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26 June 2009
Eight Miami-Area Residents Charged in $22 Million Medicare Fraud Scheme Involving Home Health Care AgenciesRead the Press Release
WASHINGTON – Eight Miami-Dade County, Fla., residents have been indicted in connection with an alleged $22 million Medicare fraud scheme operated out of Miami businesses purporting to specialize in home health care services, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Acting U.S. Attorney Jeffrey H. Sloman of the Southern District of Florida, and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS). A temporary restraining order freezing assets of the indicted defendants and their companies was also filed.
Gladys Zambrana, Javier Zambrana, Enrique Perez, Alejandro Hernandez Quiros aka Alex Hernandez, Vanessa Estrada, Vicenta Tellechea, Modesto Hidalgo and Carlos Castaneda were charged in an indictment unsealed today in Miami with conspiracy to commit health care fraud. Gladys Zambrana was also charged with four counts of health care fraud. Gladys Zambrana and Hernandez Quiros were charged with three counts each of paying health care kickbacks, while Perez, Hidalgo and Tellechea were charged with one count each of paying health care kickbacks. Gladys Zambrana, Perez, Alejandro Quiros, Tellechea and Castaneda were also charged with conspiracy to launder health care fraud proceeds.
According to the indictment, Gladys Zambrana, Perez and Hernandez Quiros operated ABC Home Health Care Inc. (ABC), listing Javier Zambrana as the owner; and Gladys Zambrana and Castaneda operated Florida Home Health Care Providers Inc. (Florida Home Health), listing Tellechea as the owner. Both ABC and Florida Home Health purported to be home health agencies that catered to Medicare beneficiaries. The indictment alleges that at both agencies, beneficiaries were recruited and paid kickbacks and bribes to arrange for their Medicare beneficiary numbers to be used by their co-conspirators to file claims with Medicare for purported home health care services. The indictment alleges that the services were not provided and were not medically necessary.
The indictment alleges that in addition to exerting ownership and control of the home health agencies, Hernandez Quiros and Castaneda acted as Medicare beneficiary recruiters for ABC and Florida Home Health, respectively; and Hidalgo, a medical assistant, falsified medical tests and records to make it appear that the services were needed. The indictment alleges that ABC billed more than $17 million to the Medicare program for services provided from January 2006 through December 2008 that were medically unnecessary and were not actually provided. During that time frame, Medicare paid more than $11 million on those fraudulent claims submitted by ABC. The indictment also alleges that from October 2007 through March 2009, Florida Home Health billed more than $5 million to the Medicare program for services that were medically unnecessary and not actually provided. During that time frame, Medicare paid more than $4 million on those fraudulent claims submitted by Florida Home Health.
The charge of conspiracy to commit health care fraud carries a maximum prison sentence of 10 years. Each charged count of health care fraud carries a maximum prison sentence of 10 years and each count of paying health care kickbacks carries a maximum prison sentence of five years. Conspiracy to launder health care fraud proceeds carries a maximum prison sentence of 10 years per count.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
In conjunction with the criminal case, on June 24, 2009, the U.S. Attorney’s Office filed a civil complaint for injunctive relief under the fraud injunction statute and obtained a temporary restraining order freezing the assets of ABC, Florida Home Health, Gladys Zambrana, Javier Zambrana, Perez, Hernandez Quiros, Castaneda and Tellechea. In addition, that temporary restraining order also freezes certain financial assets of four other companies the defendants owned or controlled and allegedly used to launder money fraudulently obtained from Medicare. The temporary restraining order is intended to preserve the remaining proceeds of the fraud for recovery by the United States as part of the criminal case and any related civil proceedings.
"This indictment is a powerful example of the ongoing impact of the Medicare Fraud Strike Force," said Assistant Attorney General Lanny A. Breuer. "Through real-time data analysis, the Strike Force is at the forefront of stopping health care fraudsters in their tracks."
"Health care fraud schemes in South Florida range from simple billing schemes and fly-by-night durable medical equipment providers, to more sophisticated frauds, including infusion fraud, fraud on the Medicare Advantage Program, and now fraud in the delivery of home health services," said Acting U.S. Attorney Jeffrey H. Sloman. "Today’s coordinated criminal and civil action delivers an effective one-two punch to health care fraudsters: they were not only caught and criminally charged, but they are also being stripped of their illegal proceeds."
"Today’s arrests demonstrate our vigilance in combating home health fraud by bringing to bear enforcement resources from across government," said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. "These kickback schemes involving conspiracies between suppliers and beneficiaries divert millions of dollars away from the Medicare beneficiaries who truly need these critical services."
The criminal case is being prosecuted by Trial Attorney N. Nathan Dimock and Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section. The civil case is being handled by Assistant U.S. Attorney Ted L. Radway of the U.S. Attorney’s Office for the Southern District of Florida. The case was investigated by the FBI and the HHS Office of Inspector General.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and Acting U.S. Attorney Sloman of the Southern District of Florida. Since strike force operations began in March 2007, 115 cases including 257 defendants have been indicted. 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 .
Indictment
Dallas Independent School District Agrees to Settle False Claims Allegations Involving E-Rate ProgramRead the Press Release
WASHINGTON - The Dallas Independent School District (DISD) has agreed to settle claims that the school district violated the False Claims Act in connection with the Federal Communications Commission’s E-Rate program, the Department of Justice and the U.S. Attorney’s Office for the Northern District of Texas announced today. Under the terms of the settlement, the DISD will relinquish more than $150 million in requests for federal funds, and will pay a total of $750,000.
The E-Rate program, created by Congress in the Telecommunications Act of 1996, and overseen by the FCC, provides funding for needy schools and libraries to connect to and use the Internet. Under, the E-Rate program – which is funded by monies collected from telephone users – schools apply for funds to pay for hardware and monthly connectivity service fees.
The United States alleged that the DISD provided false information to the E-Rate program by engaging in non-competitive bidding practices for E-Rate contracts. The United States also contended that school district officials improperly received gratuities from technology vendors, including trips, meals, golfing and the free use of a yacht. The school district’s former chief technology officer, Ruben Bohuchot, was convicted in July 2008 on bribery charges stemming from the receipt of federal funds under the E-Rate program.
"The E-Rate Program provides critical support to the poorest schools in the nation, providing them with Internet access and wiring," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "Working with our partners at the FCC Office of the Inspector General, the Department of Justice is committed to ensuring that this important program, which benefits our neediest children, not be misused."
The resolution announced today resulted from an ongoing federal investigation of fraud and anti-competitive conduct in the E-Rate program in Texas. The investigation is being conducted jointly by the Civil Division, the U.S. Attorney’s Office for the Northern District of Texas and the FCC Office of the Inspector General.
25 June 2009
UBS Client Pleads Guilty to Filing False Tax ReturnRead the Press Release
WASHINGTON - UBS client, Steven Michael Rubinstein of Boca Raton, Fla., pleaded guilty today to filing a false tax return for tax year 2004, the Justice Department and Internal Revenue Service (IRS) announced. On April 1, 2009, Rubinstein was charged with filing a false tax return that intentionally failed to disclose the existence of a Swiss bank account maintained by UBS of which he was the beneficial owner and failed to report any income earned on that account.
According to court documents and statements made during the court hearing, Rubinstein maintained a UBS bank account in the name of Hybridge International Ltd., a nominee British Virgin Island corporation. From 2001 through 2008, Rubinstein communicated with bankers at UBS via email, telephone and in person about the purchase and sale of securities worth more than 4.5 million Swiss Francs, the conversion of investments from U.S. dollars to British Pounds, the deposit and transfer of funds into and out of the UBS Swiss accounts, and the repatriation of approximately $7 million into the United States to purchase property and build his personal residence in Boca Raton. Additionally, Rubinstein deposited and sold more than $2 million in South African Krugerrands through his UBS accounts.
According to court records, on or about April 15, 2005, Rubinstein, a chartered accountant who works for an international company that assists clients to build, buy and sell yachts, filed a tax return for 2004 which he signed under the penalties of perjury. The tax return failed to report that he had an interest in, or signature authority over, a financial account at UBS in Switzerland. Additionally, Rubinstein failed to report the income he earned on any UBS Swiss bank accounts.
Additionally, Rubinstein acknowledged that he was required to file Reports of Foreign Bank and Financial Accounts (FBARs) disclosing his UBS bank account for years 2001 through 2007. FBARs must be filed with the U.S. Treasury on or before June 30 of the succeeding year. However, he admitted that he intentionally failed to file FBARs each year. As part of his plea agreement, Rubinstein agreed to pay a fifty percent penalty for the year with the highest balance in the account as of June 30 in order to resolve his civil liability for failing to file FBARs for tax years 2001 through 2007.
"As the FBAR filing deadline of June 30 rapidly approaches, taxpayers should be aware of the serious consequences of failing to report offshore income and foreign bank accounts," said Acting Assistant Attorney General John A. DiCicco. "Taxpayers who hide income offshore and
fail to comply with the FBAR filing deadline face criminal prosecution, jail time, and steep fines."
"Today’s guilty plea resolves the first prosecution of a UBS client based upon records received from UBS pursuant to the historic deferred prosecution agreement executed earlier this year. In accordance with this agreement, UBS has disclosed the identities of wealthy Americans who were illegally hiding money to evade U.S. taxes," said Acting U.S. Attorney Jeffrey H. Sloman. "More prosecutions are expected to follow, as we continue to hold accountable those who conceal money and assets in an effort to avoid their income tax obligations."
"Combating offshore tax evasion by wealthy taxpayers continues to be one of the IRS’ top priorities," said IRS Commissioner Doug Shulman. "The IRS is committed to vigorously pursuing those who illegally hide their money offshore as well as the financial institutions which help them."
Sentencing has been set for Sept. 30, 2009, before U.S. Judge Marcia G. Cooke. Rubinstein faces a maximum sentence of three years in prison and a maximum fine of $250,000 or twice the amount of pecuniary gain to the defendant or loss to the IRS. Rubinstein remains free on a $12 million bail pending sentencing.
Acting Assistant Attorney General DiCicco and Acting U.S. Attorney Sloman commended the investigative efforts of the IRS agents involved in this case. The prosecution is being handled by Senior Litigation Counsel Kevin M. Downing and Trial Attorney Michael P. Ben’Ary of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman.
In Feburary 2009, UBS entered into a deferred prosecution agreement in which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS agreed to provide the U.S. government with the identities of, and account information for, certain United States customers of UBS’s cross-border business.
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, U.S. citizens much file a FBAR, with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
Owner of New Jersey Landscaping Sub-Contractor Pleads Guilty to Defrauding the Environmental Protection AgencyRead the Press Release
WASHINGTON – The co-owner of a Martinsville, N.J., landscaping company pleaded guilty to participating in a fraud conspiracy at the Environmental Protection Agency (EPA)-designated Superfund site, Federal Creosote, located in Manville, N.J., the Department of Justice announced today.
Frederick Landgraber pleaded guilty in the U.S. District Court of New Jersey today to one count of conspiracy to defraud the EPA from approximately March 2002 until approximately June 2005 at the Federal Creosote site. As part of the conspiracy, Landgraber provided more than $30,000 in kickbacks to an employee of the prime contractor at the site in exchange for which that employee steered landscaping sub-contracts to Landgraber’s company. Landgraber and his co-conspirator subverted the competitive bidding process by submitting intentionally high cover bids on behalf of fictitious companies. In total, Landgraber’s company received approximately $1.5 million in sub-contracts at Federal Creosote.
The clean-up at the Federal Creosote site is partly funded by the EPA. Under an interagency agreement between the EPA and the Army Corps of Engineers, prime contractors oversaw the removal, treatment and disposal of contaminated soil, as well as other operations at the Federal Creosote site.
"The fictitious bids were created specifically to evade bidding requirements that are in place to ensure competition and protect taxpayer dollars in the government procurement process," said Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement of the Department’s Antitrust Division. "The Antitrust Division will continue to apprehend and prosecute those who commit these crimes."
Today’s charge is the result of an ongoing antitrust investigation into bid rigging, bribery, fraud and tax-related offenses at New Jersey Superfund sites. In addition to Landgraber, five 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. (JMJ), 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 Federal Creosote and the Diamond Alkali Superfund site, located in Newark, N.J. Sentencing for JMJ, Drimak and Stoerr is scheduled for Dec. 7, 2009.
On March 4, 2009, National Industrial Services LLC and co-owner Victor Boski pleaded guilty to participating in a separate kickback and fraud conspiracy at Federal Creosote and Diamond Alkali.
Finally, 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.
The fraud conspiracy that Landgraber is charged with carries a maximum penalty of five years in prison and a $250,000 fine. 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 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 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.
Former Memphis, Tennessee, Police Officer<br /> Convicted of Civil Rights ViolationsRead the Press Release
Carlton Moore, formerly an officer with the Memphis Police Department, pleaded guilty on Thursday in federal court in Memphis, Tenn., to three counts of violating civil rights for stealing money from motorists while acting under color of law. Moore faces up to three years in prison.
Moore admitted that on March 1 and March 14, 2008, and again on May 4, 2009, he surreptitiously stole cash from three Latino drivers he pulled over while on duty as a Memphis police officer. During these stops, Moore ordered the victims out of their vehicles, patted them down and removed personal items from them during the search. He then stole money from the victims before returning their personal items and releasing them.
"Police officers who abuse their authority for personal gain will be vigorously prosecuted," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Our laws give every American a fundamental right not to be victimized by rogue police officers."
"Officer Moore dishonored his badge and his fellow officers when he chose to steal from innocent immigrants during traffic stops. Protecting the rights of every person from abuse committed by public officials is of the highest priority of this office," said Larry Laurenzi, U.S. Attorney for the Western District of Tennessee.
"Our citizens have a right to ethical treatment from all law enforcement officers and we, as civil servants, must never forget that we have sworn an oath to serve and protect them," said My Harrison, Special Agent in Charge of the FBI Memphis Field Office.
"We have a responsibility to our citizens, visitors and the outstanding members of the Memphis Police Department. We will not tolerate those who dishonor our badge by criminal activity. Mr. Moore admitted to robbing Hispanic members of our community while on-duty, in uniform and in a marked squad car," said Larry A. Godwin, Director of the Memphis Police Department. "After initiating this investigation, we worked in conjunction with the FBI to capture Moore as he committed the crime. We police our own and criminals wearing our badge will be aggressively pursued just as any other criminal in Memphis."
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit the willful use of excessive force or other acts of misconduct by law enforcement officials. The Division has compiled a significant record on criminal civil rights prosecutions.
This case was investigated by the FBI and the Memphis Police Department. Assistant U.S. Attorney Steve Parker from the U.S. Attorney’s Office in Memphis and Trial Attorney Jonathan Skrmetti from the Civil Rights Division are prosecuting the case.
Former Contracting Officer Pleads Guilty to Filing False Tax ReturnsRead the Press Release
WASHINGTON – Tijani Ahmed Saani, a former civilian employee of the U.S. Department of Defense, pleaded guilty today to filing false tax returns for tax years 2003 through 2007, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Assistant Attorney General Christine A. Varney of the Antitrust Division.
Saani, 53, a former resident of Kuwait City, Kuwait, worked as a contracting officer in Kuwait from 1994 until his arrest in May 2008. According to the indictment to which Saani pleaded guilty, he worked on detail from 2002 to 2007 at Camp Arifjan, Kuwait. Saani pleaded guilty today in U.S. District Court for the District of Columbia before Judge Richard J. Leon to a five-count indictment, admitting he filed false tax returns for tax years 2003 through 2007. He also admitted that during that period of time he maintained overseas bank accounts in the United States and the Jersey Channel Islands that he failed to properly report on his income tax returns.
The indictment, filed Sept. 19, 2008, charged that the tax returns Saani filed were false because he failed to disclose his interest in or authority over multiple foreign bank accounts, failed to report interest earned from those bank accounts, and failed to report other additional income on his tax returns for tax years 2003 through 2007.
Saani faces up to three years in prison and a fine of $100,000 for each of the five charged counts to which he pleaded guilty. His sentencing has been scheduled for Oct. 8, 2009.
This case is being prosecuted by Trial Attorneys Kathryn H. Albrecht, Richard B. Evans and Ann C. Brickley of the Criminal Division’s Public Integrity Section, which is headed by Chief William M. Welch II, as well as Trial Attorneys Mark W. Pletcher, Emily W. Allen and Ryan Danks of the Antitrust Division’s National Criminal Enforcement Section, which is headed by Chief Lisa Phelan. Assistance was also provided by the Criminal Division’s Office of International Affairs.
The case is being investigated by the Internal Revenue Service - Criminal Investigation, Army Criminal Investigation Division, Defense Criminal Investigative Service, U.S. Immigration and Customs Enforcement, FBI and the Special Inspector General for Iraqi Reconstruction.
Today’s guilty plea resulted from the Department’s ongoing investigation into procurement fraud in Iraq and Afghanistan. The Department's 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 bid rigging, bribery or other criminal conduct regarding DOD contracts is urged to call the Defense Criminal Investigative Service at 800-424-9098 or [email protected]; Army Criminal Investigation Division at www.cid.army.mil; or the FBI at 800-225-5324.
Florida Man Indicted in Connection with Fraudulent Vending Machine Business Opportunity VentureRead the Press Release
WASHINGTON – A Tampa federal grand jury has charged a Florida man with criminal contempt of a federal court order in connection with the operation of a fraudulent vending machine business opportunity, the Justice Department announced today. The criminal charges form part of the government’s continued nationwide crackdown on business opportunity fraud.
The indictment returned by the grand jury alleges that Mark Miller, 40, of Maitland, Fla., fraudulently marketed and sold business opportunities nationwide under the names Site Selectors Inc., Five-Star Vending Inc., Markland Group Inc. and Break Time Vending. Miller and his representatives allegedly told customers that, for purchase prices of $2,500 or more, they would receive snack and drink vending machines and be able to place them in profitable locations through the use of Miller’s locating services.
Miller was subject to a 2003 federal court order that, among other things, banned him from the sale of business ventures, forbid misrepresentations in the sale of such ventures (should he decide to violate the ban), and required that he monitor his salespeople to ensure they made no misrepresentations. According to the indictment, Miller violated this order by selling vending machine business ventures out of Seminole and Orange Counties in Florida from at least April 2005 through at least April 2007, making various misrepresentations when he sold the ventures, and using an alias to do so. Miller’s violations allegedly cost consumers more than $450,000.
The indictment further alleges that Miller’s customers complained to him and his representatives about not receiving purchased vending machines or locating services. Miller allegedly refused to give refunds and instead told, and instructed employees to tell, complaining customers false stories about the reasons for his not providing the promised business ventures.
"This case stems from an injunction we obtained after the Federal Trade Commission referred a civil case to us involving Mark Miller and a business opportunity he sold called Century Placements that also involved vending machines. The 2003 order in the civil case gave Miller a chance to obey the law, but instead he continued with the same type of illegal scheme," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "When people disobey court orders and cause consumers to lose money, we will not hesitate to seek justice by filing criminal contempt charges. In fact, we have charged over 100 individuals with business opportunity-related felonies in the past five years."
Miller is charged with seven felony counts of criminal contempt. If convicted, Miller faces imprisonment and a possible fine. An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Assistant Attorney General West commended the efforts of the U.S. Postal Inspection Service, which investigated the criminal case. The case is being prosecuted by trial attorney Mark Josephs of the Civil Division’s Office of Consumer Litigation.
24 June 2009
Medicare Fraud Strike Force Operations Lead to Charges Against 53 Doctors, Health Care Executives and Beneficiaries for More Than $50 Million in Alleged False Billing in DetroitRead the Press Release
WASHINGTON – Fifty-three people have been indicted for schemes to submit more than $50 million in false Medicare claims in the continuing operation of the Medicare Fraud Strike Force in Detroit, Attorney General Eric Holder, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius and FBI Director Robert Mueller announced today. The Strike Force in Detroit is the third phase of a targeted criminal, civil and administrative effort against individuals and health care companies that fraudulently bill the Medicare program.
While the indictments were returned by a grand jury in Detroit, individuals were arrested today in Detroit, Miami and Denver as a result of phase three operations of the Strike Force. 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.
"As demonstrated by today’s charges and arrests, we will strike back against those whose fraudulent schemes not only undermine a program upon which 45 million aged and disabled Americans depend, but which also contribute directly to rising health care costs that all Americans must bear," said Attorney General Holder. "The vast majority of doctors, patients, and medical companies do the right thing and work with the Medicare program to provide access to medical services. To those who work diligently and ethically to provide medical care through the Medicare program, we will work with you to root out the few who corrupt the system and taint the good reputations of health professionals everywhere."
"The Obama Administration is committed to turning up the heat on Medicare fraud and employing all the weapons in the federal government’s arsenal to target those who are defrauding the American taxpayer," said HHS Secretary Kathleen Sebelius. "Thanks to cooperation from across the government and some of the best law enforcement professionals in the country, today we were able to save millions of dollars from being lost to criminals and send a powerful message to those who seek to defraud the system, that we are coming after them. But our joint efforts on HEAT don’t just stop at the jailhouse door. Our Medicare program is working closely in partnership with our own and other law enforcement operations to prevent fraud from happening in the first place. Every dollar we can save by stopping fraud can be used to strengthen the long-term fiscal health of Medicare, bring down costs and deliver better service to Medicare beneficiaries."
The Strike Force operations in Detroit are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a renewed effort announced in May 2009 between the Department of Justice and HHS to focus their joint efforts to prevent fraud and enforce current anti-fraud laws around the country. The HEAT taskforce, co-chaired by Deputy Attorney General David Ogden and Deputy Secretary Bill Corr, is made up of top-level law enforcement agents, prosecutors and staff from both Departments and their operating divisions. In the May 2009 announcement, Attorney General Holder and Secretary Sebelius announced the expansion of the Strike Force into Detroit and Houston to build upon existing partnerships between the agencies in a heightened effort to reduce fraud and recover taxpayer dollars.
Today, federal agents from the FBI and the HHS Office of Inspector General (HHS-OIG) began executing arrest warrants in Detroit, Miami and Denver as part of a concentrated effort to address fraud in the metro-Detroit area. Charges were unsealed today against 53 individuals who are accused of various Medicare fraud offenses, including conspiracy to defraud the Medicare program, criminal false claims and violations of the anti-kickback statutes. The Strike Force operations in Detroit have identified two primary areas – infusion therapy and physical/occupational therapy providers – in which schemes were allegedly orchestrated to defraud the Medicare program.
According to the indictments, the defendants charged today participated in schemes to submit claims to Medicare for treatments that were in fact medically unnecessary and oftentimes, never provided. In many cases, indictments allege that beneficiaries accepted cash kickbacks in return for allowing providers to submit forms saying they had received the unnecessary and not provided treatments. Collectively, the physicians, medical assistants, patients, company owners and executives charged in the indictments are accused of conspiring to submit more than $50 million in false claims to the Medicare program.
"We will continue to work together in the months to come to identify and stop those who would line their own pockets with taxpayer money – those who seek to benefit at the expense of our health care system, our economy and our collective well-being," said FBI Director Mueller.
"Today’s landmark series of arrests in Detroit and across the country demonstrates that health care fraud can happen anywhere in America," said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. "We will continue to detect and respond rapidly to emerging fraud schemes to protect our federal health care programs and conserve scarce health care dollars so critically needed for the care of our beneficiaries."
The work of the Detroit Strike Force is another important step in the multi-phase enforcement and regulatory HEAT initiative designed to reduce the potential for Medicare and Medicaid fraud. Since its inception in March 2007 with phase one in South Florida and expansion to phase two in Los Angeles in May 2008, the Strike Force has obtained indictments of more than 250 individuals and organizations that collectively have billed the Medicare program for more than $600 million. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Each of the three Detroit Strike Force teams is led by a federal prosecutor supervised by the Justice Department’s Criminal Division’s Fraud Section in Washington, D.C., and the U.S. Attorney’s Office for the Eastern District of Michigan. Each team has four to six agents, with at least one agent from the FBI and HHS-OIG.
The cases are being prosecuted by attorneys from the Fraud Section in the Justice Department’s Criminal Division, including Deputy Chief Kirk Ogrosky and Trial Attorneys John K. Neal and Benjamin D. Singer as well Special Assistant U.S. Attorney Thomas W. Beimers in the U.S. Attorney’s Office for the Eastern District of Michigan, on detail from HHS-OIG.
An indictment is merely an allegation, and defendants are presumed innocent until and unless proven guilty.
To learn more about the HEAT team, go to: www.hhs.gov/stopmedicarefraud
Fact Sheet - Medicare Fraud Strike Force
Fact Sheet - Medicare Fraud Strike Force - Detroit
Federal Court Enjoins Las Vegas Man Whose Tax-fraud Scheme<br /> Is Estimated to Have Cost Treasury $31 MillionRead the Press Release
A federal court has permanently enjoined Reinhold Sommerstedt, a Las Vegas-based promoter of a sham trust tax scam. According to papers filed in the case, Sommerstedt created phony domestic and foreign trusts to move customers’ assets from the United States to offshore banks located in the West Indies. Customers allegedly used phony loans and gifts to repatriate their money while concealing it from the Internal Revenue Service (IRS). Customers paid as much as $14,500 to participate in the scheme.
In granting the injunction, Judge Brian E. Sandoval of the U.S. District Court for the District of Nevada said that Sommerstedt failed to present "any evidence to refute the government's indication that Sommerstedt's trust scheme was organized and operated solely for the purpose of improperly reducing his customers' federal tax liabilities." The injunction bars Sommerstedt from promoting the trust scheme or any similar scheme. He must also give the government a list of his customers’ names, addresses, e-mail addresses, telephone numbers and Social Security numbers.
The court found that Sommerstedt’s actions were "not an isolated act of misconduct" and that the scheme "involved more than 180 customers." The government complaint in the case alleged that the scheme cost the U.S. Treasury more than $31 million in lost tax revenue. The court said that it was "not persuaded by Sommerstedt’s self-serving statement that an injunction is unnecessary because he will voluntarily refrain from future fraudulent conduct," noting that Sommerstedt has "never acknowledged the wrongfulness of his actions."
The other three defendants in the case previously consented to permanent injunctions. They are Daniel Young of Las Vegas, who allegedly created phony domestic and foreign trusts to move customers’ assets from the United States to offshore banks located in the West Indies;
Lynn Lakers of Boulder City, Nev., a tax-return preparer who allegedly prepared false tax returns for the phony trusts used in the scheme; and Stephen Nestor of Boise, Idaho, a former IRS revenue officer who allegedly signed false tax returns on behalf of customers’ bogus trusts.
Offshore transactions and trust misuse are two of the IRS’s Dirty Dozen tax scams for 2009.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Robert Metcalfe, the Justice Department trial attorney who handled the case.
In this decade the Justice Department has obtained injunctions against more than 410 tax-fraud promoters and tax-return preparers. More information about these efforts can be found on the
Justice Department Web site.
Alabama Resident Pleads Guilty to Filing False Tax Returns<br /> in Connection with Embezzlement SchemeRead the Press Release
WASHINGTON - Sims Lawson Jr., a resident of Killen, Ala., pleaded guilty yesterday to filing false tax returns for years 2002 through 2004, the Justice Department and Internal Revenue Service (IRS) announced. Lawson appeared before Judge R. David Proctor in Birmingham, Ala., and admitted that he failed to pay federal income taxes of $369,038 and state income taxes of $50,938.
According to the criminal information and plea agreement, Lawson willfully omitted from his tax returns income that he had embezzled from an estate that he managed. Lawson was hired in 2002 to co-manage an estate, and his duties included managing the books and records of the estate, collecting on loans made by the estate and determining the estate’s value for tax purposes. In 2005, the estate received an ex parte court order removing Lawson from his responsibilities as trustee. It was later determined that Lawson had misappropriated at least $721,417 in 2002, 2003 and 2004, which he also failed to report on his personal tax returns. The estate also paid Lawson an additional $297,352, which he failed to report on his personal tax return.
According to the criminal information and plea agreement, throughout the time period he was employed with the estate, Lawson misappropriated money from the estate in several ways. For example, Lawson wrote checks from the estate payable to himself and used estate checks to pay his personal expenses. Lawson fraudulently used estate checks to pay for the installation of a swimming pool at his personal residence, renovations on his personal residence, and extravagant trips to locales including New York City, Las Vegas, the Sundance Film Festival, the Bahamas and Disney World. Lawson also purchased timeshares at the Atlantis resort in the Bahamas, as well as timeshares at the Disney World resort in Orlando, Fla., with the embezzled funds. Lawson also used funds from the estate to purchase jewelry and tickets to various events. All of these renovations and purchases constituted income to Lawson.
Judge Proctor has set sentencing for Oct. 6, 2009. Lawson faces a maximum sentence of nine years in prison and a maximum fine of $750,000 or twice the gross gain to the defendant or twice the gross loss to the IRS.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division attorneys Jed Silversmith and Matthew Mueller, who prosecuted the case. He also thanked the IRS Criminal Investigation agents in the Birmingham office, who investigated the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax.
23 June 2009
United States Settles Claims Alleging Bid Rigging Conspiracy with Two German Moving CompaniesRead the Press Release
The United States has settled with two German moving companies relating to allegations of bid rigging in violation of the False Claims Act. ITO Möbel Transport GmbH has agreed to pay $150,000, and Birkart Globistics GmbH & Co. Logistik and Service KG will pay $222,146. The companies subcontracted with American freight forwarding firms to transport within Germany the household goods belonging to military and civilian Department of Defense (DOD) personnel.
The United States intervened in two lawsuits alleging that in November 2000, Gosselin Worldwide Moving N.V., a Belgian company, through its managing director Marc Smet, and four German moving companies, including ITO and Birkart, executed a written agreement to raise the rates that they charged to American freight forwarding companies for packing and unpacking services within Germany and for services performed at German ports. The agreement further provided that none of the companies would perform work for less than the agreed-upon rate.
The American freight forwarding companies then submitted bids to the DOD at specific elevated price levels according to the instructions of the conspirators and were subsequently awarded transportation contracts based on their non-competitive bids. As a result of the conspiracy, the DOD overpaid for transportation contracts beginning in 2001 and continuing at least through 2002. To date, the United States has recovered more than $14 million in connection with this bid-rigging conspiracy.
"These settlements reflect the United States’ determination to deter schemes that undermine the military’s efforts to acquire services at a competitive price," said Tony West, Assistant Attorney General of the Justice Department’s Civil Division.
The Gosselin conspiracy was brought to the United States’ attention by two lawsuits, one of which was filed in the U.S. District Court for the Eastern District of Virginia by two German citizens who worked with one of the German moving companies, and the other which was filed in the Eastern District of Missouri by the owner of an American freight forwarding company. The suits were filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens, known as "relators," to sue on behalf of the government to recover federal funds that were obtained by false or fraudulent claims.
In addition to monetary payments, the settling German companies have agreed to cooperate with the government as it pursues claims against the remaining defendants, which include Gosselin Worldwide Moving N.V., Marc Smet, Andreas Christ Spedition & Möbeltransport GmbH, and the Viktoria Schäfer entities.
Media Executive John Malone to Pay $1.4 Million Civil Penalty for Violating Antitrust Premerger Notification RequirementsRead the Press Release
WASHINGTON — Media executive John C. Malone will pay a $1.4 million civil penalty to settle charges that he violated premerger reporting and waiting requirements when he acquired Discovery Holding Co. voting securities, the Department of Justice announced today.
The Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Malone for violating the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976. At the same time, the Department filed a proposed settlement that, if approved by the court, will settle the charges.
Malone is Chairman of the Board of Liberty Media Corporation and Chief Executive Officer and Chairman of the Board of Discovery Holding Co., a leading provider of non-fiction television entertainment headquartered in Englewood, Colo.
According to the complaint, Malone failed to comply with the antitrust premerger notification requirements of the HSR Act before acquiring voting securities of Discovery in August 2005, and continued to acquire Discovery voting securities through April 2008. On June 12, 2008, Malone made a corrective filing for the acquisitions of Discovery voting securities. Before the expiration of the waiting period triggered by the June 12, 2008, filing, Malone made additional acquisitions of Discovery voting securities on June 14, 2008, when he exercised two options. Malone exercised these options using an escrow arrangement, but the escrow arrangement did not prevent beneficial ownership of the voting securities from passing to Malone in violation of the Act. The complaint alleges that Malone was in violation of the HSR Act from Aug. 9, 2005, through July 14, 2008.
The Hart-Scott-Rodino Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements on individuals and companies over a certain size before they consummate acquisitions resulting in holding stock or assets above a certain value, which was $53.1 million in August 2005, and with annual adjustments to reflect changes in gross national product is currently $65.2 million.
Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice. For a party in violation of the HSR Act before Feb. 10, 2009, the maximum civil penalty is $11,000 a day for each day it is in violation of the Act. For a party in violation of the HSR Act on or after Feb. 10, 2009, the maximum penalty is $16,000 a day.
Justice Department Statement Regarding Recent Story Concerning Government’s Litigation Involving UbsRead the Press Release
WASHINGTON – “There is no basis for the report in The New York Times. While the Department is always willing to consider settlement in any case, the suggestion that the Department is planning to drop this suit is simply untrue. The Department is continuing with the case against UBS and will file its brief asking the court to enforce the summons on June 30.”
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Justice Department Intervenes in Americans with Disabilities Act Lawsuit<br /> Against Transportation ProviderRead the Press Release
WASHINGTON – The Justice Department today announced that it has moved to intervene in a lawsuit filed in federal court in Jackson, Miss., challenging inaccessibility in Jackson’s public transportation system. The pending lawsuit, filed by 11 residents of Jackson with disabilities and two non-profit organizations that work on behalf of people with disabilities, alleges violations of the Americans with Disabilities Act and the Rehabilitation Act of 1973 (ADA).
The Department’s complaint alleges that the city of Jackson has failed to maintain, promptly repair and keep in operative condition the wheelchair lifts of the city’s fixed route bus system, known as JATRAN; has failed to adequately train personnel to properly assist passengers with disabilities; has failed to provide the required level of service to passengers of Handilift, the ADA complementary paratransit service; and has otherwise denied individuals with disabilities benefits to which they are entitled under the law.
"Accessible public transportation is vital to people with disabilities so that they can fully participate in their community," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Failing to provide required accessibility discriminates against persons with disabilities. Eradicating such discrimination and ensuring the full accessibility that the law requires is one of the Civil Rights Division’s highest priorities."
The Department’s complaint details allegations of injury caused by inaccessible public transportation in Jackson. The factual allegations in the Department’s filing include frequent instances where individuals who use wheelchairs are forced to wait while multiple JATRAN buses with inoperable lifts pass them by, often leaving them stranded as they attempted to get to work, to medical appointments and to numerous other essential destinations such as grocery shopping. The government further alleges that the availability of Handilift service to ADA paratransit eligible persons is significantly limited by capacity constraints, including failure to provide next-day service, failure to plan to meet the demand for paratransit services, a substantial numbers of trip denials, significantly untimely pickups and limitations to telephone reservation capacity.
The Americans with Disabilities Act, the Rehabilitation Act of 1973, and their implementing regulations detail the requirements with which fixed-route and complementary paratransit public transportation systems must comply.
"The decision of the Department to intervene in this matter indicates our commitment to protect the rights of all Americans and advance the ability of every individual to fully participate in society," said Stan Harris, Acting U.S. Attorney for the Southern District of Mississippi.
The decision to seek to intervene in the lawsuit reflects the Civil Rights Division’s ongoing commitment to actively enforce federal disability discrimination laws.
City of Duluth, Minnesota, and Western Lake Superior Sanitary District Agree to Eliminate Sewer OverflowsRead the Press Release
WASHINGTON—The city of Duluth, Minn., and the Western Lake Superior Sanitary District have agreed to make improvements to the area’s sewer system, estimated to cost about $130 million, to eliminate sanitary sewer overflows in an agreement filed today in U.S. District Court inMinneapolis Minn., the Justice Department and U.S. Environmental Protection Agency (EPA) announced.
Duluth and the district have also agreed to pay a combined penalty of $400,000 to be equally divided between the United States and the state of Minnesota. The agreement requires that the improvements to the system to eliminate sanitary sewer overflows be in place by 2016.
According to EPA, between 1999 and 2004, the city and the district experienced at least 250 sanitary sewer overflows. These overflows resulted in at least 47 million gallons of untreated sewage entering the St. Louis River and Lake Superior.
"Duluth and the sewer district worked with the federal and state governments to agree on a remedial plan and settlement that will protect water quality in the Duluth area without the need for expensive and time-consuming litigation," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We are pleased the state of Minnesota joined us in this case, as such joint enforcement efforts have repeatedly proved effective in Clean Water Act cases."
"EPA is pleased to have reached an agreement with Duluth and the Western Lake Superior Sanitary District," said Acting Regional Administrator Bharat Mathur. "Eliminating sanitary sewer overflows will benefit public health and water quality in the St. Louis River and Lake Superior."
The Western Lake Superior Sanitary District provides sewer service to 18 communities and services a population of about 130,000. Duluth, with a population of 90,000, is the largest community served by the district.
The consent decree, lodged today in the U.S. District Court for the District of Minnesota, 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.
22 June 2009
Washington State Police Officer Indicted<br /> on Federal Civil Rights ChargesRead the Press Release
A two-count federal grand jury indictment returned against Karl F. Thompson Jr., a Spokane, Wash., police officer, was unsealed today.
The indictment charges Thompson, 61, with the deprivation of Otto Zehm’s civil rights on March 18, 2006, by repeatedly striking him with a baton and tasering him, resulting in bodily injury. The indictment also charges Thompson with making a false entry in a record in a matter investigated by a federal agency.
The civil rights charge carries a maximum penalty of 10 years imprisonment, a $250,000 fine, up to three years of court supervision after release and restitution. The falsification of records in a matter investigated by a federal agency carries a maximum penalty of 20 years imprisonment, a $250,000 fine, and up to three years of court supervision after release.
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
The case was investigated by the FBI and is being prosecuted by Civil Rights Division Trial Attorney Victor Boutros and Assistant U.S. Attorney Timothy Durkin.
Statement of Attorney General Eric Holder on U.S. Supreme Court’s Ruling in Voting Rights Act Case, Northwest Austin Municipal Utility District No. 1 v. HolderRead the Press Release
"The Supreme Court’s decision to leave in place Section 5 of the Voting Rights Act marks a victory for voting rights in America. In a nearly-unanimous decision, the Court not only recognized the historic achievements of the Voting Rights Act as helping make us a ‘very different Nation’, but also ensured that this law will continue to protect free and fair access to the voting booth. The Department of Justice will continue to vigorously enforce the Voting Rights Act, which was renewed with overwhelmingly bipartisan support in Congress in 2006.
"As a nation, we have made great strides in advancing and protecting civil rights in the past 44 years since the Voting Rights Act was first passed. But there is still more work to be done to fulfill the promise of full voting rights, free from discrimination, for all Americans."
Detroit Spammer and Four Co-Conspirators Plead Guilty to <br /> Multi-Million Dollar E-mail Stock Fraud SchemeRead the Press Release
Five individuals pleaded guilty today in federal court in Detroit for their roles in a wide-ranging international stock fraud scheme involving the illegal use of bulk commercial e-mails, or "spamming."
Alan M. Ralsky, 64, of West Bloomfield, Mich., and Scott K. Bradley, 38, also of West Bloomfield, both pleaded guilty to conspiracy to commit wire fraud, mail fraud and to violate the CAN-SPAM Act. Ralsky and Bradley also pleaded guilty to wire fraud, money laundering and violating the CAN-SPAM Act. Under the terms of his plea agreement, Ralsky acknowledges he is facing up to 87 months in prison and a $1 million fine under the federal sentencing guidelines while Bradley acknowledges that he is facing up to 78 months in prison and a $1 million fine under the federal sentencing guidelines.
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.
John S. Bown, 45, of Fresno, Calif., pleaded guilty to conspiracy to commit wire fraud, mail fraud and to violate the CAN-SPAM Act. He also pleaded guilty to conspiring to commit computer fraud by creating a botnet and violating the CAN-SPAM Act. A botnet is a network of computers that have been infected by malicious software. Under the terms of his plea agreement, Bown acknowledges he is facing up to 63 months in prison and a $75,000 fine under the federal sentencing guidelines.
William C. Neil, 46, of Fresno, pleaded guilty to conspiring to violate the CAN-SPAM Act and violating the CAN-SPAM Act. Under the terms of his plea agreement, Neil acknowledges he is facing up to 37 months in prison and a $30,000 fine under the federal sentencing guidelines.
James E. Fite, 36, of Culver City, Calif., pleaded guilty to conspiracy to commit wire fraud, mail fraud, and to violate the CAN-SPAM Act. He also pleaded guilty to violating the CAN-SPAM Act and making false statements to FBI agents. Under the terms of his plea agreement, Fite acknowledges he is facing up to two years in prison and a $30,000 fine under the federal sentencing guidelines. All five defendants are scheduled to be sentenced on Oct 29, 2009.
"We will not allow criminals to use e-mail as a conduit for fraud. This prosecution, the Department’s largest to date under the CAN-SPAM Act, underscores our strong and steadfast commitment to ridding our financial markets and cyberspace of e-fraudsters looking to prey on innocent victims," said Assistant Attorney General Lanny A. Breuer.
"Alan Ralsky was at one time the world’s most notorious illegal spammer," said U.S. Attorney Terrence Berg. "Today Ralsky, his son-in-law Scott Bradley, and three of their co-conspirators stand convicted for their roles in running an international spamming operation that sent billions of illegal e-mail advertisements to pump up Chinese ‘penny’ stocks and then reap profits by causing trades in these same stocks while others bought at the inflated prices. Using the Internet to manipulate the stock market through spam e-mail campaigns is a serious crime, and this case serves notice that federal law enforcement has the both the capability and the will to successfully investigate, prosecute and punish such cybercrimes."
"Cyber crime investigations are a top priority of the FBI and we will continue to aggressively investigate those individuals who use and hide behind computers to commit various crimes," said Andrew G. Arena, Special Agent in Charge, FBI.
"In today’s competitive international business world, there will always be a select few who illegally manipulate the system for their own profit," said Maurice M. Aouate, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS-CI). "IRS CI will continue to diligently follow the money and assist in the seizure and forfeiture of any ill-gotten gains from their illegal business practices."
"Today marks a victory for all those who entrust their money to others within the U.S. economy. Postal Inspectors have protected Americans from those that have used the U.S. Mail for fraudulent purposes since the passage of the Mail Fraud Statute in 1872," said Joseph A. Pirone, U.S. Postal Inspector in Charge. "Ralsky’s and Bradley’s pleas demonstrate the Postal Inspection Service’s continuing commitment to protect the public."
According to court records, from January 2004 through September 2005, Ralsky, Bradley, Judy Devenow, Bown, William Neil, Anki Neil, James Bragg, Fite, Peter Severa, How Wai John Hui, Francis Tribble, and others engaged in a related set of conspiracies designed to use spam e-mails to manipulate thinly traded stocks and profit by trading in those stocks once their share prices increased after recipients of the spam e-mails traded in the stocks being promoted. The defendants were indicted in the Eastern District of Michigan in December 2007.
Ralsky served as the chief executive officer and primary deal maker for the spam e-mail operation. Bradley, Ralsky’s son-in-law, served as the chief financial officer and director of operations for the spam e-mail operation. Bown, who was chief executive officer of an Internet services company, GDC Layer One, served as the chief technology officer for the spam e-mail operation. William Neil, who was an employee of GDC Layer One, built and maintained a computer network used to transmit spam e-mails as part of the conspiracy. Fite was a contract spammer who hired others to send spam e-mails as part of the conspiracy.
Devenow, Hui and Tribble previously pleaded guilty for their roles in the conspiracy. Devenow served as a manager for the spam e-mail operation and also sent spam e-mails. Tribble planned and directed the stock trading carried out in furtherance of the conspiracy. Hui, who was the CEO of China World Trade, served as the lead dealmaker representing the companies whose stocks were being promoted via spam e-mail.
According to court documents, many of the spam e-mails promoted thinly traded "pink sheet" stocks for U.S. companies owned and controlled by individuals in Hong Kong and China. The spam e-mails contained materially false and misleading information or omissions and were created and sent using software programs that made it difficult to trace them back to the conspirators. According to the indictment, the conspirators used wire communications, the U.S. mail and common carriers to further their frauds. The conspirators also engaged in money laundering involving millions of dollars generated by their manipulative stock trading.
According to the indictment, the defendants used various illegal methods in order to maximize the amount of spam that evaded spam-blocking devices and tricked recipients into opening, and acting on, the advertisements in the spam. These included using falsified "headers" in the e-mail messages, using proxy computers to relay the spam, using falsely registered domain names to send the spam, and also making misrepresentations in the advertising content of some of the underlying e-mail messages.
The cases against Anki Neil, Bragg and Severa are still pending. An indictment is merely an accusation and defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
The charges arose after a three-year investigation, led by the FBI with assistance from the U.S. Postal Inspection Service and IRS-CI 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.
19 June 2009
Two Military Officials Plead Guilty to Bribery, Fraud and Conspiracy <br /> Related to Defense Contracts in AfghanistanRead the Press Release
Two U.S. military officials pleaded guilty to various bribery, fraud and conspiracy charges relating to Department of Defense (DOD) contracts in Afghanistan. A third military official pleaded guilty to receiving stolen property, which was obtained through the bribery conspiracy. In addition, four DOD contractors and four affiliated contracting companies were indicted for their roles in paying bribes to the military officials and otherwise defrauding the United States.
The pleas of the military officials were filed today in U.S. District Court in Chicago. A superseding indictment of the contractors and companies was filed yesterday in U.S. District Court in Chicago.
"As the United States continues to expend resources in Afghanistan, the Antitrust Division will remain vigilant in prosecuting individuals and companies who divert funds for their personal gain," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division.
Christopher P. West, a U.S. Army Major from Chicago who served in Afghanistan from 2004 to 2005, pleaded guilty to charges contained in the superseding indictment including three counts of bribery and three counts of conspiracy. West admitted to accepting $90,000 cash from contractors in exchange for awarding DOD contracts at Bagram Airfield, Afghanistan. West also pleaded guilty to two additional counts of conspiracy for accepting cash payments from contractors in exchange for defrauding DOD by certifying inflated numbers of bunkers and barriers delivered at Bagram Airfield, causing the DOD to pay for goods that were invoiced and paid for but never received. Bunkers and barriers are cement structures used for force protection and perimeter walls. West agreed to pay $500,000 in restitution to DOD, to forfeit any fraud-related assets to the United States and to cooperate with the Department’s investigation.
Charles Patton, a friend of West’s and a U.S. Army Sergeant from Chicago, pleaded guilty today to charges of receiving stolen property. Although a member of the same military unit as West, Patton was not deployed to Afghanistan. Patton admitted that he received shipments of cash from West in 2004 and 2005, while West was deployed. Patton hid the money in his home until West returned to the United States and retrieved the cash. Later, at West’s request, Patton moved the money to a safe deposit box in his own name. Patton has agreed to pay $100,000 in restitution, to forfeit any fraud-related assets and to cooperate with the Department’s investigation.
Patrick W. Boyd, a U.S. Air Force Master Sergeant from Rockledge, Fla., who served as a contracting officer at Bagram Airfield, Afghanistan in 2004 and 2005, pleaded guilty to three counts of bribery and three counts of conspiracy for accepting $90,000 cash from contractors in exchange for the award of DOD contracts at Bagram Airfield. Boyd also admitted to the additional offense conduct of receiving $25,000 in cash from a contractor in return for the award of a telecommunications infrastructure contract at Bagram Airfield. Boyd has agreed to pay $130,000 in restitution to the DOD, to forfeit any fraud-related assets and to cooperate with the Department’s investigation.
The superseding indictment also charges brothers Assad John Ramin and Tahir Ramin, both U.S. citizens, and their companies AZ Corporation and Top’s Construction, Noor Alam, an Afghan citizen, and his company Northern Reconstruction Organization, and Abdul Qudoos Bakhshi, an Afghan citizen, and his company Naweed Bakhshi Company, with various counts of bribery, fraud and conspiracy. The superseding indictment alleges that these individuals and their companies conspired to and did pay bribes to West, Boyd and others in order to obtain contracts for supplying concrete bunkers and barriers and asphalt paving. It also charges that the contractors, along with West and others, conspired to and did inflate the number of bunkers and barriers delivered to Bagram Airfield, thereby causing the DOD to pay for bunkers and barriers that were invoiced and paid for but never delivered.
West and Boyd were originally indicted in August 2008 on bribery and conspiracy charges. At the same time, the Ramin brothers, Alam and his company and Bakhshi and his company, were indicted on similar charges. Today’s superseding indictment adds AZ Corporation and Top’s Construction to the indictment, as well as mail fraud charges and additional bribery and conspiracy charges.
"It is shameful that some members of our Armed Forces have conspired with contractors to unjustly enrich themselves while the U.S. is engaged in combat operations in Afghanistan," said Sharon E. Woods, Director, Defense Criminal Investigative Service. "These crimes are particularly contemptible because they involve military members and contractors who are suppose to ensure our troops receive the best support and equipment possible to sustain our military operations. DCIS and its law enforcement partners will aggressively pursue allegations of corruption in Afghanistan and will continue to protect America's warfighters both overseas and in the U.S."
"Today’s announcement makes it perfectly clear that such activity by anyone affiliated with the U.S. Army, in or out of uniform, will not be tolerated. We will continue to investigate allegations of this nature and do everything in our power to see that persons responsible are held accountable and brought to justice," said Brigadier General Rodney Johnson, the Commanding General of the U.S. Army Criminal Investigation Command.
The individuals face up to 20 years in prison and a fine of $250,000 for the mail fraud conspiracy charge, and up to five years in prison and a fine of $250,000 for each of the bribery conspiracy counts. The maximum fine for these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum. The individuals also face up to 15 years in prison and fines up to three times the amount or value of the bribe for each of the bribery counts. Each corporate defendant faces a maximum fine of up to $500,000 on each charged offense.
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.
Stanford Financial Group Executives and Former Chairman of Antiguan Bank Regulator <br /> Indicted for Fraud and ObstructionRead the Press Release
Robert Allen Stanford, 59, chairman of the Houston-based Stanford Financial Group (SFG), three SFG executives and the former chief executive officer of the Antiguan bank regulatory agency have been indicted on fraud and obstruction charges related to a $7 billion scheme to defraud investors.
Also charged in an indictment returned in Houston yesterday and unsealed today was Laura Pendergest-Holt, 35, SFG’s chief investment officer; Gilberto Lopez, 66, SFG’s chief accounting officer; Mark Kuhrt, 37, SFG’s global controller; and Leroy King, 63, the former administrator and CEO of Antigua’s Financial Services Regulatory Commission. Stanford was arrested in Virginia last night, and is scheduled to make an initial appearance today in Richmond. Lopez and Kuhrt were arrested this morning and will make initial appearances in Houston this afternoon. Pendergest-Holt, who previously was indicted on obstruction-related charges, will make her initial appearance on the charges unsealed today in Houston in the near future.
"The Department of Justice will vigorously root out and expose financial crimes that wreak havoc on innocent investors," said Lanny A. Breuer, Assistant Attorney General of the Criminal Division. "Investors need access to accurate and truthful financial information in order to make decisions about how to invest their hard-earned savings. Their savings, and indeed the integrity of our capital markets, are jeopardized when investors are deceived. These difficult economic times make the mission of the Department all the more important."
"The investing public needs to be assured that it is protected from those who would corruptly deprive them of their financial security," said U.S. Attorney Tim Johnson of the Southern District of Texas. "When individuals or business entities engage in fraudulent activity designed to deprive investors of their assets, we will devote whatever resources necessary to bring them to justice."
"Economic crime schemes such as those alleged here today are unfortunately all too commonplace," said Assistant Director Kevin Perkins, FBI Criminal Investigative Division. "These crimes strike at the heart of our economy and our quality of life."
"The IRS is united with the federal law enforcement community in our resolve to put out of business those financial schemes that defraud investors and the U.S. government," said Eileen Mayer, Chief, IRS Criminal Investigation. "This is particularly true as it relates to international financial fraud, and we will continue to follow the money in order to bring those responsible to justice."
"Robert Stanford’s investors trusted him and his associates, in many instances, with their life savings," said Gregory Campbell, Deputy Chief Inspector, U.S. Postal Inspection Service. "When allegations are made that the U.S. Mail has been used to violate such a trust, it’s our job as Postal Inspectors to restore America’s confidence in the integrity of its postal system and help to bring the violators to justice."
According to the indictment, Stanford and his co-defendants engaged in a scheme to defraud investors who purchased approximately $7 billion in certificates of deposit administered by Stanford International Bank Ltd. (SIBL), an offshore bank controlled by Stanford and located on the island of Antigua. Stanford and his co-defendants allegedly misused and misappropriated most of those investor assets, including diverting more than $1.6 billion into undisclosed personal loans to Stanford himself, while misrepresenting to investors SIBL’s financial condition, its investment strategy and the extent of its regulatory oversight by Antiguan authorities. For example, the indictment alleges the following:
- That the defendants allegedly falsely claimed that SIBL’s assets grew from approximately $1.2 billion in 2001 to approximately $8.5 billion in December of 2008. The indictment alleges that, in fact, approximately $5 billion of SIBL’s reported assets consisted of notes on loans to Stanford and grossly overstated interests in "island properties," including more than $2 billion added to the books in 2008 from an allegedly artificial real estate deal that Stanford and his co-conspirators conceived to inflate the bank’s reported assets;
- That Stanford and his co-defendants allegedly falsely represented to investors that SIBL’s investment strategy was to "minimize risk and achieve liquidity" and promised rates of return on CDs that in the end were simply too good to be true in light of the bank’s actual investments and assets; and
- That Stanford and his co-defendants allegedly made false and misleading representations about the regulatory scrutiny of the bank by Antiguan authorities, when, in fact, Stanford was making corrupt payments of more than $100,000 to King to ensure that the Antiguan bank regulatory authority that he headed did not accurately audit, or verify the assets reported in the bank’s financial statements.
Also according to the indictment, Stanford, Pendergest-Holt and King conspired to conceal the fraud from the U.S. Securities and Exchange Commission (SEC) in order to fend off an SEC investigation. King allegedly provided Stanford and others with confidential information that he had received from an official SEC inquiry into a possible fraud on investors by SIBL so that additional false representations concerning SIBL’s financial health and Antiguan regulatory oversight could be made. In addition, Stanford, Pendergest-Holt and others allegedly agreed that Pendergest-Holt would provide false information to the SEC about the true value of SIBL’s investment portfolio.
The defendants are charged with one count of conspiracy to commit mail, wire and securities fraud; seven counts of wire fraud; ten counts of mail fraud; and one count of conspiracy to commit money laundering. The indictment also charges Stanford, Pendergest-Holt, and King with conspiracy to obstruct an SEC proceeding. The indictment seeks forfeiture of the proceeds of the fraud from all defendants, including forfeiture of specific foreign bank accounts controlled by Stanford, Davis and Pendergest-Holt.
Also unsealed today was a criminal information charging James M. Davis, 60, SFG’s chief financial officer, with conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct an SEC investigation. The information seeks forfeiture of up to $1 billion in fraud proceeds. Davis will make his initial appearance on these charges in Houston in the near future.
Additionally, also unsealed today was an indictment returned in the Southern District of Florida charging Bruce Perraud, 42, a former SFG Global Security Specialist, with destruction of records related to a federal investigation. Perraud allegedly ordered and supervised the destruction of numerous SFG documents housed at SFG’s Fort Lauderdale, Fla., office after he was put on notice that a federal court had ordered the preservation of SFG documents in connection with an SEC investigation and lawsuit. Perraud was arrested in the area of Naples, Fla., this morning and will make his initial appearance in the near future.
An indictment is merely an accusation and defendants are presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
The case is being investigated by the FBI’s Houston Field Office, Internal Revenue Service - Criminal Investigation, and the U.S. Postal Inspection Service. The case is being prosecuted by individuals from the Criminal Division’s Fraud Section, including Paul E. Pelletier, Principal Deputy Chief; Jack Patrick, Senior Litigation Counsel; Matthew Klecka, Trial Attorney; and Allan Medina, Law Clerk of the Criminal Division’s Fraud Section, as well as Gregg Costa, Assistant U.S. Attorney, Southern District of Texas.
The Criminal Division’s Asset Forfeiture and Money Laundering Section assisted the trial team by working with our foreign counterparts to facilitate the freezing of more than $300 million of Stanford’s assets in the United Kingdom, Canada and other countries. The Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the Southern District of Florida also provided assistance in this matter.
Justice Department Files Lawsuit Alleging Racial Discrimination at Mobile Home Park in Gulfport, MississippiRead the Press Release
The Department today filed a lawsuit against the former owner and managers of Homestead Mobile Home Village, a mobile home park in Gulfport, Miss., for violating the Fair Housing Act by discriminating against black tenants on the basis of race or color.
The lawsuit filed in U.S. District Court for the Southern District of Mississippi charges that Edward and Barbara Hamilton, the former managers of the mobile home park, unjustly sought to evict a black couple and their five minor children who had moved there after being displaced by Hurricane Katrina. According to the complaint, the Hamiltons attempted to evict the family and other black residents for allegedly violating the rules of the park, but did not attempt to evict white residents for as many or more violations. The complaint also alleges the Hamiltons harassed and intimidated black tenants. The suit names as a defendant Indigo Investments LLC, the owner of Homestead Mobile Home Park at the time the Hamiltons managed the park.
"No one should have to suffer harassing, unequal treatment from a landlord based on one’s race or color," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Justice Department will vigorously prosecute any landlord who engages in racial discrimination in violation of the Fair Housing Act."
The lawsuit arose from a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by two black residents of Homestead. The complainants also sought assistance from the Gulf Coast Fair Housing Center, a private, non-profit fair housing organization which provided additional information to HUD. After investigating the complaint, HUD issued a charge of discrimination and after one of the respondents named in HUD’s charge elected to have the case heard in federal court, the case was referred to the Justice Department. The suit also alleges that the defendants’ conduct constitutes a pattern or practice of discrimination or a denial of rights to a group of persons.
"It’s hard enough for families recovering from catastrophic events like Hurricane Katrina to put their lives back together, without also having to face housing discrimination," said John Trasvina, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. "HUD in partnership with the Department of Justice works to ensure there is no room for racial discrimination in a Mississippi mobile home park or anywhere else in the nation."
The lawsuit seeks monetary damages for those harmed by the defendants’ actions, civil penalties and a court order barring future discrimination.
Individuals who may have information related to this lawsuit should contact the Justice Department at 601-965-4480 or toll free at 1-800-896-7743. Fighting illegal housing discrimination is a top priority of the Justice Department. Visit the Civil Rights Division’s Web site at http://www.usdoj.gov/crt for more information about the laws it enforces.
The complaint is an allegation of unlawful conduct and the defendants are presumed innocent unless proven guilty. The allegations must still be proven in federal court.
18 June 2009
Statement from the Attorney General on Today’s Decision by the Supreme Court in District Attorney’s Office for the Third Judicial District et al. v. OsborneRead the Press Release
"The Supreme Court today held that there is no substantive due process right to access DNA evidence after a person has been duly convicted. But today’s decision is limited: the Court merely spoke about what is constitutional, not what is good policy. And there is a fundamental difference. Constitutional rights are only one part of a fair and full system of justice. Simply because a course of action is constitutional does not make it wise. Nothing in today’s decision detracts from the unique power of DNA; indeed, the first line of today’s Court opinion emphasized that ‘DNA testing has an unparalleled ability both to exonerate the wrongly convicted and to identify the guilty.’ DNA testing helps ensure that justice is done.
"For that reason, this administration believes that defendants should be permitted access to DNA evidence in a range of circumstances. In the 2004 Innocence Protection Act, Congress guaranteed access to DNA evidence held by the federal government under specific conditions, and made money available to encourage states to do the same. Today’s decision reaffirmed the power of such practices, and I hope that in light of today’s decision all levels of government will follow the federal government’s lead by working to expand access to DNA evidence."
New York Man Indicted for Clean Air Act ViolationsRead the Press Release
WASHINGTON-- A federal grand jury in the Western District of New York, has returned an indictment charging Keith Gordon-Smith, owner of an asbestos removal company, with numerous violations of the Clean Air Act, submitting false statements and obstruction of justice, the Justice Department announced.
The charges stem from allegations that Gordon-Smith directed and caused illegal asbestos removal at several sites in the Rochester, N.Y., area, and hid the illegal asbestos removal from federal agencies.
The Clean Air Act requires contractors who remove asbestos from public buildings to follow federally established work practice standards to ensure the safe removal of the asbestos. The required standards include providing notice to the U.S. Environmental Protection Agency (EPA) before commencing asbestos removal, adequately wetting the asbestos during the removal and before disposal, and properly disposing of the asbestos at an EPA-approved disposal site.
The 15-count indictment alleges that between June 2006 and August 2008, Gordon-Smith had employees of his asbestos abatement company, Gordon-Smith Contracting Inc., remove asbestos from schools and a hospital in the Rochester area, without ensuring that the asbestos was kept adequately wet or properly disposed. The indictment also alleges that Gordon-Smith took several steps to hide the illegal asbestos removal from federal agencies. These included failing to provide prior notification to EPA before the asbestos removal projects were performed at the schools and hospital, giving false statements to an inspector from the Occupational Safety and Health Administration (OSHA), and providing a false notification to the EPA.
If convicted, Gordon-Smith could be punished by up to five years in prison as well as a criminal fine of up to $250,000 for each count.
Once Gordon-Smith is arraigned, and in accordance with the Crimes Victims Rights Act, the U.S. Attorney’s Office for the Western District of New York will be providing a public notice in the Rochester Democrat and Chronicle to notify potential victims who may have been directly and proximately harmed as a result of the alleged crimes. The notice will include information directing potential victims to a website as well as a contact phone number established by the U.S. Attorney’s Office.
The case is being prosecuted by the U.S. Attorney’s Office for the Western District of New York and the Justice Department’s Environmental Crimes Section. The case was investigated by the EPA Criminal Investigation Division and the U.S. Department of Labor Office of the Inspector General.
Justice Department Settles Lawsuit Alleging Discrimination by Marion, Alabama, Against Alabama National Guard MemberRead the Press Release
WASHINGTON – The Justice Department today announced that it has entered into a consent decree with the city of Marion, Ala., that, if approved by the U.S. District Court in Mobile, Ala., will resolve the Department’s lawsuit filed against Marion on behalf of Cynthia Y. Davis, a member of the state’s Army National Guard.
The complaint filed in July 2008 alleged that the city of Marion violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by failing to reinstate Davis in her dispatcher position in the city’s police department following her return from basic training in August 2007. The Labor Department’s Veterans’ Employment and Training Service had investigated Davis’ complaint, determined that it had merit and, upon completion of conciliation efforts, referred the matter to the Justice Department.
Enacted by Congress in 1994, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment not been interrupted by military service, or in positions of like status, seniority and pay.
The consent decree requires Marion to reemploy Davis as a full-time dispatcher at the rate of pay and with the amount of seniority and benefits she would have earned had she remained continuously employed by the city until the present, including during the time of her active duty service in the Alabama National Guard. Since Davis is to be reemployed by the city as a full-time dispatcher, she is also guaranteed a full-time dispatcher position with the Perry County, Ala., Emergency Communication District when Marion’s full-time dispatchers are transferred to the Perry County Emergency 911 Board on or about July 1, 2009. As a full-time Perry County Emergency 911 Board dispatcher, Davis will receive a higher wage and better benefits than she had received as a city of Marion employee.
"Service members should not fear being penalized in their civilian careers because they make the decision to join the military," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "This agreement demonstrates the Justice Department’s commitment to the vigorous enforcement of federal laws that protect the employment rights of men and women who serve our country in the military."
The Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. It has filed 16 lawsuits and obtained 18 settlements under USERRA on behalf of service members in 2009. Additional information about the enforcement of USERRA can be found on the Justice Department Web sites http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, and on the Labor Department’s Web site at http://www.dol.gov/vets/programs/userra/main.htm.
Joint Statement by Secretary Napolitano and Attorney General Eric Holder on Today’s Signing of a DEA-ICE Drug Trafficking Enforcement AgreementRead the Press Release
"Moving past old disputes and ensuring cooperation between all levels of our Departments has been one of our top priorities since taking office. Today's agreement reflects our commitment to working together to protect the American people from violence and criminal activity along our borders.
Ultimately, this agreement allows us to utilize the full range of the federal government‘s capabilities to disrupt and dismantle drug cartels and other criminal organizations that seek to infiltrate our borders.
Giving ICE agents the authority to investigate drug trafficking cases, enhancing information sharing capabilities between ICE and the DEA, and ensuring full participation in intelligence centers will strengthen our efforts to combat international narcotics smuggling, streamline operations and bring better intelligence to our front line personnel."
Honolulu Man and Woman Indicted on Federal Sex Trafficking ChargesRead the Press Release
A federal grand jury in the District of Hawaii has indicted Rodney D. King, 43, and Sharon-Mae Nishimura, 30, both of Honolulu, on multiple counts of federal sex trafficking of adult women and minor female victims.
The charges include allegations of sex trafficking of three adult victims. Specifically, the indictment alleges that from periods within April 2006 through June 2007, King used force, fraud and coercion to engage two adult women in commercial sex and that he did so for his own financial benefit. The indictment also alleges that King attempted to engage a third adult woman in commercial sex in October 2007 by using force, fraud and coercion; and that Nishimura aided and abetted him in that attempt. If convicted of any of these counts, King and Nishimura would each face a sentence of imprisonment for a period of 15 years to life.
Two minor girls were also victimized. The indictment alleges that King engaged one of the minor girls in commercial sex acts from September 2007 through December 2007. It also charges both King and Nishimura with the December 2007 sex trafficking of a second minor victim, alleging that they knew both that the victim was a minor; and that force, fraud and coercion would be used to engage the victim in commercial sex acts. The indictment further charges King and Nishimura with conspiring to engage this 16-year old victim in commercial sex acts. The indictment states that, as a means of inducing her compliance, King provided this teenager with access to crystal methamphetamines.
For conviction of either of the counts of sex trafficking of minors, King and Nishimura would each face a sentence of imprisonment for a period of 10 years to life. For conviction of the crime of conspiracy, each would face a sentence of up to five years in prison. King and Nishimura each also face fines of up to $250,000 per count of conviction. An indictment is merely an accusation and the defendants are presumed innocent unless proven guilty.
The case is being prosecuted by Civil Rights Division trial attorney Kayla Bakshi with the Human Trafficking Prosecution Unit and Assistant U.S. Attorney Darren Ching for the District of Hawaii. The continuing investigation of this case is being conducted by the FBI with the assistance of the Honolulu Police Department and the Hawaii Department of Public Safety Sheriff Division.
Human trafficking prosecutions are a top priority of the Justice Department. In Fiscal Year 2008, the Civil Rights Division and U.S. Attorney’s Offices filed a record number of criminal civil rights cases, including record numbers of both sex trafficking and labor trafficking cases.
Former Military Contractor Convicted of Participating in Scheme to Steal Large Quantities of Fuel from U.S. Army in AfghanistanRead the Press Release
Raschad L. "Sean" Lewis, a former fuel section employee of Kellogg Brown and Root Inc. (KBR), assigned to Bagram Airfield in Afghanistan, was found guilty yesterday by a federal jury of conspiracy, false writing, bribery of a public official, and false claims stemming from a bribery and a fuel diversion scheme.
According to court documents, KBR had a contract to provide support services to the U.S. Army at Bagram Airfield, including unloading truckloads of jet fuel delivered by drivers hired by Red Star Enterprises Limited. Evidence at trial proved that between May and September 2006, Lewis and other KBR employees conspired to accept payments from drivers, who in fact were selling their fuel to parties outside the airfield, in return for providing the drivers with documents to deliver to Red Star falsely showing that the truckloads of fuel had been delivered to the airfield. According to evidence presented in court, more than 48 truckloads of fuel were diverted for sale outside the airfield between May and September 2006, valued at more than $800,000.
Lewis is facing a maximum penalty of 30 years in prison when he is sentenced on Aug. 21, 2009. Previously, former KBR employee Wallace A. Ward pleaded guilty to conspiracy on Jan. 25, 2008, and was sentenced on April 11, 2008, to 26 months in prison. Another former KBR employee, James N. Sellman, pleaded guilty to conspiracy on Feb. 7, 2008, and was sentenced on May 9, 2008, to 26 months in prison.
The case is being prosecuted by Assistant U.S. Attorney Jack Hanly of the U.S. Attorney’s Office for the District of Virginia and Trial Attorney James Graham of the Criminal Division’s Fraud Section. The case was investigated by the U.S. Army Criminal Investigative Division in Virginia and Afghanistan, and the Defense Criminal Investigative Service in Virginia. The Defense Energy Support Center’s Office of the General Counsel in Fort Belvoir, Va., also provided assistance.
In October 2006, the National Procurement Fraud Task Force was formed 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 National Procurement Fraud Task Force, chaired by Assistant Attorney General Breuer, includes 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 other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
17 June 2009
Justice Department Settles Lawsuit Against the Sheriff of Bryan County, Oklahoma, <br /> Alleging Pregnancy DiscriminationRead the Press Release
The Department today entered into a consent decree with the sheriff of Bryan County, Okla., that, if approved by the U.S. District Court in Muskogee, Okla., will resolve the Department’s employment discrimination complaint against the Sheriff, also filed today with the court.
The complaint alleges that the sheriff, in his official capacity, engaged in a pattern and practice of employment discrimination against women based on pregnancy by requiring the reassignment of female confinement officers employed at the Bryan County Jail to administrative duties upon their becoming pregnant, in violation of Title VII of the Civil Rights Act of 1964. Title VII prohibits discrimination in employment on the basis of race, color, sex (including pregnancy), national origin or religion.
The consent decree prohibits the sheriff from engaging in any act or practice that discriminates against any employee of, or applicant for employment with, the Bryan County Sheriff’s Office, including the Bryan County Jail, on the basis of sex and pregnancy in violation of Title VII. The consent decree also requires the sheriff to implement and disseminate a policy that prohibits employment discrimination on the basis of pregnancy and to provide mandatory training regarding sex and pregnancy discrimination to all employees.
"The Justice Department commends the sheriff of Bryan County for working cooperatively with us to resolve this matter. We are pleased that the sheriff has agreed to promptly implement new policies and procedures that comply with Title VII," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division will continue to vigorously enforce the right of pregnant employees to be free of discrimination in the workplace."
The Department of Justice’s Civil Rights Division has jurisdiction to bring lawsuits under Title VII against state and local governments, and the enforcement of Title VII has been a priority of the Division. Visit http://www.usdoj.gov/crt/ for information about the Civil Rights Division and http://www.usdoj.gov/crt/emp for additional information about its enforcement of Title VII.
16 June 2009
Two Oregon Men Sentenced for Role in Federal Hate CrimeRead the Press Release
Gary Moss, 37, was sentenced to serve 41 months in federal prison for conspiring to deprive individuals of their civil rights, and co-conspirator Devan Klausegger, 30, was sentenced to serve 51 months for the same charge. Both defendants were ordered to serve three years of supervised release and ordered to pay restitution to the victims in the amount of $3,107.
According to their plea agreements, as set forth in the indictment, on May 26, 2008, Moss poured a flammable liquid in the shape of a cross and the letters "KKK" on the front lawn of a residence leased by an African-American, his Hispanic wife and their two small children. Then Klausegger handed Moss a small explosive device which Moss used to start a fire on the lawn. The fire was close enough to the victims’ house to endanger the dwelling and its occupants, including the couple’s two small children. Fortunately, a neighbor grabbed a garden hose and extinguished the fire before the victims could be harmed.
In connection with their guilty pleas in February 2009, Moss and Klausegger admitted that they acted with the intent to interfere with the victims’ rights under the Fair Housing Act because they knew that the person who leased the residence was African American.
"Americans should be free to live in a home of their choosing, free from threats of bigotry and intimidation. The Civil Rights Division will prosecute those who commit such despicable acts of hatred to the full extent of the law," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
"Crimes motivated by racial hatred are an abomination in a civilized society," U. S. Attorney Immergut said. "We hope that the sentences imposed today will deter others from engaging in similar conduct".
This matter was investigated by Special Agent Adam Marre of the Medford Division of the FBI and was prosecuted by Assistant U.S. Attorney William (Bud) Fitzgerald and Trial Attorney Roy Conn III of the Civil Rights Division of the Justice Department.
Two Baltimore Businessmen Indicted for Conspiring to Rig Bids at Maryland Tax Lien AuctionsRead the Press Release
WASHINGTON — Two Baltimore businessmen were indicted today for conspiring to rig bids at tax lien auctions in Maryland for more than five years, the Department of Justice announced today.
The one-count felony indictment filed today in the U.S. District Court in Baltimore alleges that Harvey M. Nusbaum and his business partner, Jack W. Stollof, participated in a conspiracy to rig bids in tax lien auctions conducted by the city of Baltimore and various counties in the state of Maryland beginning in or around the Spring of 2002 and continuing until at least Aug. 9, 2007. The indictment alleges that Nusbaum, Stollof and their co-conspirators agreed among themselves which of them would bid on specific tax liens or groups of tax liens, and agreed upon specific prices to be bid in certain auctions.
"With so many homeowners struggling these days, it is more important than ever that all aspects of real estate transactions, including tax lien auctions, remain competitive and free from collusion," said Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement of the Department’s Antitrust Division. "The Antitrust Division will vigorously prosecute those who rig bids and deny Americans a competitive bidding process."
When owners of real property in Maryland fail to pay property taxes, the county or city in which the property is located may attach a lien. If the taxes remain unpaid after a waiting period, the lien is sold at auction. The winner of the auction has the right to collect the amount of the lien from the delinquent taxpayer, along with interest, and eventually to foreclose on the property if the lien and interest remain unpaid. Counties and municipalities in Maryland typically hold tax lien auctions annually.
The indictment alleges that Nusbaum and Stollof carried out the bid-rigging conspiracy with co-conspirators by:
- Attending meetings and engaging in discussions regarding bids for tax liens being auctioned by a municipality and counties in Maryland;
- Agreeing during those meetings and discussions not to compete at certain tax lien auctions by allocating which tax liens, properties, or groups of properties each group would bid or refrain from bidding on, and by agreeing on prices that would be bid in certain auctions;
- Discussing and exchanging prices to be bid at certain tax lien auctions so as not to submit higher bids than one another;
- Submitting bids in accordance with the agreements reached; and
- Purchasing tax liens under those agreements at collusive and non-competitive prices.
This case is the result of an ongoing investigation by the Antitrust Division’s National Criminal Enforcement Section and the FBI into anticompetitive conduct at tax lien auctions. In June of 2008, Steven L. Berman pleaded guilty to the same conspiracy. He has not yet been sentenced.
Nusbaum and Stollof are each charged with one count of bid rigging in violation of the Sherman Act, a violation which carries a maximum sentence of 10 years in prison and a fine of $1 million for individuals. Under the statute, 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.
Anyone with information concerning bid rigging or other anticompetitive conduct regarding tax lien auctions is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-305-1878, or the FBI’s Baltimore Office at 410-265-8080.
Associate of Tax Defier Irwin Schiff Pleads Guilty to Tax CrimeRead the Press Release
WASHINGTON – Lawrence Cohen, a resident of Las Vegas and a former employee of the now defunct Freedom Books, pleaded guilty today to a tax charge before U.S. District Judge Kent J. Dawson in Las Vegas, the Justice Department and Internal Revenue Service (IRS) announced.
Cohen pleaded guilty to one count of aiding and assisting in the preparation of a false 2000 Form 1040 for a client of Freedom Books. Cohen has agreed to pay restitution for the taxes owed. The plea agreement lists an agreed tax loss of $92,530, most of which is based on the taxes not paid by several Freedom Book clients for whom Cohen prepared false income tax returns.
According to the plea agreement and court documents, from approximately late 2000 or early 2001 until at least 2003, Cohen worked with Irwin Schiff and Cynthia Neun at Freedom Books in Las Vegas. As part of his employment at Freedom Books, Lawrence Cohen promoted the filing of "zero returns" with the IRS.
"Those who intentionally file false and frivolous income tax returns or fail to file tax returns or fail to pay all taxes legally due risk criminal prosecution," said Ronald A. Cimino, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division. "The Tax Division’s National Tax Defier Initiative is focused on those who intentionally refuse to comply with our laws. The punishment for such willful criminal defiance of our tax laws includes imprisonment and substantial fines."
Paul Camacho, Special-Agent-in-Charge of the Las Vegas Field Office of the Criminal Investigation Division of the Internal Revenue Service, emphasized the importance of this prosecution to deter others from adopting and using these frivolous arguments. "Many taxpayers from Nevada, as well as customers from all over the United States, were duped by the fraudulent advice of Schiff, Neun and Cohen, and then were later forced to pay substantial penalties and interest."
Cohen faces a maximum prison sentence of three years and a $250,000 fine. His sentencing hearing was set for Sept. 16, 2009. As part of the plea agreement, the government will dismiss the other charge against Cohen, tax evasion for his 2000 individual income tax return, at sentencing.
In September 2005, Cohen, along with Irwin Schiff and Cynthia Neun, was tried on conspiracy and tax fraud charges. Schiff and Neun were convicted on the conspiracy charges and other tax fraud counts and sentenced to prison. Cohen was acquitted of conspiracy and other tax counts, but was convicted of aiding and assisting in the preparation of one false 2000 Form 1040 (the same count to which he is pleading guilty).
In December 2007, Cohen’s conviction was reversed by the Court of Appeals for the Ninth Circuit. The Ninth Circuit vacated Cohen’s conviction because the district court failed to allow the defendant’s expert psychiatrist to testify about Cohen’s alleged narcissistic personality disorder. The Ninth Circuit said the testimony, if allowed, would have assisted the jury in making a decision about whether Cohen had acted willfully when preparing the false income tax return.
Acting Deputy Assistant Attorney General Cimino commended the IRS-Criminal Investigation special agents who investigated the case, as well Tax Division trial attorneys Lori A. Hendrickson and Christopher S. Strauss who prosecuted the case.
15 June 2009
Wife of Gang Leader Pleads Guilty to Narcotics ChargesRead the Press Release
On the day her trial was to begin in U.S. District Court in Lubbock, Texas, Almighty Latin King and Queen Nation (ALKQN) member Marie Chavez, aka "Shorty," the wife of an alleged ALKQN leader Jose Nava, aka "Chino," pleaded guilty to a superseding indictment charging her and 16 co-defendants with various offenses related to alleged narcotics and weapons trafficking and violent activities.
Specifically, Chavez, 28, of Lubbock, pleaded guilty to one count of conspiracy to distribute and possession with intent to distribute five kilograms or more of cocaine and 100 kilograms or more of marijuana; and possession with intent to distribute 500 grams or more of cocaine. She faces a maximum statutory sentence of not less than 10 years and up to life in prison. A sentencing date has not yet been scheduled. Chavez has been in custody since her arrest in December 2008.
According to documents filed in court, Chavez admitted that from 2001 until the time of her arrest, she and co-defendants, Jose Robledo Nava, aka "Chino" (her husband); Luis Nava, aka "Flaco"; Reynaldo Nava, aka "Rat"; Robert Allen Ramirez, aka "Nesyo"; Carol Ann Rivas Nava; Cecily Dominique Juarez; Jesus Martinez, aka "Solid"; David Hellums, aka "CutThroat"; James Johnathan Cole, aka "Blitz"; Eduardo Daniel Mares, aka "Pitt"; Gabriel Lee Gonzales, Michael Conde, aka "Psycho"; Guerrero Olivas, aka "Screech;" John Guzman; Hiluterio Chavez, aka "Zeus"; and Eliseo Perez, aka "Wicked"; and others agreed to distribute and possess with intent to distribute cocaine and marijuana.
Chavez today admitted that in furtherance of the conspiracy she was responsible for at least 50 kilograms, but less than 150 kilograms of cocaine, and at least 100 kilograms, but less than 400 kilograms of marijuana. Chavez further admitted that she and her co-defendants intentionally and knowingly possessed with the intent to distribute cocaine and marijuana, and distributed cocaine and marijuana to others. According to the indictment, they acquired the cocaine and marijuana from Mexico and brought it to the South Texas region, where it was packaged, stored, and transported to Big Spring, Texas, Lubbock, and Midland, Texas, for further distribution.
Chavez today admitted that she transported, divided, packaged, distributed and stored cocaine and marijuana throughout North Texas and that she would send cash to other co-conspirators in furtherance of this conspiracy. She further admitted that on Dec. 13, 2008, she and co-defendants Jose Robledo Nava, Reynaldo Nava and Carol Ann Rivas Nava knowingly and intentionally possessed with intent to distribute 500 grams or more, but less than five kilograms, of cocaine.
Chavez is the tenth defendant in the case to plead guilty. Others who have pleaded guilty include:
Jesus Martinez, aka "Solid," 28, of Midland
John Guzman, 30, of Big Spring
Hiluterio Chavez, aka "Zeus," 33, of Chicago
Eliseo Perez, aka "Wicked," 28, of Mission, Texas
Luis Nava, aka "Flaco," 25, of Midland
Reynaldo Nava, aka "Rat," 27, of Big Spring
Carol Ann Rivas Nava, 20, of Big Spring
Cecily Dominique Juarez, 20, of Midland
Guerro Olivas, aka "Screech," 26, of Big Spring
The indictment also alleged that from 2004 through mid July 2005, defendants Jose Robledo Nava, Jesus Martinez and Hiluterio Chavez conspired to deal in firearms. Last month, Jesus Martinez and Huluterio Chavez pleaded guilty to conspiring to engage in the business of dealing firearms.
Jose Robledo Nava is allegedly the ALKQN leader in Texas. He, along with James Johnathan Cole, Robert Allen Ramirez, Gabriel Lee Gonzales and Eduardo Daniel Mares are charged in the indictment with the May 4, 2008, murders of Valerie Garcia and Michael Cardona, in Big Spring.
The case is being investigated by the National Gang Targeting, Enforcement, and Coordinating Center (Gang TECC); the Organized Crime Drug Enforcement Task Force (OCDETF); the Midland and El Paso U.S. Attorney’s Offices; the FBI; the U.S. Drug Enforcement Agency; U.S. Immigration and Customs Enforcement; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the El Paso Intelligence Center; U.S. Customs and Border Protection; the U.S. Marshals Service; the Texas Department of Public Safety; the Lubbock, Midland, Houston, San Antonio and Big Spring, Texas, Police Departments; the Lubbock County Sheriff’s Office; and the Howard County, Texas, District Attorney’s Office.
Assistant U.S. Attorney Cody L. Skipper of the Lubbock U.S. Attorney’s Office and Trial Attorney Joseph A. Cooley of the Criminal Division’s Gang Unit are prosecuting the case.
Justice Department Settles Lawsuit Against the Sheriff of Harrison County, Indiana, <br /> Alleging Sex DiscriminationRead the Press Release
The Department today entered into a consent decree with Harrison County, Ind., Sheriff George Michael Deatrick, in his official capacity, the Harrison County Board of Commissioners and the Harrison County Council that, if approved by the U.S. District Court for the Southern District of Indiana, will resolve the Department’s complaint filed in March 2009 under Title VII of the Civil Rights Act of 1964, as amended.
Title VII prohibits discrimination in the workplace on the basis of race, color, sex, national origin and religion, as well as retaliation for filing a charge of discrimination.
The complaint alleged that Sheriff Deatrick subjected Deana Decker and Melissa Graham, former employees of the Sheriff’s Department, to sexual harassment by touching them in a sexual and offensive manner and directing sexually-charged comments to them in violation of Title VII. After Decker and Graham filed discrimination charges against Deatrick with the Equal Employment Opportunity Commission, the complaint alleged that the sheriff retaliated against them by brandishing a gun and staring at them in order to intimidate and frighten them.
Under the terms of the consent decree, the sheriff, the council and the commissioners must pay $375,000 to Decker and Graham as part of the settlement reached with the Department and a separate lawsuit with the former employees. The consent decree also requires the sheriff to retain an Equal Employment Opportunity (EEO) trainer to conduct annual mandatory courses focused on preventing sex discrimination and retaliation and to appoint an EEO monitor to evaluate the practices of the sheriff in preventing sex discrimination and retaliation, investigate complaints concerning sex discrimination and retaliation, and report on the findings of the investigations to the Department of Justice.
"Women in the workplace have the right to earn a living without being subjected to sexual harassment, especially from their supervisors," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is pleased that the sheriff of Harrison County will adopt a policy against sex discrimination, provide training to its employees as to the requirements of Title VII, and provide Ms. Decker and Ms. Graham with the relief to which they are entitled."
The Civil Rights Division of the Justice Department is committed to the vigorous enforcement of Title VII. Visit http://www.usdoj.gov/crt/emp/index.html for more information about the Division’s enforcement of Title VII and other federal employment laws.
Justice Department Files Lawsuit Against Nevada to Enforce Employment Rights <br /> of U.S. Army ReservistRead the Press Release
The Department today filed a lawsuit against the state of Nevada and its Office of the State Controller alleging it violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by refusing to promptly reemploy Arthur Ingram when he returned from active military duty and then by firing him after he filed a USERRA complaint. The suit was filed in U.S. District Court in Reno, Nev.
Enacted by Congress in 1994, USERRA 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. USERRA also prohibits employers from retaliating against service members for exercising their USERRA rights.
Ingram, a colonel in the U.S. Army Reserve, was Nevada’s chief deputy controller when he was called to active duty in June 2003. After he was honorably discharged in April 2008, Ingram sought reemployment with the state of Nevada. The Justice Department’s complaint alleges that the state initially offered Ingram a job but at considerably less pay and status and then withdrew that offer and backdated Ingram’s termination after he filed a USERRA complaint.
"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. "The law is clear – unnecessary delays and reprisal will not be tolerated."
The Labor Department’s Veterans’ Employment and Training Service investigated and attempted to resolve Ingram’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 15th 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.
Associate Attorney General Tom Perrelli Announces New Initiative on Tribal Justice in Indian CountryRead the Press Release
During his address to more than 500 attendees of the National Congress of American Indians’ (NCAI) 2009 Mid-Year Conference today, Associate Attorney General Tom Perrelli announced the launch of a new major Justice Department initiative to increase engagement, coordination and action on tribal justice in Indian Country. NCAI provides national leadership on issues facing tribal communities throughout the United States.
Perrelli announced that later this year, Attorney General Eric Holder will convene a Tribal Nations Listening Conference to confer with tribal leaders on how to address the chronic problems of public safety in Indian Country and other important issues affecting tribal communities. Leading up to the Listening Conference, Deputy Attorney General David W. Ogden and Perrelli will convene a series of regional summits to seek tribal representatives’ input in setting the agenda. Those planning sessions will include Department component leaders, tribal leaders and experts in relevant areas to begin a dialogue on a range of important issues including, law enforcement policy and personnel; communications and consultation; grants and technical assistance; detention facilities; federal prosecution in Indian country; tribal court development; domestic violence; drug courts and substance abuse; federal litigation involving tribes; and civil rights. No locations or dates have been announced.
"To improve Indian Country law enforcement, we must act as real partners with those who know the issue best. We need to hear, and heed, your voices. It has been too long since that happened," said Perrelli. "A Listening Conference is an important step, but it is only going to change the way we do business if we come out of it with concrete, specific proposals and take action."
In 1994, Attorney General Janet Reno convened the only other National Listening Conference, sponsored jointly with the Department of the Interior, which led to numerous initiatives, including major funding for tribal police, jails and courts.
Perrelli also addressed the need for greater communication and partnership between federal, state, local and tribal law enforcement, saying, "Tribal communities are facing great challenges, but also have enormous opportunities. And while we at the Department of Justice have some resources that can help make your communities safer, we also know that it takes more than resources to fight and prevent crime. It takes real partnerships. At the Department, we are committed to more effectively partnering with tribal communities to improve public safety and the health of Indian Country."
He noted that the Department’s Office of Community Oriented Policing Services has provided more than $330 million in assistance to law enforcement agencies in Indian Country to date, with nearly $240 million of this awarded through the Tribal Resources Grant Program to improve tribal law enforcement infrastructure by providing critical resources, training, technical assistance, and other support necessary. Perrelli noted, with an emphasis on the impact that violence against women continues to have in Indian Country, that the Office on Violence Against Women has also awarded more than $86 million to grant projects reaching nearly half of the nation’s 562 Indian Tribes.
Of the $4 billion provided to the Justice Department to assist tribal, state and local law enforcement and criminal justice systems in the President’s American Recovery and Reinvestment Act of 2009 (Recovery Act), Perrelli explained that Indian country will receive at least $248 million to fund four important grants specific to tribes:
- $225 million for Correctional Facilities on Tribal Lands grants;
- $20.8 million for Indian Tribal Government grants;
- $2.8 million for Tribal Domestic Violence and Sexual Assault Coalitions grants; and
- $1 million for a Tribal Crime Data Collection, Analysis and Estimation Project.
Tribal communities are also eligible for additional funds through discretionary Recovery Act grants.
12 June 2009
United States Transfers Three Guantanamo Detainees <br /> to the Kingdom of Saudi ArabiaRead the Press Release
Three Saudi nationals were transferred today from the detention facility at Guantanamo Bay to the Kingdom of Saudi Arabia under appropriate security measures.
All individuals transferred to Saudi Arabia are subject to judicial review in Saudi Arabia before they undergo a rehabilitation program. While in a rehabilitation program, they will be under the control of the Saudi Government. The U.S. and Saudi Governments are working closely together on all matters related to the transfer of Saudi detainees from Guantanamo to Saudi Arabia.
As directed by the President’s Jan. 22, 2009, Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of the cases involving Khalid Saad Mohammed, Abdalaziz Kareem Salim Al Noofayaee and Ahmed Zaid Salim Zuhair. As a result of that review, these detainees were approved for transfer from Guantanamo Bay. Each of these detainees was previously cleared for transfer by the prior Administration. The transfers were carried out pursuant to an arrangement between the United States and the Kingdom of Saudi Arabia.
"With these latest transfers, the U.S. Government has moved nine detainees over the course of this week to locations in Bermuda, Chad, Iraq, and Saudi Arabia. This marks the largest number of transfers in a single week in well over a year and occurred, in large part, due to the willingness of foreign governments to work closely with the United States on this important issue and to assist in the closure of the Guantanamo Bay detention facility. We are grateful for the cooperation of the Kingdom of Saudi Arabia and for its assistance on the successful transfer of the three individuals today," said Matthew Olsen, Executive Director of the Guantanamo Review Task Force.
Since 2002, more than 540 detainees have departed Guantanamo for other countries including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Bermuda, Chad, Denmark, Egypt, France, Great Britain, Iran, Iraq, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Russia, Saudi Arabia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
Tyson Foods Sentenced to Pay Fine for OSHA Violation That Led to Worker DeathRead the Press Release
Tyson Foods Inc. was sentenced today in U.S. District Court in Arkansas to pay the maximum fine for willfully violating worker safety regulations that led to a worker’s death in its River Valley Animal Foods (RVAF) plant in Texarkana, Ark., the Justice Department announced.
The court ordered Tyson Food to pay the $500,000, the maximum criminal fine as well as serve one year probation.
According to the court documents filed in the case, Tyson operated several RVAF plants that recycled poultry products into protein and fats for the animal food industry. As part of the rendering process in four of the plants, the company used high-pressure steam processors called hydrolyzers to convert the poultry feather into feather meal.
Decomposition of biological material such as poultry feathers produces hydrogen sulfide gas, an acute-acting toxic substance. Employees at the Tyson facilities often were exposed to the toxic gas when working on or near the hydrolyzers, which required frequent adjustment and replacement.
As of October 2003, corporate safety and regional management were aware that hydrogen sulfide gas was present in the RVAF facilities and three of the four facilities with hydrolizers had taken measures to protect employees from hydrogen sulfide gas near the hydrolyzers. However, Tyson Foods did not take sufficient steps to implement controls or protective equipment to reduce exposure within prescribed limits or provide effective training to employees on hydrogen sulfide gas at the Texarkana facility despite an identical exposure, resulting in hydrogen sulfide poisoning of an RVAF Texarkana employee in March 2002.
As a result, at approximately 1 a.m. on Oct. 10, 2003, RVAF maintenance employee Jason Kelley was overcome with hydrogen sulfide gas while repairing a leak from a hydrolyzer and later died. Another employee and two emergency responders were hospitalized due to exposure during the rescue attempt. Two employees also were treated at the scene.
"Federal laws require employers to undertake steps that limit exposure to dangerous substances like the gas that killed Jason Kelley. Today, Tyson Foods is paying the maximum fine for failing to abide by these laws," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The Justice Department takes its enforcement responsibility seriously and companies that ignore these laws and risk their employees’ lives will be prosecuted."
The Occupational Safety and Health Act (OSHA) requires that employers furnish places of employment free from recognized hazards that are likely to cause death or serious physical harm to employees. This includes taking steps to ensure that employee exposure to dangerous substances such as hydrogen sulfide gas remains within prescribed limits.
The investigation was conducted by the Department of Labor and prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Western District of Arkansas under the Environmental Crimes Section’s worker endangerment initiative.
Silver Spring, Maryland, Return Preparer Found Guilty of Preparing False Tax Returns for ClientsRead the Press Release
WASHINGTON - Following a four-day trial and less than an hour ofdeliberations, a federal jury today convicted tax return preparer, Marcel J. Toto-Ngosso, of Silver Spring, Md., of 17 counts of preparing false tax returns in connection with a scheme to generate fraudulent tax refunds for client-taxpayers, the Justice Department and Internal Revenue Service (IRS) announced.
According to the indictment and evidence introduced during trial, Toto-Ngosso ran a tax preparation business out of his home, located on East Shaw Avenue in Silver Spring. Toto-Ngosso prepared false tax returns for clients for tax years 2001 through 2006 which claimed numerous fraudulent deductions including false dependents, inflated charitable contributions, fraudulent un-reimbursed employee expenses and other false and fraudulent deductions to which Toto-Ngosso knew his clients were not entitled.
Evidence was also introduced that Toto-Ngosso purchased the names and Social Security numbers of individuals, which he later sold to his clients for $500 to $800 per dependent. Toto-Ngosso used these names and Social Security numbers on the false tax returns in order to secure larger refunds for his clients.
At trial, the government introduced evidence that after Toto-Ngosso learned he was under investigation by the IRS, he instructed his clients to lie about the information that he reported on their tax returns.
U.S. District Judge Roger W. Titus scheduled sentencing for Sept. 21, 2009. Toto-Ngosso was detained pending sentencing. He faces a maximum of three years in prison and a $250,000 fine for each count of conviction.
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 Jorge Almonte and Tino Lisella who prosecuted the case. Acting Assistant Attorney General DiCicco also thanked the U.S. Attorney’s Office in Greenbelt, Maryland for their assistance.
Shark Fins Dealer Pleads Guilty to Illegally Dealing in Fins from Protected SpeciesRead the Press Release
WASHINGTON—Mark L. Harrison, a resident of Southport, Fla., and Harrison International LLC, a Florida corporation, today pleaded guilty in U.S. District Court in Atlanta to violating the Lacey Act, a federal fish and wildlife trafficking law, by dealing in shark fins, the landing of which was not reported as required by law, the Justice Department announced today.
In addition, Mark Harrison pleaded guilty to a second charge related to his attempted export of shark fins of species that are prohibited to harvest under laws of the state of Florida. Harrison also pleaded guilty to a third charge related to trading in shark fins that had been prepared, packed or held under insanitary conditions.
According to the charges and other information presented in court, Harrison allegedly represented himself to be the nation’s largest shark fin buyer, purchasing "millions" of shark fins since he had been in the business, beginning in 1989. According to the plea agreements, in February 2005, Harrison purchased shark fins in Florida from an individual fisherman and later resold them in interstate commerce. No report of the landing or sale of those fins was filed with any Florida authorities, as required by law. Accurate reporting statistics of shark harvests are crucial for managing and regulating the populations of the various shark species that occur in U.S. waters.
In August 2007, Harrison attempted to export through Atlanta a shipment of shark fins that included at least 211 fins from Caribbean sharp-nosed sharks, two fins from bignose sharks, and two fins from night sharks, all of which are protected by Florida and/or federal laws due to their low population levels.
Finally, the plea agreements reveal that for almost four years Harrison processed shark fins by drying them on open air racks and/or tarpaulins laid on the ground, outdoors, on his property in Southport. The fins were left out at all times until dry and were exposed to bird droppings and insects. Dogs ran freely among the drying racks. Harrison would then sell the dried fins and ship them in interstate commerce through the Northern District of Georgia.
"Trafficking the fins of these shark species is not a harmless offense," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "These species are protected in order to ensure their continued sustainability. The Justice Department, along with our partner agencies, will continue to prosecute those who illegally trade in protected shark or other wildlife species."
"We will not tolerate the illegal harvest and sale of protected shark species whose populations continue to diminish in our oceans," said Hal Robbins, Special Agent in Charge for National Oceanic and Atmospheric Administration (NOAA) Fisheries Southeast Region. "We are pleased with the apprehension of Mr. Harrison, who is one of the country’s largest commercial shark fin buyers and I applaud the efforts of the prosecutors and Agents involved in this multi-agency federal investigation."
The Lacey Act, enacted in 1900, is the first national wildlife law, and was passed to assist states in enforcing wildlife laws. It provides additional protection to fish, wildlife and plants that were taken, possessed, transported or sold in violation of state, tribal, foreign or U.S. law.
Since 1993, the NOAA Fisheries Service has managed, via federal fishery management plans, the commercial harvest and sale of sharks in or from federal waters of the Atlantic Ocean, Gulf of Mexico and Caribbean Sea. In 1998, the United Nations’ Food and Agriculture Organization finalized and adopted an "International Plan of Action for the Conservation and Management of Sharks," recognizing the worldwide pressure being placed on declining shark populations by commercial fishing and the demand for shark fin soup. U.S. management of sharks has included prohibitions against retaining and/or selling particular species, including some in which Harrison was dealing, the populations of which are so reduced that further harvesting cannot be sustained.. There are currently 19 federally protected species of sharks.
David E. Nahmias, U.S. Attorney for the Northern District of Georgia said, "There is an immense trade in wildlife products. Those who trade in wildlife must comply with federal and state wildlife statutes and regulations. We will support the investigative work of those agencies who identify violations of these laws, and commend the teamwork of the investigators who brought these wildlife violations to our attention."
"We are proud of the coordinated investigative work of our agents with their colleagues from NOAA, Office of Law Enforcement and the Food and Drug Administration Office of Criminal Investigations," said James Gale, Special Agent in Charge, Southeast Region, U.S. Fish and Wildlife Service, Office of Law Enforcement. "This case is an excellent example of the U.S. Fish & Wildlife Service’s commitment to investigate and interdict the commercialization of protected wildlife species."
Harrison is scheduled to be sentenced on Aug. 19, 2009, at 9:30 a.m., before U.S. Magistrate Judge Russell Vineyard of the Northern District of Georgia. Harrison faces up to one year in federal prison and a fine of up to $100,000. His company faces a fine of $200,000.
This case was investigated by Special Agents of the NOAA Office for Law Enforcement, the U.S. Fish and Wildlife Service Office of Law Enforcement and the Food and Drug Administration Office of Criminal Investigations.
The case was prosecuted by the U.S. Attorney’s Office for the Northern District of Georgia and the Justice Department’s Environmental Crimes Section.
11 June 2009
United States Transfers Two Guantanamo Detainees to Foreign NationsRead the Press Release
The Department today announced that one national of Iraq and one national of Chad have been transferred from the detention facility at Guantanamo Bay to their home countries.
As directed by the President’s Jan. 22, 2009, Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of each of these cases. As a result of that review, these detainees were approved for transfer from Guantanamo Bay. The transfers were carried out pursuant to arrangements between the United States and the governments of Iraq and Chad.
Last night, Iraqi national Jawad Jabber Sadkhan was transferred to Iraq. Chadian national Mohammed El Gharani was transferred to Chad earlier today. On Jan. 14, 2009, a federal court ordered the U.S. government to take all necessary and appropriate steps to facilitate El Gharani’s release from Guantanamo Bay.
"As our review of detainees continues, the support of the international community is critical to the closure of the detention facility at Guantanamo Bay and the security of our country," said Matthew Olsen, Executive Director of the Guantanamo Review Task Force. "We are grateful for the cooperation of the Governments of Iraq and Chad and for their assistance on the successful transfer of these individuals."
Since 2002, more than 540 detainees have departed Guantanamo for other countries including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Denmark, Egypt, France, Great Britain, Iran, Iraq, Jordan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Russia, Saudi Arabia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.
United States Resettles Four Uighur Detainees from Guantanamo Bay to the Government of BermudaRead the Press Release
Four detainees, Chinese nationals of Uighur ethnicity who had been held at the Guantanamo Bay detention facility, have been resettled in Bermuda. These detainees, who were subject to release as a result of court orders, had been cleared for release by the prior administration, which determined they would no longer treat them as enemy combatants. The detainees were again cleared for release this year after review by the interagency Guantanamo Review Task Force.
As directed by the President’s January 22, 2009, Executive Order, the interagency Guantanamo Review Task Force conducted a comprehensive review of the four, including a threat evaluation, and approved them for resettlement. The detainees left Guantanamo Bay today pursuant to an arrangement between the United States and the Government of Bermuda.
The Uighurs are a Turkic Muslim minority from the Xinjiang province of far-west China. The Uighurs currently at Guantanamo Bay left China and made their way to Afghanistan, where most eventually settled in a camp with other Uighurs opposed to the Chinese government. After the United States conducted aerial strikes in the area in October 2001, the Uighurs from that camp fled to Pakistan and were later apprehended. According to available information, these individuals did not travel to Afghanistan with the intent to take any hostile action against the United States.This marks the first time since 2006 that the U.S. government has successfully resettled any of the Guantanamo Uighur population. In 2006, five Uighurs were transferred to Albania; there have been no reports of post-resettlement engagement in criminal behavior or terrorist activities.
"By helping accomplish the President’s objective of closing Guantanamo, the transfer of these detainees will make America safer," said Attorney General Eric Holder. "We are extremely grateful to the government of Bermuda for its assistance in the successful resettlement of these four detainees, and we commend the leadership they have demonstrated on this important issue."
Since 2002, more than 540 detainees have departed Guantanamo for other countries including Albania, Algeria, Afghanistan, Australia, Bangladesh, Bahrain, Belgium, Denmark, Egypt, France, Great Britain, Iran, Iraq, Jordan, Kazakhstan, Kuwait, Libya, Maldives, Mauritania, Morocco, Pakistan, Russia, Saudi Arabia, Spain, Sweden, Sudan, Tajikistan, Turkey, Uganda, United Kingdom and Yemen.Two Individuals Indicted for Trafficking Counterfeit Gaming Machines and Computer ProgramsRead the Press Release
Rodolfo Rodriguez Cabrera, 43, a Cuban national, and Henry Mantilla, 35, of Cape Coral, Fla., have been charged in a scheme to produce and sell counterfeit International Game Technology (IGT)-brand video gaming machines, commonly known as slot machines, and counterfeit IGT computer programs.
Cabrera was arrested June 8, 2009, in Riga, Latvia, based on the indictment. Mantilla is scheduled to appear based on a summons in U.S. District Court for the District of Nevada on July 2, 2009, before U.S. Magistrate Judge Robert J. Johnston.
According to the indictment, returned on April 22, 2009, and unsealed yesterday, Cabrera owned and operated a company called FE Electronic in Riga, Latvia, and Mantilla owned and operated a company named Southeast Gaming Inc., in Cape Coral, Fla. The indictment alleges that between August 2007 and April 15, 2009, Cabrera and Mantilla conspired to make unauthorized copies of IGT video gaming machine computer programs, place counterfeit labels bearing IGT’s registered trademark on the computer programs, install the counterfeit computer programs in IGT gaming machine cabinets and then sell the counterfeit computer programs and gaming machines through their respective companies, all without the permission of the trademark and copyright owner, IGT.
Cabrera and Mantilla are charged in the indictment with one count of conspiracy, two counts of trafficking in counterfeit goods, two counts of trafficking in counterfeit labels and two counts of criminal copyright infringement. If convicted of all charges, each defendant faces a maximum of up to 45 years in prison and $5.25 million in fines. The indictment also contains 13 forfeiture allegations that require the defendants, if convicted, to forfeit any and all counterfeit items and to forfeit up to $5 million in proceeds from their alleged criminal activity.
The case is being investigated by the FBI and prosecuted by Assistant U.S. Attorney Michael Chu of the U.S. Attorney’s Office for the District of Nevada and Trial Attorney Thomas S. Dougherty of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS). Significant assistance has been provided by the Central Criminal Police Department of the Latvian Ministry of Interior; Latvia’s Office of the Prosecutor General, International Cooperation Division; and Senior Trial Attorney Deborah Gaynus of the Criminal Division’s Office of International Affairs. CCIPS Trial Attorney John Zacharia also assisted with the prosecution. IGT also provided assistance in this matter.
An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in a court of law.
Indictment
Seafood Wholesaler and Owner Plead Guilty to Conspiracyin the Illegal Harvesting of RockfishRead the Press Release
Golden Eye Seafood LLC and owner, Robert Lumpkins of St. Mary’s County, Md., pleaded guilty today to conspiracy to and violating the Lacey Act, by falsely recording the amount and weight of striped bass, also known as rockfish, that were harvested by local fisherman and checked-in through Golden Eye from 2003 to 2007.
According to his plea agreement, from at least 2003 to the present, Lumpkins was a fish wholesaler, doing business from his residence in Piney Point, Maryland, under the name Golden Eye Seafood. Lumpkins, through, Golden Eye, acted as a commercial striped bass check-in station for the state of Maryland. Lumpkins admitted that from on numerous occasions from 2003 to 2007, he falsely recorded the amount of striped bass that fisherman harvested and failed to record some of the striped bass that was caught or recorded a lower weight of striped bass than was actually caught. Lumpkins and the fisherman would also falsely inflate the actual number of fish harvested. By under-reporting the weight of fish harvested, and over-reporting the number of fish taken, the records would make it appear that the fishermen had failed to reach the maximum poundage quota for the year, but had nonetheless run out of tags. As a result, the state would issue additional tags that could be used by the fishermen allowing them to catch striped bass above their maximum poundage quota amount. Lumpkins and Golden Eye shipped the majority of the fish to purchasers in Maryland and in other states.
Golden Eye Seafood faces a maximum fine of $500,000 on each of the three counts to which it pleaded guilty and Robert Lumpkins faces a maximum penalty of five years in prison and a $250,000 fine on each of the four counts to which he pleaded guilty. U.S. District Judge Peter J. Messitte has scheduled the sentencing hearing for September 22 and 23, 2009.
Additionally, John Evans, a commercial fisherman who operated in St. Mary’s County and the surrounding waters of the Chesapeake Bay, was charged with a violation of the Lacey Act for overfishing striped bass. Two other fishermen, Joseph Peter Nelson Jr. of Great Mills, Md., and his father Joseph Peter Nelson of Avenue, Md., have been indicted in the District of Maryland and are awaiting trial.
Sentencing dates for the remaining defendants who have pleaded guilty to similar charges are listed below.
Kenneth Dent, July 2, 2009, 9:30 AM
Jerry Decatur Sr., July 1, 2009, 9:30 AM
Jerry Decatur Jr., August 12, 2009, 9:30 AM
Cannon Seafood, a Washington, D.C., fish wholesaler, its owner, Robert Moore Sr. and his son Robert Moore Jr. pleaded guilty to similar charges. Cannon Seafood was ordered to pay restitution of $28,000 and a fine of $80,000. Robert Moore, Sr. and Robert Moore, Jr. were each sentenced to 36 months probation, ordered to pay restitution of $15,000 and $10,000, and a fine of $40,000 and $30,000, respectively.
Thomas L. Hallock, a commercial fisherman licensed in Maryland, was sentenced to a year and a day in prison, for illegally overfishing rockfish and was ordered to pay restitution of $40,000 and a fine of $4,000. Commercial fisherman Thomas Crowder was sentenced to 15 months in prison, ordered to pay a $5,000 fine and restitution of $96,250 and Charles Quade was sentenced to five months in prison, followed by five months of home detention. Quade was also ordered to pay a $1,000 fine and restitution of $5,000. Keith Collins was sentenced to 13 months in prison and was ordered to pay $70,569 in restitution and a fine of $4,500. All of the restitution is to be paid to the National Fish and Wildlife Foundation to the benefit of the Chesapeake Bay Striped Bass Restoration Account.
As a result of the investigation and prosecution, two fish wholesalers and a total of 15 individuals have been charged for illegally harvesting and underreporting their catch of striped bass, including today’s defendants. Eleven individuals and two wholesale companies have pleaded guilty.
The case is being prosecuted by Assistant U.S. Attorneys Stacy Dawson Belf and Christen Sproule for the District of Maryland and Senior Trial Attorney Wayne Hettenbach of the Justice Department’s Environmental Crimes Section.
Georgia Federal Court Permanently Bars Fulton County Man from Preparing Tax ReturnsRead the Press Release
A federal court in Atlanta has permanently barred Derrick Jackson and his businesses from preparing federal tax returns for others. The court said that since 2002, Jackson "has prepared blatantly fraudulent tax returns for customers." Jackson’s businesses were called Tax Wisdom and International Tax and Accounting Services.
The court said that Jackson used an alias and false federal tax identification number to disguise his true identity from the Internal Revenue Service (IRS) when preparing returns. The court also found that Jackson engaged in other unlawful conduct, such as filing phony W-2 forms and claiming false deductions and credits on customers’ tax returns, including fraudulent fuel tax credits and false earned income tax credits.
Fuel credit scams are on this year’s IRS list of the Dirty Dozen Tax Scams. In the past few years the Justice Department has obtained injunctions shutting down many tax preparers who claim the phony credits on customers’ returns.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Grayson Hoffman, the Justice Department trial attorney who handled the case, and Shauna Henline, a technical advisor with the IRS’s Small Business/Self-Employed Division, who conducted the investigation.
In the past decade the Justice Department’s Tax Division has obtained injunctions against more than 405 tax-return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.
Defense Department Official Indicted on Espionage, False Statement ChargesRead the Press Release
A federal grand jury in the Eastern District of Virginia has indicted James Wilbur Fondren Jr., on one count of conspiracy to communicate classified information to an agent of a foreign government and act as an illegal foreign agent; four counts of unlawfully communicating classified information to an agent of a foreign government; and three counts of making false statements to the FBI. If convicted on all charges, Fondren would face a maximum of 60 years in prison.
Fondren, age 62, worked at the Pentagon and, from August 2001 through Feb. 11, 2008, was the Deputy Director, Washington Liaison Office, U.S. Pacific Command (PACOM). He held a Top Secret security clearance, worked in a Sensitive Compartmentalized Information Facility (SCIF) and had a classified and unclassified computer at his cubicle. He has been on administrative leave with pay since mid-February 2008 and has not performed any duties in or for PACOM since that time.
On May 13, 2009, Fondren turned himself in to federal agents after being charged in a criminal complaint with conspiracy to communicate classified information to an agent of a foreign government.
According to the indictment returned today, from approximately Nov. 2004 to Feb. 11, 2008, Fondren provided certain classified Defense Department documents and other information to Tai Shen Kuo, a naturalized U.S. citizen from Taiwan.
Fondren was aware that Kuo had maintained a close relationship with an official of the People’s Republic of China (PRC), to whom Kuo introduced Fondren during a trip the two took to the PRC in March 1999. As Kuo well knew, this individual was an official of the PRC government. Fondren and the PRC official exchanged more than 40 email messages between March 1999 and November 2000.
Fondren is alleged to have provided classified information through Kuo, under the guise of consulting services, using a business that had Kuo as its sole customer. Fondren would incorporate this information into "opinion papers" that he sold to Kuo. He would also provide Kuo with sensitive, but unclassified Defense Department publications.
The indictment also alleges that, when Fondren was interviewed by FBI agents regarding this investigation, he falsely represented that everything he wrote to Kuo in his opinion papers was based on information from press and media reports and from his experience; that he had never taken any classified information home; and that he had not given Kuo a draft copy of an unclassified document on military strategy.
This investigation was conducted by the FBI. The Air Force Office of Special Investigations (OSI) provided substantial assistance and cooperation throughout the course of the investigation.
The prosecution is being handled by Assistant U.S. Attorneys Neil Hammerstrom and James P. Gillis, from the U.S. Attorney’s Office for the Eastern District of Virginia, and Trial Attorney Ryan Fayhee from the Counterespionage Section of the Justice Department’s National Security Division.
The public is reminded that an indictment only contains charges and is not evidence of guilt. A defendant is presumed innocent unless and until proven guilty.
Defendant Sentenced in Conspiracy to Export Military Aircraft Parts to IranRead the Press Release
Traian Bujduveanu was sentenced in Miami federal court for his role in a conspiracy to illegally export military and dual use aircraft parts to Iran. Bujduveanu’s co-defendant, Hassan Keshari, and his corporation, Kesh Air International, were sentenced in May 2009.
U. S. District Court Judge Patricia Seitz sentenced Bujduveanu to 35 months in prison, followed by three years of supervised release. Bujduveanu pled guilty on April 2, 2009, to Count 1 of the Indictment, which charged conspiracy to export and cause the export of goods from the U.S. to the Islamic Republic Iran, in violation of the Embargo imposed upon that country by the United States and in violation of the International Emergency Economic Powers Act, Title 50, United States Code, 1705(a), and to export and cause to be exported defense articles, in violation of the Arms Export Control Act, Title 22, United States Code, Section 2778(b), all in violation of Title 18, United States Code, Section 371.
As part of his plea, Bujduveanu, a Romanian national and naturalized U.S. citizen, admitted that he used his Plantation, Fla., corporation, Orion Aviation, to sell aircraft parts to Keshari for purchasers in Iran and exported the aircraft parts to Iran by way of freight forwarders in Dubai, United Arab Emirates. Among the aircraft parts illegally exported to Iran through the conspiracy were parts designed exclusively for the F-14 Fighter Jet, the Cobra AH-1 Attack Helicopter, and the CH-53A Military Helicopter. All of these aircraft are part of the Iranian military fleet, while the F-14 is known to be used exclusively by the Iranian military. Moreover, all of the parts supplied by Bujduveanu as part of the conspiracy are manufactured in the U.S., are designed exclusively for military use, and have been designated by the U.S. Department of State as "defense articles" on the U.S. Munitions List, thus requiring registration and licensing with the Department of State, Directorate of Defense Trade Controls. Neither Bujduveanu nor his co-defendants are registered or had the required licenses to ship defense articles to Iran.
According to the Indictment and statements and documents filed with the court, Bujduveanu received orders by email from Keshari requesting specific aircraft parts for buyers in Iran. Bujduveanu then provided quotes, usually by e-mail, to Keshari. After the receipt of payment for the parts from Keshari, Bujduveanu then the parts to a company in Dubai through the use of false or misleading shipping document. From Dubai, the parts were then shipped on to the purchasers in Iran.
Bujduveanu has been in federal custody since his arrest in June 2008.
Mr. Sloman commended the investigative efforts of the U.S. Department of Commerce, Office of Export Enforcement, U.S. Immigration and Customs Enforcement, Office of Investigations, and the U.S. Department of Defense, Defense Criminal Investigative Service, for their work on this investigation. The case is being prosecuted by Assistant U.S. Attorney Melissa Damian. Trial Attorney Ryan Fayhee, of the Counterespionage Section of the Justice Department’s National Security Division, is providing assistance.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov.
Chicago Police Officer Sentenced for Violating Federal Civil Rights of a Man <br /> Beaten While Restrained in a WheelchairRead the Press Release
William Cozzi, a Chicago police officer, was sentenced today to 40 months in federal prison for violating the federal civil rights of a man whom the officer struck repeatedly with a dangerous weapon while the man was handcuffed and shackled in a wheelchair.
Cozzi, 52, of Chicago, pleaded guilty in January and admitted that he used excessive or unreasonable force while acting under color of law. He was ordered to begin serving his sentence on Aug. 6, 2009. The sentence was imposed by U.S. District Judge Blanche Manning, who also imposed a $2,000 fine, two years of supervised release and 200 hours of community service. Cozzi joined the Chicago Police Department in 1992 and was assigned to the 25th District at the time of the alleged incident. He was subsequently suspended from duty.
Cozzi was charged in April 2008 with depriving the victim of his civil rights. In pleading guilty, Cozzi admitted that on Aug. 2, 2005, while performing his duties as a police officer, he used a "sap" – a dangerous weapon similar to a blackjack – to repeatedly strike the unnamed victim, identified only as "Victim A," who was handcuffed and shackled in a wheelchair at Norwegian American Hospital in Chicago, resulting in bodily injury. At the time, Victim A was awaiting treatment in the hospital emergency room after being stabbed in the shoulder.
"Police officers are given tremendous authority and responsibility so that they can protect and serve the public trust. Those who abuse that authority face serious consequences," said Loretta King, Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is committed to the vigorous enforcement of federal laws prohibiting this type of misconduct by law enforcement officials."
"No law enforcement officer may use unreasonable force with impunity and every citizen, regardless of being in police custody, has a Constitutional right to be free from the use of excessive force," U.S. Attorney Patrick J. Fitzgerald said.
Cozzi pleaded guilty while reserving his right to appeal a judge’s rulings last year denying his motion to dismiss the indictment on the grounds that the prosecution was based in part on compelled statements he made to the Chicago Police Department’s Office of Professional Standards and during a police review board hearing.
According to a plea agreement, Cozzi was dispatched to the hospital to respond to the stabbing and approached Victim A who was being loud and verbally abusive while awaiting treatment for the stabbing. Shortly after approaching Victim A, Cozzi placed him in handcuffs and left the emergency room to retrieve leg shackles, which he then placed upon Victim A. With the victim restrained, Cozzi used a sap to repeatedly strike him in the face and body. At the time, Victim A posed no physical threat to Cozzi or anyone else at the hospital, according to the plea agreement.
Cozzi also admitted that he subsequently prepared a false arrest report and misdemeanor complaints stating that Victim A attempted to punch him and two hospital security guards, as well as a false tactical response report stating that he used an "open hand strike" on Victim A but omitted that he struck the victim with a sap.
The government was represented in court by Civil Rights Division Trial Attorney Betsy Biffl and Assistant U.S. Attorney Scott Drury.
10 June 2009
Defendant Found Guilty of Conspiracy to Support TerroristsRead the Press Release
WASHINGTON - After a bench trial held last week in the Northern District of Georgia, U.S. District Judge William S. Duffey, Jr., announced today that Syed Haris Ahmed, 24, has been found guilty of conspiracy to provide material support to terrorists.
"This case has never been about an imminent threat to the United States, because in the post-9/11 world we will not wait to disrupt terrorism-related activity until a bomb is built and ready to explode," said David E. Nahmias, U.S. Attorney for the Northern District of Georgia. "The fuse that leads to an explosion of violence may be long, but once it is lit – once individuals unlawfully agree to support terrorist acts at home or abroad – we will prosecute them to snuff that fuse out. This investigation is connected to arrests and convictions of multiple terrorist supporters in Atlanta and around the world – all before any innocent people were killed. I commend the agents, prosecutors, and support staff who have worked so hard for so long to gather and present the evidence that led to today’s guilty verdict."
"This prosecution underscores the importance of international and domestic cooperation in combating terrorism," said David Kris, Assistant Attorney General for National Security. "The agents, analysts and prosecutors involved in this case and in related investigations around the world deserve a special thanks for their efforts."
"Protecting the United States from terrorist attacks is the highest priority of every FBI employee," said FBI Atlanta Special Agent in Charge Gregory Jones. "Working with our law enforcement and intelligence community partners, the FBI was fortunate enough to have disrupted and dismantled a group whose stated goal was to provide support to those engaged in terrorism. I would like to thank the men and women of the Atlanta Joint Terrorism Task Force (JTTF) who, for over a year and a half, painstakingly pursued this defendant and others as they conspired and devised ways to achieve their dangerous goals. The conviction in this case validates the FBI’s approach that we do not need to wait, nor should we wait, for an individual to be caught with his hands on a bomb before we recognize and respond to the threat."
According to U.S. Attorney Nahmias and the evidence presented during the trial:
Ahmed is a naturalized U.S. citizen who was born in Pakistan and raised in Marietta and Dawsonville, Ga. At trial, the government presented evidence that, beginning in late 2004 and early 2005, Ahmed unlawfully agreed (conspired) with others to provide material support to terrorists engaged in violent jihad. The evidence indicated that the material support consisted of: (1) Ahmed and other individuals who would provide themselves as personnel to engage in violent jihad, and (2) property, namely, video clips of symbolic and infrastructure targets for potential terrorist attacks in the Washington, D.C., area, including the United States Capitol, which were taken by Ahmed and his principal alleged co-conspirator and then sent to "the jihadi brothers" abroad.
At trial, the government presented evidence that Ahmed and his co-conspirators used the Internet to develop relationships and maintain contact with each other and with other supporters of violent jihad in the United States, Canada, the United Kingdom, Pakistan, and elsewhere. In support of the conspiracy, in March 2005 Ahmed traveled with his principal co-conspirator to Toronto, Canada, to meet with other co-conspirators and discuss their plans to travel to Pakistan in an effort to attend a paramilitary training camp operated by a terrorist organization, as well as potential targets for terrorist attacks in the United States.
In April 2005, Ahmed and his principal co-conspirator traveled to the Washington, D.C., area to take the casing videos, which the government’s evidence showed they made to establish their credentials with other violent jihad supporters as well as for use in violent jihad propaganda and planning. Ahmed’s co-conspirator sent several of the video clips to Younis Tsouli, a/k/a "Irhabi007" (Arabic for "Terrorist 007"), a propagandist and recruiter for the terrorist organization Al Qaeda in Iraq, and to Aabid Hussein Khan, a/k/a "Abu Umar," a facilitator for the Pakistan-based terrorist organizations "Lashkar-e-Tayyiba" and "Jaish-e-Mohammed." Both Tsouli and Khan have since been convicted of terrorism offenses in the United Kingdom.
The government also presented evidence at trial that in July 2005, Ahmed traveled from Atlanta to Pakistan in an unsuccessful attempt to enter a training camp and ultimately engage in violent jihad. After returning to Atlanta to resume his studies at Georgia Tech in August 2005, Ahmed expressed regret at his failure to join violent jihadists, conducted internet research on topics such as high explosives and evading surveillance, and discussed his intent to make another attempt to enter a violent jihad training camp.
In March 2006, however, Ahmed was approached by FBI agents and agreed to a series of voluntary, non-custodial interviews over the course of eight days. Amid efforts to deny his illegal activities and mislead the agents, Ahmed made increasingly incriminating statements. Efforts by the FBI to obtain Ahmed’s cooperation in the ongoing international terrorism investigation ended after the FBI discovered that Ahmed was surreptitiously contacting his principal co-conspirator, who was then in Bangladesh, to advise him of the FBI investigation and to warn him not to return to the United States. The conspiracy to provide material support to terrorists did not result in any known acts of terrorism.
Ahmed was arrested in Atlanta on March 23, 2006, on the original indictment in this case, which charged him with one count of material support of terrorism. He has been in custody since that time. The initial indictment was unsealed and publicly announced on April 20, 2006, after the arrest of the alleged principal co-conspirator in Bangladesh. Superseding indictments added three additional charges.
Ahmed recently waived his right to a jury trial on the conspiracy charge of the second superseding indictment (Count One) and agreed to have the verdict decided by the Court. The other three counts were severed. The bench trial was held on June 1-4, 2009, and the Court then took the verdict under advisement until today.
Judge Duffey delivered the guilty verdict in open court, but sealed his written findings supporting the verdict until the completion of the jury trial of a related case against the alleged principal co-conspirator, which is scheduled to begin on August 3, 2009. Judge Duffey set a hearing for tomorrow, June 11, at 11:00 a.m., for anyone interested in being heard on the sealing of the findings supporting the guilty verdict.
Ahmed could receive a maximum sentence of 15 years in prison, followed by a term of supervised release up to life, and a fine of up to $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. A sentencing date will be set after the completion of the alleged co-conspirator’s trial.
This case is being investigated by agents and officers of the Atlanta Joint Terrorism Task Force (JTTF), which is led by the FBI, Atlanta Division.
Assistant United States Attorneys Robert McBurney and Christopher Bly and Trial Attorney Alexis Collins, of the Counterterrorism Section of the Justice Department’s National Security Division, are prosecuting the case.
Arrests Made in Operation Targeting Network Selling Stolen Native American ArtifactsRead the Press Release
FBI and BLM agents, joined by the U.S. Marshals and local and state law enforcement partners, were simultaneously arresting defendants and executing search warrants in Utah Wednesday morning following a more than two-year undercover operation targeting a network of individuals allegedly involved in the sale, purchase, and exchange of artifacts illegally taken from public or Indian lands in the Four Corners region of the country. The investigation represents the nation’s largest investigation of archaeological and cultural artifact thefts.
Twelve indictments charging 24 defendants with violations of the Archaeological Resources Protection Act (ARPA) and the Native American Graves Protection and Repatriation Act (NAGPRA) were unsealed this morning in Salt Lake City. Arrest warrants were issued for 23 of the 24 individuals charged as a part of the investigation. Twelve search warrants also are being executed. The case involves 256 artifacts totaling $335,685.
The indictments were announced this morning in Salt Lake City by the Deputy Attorney General David W. Ogden of the U.S. Department of Justice; Ken Salazar, Secretary of the Interior; Brett L. Tolman, U.S Attorney in Utah; Timothy J. Fuhrman, Special Agent in Charge of the FBI’s Salt Lake City Field Office; and Larry Echo Hawk, Assistant Secretary of the Interior for Indian Affairs.
In addition to ARPA and NAGPRA violations, the indictments allege theft of government property, depredation of government property, and theft of Indian tribal property. The indictments unsealed today were returned by a grand jury in Utah and charge defendants in Utah, New Mexico, and Colorado. A list of defendants and the charges they face is included as an attachment to this press release. Defendants charged in federal indictments are presumed innocent unless or until proven guilty in court.
"These archaeological treasures are precious and protecting them preserves a rich history and heritage. That is why the Justice Department will use all of its tools to vigorously enforce the laws designed to safeguard the cultural heritage of Native Americans," said Deputy Attorney General Ogden. "Recommitting resources and focus to criminal justice in Indian Country is of paramount importance to the Justice Department. We are currently conducting a training initiative with the Interior Department for federal prosecutors and law enforcement personnel on looting, vandalism, and illegal trafficking of cultural heritage, and are planning to reach out to with Indian Country leaders in the near future to engage in an ongoing consultation on these issues."
"Let this case serve notice to anyone who is considering breaking these laws and trampling our nation’s cultural heritage that the BLM, the Department of Justice, and the federal government will track you down and bring you to justice," said Secretary Salazar. "As these alleged criminals are prosecuted and as federal agents continue to hunt down wrong doers, BLM cultural resources staff will work to ensure the proper recovery, identification, repatriation, and storage of the artifacts that have been confiscated.
"The indictments unsealed today charge a group of defendants, largely excavators, dealers, and collectors, with serious violations of federal law," U.S. Attorney Tolman said today. "Those who remove or damage artifacts on public or tribal lands take something from all of us. These treasures are the heritage of all Americans, and in many cases, the objects are sacred to Native Americans. The notion that you can take whatever you want from public lands is wrong. Individuals engaged in this kind of conduct will be investigated and prosecuted."
"The FBI has taken this matter seriously and spent a significant amount of personnel and financial resources in exposing this network of individuals illegally trafficking in these items," said FBI Special Agent in Charge Fuhrman. "The FBI remains committed to devoting all necessary resources to address this problem."
"The problem American Indian and Alaska Native tribes face of looters robbing them of their cultural patrimony is a major law enforcement issue for federal agencies responsible for enforcing historic preservation laws in Indian Country," said Assistant Secretary of the Interior for Indian Affairs Larry Echo Hawk. "Today’s action should give tribes reassurance that the Obama Administration is serious in preserving and protecting their cultural property."
The Four Corners region, rich in archaeological resources, contains artifacts that are vitally important to the scientific, academic, and Native American communities. The illegally obtained relics include decorated Anasazi pottery, an assortment of burial and ceremonial masks, a buffalo headdress, and ancient sandals known to be associated with Native American burials. Additionally, improperly excavated archeological sites mean a significant amount of historical information is lost because the artifacts are not identified in the context of where they were located.
Defendants will have initial appearances before U.S. Magistrate Judge Samuel Alba at the Grand County Courthouse in Moab Wednesday. The U.S. Attorney’s Office is seeking to detain one of the defendants. Others will be ordered to maintain and store in current condition all artifacts in their possession and engage in reasonable efforts to protect them from damage, destruction, loss or theft. One defendant is not being arrested and will be issued a summons to appear in federal court.
ARPA prohibits the unauthorized excavation and removal of archaeological resources on federal lands as well as the unlawful sale, purchase, or exchange of such resources. Under NAGPRA, any Native American human remains, funerary objects, objects of cultural patrimony and sacred objects must be repatriated to Indian tribes. The BLM will consult with tribes to determine cultural affiliation and to facilitate repatriation. For artifacts not subject to NAGPRA, the BLM will work with museums to stabilize, identify, and preserve them under the provisions of ARPA, and make them available for scientific research and public education.
9 June 2009
Wisconsin Couple Sentenced for Forcing a Woman to Work as Their Domestic Servant for 19 YearsRead the Press Release
Jefferson Calimlim Sr. and his wife, Elnora Calimlim, both medical doctors in Milwaukee, Wis., were each sentenced today to 72 months in prison for forcing a woman to work as their domestic servant and illegally harboring her for 19 years in their Brookfield, Wis., residence.
The defendants, initially sentenced on Nov. 16, 2006, to four-year prison terms each, were re-sentenced today, after the Court of Appeals identified legal errors in the initial sentencing and remanded to the trial court for re-sentencing.
On May 26, 2006, Jefferson Calimlim Sr. and Elnora Calimlim were convicted by a Milwaukee federal jury for using threats of serious harm and physical restraint against a Filipina to obtain her services, in violation of federal law. Jefferson Calimlim Jr. was convicted of harboring an illegal alien.
According to evidence presented at trial, Jefferson Calimlim Sr. and his wife recruited and brought the victim from the Philippines to the U.S. in 1985 when she was 19 years old. In September 2004, federal law enforcement officers responding to a tip removed the victim, then age 38, from the Calimlim’s residence through the execution of a federal search warrant. The victim testified that for 19 years she was hidden in the Calimlim’s home, forbidden from going outside and told that she would be arrested, imprisoned and deported if she was discovered.
"Our Constitution promises freedom to all," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The defendants denied the victim the basic right to her freedom. The Department of Justice is committed to prosecuting those who prey on vulnerable members of our society and hold them in modern-day slavery."
"Human Trafficking is a form of modern day slavery and is simply not acceptable. No person should ever be forced to live in fear, virtual isolation and servitude," said Acting U.S. Attorney Michelle L. Jacobs for the Eastern District of Wisconsin. "The prosecution of human trafficking offenses is a top priority of the Justice Department, and our office is committed to aggressively pursuing these cases."
In Fiscal Year 2008, the Department brought a record number of human trafficking cases, including both the highest number of both sex trafficking and labor trafficking cases ever brought in a single year.
The case was prosecuted by Assistant U.S. Attorney Tracy Johnson and Trial Attorney Susan French of the Civil Rights Division’s Human Trafficking Prosecution Unit. The case was jointly investigated by the Milwaukee Office of U.S. Immigration and Customs Enforcement and the FBI.