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16 July 2009
Attorney General Announces $500,000 Recovery Act Grant for California Transitional Housing ProgramRead the Press Release
Attorney General Eric Holder today announced that $500,000 in Recovery Act funds have been awarded to the Support for Harbor Area Women’s Lives (SHAWL) House, a program of the Volunteers of America of Los Angeles (VOALA). The announcement was made during the Attorney General’s visit to SHAWL House, known for its transitional housing and support services to victims of domestic violence in the South Bay area of Los Angeles.
"Transitional housing assistance programs help bridge a gap between emergency shelter and permanent housing for victims and their families. Providing viable temporary housing options and services that promote self-sufficiency are critical and proven steps toward violence-free lives," said Attorney General Holder. "We all know that the most vulnerable in our society bear the greatest burden in times of economic hardship. The grant we are delivering today to the SHAWL House, and the women these funds will help, is a concrete example of the Recovery Act at work."
The landmark American Recovery and Reinvestment Act of 2009, signed into law by President Obama, provides the Justice Department’s Office on Violence Against Women (OVW) with $43 million for the Transitional Housing Assistance Program to provide holistic, victim-centered support services that move individuals into permanent housing. The grant to VOALA’s SHAWL House is the first grant awarded under the Transitional Housing Assistance Program.
Transitional housing programs meet the goals of the Recovery Act through employing victim advocates and other personnel to assist victims, renovating housing for victims, offering additional housing units, and increasing job opportunities for victims through training, education and other support services. The award period for these grants is 24-36 months.
OVW, a component of the U.S. Department of Justice, provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act (VAWA) and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing 19 federal grant programs, OVW often undertakes initiatives in response to special needs identified by communities facing acute challenges.
More information is available at www.ovw.usdoj.gov.
15 July 2009
Ship Captain and Chief Officer Plead Guilty to Crimes Related to Pollution from Cargo Ship Traveling to New OrleansRead the Press Release
A Greek citizen, Panagiotis Lekkas, the captain of the bulk cargo ship the M/V Theotokos, pleaded guilty today to four felony counts in federal court in New Orleans for violating anti-pollution laws, ship safety laws and obstructing a U.S. Coast Guard investigation. Additionally, a Philippine citizen, Charles P. Posas, the second highest officer onboard the M/V Theotokos, pleaded guilty to two felony counts of lying to the Coast Guard and violating recordkeeping laws aimed at reducing the risk of marine invasive species.
Posas is the first individual ever charged under the anti-invasive species law, a law designed to mitigate the introduction of marine invasive species into waters of the United States. Aquatic nuisance species are non-indigenous species that threaten the diversity or abundance of native species or the ecological stability of infested waters.
Lekkas, who was the highest ranking officer aboard the ship, pleaded guilty to one count of violating the Act to Prevent Pollution from Ships, one count of obstruction of justice and two counts of violating the Ports and Waterways Safety Act. Posas, who served as the vessel’s chief officer, pleaded guilty to one count of false statement and one count of violating the Nonindigenous Aquatic Nuisance and Prevention Control Act.
The vessel is owned by Liberia-based Mirage Navigation Corporation and is managed by Polembros Shipping Limited. Sentencing for both individual defendants is set for Oct. 14, 2009.
The Coast Guard’s investigation revealed that Lekkas, as the ship’s master, was in charge of the vessel’s operation and was responsible for both the deck department and the engineering department. Chief Officer Posas had direct authority over the deck department, which oversees ship navigation, cargo loading and ballasting. As such, the defendants monitored the ship’s ballast water system and directed the crew to take soundings of the ballast tanks to determine the volume of liquid in particular tanks. Ballast tanks are segregated tanks designed exclusively to hold water and are used to control a ship’s stability and trim. A properly functioning ballast system is essential to safe vessel operation.
In the summer of 2008, during a passage from the Suez Canal to China, Lekkas and Posas suspected that the aftpeak ballast tank was leaking, but the crew was unable to confirm a leak during an inspection. Later, while at a dock, offloading cargo in China, Lekkas and Posas observed an approximately 24-inch crack in the ship’s rudder stem. It was evident that water had passed through the crack because water was streaming out of it from inside of the ship. Lekkas reported the crack to company personnel, but failed to write a written report. Lekkas did not report it to the Coast Guard until he was confronted by Coast Guard inspectors in New Orleans. In court documents, Lekkas admitted that he knew the crack could have adversely affected the safety and safe handling and operation of the vessel. No repairs were undertaken on the rudder stem crack until the Coast Guard ordered it repaired upon its discovery.
The Port and Waterways Safety Act (PWSA) requires that a vessel operator must report all hazardous conditions to the Coast Guard prior to arrival in a U.S. port. Under the PWSA regulations, a hazardous condition does not have to be a definitive danger or imminent threat, but need only be a condition that may adversely affect the safety of any vessel, bridge, structure or shore area or the environmental quality of any port, harbor or navigable waterway of the United States. It may, but need not, involve collision, allision, fire, explosion, grounding, leaking, damage, injury or illness of a person aboard or manning-shortage.
The Coast Guard has notification processes in place to utilize for vessels arriving to U.S. ports that have identified hazardous conditions onboard, such as excessive leaks and major equipment malfunctions. A vessel operator has several options available, including notifying the Coast Guard 96 hours prior to arrival of the hazardous condition or contacting the applicable ports’ 24-hour Sector Command Center or Vessel Traffic Service.
Through further investigation, the Coast Guard also found fuel was leaking, or "migrating" from the deep fuel tanks into the forepeak ballast tank. The forepeak tank is another one of the ballast tanks designed to hold water as part of the ship’s stability and trim control system. The forepeak tank, found in the bow of the ship, is the most forward tank of any sort on the M/V Theotokos. Directly astern of the forepeak tank were two fuel tanks, known as the deep fuel tanks.
In mid-September 2008, Lekkas and Posas learned that fuel oil may have been leaking into the forepeak ballast tank because it was reported that the sounding tapes were dirty with oil. After opening the tank’s hatch, two inspections confirmed the presence of oil in the forepeak tank. Following this discovery, Captain Lekkas ordered the crew to undertake a cleaning operation that initially involved skimming the surface of the water in order to remove the oil. In order to facilitate further cleaning, Lekkas ordered the level of the liquid in the tank lowered by pumping it directly overboard through the ballast pump. As the liquid level was lowered the crew could clean more of the tank, with the cleaning operation expanding to rags and a portable pump. The discharged ballast liquid was contaminated with oil.
The Act to Prevent Pollution from Ships and its regulations require that discharges from the machinery spaces of a cargo ship must be fully and accurately recorded in the oil record book. This obligation extends to emergency, accidental, or other exceptional discharges of oil and oily mixtures. Lekkas ordered the ballast discharges and counter-signed each page of the oil record book, certifying its accuracy. However, none of the contaminated ballast water discharges were recorded in the Oil Record Book.
When the vessel was about two days out from arriving in New Orleans, in late September 2008, it was clear that oil was continuing to leak into the forepeak tank. Prior to entering the Mississippi River and about a day out from New Orleans, Lekkas ordered two fitters to fabricate and install an obstruction device onto the forepeak tank’s sounding tube so that during Coast Guard inspections, when taking a sounding, the results would only reveal water and not the presence of oil in the tank. The obstruction device consisted of a rubber hose with a metal stopper at the bottom end. Before being affixed to the sounding tube, the rubber hose was partially filled with water.
On Oct. 1, 2008, the Coast Guard boarded the M/V Theotokos near New Orleans in order to inspect the ship. During the inspection, the Coast Guard oversaw the sounding of the forepeak tank which indicated the presence of water in the tank but did not reveal the oil. Later, as part of the inspection, the Coast Guard had the crew open the hatch to the forepeak tank which revealed approximately one meter of oil in the tank. During the initial inspection, confined spaces safety regulations prevented the Coast Guard inspectors from retrieving the obstruction device. Although the inspection lasted another two days, Lekkas ordered the fitters to remove the rubber hose from the tank and restore the sounding tube to its original condition. The removal occurred before the Coast Guard had an opportunity to enter the tank.
In addition to the obstruction regarding the sounding pipe, Lekkas admitted in court documents that he knew about the fuel leak into the forepeak tank well before coming to New Orleans and that he chose not to report the leaks to the Coast Guard. Lekkas further admitted that the fuel migration may have adversely affected the safety of the M/V Theotokos or the environmental quality of U.S. ports and shores because the oil contamination in the ballast system meant that captain could not have utilized the ballast system, with its attendant direct overboard discharges, without polluting the marine environment.
Additionally, during the inspection, a Coast Guard inspector asked to see complete ballast records for the Theotokos. Posas responded by physically handing the inspector a copy of the Sept. 27, 2008, ballast report, which is a report of soundings and volumes of water in the ballast system. Posas prepared, signed and maintained these reports as part of his duties as chief officer. In court documents Posas admitted, that at the time he presented the ballast report to the Coast Guard inspector, he knew that the form was false.
Maintenance of accurate ballast water records is required under Ballast Water Management for Control of Nonindigenous Species regulations promulgated under the Nonindigenous Aquatic Nuisance Prevention and Control Act.
"Invasive marine species are a serious problem that can be transmitted in the ballast water of oceangoing vessels. Today’s pleas should act as a warning to industry and crewmembers alike that we will investigate and prosecute those who ignore not only pollution laws but those laws designed to protect native species," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
U.S. Attorney Jim Letten noted, "The message should be clear that this office, in conjunction with its partnership with the U.S. Coast Guard, the Department of Justice Environmental Crimes Section and all its law enforcement partners, will vigorously prosecute individuals who impede or obstruct the U.S. Coast Guard’s mission and pollute our marine environment."
"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‘s Environmental Crime Section, and the U.S. Attorney for the Eastern District of Louisiana," said Rear Admiral Mary Landry, Eighth District Coast Guard commander.
"Coast Guard Investigative Service will continue to aggressively investigate those who profit by violating our environmental laws," said Damon Rodriguez, Special Agent in Charge, Gulf Region, Damon Rodriguez.
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.
Louisiana Tax Defier Sentenced to 46 Months in PrisonRead the Press Release
WASHINGTON – Paul Richard Arceneaux, a resident of Church Point, La., was sentenced today to prison for failing to file his personal tax returns for 2003 and 2004 and corruptly interfering with the due administration of the Internal Revenue laws, the Justice Department and Internal Revenue Service (IRS) announced. The Honorable Walter J. Gex III, U.S. District Court Judge for the Southern District of Mississippi, sentenced Arceneaux to 46 months in prison and three years of supervised release. The court also ordered Arceneaux to pay restitution of $176,616.18.
In April 2009, Arceneaux was convicted of all charges following a jury trial in Jackson, Miss. According to the indictment and the evidence presented at trial, Arceneaux, formerly of Long Beach, Miss., filed false tax returns or amended tax returns for tax years 1998 through 2002 on which he falsely claimed he earned no income. Additionally, Arceneaux failed to file tax returns for tax years 2003 to 2006. Arceneaux filed fictitious liens for millions of dollars against the Chancery Clerk for Harrison County, an employee of the Chancery Clerk’s office, and an employee of the IRS. Arceneaux also filed frivolous lawsuits against the Commissioner of the IRS and an IRS employee.
In July 2004, the Honorable Louis Guirola Jr., a U.S. District Court Judge for the Southern District of Mississippi, dismissed Arceneaux’s frivolous lawsuits in which Arceneaux claimed that he was a citizen of the state of Mississippi, not the United States, and therefore the Internal Revenue code did not apply to him. Judge Guirola wrote that Arceneaux’s arguments that he is not subject to this nation’s federal tax laws "have been considered and uniformly rejected by the courts."
John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorney Jed Silversmith and Assistant U.S. Attorney Mike Hurst, who prosecuted the case.
Houston Computer Administrator Sentenced to Two Years in Prison for Hacking Former Employer's Computer NetworkRead the Press Release
The former director of information technology for a non-profit organ and tissue donation center was sentenced today to two years in prison for hacking into her former employer’s computer network.
Danielle Duann, 51, of Houston, pleaded guilty on April 30, 2009, to a one-count criminal indictment charging her with unauthorized computer access. Duann was sentenced today by U.S. District Judge David Hittner in the Southern District of Texas. In addition to the two-year prison term, Judge Hittner sentenced Duann to a three-year period of supervised release following completion of her prison sentence, and ordered her to pay $94,222 in restitution to compensate her former employer for the damage that resulted from her actions.
In pleading guilty, Duann admitted to illegally accessing the computer network of LifeGift Organ Donation Center and then intentionally deleting organ donation database records, accounting invoice files, database and accounting software applications and various backup files, without authorization. LifeGift is the sole provider of organ procurement services for more than 200 hospitals throughout 109 counties in North, Southeast and West Texas.
According to court documents, LifeGift terminated Duann from her position as their director of information technology on Nov. 7, 2005, and revoked all of her previous administrative rights and access to the LifeGift computer network. In pleading guilty, Duann admitted that beginning on the evening of Nov. 7, 2005, and continuing until Nov. 8, 2005, she repeatedly gained unauthorized access to the LifeGift computer network via a remote connection from her home and intentionally caused damage by deleting numerous database files and software applications, as well as their backups, related to LifeGift’s organ and tissue recovery operations.
Duann further admitted that in an attempt to conceal her activities, she disabled the computer logging functions on several LifeGift computer servers and erased the computer logs that recorded her remote access to the LifeGift network
This case was investigated by the FBI and is being jointly prosecuted by Trial Attorney Thomas Dukes of the Criminal Division’s Computer Crime and Intellectual Property Section and Special Assistant U.S. Attorney Bret W. Davis of the U.S. Attorney’s Office for the Southern District of Texas.
Attorney General Holder Announces $8.7 Million <br /> in Recovery Act Grants to Support Law Enforcement Efforts <br /> on the Southwest BorderRead the Press Release
Attorney General Eric Holder today announced more than $8.7 million in Recovery Act funds for three communities in California to use in fighting crime and drug trafficking as part of the Justice Department’s Southwest Border Strategy. In March 2009, the Department announced its Mexico Cartel Strategy, which uses federal prosecutor-led task forces that bring together federal, state and local law enforcement components to identify, disrupt and dismantle the Mexican drug cartels through investigation, prosecution and extradition of their key leaders and facilitators, and seizure and forfeiture of their assets.
"The Department of Justice is intensifying its efforts to investigate, prosecute and punish members of the Mexican drug cartels," said Attorney General Holder. "The guns, drugs, and bulk cash that are the backbone of the cartels’ business contribute to addiction and drug-related violence in our communities. The Recovery Act funding these three California communities are receiving will help local law enforcement in our joint efforts to combat the threat posed by these cartels."
The Department is increasing its focus on investigations and prosecutions of the southbound smuggling of guns and cash that fuel the violence and corruption and attacking the cartels in Mexico. In recent months, the Department has announced resources for the Southwest border, including an increased law enforcement presence and is now providing additional resources through the Recovery Act grants announced today. In addition, the Department is continuing to collaborate with counterparts in Mexico to strengthen Mexico’s law enforcement capacity and institutions.
Department officials are taking an active role in the national effort to combat the Mexican drug cartels. Two weeks ago, top Department officials participated in the Violent Crime and Arms Trafficking Summit in Albuquerque, N.M., where federal, state and local officials worked to refine enforcement strategies. In June 2009, the Attorney General, along with Secretary Janet Napolitano and Director Gil Kerlikowske from the Office of National Drug Control Policy released President Obama’s National Southwest Border Counternarcotics Strategy, designed to stem the flow of illegal drugs and their illicit proceeds across the Southwest Border by, among other things, increasing coordination and information sharing with state and local law enforcement agencies. Previously, the Attorney General and other Department officials participated in high-level meetings with U.S. and Mexican officials at an arms trafficking conference in Cuernavaca, Mexico.
As part of the efforts to combat Mexican drug cartels, the Office of Justice Programs (OJP) is administering the $30 million Recovery Act Assistance for Law Enforcement along the Southern Border and in High Intensity Drug Trafficking Areas (Southern Border/HIDTA). This will provide resources for hiring, retention, assistance and equipment to law enforcement to combat criminal narcotics activity stemming from the southern border-states.
The Attorney General was joined by local law enforcement officials as he announced grant awards to the California communities of Chula Vista ($2,864,605); San Mateo County ($800,700); and San Diego County ($4,999,996). The Chula Vista Police Department, on behalf of the California Border Alliance Group, plans to use these Recovery Act funds to support task force efforts to gather intelligence related to cross-border violence, including creating or retaining 10 positions. The San Mateo County Sheriff’s Office, along with the Northern California HIDTA, plans to use the funds to develop an automated intelligence management system to track wholesale distribution from Mexican drug trafficking organizations out of the San Francisco area. San Diego County plans to use the funds to create a team of 16 uniformed officers to patrol the border for drug smuggling and criminal activity and fund a dedicated deputy district attorney to prosecute those apprehended. The remaining Southern Border/HIDTA grant awards are being processed and will be announced in the near future.
The Southern Border/HIDTA grant program is part of more than $4 billion in Department of Justice Recovery Act funds available to assist state, local and tribal law enforcement and for other criminal justice activities that help to prevent crime and improve the criminal justice system in the United States, while supporting the creation of jobs and much needed resources for states and local communities.
OJP provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has five component bureaus: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; and the Office for Victims of Crime. Additionally, OJP has two program offices: the Community Capacity Development Office, which incorporates the Weed and Seed strategy, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information can be found at www.ojp.gov.
14 July 2009
Endoscopic Technologies to Pay U.S. $1.4 Million to Resolve Allegations of Medicare FraudRead the Press Release
WASHINGTON – Endoscopic Technologies Inc. (Estech), a medical device manufacturer, has agreed to pay the United States $1.4 million to resolve civil claims in connection with the alleged promotion of its surgical ablation devices, the Justice Department announced today. Surgical ablation devices use focused energy to create controlled lesions or scar tissue on a patient’s heart or other organs.
The settlement resolves allegations that the San Ramon, Calif.-based company marketed its medical devices to treat atrial fibrillation (the most common cardiac arrhythmia or abnormal heart rhythm), a use that is not approved by the U.S. Food and Drug Administration (FDA). The government also alleged that Estech promoted expensive heart surgeries using the company’s devices when less invasive alternatives were appropriate, advised hospitals to up-code surgical procedures using the company’s devices to inflate Medicare reimbursements, and paid kickbacks to healthcare providers to use its devices. The United States asserted that by engaging in this conduct, Estech knowingly violated the Food, Drug and Cosmetic Act and caused the submission of false and fraudulent claims in violation of the False Claims Act.
"The Department of Justice is committed to protecting Medicare from the unlawful marketing practices of Estech and other medical device manufacturers," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "We will continue to work with our partners at the Department of Health and Human Services Inspector General’s Office and the FDA Office of Chief Counsel to preserve the integrity of our public health programs."
The allegations were made against Estech in a lawsuit filed in the U.S. District Court for the Southern District of Texas under the qui tam provisions of the False Claims Act, which permit private citizens, called "relators," to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment. The relator will receive a total of $210,000 as the statutory share of the settlement.
The Southern District of Texas has also unsealed four additional qui tam lawsuits filed by relators against other surgical ablation device manufacturers. The United States continues to investigate those cases.
The settlement with Estech was the result of a coordinated effort by the U.S. Attorney’s Office for the Southern District of Texas, the Civil Division of the Department of Justice, the Department of Health and Human Services’ Office of Inspector General, and the FDA Office of Chief Counsel.
13 July 2009
New Jersey Electrical Services Company Employee Sentenced to 20 Months in Jail for Kickback and Fraud SchemeRead the Press Release
WASHINGTON — An employee of a Sewell, N.J., sub-contractor that provided temporary electrical services was sentenced today to serve 20 months in jail for his role in a kickback and fraud scheme at an Environmental Protection Agency (EPA)-designated Superfund site in New Jersey, the Department of Justice announced. The sub-contractor was also ordered to pay $154,597 in restitution to the EPA, jointly and severally with his co-conspirators.
Christopher Tranchina of Glassboro, N.J., a Service Manager for a Sewell sub-contractor, pleaded guilty on Feb. 26, 2009, in the U.S. District Court in New Jersey, to conspiring to defraud the United States. From approximately the Spring of 2001 until approximately June of 2005, Tranchina and other co-conspirators defrauded the EPA by paying approximately $138,000 in kickbacks to an employee of a prime contractor at the Federal Creosote Superfund site in Manville, N.J. In exchange for the kickbacks, Tranchina’s employer was awarded subcontracts at Federal Creosote. The kickbacks were included in the prices charged to the EPA, which partly funded the remediation of the site. Tranchina received approximately $23,000 of the kickbacks, in the form of a hot tub, an HVAC system, cash and checks.
Tranchina had pricing and bidding authority for all sub-contracts between his employer and the prime contractor at Federal Creosote during the charged period. As a result of the conspiracy and in return for Tranchina’s payment of kickbacks to the prime contractor, Tranchina’s employer received approximately $1.2 million in sub-contracts at Federal Creosote.
"Today’s sentencing should make clear that those who conspire to subvert the competitive bidding process will be held accountable," said Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement of the Department’s Antitrust Division.
The charge is the result of an ongoing federal antitrust investigation into bid rigging, bribery, fraud and tax-related offenses conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation. To date, a total of three companies and seven individuals have pleaded guilty. Bennett Environmental Inc. was sentenced in December 2008 to pay criminal fines and restitution totaling more than $2.66 million. The other individuals and companies are awaiting sentencing.
Today’s charge reflects the Department’s commitment to protecting U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prosecution and prevention of procurement fraud associated with the increase in contracting activity for national security and other government programs.
Anyone with information concerning bid-rigging, kickbacks or fraud relating to sub-contracts awarded at the Federal Creosote site should contact the New York Field Office of the Antitrust Division at 212-264-9308.
Four Members of Casino-Cheating Criminal Enterprise Sentenced <br /> for Targeting Casinos in the United States and CanadaRead the Press Release
George Michael Lee, Duc Cong Nguyen, Hop Nguyen and Tien Duc Vu were sentenced today in San Diego for their roles in a scheme by the "Tran Organization" to cheat casinos across the United States and Canada. Duc Cong Nguyen and Vu admitted that they and their co-conspirators unlawfully obtained up to $2.5 million during card cheats.
A three-count indictment was returned May 22, 2007, and unsealed in the Southern District of California on May 24, 2007, charging Lee, Vu and 12 others each with one count of conspiracy to participate in the affairs of a racketeering enterprise; one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering. The indictment also charged five separate individuals, including Duc Cong Nguyen, each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering.
Lee was sentenced to 36 months in prison and three years of supervised release by District Judge John A. Houston in San Diego. The court also ordered forfeiture in the amount of $731,645; and ordered restitution in the amount of $2,208,019, payable to several casinos. Lee pleaded guilty on Dec. 13, 2007, to conspiracy to participate in the affairs of a racketeering enterprise. Lee was also sentenced on two separate indictments to which he pleaded guilty after agreeing to transfer the charges to San Diego from the Western District of Washington. The two indictments related to card-cheating activity at Emerald Queen Casino and Nooksack River Casino, which are Indian gaming establishments in Washington state.
Duc Cong Nguyen was sentenced to one year and one day in prison and three years of supervised release by Judge Houston. The court also ordered restitution in the amount of $945,055, payable to several casinos. Duc Cong Nguyen pleaded guilty on Aug. 10, 2007, to conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos.
Vu was sentenced by Judge Houston to one year and one day in prison and three years of supervised release. The court also ordered forfeiture in the amount of $53,500; and ordered restitution in the amount of $2,164,632, payable to several casinos. Vu pleaded guilty on Aug. 8, 2008, to conspiracy to participate in the affairs of a racketeering enterprise. Vu was also sentenced on a separate indictment to which he pleaded guilty after agreeing to transfer the charges to San Diego from the Western District of Washington. The transferred indictment related to card-cheating activity at Nooksack River Casino, which is an Indian gaming establishment in Washington state.
Hop Nguyen, who waived indictment and pleaded guilty on Jan. 27, 2009, to filing a false income tax return, was sentenced to one year of supervised release by District Judge William Q. Hayes in San Diego. The court also ordered restitution in the amount of $131,238, payable to several casinos. Hop Nguyen’s plea agreement contained admissions of casino-cheating activities on behalf of the Tran Organization at casinos in the United States and Canada.
A second indictment has alleged that 11 additional defendants conspired to commit offenses on behalf of the Tran Organization. A one-count indictment, unsealed in the Southern District of California on Sept. 11, 2008, charged Bryan Arce; Don Man Duong; Hogan Ho; Thang Viet Huynh; Outtama Keovongsa; Leap Kong, aka Lanida Kong; Qua Le; Khunsela Prom, aka Danny Prom; James Root; Darrell Saicocie; and Dan Thich each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering.
According to the two indictments, the defendants and others executed a "false shuffle" cheating scheme at casinos in the United States and Canada during blackjack and mini-baccarat games. The indictments allege that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating "slugs" or groups of unshuffled cards. The indictments also allege that after tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a "false shuffle," and members of the group would then bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy repeatedly won thousands of dollars during card games, including winning several hundred thousand dollars on one occasion.
The indictments also allege that the members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during blackjack games.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
To date, 29 defendants have pleaded guilty to charges relating to the casino-cheating conspiracy, including: Phuong Quoc Truong; Tai Khiem Tran; Anh Phuong Tran; Phat Ngoc Tran; Martin Lee Aronson; Liem Thanh Lam; George Michael Lee; Tien Duc Vu; Son Hong Johnson; Barry Wellford; John Tran; Willy Tran; Tuan Mong Le; Duc Cong Nguyen; Han Truong Nguyen; Roderick Vang Thor; Sisouvanh Mounlasy; Navin Nith; Renee Cuc Quang; Ui Suk Weller; Phally Ly; Khunsela Prom; Hop Nguyen; Hogan Ho; Darrell Saicocie; Bryan Arce; Qua Le; Outtama Keovongsa; and Leap Kong. These defendants admitted to targeting, with the aid of co-conspirators, a combined total of approximately 25 casinos during the course of the conspiracy, including:
1) Beau Rivage Casino in Biloxi, Miss.;
2) Casino Rama, in Orillia Ontario, Canada;
3) Foxwoods Resort Casino in Ledyard, Conn.;
4) Gold Strike Casino in Tunica, Miss.;
5) Horseshoe Casino in Bossier City, La.;
6) Horseshoe Casino and Hotel in Tunica, Miss.;
7) Isle of Capri Casino in Westlake, La.;
8) Majestic Star Casino in Gary, Ind.;
9) Mohegan Sun Resort Casino in Uncasville, Conn.;
10) Palace Station Casino in Las Vegas;
11) Resorts East Chicago Hotel and Casino in East Chicago, Ind.;
12) Sycuan Casino in El Cajon, Calif.
13) Cache Creek Indian Bingo and Casino in Brooks, Calif.;
14) Emerald Queen Casino in Tacoma, Wash.;
15) Imperial Palace Casino in Biloxi;
16) Argosy Casino in Baton Rouge, La.;
17) Trump 29 Casino in Coachella, Calif.;
18) Isle of Capri Casino in Bossier City;
19) Agua Caliente Casino in Rancho Mirage, Calif.;
20) Spa Resort Casino in Palm Springs, Calif.;
21) Pechanga Resort and Casino in Temecula, Calif.;
22) L'Auberge du Lac Casino in Lake Charles, La.;
23) Nooksack River Casino in Deming, Wash.;
24) Barona Valley Ranch Casino and Resort in Lakeside, Calif.; and
25) Caesars Indiana Hotel and Casino in Elizabeth, Ind.
The case is being investigated by the FBI’s San Diego Field Office; the Internal Revenue Service-Criminal Investigation; the San Diego Sheriff’s Department; and the California Department of Justice’s Bureau of Gambling Control. The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission; and the Washington State Gambling Commission.
The prosecution of the case is led by the Criminal Division’s Organized Crime and Racketeering Section (OCRS). Department of Justice Trial Attorneys Joseph K. Wheatley, Robert S. Tully and Gavin A. Corn are prosecuting the case in San Diego.
12 July 2009
United States, UBS and Switzerland Request Stay<br /> in Court ProceedingsRead the Press Release
The Department of Justice, UBS and the Swiss government have requested a stay with a rescheduled hearing date of Aug. 3, 2009, in the proceedings for enforcement of the summons ordering UBS to turn over records of account holders. The stay was requested in order to provide the parties additional time to discuss a possible alternative resolution of the matter.
The parties have agreed that any alternative resolution reached would necessarily include a provision requiring UBS to provide the Internal Revenue Service information on a significant number of individuals with UBS accounts. If an alternative resolution is not reached, the Department of Justice will continue to vigorously pursue enforcement of the summons through the court.
10 July 2009
Little Rock, Arkansas, Man Pleads Guilty to Federal<br /> Sex Trafficking and Related ChargesRead the Press Release
Everett Cooney waived indictment and pleaded guilty in court in Little Rock, Ark., to a federal charge of sex trafficking an underage female. Chief U.S. District Judge J. Leon Holmes accepted Cooney’s guilty plea.
During the hearing, Cooney admitted that he knew the underage female with the initials of "DB" was between the ages of 14 and 18 when he caused her to engage in the commercial sex acts, from which he benefitted. Pursuant to the plea agreement, the pending indictment was dismissed upon the court’s acceptance of Cooney’s plea to the sex trafficking charge. Cooney faces a minimum of 10 years and up to life in prison. A sentencing hearing will be scheduled by the court. Cooney remains in custody pending his sentencing.
Cooney’s co-defendant, Tommy Handy, is also in custody awaiting trail. The trial is scheduled for Oct. 5, 2009. Handy was indicted on Feb. 5, 2009, on one count of conspiracy to commit sex trafficking and four counts of sex trafficking; two counts of possessing a firearm in furtherance of a crime of violence; and conspiracy to distribute crack cocaine. Handy is also charged with being a felon in possession of a firearm on July 25, 2005. If found guilty on the federal charges, Handy faces a maximum sentence of life in prison and a fine in excess of $1 million.
The case is the result of a joint investigation conducted by the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Little Rock Police Department. The case is being prosecuted by Assistant U.S. Attorney Joe J. Volpe and Trial Attorney Jim Felte of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Fourth Person Pleads Guilty to<br /> Illegally Accessing Confidential Passport FilesRead the Press Release
A fourth individual pleaded guilty today to illegally accessing numerous confidential passport application files. William A. Celey, 27, of Washington, D.C., pleaded guilty before U.S. Magistrate Judge Deborah A. Robinson in the District of Columbia to a one-count criminal information charging him with unauthorized computer access.
According to court documents, from August 2003 through July 2004, Celey worked as a contract employee for the State Department as a file assistant. According to plea documents, Celey admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Celey admitted that between June 22, 2004, and July 15, 2004, he logged onto the PIERS database and viewed the passport applications of more than 75 celebrities and their families, actors, models, musicians, athletes, record producers, family members, a politician and other individuals identified in the press. Celey admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.
Celey is the fourth current or former State Department employee to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing nearly 200 confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing more than 150 confidential passport files. On March 23, 2009, Cross was sentenced to 12 months of probation and ordered to perform 100 hours of community service. On Jan. 27, 2009, Gerald R. Lueders, a former Foreign Service Officer, watch officer and recruitment coordinator, pleaded guilty to unlawfully accessing more than 50 confidential passport files. Lueders was sentenced on July 8, 2009, to one year of probation and ordered to pay a $5,000 fine. Celey is scheduled to be sentenced on Oct. 23, 2009.
These cases are being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II. The cases are being investigated by the State Department Office of Inspector General.
Federal Jury Rejects Altria Group's $24 Million Tax Shelter ClaimRead the Press Release
WASHINGTON – A federal jury in New York has rejected the $24 million tax refund claim filed by Altria Group Inc. relating to its investment in lease-in, lease-out (LILO), and sale-in, lease-out (SILO) tax shelters, the Justice Department announced today. The verdict follows a three-week trial in the Southern District of New York before U.S. District Judge Richard J. Holwell.
The evidence at trial showed that Altria made purported investments in four properties: a power plant in Georgia, a power plant in Florida, a Dutch wastewater treatment facility and a New York Metropolitan Transportation Authority rail yard in Queens. Altria claimed ownership of the properties, which were owned by tax-indifferent entities (i.e., entities that do not generally pay federal taxes), for the purpose of taking the tax deductions which those entities could notHowever, the jury found that Altria never acquired the benefits and burdens of ownership and that the transactions lacked economic substance. The jury accordingly rejected Altria’s $24 million refund claim.
The Justice Department has reported that hundreds of LILO and SILO transactions were entered into by taxpayers in the late 1990s, and that billions of dollars may be at stake in disputes over these transactions. The government has prevailed in all four cases, including this one, where such tax shelters have been challenged.
"This victory for the United States should serve as another warning to taxpayers not to engage in abusive tax shelter transactions and that the government will continue to shut these transactions down," said John Dicicco, Acting Assistant Attorney General of the Tax Division.
Mr. DiCicco thanked IRS attorneys Abigail Foster Dunnigan, Steven Balahtsis and John Aramburu for their invaluable assistance, and especially noted the contribution that the late David F.P. O’Connor had made to the successful resolution of this matter.
Assistant U.S. Attorneys David J. Kennedy, Robert William Yalen, Lawrence H. Fogelman and Bertrand Madsen, and Special Assistant U.S. Attorney Matthew Von Schuch of the Justice Department’s Tax Division litigated this case.
Donaldson, Arkansas, Man Pleads Guiltyto Federal Civil Rights ChargesRead the Press Release
Dustin I. Nix, 21, of Donaldson, Ark., pleaded guilty today in federal court in Hot Springs, Ark., to two federal civil rights charges for his role in a conspiracy to force a woman and her young children from their home in Donaldson because she associated with African Americans. Pursuant to the plea agreement, Nix faces up to ten years in prison and a fine of up to $250,000 for each count. A sentencing hearing has not yet been scheduled.
According to documents filed in court, Nix admitted that on June 15, 2008, he conspired with others to force the victims to leave Donaldson because they associated with African Americans. Specifically, Nix and the others agreed to construct a cross and burn it in front of the victims’ home. Nix physically assisted in constructing the cross. On June 21, 2008, Nix and others erected the cross in front of the victims’ home and attempted to set it on fire. Nix admitted that he understood that the purpose of burning the cross was to threaten and intimidate the victims, and that it was not intended as a joke or prank.
"Living in one’s home and associating with individuals of one’s choosing, without intimidation because of race, is a core right of all persons in this country," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The defendant used threats of violence against innocent victims because of his racial prejudice. This is illegal and despicable, and we will prosecute such crimes whenever and wherever they occur."
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit the interference with the right of individuals to live in the home and community of their choosing without discrimination and intimidation based on race. The Division has compiled a significant record on criminal civil rights prosecutions.
Agents from the FBI’s Little Rock Division investigated this matter. The case was prosecuted by Assistant U.S. Attorney Matthew Quinn for the Western District of Arkansas and Special Litigation Counsel Gerard Hogan and Trial Attorney Benjamin Hawk of the Civil Rights Division of the Justice Department.
Connecticut Investor Found Guilty in Massive Scheme to Bribe Senior Government Officials<br /> in the Republic of AzerbaijanRead the Press Release
Frederic A. Bourke Jr., 63, was found guilty today by a federal jury in Manhattan of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and the Travel Act, and making false statements to the FBI. Bourke, of Greenwich, Conn., was convicted following a six-week jury trial before U.S. District Judge Shira A. Scheindlin.
Evidence presented at trial established that Bourke was a knowing participant in a scheme to bribe senior government officials in Azerbaijan with several hundred million dollars in shares of stock, cash, and other gifts. According to evidence presented at court, the bribes were meant to ensure that those officials would privatize the State Oil Company of the Azerbaijan Republic (SOCAR) in a rigged auction that only Bourke, fugitive Czech investor Viktor Kozeny and members of their investment consortium could win, to their massive profit. According to evidence presented at trial, the scheme involved the purchase of vouchers and options that could be used to bid for shares in SOCAR. The vouchers and options were largely purchased with millions of dollars of cash flown into Azerbaijan on private planes. The vouchers and options were intended to be exercised by Oily Rock Ltd., a company Kozeny allegedly controlled, according to evidence presented at trial. Bourke, a friend and neighbor of Kozeny’s in Aspen, Colo., invested approximately $8 million in Oily Rock, on behalf of himself and family members and friends. Evidence also showed that Bourke obtained directorships, salary and stock options with related companies that Kozeny allegedly set up and funded.
Beginning in August 1997 through fall 1998, evidence presented at trial showed that Bourke and others conspired to pay or cause to be paid millions of dollars worth of bribes to Azeri government officials to ensure that their investment consortium would gain, in secret partnership with the Azeri officials, a controlling interest in SOCAR and its substantial oil reserves. For example, evidence presented at trial showed that in August 1997, Kozeny allegedly agreed to transfer to corrupt Azeri officials two-thirds of the vouchers and options Oily Rock purchased, and to give them two-thirds of all of the profits arising from his investment consortium’s participation in SOCAR’s privatization. In addition, evidence presented at trial showed that in June 1998, Bourke knew that Kozeny arranged for Oily Rock to increase its authorized share capital from $150 million to $450 million so that the additional $300 million worth of Oily Rock shares could be transferred to one or more of the Azeri officials as a further bribe payment. Bourke also arranged for two of the corrupt officials to travel to New York City on different occasions in 1998 to receive medical treatment, for which Oily Rock paid. Thereafter, in interviews with the FBI in April and May of 2002, Bourke falsely stated that he was not aware that Kozeny had made the alleged payments to the Azeri Officials.
Bourke and Kozeny were indicted in October 2005. At sentencing, scheduled for Oct. 13, 2009, Bourke faces a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss resulting from the alleged violations on each of the two counts on which he was convicted. Bourke was acquitted of one count of money laundering.
The prosecution and the related case against Kozeny are being handled jointly by the U.S. Attorney’s Office for the Southern District of New York and the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Harry A. Chernoff and Iris Lan, as well as Fraud Section Deputy Chief Mark F. Mendelsohn and Assistant Chief Robertson Park are prosecuting the case.
The charges contained in the indictment are merely accusations and defendants are presumed innocent unless and until proven guilty.
9 July 2009
Minneapolis Man Sentenced for Conspiracy to Provide Material Support to Al-QaedaRead the Press Release
WASHINGTON - A 35-year-old Minneapolis man was sentenced today in federal court on one count of conspiring to provide material support and resources to al-Qaeda.
David Kris, Assistant Attorney General for National Security, and Frank J. Magill, U.S. Attorney for the District of Minnesota announced that on July 9 in Minneapolis, U.S. District Court Judge John Tunheim sentenced Mohammed Abdullah Warsame to 92 months in prison and three years of supervised release.
Warsame, a naturalized Canadian citizen of Somali descent, was charged with one count of conspiracy to provide material support to a foreign terrorist organization – al Qaeda – in a Jan. 20, 2004, indictment returned in the District of Minnesota. A June 21, 2005, superseding indictment also charged Warsame with one count of providing material support to al-Qaeda and three counts of making false statements to the FBI. Warsame pleaded guilty to the material support count of the superseding indictment on May 5, 2009. The government has agreed as part of a plea agreement to dismiss the remaining charges.
"I applaud the many agents, analysts and prosecutors whose tireless efforts led to this sentence. This case serves as a reminder of the continuing threats we face as a nation and our resolve to meet those threats," said David Kris, Assistant Attorney General for National Security.
"Today’s sentence marks the culmination of many years of painstaking investigative and prosecutorial work, and all those involved in this case, particularly the Joint Terrorism Task Force, deserve our thanks," said U.S. Attorney Magill. "Mr. Warsame has admitted to providing material support to the al-Qaeda terrorist organization. Mr. Warsame’s actions demonstrate that he was a member of the organization, that he believed in its cause, and that he was willing to violate United States law in support of al-Qaeda. The sentence imposed today shows that our battle against terrorism continues, including right here in Minnesota, and that those who knowingly provide support to terrorists will be held accountable for their actions."
According to the plea agreement, Warsame admitted that from about March 2000 through at least December 2003, he conspired with others to provide material support to al-Qaeda in the form of personnel, training and currency.
According to court documents, in March 2000, Warsame traveled through the mountains from Pakistan to Afghanistan, where he attended an al-Qaeda training camp outside Kabul. For the next three to five months, Warsame received training in physical fitness, the use of weapons and martial arts. Warsame also traveled to the front lines with the Taliban and observed combat between the Taliban and the Northern Alliance.
In the summer of 2000, he then traveled to the al Faruq training camp, where he received further military training and met Osama Bin Laden. Warsame described Bin Laden as "very inspirational." At this camp, Warsame was trained in the use of AK-47 rifles, Uzis and other weapons, as well as training in tactics and navigation. During this time, Warsame again fought for the Taliban and said he was exposed to heavy fighting.
Warsame returned to Pakistan, and while there, he was in contact via e-mail with al-Qaeda associates he had met in Afghanistan. In one of those e-mails, Warsame described his time spent at the camps as "one of the greatest experiences of my life. I will be going back there very soon."
In another e-mail dated Dec. 6, 2000, Warsame wrote, "If you have any news or important information please let me know, because I don’t want to be late for the action, you know what I mean. We hear there might be an attack soon."
After a few months in Pakistan, Warsame returned to Afghanistan and to an al-Qaeda guesthouse. The guesthouse was used as a place of rest for people attending Bin Laden’s camp. Warsame was assigned to guard the guesthouse and later met a variety of individuals who have been indicted and convicted of terrorism-related offenses in the United States, including Zacarias Moussaoui and Richard Reid.
Warsame attended an Islamic institute near the guesthouse that taught radical Islam and preached jihad to students and said, according to court documents, the institute’s leader was a high-ranking al-Qaeda member. Warsame admitted that he approached this individual for money in order to bring his family from Canada to Afghanistan.
Warsame admitted that in March 2001, he traveled from Pakistan via London to Canada and continued his e-mail contacts with the al-Qaeda associates he had met in Afghanistan. In addition, he sent approximately $2,000 (Canadian) to one of his former training camp commanders. Warsame also provided information to an individual he met in Afghanistan about the process for entering Canada.
Warsame then relocated to Minneapolis. Throughout 2002 and 2003, he continued to exchange e-mail messages with and provide information to several individuals associated with al-Qaeda.
This case was the result of an investigation by the FBI Joint Terrorism Task Force (JTTF). The JTTF is a multi-agency effort combining the resources of federal, state and local law enforcement. In addition to the FBI, the investigation was conducted with the assistance of the U.S. Department of Homeland Security, the U.S. Immigration and Customs Enforcement, the U.S. Marshals Service, the Minneapolis Police Department, the St. Paul Police Department, the Hennepin County Sheriff’s Office and the Minnesota Department of Public Safety.
The case was prosecuted by Assistant U.S. Attorneys W. Anders Folk, Tom M. Hollenhorst and Michael Ward, of the District of Minnesota, and Trial Attorney Joseph N. Kaster from the Counterterrorism Section of the Justice Department’s National Security Division.
Justice Department Files Lawsuit Against City of Milwaukee to Enforce Employment Rights of Member of the Air National GuardRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against the city of Milwaukee alleging it violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by refusing to provide Michael Crivello, then an incumbent Milwaukee police officer, with a make-up promotional examination for detective that he missed while away on active duty military service with the Air National Guard and thereby failing to properly determine his reemployment status as a police officer eligible for promotion to detective.
Although Crivello was eventually promoted to detective based upon a subsequent promotional examination, the Department contends that Crivello is entitled to have his date for promotion to detective made retroactive, for all purposes, to the date he would have been promoted to detective had the city allowed him to take a make-up examination for the one he missed while on active duty military service. The suit was filed in U.S. District Court in the Eastern District of Wisconsin.
Enacted by Congress in 1994, USERRA prohibits employers from discriminating or retaliating against employees or applicants for employment because of their past, current or future military obligations. Subject to certain conditions, USERRA also requires employers to promptly reemploy returning service members in the position they would have held had their employment not been interrupted by military service, or in a position of like status, seniority and pay. This protection includes opportunities for advancement.
"The Civil Rights Division is strongly committed to protecting the employment rights of the men and women who serve our country in uniform," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "No service member should miss out on an opportunity for advancement in his or her civilian career due to military service."
The Labor Department’s Veterans’ Employment and Training Service investigated and attempted to resolve Crivello’s USERRA complaint before referring it to the Justice Department for litigation.
The Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. This is the 18th USERRA lawsuit the Civil Rights Division has filed in 2009 on behalf of service members. Additional information about USERRA can be found on the Justice Department’s Web sites http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, as well as on the Labor Department’s Web site at www.dol.gov/vets/programs/userra/main.htm.
Highland Park, Michigan, Police Officer Indicted on<br /> Civil Rights ChargesRead the Press Release
Brenda Stevenson, an officer with the city of Highland Park, Mich., Police Department, was indicted today by a federal grand jury in Detroit on charges of using unlawful and excessive force and making a false statement to an FBI agent.
The indictment charges that Stevenson, 45, while acting as a sergeant with the Highland Park Police Department, willfully used excessive force when she struck and assaulted an individual identified in the indictment only as "V.B." The indictment also alleges that the defendant caused bodily injury to V.B. and that she later made false statements to an FBI agent investigating the incident.
Stevenson faces up to 15 years of prison and a fine of up to $500,000. An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it is the government’s burden to prove guilt beyond a reasonable doubt.
The case is being investigated by the FBI’s Detroit Field Office and is being prosecuted by Civil Rights Division Trial Attorney Karima Maloney and Assistant U.S. Attorney Pamela Thompson for the Eastern District of Michigan.
8 July 2009
Former State Department Employee Sentenced<br /> for Illegally Accessing Confidential Passport FilesRead the Press Release
A former State Department employee was sentenced today to one year of probation and ordered to pay a $5,000 fine for illegally accessing more than 50 confidential passport application files.
On Jan. 27, 2009, Gerald R. Lueders, 65, of Woodbridge, Va., pleaded guilty to a one-count criminal information charging him with unauthorized computer access. Lueders was sentenced today by U.S. Magistrate Judge Alan Kay in the District of Columbia.
According to court documents, from June 1974 through September 2001, Lueders served as a Foreign Service Officer at the State Department. From October 2001 through February 2009, Lueders worked for the State Department as a retired annuitant, serving as a recruitment coordinator in various State Department bureaus. In the interim, from July 2005 to February 2008, Lueders also worked as a watch officer within the Office of Consular Affairs. According to information contained in plea documents, Lueders admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains, among other data, all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Lueders admitted that between July 2005 and February 2008, he logged onto the PIERS database and viewed the passport applications of more than 50 celebrities, actors, politicians, musicians, athletes, family members, members of the media, business professionals, colleagues and other individuals identified in the press. Lueders admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.
Lueders is the third current or former State Department employee to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing nearly 200 confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing more than 150 confidential passport files. On March 23, 2009, Cross was sentenced to 12 months of probation and ordered to perform 100 hours of community service.
These cases are being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II. The cases are being investigated by the State Department Office of Inspector General.
Former Jackson, Mississippi Police Department Officer Is Sentenced for Civil Rights ViolationRead the Press Release
Jonathan Haynes, a former police officer with the Jackson, Miss., Police Department, was sentenced today for a civil rights violation for stealing money from a citizen during an off-duty encounter.
U.S. Magistrate Judge James C. Sumner of the Southern District of Mississippi sentenced Haynes to a term of three years probation and six months home confinement with electronic monitoring (employment and employment training permitted). Haynes was ordered to pay a $1,500 fine and $100 restitution for this offense. The judge also ordered Haynes to pay $100 in restitution to the victim. As part of his plea agreement, Haynes, who was fired from the Jackson Police Department, has agreed not to work as a law enforcement officer for any federal, state or local law enforcement agency for three years.
Haynes previously pleaded guilty and admitted during his April 2, 2009, plea hearing that he abused his authority as a law enforcement officer on June 21, 2008, when, while off-duty, but in uniform, he stopped and searched two men without cause or legal justification and stole $100 from one of the men. Haynes agreed that his conduct violated federal law and the constitutional rights of the two men.
The case was investigated by the FBI. The case was prosecuted by Trial Attorney Erin Aslan of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Glenda Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi. The defendant is not related to and has no known relationship to AUSA Haynes.
7 July 2009
Virginia Software Writer Pleads Guilty to <br /> Aiding and Abetting Detroit Spam ConspiracyRead the Press Release
An individual pleaded guilty today in federal court in Detroit for his role in creating and marketing software designed and used to send bulk commercial e-mails, known as "spam," in violation of the CAN-SPAM Act.
David S. Patton, 49, of Centreville, Va., pleaded guilty to aiding and abetting violations of the CAN-SPAM Act committed by Alan Ralsky and Scott Bradley of West Bloomfield, Mich., and others. Under the terms of his plea agreement, Patton acknowledges he is facing up to six years in prison and agrees to pay a fine of $3,000 while forfeiting $50,100 in proceeds from the sale of his software.
The CAN-SPAM Act was passed by Congress in 2003 to address spam e-mails. The criminal provisions of the act prohibit falsification of certain information used in the transmission of e-mail, as well as the use of proxies to disguise the identities of the individuals sending the e-mails.
According to court documents, from January 2004 through September 2005, Patton, through his company Lightspeed Marketing Inc. developed, marketed, sold and distributed customized software products and provided ongoing support services. In his plea agreement, Patton acknowledged that the services he provided enabled users to send large volumes of spam e-mail at high speeds and disguise the true origin of the e-mails from recipients in order to evade anti-spam filters, "blacklisting" and other spam-blocking devices and techniques. These software products included, but were not limited to, the software programs "Nexus" and "Proxy Scanner."
In his plea agreement, Patton admitted that he intentionally designed Nexus to enable users to insert materially false information into the "headers" of the spam e-mails it sent. Patton designed Proxy Scanner to enable users to make use of third-party "proxy" computers to relay or retransmit spam e-mails and in turn disguise their true origin. Patton admitted he sold both Nexus and Proxy Scanner to Alan Ralsky and other customers, knowing that the two software programs would be used to commit violations of the CAN-SPAM Act. Patton also admitted that he provided ongoing support and product updates to his Nexus and Proxy Scanner customers with the intent to assist them in violating the CAN-SPAM Act.
Patton is the twelfth defendant charged in connection with the spam e-mail operation run by Ralsky from January 2004 to September 2005. Ralsky and Bradley, as well as Judy Devenow, John Bown, William Neil, James Fite, Francis Tribble and How Wai John Hui all previously pleaded guilty for their roles in conspiring to commit violations of the CAN-SPAM Act and other offenses, including wire fraud, mail fraud, computer fraud and money laundering.
Also indicted in the case were defendants Anki Neil, James Bragg and Peter Severa. An indictment is merely an accusation. All defendants should be presumed innocent until and unless the government proves their guilt beyond a reasonable doubt in court
The charges arose after a three-year investigation led by the FBI, with assistance from the U.S. Postal Inspection Service and IRS – Criminal Investigations, revealed a sophisticated and extensive spamming operation. The case is being prosecuted by U.S. Attorney Terrence Berg and Trial Attorneys Thomas Dukes and Mona Sedky Spivack of the Criminal Division’s Computer Crime and Intellectual Property Section.
Justice Department Files Suit Against Cheese ManufacturerRead the Press Release
WASHINGTON – The U.S. Department of Justice, on behalf of the U.S. Food and Drug Administration, today filed a complaint seeking injunctive relief against Peregrina Cheese Inc., Brooklyn, N.Y., and two of its officers: Javier Peregrina and Isabel Peregrina.
The company prepares and processes a variety of cheeses, sour cream, flan and gelatin products and distributes them to specialty grocery stores in northeastern Pennsylvania and in the New York City area.
The government’s complaint, filed today in the Eastern District of New York, alleges that the company has an extensive history of operating under insanitary conditions and producing cheese contaminated with Listeria monocytogenes. Listeria is a foodborne pathogen that can cause serious illness and death.
If entered by the court, the injunction would temporarily stop the company and its officers from manufacturing and distributing food until further action is taken by the court.
"This company has consistently failed to make corrections to improve the insanitary conditions under which it processes cheese products, despite frequent warnings to do so," said Michael Chappell, the FDA’s acting associate commissioner for regulatory affairs. "The FDA will not tolerate food companies that fail to provide adequate safeguards."
"When called upon by the FDA, the Department of Justice is ready and able to prevent the distribution of adulterated food to American consumers," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
"The public must be able to trust that the food in their grocery stores is safe for them to eat," said Benton J. Campbell, the United States Attorney for the Eastern District of New York. "We will continue to work with the FDA to ensure that companies that produce food under dangerous or insanitary conditions take corrective action to clean up their act."
As alleged in the complaint, on numerous occasions since 2004, FDA investigators found Listeria monocytogenes in finished cheese products and inside Peregrina Cheese’s facility. Additionally, routine laboratory testing by New York State Department of Agriculture and Markets (NYSDAM) also found Listeria in the company’s products on numerous occasions since 2003.
The FDA and NYSDAM inspections also revealed that the company repeatedly violated the current Good Manufacturing Practice (cGMP) requirements for foods. Investigators found filthy conditions, standing water in food processing equipment, workers inappropriately dressed and a dead rodent inside the plant.
The government’s complaint alleges that both the FDA and NYSDAM repeatedly advised Peregrina Cheese and its officers of their cGMP violations; NYSDAM has also assessed fines against the company.
Peregrina Cheese’s lack of effective measures to bring its food processing operations into compliance with the law poses a public health threat because of the potential that Listeria will be in the food processed by the company.
Listeriosis, the illness caused by Listeria monocytogenes, can be serious and sometimes cause fatal infections in young children, frail or older people, and others with weakened immune systems. Although healthy individuals may experience only short-term symptoms, such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, Listeria infection in pregnant women can cause miscarriages and stillbirths.
No illnesses have been reported to date from Peregrina Cheese products. However, if individuals have eaten the products and are experiencing any of the symptoms listed above, they should contact their health care professional.
6 July 2009
Former Florida State Corrections Officer Sentenced to Three Years in Prison for Assaulting an InmateRead the Press Release
Paul Tillis, a former Florida Department of Corrections officer, was sentenced today in federal court in Jacksonville, Fla., on a federal civil rights charge related to assaulting an inmate. Tillis was sentenced to three years in prison followed by two years of post-release supervision.
Following a week-long trial, a federal jury in Jacksonville convicted Tillis on Jan. 16, 2009, of violating the civil rights of an inmate at the Florida State Prison in Raiford while on duty as a supervisory corrections officer. The evidence at trial showed that he assaulted the victim by pouring a bottle of scalding water onto the inmate’s chest while the inmate was lying on the floor of his cell. The evidence showed that Tillis also failed to arrange for medical care for the victim, who suffered second degree burns on his chest as a result of this assault.
"Corrections officers must not misuse their positions of authority to inflict physical harm on inmates as punishment," said Acting Assistant Attorney General Loretta King for the Civil Rights Division. "While the vast majority of law enforcement officers carry out their difficult duties in a lawful and professional manner, the Department of Justice will continue to vigorously prosecute those who cross the line and commit acts of cruelty such as this."
This case was investigated by agents from the FBI’s Jacksonville Division and the Florida Office of the Inspector General. The case was prosecuted by Assistant U.S. Attorney Mac Heavener of the U.S. Attorney’s Office for the Middle District of Florida and Department of Justice Civil Rights Division Trial Attorney Douglas Kern.
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit unreasonable search and seizure, deprivation of property without due process of law and other acts of misconduct by law enforcement and other government officials. More information about the Civil Rights Division of the Justice Department, and the laws it enforces, is available at http://www.usdoj.gov/crt.
Canadian Executive Pleads Guilty to Fraud and Money Laundering Conspiracies Involving a New Jersey Environmental Protection Agency Superfund SiteRead the Press Release
WASHINGTON — A former executive of Bennett Environmental Inc. (BEI), a Canadian-based company that treats and disposes of contaminated soil, pleaded guilty to participating in a conspiracy to pay kickbacks and commit fraud at the U.S. Environmental Protection Agency (EPA)-designated Superfund site, Federal Creosote, located in Manville, N.J. The former executive also pleaded guilty to participating in a money laundering conspiracy and impeding a proceeding before the U.S. Securities and Exchange Commission (SEC), the Department of Justice announced today.
According to the charges filed in the U.S. District Court of New Jersey today, Robert P. Griffiths pleaded guilty to one count of conspiracy to defraud the EPA by inflating the prices he charged to a prime contractor of the EPA and providing kickbacks to employees of that prime contractor. This conspiracy took place from approximately December 2001 until approximately August 2004 at the Federal Creosote site. Griffiths and his co-conspirators were given the bid prices of BEI’s competitors, which allowed BEI to submit the highest possible bid prices and still be awarded the sub-contracts. On one occasion, Griffiths and his co-conspirators inflated the bid prices to cover approximately $1.3 million in kickbacks and amounts BEI kept for itself. The kickbacks were in the form of money transferred by wire to a co-conspirator’s shell company, lavish cruises for senior officials of the prime contractor, various entertainment tickets, pharmaceuticals and home entertainment electronics. The Department said that the co-conspirators were able to allocate at least $43 million in fraudulently awarded sub-contracts to BEI for the removal, treatment and disposal of contaminated soil at the Federal Creosote site and to fraudulently conceal from the U.S. Army Corps of Engineers that BEI had submitted false invoices for the disposal of approximately 20,000 tons of soil.
Griffiths also pleaded guilty to a second count of conspiracy to commit international money laundering, the purpose of which was for Griffiths to profit personally from the fraud and kickback scheme. From approximately February 2003 through approximately September 2004, Griffiths and a co-conspirator who received more than $1 million in kickbacks through his shell company, laundered approximately $207,000 of the kickback proceeds from the co-conspirator’s bank account in New Jersey to a bank account controlled by Griffiths in Ontario, Canada.
In addition, Griffiths pleaded guilty to a third count of obstructing an official proceeding before the SEC. On or about Nov. 3, 2005, Griffiths made false statements in response to questions asked by the SEC for the purpose of deceiving the SEC and concealing his conduct in the fraudulent scheme. At that time, the SEC was investigating whether Griffiths and others had obtained information not available to the public and relied upon that information to conduct certain securities transactions improperly.
The clean-up at the Federal Creosote site is partly funded by the EPA. Under an interagency agreement between the EPA and the Corps of Engineers, prime contractors oversaw the removal, treatment, disposal of contaminated soil, as well as, other operations at the Federal Creosote site.
"The public relies upon their tax dollars being spent wisely, not for providing kickbacks to corrupt contractors," said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. "The Antitrust Division will vigorously investigate and prosecute fraudulent schemes that circumvent the competitive bidding process."
Including Griffiths, seven individuals and three companies have pleaded guilty in this investigation. Bennett Environmental Inc. (BEI) pleaded guilty to participating in a conspiracy to defraud the EPA at the Federal Creosote site and was sentenced on Dec. 15, 2008, to pay a $1 million fine and $1.66 million in restitution. On the same day, Zul Tejpar, a former BEI executive, pleaded guilty to participating in the same fraud conspiracy as BEI. Sentencing is scheduled for Sept. 28, 2009.
In addition, on July 23, 2008, JMJ Environmental Inc., a Laurel Springs, N.J., wastewater treatment supply company, its owner John Drimak, Jr., and Norman Stoerr, a former contracts administrator at the Federal Creosote site pleaded guilty to bid rigging, fraud and tax charges related to New Jersey Superfund sites - Federal Creosote and Diamond Alkali in Newark, N.J. Sentencing for all three is scheduled for Dec. 7, 2009.
On March 4, 2009, National Industrial Services LLC, an industrial pipes, valves and fittings supply company located in Middlesex, N.J., and its co-owner Victor Boski pleaded guilty to participating in a separate kickback and fraud conspiracy at Federal Creosote and Diamond Alkali.
On Feb. 26, 2009, Christopher Tranchina, an employee of a Sewell, N.J., company that provided temporary electrical utilities, pleaded guilty to participating in a separate kickback and fraud conspiracy at Federal Creosote. Tranchina is scheduled to be sentenced on July 13, 2009.
On June 25, 2009, Frederick Landgraber, the co-owner of a landscaping company located in Martinsville, N.J., pleaded guilty to participating in a separate kickback and fraud conspiracy at Federal Creosote. Landgraber is scheduled to be sentenced on Oct. 19, 2009.
The fraud conspiracy that Griffiths is charged with carries a maximum penalty of five years in prison and a $250,000 fine. The obstruction charge carries a maximum penalty of 20 years in prison and a $250,000 fine. The maximum fines resulting from each of these charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. The money laundering conspiracy that Griffiths is charged with carries a maximum penalty of 20 years in prison, five years of supervised release, and a $500,000 fine, or twice the value of the funds involved in the transportation, transmission, or transfer, whichever is greater.
Today’s charges reflect the Department’s commitment to protecting U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prosecution, and prevention of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The ongoing investigation is being conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation. Anyone with information concerning bid rigging, kickbacks, tax offenses, or fraud relating to sub-contracts awarded at the Federal Creosote or Diamond Alkali sites should contact the New York Field Office of the Antitrust Division at 212-264-9308.
2 July 2009
U.S. Joins False Claims Act Suit Against Several Corporations and Individuals at Mississippi's Stennis Space CenterRead the Press Release
WASHINGTON – The United States has joined a whistleblower suitagainst Science Applications International Corp. (SAIC); Applied Enterprise Solutions (AES); Dale Galloway, Chief Executive Officer of AES; Stephen Adamec, former Director of the Naval Oceanographic Major Shared Resource Center (NAVO MSRC) at the Stennis Space Center in Hancock County, Mississippi; and Robert Knesel, Deputy Director of NAVO MSRC, the Justice Department announced today.
The lawsuit, filed in the U.S. District Court for the Southern District of Mississippi, alleges that the defendants knowingly violated the False Claims Act when they submitted (or caused to be submitted) false claims and conspired to submit false claims under a $3.2 billion contract with the General Services Administration (GSA) to provide support services to a branch of the NAVO MSRC. In April 2004, GSA awarded the contract to SAIC, which teamed with AES and Lockheed Martin Space Operations to perform the agreement.
The suit alleges that Adamec and Knesel, then government employees, conspired with Galloway, SAIC, and AES to ensure that SAIC and its partners were awarded the contract by (a) sharing non-public, advance procurement information with the SAIC team that was not provided to other potential bidders; (b) sharing information about the solicitation with the SAIC team before providing that information to other bidders; and (c) choosing a type of contract and putting language in the solicitation in order to bias the selection process to favor the SAIC team.
The case was filed by David Magee, a former employee at the NAVO MSRC, under the qui tam or whistleblower provisions of the False Claims Act. Under the False Claims Act, a private party, known as a "relator," can file an action on behalf of the United States and receive a portion of the recovery. The Act further provides that the United States may recover three times the amount of its losses, plus civil penalties.
"Those who do business with the government must act fairly and in accordance with the law," said Tony West, Assistant Attorney General for the Civil Division. "As this case illustrates, the Department of Justice will actively pursue legal action against both contractors and federal employees who seek to gain an unfair advantage in the procurement process." Assistant Attorney General West thanked the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, and the GSA Office of Inspector General, all of which aided the Civil Division in its investigation of this fraud matter.
Kansas Woman Pleads Guilty to Making False Statement to FBI in E-Rate Fraud InvestigationRead the Press Release
WASHINGTON — A Kansas woman pleaded guilty to making a false statement to the FBI during an investigation into allegations of fraud against the Federal Communications Commission’s (FCC) E-Rate program, the Department of Justice announced today.
According to the plea agreement, filed today in U.S. District Court in Kansas City, Kan., Mary Jo LaDuron, aka Mary Jo Gault, of Leavenworth, Kan., lied to FBI agents who were investigating allegations of fraud against the E-Rate program. According to the information, LaDuron worked for Elephantine Corporation beginning in 1999 through at least November 2003. Elephantine was formed and owned by LaDuron’s son, Leonard Douglas "Doug" LaDuron. Mary Jo LaDuron lied to FBI agents on March 23, 2006, when she denied knowing certain information about Elephantine and the E-Rate program.
On April 24, 2008, Mary Jo LaDuron was previously indicted for participating in a conspiracy to defraud the E-Rate program. Today’s plea resolves the Antitrust Division’s charges against her. Other individuals who were charged in connection with the same conspiracy include Leonard Douglas LaDuron, as well as two co-conspirators, Benjamin Rowner and Jay H. Soled. Leonard Douglas LaDuron, Rowner and Soled have all pleaded guilty to participating in the conspiracy, which began in 1999 and ran at least until 2003. All three individuals are awaiting sentencing. Leonard Douglas LaDuron also pleaded guilty to one count of making a false statement to the Lawrence-Douglas County Housing Authority, which administers the Department of Housing and Urban Authority’s Housing Choice Voucher Program in Lawrence, Kan.
The Schools and Libraries Universal Service Fund, a federally funded program known as E-Rate, was created by the Telecommunications Act of 1996. E-Rate is a program through which the Universal Services Administrative Company, a not-for-profit corporation, acting under oversight of the FCC, subsidizes the provision of Internet access and telecommunications services, as well as internal computer and communications networks to economically disadvantaged schools and libraries.
The false statement charge carries a maximum penalty of five years in prison and a $250,000 fine. Today’s charge is the result of an investigation conducted by the Antitrust Division’s Chicago Field Office, the FBI, the Department of Housing and Urban Development Office of Inspector General, and the FCC with assistance from the U.S. Attorney’s Office for the District of Kansas. Anyone with information concerning violations of the E-Rate program or other anticompetitive conduct is urged to call the Antitrust Division’s Chicago Field Office at 312-353-7530.
Jackson, Miss. Man Sentenced to 70 Months in Prison <br /> for Receiving and Possessing Child PornographyRead the Press Release
Joseph McNealy, a former Jackson, Miss., computer systems administrator, was sentenced today to 70 months in prison for receiving and possessing images of child pornography.
McNealy, 39, was also sentenced to lifetime supervised release following his term in prison by U.S. District Judge David C. Bramlette III, and was ordered to pay a $2,000 fine.
McNealy was found guilty after a four-day jury trial in Natchez, Miss., in March 2009 of receiving and possessing image files of child pornography, which federal investigators discovered on his home computer on Sept. 14, 2004. According to testimony presented at trial, McNealy received the child pornography from Internet newsgroups and Web sites on or about April 16, 2003, through on or about May 21, 2003; on or about Feb. 5, 2004, through on or about Sept. 14, 2004; and on or about June 29, 2004.
The original indictment charging McNealy was issued by a federal grand jury in October 2007. A superseding indictment adding to the original charges was issued by the grand jury in August 2008.
The case was prosecuted by Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office in Jackson and Barak Cohen of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). CEOS’ High-Tech Investigative Unit and U.S. Immigration and Customs Enforcement (ICE) provided forensic analysis of McNealy’s computer. The charges resulted from an ICE investigation.
Former Owner of the Largest Chrysotile Asbestos Mine and Mill in the U.S. Agrees to Address Contamination at Vermont SiteRead the Press Release
WASHINGTON— As part of a multi-site settlement, G-I Holdings Inc. has agreed to address asbestos contamination caused by its past operation of the largest chrysotile asbestos mine and mill in the country, the United States and the state of Vermont announced today.
The 1,673-acre abandoned mine site in Vermont, known as the Vermont Asbestos Group Mine Site (VAG Site) is the most significant of the contaminated sites covered by the settlement, which includes 12 other industrial sites across the country where G-I may have disposed of hazardous waste.
According to a federal complaint filed in New Jersey, the VAG Site has two towering piles of asbestos-containing mine and mill tailings, which are eroding offsite and adversely affecting downstream surface waters and wetlands. These piles also attract hikers, rock collectors, and ATV enthusiasts. In the complaint, the United States alleged that these activities may cause exposure to airborne-asbestos by those who access the site.
Under today’s settlement, G-I will take immediate steps at the VAG Site by constructing fencing, gates and road barriers to restrict public access; providing onsite surveillance and securing the mill buildings. They will also monitor air emissions from the piles; conduct dust suppression, if necessary, and provide support to EPA and Vermont for future sampling and monitoring. These tasks will take place over eight years, at a cost of up to $7.75 million. The need for dust suppression will depend on the air monitoring results. G-I will also reimburse the federal and state governments for past and future cleanup costs at the VAG Site and related off-site contamination. G-I, now in Chapter 11 bankruptcy, will reimburse a portion of EPA and Vermont’s cleanup costs up to 8.6 percent of $300 million. Finally, G-I will pay $850,000 for damages to local wetlands and waterways contaminated by the site.
Also, as part of the settlement, G-I will contribute $104,615 as its share of cleanup costs to resolve federal claims at nine other superfund sites where its predecessors disposed of hazardous waste. In addition, under the decree, the federal government will have up to 10 years to bring claims for cleanup costs and damages to natural resources at three related heavily-contaminated sites in or near Linden, N.J. Under the consent decree, the Linden claims will pass through the bankruptcy and not be discharged, but will eventually be paid at the bankruptcy rate of 8.6 percent on the dollar if G-I is found liable for the contamination.
"The cornerstone of this settlement is that G-I is responsible for completing extensive work at the Vermont Asbestos Group Mine Site, focusing on site security, air monitoring and investigating and sampling certain mine tailings," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "G-I will also pay for its share of cleanup costs for this Site and nine other contaminated sites around the country."
The consent decree, lodged today in the U.S. Bankruptcy Court for the District of New Jersey, 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.
Federal Court Acts to Stop Alleged $30 Million Scam Involving Tax Credits Based on Fictitious Methane Production at LandfillsRead the Press Release
A federal judge in Tampa, Fla., has permanently barred eight men – including five tax preparers and two Certified Public Accountants (CPA) – from promoting an alleged tax fraud scheme involving bogus income tax credits. The eight men are among 32 defendants named in a civil injunction lawsuit who allegedly helped customers claim more than $30 million in bogus federal income tax credits designed for producers of fuel from non-conventional sources. The court orders were signed by Judge Susan C. Bucklew of the U.S. District Court for the Middle District of Florida.
According to the government complaint in the case, the scheme involved claiming tax credits based on the purported recovery and sale of methane from landfills in Puerto Rico, Illinois, New York, Ohio and Connecticut. In fact, the government’s complaint states that no methane was produced or sold, although some of the defendants created fictitious business records to falsely document the purported production and sales.
The eight men enjoined are George Calvert of Hernando Beach, Fla.; Gregory Guido of Lithia, Fla.; Robert Anderson of Bloomington, Ill.; Ralph Johnson of Alton, Ill.; David Geiger of St. Charles, Mo.; William Neel of Clayton Mo.; Mark Johnson of Mansfield Texas; and Carl Martin-Stewart of Carthage, Texas. All eight consented to be enjoined without admitting wrongdoing. The lawsuit remains pending against the other 24 individual defendants, although the case against some defendants has been transferred to a federal court in Texas.
The government suit alleges that Calvert and Guido, who is a CPA, concocted the scheme and promoted it through tax preparers who acted as subpromoters – including Ralph Johnson, Mark Johnson, Geiger and Neel, who is also a CPA. The tax preparers allegedly sold interests in the fictitious methane-production facilities to thousands of customers in at least 14 states across the country and prepared income tax returns for customers claiming tax credits based on the fictitious methane sales.
According to the complaint, Martin-Stewart sold the scheme to customers and helped create promotional materials that were distributed to subpromoters and customers. The complaint alleges that Anderson prepared false engineering reports for the scheme promoters to use to purportedly substantiate the fictitious methane production. On June 15th Anderson pleaded guilty to conspiracy to defraud the United States and mail fraud in a related federal criminal case. He faces a maximum penalty of five years in prison.
The injunction orders also bar the eight men from interfering with or obstructing Internal Revenue Service (IRS) audits of scheme participants. In addition, Calvert is permanently barred from preparing federal tax returns for others or representing anyone in a matter before the IRS.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Shana Starnes, the Justice Department trial attorney who handled the case, and Jean Lane, a revenue agent with the IRS’s Small Business/Self-Employed Division, who conducted the investigation.
In the past decade, the Justice Department has obtained injunctions against more than 410 tax return preparers and tax-fraud promoters. Information about the Justice Department’s Tax Division and its efforts to enjoin unscrupulous tax return preparers and tax-fraud promoters is available on the Justice Department Web site.
1 July 2009
United States Settles False Claims Act Allegations <br /> Against National Home Builder and Mortgage LenderRead the Press Release
Beazer Homes USA Inc. has agreed to pay the United States $5 million dollars, plus contingent payments of up to $48 million dollars to be shared with victimized private homeowners, to resolve allegations that it, and Beazer Mortgage Corp., were involved in fraudulent mortgage origination activities in connection with federally insured mortgages. Beazer Homes, which is headquartered in Atlanta, operates in at least 21 states.
The U.S. Department of Housing and Urban Development’s Federal Housing Administration guarantees home mortgage loans for low and low-to-moderate income families. The settlement resolves allegations that when Beazer Mortgage Corp. made Federal Housing Administration (FHA) insured mortgage loans for the purchase of homes built by Beazer Homes USA Inc., the companies fraudulently and improperly: 1) required purchasers to pay "interest discount points" at closing, but then kept the cash and failed to reduce interest rates; 2) provided cash "gifts" to home purchasers through certain charities, so purchasers could come up with minimum required down payments, with assurances the "gifts" would not have to be repaid, and then increased home purchase prices to offset the amount of the gifts; 3) obscured which of its branches made defaulting mortgage loans to avoid FHA detection of excessive default rates, and; 4) ignored "stated income" requirements in making loans to unqualified purchasers.
As a consequence, unqualified home buyers were induced to enter into FHA insured mortgages, interest rates for and the amount of FHA insured mortgages were improperly inflated, and Beazer Mortgage branches involved in fraudulent activity were hidden from the FHA. In some instances, mortgages that resulted from these fraudulent activities defaulted. When they did so, holders of the loans made FHA mortgage insurance claims and the FHA was wrongfully required to pay inflated claims, and to pay for the management, maintenance, rehabilitation and marketing of defaulted properties.
The settlement is in conjunction with a Deferred Prosecution Agreement (DPA) entered into between the companies and the U.S. Attorney’s Office for the Western District of North Carolina, also announced today. The DPA provides for restitution to private homeowners who were victims of the companies’ fraudulent activities, as well as to the FHA.
"Fighting mortgage fraud is a top priority for this Administration, especially when public dollars are at stake," said Assistant Attorney General Tony West, who heads the Civil Division. "We will aggressively pursue fraud claims against federal mortgage insurance programs, which are so vitally important to this economy." Assistant Attorney General West commended both the United States Attorneys’ Office and HUD for their work on this lawsuit and stressed that this is an example of the success that can be achieved when there is collaboration among agencies.
"This action shows that the Administration is serious about making the housing market safe from mortgage fraud and will crackdown on those who violate the trust of American homebuyers," said HUD Secretary Shaun Donovan. "At this time of uncertainty in the mortgage market, it is especially important that lenders, including builder-affiliated lenders, are held to the highest standards of conduct."
Retired University Professor Sentenced to Four Years in Prison for <br /> Arms Export Violations Involving Citizen of ChinaRead the Press Release
John Reece Roth, 72, of Knoxville, Tenn., was sentenced to 48 months in prison for violating the Arms Export Control Act by conspiring to illegally export, and actually exporting, technical information relating to a U.S. Air Force (USAF) research and development contract.
The sentencing took place in U.S. District Court in Knoxville before Judge Thomas Varlan, Jr. A former University of Tennessee professor, Roth will serve a term of two years supervised release after completing his prison term.
The illegal exports by Dr. Roth of technical information, known as "technical data," related to his illegal disclosure and transport of restricted military information associated with the USAF contract to develop specialized plasma technology for use on an advanced form of an unmanned aerial vehicle (UAV), also known as a drone.
The illegal exports of military technical information involved specific information about advanced plasma technology that had been designed and was being tested for use on the wings of drones operating as weapons or surveillance systems. The Arms Export Control Act prohibits the export of defense-related materials, including the technical data, to a foreign national or a foreign nation.
After a trial in September 2008, Dr. Roth was convicted of conspiring with Atmospheric Glow Technology, Inc., a Knoxville technology company, of unlawfully exporting in 2005 and 2006 fifteen different "defense articles" to a citizen of the People’s Republic of China in violation of the Arms Export Control Act. This law prohibits the export of defense-related materials, including the technical data, to a foreign national or a foreign nation. These defense articles related to different specific military technical data that had been restricted and was associated with the USAF project to develop plasma technology for use on weapons system drones.
Dr. Roth was also convicted of one count of wire fraud relating to defrauding the University of Tennessee of his honest services by illegally exporting sensitive military information relating to this USAF research and development contract.
The Federal Bureau of Investigation (FBI) led the investigation and was joined in its efforts by U.S. Immigration and Customs Enforcement (ICE), the U.S. Air Force Office of Special Investigations, and the Department of Commerce’s Office of Export Enforcement. The case was prosecuted by Assistant U.S. Attorneys Jeffrey Theodore and Will Mackie of the U.S. Attorney’s Office for the Eastern District of Tennessee.
U.S. Attorney Dedrick commended the efforts of the special agents from the agencies supporting the investigation. He noted that this case was quickly brought to trial and sentencing through the excellent work of the Department of Justice’s National Security Division and the Assistant U.S. Attorneys and support staff from his office. Dedrick added, "This case should send a stern warning to those who would betray the trust of our nation by violating the export control laws by providing our military information to foreign nationals."
David Kris, Assistant Attorney General for National Security, stated, "I applaud the agents and prosecutors who worked tirelessly to bring about this result. The illegal export of restricted military data represents a serious threat to national security. We know that foreign governments are actively seeking this information for their own military development. Today’s sentence should serve as a warning to anyone who knowingly discloses restricted military data in violation of our laws."
FBI Special Agent in Charge Richard Lambert added: "Safeguarding sensitive military technology vital to our nation’s defense remains a top priority of the FBI. We are grateful to the University of Tennessee for its invaluable partnership in this important investigation."
Retired Military Official Pleads Guilty to Bribery and Conspiracy Related to Defense Contracts in AfghanistanRead the Press Release
WASHINGTON – A retired U.S. military official pleaded guilty to bribery and conspiracy charges relating to Department of Defense (DOD) contracts in Afghanistan, the Department of Justice announced today.
According to the plea agreement, which was filed in U.S. District Court in Chicago today, First Lieutenant Robert Moore (Ret.) pleaded guilty to conspiracy and bribery charges. Moore admitted to accepting money from contractors in exchange for the award of DOD contracts at Bagram Airfield, Afghanistan (Bagram). Moore also admitted to falsifying the number of bunkers and barriers delivered at Bagram, causing DOD to pay for bunkers and barriers that were never received. Bunkers and barriers are cement structures used at Bagram for force protection and perimeter walls. Additionally, Moore pleaded guilty to falsifying damage reports for leased vehicles at Bagram, causing DOD to pay for repairs not needed or performed. Moore has agreed to pay $120,000 in restitution and to cooperate with the Department’s investigation.
"Conduct that defrauds the United States and depletes funds intended for the war effort in Afghanistan or elsewhere will not be tolerated," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division.
Moore’s plea follows the return of a related superseding indictment on June 19, 2009, and the entry of guilty pleas by two of the individuals charged in the superseding indictment. Christopher P. West, a U.S. Army Major from Chicago, and Patrick W. Boyd, a U.S. Air Force Master Sergeant from Rockledge. Fla., pleaded guilty to bribery and conspiracy charges relating to DOD contracts at Bagram. The superseding indictment also charged four individuals – Assad John Ramin, Tahir Ramin, Noor Alam and Abdul Qudoos Bakhshi – and four companies – AZ Corporation, Top’s Construction, Northern Reconstruction and Naweed Bakhshi Company – with various counts of bribery, fraud and conspiracy relating to DOD contracts at Bagram. Also on June 19, 2009, Charles Patton, a U.S. Army Sergeant from Chicago, pleaded guilty to charges of receiving stolen property.
Moore is charged with conspiracy, a violation that carries a maximum sentence of five years in prison and a fine of $250,000. Under the statute, the fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum. Moore is also charged with bribery, a violation that carries a maximum sentence of 15 years in prison and a fine of $250,000 or up to three times the amount or value of the bribe, whichever is greater.
This case is part of an ongoing investigation being prosecuted by the Antitrust Division’s National Criminal Enforcement Section (NCES), with assistance from the Criminal Division’s Office of International Affairs. The investigation of this case is being conducted by the Defense Criminal Investigative Service (DCIS), the U.S. Army Criminal Investigation Command (Army CID), and Air Force Office of Special Investigations. Additional assistance was provided by Customs and Border Protection, Field Operations in Chicago; and the Internal Revenue Service, Criminal Investigations Division.
Today’s charges are an example of the Department of Justice’s commitment to protect U.S. taxpayers from procurement fraud through the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
Anyone with information concerning illegal conduct in the procurement of goods or services involving DOD contracts in Iraq or Afghanistan is urged to contact NCES at 202-307-6694 or [email protected]; DCIS at 800-424-9098 or [email protected]; or Army CID at www.cid.army.mil.
Jury Convicts Los Angeles Physician Assistant for Stealing Doctors Identity and Defrauding Medicare in $7.7 Million SchemeRead the Press Release
A federal jury in Los Angeles convicted a physician assistant late yesterday for his role in a $7.7 million Medicare fraud scheme.
After a seven-day trial in federal court in Los Angeles, a jury found Ronald Luis Bradshaw, 59, guilty on all charged counts, including conspiracy to commit health care fraud, multiple counts of health fraud and aggravated identity theft for prescribing medically unnecessary durable medical equipment to hundreds of Medicare beneficiaries under the stolen identity of a doctor.
"At the core of Medicare fraud schemes, individuals place personal greed above providing legitimate medical care. In this case, the defendant not only defrauded the Medicare program, he also stole the identification of a doctor to do it" said Assistant Attorney General Lanny A. Breuer. "The jury’s conviction sends a message to health care providers committing Medicare fraud – American taxpayers will not tolerate abuse of a program intended to benefit the elderly and disabled."
"Fraud against public health care programs not only robs taxpayers but also adversely affects millions of legitimate patients in need of the services and equipment to improve their lives," said U.S. Attorney Thomas P. O’Brien. "For years we have pursued fraudsters who attempt to exploit the health care system for their own personal gain. Now, we have another example of an unscrupulous provider being brought to justice."
"Today’sconviction is another milestone for our Medicare Fraud Strike Force here in Los Angeles," said Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General for the Department of Health of Human Services. "Our collaborative partnership under the HEAT initiative is getting concrete results as we continue our efforts to combat health care fraud on behalf of the American people."
According to the evidence presented at trial, Bradshaw worked as a licensed physician assistant at a Los Angeles clinic, Glenmountain Medical Group (Glenmountain), allegedly under the supervision of a doctor. Evidence at trial established that from approximately April 2005 to April 2008, Bradshaw prescribed hundreds of motorized wheelchairs and custom-fitted orthotics to Medicare beneficiaries under the apparent authority and supervision of a doctor. Bradshaw also ordered diagnostic tests for these beneficiaries under the same doctor’s apparent authority.
The doctor, whose unique physician identification number had been used by the defendant to forge medically unnecessary prescriptions, testified that he never worked at Glenmountain and that he never authorized the defendant to use his number. The total amount billed under this doctor’s name for medical equipment and tests prescribed by the defendant was $7,708,069.
Several beneficiaries testified at trial that they were recruited by patient recruiters to be examined at Glenmountain. Some beneficiaries testified that they were enticed by the promise of a free exam, while others were promised free, expensive medical equipment. Juana Aranda, a professional patient recruiter who previously pleaded guilty in connection with this scheme, testified that she was paid cash for bringing Medicare beneficiaries to Glenmountain and that she was paid more if the beneficiary was prescribed a motorized wheelchair.
Each of the beneficiaries who testified at trial stated that they had no difficulties walking and that they did not complain about any difficulties during their respective examinations. After their examinations, however, each received a motorized wheelchair delivered to them by Star Medical Supply Inc., a durable medical equipment company owned and operated by Karen Arakelyan, who previously pleaded guilty in connection with this scheme. Arakelyan testified that he paid a Glenmountain representative $1,200 per prescription. Arakelyan admitted he then delivered a motorized wheelchair to the beneficiary and filed a fraudulent claim with Medicare based on the bogus prescription that he purchased from Glenmountain.
At sentencing, scheduled for Nov. 12, 2009, Bradshaw faces a maximum penalty of 10 years in prison on each of the four health care fraud counts as well as the conspiracy to commit health care fraud count for which he was convicted. In addition, he faces a mandatory two-year prison sentence on the aggravated identity theft count, which must be served consecutive to the sentence on the fraud counts.
The case was prosecuted by Trial Attorney Steven Kim of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Christopher K. Lui, with the investigative assistance of the HHS Office of the Inspector General and the FBI. The case was brought as part of the Medicare Fraud Strike Force. Federal prosecutors have indicted 115 cases with 257 defendants in Miami, Los Angeles and Detroit since the inception of strike force operations in March 2007. Collectively, these defendants are alleged to have fraudulently billed the Medicare program for more than $600 million.
The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. In May 2009, the Department of Justice and HHS announced the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint effort to prevent fraud and enforce current anti-fraud laws around the country. As part of the HEAT initiative, Medicare Fraud Strike Force operations were expanded from South Florida and Los Angeles to Detroit and Houston. To learn more about the HEAT initiative, go to: www.hhs.gov/stopmedicarefraud.
Former Memphis Police Officer Sentenced to Prison Term of Life Plus 255 Years for Civil Rights, Narcotics, Robbery and Firearms CrimesRead the Press Release
Arthur Sease IV, a former Memphis Police Department officer, was sentenced today to a prison term of life plus 255 years by Chief Judge Jon P. McCalla in Memphis, Tenn. A jury convicted Sease in February 2009 of 44 counts of civil rights, narcotics, robbery, and firearms offenses.
"The peace and prosperity of our nation hinge on the integrity of our law enforcement officers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "We will continue to vigorously prosecute police corruption both to protect the rights of individuals and to maintain faith in our legal system."
"Effective law enforcement begins with honest law enforcement," said U.S. Attorney Lawrence J. Laurenzi. "We will aggressively pursue and convict those officers and agents who violate the law and the public’s trust. We have entrusted law enforcement officers with our safety and protection and we demand that they perform their duties honestly and truthfully."
"The sentence is extraordinary in that it is one of the longest ever imposed for civil rights violations which did not involve a victim’s death," said My Harrison, Special Agent in Charge of the FBI’s Memphis Field Office. "We will vigorously investigate abuses of authority to defend the fundamental right to ethical behavior by government employees."
"This sentencing sends a serious message that police misconduct will not be tolerated and will be dealt with harshly by our courts. While criminal conduct brings dishonor to those who commit them, this officer’s actions should not reflect negatively on our fellow officers who continue to serve this community with pride and integrity," said Police Director Larry Godwin.
The evidence at trial showed that from November 2003 through April 2006, Sease conspired with other members of the Memphis Police Department to use their authority as law enforcement officers, to rob suspected drug dealers of cash, cocaine, and marijuana. Sease and his co-conspirators would then resell the stolen drugs for their own profit. The government proved that Sease committed or was involved in 15 separate robberies.
Five other individuals had already pleaded guilty in this case. Andrew Hunt was sentenced in February 2009 to 10 years in prison after pleading guilty in September 2006 to a federal civil rights conspiracy, robbery affecting interstate commerce and drug distribution. Former Memphis police officer Antoine Owens pleaded guilty in August 2007 and received a sentence of 63 months incarceration and three years of supervised release in March 2009. Alexander Johnson, another former Memphis police officer, pleaded guilty in April 2007 and was sentenced to 30 months in prison and two years of supervised release in March 2009. Laterrica Woods, a civilian who helped Sease and Hunt with one of their robberies, also pleaded guilty to a civil rights conspiracy in September 2007 and was sentenced to 36 months imprisonment and three years of supervised release in April 2009. Harold McCall, also a former Memphis police officer, pleaded guilty to a civil rights conspiracy in a related case in May 2007 and received a sentence of three years probation including one year of home confinement in June 2009.
This case was investigated by Special Agents Tracey Harris, Maria Irizarri and Jaime Corman from the FBI's Memphis Division and Sergeants Matt Whittington and Billy Greenwood of the Memphis Police Department Security Squad. Assistant U.S. Attorney Steve Parker from the U.S. Attorney's Office for the Western District of Tennessee and Trial Attorney Jonathan Skrmetti from the Justice Department’s Civil Rights Division prosecuted the case.
U.S. Attorney Lawrence J. Laurenzi specifically commended Memphis officers Tony Parks and Thurmond Richardson for their contribution to the investigation. Testimony at trial revealed the officers learned that a Memphis police officer was robbing drug dealers. Their investigation revealed Hunt as the officer. Richardson and Parks initiated an undercover operation of a planned robbery, resulting in Hunt’s arrest and evidence implicating Seale.
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit unreasonable search and seizure, deprivation of property without due process of law and other acts of misconduct by law enforcement and other government officials. More information about the Civil Rights Division of the Justice Department, and the laws it enforces, is available at http://www.usdoj.gov/crt.
Attorney General Appoints New Chief Immigration JudgeRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today the appointment of Brian M. O’Leary as the Executive Office for Immigration Review’s (EOIR) Chief Immigration Judge. Prior to his appointment, Judge O’Leary served as an immigration judge from May 2007 to June 2009 at the Arlington, Va., Immigration Court. He served as a temporary board member on the Board of Immigration Appeals from May 2006 to May 2007 and as a deputy chief immigration judge in the Office of the Chief Immigration Judge from March 2003 to May 2006.
Judge O’Leary served as an assistant chief immigration judge from May 1994 to March 2003, during which time, from May 2000 to October 2001, he served as an acting deputy chief immigration judge. Before joining EOIR, Judge O’Leary worked for five years in numerous positions with the former Immigration and Naturalization Service (INS) Headquarters Office of the General Counsel where he served as associate general counsel, deputy associate general counsel, and assistant general counsel. He also served with the U.S. Attorney’s Offices in the Southern District of Florida, as well as the Eastern District of Virginia, where he worked as special assistant U.S. attorney. Prior to that experience, Judge O’Leary worked as a trial attorney with the INS Miami District Office.
Judge O’Leary completed undergraduate work at Georgetown University’s School of Foreign Service in 1982, and received a juris doctorate in 1985 from the New England School of Law. He is a member of the Massachusetts and Florida state bars.
The Office of Chief Immigration Judge is part of EOIR located in Falls Church, Va. The Chief Immigration Judge provides overall program direction, articulates policies and procedures, and establishes priorities for more than 200 immigration judges located in more than 50 immigration courts nationwide. EOIR’s immigration judges conduct administrative court proceedings to determine whether foreign-born individuals —who are charged by the Department of Homeland Security with violating immigration law —should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. Immigration judges decide each case independently, and their decisions are final unless appealed or certified to the Board of Immigration Appeals.
Assistant Attorney General Ron Weich Announces Leadership Team <br /> in the Office of Legislative AffairsRead the Press Release
Ronald Weich, Assistant Attorney General for the Justice Department’s Office of Legislative Affairs today announced two new members of the Office’s leadership team. Mark D. Agrast and Judith Appelbaum have been appointed as Deputy Assistant Attorneys General.
Agrast joins the Office as the Deputy Assistant Attorney General handling criminal and national security matters. Appelbaum is the Deputy Assistant Attorney General managing civil and civil rights issues, as well as nominations.
"Mark and Judy round out an outstanding team in the Office of Legislative Affairs," said Weich. "Their deep policy and congressional experience will prove invaluable as we work with Congress to advance the Department of Justice’s legislative initiatives. They bring the vision and intellect to ensure that this Office performs at the highest of levels."
Appelbaum joined the Department from the American Constitution Society for Law and Policy, where she served as the Director of Programs since 2006. Previously, she was Vice President and Legal Director at the National Women’s Law Center (NWLC), where she participated in litigation, advocacy, and public education activities in many areas of NWLC’s work, with a particular focus on civil rights and judicial nominations. Before that, she served as Counsel to Sen. Edward Kennedy on his Judiciary Committee staff and his chief advisor on women’s rights issues. Appelbaum received her B.A. summa cum laude from the University of Pennsylvania and her law degree from Stanford Law School.
Agrast previously served as the Senior Vice President for Domestic Policy and later as a Senior Fellow at the Center for American Progress. Prior to that, he spent more than a decade on Capitol Hill as Counsel and Legislative Director to Rep. William Delahunt of Massachusetts and as a senior aide to Rep. Gerry Studds, also of Massachusetts. Agrast received his B.A. summa cum laude from Case Western Reserve University in 1978, attended Oxford University as a Rhodes Scholar from 1978 to 1981, and received his law degree from Yale Law School in 1985.
The Office of Legislative Affairs is responsible for the development and implementation of strategies to advance the Department’s legislative initiatives and other interests relating to Congress. The Office also articulates the Department’s position on legislation proposed by Congress, facilitates the appearance of Department witnesses at congressional hearings, and manages the interagency clearance process led by Office of Management and Budget. The Office also participates in the Senate confirmation process for federal judges and Department nominees, such as Assistant Attorneys General and U.S. Attorneys. These functions are important to the Department’s cooperative and productive relationship with Congress.
30 June 2009
U.S. National Charged with Sexual Abuse While OverseasRead the Press Release
Andrew Warren, 41, has been charged in U.S. District Court for the District of Columbia with one count of sexual abuse in Algeria within the special maritime and territorial jurisdiction of the United States.
The one-count indictment, returned by a federal grand jury on June 18, 2009, and unsealed today, alleges that Warren sexually assaulted another individual on Feb. 17, 2008. The indictment also alleges that at the time of the alleged sexual assault, the victim was incapable of appraising the nature of the conduct and was physically incapable of declining participation in, or communicating unwillingness to engage in the sexual act. Warren surrendered to Special Agents of the Diplomatic Security Service this morning and was arraigned this afternoon before U.S. Magistrate Judge John M. Facciola this afternoon.
If convicted, Warren faces up to life in prison.
The case is being investigated by the Diplomatic Security Service. The Bureau of Diplomatic Security is the U.S. Department of State's law enforcement and security arm. The case is being prosecuted by attorneys from the U.S. Attorney’s Office for the District of Columbia and the Criminal Division’s Domestic Security Section.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. A defendant is presumed innocent unless and until convicted through due process of law.
Indictment
Superseding Indictment Returned in Federal Kidnapping and Drug CaseRead the Press Release
Additional charges and defendants have been added to a federal case arising from the abduction of a boy from his Las Vegas home in October 2008.
Jose Lopez-Buelna, aka "Miguel," 48; Jesus Gastelum, aka "Jose," 35; and Erik Dushawn Webster, 44; all of Las Vegas, were each charged today in a superseding indictment with conspiracy to distribute a controlled substance, specifically to distribute five kilograms or more of cocaine.
Lopez-Buelna was also charged with conspiracy to launder money; conspiracy to commit kidnapping; kidnapping; conspiracy to commit hostage taking; hostage taking; and two counts of money laundering-promotion.
Gastelum was also charged with conspiracy to launder money; conspiracy to commit kidnapping; kidnapping; conspiracy to commit hostage taking; hostage taking; two counts of money laundering-promotion; and money laundering-monetary transaction.
Webster was also charged with conspiracy to launder money and money laundering-promotion, and Luis Vega-Rubio, aka "Bear," 36, of Las Vegas, was charged with conspiracy to commit kidnapping; kidnapping; conspiracy to commit hostage taking; and hostage taking.
The previous indictment in the case, returned on March 17, 2009, charged only Lopez-Buelna and Vega-Rubio with conspiracy to kidnap a child.
The superseding indictment alleges that Lopez-Buelna and Gastelum provided money to individuals to purchase motor homes in the United States to transport cocaine and money between Mexico, the United States and Canada. The superseding indictment alleges the motor homes were modified after purchase with hidden lead-lined compartments to conceal cocaine and money from law enforcement.
According to the superseding indictment, Webster and other unindicted co-conspirators – including Clemens Tinnemeyer – agreed to drive the motor homes to various locations, including Nevada, California, Georgia, Illinois, New York, Canada and Mexico. Lopez-Buelna and Gastelum allegedly paid Tinnemeyer between $17,000 and $25,000 per trip to drive a motor home across the United States to Mexico and Canada, and allegedly provided Tinnemeyer additional money for side trips, expenses and motor home repairs.
The superseding indictment alleges that Tinnemeyer made several trips in the motor home between Mexico and different cities in the United States, and that in or about June 2008, Tinnemeyer allegedly drove a motor home to Atlanta, New York and Chicago, when he discovered approximately $4.5 million in a hidden compartment.
Tinnemeyer allegedly stole the $4.5 million, and Lopez-Buelna and others started searching for them. According to the superseding indictment, they hired private investigators, visited relatives and offered Tinnemeyer’s friends and associates money. In July, Vega-Rubio allegedly delivered a threatening note to Tinnemeyer’s daughter in Las Vegas telling Tinnemeyer to contact them.
According to the superseding indictment, approximately three months later, on Oct. 15, 2008, Tinnemeyer’s young grandson was abducted from Tinnemeyer’s daughter’s home in Las Vegas by an unknown number of persons. The boy allegedly was held hostage by unknown individuals on the orders of Lopez-Buelna, Gastelum and Vega-Rubio for approximately three days to compel Tinnemeyer to come out of hiding and to contact them. The boy allegedly was held at more than one location and was transported between locations in a suitcase.
The boy was released on Oct. 18, 2009, after law enforcement submitted photographs of Lopez-Buelna to the media as a person of interest in the abduction, as well as information that Tinnemeyer had been arrested and that a substantial amount of cash had been recovered.
If convicted of the drug conspiracy charge, the defendants face a maximum penalty of life in prison and a $4 million fine. The kidnapping charge carries a maximum penalty of life in prison. The money laundering charges carry a maximum penalty of 20 years in prison.
The superseding indictment also alleges that the defendants shall forfeit all property derived from the proceeds of the offenses, including more than $3.9 million in cash, numerous vehicles, a boat and two semi-automatic pistols.
All of the defendants, except Jesus Gastelum, who is a fugitive, are in federal custody pending trial. Arraignments for Lopez-Buelna, Webster and Vega-Rubio are set for July 10, 2009, at 10:30 a.m., before U.S. Magistrate Judge Peggy A. Leen.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The case is being investigated by the U.S. Drug Enforcement Administration, the FBI, the Las Vegas Metropolitan Police Department and Internal Revenue Service - Criminal Investigation.
The initial complaints and indictment were handled by Assistant U.S. Attorneys Kathleen Bliss and Nicholas Dickinson. The superseding indictment and prosecution are being handled by Trial Attorneys Marty Woelfle and Margaret Honrath of the Criminal Division’s Organized Crime and Racketeering Section.
Phoenix Asphalt Paver Convicted of Tax EvasionRead the Press Release
WASHINGTON - John D. Stacey, a resident of Phoenix, was convicted today of income tax evasion, corrupt interference with the due administration of the Internal Revenue Service (IRS) and multiple counts of fraudulent use of a social security number, the Department of Justice and IRS announced. A federal jury convicted Stacey of all counts of the indictment following a three week trial before Judge Neil V. Wake in Phoenix.
Stacey was indicted by a federal grand jury in July 2008. According to the evidence presented at trial, Stacey operated a sole proprietorship asphalt paving company that did business under various names, including A to Z Paving, Triple A Paving, Texas Paving, Pave Your Way Construction and A to Z Paving Engineering, among others. Stacey earned gross income in excess of $4 million from his business during the years 2000 to 2003, but he has never filed an individual income tax return with the IRS.
According to the evidence presented at trial, since at least February 2002, Stacey knew that he owed taxes, penalties and interest for tax years 1995, 1996 and 1997. Stacey has made no payments to the IRS towards this tax debt. In addition to not paying his outstanding tax debt, Stacey took numerous steps to frustrate the IRS’s efforts to both investigate the case and collect tax that he owed. For example, Stacey made multiple false statements to IRS agents, operated his business to prevent creating business records, made a number of luxury purchases rather than paying his outstanding tax debt and provided paving customers and financial institutions with multiple false social security numbers to prevent the IRS from receiving accurate information about his income, assets and financial transactions.
Judge Wake scheduled sentencing for Sept. 28, 2009. Stacey faces a maximum sentence of five years in prison for the tax evasion charge; a maximum sentence of three years in prison for the corrupt endeavor charge; and a maximum sentence of five years in prison for each false social security charge. Additionally, Stacey faces a fine of $250,000, for each charged count.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Ellen Quattrucci, Monica Edelstein and Stephanie Carowan, who prosecuted the case. Acting Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office in Phoenix for their assistance in successfully prosecuting this matter.
Fort Myers Real Estate Agents Sentenced to Prison for Tax CrimesRead the Press Release
WASHINGTON – Sheri Redekker Barry and Warren Thomas Barry, a wife and husband who are both real estate agents in Fort Myers, Fla., have been sentenced to prison for conspiracy and failure to file tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Court Judge John E. Steele on Monday sentenced Sheri Barry to 36 months in prison and Warren Barry to 24 months in prison. The court also ordered the Barrys to pay restitution in the amount of $555,728.
In March 2009, a federal jury convicted the Barrys of conspiring to impede and impair the IRS. The jury also convicted Sheri Barry of four counts of failure to file for the tax years 2002 through 2005 and convicted her husband of three counts of failure to file for the tax years 2003 through 2005.
According to the indictment and evidence presented at trial, Sheri Barry had not filed a tax return since 1988, and Warren Barry had not filed a tax return since 2000. The Barrys sent multiple letters to the IRS advancing false and frivolous tax defier claims purporting to set forth reasons why the defendants were not required to file returns or pay taxes. The IRS repeatedly warned Sheri and Warren Barry that their positions were frivolous and advised the Barrys of their legal duty to file returns. The IRS also issued notices of federal tax liens to Sheri and Warren Barry.
According to the indictment and evidence presented at trial, Sheri and Warren Barry ignored the IRS’s warnings and conspired to hide their income and assets from the IRS. For example, Sheri and Warren Barry engaged in a pattern of buying and selling real estate in the Fort Myers area through Sheri Barry’s children and other nominees. Sheri and Warren Barry deposited their substantial real estate earnings in bank accounts in the name of nominees, including Sheri Barry’s children. Additionally, Sheri and Warren Barry attempted to pay their outstanding tax liabilities with fictitious instruments, called Bills of Exchange. Sheri and Warren Barry also purchased the fictitious instruments from American Rights Litigators (ARL).
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the IRS special agents who investigated the case, as well as Assistant U.S. Attorney Doug Molloy and Tax Division trial attorney Michael Boteler who prosecuted the case.
In August 2004, a federal district judge permanently enjoined ARL and two of its promoters from the sale of a nationwide tax scam. In April 2008, a federal court in Florida sentenced two promoters of ARL, as well as ARL client Wesley Snipes, to prison for tax offenses. In September 2008, five promoters of ARL were indicted for tax fraud.
More information about the Justice Department’s Tax Division, including its tax enforcement efforts against ARL and its customers, may be found at http://www.usdoj.gov/tax.
Former Virginia Marine Products Company Executive Pleads Guilty to Bid Rigging on Contracts with the U.S. Navy and OthersRead the Press Release
WASHINGTON — The chief executive officer of a former Virginia marine products company pleaded guilty and has agreed to pay a $100,000 criminal fine and serve time in jail for his role in a conspiracy to rig bids and allocate customers with respect to marine products purchased by the U.S. Navy, the U.S. Coast Guard, and other public and private entities, the Department of Justice announced today.
According to a one-count felony charge filed on May 26, 2009, in the U.S. District Court in Norfolk, Va., Frank A. March, chief executive officer of a former marine products company located in Clearbrook, Va., participated in a conspiracy between June 2001 and December 2002 to allocate customers and rig bids for contracts of foam-filled marine fenders and buoys. During the course of the conspiracy, the conspirators discussed and agreed to allocate among themselves contracts from the Department of Defense (DOD), the Department of Homeland Security and others. Under the plea agreement, March has agreed to cooperate fully in the Department’s ongoing antitrust investigation. The amount of jail time March will serve will be determined by the court.
Foam-filled marine fenders are used as a cushion between ships and fixed structures, such as docks, piers or other ships. Foam-filled buoys are used in a variety of applications, such as channel markers and navigational aids.
"The Department’s Antitrust Division is committed to ensuring that both the military and private businesses are able to buy these necessary marine products at the lowest possible price," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "Those who engage in bid rigging will be held accountable for their actions."
Several other executives have already pleaded guilty to participating in this same conspiracy. In January 2008, Robert Taylor, former president of March’s company based in Clearbrook, Va., was sentenced to pay a $300,000 criminal fine and to serve two years in jail for his role in this conspiracy as well as additional charges. Donald Murray, the company’s former chief financial officer, was sentenced in March 2008 to pay a $75,000 criminal fine and to serve a year and a half in jail for his role in this conspiracy and another charge. A California executive, Gerald Thermos, pleaded guilty to participating in the same conspiracy and was sentenced in March 2008 to pay a criminal fine of $50,000 and to serve four months in jail.
"Those that try to circumvent the Government contract process should take note of this," said Sharon Woods, Director of the Defense Criminal Investigative Service (DCIS). "DCIS will aggressively pursue individuals and contractors that engage in bid-rigging and price-fixing schemes with our partners in the Department of Justice."
The bid-rigging charge, a violation of the Sherman Act, carries a maximum penalty of three years in prison and a $350,000 fine for individuals for violations occurring before June 22, 2004. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is an example of the Department’s commitment to protect U.S. taxpayers from public procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative announced in October 2006 is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section, DOD’s Office of Inspector General, DCIS and the U.S. Navy Criminal Investigative Service. Anyone with information concerning bid rigging or other anticompetitive conduct in the marine products industry is urged to call the National Criminal Enforcement Section of the Antitrust Division at 202-307-6694 or the Arlington, Va., Resident Agency of the DCIS at 703-604-8439.
Former Promoter of Abusive Trusts Pleads Guilty to Tax EvasionRead the Press Release
WASHINGTON - Roderick Prescott, a resident of Orem, Utah, and a former principal of National Trust Services (NTS) in San Jose, Calif., and later Selma, Ore., pleaded guilty today to tax evasion, the Justice Department and Internal Revenue Service (IRS) announced. Prescott admitted to evading at least $550,000 in personal income taxes for 1998 and 1999. Prescott was scheduled to begin trial on July 7, 2009, before Chief U.S. District Judge Ann Aiken in Eugene, Ore.
According to the indictment, the plea agreement and the government’s trial brief, Prescott and his former business partner Leroy Fritts (now deceased) earned significant income from the nationwide promotion and sale of abusive trusts through NTS, which they founded in 1988. Prescott and Fritts deposited approximately $3.5 million into various bank accounts through the sale of such trusts. They also earned income from recruiting clients of NTS to invest in Fountainhead Global Trust (FGT), a purported offshore investment that promised returns as high as 50 percent per year.
According to the government’s trial brief, FGT was a Ponzi scheme which collected approximately $20 million in investors’ funds from 1995 through 1999. FGT transferred some of the money to an offshore account in the Cayman Islands at the Bank of Bermuda, ostensibly to be invested in high-interest debt through a Florida entity called "Cash 4 Titles." Prescott and Fritts then funneled part of the money in the account back to themselves. They also took large sums of investors’ funds without ever sending the money offshore. The government asserts that instead, they spent the funds often by direct payments from FGT bank accounts on luxury goods and real estate. Eventually the scheme broke down and the vast majority of investors lost their full investments.
According to the government’s trial brief, despite making significant income from NTS and FGT, neither Prescott nor Fritts filed any individual federal income tax returns for 1998 or 1999. Prescott last filed a tax return in 1991. Prescott and Fritts used FGT money to purchase, among other items, a nearly $3 million ranch near Grants Pass, Ore., on which they began construction of two custom-built luxury log homes. The construction budget was approximately a combined $2 million, and they spent over $465,000 before halting construction in 1999. Prescott and Fritts also purchased solar panels for the ranch for over $328,000, frozen food in anticipation of a year 2000 apocalypse for over $1.1 million and numerous vehicles and other personal items.
According to the government’s trial brief, Prescott and Fritts used an array of purported trusts and related bank accounts, including numerous offshore bank accounts at the Bank of Bermuda in the Cayman Islands, to conceal their income from the IRS. Prescott and Fritts also used false or fictitious taxpayer identification numbers and offshore credit cards in fake names issued to them by the Bank of Bermuda in the Cayman Islands.
Judge Aiken scheduled sentencing for Sept. 9, 2009. Prescott faces a maximum sentence of five years in prison and a maximum fine of $250,000.
Acting Assistant Attorney General John A. DiCicco commended the IRS-Criminal Investigation special agents who investigated the case, as well as Tax Division trial attorneys Jay Nanavati and Timothy Stockwell who prosecuted the case.
Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site http://www.ustreas.gov/irs/ci. Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.
Former National Archives Employee Pleads Guilty to Conflict of InterestRead the Press Release
WASHINGTON – Jeffrey Davis, a former employee of the National Archives and Records Administration (NARA), pleaded guilty today in U.S. District Court in Atlanta to engaging in a felony conflict of interest by collecting fees from customers of a company he owned and operated for services he performed as part of his official duties at NARA, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Davis, 43, was assigned as an archives technician at NARA’s Atlanta Records Center from August 2005 until his employment was terminated in October 2008, according to court documents. As an archives technician, Davis was responsible for assisting the public with requests for court documents maintained by NARA. According to the plea agreement, from July 2007 until October 2008 while employed by NARA, Davis also owned and operated a company named Documents Archival Retrieval Transferring Services of Georgia (DARTSOFGA), a document retrieval company that charged its customers a fee for obtaining court records in addition to the fees charged by NARA and the Administrative Office of the United States Courts (AOUSC).
From September 2007 to October 2008, Davis admitted he used his official position at NARA to retrieve and copy court documents for DARTSOFGA customers. In an effort to conceal from NARA his affiliation with DARTSOFGA and to increase DARTSOFGA’s profits, Davis failed to pay NARA and AOUSC the applicable fees associated with the DARTSOFGA customer requests for court records.
Davis pleaded guilty to receiving monetary payments from DARTSOFGA in connection with the retrieval of court records from NARA using his official position. According to the plea agreement, Davis admitted such payments were an illegal supplementation of the salary paid by the government as compensation for his services as a NARA employee. Davis faces a maximum sentence of five years in prison and a $250,000 fine. Davis’ sentencing is scheduled for Sept. 10, 2009, before District Judge Timothy C. Batten Sr.
This case is being prosecuted by Trial Attorney Justin V. Shur of the Criminal Division’s Public Integrity Section, headed by William M. Welch II, Chief. The case is being investigated by the U.S. National Archives and Records Administration, Office of Inspector General.
Indictment
Former Indiana Water Treatment Plant Superintendent Pleads Guilty to Falsifying ReportsRead the Press Release
Herbert L. Corn, the former superintendent of the city ofRochester Wastewater Treatment Plant in Rochester, Ind., pleaded guilty today in U.S. District Court in South Bend, Ind., to falsifying monthly discharge monitoringreports that concealed violations of the Clean Water Actat the Rochester plant.
Corn pleaded guilty to a five-count felonyinformation charging him with making false statements in discharge monitoring reports submitted to the Indiana Department of Environmental Management (IDEM). He admitted that from September 2004 and continuing through May 2007, he submitted at least five reports containing false data for treated water that is discharged from the Rochester plant into Mill Creek, a tributary of the Tippecanoe River.
Under the federal Clean Water Act, which is administered and enforced by IDEM as well as the U.S. Environmental Protection Agency (EPA), before discharging the waste water it collects to Mill Creek, the Rochester plant must treat the water to meet concentration limits on certain pollutants as set forth in its permit. Three pollutants in the permit that have concentration limits are Escherichia Coli bacteria (E. Coli), Ammonia NH3-N and Carbonaceous Biological Oxygen Demand-5 (CBOD). The discharge of pollutants above the concentration limits for these pollutants is a violation of the permit and the Clean Water Act. The Rochester plant is required to report and certify the results of its discharge sampling on a monthly basis to IDEM.
As part of the plea agreement, Corn admitted that on at least five separate occasions from September 2004 and continuing through May 2007 he reported levels in the discharge reports submitted to IDEM that indicated the levels of E. Coli, Ammonia NH3-N, and CBOD-5 were in compliance with the permit concentration limits when he knew in fact they were not.
"All citizens should be confident that their civil servants are providing accurate reports and abiding by laws meant to protect the environment," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The prosecution in this case demonstrates the coordinated effort of federal, state and local officials to investigate and prosecute those violating the nation’s environmental laws."
"Accurate information about a community’s water quality is essential to protect the public health and the environment," said Randy Ashe, Special Agent-in-Charge of EPA’s criminal enforcement program in Chicago. "Those who submit false reports or bogus data undermine those efforts and they will be vigorously investigated and prosecuted."
"Certified wastewater operators are entrusted with the public health and must be held fully accountable to fulfill their duties, including honest and accurate reporting," said IDEM Commissioner Thomas Easterly. "IDEM inspectors work hard to identify and correct problems, and coordinate with our state and federal partners to ensure the protection of Hoosiers and our environment. We thank the staff of the U.S. Attorney’s Office, the U.S. Department of Justice, and the U.S. EPA’s criminal enforcement division in Chicago for their help in this case."
As a result of the felony conviction, Corn could be sentenced up to two years in prison and fined up to $250,000 for each count.
The criminal charges arose from a criminal investigation jointly undertaken by the Criminal Investigation Division of the EPA and the IDEM Office of Criminal Investigation, which are part of the Northern District of Indiana Environmental Crimes Task Force. Members of the task force include:
- U.S. Attorney’s Office for the Northern District of Indiana
- Environmental Crimes Section of the Department of Justice
- EPA – Criminal Investigation Division
- Department of Homeland Security - U.S. Coast Guard Investigative Service
- Federal Bureau of Investigation
- U.S. Fish and Wildlife Service
- U.S. Department of Transportation – Office of Inspector General
- U.S. Department of Labor – Office of Inspector General
- Indiana Department of Environmental Management – Office of Criminal Investigations
- Indiana Department of Natural Resources – Law Enforcement Division
- Indiana Attorney General’s Office
- Indiana State Police
The Task Force encourages citizens in the Northern District of Indiana to report environmental crimes to 312-886-9872 or at the Web site http://www.epa.gov/compliance/complaints/index.html.
The case is being prosecuted by Assistant U.S. Attorney Toi Denise Houston, Special Assistant U.S. Attorney David P. Mucha and Environmental Crimes Section Trial Attorney Gary N. Donner.
29 June 2009
Miami Physician Sentenced to 97 Months in Prison for Role <br /> in $10 Million Medicare Fraud SchemeRead the Press Release
Miami physician Roberto Rodriguez, 54, was sentenced today to 97 months in prison for his role in a Medicare fraud scheme involving HIV infusion services. Rodriguez was also ordered to pay more than $9 million in restitution to the Medicare program during today’s sentencing hearing before U.S. District Judge Paul C. Huck.
Rodriguez pleaded guilty before Judge Huck on March 23, 2009, to conspiracy to commit healthcare fraud. In his guilty plea, Rodriguez admitted that he was a co-owner of and practicing physician at Midway Medical Center Inc. (Midway), a Miami clinic that purported to specialize in the treatment of HIV patients. Rodriguez admitted that, while at Midway, he and his co-conspirators routinely billed the Medicare program for services that were medically unnecessary and in many instances were never provided. Rodriguez further admitted that he purchased only a small fraction of the drugs that were purportedly administered to patients at the clinic.
Most of the services allegedly provided to patients at Midway were billed to the Medicare program as treatments for thrombocytopenia, a disorder involving a low count of platelets in the blood. According to the plea documents, none of Midway’s patients actually had low blood platelet counts. Rodriguez admitted that to make it appear that the patients actually had low platelet levels, he and his co-conspirators used chemists to manipulate the blood samples drawn from Midway’s patients before the blood was sent to a laboratory for analysis. In his plea, Rodriguez admitted to ordering that patients at Midway receive medications designed to treat thrombocytopenia despite knowing that the laboratory results had been falsified and that the patients did not actually have that condition.
Midway was not the only clinic where Rodriguez purported to treat HIV patients with injection and infusion therapies. In his plea, Rodriguez admitted that he was listed as medical director and practicing physician for five other Miami-area HIV infusion clinics between October 2003 and February 2005, where he engaged in similar criminal activity. Specifically, Rodriguez admitted that he and his co-conspirators at these other clinics billed the Medicare program for HIV injection and infusion services that Rodriguez knew were medically unnecessary and in some instances were never provided. Rodriguez admitted to causing more than $20 million in false claims to be submitted to the Medicare program at all of his clinics, including Midway.
A number of Rodriguez’s co-defendants have already been sentenced for their roles at Midway and related clinics. On June 5, 2009, in a sentencing hearing before Judge Huck, chemist Alexis Dagnesses, 44, was sentenced to 90 months in prison; medical assistant Gonzalo Nodarse, 38, was sentenced to 78 months in prison; medical assistant Alexis Carrazana, 41, was sentenced to 72 months in prison; and physician Carlos Garrido, 69, was sentenced to 37 months in prison. Rodriguez’s co-defendant Carmen del Cueto, a physician, is scheduled to be sentenced on Sept. 11, 2009.
The case was prosecuted by Trial Attorney John K. Neal of the Criminal Division’s Fraud Section and investigated by the HHS Office of the Inspector General and the FBI. The case was brought as part of the Medicare Fraud Strike Force, supervised by Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and Acting U.S. Attorney Sloman of the Southern District of Florida. Federal prosecutors have indicted 115 cases with 257 defendants in Miami, Los Angeles and Detroit since the inception of strike force operations in March 2007. Collectively, these defendants are alleged to have fraudulently billed the Medicare program for more than $600 million.
The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. In May 2009, the Department of Justice and HHS announced the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint effort to prevent fraud and enforce current anti-fraud laws around the country. As part of the HEAT initiative, Medicare Fraud Strike Force operations were expanded from South Florida and Los Angeles to Detroit and Houston. To learn more about the HEAT initiative, go to:
www.hhs.gov/stopmedicarefraud .Justice Department Files Lawsuit Against Stonescape Pavers LLC to Enforce Employment Rights of U.S. Air Force ReservistRead the Press Release
The Department today filed a lawsuit in U.S. District Court in Las Vegas against Stonescape Pavers LLC alleging that the company willfully violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by firing Matthew T. Denning without cause when he returned from active duty.
Enacted by Congress in 1994, USERRA prohibits employers from discriminating or retaliating against employees or applicants for employment because of their past, current or future military obligations. Subject to certain conditions, USERRA requires that employers promptly reemploy returning service members and prohibits employers from terminating service members except for cause for 180 days after their reemployment.
Denning, a former Utah Army National Guardsman and current Air Force Reservist, was a salesman for Stonescape when he was called to active duty to deploy to Iraq with the Utah Army National Guard in January 2006. After he was honorably discharged in June 2006, Denning was reemployed by Stonescape. The Justice Department’s complaint alleges that Stonescape terminated Denning without cause in August 2006 during his statutorily protected reemployment time period.
"In enacting USERRA, Congress recognized that it is important to protect the employment rights of the men and women who serve our country in uniform by protecting them from discharge without cause," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in our nation’s military."
The Labor Department’s Veterans’ Employment and Training Service investigated and attempted to resolve Denning’s USERRA complaint before referring it to the Justice Department for litigation.
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. This is the 17th USERRA suit the Justice Department has filed this year on behalf of service members. Additional information about USERRA can be found on the Justice Department’s Web sites at http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, as well as on the Labor Department’s website at http://www.dol.gov/vets/programs/userra/main.htm.
Former Social Worker Sentenced for Role in Scheme to Defraud Department of Veterans Affairs <br /> and Obstructing JusticeRead the Press Release
A former Department of Veterans Affairs (VA) social work associate was sentenced to three years in prison for her role in a scheme to defraud the United States of her honest services in connection with her work finding suitable housing and daily care for mentally ill and disabled military veterans and then obstructing the VA’s investigation into the fraudulent scheme. U.S. District Judge Richard W. Story also ordered Bridgette L. Davidson, 39, to pay a $5,000 fine and to serve three years of supervised release following her release from prison.
On March 12, 2009, following a three-day jury trial, Davidson was found guilty of four counts of honest services mail fraud, one count of criminal conflict of interest, and one count of making a false statement to VA officials investigating the fraudulent scheme. Davidson and her ex-boyfriend, Darrick O. Frazier, 35, both of Atlanta, were charged in the six-count indictment on Nov. 14, 2006. On Sept. 2, 2008, Frazier pleaded guilty to one count of honest services mail fraud and entered into a plea agreement with the government. On Nov. 18, 2008, he was sentenced to 12 months and one day in prison and ordered to pay $20,200 in restitution.
According to court documents, from September 2000 through September 2002, Davidson was employed as a social work associate with the Atlanta VA Medical Center. Among her duties, Davidson was entrusted with finding suitable housing and living arrangements for mentally ill and disabled military veterans. According to evidence presented at trial, rather than place the veterans entrusted to her care in independently-owned and licensed assisted living facilities, from November 2001 through mid-April 2002, Davidson, assisted by Frazier, secretly rented a home in Marietta, Ga., a city located several miles northwest of Atlanta, to house the mentally ill and disabled military veterans in exchange for monthly federal subsidy payments. During this time, trial evidence showed that Davidson falsely represented to VA officials and to the military veterans’ legal guardians and custodians that the facility was an independently-owned personal care home suitable to house and care for the veterans. Evidence at trial showed that Davidson and Frazier used the rental income obtained from the veterans housed at the facility to pay some of the rent, utilities and related expenses on the rental property, and then kept the excess revenue for their own personal benefit.
Evidence at trial revealed that on April 15, 2002, a veteran died in the home and the facility was immediately shut down. The VA launched an internal investigation into Davidson’s connection to the facility. When interviewed under oath by VA officials, trial testimony proved that Davidson falsely denied that she had any ownership or financial interest in the personal care home she and Frazier secretly owned and operated.
The case is being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II, and Assistant U.S. Attorney Teresa D. Hoyt of the Northern District of Georgia. The case is being investigated by the VA Office of Inspector General.
Former Executive of Philadelphia Company Pleads Guilty to<br /> Paying Bribes to Vietnamese OfficialsRead the Press Release
A former executive of Philadelphia-based Nexus Technologies Inc. pleaded guilty today in connection with his participation in a conspiracy to bribe Vietnamese government officials in exchange for lucrative contracts to supply equipment and technology to Vietnamese government agencies, in violation of the Foreign Corrupt Practices Act (FCPA).
Joseph T. Lukas, 60, a resident of New Jersey, was a partner in Nexus Technologies Inc. until 2005. According to court documents, Nexus Technologies Inc. was a privately owned export company that identified U.S. vendors for contracts opened for bid by the Vietnamese government to purchase a wide variety of equipment and technology, including underwater mapping equipment, bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems. Lukas was responsible for overseeing the negotiation of contracts with suppliers in the United States.
In connection with his guilty plea, Lukas admitted that from 1999 to 2005, he and other employees of Nexus Technologies Inc. agreed to pay, and knowingly paid, bribes to Vietnamese government officials in exchange for contracts with the agencies for which the officials worked. The bribes were falsely described as "commissions" in the company’s records.
Lucas was arrested on Sept. 5, 2008, after being indicted by a federal grand jury in Philadelphia on one count of conspiracy to bribe Vietnamese public officials in violation of the FCPA and one substantive count of violating the FCPA. Lukas was indicted on Sept. 4, 2008, along with the company and alleged co-conspirators Nam Nguyen, Kim Nguyen and An Nguyen. Cases are still pending against the remaining defendants and the company.
At sentencing, scheduled for April 6, 2010, Lukas faces a maximum sentence of 10 years in prison.
The case is being prosecuted by Assistant U.S. Attorney Jennifer Arbittier Williams for the Eastern District of Pennsylvania and Trial Attorney Kathleen M. Hamann of the Criminal Division’s Fraud Section. The case was investigated by the FBI and the U.S. Department of Commerce, Office of Export Enforcement.
Alleged Afghan Narcotics Trafficker Ordered Detained Pending Trial on U.S. Drug ChargesRead the Press Release
Haji Bagcho, aka Haji Bagh Chagul, an Afghan national, was ordered detained today by Magistrate Judge John M. Facciola in U.S. District Court for the District of Columbia while he awaits trial on U.S. narcotics charges.
Bagcho was charged in a two-count indictment unsealed June 24, 2009, with one count of conspiracy to distribute one kilogram or more of heroin knowing and intending that it would be imported into the United States and one count of distribution of one kilogram or more of heroin knowing and intending that it be imported into the United States. Conviction on either of these charges carries a mandatory minimum sentence of 10 years in prison and a maximum of life in prison. The indictment also contains a forfeiture allegation that would require Bagcho, if convicted, to forfeit the proceeds of his criminal activity.
"People who commit crimes against the United States from outside our borders are not immune from justice, as this indictment proves," said Assistant Attorney General Lanny A. Breuer.
"The indictment of Haji Bagcho demonstrates our commitment to bring dangerous drug traffickers to justice," said DEA Acting Administrator Michele M. Leonhart. "This alleged drug lord sought to import heroin into our country. We will stop these narco-traffickers and stem their flow of illicit drugs."
In September 2006, the DEA and the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) began investigating Bagcho’s alleged heroin trafficking activities in the area along the Afghan/Pakistan border. Bagcho arrived in the United States from Afghanistan on June 23, 2009.
The case is being prosecuted by trial attorneys from NDDS. The investigation in this case was led by the Special Operations Division and DEA’s Kabul Country Office. Significant assistance in this matter was provided by attorneys in the Criminal Division’s Senior Federal Prosecutors Program in Kabul and the Criminal Division’s Office of International Affairs. The Government of Afghanistan, through the Attorney General’s Office, the Ministry of Foreign Affairs, the Ministry of the Interior and the Afghan Counter Narcotics Justice Task Force played significant roles in the this matter.
An indictment is a formal charging document notifying the defendant of his charges. All persons charged by an indictment are presumed innocent until proven guilty.
26 June 2009
Justice Department Files Complaint and Reaches Settlement to Improve Conditions at Texas State Facilities for Persons with Developmental DisabilitiesRead the Press Release
WASHINGTON – The Justice Department announced today a simultaneous lawsuit and settlement with the state of Texas concerning the care given to residents of the state’s 13 facilities for persons with developmental disabilities. Along with the settlement agreement, the Department will file a complaint initiating a lawsuit against the state in federal court. An independent monitor will be appointed to oversee the state’s compliance with the settlement agreement and the court will retain ultimate jurisdiction.
The facilities are state-owned and operated residential facilities that serve nearly 5,000 persons with developmental disabilities. The agreement, which will be subject to the approval of the U.S. District Court in Austin, Texas, addresses concerns about conditions and practices at the facilities, which led the Department to investigate potential violations of the Civil Rights of Institutionalized Persons Act (CRIPA).
"The Justice Department is committed to protecting the fundamental rights of all our citizens. This agreement reflects that principle by protecting the civil rights of some of Texas’s most vulnerable residents," said Attorney General Eric Holder.
The state of Texas fully cooperated with the Justice Department’s investigation. Under the terms of the settlement agreement, the state will work to ensure that facility residents are safe and that they receive the care and services necessary to meet their individualized needs. Specifically, the state has agreed to undertake a variety of measures, including: providing a safe and humane environment with zero tolerance for abuse or neglect of residents; providing adequate medical care, nursing services, and nutritional and physical support, including therapy and communication support; providing adequate psychological and behavioral services and psychiatric care; providing adequate habilitation; providing adequate integrated protections, services, treatments, and supports; and, ensuring that residents are free from undue bodily restraint. The state will also ensure that each resident is served in a setting that is as well integrated into the community as possible, as required by the Americans with Disabilities Act and the U.S. Supreme Court’s decision in Olmstead v. L.C., 527 U.S. 581 (1999).
Under the terms of the agreement, Texas will fund and work with an independent monitor, who will oversee the state’s compliance with the agreement. The agreement contemplates that the state will reach compliance within five years, but it will continue until compliance is achieved.
"We commend the state for working with the Department to ensure that persons living in these institutions receive the protection, care, and services that they need and deserve, and that they have expanded opportunities to live their lives in more community-integrated settings, consistent with federal law," said Loretta King, Acting Assistant Attorney General for Civil Rights.
The remedial agreement represents a negotiated resolution of the Justice Department’s investigation that would not have been possible without the cooperation and commitment of the Governor of Texas, Rick Perry, the Texas Department of Aging and Disability Services, the Texas Attorney General’s Office and the Texas Legislature.
The agreement comes near the tenth anniversary of the Olmstead decision, which held that unjustified institutional isolation of individuals with disabilities is a form of unlawful discrimination under the Americans With Disabilities Act. As part of the commemoration of this anniversary, President Obama launched the "Year of Community Living," a new effort aimed at providing opportunities for community living, and for full inclusion in the life of our nation, to individuals with disabilities. The Justice Department also is strengthening its partnership with the U.S. Department of Health and Human Services to ensure vigorous enforcement of the laws that protect the civil rights of individuals with disabilities.
CRIPA authorizes the Attorney General to investigate conditions in certain institutions owned or operated by, or on behalf of, state or local governments. These institutions include nursing homes, residential facilities serving persons with developmental disabilities, mental health facilities, jails, prisons, and juvenile correction facilities. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems.
More information about the Civil Rights Division of the Justice Department, and the laws it enforces, is available at http://www.usdoj.gov/crt.
GSA Contractor University Loft Company to Pay U.S. $400,000 to Resolve Contract Fraud AllegationsRead the Press Release
WASHINGTON – Following an investigation of alleged false claims and contract fraud, J Squared Inc., d/b/a University Loft Company, has reached a settlement with the United States, the Justice Department announced today. Indiana-based University Loft Company has agreed to pay the United States $400,000.
The settlement resolves allegations that the company knowingly sold Malaysian-made furniture to government purchasers in violation of the Trade Agreements Act (TAA). To further government trade policy, the Trade Agreements Act sets requirements for the country of origin of products sold to the United States. University Loft Company was required to comply with the TAA under contracts with the General Services Administration that allowed it to sell to the military and other government purchasers. University Loft Company competitor Furniture by Thurston Inc., and Lee Thurston filed this lawsuit on behalf of the U.S. government and will receive a $66,000 share of the recovery. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery obtained by the government.
"This settlement shows that companies that do business with the government will be held to the terms of their government contracts," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division.
This settlement was the result of a coordinated effort to investigate and resolve the allegations by the U.S. Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of Columbia; the General Services Administration, Office of Inspector General; the Air Force Office of Special Investigations; the Defense Criminal Investigative Service; the Naval Criminal Investigative Service; and the Department of the Navy, Acquisition Integrity Office.
This case was investigated as part of the National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, the U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrates the Justice Department’s commitment to helping ensure the integrity of the government procurement process.