a Border Patrol agent underscore the consequences of violating federal wildlife laws," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division, "Soliz attempted to trade in a threatened tortoise species in violation of laws designed to protect wildlife from extinction. The Justice Department responds aggressively to those who choose to undermine federal wildlife laws and contribute to the endangerment of protected species."
According to statements made court, in March 2006, Soliz, then while employed as a U.S. Border Patrol agent, contacted an individual in Dar-Es Salaam, Tanzania, who was selling leopard tortoises. Soliz asked to buy eight of the tortoises and indicated an interest in buying more at a later date as part of a long-term business relationship. On April 7, 2006, a U.S. Customs inspector at John F. Kennedy International Airport intercepted a package containing the tortoises being sent to Soliz. The package was labeled as containing 50 live scorpions. When a U.S. Fish and Wildlife inspector opened the package, he found 14 live leopard tortoises and one dead tortoise.
Leopard tortoises are listed in Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). The CITES Appendices list species afforded different levels or types of protection from over-exploitation. Appendix II lists species that are not necessarily now threatened with extinction but may become so unless trade is closely controlled. International trade in specimens of Appendix II species may be authorized by the granting of an export permit from the exporting country. No export permit accompanied the tortoises bought by Soliz.
The case was prosecuted by Senior Trial Attorney Claire Whitney of the Justice Department’s Environmental Crimes Section. The case was investigated by the U.S. Fish and Wildlife Service’s Office of Law Enforcement.
4 August 2009
Justice Department Signs Agreement with <br /> Chautauqua County, New York, to Ensure Civic Access <br /> for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced an agreement with Chautauqua County, N.Y., to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under the Department’s Project Civic Access initiative, which aims to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 166th under Project Civic Access.
The goal of Project Civic Access is to ensure that people with disabilities have an equal opportunity to participate in civic life. As part of the project, Justice Department investigators, attorneys and architects conduct on-site surveys of state and local government programs and facilities across the country for the purpose of identifying modifications needed for compliance with ADA requirements. The agreements contain a plan setting out the specific steps a community will take to improve access for persons with disabilities.
"All citizens have a right to access public programs, services and facilities, and this agreement will ensure that persons with disabilities have the same civic access that so many of us take for granted," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The officials of Chautauqua County are to be commended for making this important commitment to improving access for persons with disabilities."
Chautauqua County, located in the southwestern corner of New York state, next to the Pennsylvania border, is the westernmost of New York’s counties. More than 20 percent of the people living in Chautauqua County have disabilities and will benefit from the agreement announced today.
Under the agreement, Chautauqua County will take several key steps to improve access for persons with disabilities, including:
- Making physical modifications to its facilities so that parking, routes into the buildings, entrances, public telephones, restrooms, service counters and drinking fountains are accessible to people with disabilities;
- Working with the Justice Department to ensure that the county’s emergency management program provides equal access to persons with disabilities;
- Ensuring that the county’s official Web site is accessible to persons with disabilities, including individuals who are blind or have low vision;
- Ensuring that polling places and voter registration materials are accessible to people with disabilities; and
- Ensuring that the county’s sidewalks program affords access to persons with mobility disabilities by installing curb ramps.
People interested in finding out more about the ADA, today’s agreement with Chautauqua County, N.Y., or the Department’s Project Civic Access initiative can find this information on the ADA Web site at http://www.ada.gov or may call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Justice Department Obtains $35,000 in Disability-Based Housing Discrimination Settlement with Apartment Complexin Longview, WashingtonRead the Press Release
WASHINGTON – The Justice Department today announced an agreement with the former owners and managers of Valley View Apartments in Longview, Wash., to settle allegations that they violated the Fair Housing Act by intentionally discriminating against an individual with a disability. Under the settlement, which must be approved by the U.S. District Court for the Western District of Washington, the defendants must pay a total of $35,000 to the complainant.
The lawsuit originated from charges filed by the Department of Housing and Urban Development (HUD) on behalf of a tenant of Valley View Apartments. In 2004, the tenant, who has a mobility impairment that limits his ability to enter or exit a car, asked to use two contiguous parking spaces in the apartment complex’s lot until a handicap accessible space became available. The complaint alleged that the former owners and managers of the apartments, John E. and Shirley L. Price, violated the Fair Housing Act when they intentionally discriminated against the tenant by refusing his request and by initiating retaliatory eviction proceedings. The complaint also alleged that the tenant’s request was reasonable and necessary to afford him an equal opportunity to use and enjoy his dwelling.
"Individuals with disabilities have the basic right to expect reasonable accommodations that allow them access to housing. This settlement is a significant award for a case involving housing discrimination against a lone individual, and it should send a strong message to landlords that they must take all requests for reasonable accommodations very seriously," said Acting Assistant Attorney General Loretta King of the Civil Rights Division.
"The fact that people continue to be denied housing in the 21st century because of their disability is unacceptable," said John Trasviña, Assistant Secretary for Fair Housing and Equal Opportunity. "This conduct has been illegal for more than 20 years, and we intend to enforce the full extent of the law."
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability or 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), e-mail the Justice Department at [email protected] or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Business Owner Sentenced to 100 Years for His Role in Scheme <br /> to Defraud Clients of Funds Allegedly Held in TrustRead the Press Release
Edward H. Okun, the former owner of The 1031 Tax Group LLP (1031TG), was sentenced today to 100 years in prison for his leading role in a scheme to defraud and obtain approximately $126 million in client funds held by 1031TG.
Okun was also ordered to forfeit $40 million by U.S. District Judge Robert E. Payne.
After a three-week trial in federal court in Richmond, Va., a jury found Okun, 58, of Miami, guilty on March 19, 2009, of conspiracy to commit mail and wire fraud, wire fraud, conspiracy to commit money laundering, money laundering, bulk cash smuggling and perjury.
"Edward Okun’s investors trusted that he would keep their funds safe," said Assistant Attorney General Lanny A. Breuer. "But evidence introduced at trial showed that Mr. Okun instead used those investor dollars to finance a lavish lifestyle and to grow his own business holdings. Today's sentencing provides a measure of justice for those who lost so much to Okun’s deceit."
"Because of Edward Okun’s crimes, many victims in this case experienced near financial collapse and personal pain," said U.S. Attorney Dana J. Boente. "Today’s sentence is proper punishment for such an egregious breach of trust by a financial advisor."
According to the evidence presented at trial, from August 2005 through April 2007, Okun and others used 1031TG and its subsidiaries, all owned by Okun, in a scheme to defraud clients of millions of dollars through false pretenses. Section 1031 of the Internal Revenue Code allows investment property owners to defer the capital gains tax that would otherwise be due on properties sold, if the proceeds are used to purchase new property in a specified time frame. To facilitate this exchange, investment property owners deposit the proceeds of property sales with qualified intermediaries and sign exchange agreements that include various promises by the qualified intermediaries to clients regarding the safekeeping and use of exchange funds.
Specifically, the evidence presented at trial established that 1031TG obtained funds by promising clients that their money would be used solely to effect 1031 exchanges as outlined in the exchange agreements. After making such promises, evidence showed that Okun and others misappropriated approximately $126 million in client funds to support his lavish lifestyle, pay operating expenses for his various companies, invest in commercial real estate, and purchase additional qualified intermediary companies to obtain access to additional client funds. In the negotiations to purchase additional qualified intermediary companies, evidence showed that Okun and others misled owners of those companies to induce them to sell their companies to Okun, who then took control of and misappropriated the client funds.
The evidence also showed that Okun instructed his employees in Richmond to withdraw $15,000 in cash from Investment Properties of America’s (IPofA) bank account, a company owned by Okun, and smuggle the cash to his personal yacht on Paradise Island in the Bahamas to avoid federal currency reporting requirements.
The jury also found that Okun made material false statements under oath before the U.S. District Court for the Eastern District of Virginia in a fraudulent attempt to assert a personal attorney-client relationship with a former chief legal officer of IPofA.
In related cases, Lara Coleman, the former chief operating officer of IPofA, pleaded guilty on Jan. 6, 2009, to conspiring to commit mail and wire fraud and to making a material false statement to federal investigators and agreed, under the terms of the plea, to a sentence of 10 years in prison. Robert D. Field II and Richard E. Simring have also pleaded guilty to participating in the conspiracy to defraud 1031TG customers. Field was the chief financial officer and Simring was the chief legal officer of a holding company that was set up, in part, to oversee both IPofA and 1031TG, though neither company was ever officially made a subsidiary of the holding company. Field pleaded guilty on July 3, 2008, and Simring pleaded guilty on July 24, 2008. Field and Simring each face a maximum of five years in prison at sentencing. Coleman, Field and Simring are scheduled to be sentenced on August 13, 2009. All three defendants who pleaded guilty in this case agreed to forfeiture.
The case is being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica A. Brumberg for the Eastern District of Virginia and Trial Attorney Brigham Q. Cannon of the Criminal Division’s Fraud Section. This continuing investigation is being conducted by the U.S. Postal Inspection Service, the Internal Revenue Service and the FBI.
Boston-Based Bus Company Agrees to $650,000 Penalty for Violating the Clean Air Act and Anti-Idling RegulationsRead the Press Release
WASHINGTON—Paul Revere Transportation LLC, a bus company based in Boston, has agreed to pay a $650,000 civil penalty after being found liable by a jury in June for violating federal and state clean air laws for idling their buses for extended periods of time, the Justice Department and U.S. Environmental Protection Agency announced today.
The company was found liable on June 8, 2009, after a six-day trial in U.S. District Court in Boston, for 234 separate violations of the Clean Air Act and a Massachusetts anti-idling regulation. A hearing to determine a penalty for those violations was scheduled to begin in two weeks, until the company agreed to pay the civil penalty.
Paul Revere owns and operates a large fleet of buses and other vehicles, including approximately 60 running out of its bus yard in Roxbury, Mass. In 2006, an EPA inspector observed buses idling at the yard for extended periods. As a result, the United States filed a complaint against the company in federal court for violations of the Massachusetts anti-idling regulation, a requirement under the Commonwealth’s Clean Air Act State Implementation Plan.
The anti-idling regulation prohibits the unnecessary operation of the engine of a motor vehicle while the vehicle is stopped for a foreseeable period of time in excess of five minutes. The complaint alleged that Paul Revere idled its buses for lengthy periods of time, many extending more than an hour over the legal limit.
"This penalty appropriately punishes past violations of federal and state clean air laws and will deter other transportation companies from leaving their vehicles idling for extended periods of time in the future," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"Roxbury is a densely-populated urban area, where people already suffer from extremely high asthma rates. It is unacceptable that diesel buses and other vehicles were left idling for more than an hour at a time," said Ira W. Leighton, acting regional administrator of EPA’s New England office. "Diesel pollution is very harmful, especially for sensitive populations such as the young, elderly, and people who suffer from asthma. Following anti-idling laws helps protect the health of people who live in the surrounding area."
EPA’s New England office has previously brought and resolved 10 separate enforcement actions for penalties against nine different companies, including Paul Revere, for violations of the idling law.
Idling diesel engines emit pollutants which can cause or aggravate a variety of health problems including asthma and other respiratory diseases, and the fine particles in diesel exhaust are a likely human carcinogen. Diesel exhaust not only contributes to area-wide air quality problems, but more direct exposure can cause lightheadedness, nausea, sore throat, coughing, and other symptoms. Drivers, passengers, facility workers, neighbors and bystanders are all vulnerable. Diesel emissions also contribute to air pollution which can lead to early deaths, asthma attacks, other health problems.
Once the violations were discovered at the Roxbury facility, inspections were conducted once a week for seven weeks. During each inspection, numerous Paul Revere vehicles, sometimes more than 20, were seen idling for periods of up to two hours. During the seven separate inspections more than 100 hours of illegal idling were witnessed.
Paul Revere’s illegal idling was also documented by a local resident living adjacent to Paul Revere’s Roxbury yard, who testified at trial regarding numerous violations she witnessed over the years at the facility.
Paul Revere has previously been cited by EPA for violations of the Massachusetts anti-idling law. In 2003, Paul Revere paid a civil penalty for illegal idling at Boston’s Logan Airport.
The federal government has worked aggressively with the six New England states to implement and enforce anti-idling programs. EPA’s inspections of transportation facilities are part of a region-wide effort, in partnership with the Massachusetts Department of Environmental Protection and the city of Boston, to curb diesel air emissions, particularly in inner city neighborhoods such as Roxbury where diesel air pollution and asthma rates are substantially higher than in other parts of Massachusetts.
The Stipulation and Order, lodged in the U.S. District Court for Massachusetts, is subject to a 30-day public comment period and approval by the federal court. A copy of the Stipulation and Order is available on the Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
Aluminum Recycler Agreesto Resolve Clean Air Act ViolationsRead the Press Release
WASHINGTON— Aleris International Inc., one of the nation’s largest aluminum recyclers, and 13 of its subsidiaries have committed to implementing environmental improvements and controls projected to cost $4.2 million at 15 plants located in 11 states, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.
The company also agreed to a $4.6 million civil penalty to resolve violations of the Clean Air Act, which will be allowed as an unsecured claim in Aleris’s bankruptcy proceeding pending in Delaware.
Aleris uses recycled beverage cans, scrap, and other materials to produce aluminum in liquid or ingot form. Part of the aluminum production process causes emissions of pollutants such as dioxins and furans, hydrogen chloride, and particulate matter.
The consent decree requires Aleris to better enclose its furnaces to improve the capture of emissions, retest every furnace using model test protocols, adopt model recordkeeping and reporting documents, and install pollution control or monitoring equipment at particular facilities. The settlement is expected to reduce annual emissions of particulate matter by up to 24,000 pounds, hydrogen chloride by up to 870,000 pounds, and dioxins and furans by up to one pound per year. Dioxins and furans, created during incineration, are known to cause cancer and are extremely toxic at low levels.
"This settlement, including the significant civil penalty, will help to protect human health and the environment by bringing one of the country’s largest secondary aluminum companies into compliance with the Clean Air Act’s rules for the industry," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division. "It will also serve as notice to the rest of the industry that we will vigorously enforce the Act and rules."
"Today’s settlement sets a new standard for aluminum recyclers nationwide," said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. "This will ultimately result in cleaner air for the people living near Aleris facilities throughout the country."
In a complaint filed last February in the U.S. District Court for the Northern District of Ohio, the United States alleged that Aleris violated the National Emission Standards for Hazardous Air Pollutants for Secondary Aluminum Production, which became effective in 2003. The complaint alleged that Aleris failed to design and install adequate systems to capture emissions of pollutants, to demonstrate compliance with federal emission standards through adequate performance testing, to correctly establish and monitor operating parameters, and to comply with recordkeeping and reporting requirements.
The settlement requires Aleris and its subsidiaries to implement pollution controls and take other compliance measures at facilities located in Goodyear, Ariz.; Post Falls, Idaho; Morgantown and Lewisport, Ky.; Chicago Heights, Ill.; Wabash, Ind.; Coldwater and Saginaw, Mich.; Uhrichsville, Ohio; Sapulpa, Okla.; Loudon and Shelbyville, Tenn.; Richmond, Va.; and Friendly, W.Va. The states of Idaho, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee, Virginia, and West Virginia and Maricopa County, Ariz., joined today’s settlement and will share a portion of the civil penalty. This is the largest number of facilities ever included in a Clean Air Act settlement involving the secondary aluminum production industry.
Dioxins and furans bioaccumulate, or accumulate in higher than normal concentrations, in fish and other fatty foods and disrupt brain development and hormone systems, particularly in developing fetuses. Hydrogen chloride can be corrosive to the eyes, skin, and mucous membranes, and both short- and long-term exposure are linked to a number of respiratory and other health effects. Exposure to particulate matter is also linked to respiratory problems like asthma and other adverse health effects.
The consent decree, lodged in the U.S. District Court for the Northern District of Ohio, is subject to a 30-day public comment period and approval by both the district court and the U.S. Bankruptcy Court for the District of Delaware. A copy of the consent decree is available on the Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
More information on the Aleris Clean Air Act settlement is available at: http://www.epa.gov/compliance/resources/cases/civil/caa/aleris.html.
3 August 2009
U.S. Sues First Choice Armor & Equipment for Providing<br /> Defective Bullet-Proof Vests to Law Enforcement AgenciesRead the Press Release
The United States has filed a False Claims Act lawsuit against First Choice Armor & Equipment Inc. and its founder, Edward Dovner, for submitting false claims for bullet-proof vests purchased by the United States for federal, state, local and tribal law enforcement agencies, the Justice Department announced today.
First Choice, which manufactured and sold bullet-proof vests containing Zylon fiber from 2000- 2005, marketed its vests to law enforcement agencies as a thinner and more lightweight alternative to other bullet-proof vests. The United States alleges that at the same time First Choice was selling its Zylon bullet-proof vests, the company and its founder knew of significant manufacturing and degradation problems in the Zylon fiber that rendered the material unsafe for ballistic use. In fact, when the Justice Department’s National Institute of Justice tested eight of First Choice’s bullet-proof vests in 2005, all failed.
The United States has also sued Mr. Dovner and Karen Herman, Mr. Dovner’s wife and First Choice’s president, for a fraudulent conveyance – a transfer of property that is made to swindle, hinder or delay a creditor, or to put such property beyond his or her reach – in violation of the Federal Debt Collection Procedures Act. The government alleges that after learning of the investigation into Zylon bullet-proof vests, Mr. Dovner and Ms. Herman removed more than $5 million from First Choice. Mr. Dovner then purchased a Ferrari, a Maserati and a private jet through various shell companies.
"By providing defective bullet-proof vests to the nation’s law enforcement officers, First Choice put the lives of those officers at risk," stated Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "The government’s investigation has determined that bullet-proof vest manufacturers, such as First Choice, wasted taxpayer dollars by failing to address these problems even after they were warned about them."
The United States is already pursuing lawsuits against Toyobo Co., the manufacturer of the Zylon fiber used in the First Choice bullet-proof vests, as well as Second Chance Body Armor and Honeywell International Inc., two other companies that manufactured Zylon vests or components for those vests. The government has previously settled for more than $47 million with five other entities that allegedly were involved in the manufacture or sale of defective Zylon vests.
Assistant Attorney General West acknowledged the cooperation between the many government agencies participating in this ongoing investigation, including the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, the General Services Administration Office of the Inspector General, the Department of Homeland Security Office of Inspector General, the Treasury Inspector General for Tax Administration, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigative Division, the Air Force Office of Special Investigations, the Department of Energy Office of the Inspector General, the U.S. Agency for International Development Office of the Inspector General, the Federal Bureau of Investigation and the Defense Contracting Audit Agency.
Justice Department Signs Agreement with Wendell, Idaho, <br /> to Ensure Civic Access for People with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department today announced an agreement with the city of Wendell, Idaho, to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under the Department’s Project Civic Access initiative, which aims to bring state and local governments into compliance with the Americans with Disabilities Act (ADA). This agreement is the 165th under Project Civic Access.
As part of Project Civil Access, Justice Department investigators, attorneys and architects conduct on-site surveys of state and local government programs and facilities across the country for the purpose of identifying modifications needed for compliance with ADA requirements. The agreements contain a plan setting out the specific steps a community will take to improve access for persons with disabilities.
"Although Wendell is one of our nation’s smaller cities, more than 20 percent of Wendell residents have some type of disability. We are pleased that officials in the city of Wendell recognize the importance of civic access for those individuals," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "As a result of the city’s efforts, all of its residents will have equal access to city programs and services."
Wendell is a town of just over 2,300 residents located about 100 miles southeast of Boise, Idaho, and one out of every five residents has a disability. The Department’s agreement with the city specifies that Wendell will:
- Make physical modifications to its facilities so that parking, routes into the buildings, entrances, public telephones, restrooms, service counters and drinking fountains are accessible to people with disabilities;
- Post, publish and distribute a notice to inform the public of the provisions of Title II of the ADA and their applicability to the City’s programs, services and activities;
- Ensure that all appropriate employees are trained and practiced in using the Idaho Relay Service to make and receive calls;
- Develop a method for providing information for interested persons with disabilities concerning the existence and location of the city’s accessible services, activities and programs; and
- Install signs at any inaccessible entrance to a facility directing users to an accessible entrance or to information about other accessible facilities.
The ADA requires state and local government programs, activities, and services to be accessible to persons with disabilities. It applies to all communities throughout the United States, from the largest cities and counties to the smallest towns and villages.
People interested in finding out more about the ADA, today’s agreement with the city of Wendell or the Department’s Project Civic Access initiative can obtain information on the ADA Web site at http://www.ada.gov or may call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Five Companies Agree to $21 Million Settlement for Environmental Damages in PennsylvaniaRead the Press Release
WASHINGTON—Five companies have agreed to compensate the United States and the Commonwealth of Pennsylvania nearly $21.4 million in cash and valuable property to address natural resource damages resulting from decades of zinc smelting operations at the Palmerton Zinc Pile Superfund site in northeast Pennsylvania, the Justice Department and the Commonwealth of Pennsylvania announced today. The settlement is the largest natural resource damage settlement to date in Pennsylvania.
CBS Operations Inc., TCI Pacific Communications Inc., CBS/Westinghouse of Pa. Inc., HH Liquidating Corp. and HRD Liquidating Corp., agreed to make a cash payment of $9.875 million and to transfer 1200 acres of valuable property, known as the Kings Manor property and valued at approximately $8.72 million, to the Pennsylvania Game Commission. The companies’ cash payment will be deposited into the U.S. Department of the Interior’s Natural Resource Damage Assessment and Restoration Trust Fund to be used to restore, replace, or acquire the equivalent of natural resources injured as a result of releases of hazardous substances at the Palmerton Zinc site.
In addition, the companies agreed to pay $2.5 million for damage assessment costs and to discharge a mortgage worth $300,000 on the Wildlife Information Center (Lehigh Gap Nature Center), a non-profit conservation and environmental education organization, located at the Lehigh Gap.
"The funds and property recovered from this settlement will result in a cleaner, restored environment to counteract the damages that were incurred as a result of the years of harmful emissions from smelter operations," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This settlement is a result of a cooperative effort by federal and state trustees."
The settlement will resolve claims under the Comprehensive Environmental Response and Compensation Act, also known as the Superfund law, the Clean Water Act and the Pennsylvania Hazardous Sites Cleanup Act, under which federal and state trustees of natural resources are authorized to seek compensation for damages to resources that are injured by releases of hazardous substances.
The Palmerton Zinc Pile Superfund Site consists of a broad area impacted by emissions of contaminants from historic zinc smelting operations and more recent zinc-recovery operations at a plant site located twenty-five miles north of Allentown, Pa., in Palmerton, Pa. Over ninety years of smelting operations by the former New Jersey Zinc Co., emitted hazardous materials including arsenic, cadmium, chromium, copper, lead, manganese and zinc into the surrounding environment through air emissions and the release of solid wastes.
Large quantities of the hazardous materials were carried by wind and deposited over surrounding areas resulting in defoliation and contamination of thousands of acres throughout the ridge and valley area of eastern Pennsylvania. The National Park Service owns and maintains approximately 800 acres of land that has been acquired to protect the Appalachian National Scenic Trail in this area, which winds along the Blue Mountain ridge and through the associated gaps. The Pennsylvania Game Commission also owns several thousand acres of State Game Lands on Blue Mountain. Hazardous materials subsequently contaminated several miles of Aquashicola Creek and the Lehigh River as a result of erosion, surface runoff, and shallow ground water contamination.
CBS/Westinghouse of Pa. Inc., is a current owner of a portion of the Site. CBS Operations Inc., TCI Pacific Communications Inc., HH Liquidating Corp. and HRD Liquidating Corp., are successors of the zinc smelting and zinc recovery operators.
The trustees in this case include: the U.S. Department of the Interior, Fish and Wildlife Service and National Park Service, the U.S. Department of Commerce, National Oceanic and Atmospheric Administration, the Pennsylvania Department of Environmental Protection, the Pennsylvania Game Commission, the Pennsylvania Fish and Boat Commission and the Pennsylvania Department of Conservation and Natural Resources.
The consent decree, lodged in the U.S. District Court for the Middle District of Pennsylvania, is subject to a 60-day comment period and final court approval. The consent decree is available on the Justice Department Web site at www.usdoj.gov/enrd/Consent_Decrees.html.
Attorney General Holder Appoints New Member<br /> to the Board of Immigration AppealsRead the Press Release
WASHINGTON – Attorney General Eric H. Holder, Jr., announced today the appointment John H. Guendelsberger as a new member of the Board of Immigration Appeals (BIA). The BIA is part of the Justice Department’s Executive Office for Immigration Review located in Falls Church, Va., and is responsible for hearing appeals of decisions rendered by immigration judges or certain Department of Homeland Security officers. It is the highest administrative body for interpreting and applying Federal immigration laws.
Mr. Guendelsberger has served as senior counsel to BIA’s board chairman since October 2003. During this time, from May 2007 to July 2009, he has served as a temporary board member. He previously served as a board member from September 1995 to October 2003.
Mr. Guendelsberger worked for three years as a staff attorney with Ohio Legal Rights Service, a state agency advocating the rights of persons with mental or developmental disabilities. From 1980 to 1995, he was a professor of law at Ohio Northern University College of Law where he specialized in immigration law, comparative law and international law. Mr. Guendelsberger has written numerous articles in the area of immigration law and has represented aliens on a pro bono basis before Immigration Judges and the Board.
He received his juris doctorate from Ohio State University College of Law in 1977. Mr. Guendelsberger also earned a number of advanced degrees in law including a master of laws degree and a doctor of science of law degree from Columbia University School of Law and a diploma of advanced studies from the University of Paris (Pantheon-Sorbonne). He is a member of the Ohio Bar.
31 July 2009
Two Chemical Companies Agree to Resolve Environmental Violations in OhioRead the Press Release
WASHINGTON—The former and current owners and operators of a chemical facility in Addyston, Ohio, LANXESS Corp. and INEOS ABS USA Corp., have agreed to pay a $3.1 million civil penalty and INEOS will spend up to $2 million to install environmental controls and modify operating procedures to resolve violations of multiple environmental laws, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.
The settlement resolves a complaint filed by the United States and the state of Ohio alleging violations of the Clean Air Act, the Comprehensive Environmental Response, Compensation and Liability Act and the Emergency Planning and Community Right-to-Know Act.
"We are pleased that this settlement requires INEOS to go beyond compliance and take immediate steps to reduce emissions of hazardous air pollutants. The reductions will produce real health benefits for the people of Ohio," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"This settlement is an excellent example of state, local and federal agencies working together to improve the environment in the Addyston, Ohio area," said Bharat Mathur, the EPA Region 5 Acting Regional Administrator.
Under the agreement filed in U.S. District Court in the Southern District of Ohio, INEOS, the current owner and operator of the Addyston Facility, has agreed to upgrade environmental controls and make multiple modifications of its operating procedures including:
- Operating its flare in accordance with specific new parameters to ensure control of volatile organic compounds (VOCs), which include hazardous air pollutants, in accordance with its flare control efficiency permit requirements;
- Installing a new biofilter system in the wastewater treatment system to reduce acrylonitrile emissions, a hazardous air pollutant;
- Conducting a comprehensive review of compliance with emergency release reporting regulations;
- Implementing a comprehensive set of leak detection and repair (LDAR) practices that go beyond regulatory requirements.
The LDAR practices agreed to in the settlement include an innovative program to replace valves with new "low leak" valve technology and to monitor and repair equipment that is leaking at a lower rate than required by regulations, thereby reducing fugitive emissions from leaks.
EPA estimates that the settlement will reduce multiple harmful emissions from the facility’s historical operations including 360 tons of butadiene emissions per year from the flare controls, one ton of acrylonitrile emissions per year from the biofilter project and 60 tons per year in hazardous air pollutants from the enhanced LDAR program. Since the company was notified of its violations, they have implemented a series of emissions reduction projects to reduce these emissions.
EPA classifies acrylonitrile as a probable human carcinogen and butadiene as a known human carcinogen by inhalation. Some of the effects associated with short-term inhalation exposure to acrylonitrile and butadiene are similar and include irritation of the eyes, skin and respiratory tract and central nervous system effects such as drowsiness, dizziness, headaches and nausea. In addition, VOCs contribute to the formation of ozone. Ozone has been shown to be responsible for the reduction of lung function, respiratory symptoms, and increased lung inflammation. Ozone also causes damage to forests and crops, fabric, and exterior coatings such as oil and acrylic latex, oil coatings and automotive finishes.
According to the complaint filed simultaneously with the consent decree, the Addyston Facility allegedly violated the Clean Air Act’s requirements for monitoring and repairing leaks of hazardous air pollutants, and emitted hazardous air pollutants on more than 30 occasions in excess of the legal limits. The facility also failed to comply with requirements relating to the flare, which controls emissions of butadiene, a hazardous air pollutant, by repeatedly failing to meet a 99 percent control efficiency and minimum heat content requirement required by its permits. LANXESS also failed to immediately report releases of hazardous substances to proper federal, state and local emergency response authorities.
The consent decree, lodged today in the U.S. District Court for the Southern District of Ohio, 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 Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
Justice Department Announces Disabled Access Settlement with Developers of Woodbridge, Virginia, Apartment ComplexRead the Press Release
WASHINGTON – The Justice Department today announced a settlement that, pending court approval, will resolve allegations that those involved in the design and construction of the Summerland Heights Apartments, a 318-unit apartment complex in Woodbridge, Va., discriminated on the basis of disability in the design and construction of the project.
The complaint, filed today in the U.S. District Court for the Eastern District of Virginia in conjunction with a consent decree, alleges that the defendants violated the federal Fair Housing Act. It cites a failure to design and construct the Summerland Heights Apartments so that ground floor units contain features of accessible design and the public use and common use areas are readily accessible to and usable by individuals with disabilities.
"Accessible housing is not only a civil right for individuals with disabilities, it is a basic necessity. Accessibility must be considered in the design and construction of new buildings, and the Justice Department is committed to enforcing the nation’s fair housing laws to protect the rights of all citizens, including those with disabilities," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
Under the settlement, the defendants will pay all costs related to retrofitting the apartment complex to make it accessible to persons with disabilities. The defendants must also establish a $40,000 fund which will be used to compensate individuals harmed by the inaccessible housing. The settlement also requires the defendants to undergo training on the requirements of the Fair Housing Act.
The required retrofitting includes modifying walkways to eliminate excess slopes and level changes, providing accessible curb ramps, and providing accessible parking and routes to site amenities, such as clubhouses, pools, mailboxes and trash facilities. The settlement also provides for the replacement of inaccessible knob door hardware with levers, and the widening of inaccessible doorways.
The defendants are: Summerland Heights GP LLC, Summerland Heights II GP LLC, Summerland Heights L.P., Summerland Heights II L.P., Charles P. Johnson & Associates Inc. and the Marlyn Development Corp.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability or 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), e-mail the Justice Department at [email protected] or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Control Components Inc. Pleads Guilty to Foreign Bribery Charges and Agrees to Pay $18.2 Million Criminal FineRead the Press Release
Control Components Inc. (CCI), a Rancho Santa Margarita, Calif.-based company, pleaded guilty today to violations of the Foreign Corrupt Practices Act (FCPA) and the Travel Act in a decade-long scheme to secure contracts in approximately 36 countries by paying bribes to officials and employees of various foreign state-owned companies as well as foreign and domestic private companies.
Today, CCI entered guilty pleas to a three-count criminal information before U.S. District Judge James V. Selna in the Central District of California, Santa Ana Division. CCI designs and manufactures service control valves for use in the nuclear, oil and gas, and power generation industries. As part of the plea agreement, CCI agreed to pay a criminal fine of $18.2 million; create, implement and maintain a comprehensive anti-bribery compliance program; retain an independent compliance monitor for a three-year period to review the design and implementation of CCI’s anti-bribery compliance program and to make periodic reports to CCI and the Department of Justice; serve a three-year term of organizational probation; and continue to cooperate with the Department of Justice in its ongoing investigation.
Immediately following CCI’s guilty plea, Judge Selna imposed a sentence in accordance with the plea agreement. CCI was ordered to pay an $18.2 million criminal fine, placed on organizational probation for three years, and ordered to create and implement a compliance program and retain an independent compliance monitor for three years.
According to the information and plea agreement, from 1998 through 2007, CCI violated the FCPA and the Travel Act by making corrupt payments to numerous officers and employees of state-owned and privately-owned customers around the world, including in China, Korea, Malaysia and the United Arab Emirates,for the purpose of obtaining or retaining business for CCI. Specifically, from 2003 through 2007, CCI paid approximately $4.9 million in bribes, in violation of the FCPA, to officials of various foreign state-owned companies and approximately $1.95 million in bribes, in violation of the Travel Act, to officers and employees of foreign and domestic privately-owned companies. The alleged corrupt payments were made to foreign officials at state-owned entities including Jiangsu Nuclear Power Corp. (China), Guohua Electric Power (China), China Petroleum Materials and Equipment Corp., PetroChina, Dongfang Electric Corporation (China), China National Offshore Oil Corporation, Korea Hydro and Nuclear Power, Petronas (Malaysia) and National Petroleum Construction Company (United Arab Emirates).
In related cases, two former executives of CCI previously pleaded guilty to conspiring to bribe officers and employees of foreign state-owned companies on behalf of the valve company. Mario Covino, CCI’s former director of worldwide factory sales, pleaded guilty on Jan. 8, 2009, to one count of conspiracy to violate the FCPA and admitted to causing the payment of approximately $1 million in bribes to officers and employees of several foreign state-owned companies. Richard Morlok, CCI’s former finance director, pleaded guilty on Feb. 3, 2009, to one count of conspiracy to violate the FCPA and admitted to causing the payment of approximately $628,000 in bribes to officers and employees of several foreign state-owned companies. Covino and Morlok are scheduled to be sentenced on Jan. 25, 2010.
On April 8, 2009, six former CCI executives were charged in a 16-count indictment with violations of the FCPA, the Travel Act and other statutes. The six former CCI executives are Stuart Carson, CCI’s former chief executive officer; Hong (Rose) Carson, CCI’s former director of sales for China and Taiwan; Paul Cosgrove, CCI’s former director of worldwide sales; David Edmonds, CCI’s former vice president of worldwide customer service; Flavio Ricotti, CCI’s former vice-president and head of sales for Europe, Africa and the Middle East; and Han Yong Kim, the former president of CCI’s Korean office. Trial is currently scheduled for Dec. 8, 2009.
An indictment is merely an accusation and the defendant is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
In total, CCI admitted that from 2003 through 2007, it made approximately 236 corrupt payments in more than 30 countries, which resulted in net profits to the company of approximately $46.5 million from sales related to those corrupt payments.
The case is being prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Douglas McCormick of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI’s Washington Field Office, and its team of special agents dedicated to the investigation of foreign bribery cases.
Information
Canadian National Charged with Foreign Bribery and <br /> Paying Kickbacks Under the Oil for Food ProgramRead the Press Release
A Canadian citizen has been charged in an indictment unsealed yesterday for his alleged participation in an eight-year conspiracy to defraud the United Nations Oil for Food Program (OFFP) and to bribe Iraqi government officials in connection with the sale of a chemical additive used in the refining of leaded fuel.
Ousama Naaman, 60, of Abu Dhabi, United Arab Emirates, was indicted on Aug. 7, 2008, in U.S. District Court for the District of Columbia. Naaman is charged with one count of conspiracy to commit wire fraud and to violate the Foreign Corrupt Practices Act (FCPA) and two counts of violating the FCPA. Naaman was arrested on July 30, 2009, in Frankfurt, Germany. The Department of Justice is seeking his extradition from Germany to the United States.
According to the indictment, from 2001 to 2003, acting on behalf of a publicly traded U.S. chemical company and its subsidiary, Naaman allegedly offered and paid 10 percent kickbacks to the then Iraqi government in exchange for five contracts under the OFFP. Naaman allegedly negotiated the contracts, including a 10 percent increase in the price to cover the kickback. In exchange for handling the kickbacks, Naaman allegedly received two percent of the contract value, in addition to the two percent commission he was paid for securing the contracts. The U.S. company allegedly inflated its prices in contracts approved by the OFFP to cover the cost of the kickbacks.
In addition, according to the indictment, in 2006 Naaman allegedly paid $150,000 in bribes on behalf of the U.S. company to Iraqi Ministry of Oil officials to ensure that a competing product manufactured by a different company failed a field test, keeping the competing product out of the Iraqi market. Naaman is alleged then to have provided the U.S. company with false invoices, on the basis of which the U.S. company reimbursed him for the bribes to the Iraqi officials.
If convicted on all charges, Naaman faces a maximum prison sentence of 15 years.
The case is being prosecuted by Trial Attorney Kathleen M Hamann of the Criminal Division’s Fraud Section. The case is being investigated by the Washington Field Office of the FBI. Significant assistance was provided by the Criminal Division’s Office of International Affairs, the U.S. Securities and Exchange Commission’s Division of Enforcement and the United Kingdom Serious Fraud Office’s United Nations Oil for Food Investigations Unit.
An indictment is merely an accusation and the defendant is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
British Citizen Arrested in Connection with Costa Rica-based<br /> Business Opportunity Fraud VenturesRead the Press Release
WASHINGTON – A British citizen charged in connection with the operation of a series of fraudulent business opportunities was arrested Thursday evening in Miami following his indictment by a Miami federal grand jury on June 9, 2009, the Justice Department and the U.S. Postal Inspection Service announced today.
Dilraj Mathauda was arrested based on charges that he and his co-conspirators purported to sell beverage and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The charges form part of the government’s continued nationwide crackdown on business opportunity fraud.
According to the indictment, beginning in May 2005, Mathauda fraudulently induced victims to buy business opportunities in USA Beverages Inc. and Omega Business Systems Inc. for, in many cases, at least $10,000 each. Mathauda, using an alias, and his co-conspirators employed Voice Over Internet Protocol (VoIP) phone service and virtual offices in the U.S. to make it appear to potential purchasers that the companies’ operations were fully within the United States. Mathauda is alleged to have operated out of Costa Rica as he was fraudulently inducing potential purchasers to buy the purported business opportunities.
Mathauda and his co-conspirators allegedly made numerous false statements to potential purchasers of the business opportunities. According to the indictment, they falsely told their victims that the companies were established years earlier, had a significant number of distributors across the country, and had a track record of success. Potential purchasers were referred to references who, according to the indictment, told false tales of their success as business opportunity owners. Through these and other misrepresentations, purchasers of the business opportunities were led to believe that they would earn substantial profits.
"The federal government is committed to uncovering and vigorously prosecuting business opportunity fraud," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division. "In fact, we have charged over 100 individuals with business opportunity-related felonies in the past five years."
Mathauda is charged with conspiracy and with committing his offense via telemarketing. He is also charged with ten counts of mail fraud and two counts of wire fraud. If convicted on the conspiracy count, Mathauda faces a maximum sentence of 25 years imprisonment, a possible fine, and mandatory restitution. He also faces a maximum statutory term of 25 years imprisonment on each of the mail and wire fraud counts, a possible fine, and mandatory restitution.
"We will not allow individuals living in other countries to use modern communication techniques to commit fraud on the American public. This international and domestic investigation illustrates our resolve to protect the American people from business scams, wherever they occur," said U.S. Postal Inspector in Charge, Henry Gutierrez, based in Miami.
"The Postal Inspection Service remains vigilant in investigating and rooting out fraudulent schemes. Consumers must be aware that false references and empty promises of assistance locating display racks and merchandise are extremely common in this type of scam," said U.S. Postal Inspector in Charge Pete Zegarac, based in Phoenix. "These companies took over the corporate identities of businesses established long ago – so even claims of being in business for many years must be viewed with caution."
Assistant Attorney General West commended the investigative efforts of the Postal Inspection Service, as well as the Federal Trade Commission, which previously brought a related civil suit and made a criminal referral. This matter is being prosecuted by trial attorneys in the Justice Department’s Office of Consumer Litigation.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
30 July 2009
Two Individuals Charged with Attempting to Bribe U.S. Army Contracting OfficialRead the Press Release
Two dual Afghan/U.S. citizens were charged today with conspiracy and bribery in connection with a scheme to offer $1 million in bribes to a U.S. Army contracting official in order to influence the award of a road construction contract in Afghanistan.
Rohullah Farooqi Lodin, 48, from Irvine, Calif., and Hashmatullah Farooqi, 38, from New York City, were charged today in a two-count indictment, returned by a federal grand jury in the Eastern District of Virginia. The indictment charges each defendant with one count of conspiracy to defraud and commit an offense against the United States and one count of attempting to bribe a public official.
The U.S. Army in Afghanistan is responsible for the Commander’s Emergency Response Program (CERP), which enables U.S. Army commanders in Afghanistan to use U.S. monies to fund humanitarian relief and reconstruction projects, including road construction, in that country. According to the indictment, in 2009, the U.S. Army solicited bids from contractors to design and build a road in Logar Province, Afghanistan (the Logar Road Contract). The U.S. Army received numerous bids on the Logar Road Contract, including $18 million bids each from National General Construction Company (NGCC) and Hamed Lais Group (Hamed Lais), both general contracting firms in Afghanistan that Lodin and Farooqi claimed to represent.
According to the indictment, on at least four occasions in May 2009, Lodin and Farooqi met with an Army captain who was the public official responsible for managing the CERP in Logar Province. Lodin and Farooqi told the Army captain that they represented NGCC and Hamed Lais, and were interested in securing the Logar Road Contract. According to the indictment, Lodin and Farooqi offered the Army captain $1 million in bribes if he agreed to assist in disqualifying lower bidders on the Logar Road Contract and influence the award of the contract to NGCC and Hamed Lais.
According to the indictment, Lodin and Farooqi stated they had political connections, and that to facilitate the award of the Logar Road Contract to Hamed Lais and NGCC, they could arrange for the blacklisting of lower priced bidders currently ranked ahead of their bid. The indictment also alleges that Lodin and Farooqi had numerous conversations with the Army captain and discussed the following options for paying him to influence the award of the Logar Road Contract: they stated they could wire the Army captain $1 million through Dubai or Bangkok a bank account; they offered to pay the Army captain $500,000 out of first payment under the contract and $500,000 at the conclusion of the contract; and, they offered to pay the Army captain $200,000 of the $1 million in cash before the award of the contract.
The conspiracy count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The bribery count carries a maximum penalty of 15 years in prison and a fine of the greater of $250,000, or twice the value gained or lost.
The case is being prosecuted by Special Assistant U.S. Attorney Steve A. Linick, Deputy Chief of the Criminal Division’s Fraud Section, and Fraud Section Trial Attorney James J. Graham. The investigation is being conducted by the FBI; the U.S. Army Criminal Investigative Division; the Special Inspector General for Afghanistan Reconstruction; the Defense Criminal Investigative Service; and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).
The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.
Indictment
Third Crewmember Pleads Guilty to Charges Related to Pollution from Cargo ShipRead the Press Release
WASHINGTON—A Greek citizen who oversaw the engineering department on board a Dominica-flagged bulk cargo ship pleaded guilty today in U.S. District Court in New Orleans for violating environmental laws designed to prevent pollution from ships and making false statements to the U.S. Coast Guard, the Justice Department announced.
Georgios Stamou, the chief engineer of the M/V Theotokos, pleaded guilty to one felony violation of the Act to Prevent Pollution from Ships and one felony violation for making a false statement. Stamou is the third crewmember to plead guilty to crimes related to pollution from Theotokos while on the high seas. The captain of the ship, Panagiotis Lekkas, and the second ranking officer, Charles P. Posas, both pleaded guilty to multiple felony counts on July 15, 2009.
"Illegal pollution from ships continues to be a problem. Failing to properly dispose of bilge waste and lying to Coast Guard inspectors is unacceptable and those who choose to ignore the law face prosecution," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
"This case clearly demonstrates the Coast Guard's commitment to work with our interagency partners to aggressively enforce all maritime anti-pollution and safety of life at sea laws. The breadth and magnitude of the investigation that underpinned the charges brought forth is a testament to the dedication of all persons who were involved in resolving this matter including the Coast Guard Investigative Service, the U.S. Department of Justice, and the U.S. Attorney for the Eastern District of Louisiana," said Rear Admiral Mary Landry, Eighth District Coast Guard commander.
According to court documents, Stamou was in charge of the engineering department and oversaw the ship’s machinery spaces, engines, propulsion system, and pollution prevention equipment including the oily water separator. At some point during Stamou’s employment on board the vessel, the oil water separator ceased functioning. During a voyage from Korea to Panama, Stamou spoke with a company representative and notified him that there was a problem with the oily water separator. Stamou did not utilize the oil water separator and directed crewmembers to discharge bilge waste that had accumulated during regular operation of the ship.
Engine room operations on board large oceangoing vessels such as the M/V Theotokos generate oil-contaminated bilge waste. International and U.S. law prohibit the discharge of bilge waste containing more than 15 parts per million of oil without treatment by an oily water separator - a required pollution prevention device. The International Convention for the Prevention of Pollution from Ships and federal law also require all overboard discharges be recorded in an oil record book, a standardized log which is regularly inspected by the Coast Guard.
Stamou at the time of his discharge directive was aware that bilge waste can only be legally disposed of at a shore side facility while at port or after being filtered through an oily water separator so that it contains less than 15 parts per million of petroleum. In court papers, Stamou admitted that he knew that to carry out his directive, the crew would discharge the waste directly overboard by routing the waste through the bilge line or sewage discharge valve, and not through the oil water separator. Additionally, none of the discharges were recorded, as required, in the vessel’s oil record book.
On Oct. 1, 2008, the Coast Guard boarded the Theotokos at Kenner Bend Achorage in Louisiana for a port state control inspection to ascertain its compliance with health, safety, and anti-pollution protocols. At that time, Stamou presented the false oil record book to Coast Guard inspectors.
A sentencing hearing has been scheduled for Stamou for Nov 5, 2009. Sentencing for both Lekkas and Posas is set for Oct. 14, 2009.
The case was investigated by the U.S. Coast Guard Investigative Service with assistance from inspectors from Sector New Orleans as well as legal from U.S. Coast Guard in New Orleans and at Headquarters in Washington, D.C. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section along with Dorothy Taylor of the U.S. Attorney’s Office in New Orleans.
Texas Gang Member Pleads GuiltyRead the Press Release
Almighty Latin King and Queen Nation (ALKQN) member David Hellums, aka "CutThroat," pleaded guilty today to a superseding indictment charging him and 16 co-defendants with various offenses related to alleged narcotics and weapons trafficking, as well as violent activities throughout Texas.
Specifically, Hellums, 35, of Big Spring, Texas, pleaded guilty to 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. He faces a maximum statutory sentence of not less than 10 years and up to life in prison. U.S. District Judge Sam R. Cummings ordered a pre-sentence investigation with a sentencing date to be scheduled after that investigation is completed.
According to documents filed in court, Hellums admitted that he was a member of a conspiracy that included Jose Robledo Nava, aka "Chino;" Luis Nava, aka "Flaco;" Reynaldo Nava, aka "Rat;" Robert Allen Ramirez, aka "Nesyo;" Marie Chavez, aka "Shorty;" Carol Ann Rivas Nava; Cecily Dominique Juarez; Jesus Martinez, aka "Solid;" James Johnathan Cole, aka "Blitz;" Eduardo Daniel Mares, aka "Pitt;" Gabriel Lee Gonzales; Michael Conde, aka "Psycho;" Guerrero Olivas, aka "Screech;" John Guzman; Hiluterio Chavez, aka "Zeus;" and Eliseo Perez, aka "Wicked" and others, and that from 2001 until December of 2008, directly or indirectly agreed to distribute, and possess with intent to distribute, cocaine and marijuana.
Hellums admitted that the overall scope of the conspiracy involved at least five kilograms of cocaine and 100 kilograms of marijuana. Hellums further admitted that he and his 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.
Hellums is the 12th defendant in the case to plead guilty. Others who have pleaded guilty include:
- Jesus Martinez, aka "Solid," 28, of Midland
- John Guzman, 30, of Big Spring
- Hiluterio Chavez, aka "Zeus," 33, of Chicago
- Eliseo Perez, aka "Wicked," 28, of Mission, Texas
- Luis Nava, aka "Flaco," 25, of Midland
- Reynaldo Nava, aka "Rat," 27, of Big Spring
- Marie Chavez, aka "Shorty," 28, of Lubbock
- Carol Ann Rivas Nava, 20, of Big Spring
- Cecily Dominique Juarez, 20, of Midland
- Guerro Olivas, aka "Screech," 26, of Big Spring
- Michael Conde aka "Psycho," 24, of Lamessa, Texas
The indictment also alleged that from 2004 through mid July 2005, defendants Jose Robledo Nava, Jesus Martinez, and Hiluterio Chavez conspired to deal in firearms. Last month, Jesus Martinez and Hiluterio Chavez pleaded guilty to conspiring to engage in the business of dealing firearms.
Jose Robledo Nava is allegedly the ALKQN leader in Texas. He, 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 Coordinating Center (Gang TECC); the Organized Crime Drug Enforcement Task Force (OCDETF); the Midland and El Paso U.S. Attorneys’ Offices; the U.S. Drug Enforcement Administration; the FBI; U.S. Immigration and Customs Enforcement; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the El Paso Intelligence Center; U.S. Customs and Border Protection; the U.S. Marshals Service; the Texas Department of Public Safety; the police departments of Lubbock, Midland, Houston, San Antonio and Big Spring, Texas; the Lubbock County Sheriff’s Office; and the Howard County District Attorney’s Office.
Assistant U.S. Attorney Cody L. Skipper of the Lubbock, Texas, U.S. Attorney’s Office and Trial Attorney Joseph A. Cooley of the Department of Justice’s Criminal Division’s Gang Unit are prosecuting the case.
Factual Resume
Plea Agreement
South Florida Stock Trader Sentenced to 30 Months<br /> in Prison for Role in Securities Fraud SchemeRead the Press Release
WASHINGTON – A stock trader from Jupiter, Fla., was sentenced today to 30 months in prison for engaging in securities fraud involving several publicly traded companies, Assistant Attorney General Lanny A. Breuer of the Criminal Division announced.
Paul M. Gozzo, 33, was sentenced today by U.S. District Judge Donald L. Graham in the Southern District of Florida. In addition to the prison sentence, Judge Graham ordered Gozzo to serve two years of supervised release following his release from prison and to forfeit more than $437,000 in net profits from his criminal conduct.
Gozzo pleaded guilty on March 17, 2009, to one count of conspiracy to commit securities fraud and one count of securities fraud. In his plea, Gozzo admitted to engaging in a market manipulation scheme with two co-conspirators for the purpose of artificially inflating the prices of several publicly traded stocks. Gozzo also admitted that he and his co-conspirators manipulated the stock price of several stocks by, among other things, creating the false appearance that there was greater investor interest and liquidity in the stocks than actually existed. In return for his assistance in manipulating the stock prices of these companies, Gozzo admitted that he received approximately $540,000, which resulted in a profit to Gozzo of more than $437,000.
According to information contained in plea documents, Gozzo admitted that he conspired with a purported investment banker, who owned large amounts of stock in several public companies, and the investment banker’s son to artificially increase the stock price of those companies. They did so, according to court documents, by providing support bids for shares of those companies and by engaging in coordinated trades with each other and others for the purpose of keeping the stock price artificially inflated and further inflating the stock price. This created the impression that there was a greater investor interest in the stock than truly existed, which allowed Gozzo and his co-conspirators to sell that stock at an artificially high price. Gozzo admitted that he and his co-conspirators also bought and sold stock through numerous broker-dealers to make it appear that there were several investors trading in the stocks they were manipulating, when in fact there were not additional investors. In return for Gozzo’s assistance in manipulating the stock prices of these companies, the investment banker compensated Gozzo in the form of cash retainer payments and both free-trading and restricted stock.
This case was prosecuted by Assistant Chief Hand Bond Walther and Trial Attorney Nicole H. Sprinzen of the Criminal Division’s Fraud Section and is being investigated by the FBI’s Washington Field Office. Significant assistance was provided by the U.S. Securities and Exchange Commission.
New Mexico-based Computer Assets Inc. Agrees to Settle <br /> False Claims Allegations Involving the E-Rate ProgramRead the Press Release
WASHINGTON – Computer Assets Inc. and its principals, Abraham Salazar and Damon Salazar, have agreed to pay $350,000 over three years and surrender up to $35 million in pending E-Rate applications to settle allegations that the company violated the False Claims Act in connection with the Federal Communications Commission’s E-Rate program, the Justice Department and the U.S. Attorney’s Office for the District of New Mexico announced today.
The E-Rate program, which Congress created in the Telecommunications Act of 1996, provides funding for needy schools and libraries to connect to and utilize the Internet. Under the program, which is supported by fees collected from telephone users, schools apply for funds to pay for hardware and monthly connectivity service fees.
The United States contended that the Española, N.M.-based company violated the E-Rate program’s requirements by engaging in non-competitive bidding practices for E-Rate contracts with the Kayenta Unified School District in Kayenta, Ariz. Additionally, the United States alleged that Computer Assets billed for installing excess and unnecessary networking cable, and in some instances billed twice for the same work.
These allegations arose from a False Claims Act lawsuit filed in New Mexico federal court by John Lyons, a former Computer Assets employee. The False Claims Act allows private individuals to bring civil actions for fraud on behalf of the United States and to share in the proceeds of any recovery. Mr. Lyons’ share in the settlement will amount to $77,000.
"The E-Rate program provides critical support for Internet access to the most under-served schools in the nation," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division. "Working with our partners at the FCC’s Office of the Inspector General, the Department of Justice is committed to ensuring that this important program, which benefits our neediest children, not be misused by those seeking to defraud the public."
The Justice Department’s Civil Division, with assistance from the FCC’s Office of the Inspector General, handled the investigation and settlement of this matter. The case is entitled United States ex rel. John Lyons v. Computer Assets, Inc. et al., Case No.: 05-540 RB/WPL.
Massachusetts Man Convicted on Child Pornography ChargesRead the Press Release
Johnny Pires, 24, of Middleboro, Mass., was convicted today by a federal jury in Boston of attempting to receive child pornography and possessing child pornography.
Pires was indicted on two counts of attempting to receive child pornography and one count of possessing child pornography. Following a four-day trial before U.S. District Judge Rya W. Zobel, a jury today convicted Pires of the second count of attempting to receive child pornography, and of possessing child pornography.
According to evidence presented during the trial, the case arose from an FBI undercover operation that targeted individuals using file sharing programs to trade child pornography. Testimony from an undercover agent established that Pires was using Limewire, a file share program that allows users to exchange image and video files for free, to share images of child pornography. The agent testified that during his investigation, he downloaded images depicting children engaged in sexually explicit conduct from Pires and was able to access Pires’ shared folder. During the review of Pires’ shared folder, the agent discovered numerous images of child pornography depicting pre-pubescent children engaged in various sexual acts. Based on this information, a search warrant was executed at Pires’ residence, and Pires admitted to accessing child pornography through file share programs and downloading images of the sexual abuse of children. A forensic examiner testified that a hard drive seized from Pires’ residence revealed numerous images of child pornography, including those downloaded from Limewire.
At sentencing, Pires faces a minimum of five years in prison and up to 20 years. He will also face a lifetime term of supervised release following his prison sentence. Sentencing is scheduled for October 22, 2009.
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 is being prosecuted jointly by Assistant U.S. Attorney Thomas Kanwit for the District of Massachusetts and Trial Attorney LisaMarie Freitas of the Criminal Division’s Child Exploitation and Obscenity Section. The case was investigated by the FBI.
Manhattan Return Preparer Pleads Guilty to Filing False Tax ReturnsRead the Press Release
WASHINGTON – Stavros Lubinof, owner of Apollo Tax Services in mid-town Manhattan, N.Y., pleaded guilty today to tax charges, the Justice Department and Internal Revenue Service (IRS) announced. Lubinof waived indictment and pleaded guilty to a two count criminal information charging him with conspiracy to defraud the IRS and with aiding and assisting in the preparation and filing of false and fraudulent income tax returns.
According to the criminal information and statements made during the plea hearing, from 2000 through spring 2005, Lubinof owned and operated Apollo Tax Services. While preparing income tax returns for clients at Apollo, Lubinof fabricated or inflated Schedule A deductions, such as exaggerated or fictitious unreimbursed employee expenses and gifts to charity. This thereby lowered the amount of tax due and owed by Apollos clients that was reported on their individual income tax returns. The total tax loss attributable to the conspiracy is $102,859.
U.S. District Court Judge P. Kevin Castel scheduled sentencing of Lubinof for Nov. 20, 2009 at 11 a.m. Lubinof faces a maximum sentence of eight years in prison and a maximum fine of $500,000 or twice the amount of financial gain to the defendant or loss to the IRS.
In October 2008, an employee of Lubinof at Apollo, Christos Antonakas, pleaded guilty to a two count information charging him for his role in a criminal conspiracy to defraud the IRS and for aiding and assisting in the preparation and filing of materially false income tax returns. During the plea hearing, Antonakas admitted that from 2000 through spring 2005, he worked as a tax return preparer for Apollo where he was instructed by Lubinof to fabricate or inflate Schedule A deductions for Apollo's clients, thereby lowering the amount of tax due and owing reported on their individual income tax returns.
Antonakas is scheduled to be sentenced by U.S. District Court Judge Barbara S. Jones on Aug. 21, 2009. Antonakas faces a maximum sentence of eight years in prison and a maximum fine of $500,000 or twice the amount of monetary gain to the defendant or loss to the IRS.
Acting Assistant Attorney General John A. DiCicco of the Justice Departments Tax Division commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorney Michael P. BenAry, who prosecuted the case and the U.S. Attorneys Office for the Southern District of New York for their assistance in the case.
Key Member of Atlanta Human Trafficking Ring Pleads Guilty <br /> to Sex Trafficking ChargesRead the Press Release
WASHINGTON – The Justice Department today announced that Juan Cortes-Meza, a Mexican National, pleaded guilty in federal district court in Atlanta to sex trafficking offenses involving young Mexican women and girls. Otto Jaime Larios Perez, a Guatemalan National, also pleaded guilty today to making a false statement to law enforcement and, thereby, obstructing a human trafficking investigation. Earlier this year, two other defendants charged in the same indictment, Francisco Cortes-Meza and Raul Cortes-Meza, pleaded guilty to sex trafficking offenses.
From Spring 2006 through June 2008, Juan Cortes-Meza, 31, and others charged in the conspiracy recruited and enticed approximately 10 victims to come to the Atlanta area from Mexico to engage in prostitution for the financial benefit of the members of the alleged conspiracy, according to information presented in court. With false promises of better lives, legitimate employment or marriage, Juan Cortes-Meza lured young, impoverished, rural Mexican women and girls with limited education, knowing the victims would actually be compelled into prostitution through a scheme of strict controls and physical violence.
The defendants who brought the victims into the United States used drivers, including defendant Larios Perez, 25, to transport the victims to the locations where they were forced to engage in acts of prostitution. Larios Perez was prosecuted for false statements he made when law enforcement officers stopped him with a victim in his car.
"Human trafficking and forced prostitution deny the victims not only their freedom, but also their dignity, and this sort of abhorrent illegal conduct will not be tolerated. We are committed to combating human trafficking and prosecuting those who exploit vulnerable women and girls for financial benefit," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "I applaud the many hardworking investigators and attorneys who have toppled this ring and brought its members to justice."
"Human trafficking is modern day slavery that robs individuals of their freedom and can have lasting psychological harm. Compelling women or girls by force, fraud or coercion to engage in commercial sex acts is a serious violation of federal law. This insidious abuse preys upon those who may be vulnerable due to their immigration status, unfamiliarity with this country’s legal system or fear law enforcement," said U.S. Attorney David E. Nahmias for the Northern District of Georgia. "Federal laws protect all victims of such heinous crimes whether or not they are citizens. No victim should fear coming forward to report illegal activity and criminal abuse."
Sentencing hearings for defendants Juan Cortes-Meza and Otto Jaime Larios Perez related to the pleas entered today have not yet been set. The sex trafficking offense carries a mandatory minimum sentence of 10 years in federal prison. In determining the actual sentence for both defendants, the Court will consider the U.S. Sentencing Guidelines, which are not binding but provide advisory sentencing ranges.
This case is being investigated by Special Agents of U.S. Immigration and Customs Enforcement (ICE). Assistant U.S. Attorneys Corey Steinberg and Susan Coppedge and Trial Attorney Karima Maloney of the Civil Rights Division’s Human Trafficking Prosecution Unit are prosecuting the case.