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6 May 2009
U.S. Court in Seattle Permanently Shuts Down Washington, D.C., Tax PreparerRead the Press Release
WASHINGTON – A federal judge in Seattle, Wash., has permanently barred a District of Columbia man, William H. Camp, Jr., from preparing tax returns for others and from promoting a scheme involving bogus gold mining tax deductions, the Justice Department announced today. The permanent injunction order was entered by Judge Ricardo S. Martinez of the U.S. District Court for the Western District of Washington, where a substantial number of Camp’s customers reside.
The court found that Camp was a salesmen for a sham mining expense tax scheme called MIDAS, which was offered by a firm called Merendon Mining of Colorado and the Institute for Financial Learning (IFFL).
According to the court, Camp began persuading customers in 2003 to participate in the MIDAS scheme by promising large profits from purported investments in Colorado and Arizona gold mines. The court found that MIDAS participants usually made no investment of their own funds, but instead used funds obtained from the IRS by filing amended tax returns claiming bogus gold mining development deductions to receive large tax refunds for earlier tax years. The court further found that Camp prepared these false amended returns, many of which wrongfully eliminated the majority of his customer’s income tax liabilities for 1997 through 2002. The court also found that Camp charged his customers up to $4,000 each to prepare and file the false amended returns.
The court further found that Camp prepared a legal opinion letter for his customers regarding the applicability of the mining deduction. The court found that Camp is not a certified public accountant, never held an accounting license, and did not consult any legal authority in drafting the opinion. The court held that Camp in fact knew that his customers were not engaged in the business of mining and that MIDAS participants had paid no money toward any mine development, even though his opinion letter falsely stated that "development expenses" claimed by his customers were tax deductible.
The injunction bars Camp from promoting the MIDAS tax scheme and any other false or fraudulent tax plan, preparing or assisting others in preparing any tax form or document, and falsely representing himself as a certified public accountant.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division trial attorneys Jacqueline Brown and Tom Curteman for their handling of the case, and revenue agents Andrew Crabb and Sean Flannery of the Internal Revenue Service’s Small Business/Self-Employed Division for their investigative work.
Over the past decade, the Justice Department’s Tax Division has obtained injunctions against more than 395 tax return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
Korean Businessman Indicted in Bribery Conspiracy and Wire Fraud Scheme Involving $206 Million ContractRead the Press Release
A South Korean businessman was indicted today for his alleged role in a bribery conspiracy for a $206 million telecommunications contract involving employees of the Army and Air Force Exchange Service (AAFES).
In a superseding indictment, Gi-Hwan Jeong, 44, was charged in the Northern District of Texas with conspiracy, honest services wire fraud and bribery. Jeong was previously indicted on Dec. 17, 2008, solely on bribery charges and was arrested in Dallas on Nov. 19, 2008, on a criminal complaint. In upholding Jeong’s detention, U.S. District Court Judge Jane J. Boyle found probable cause to support charges and that Jeong was a flight risk. Jeong’s trial on all counts is scheduled to begin June 24, 2009, before U.S. District Judge Ed Kinkeade.
According to the superseding indictment, AAFES provides goods and services worth billions of dollars to U.S. Armed Forces service members and their families around the world, often referred to as military exchanges. The superseding indictment alleges that between 2001 and 2006 Jeong conspired with two AAFES officials and others to commit bribery and honest services wire fraud when he agreed to make payments to the officials in the form of cash, travel and entertainment expenses in exchange for their aid in securing and maintaining a $206 million telecommunications contract for Jeong’s company, Samsung Rental Ltd. (SSRT).
On April 21, 2009, Henry Lee Holloway, identified as co-conspirator and recipient of bribes in Jeong’s superseding indictment, pleaded guilty in the Middle District of Georgia for his role in the conspiracy and for not reporting the bribes he admitted he accepted on his income tax returns. Holloway, 42, of Hamilton, Ga., worked as an AAFES general store manager at the Central Exchange in the Republic of Korea from 2003 through 2007. According to court documents, prior to Jeong’s alleged payments to Holloway, and as a result of SSRT’s failures to perform under the contractual relationship with AAFES, Holloway attempted to terminate the contractual relationship between AAFES and SSRT. After Jeong allegedly began making payments to Holloway, and as the result of those payments, Holloway admitted he used official acts and influence to support and expand that contractual relationship, including contract amendments and obligation changes.
The case is being prosecuted by Senior Trial Attorney Richard C. Pilger and Trial Attorneys Richard B. Evans and Eric G. Olshan of the Criminal Division’s Public Integrity Section, headed by William M. Welch, II, Chief. The case was investigated by the Air Force Office of Special Investigations, the FBI’s Dallas Field Office and the Internal Revenue Service.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Indictment
Justice Department Files Lawsuit AllegingDisability-based Housing Discriminationat Six Complexes in Sioux Falls, South DakotaRead the Press Release
The Justice Department filed a lawsuit today against Equity Homes Inc, PBR LLC, BBR LLC and Shane Hartung in U.S. District Court in South Dakota for failing to provide accessible features required by the Fair Housing Act at multi-family housing developments in Sioux Falls.
The lawsuit, which originated from a complaint filed with the U.S. Department of Housing and Urban Development (HUD), concerns six Sioux Falls complexes - East Briar Apartments, West Briar Apartments, Kensington Apartments, Beverly Gardens Apartments, Sertoma Hills Apartments and Sertoma Hills Villas.
"When builders and designers construct homes without regard for accessible features, they are effectively shutting the door to persons with disabilities," said Loretta King, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. "Designing and constructing multi-family housing without basic features of accessibility violates the law."
"The Fair Housing Act’s design and construction standards for accessible housing in multifamily dwellings are clear and have been law for 18 years. Most architects, builders and developers get it right. We commend Fair Housing of the Dakotas for bringing this case to our attention for enforcement of the law," stated HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasviña.
The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Among other things, the act requires that new multifamily housing developments be designed and constructed with basic accessibility features, including accessible common and public use areas, accessible routes to and through apartments, doors wide enough for wheelchair users, kitchens and bathrooms with sufficient maneuvering space for wheelchair users, outlets and environmental controls in accessible locations, and bathrooms with reinforcements for grab bars. The complaint alleges that the defendants failed to include certain of these required accessibility features at each of the six complexes.
The lawsuit seeks a court order requiring the defendants to modify the complexes to bring them into compliance with federal laws and prohibiting future discrimination by the defendants, as well as monetary damages to compensate victims.
Fighting illegal housing discrimination is a top priority of the Justice Department. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Additional information about the Fair Housing Act is also available at www.usdoj.gov/fairhousing and www.HUD.gov. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Former New Mexico Jail Administrator Sentenced for Civil Rights ViolationsRead the Press Release
A former jail administrator at the Cibola County Detention Center in Grants, N.M., was sentenced today to 97 months in prison, two years of supervised release and a $400 special assessment for violating the rights of inmates in his custody at two separate New Mexico jails. Judge James O. Browning announced the sentence today in federal court in Albuquerque, N.M.
John Gould was convicted by a federal jury on April 2, 2007, of two felony civil rights violations and two counts of obstruction of justice. According to the evidence presented at trial, on Oct. 16, 2002, while Gould was a Lieutenant and Shift Commander at the Dona Ana County Detention Center in Las Cruces, N.M., he aided and abetted officers he supervised in assaulting an inmate without justification. Specifically, the jury heard evidence that Gould applied pepper spray directly into the eyes of the inmate and then slammed his head to the floor multiple times even though the inmate was restrained on the floor and was not posing a threat to officers. As a result of this assault, the inmate suffered a fractured shoulder that required surgery and multiple rib fractures. Following the incident, Gould wrote a false official report about his actions and made false statements to the FBI and a federal grand jury. Five other corrections officers entered guilty pleas to civil rights and obstruction of justice charges in connection with this incident.
The jury also heard evidence that on March 4, 2004, Gould, while working as the administrator of the Cibola County Detention Center and after he had already been indicted for the incident at the Dona Ana County jail, shot a naked inmate twelve times in his back and buttocks with projectiles from a riot control weapon. At the time Gould deployed the weapon through an open food port window, the inmate was locked inside a holding cell and was not posing a threat to any officer. As a result of this assault, the inmate suffered multiple flesh wounds that became infected, requiring the inmate to be hospitalized for several days. Once again, following the assault, Gould wrote a false official report and made false statements about the incident.
"Law enforcement officers are given tremendous authority and responsibility so that they can protect and serve the public trust," said Loretta King, Acting Assistant Attorney General of the Civil Rights Division. "Those who abuse this authority face serious consequences. The Civil Rights Division is committed to prosecuting all cases of official misconduct and to bringing these individuals to justice."
The case was prosecuted by Special Litigation Counsel Kristy Parker and Deputy Chief Mark Blumberg of the Criminal Section of the Civil Rights Division and the U.S. Attorney’s Office for the District of New Mexico, and was investigated by FBI Special Agent Brian Russ.
Former Bank of China Managers and Their Wives Sentenced for Stealing <br /> More Than $485 Million, Laundering Money Through Las Vegas CasinosRead the Press Release
Two former managers of the Bank of China and their wives were sentenced today after their convictions on Aug. 29, 2008, by a federal jury in Las Vegas on charges of racketeering, money laundering, international transportation of stolen property as well as passport and visa fraud.
U.S. District Judge Philip M. Pro sentenced Xu Chaofan aka Hui Yat Fai to 25 years in prison, Xu Guojun aka Hui Kit Shun to 22 years in prison, Kuang Wan Fang aka Wendy Kuang to eight years in prison and Yu Ying Yi to eight years in prison. All four defendants were sentenced to three years of supervised release and ordered to pay $482 million in restitution. Denaturalization proceedings against Kuang Wan Fang and Yu Ying Yi have been initiated by the government.
Evidence presented during the trial established the elaborate scheme to defraud the Bank of China of at least $485 million, orchestrated by former managers Xu Chaofan, Xu Guojun and a third former bank manager, Yu Zhendong aka Yu Wing Chung, who pleaded guilty in connection with this investigation and cooperated with the United States. According to information presented in court, the scheme involved efforts by the bank managers to launder the stolen money through Hong Kong, Canada and the United States, among other countries, and then immigrate to the United States from China with their wives by obtaining false identities and entering into sham marriages with naturalized U.S. citizens. Evidence also proved that the bank managers’ true wives, Kuang Wan Fang and Yu Ying Yi, assisted their husbands in laundering the proceeds of the fraudulent scheme and violated U.S. immigration laws by entering this country illegally and then securing U.S. citizenship and passports through fraudulent means.
All five defendants were charged with engaging in a RICO conspiracy that began in 1991 and continued until October 2004 when the former bank managers and their wives were arrested. The underlying racketeering activities included engaging in monetary transactions with stolen money, transportation of stolen money, passport fraud and visa fraud. Evidence presented at trial established that the former bank managers created a number of shell corporations in Hong Kong and with the assistance of others funneled the bank’s money into these companies as well as numerous personal bank and investment accounts. Assisted by their wives, relatives and others, the former bank managers then laundered the stolen proceeds through Canada and the United States. Evidence presented at trial included a significant number of transactions with the stolen money through Las Vegas casinos, including bets at the casinos that ranged from $20,000 up to $80,000.
All five defendants also were convicted of engaging in a money laundering conspiracy and conspiracy to transport stolen money that began in 1998 and continued through October 2004. These conspiracy charges focused on the laundering of the stolen money in the United States not only through casinos, but also through numerous bank accounts established in the United States by the defendants.
The two former bank managers were also convicted on three counts each of visa fraud – specifically, the possession and use of a fraudulently procured non-immigrant U.S. visa to enter and/or remain in the United States. The two bank managers’ true wives were convicted of three counts each of passport fraud – specifically, the use of a U.S. passport secured through a false statement to enter or facilitate their stay in the United States.
"We will hold fully accountable those foreign nationals who abuse the financial systems of their home countries and who then, by fraudulent means, seek to live richly off their ill-gotten gains in the United States," said Assistant Attorney General Lanny A. Breuer. "Despite the best efforts of these defendants to avoid detection, their scheme first to steal nearly $500 million from a Chinese bank, and then to hide themselves and the money in the United States, was exposed thanks to the tireless efforts of federal agents and prosecutors. With their hard work, and the work of countless others like them who are on constant guard against theft and fraud, the Department will continue to unravel the most complicated financial crimes."
"The defendants sentenced today engaged in a complex scheme from across the globe, using U.S. banks and casinos to launder more than $485 million stolen from the Bank of China. Financial crimes like these know no borders. By partnering in investigations such as this one, the FBI and our law enforcement partners in the United States and abroad can combine our collective resource to most effectively attack this worldwide criminal threat," said Assistant Director Kenneth W. Kaiser, FBI Criminal Investigative Division.
Xu Chaofan, Xu Guojun, Kuang Wan Fang and Yu Ying Yi were charged on Sept. 21, 2004, in an 11-count indictment with conspiring to violate, and substantive violations of, U.S. immigration law. The third former bank manager, Yu Zhendong, pleaded guilty to engaging in a racketeering enterprise on Feb. 18, 2004, and voluntarily returned to China, where he was convicted for embezzlement for his role in the bank theft. Yu Zhendong’s true wife, Yu Xuhui (aka Fion Yu), pleaded guilty on April 26, 2005, to unlawfully procuring U.S. citizenship. She has agreed to voluntarily relinquish her American citizenship, but was permitted to remain in the United States with the couple’s children as long as she does not commit another crime. Yu Zhendong’s fake American wife, Shanna Yu Ma (aka Yu Shuzhan) pleaded guilty to submitting a false statement to the Immigration and Naturalization Service, now part of the Department of Homeland Security, in support of Yu Xuhui’s application for naturalization. Both Ma and Yu were sentenced in December 2007 to terms of probation.
This matter was prosecuted by Trial Attorney Krista Tongring and former Trial Attorney Cynthia Stone and of the Criminal Division’s Organized Crime and Racketeering Section and Assistant U.S. Attorney Ronald Cheng of the U.S. Attorney’s Office for the Central District of California. Organized Crime Strike Force Chief Eric Johnson of the U.S. Attorney’s Office for the District of Nevada served as local counsel. Significant assistance was also provided by Kyle Latimer of the Criminal Division’s Office of International Affairs. The U.S. Attorney’s Office for the District of Nevada provided significant support for the prosecution and coordination of witnesses from throughout the United States and overseas. The case was investigated by the FBI’s Las Vegas Field Office and U.S. Immigration and Customs Enforcement of the Department of Homeland Security. Essential support was also provided by the FBI’s offices in Beijing and Hong Kong. The government of the People’s Republic of China, in particular the Ministries of Justice and Public Security along with the Hong Kong Department of Justice and Hong Kong Police Force, also provided substantial assistance in producing evidence and making witnesses available, both for testimony at trial and videotaped depositions.
Connecticut Accountant Pleads Guilty to Income Tax EvasionRead the Press Release
Frank P. DiMartino, an accountant from Orange, Conn., pleaded guilty today to charges of tax evasion. DiMartino appeared before Magistrate Judge Holly B. Fitzsimmons in Bridgeport, Conn.
According to the plea agreement and evidence introduced during the plea hearing, DiMartino is the president and sole shareholder of Tax II Inc., an accounting and tax return preparation business located in Orange. During years 2001 through 2005, DiMartino operated Tax II from an office in his residence. During that time period, DiMartino attempted to evade the corporate income taxes he owed on behalf of the business by claiming personal expenses as business expenses on Tax II’s corporate income tax returns. These expenses included home repair and maintenance expenses, vehicle expenses and expenses related to the in-ground pool at the residence.
Additionally, DiMartino failed to report the Tax II funds he used to pay these personal expenses as income on his individual income tax returns for 2001 through 2005. The total tax loss associated with DiMartino’s conduct is $170,181.
Sentencing is scheduled for July 24, 2009, before District Court Judge Janet C. Hall. DiMartino faces a sentence of up to ten years in prison and a maximum fine of $500,000.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division trial attorney Michael P. Ben’Ary who is prosecuting the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
Civilian Contractor, U.S. Army Major and His Wife Indicted for Alleged Bribe Scheme Involving Contracts at Camp Arifjan in KuwaitRead the Press Release
A 23-count indictment unsealed today alleges that a civilian contractor paid more than $2.8 million in bribes to a U.S. Army contracting official stationed at Camp Arifjan, an Army base in Kuwait, and the official’s wife, and that the three individuals committed honest services fraud and money laundering offenses in connection with the same conduct.
The indictment, returned by a federal grand jury in the Northern District of Alabama, charges Terry Hall, 43, of Snellville, Ga., with one count of conspiracy to commit bribery, one substantive bribery count, eight counts of honest services wire fraud, one count of money laundering conspiracy and one count of engaging in monetary transactions in criminal proceeds.
Hall was originally indicted in the District of Columbia on Nov. 20, 2007, and charged with one count of bribery of a U.S. Army contracting official at Camp Arifjan. On Sept. 4, 2008, Hall was charged in a superseding indictment with one count of conspiracy to commit bribery, two substantive bribery counts and two honest services wire fraud counts. The government will seek dismissal of the D.C. indictments so that Hall can be tried together with his co-conspirators, named in the Alabama indictment unsealed today.
In the Alabama indictment, U.S. Army Major Eddie Pressley, 39, and his wife, Eurica Pressley, 37, both of Harvest, Ala., are charged with conspiracy to commit bribery, one substantive count of bribery, eight counts of honest services wire fraud, one count of money laundering conspiracy and eleven counts of engaging in monetary transactions in criminal proceeds.
The indictment alleges that Hall bribed two Army Majors, Eddie Pressley and James Momon, who served as Army contracting officials at Camp Arifjan between 2004 and 2006. According to the indictment unsealed today, from January 2004 to November 2007, Hall operated several companies that had contracts with the U.S. military in Kuwait, including Freedom Consulting and Catering Co. (FCC), and Total Government Allegiance (TGA). As a result of the bribes, FCC and TGA allegedly received approximately $21 million from contracts to deliver bottled water and to erect security fencing for the Department of Defense (DoD) in Kuwait and Iraq.
According to the indictment, Eddie Pressley allegedly arranged for a blanket purchase agreement (BPA) for bottled water to be awarded to FCC, and thereafter Eddie Pressley arranged for calls under that BPA. As a result, DoD paid FCC approximately $9.3 million. BPAs are contracts in which DoD agrees to pay a contractor a specified price for supplies and orders them on an as-need basis. An order under the contract is known as a "call." Eddie Pressley also allegedly arranged for DoD to award a contract to FCCto construct a security fence at Camp Arifjan, for which DoD paid FCC approximately $750,000.
In exchange for these and other official acts, Eddie and Eurica Pressley are alleged to have received more than $2.8 million in money and other valuable items from Hall. To receive the bribe payments, Eurica Pressley, at the behest of her husband, arranged for an entity named EGP Business Solutions Inc. (EGP) to be incorporated, opened a bank account in the name of EGP, and opened bank accounts in her name in Dubai, United Arab Emirates and the Cayman Islands. Hall, Eddie Pressley and Eurica Pressley also allegedly prepared and executed purported consulting agreements for the purpose of creating the appearance that Eurica Pressley had legitimately earned consulting fees from Hall. Hall then allegedly funneled bribe payments into the bank accounts controlled by Eurica Pressley.
The indictment also alleges that a second contracting official, former U.S. Army Major James Momon, arranged for calls to TGA under the same bottled water BPA, as a result of which DoD paid Hall approximately $6.4 million. Hall allegedly paid Momon at least $200,000 in exchange for these and other official acts. On Aug. 13, 2008, Momon pleaded guilty to receiving bribes from various contracting officers at Camp Arifjan.
"Service members and contractors who place personal gain above taxpayers’ interests during periods of war breach the public trust and undermine the legitimacy of public institutions," said Sharon Woods, Director of the Defense Criminal Investigative Service. "Corruption of the nature uncovered throughout the course of this investigation destroys confidence in the Government's ability to act as an effective steward of taxpayer dollars. The Defense Criminal Investigative Service remains committed to working with law enforcement partners and the Department of Justice to prosecute fraud and public corruption to the fullest extent of the law."
"Such alleged activity by Army employees or government contractors who work with the Army 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 (U.S. Army CID).
"These latest arrests of are further evidence of SIGIR’S continuing efforts to root out public corruption within the Iraq program," said Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction (SIGIR). "This successful investigation was part of cooperative efforts carried out by SIGIR and our partner agencies."
An indictment is merely an accusation and the defendant is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.
The charge of bribery conspiracy carries a maximum prison sentence of five years per count. Each substantive bribery count and wire fraud count carries a maximum penalty of 15 years in prison. Each count of money laundering conspiracy carries a maximum prison sentence of 20 years and each count of monetary transactions in criminal proceeds carries a maximum penalty of 10 years in prison.
The case is being prosecuted by trial attorneys Peter C. Sprung, Deborah Sue Mayer and Edward J. Loya Jr., of the Criminal Division’s Public Integrity Section, headed by Section Chief William Welch. These cases are being investigated by U.S. Army CID and Defense Criminal Investigation Service, FBI, ICE, the Justice Department’s Office of the Inspector General, SIGIR and the Internal Revenue Service Criminal Investigation. The investigations are continuing.
In October 2006, the Department of Justice announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force, 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. The cases brought by members of the Task Force demonstrate the Department of Justice's commitment to helping ensure the integrity of the government procurement process.
Indictment
Chief Engineer Sentenced for Concealing Vessel PollutionRead the Press Release
WASHINGTON – Carmelo Oria, a Spanish citizen who was the chief engineer on the Cyprus-flagged M/T Nautilus, was sentenced today in U.S. District Court in Massachusetts for maintaining inaccurate records that concealed a discharge of oil-contaminated water from the bilges of the M/T Nautilus, the Justice Department announced. Oria was sentenced to one month in prison, to be followed by supervised release for a term of two years and a $3,000 fine.
Oria pleaded guilty on March 9, 2009, to violating the Act to Prevent Pollution from Ships based on his role in discharging oil-contaminated bilge water directly into the ocean from the M/T Nautilus and then failing to record the discharge in the ship’s records.
The government’s investigation began in March 2008, when inspectors from the U.S. Coast Guard conducted an examination of the M/T Nautilus, following the ship’s arrival in St. Croix, U.S. Virgin Islands, and subsequently in the Port of Boston. The M/T Nautilus is a 26,794 gross ton chemical tanker owned by Cyprus-based Iceport Shipping Company Ltd., and operated by Spanish-based Consultores de Navegacion S.A.
Engine room operations on board large oceangoing vessels such as the M/T Nautilus generate large amounts of waste oil and oil-contaminated bilge waste. International and U.S. law prohibit the discharge of waste containing more than 15 parts per million of oil and without treatment by an oily water separator—a required pollution prevention device. Law also requires all overboard discharges be recorded in an oil record book, a required log that is regularly inspected by the U.S. Coast Guard.
Oria served as the Chief Engineer aboard the M/T Nautilus between January and March 2008 and was responsible for all engine room operations. During that time, Oria ordered engine room crew members to discharge oil-contaminated bilge water from the ship’s bilges directly into the ocean. When the M/T Nautilus entered the Port of Boston on March 22, 2008, the ship’s log, which Oria was responsible for maintaining, failed to disclose the overboard discharge of oil-contaminated bilge water.
"This sentence sends a loud and clear message to crewmembers and companies alike that dumping pollution directly overboard and attempting to conceal it will lead to penalties," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Maritime companies and their employees must understand that violations of our Nation’s laws are serious and the Justice Department stands ready to prosecute those who choose to ignore them."
"Our hope is that this case will send a strong message to those in the maritime community who might try to circumvent our nation’s anti-pollution laws. It is necessary to ensure that the companies realize that violating our environmental laws will be taken seriously, and will ultimately cost them more than legally disposing of the waste," said Michael K. Loucks, Acting U.S. Attorney for the District of Massachusetts.
"The Coast Guard is committed to working with the maritime industry and federal, state and local law enforcement partners to protect the U.S. maritime environment from individuals who pollute our waters," said Rear Admiral Dale G. Gabel, Commander of the First Coast Guard District in Boston, Mass. "When these violations occur, the Coast Guard will work with our partners to ensure violators are held accountable under the law."
The case was investigated by the U.S. Coast Guard, Coast Guard Investigative Service. It was prosecuted by Assistant U.S. Attorney Linda M. Ricci of Loucks’ Economic Crimes Unit, Trial Attorney Todd Mikolop of the Justice Department’s Environmental Crimes Section, and Special Assistant U.S. Attorney Christopher Jones of the U.S. Coast Guard First District Legal Office.
5 May 2009
U.S. Court Shuts Down Georgia Tax Preparation Firms Allegedly Involved in Fuel Credit Tax ScamRead the Press Release
WASHINGTON - A federal court in Savannah, Ga., today permanently barred Ophelia Kelley, of Vidalia, Ga., from preparing federal income tax returns for others, the Justice Department announced today. According to the government complaint, Kelley operated two return preparation firms in Vidalia – Kelley Tax Service and City and Country Girl Tax Service. Kelley agreed to the civil injunction order.
The civil injunction suit alleged that Kelley and her businesses repeatedly and intentionally engaged in fraudulent conduct by claiming improper deductions and tax credits for customers. Kelley allegedly claimed bogus fuel tax credits for customers who were not entitled to the credit. The fuel credit is available only to taxpayers who operate farm equipment or off-highway business vehicles. It is not available for vehicles driven on roads or highways.
The complaint alleged that Kelley fraudulently claimed absurdly large credits for truck drivers by falsely reporting purchases of huge quantities of fuel, often more than the customer could have bought using all his annual income. Return preparer fraud and 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 bogus credits on customers’ returns.
According to the complaint, Kelley also fabricated false deductions for such things as medical expenses and charitable gifts. The suit also alleged that Kelley failed to sign at least 100 tax returns she prepared for customers. Paid tax preparers are required by law to sign all returns they prepare.
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 senior 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 more than 395 injunctions against tax fraud promoters and tax return preparers. Information about these cases is available on the Justice Department’s Web site.
Texas Man Pleads Guilty to Travel with Intent to Engage in Sexual Conduct with a Minor, Possession of Child PornographyRead the Press Release
Patrick Cochran, 47, of Lake Jackson, Texas, pleaded guilty today to one count of travel with intent to engage in illicit sexual conduct with a minor, and one count of possession of child pornography.
During today’s plea hearing before U.S. District Judge Stephen M. McNamee at the federal district courthouse in Phoenix, Cochran admitted to responding to an online advertisement for a foreign tour that had been posted by undercover agents with the U.S. Department of Homeland Security’s Immigration and Customs Enforcement (ICE). Cochran further admitted that he wrote to the agents to express his interest in engaging in sexual acts with two minors, and to paying a $75 deposit to reserve a place on the tour. After Cochran traveled to a prearranged meeting place in the District of Arizona and confirmed his intent to take part in the tour, he was arrested by the agents.
Cochran further admitted to possessing more than 600 images of child pornography on various digital media at his home in Texas. The possession charge, filed in the Southern District of Texas, was transferred to the district court in Arizona for disposition by guilty plea with the consent of the U.S. Attorneys for the two districts, at the request of Cochran.
Cochran’s sentencing has been scheduled for July 27, 2009. At sentencing, Cochran may face a sentence of up to 30 years in prison, a fine of up to $250,000, a term of supervised release of any amount up to life, and he will be required to register as a sex offender in accordance with state and federal law. As part of the plea agreement, Cochran also agrees to undergo sex offender treatment and counseling as directed by the probation department.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Trial Attorney James Silver of CEOS, Assistant U.S. Attorney Vincent Q. Kirby of the U.S. Attorney’s Office for the District of Arizona, and Assistant U.S. Attorney Robert Stabe of the U.S. Attorney’s Office for the Southern District of Texas. ICE conducted the investigation.
Swedish National Charged with Hacking and Theft of Trade Secrets Related to Alleged Computer Intrusions at NASA and CiscoRead the Press Release
Philip Gabriel Pettersson, aka "Stakkato," 21, a Swedish national, was indicted today on intrusion and trade secret theft charges.
The five-count indictment includes one intrusion count and two trade secret misappropriation counts involving Cisco Systems Inc. (Cisco), of San Jose, Calif., which is a provider of computer network equipment and producer of Internet routers. According to the allegations in the indictment Pettersson intentionally committed an intrusion between May 12, 2004, and May 13, 2004, into the computer system and network of Cisco. During the alleged intrusion some Cisco Internetwork Operating System code was allegedly misappropriated.
The indictment also charges two intrusion counts involving the National Aeronautics and Space Administration (NASA), including computers at the Ames Research Center and the NASA Advanced Supercomputing Division, located at Moffett Field, Calif. The indictment alleges Pettersson committed these intrusions on May 19, 2004, May 20, 2004 and Oct. 22, 2004.Cisco and NASA cooperated in the government’s investigation. Following the incident, Cisco reported that it did not believe that any customer information, partner information or financial systems were affected.
The Department of Justice will continue to work cooperatively with the Swedish authorities on the case.
An indictment is merely an accusation. All defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt. The maximum penalty for each charge of intrusion and theft of trade secrets is 10 years in prison, a three year term of supervised release, and a fine of $250,000.
The prosecution is the result of an investigation by the FBI; U.S. Secret Service; NASA Office of Inspector General, Office of Investigations, Computer Crimes Division; and numerous additional federal agencies. Mark L. Krotoski, presently at the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), is prosecuting the case with the assistance of Paralegal Lauri Gomez and Assistant Netterie Lewis. CCIPS Senior Counsel Kimberly Peretti also assisted in the prosecution. The Criminal Division’s Office of International Affairs has assisted on international coordination issues in the case.
Indictment
Justice Department Files Lawsuit Against California <br /> Department of Corrections and Rehabilitation to <br /> Enforce the Employment Rights of Air Force ReservistRead the Press Release
WASHINGTON - The Justice Department today announced it has filed a lawsuit in U.S. District Court in Sacramento, Calif., against the California Department of Corrections and Rehabilitation (CDCR), alleging that the CDCR failed to promptly reemploy U.S. Air Force reservist Dany Felix in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
USERRA was enacted to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Subject to certain limitations, USERRA requires employers to reemploy service members who have been injured while on active duty by accommodating those service members in a position they are qualified to perform and that approximates their pre-service position in seniority, pay and status.
The complaint alleges that in March 2003, Felix, employed as a CDCR medical technical assistant, was ordered to active duty together with his Air Force Reserve unit. Felix aggravated a pre-existing back injury and also sustained a new back injury while on active duty, resulting in his being honorably discharged in August 2006. Felix sought reemployment with the CDCR shortly before and for several months after his discharge.
The CDCR initially told Felix that it would not reemploy him as a medical technical assistant because of his physical injuries and, despite Felix’s requests, did not offer him reemployment in any position. The complaint alleges that when the CDCR finally offered to reemploy Felix between February and April 2007 in alternative positions, those positions paid substantially less or would have required significantly longer commutes, than his prior medical technical assistant position. According to the complaint, the CDCR failed to offer Felix suitable reemployment until May 2007 – nine months after his honorable discharge, and only after Felix had told the CDCR that he had found a job with another employer.
"Service members injured during active duty should not be penalized with the loss of their civilian jobs," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
The Justice Department’s lawsuit was filed after receiving Felix’s complaint from the Labor Department’s Veterans’ Employment and Training Service, upon completion of its investigation.
The Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department Web sites: www.servicemembers.gov and www.usdoj.gov/crt/emp.
Federal Court Bars Individual Return Preparers and Sarasota Firms from Preparing Tax ReturnsRead the Press Release
WASHINGTON - A federal court in Tampa, Fla., has permanently barred Daniel Prewett from preparing tax returns for others, the Justice Department announced today. The court also barred Prewett from helping customers hide income offshore to avoid taxes, and from promoting other tax-dodging schemes. The court has also enjoined Prewett’s wife, Elizabeth George; former Prewett employees Frances Carlson, Elsie Chouinard and Natalie Swaney; and Prewett’s three tax preparation businesses, listed below. The injunctions against Chouinard and George permit them to continue preparing tax returns, but bar them from certain specified conduct when they do so. The individual defendants agreed to the injunctions.
The government sued the defendants in September of 2007, alleging in the civil injunction complaint that Prewett controlled a company that bought Jackson Hewitt tax preparation franchises in Florida in 1993, using a friend as nominal owner to conceal Prewett’s criminal record and ownership from the franchiser Jackson Hewitt Tax Service Inc. —the nation’s second largest tax preparation firm.
In late 2006, Prewett was arrested on federal charges related to cocaine distribution and money laundering. A jury convicted Prewett and he was given an 18-year sentence last June.
According to the injunction complaint, Prewett and the other defendants used a number of schemes to under-report customers’ tax liabilities, including helping customers set up fictitious domestic businesses to disguise fraudulent business deductions for bogus business expenses and personal assets, such as motorcycles, ATVs and jet skis. According to the complaint, one customer – a dentist – used the defendants’ scheme to claim fraudulent deductions for the cost and operational expenses of his $781,000 47-foot yacht, which he used solely for his personal pleasure. The defendants’ schemes cost the U.S. Treasury more than $130 million dollars, according to the complaint.
Injunction Details
Defendant
Date Enjoined
Daniel Prewett
May 1, 2009
Natalie Swaney
January 28, 2009
Frances Carlson
January 28, 2009
Elsie Chouinard
May 1, 2009
Elizabeth George
May 1, 2009
JH Investment Services, Inc.
April 24, 2008
JH Accounting
April 24, 2008
Simple Financial Solutions
April 24, 2008
John A. DiCicco, Acting Assistant Attorney General in charge of the Justice Department’s Tax Division, thanked trial attorney Grayson Hoffman, who handled the case, and Ricky Poole and Heather Walters-Cole, revenue agents 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 395 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.
4 May 2009
Three Ohio Residents Plead Guilty to Conspiracy to Commit Bank Fraud<br /> for Fraudulent Real Estate Loan SchemeRead the Press Release
WASHINGTON - Todd Gongwer of Dublin, Ohio; Lance Parker of Dublin, Ohio; and Joel Lee, of Galena, Ohio, pleaded guilty today to conspiracy to commit bank fraud, the Justice Department and Internal Revenue Service (IRS) announced. Gongwer, a licensed real estate agent, also pleaded guilty to tax evasion in the hearing before Judge Michael H. Watson in Columbus, Ohio. Parker also pleaded guilty to illegally structuring cash transactions.
According to the plea agreements and evidence presented during the plea hearings, from 2005 through 2007, Gongwer, Parker, Lee and others negotiated and participated in real estate deals in which each of them purchased a luxury home for a falsely inflated purchase price from real estate builder Thomas Parenteau in exchange for an undisclosed or disguised kickback. Gongwer admitted to using nominees to purchase at least two other luxury homes for inflated prices with kickbacks.
According to the plea agreements and evidence presented during the plea hearings, in each transaction, the buyers misrepresented their income and assets in order to obtain approximately 90% financing of the inflated purchase price. The buyers, seller Parenteau and Parenteau’s realtor, Bonnie Helt, attempted to justify the inflated purchase prices by creating and signing false work change orders and addendums which created the appearance that the inflated price represented additional substantial work to be completed on the homes. However, no such agreement was actually intended by any party, and the documents were not disclosed to the lenders. The object of each transaction was to use the loan proceeds in excess of the actual purchase price to fund hundreds of thousands of dollars in kickback payments to the buyers. The loans associated with the real estate purchases of Gongwer, Parker and Lee have all gone into default.
Gongwer and Parker also admitted to conducting a similar transaction involving Parker’s purchase of 15 condominium units in three buildings located in Columbus, Ohio, from Parenteu’s associate and architect, William Tarcy. Tarcy pleaded guilty to conspiracy to commit bank fraud and agreed to forfeit assets related to the offense in March 2009. Tarcy’s sale of the condominiums also involved inflated purchase prices, fraudulently obtained financing by Parker, and substantial kickback payments to Parker as the buyer.
Gongwer accepted responsibility for causing a fraud loss between $2.5 million and $7 million. Additionally, Gongwer pleaded guilty to tax evasion for failure to report income he received. According to his plea agreement, Gongwer worked for ReMax Affiliates Inc. in 2004 and was paid approximately $158,333.32 in gross income. Gongwer deposited that income into nominee accounts in order to conceal his receipt of that income from the IRS. Gongwer also failed to file income tax returns for tax years 2000 through 2005. The tax loss caused by his conduct is between $200,000 and $400,000.
Parker and Lee each accepted responsibility for causing a fraud loss between $400,000 and $1 million. Parker also pleaded guilty to structuring transactions to avoid federal reporting requirements. During 2007, Parker engaged in cash transactions in amounts less than $10,000 for the purposes of withdrawing cash from his bank accounts in order to finance gambling vacations in Las Vegas and to avoid federal currency transaction reporting requirements.
Judge Watson scheduled sentencing of all three defendants for a date after the July 2009 trial of Tom Parenteau, his accountant Dennis Sartain and his realtor Bonnie Helt, who were charged in April 2009 in a tax fraud and money laundering scheme. Gongwer faces a maximum sentence of 10 years in prison and a maximum fine of $500,000. Parker faces a maximum sentence of 10 years in prison and a maximum fine of $500,000. Lee faces a maximum sentence of five years in prison and a maximum fine of $250,000.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case. The prosecution is being handled by Tax Division Trial Attorneys Richard M. Rolwing, Jill M. Cassara, and Sean B. O’Connell.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
Ohio Man Pleads Guilty to Child Pornography ChargesRead the Press Release
Timothy Lantz, 57, of Columbus, Ohio, pleaded guilty today in Columbus to one count of transportation of child pornography and one count of failing to update his sex offender registration.
During today’s plea hearing before U.S. Magistrate Judge Mark R. Abel, Lantz admitted transporting and shipping child pornography from Ohio to New York through the Internet, and to failing to update his sex offender registration. Lantz admitted that in connection with the commission of his crimes, he had in his possession multiple computer hard drives containing approximately 1,200 digital videos and 9,000 digital images of one or more minors engaging in sexually explicit conduct. Lantz further admitted that he provided access for others to download his child pornography files either for free or in exchange for other child pornography images.
Lantz is scheduled to be sentenced no earlier than 60 days from today. He may face a sentence of 180 months in prison, a fine of up to $250,000, and up to a life-time term of supervised release. He will be required to continue to be registered as a sex offender in accordance with state and federal law.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Assistant U.S. Attorney Deborah Solove of the Southern District of Ohio and Trial Attorney Mi Yung C. Park of CEOS. The case was investigated by the Cybercrimes Task Force of the FBI’s Columbus, Ohio, Field Office and CEOS’ High Technology Investigative Unit.
MS-13 Leader Sentenced to 60 Years in Federal Prison for <br /> Racketeering Conspiracy, Armed Robbery and Gun ViolationRead the Press Release
U.S. District Judge Deborah K. Chasanow today sentenced Victor Ramirez, a/k/a "Mousey," age 30, a native of El Salvador who resided in Hyattsville, Md., to 60 years in prison, followed by five years of supervised release.
Ramirez was convicted in November 2008, after a four-week jury trial, of conspiracy to conduct and participate in racketeering enterprise activities of the gang MS-13, including three murders and an attempted murder; armed robbery of a business; and using and carrying a gun in furtherance of a crime of violence.
"Victor Ramirez’ mission was to boost the level of MS-13's criminal activities on the streets of Maryland," said Assistant Attorney General of the Criminal Division Lanny A. Breuer. "Today’s sentence is a warning to gang members with similar aspirations that we won’t tolerate this sort of criminal behavior in our neighborhoods."
"The evidence proved that MS-13 sent Victor Ramirez to Maryland from El Salvador as part of a plan to strengthen the MS-13 gang and expand the gang’s criminal activity," said U.S. Attorney Rod J. Rosenstein.
According to testimony presented during trial, Ramirez was a leader in the Teclas Locos Salvatruchos (TLS) clique of MS-13 in El Salvador, and then in Maryland. During the trial, the jury viewed a video taken in the Quezaltepeque prison in El Salvador that showed Ramirez flashing MS-13 gang signs and displaying a "Mara Salvatrucha" tattoo across his abdomen. Ramirez admitted to fellow gang members in Maryland that he had been a "first word" (or clique leader) within the clique in El Salvador. After arriving in Maryland, Ramirez represented the TLS clique at MS-13 meetings in Maryland, the District of Columbia and Virginia.
Witnesses testified that Ramirez came to the U.S. from El Salvador through Mexico, and that he had arrived in Maryland with a fellow gang member. Both Ramirez and an MS-13 leader from El Salvador told witnesses that Ramirez had been sent to Maryland to strengthen MS-13 in Maryland, ensure that MS-13 rules were being strictly followed as established by the gang leaders in El Salvador, and in particular, to make the TLS clique in Maryland more violent. In addition, once he arrived in Maryland, Ramirez was instrumental in implementing "The Program," which was a scheme to rob and extort prostitution houses and other illegal businesses in order to collect funds for MS-13.
Witnesses testified that on Oct. 9, 2005, Ramirez and other MS-13 members, including co-defendant Eris Marchante-Rivas, attended a meeting of the TLS clique in Prince George’s County. During that meeting, one of the international leaders of the TLS clique spoke to the gang members by cellular telephone from a jail in El Salvador. After the meeting, Ramirez and fellow gang members drove to meet a number of gang members from other MS-13 cliques and discussed their plans to shoot rival gang members that day. Ramirez, Marchante-Rivas and other gang members went to the 5600 block of Quintana Street in Riverdale, Md., to kill rival gang members. Once they arrived, Ramirez and other gang members left their vehicles and approached Jose Cerda, Edward Trujillo and another person, all of whom were standing in front of a house on Quintana Street. Cerda and Trujillo were shot and killed by MS-13 gang members and the third individual was wounded by a gunshot.
Witnesses also testified about the murder of Alejandro Rubi-Martinez in Langley Park, Md., on Oct. 23, 2005. Ramirez was present in Langley Park during a discussion about an individual that they suspected of being a rival gang member. Ramirez asked a gang member to drive Ramirez to his apartment, where Ramirez retrieved a handgun. Ramirez later handed this gun to an MS-13 member who shot Rubi-Martinez in Langley Park that day. A witness testified that he drove with Ramirez away from this meeting of MS-13 members just before the shooting.
Witnesses also testified about Ramirez’s leadership role in implementing the "Program" of robbing and extorting brothels in Maryland. A witness testified that he accompanied Ramirez on a number of occasions when they robbed brothels and raped the prostitutes. Ramirez decided to rob the brothel on Blueridge Avenue in Wheaton, Md., and brought a .38 caliber revolver to use during the robbery. On Nov. 14, 2005,Ramirez, co-defendant Juan Jiminez-Hernandez, and three other MS-13 gang members from the TLS clique drove to the brothel. Once inside the apartment, the MS-13 members brandished the gun that Ramirez had brought, tied up and robbed the doorman and two other men who arrived later, and raped the prostitute at gunpoint.
Detectives and Montgomery County police officers testified that they arrived at the apartment that day after tracking a carjacking suspect to that location. A female plainclothes detective knocked on the door to the apartment, posing as a neighbor. The MS-13 members inside opened the door and attempted to grab the detective, not knowing that a number of officers and detectives were lined up in the hallway outside the door waiting to enter the apartment. Witnesses testified that Ramirez was one of the three men at the doorway who attempted to grab the female detective. Law enforcement witnesses further testified that they recovered a handgun on the floor of the apartment and some of the prostitute’s jewelry in Ramirez’s pockets. A fifth gang member, who had remained in the car, attempted to warn the other gang members about the arrival of the police, but was unsuccessful. He fled in the car, but was later apprehended by police.
Eris Marchante-Rivas, also known as "Strayboy," age 24, of Hyattsville, Md., was sentenced to 30 years in prison on Jan. 12, 2009, and Juan Jiminez-Hernandez, also known as "Sniroon," age 23, of Beltsville, Md., was sentenced on Nov. 10, 2008, to 12 ½ years in prison, followed by five years of supervised release.
Assistant Attorney General Lanny A. Breuer and U.S. Attorney Rod J. Rosenstein commended the Bureau of Alcohol, Tobacco, Firearms and Explosives; the FBI; the Prince George’s County Police Department; U.S. Immigration and Customs Enforcement; the Montgomery County Police Department;the Howard County Police Department; the Maryland National Capital Park Police; the Maryland State Police; Prince George’s County State’s Attorney Glenn F. Ivey and Montgomery County State’s Attorney John McCarthy and their offices for their work in this investigation and prosecution.
Mr. Breuer and Mr. Rosenstein thanked Assistant U.S. Attorneys Chan Park and Robert K. Hur, and David Jaffe, a Trial Attorney from the Justice Department’s Gang Unit, who prosecuted the case.
Justice Department to Monitor Elections in MississippiRead the Press Release
WASHINGTON - The Justice Department today announced that on May 5, 2009, it will monitor municipal elections in the towns of Cleveland, Como, Meridian and Sardis, Miss., to ensure compliance with the Voting Rights Act of 1965.
Under the Voting Rights Act, the Justice Department is authorized to ask the U.S. Office of Personnel Management to send federal observers to areas that are specially covered in the act or by a federal court order. Federal observers will be assigned to monitor polling place activities for the election in the town of Cleveland based on the special coverage provisions. The observers will watch and record activities during voting hours at polling locations in this jurisdiction, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials. In addition, Justice Department personnel will monitor the municipal elections in the towns of Como, Meridian and Sardis for compliance with the Voting Rights Act.
Each year, the Justice Department deploys hundreds of federal observers from the Office of Personnel Management, as well as departmental staff, to monitor elections across the country. In calendar year 2008, for example, 1,060 federal observers and 344 Department personnel were sent to monitor 114 elections in 76 jurisdictions in 24 states. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Justice Department’s Civil Rights Division at 1-800-253-3931.
More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice Web site at www.usdoj.gov/crt/voting/ .
Justice Department Reaches Settlement with Consolidated Multiple Listing Service Inc.Read the Press Release
WASHINGTON — The Department of Justice announced today that it has reached a proposed settlement with Consolidated Multiple Listing Service Inc. (CMLS) that requires CMLS to change its rules to allow low-priced and innovative brokers to compete with traditional brokers in the Columbia, S.C., area. The Department said the rules caused consumers to pay more for residential real estate brokerage services in the Columbia area.
The Department’s Antitrust Division filed its proposed settlement in U.S. District Court in South Carolina. If approved by the court, the proposed settlement would resolve the Department’s antitrust concerns.
"Today’s settlement will remove unlawful impediments to competition for real estate brokerage services in the Columbia area and will lead to more choices and lower brokerage fees for South Carolina consumers," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "For most Americans, purchasing a home is the most significant purchase of their life. This settlement demonstrates the Department of Justice’s continuing commitment to preserve competition in the real estate brokerage industry."
A multiple listing service (MLS), like the one operated by CMLS, is a joint venture of real estate brokers that combines its members’ home listings information into an electronic database that is made available to all member real estate brokers. This database serves as a clearinghouse for the members to communicate important information among themselves, such as descriptions of the listed properties for sale and offers to compensate other members if they locate purchasers for those listings. In addition, the database allows member brokers who represent buyers to search for nearly all the listed properties in the area that match the buyer’s needs.
Because the MLS’s database is the primary source of home listings information on virtually every home listed for sale in a given area, access to the database – and therefore MLS membership – is critical for any real estate broker seeking to serve clients successfully in the MLS’s service area. Consequently, the rules adopted by the MLS governing who can be a member and how members must behave can have a significant impact on competition among real estate brokers in the area served by the MLS.
In May 2008, the Department’s Antitrust Division filed a civil antitrust lawsuit against CMLS in U.S. District Court in South Carolina, challenging policies and rules that restrained competition among brokers in Columbia in several ways. CMLS imposed burdensome prerequisites to membership that prevented some real estate brokers, such as those who would likely compete aggressively on price, from listing homes for sale in the MLS’s database, ensuring that those brokers could not compete in the Columbia area. CMLS required applicants for membership to discuss the nature of their businesses with a committee of incumbent members and reserved the power to deny membership to brokers who they feared would compete too aggressively. CMLS also stabilized the price of brokerage services by forcing its broker members to provide a full set of brokerage services regardless of whether a client wanted the required services. The Department said that those rules prevented consumers from receiving the full benefits of competition, discouraged discounting, and threatened to lock in outmoded business models.
The proposed settlement with CMLS requires it to change those rules and prohibits it from adopting new rules that exclude real estate brokers from membership based on their business models or price structures. CMLS must allow any broker holding the appropriate license under South Carolina law to become a member and cannot continue to exclude brokers based on their business models. It will repeal rules that denied Columbia-area home sellers the ability to hire a real estate broker to perform only the specific services the seller desired, at a lower cost than the seller would pay a traditional, full-service broker. CMLS also will repeal its requirement that its member brokers use only the single contract approved by CMLS, which blocked home sellers from alternative arrangements that allowed them to avoid paying any commission to their broker if the sellers found buyers for their homes.
The proposed settlement, along with the Department’s competitive impact statement, will be published in the Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments regarding the proposed final judgment within 60 days of its publication to John R. Read, Chief, Litigation III Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 4000, Washington, D.C. 20530 (Tel: 202-307-0468). At the conclusion of the 60-day comment period, the court may enter the proposed final judgment upon a finding that it serves the public interest.
Columbus Woman Pleads Guilty to Money Laundering ConspiracyRead the Press Release
WASHINGTON - Marsha K. Parenteau of Columbus, Ohio, pleaded guilty today to conspiracy to commit money laundering, the Justice Department and Internal Revenue Service (IRS) announced. Parenteau appeared before Judge Michael H. Watson in Columbus.
During her plea hearing, Parenteau admitted that, from 2003 through 2008, she and others, including her husband, their shared accountant and her husband’s mistress, sought and obtained millions of dollars in loans from various financial institutions by falsely misrepresenting her income and assets, as well as the income and assets of others involved in the scheme.
According to the plea agreement and evidence presented during the plea hearing, Parenteau and others used the proceeds of the fraudulently obtained loans to, among other things, pay funds to her husband’s mistress and pay funds to Parenteau and her husband to fund their lifestyles, including the renovation of a property known as Loretta Estates. Loretta Estates is a mansion located on the Scioto River in Columbus, Ohio, which consists of approximately 4.5 acres with five buildings and more than 27,000 square feet of living space.
The value of the laundered funds specified in the plea for Mrs. Parenteau is between $400,000 and $1,000,000. Parenteau faces a maximum sentence of twenty years in prison and a maximum fine of $500,000.
Parenteau’s husband, Thomas E. Parenteau, accountant Dennis G. Sartain and realtor Bonnie Helt-Adams were charged with tax fraud, bank and wire fraud, money laundering and obstruction of justice in April 2009. Trial is currently scheduled for July 2009 before Judge Michael H. Watson in Columbus.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case. The prosecution is being handled by Tax Division Trial Attorneys Richard M. Rolwing, Jill M. Cassara, and Sean B. O’Connell.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
1 May 2009
U.S. Intervenes in Suit Against Former Beef Suppliers to National School Lunch ProgramRead the Press Release
WASHINGTON -- The United States has intervened in a civil lawsuit against two former suppliers to the National School Lunch Program – Hallmark Meat Packing Company and Westland Meat Company Inc. – for submitting false and fraudulent claims to the Agricultural Marketing Service (AMS), a division of the U.S. Department of Agriculture (USDA), the Justice Department announced today. All ground beef containing defendants’ products was recalled by USDA as of Feb. 16, 2008, and defendants no longer supply beef to the National School Lunch Program or AMS.
The National School Lunch Program is a federally-assisted meal program operating in public and nonprofit private schools and residential child care institutions. The program, established under the National School Lunch Act in 1946, provides nutritionally balanced, low-cost or free lunches to children each school day.
The suit was originally filed by the Humane Society of the United States under the qui tam or whistleblower provisions of the False Claims Act (FCA). In its complaint, the Humane Society alleges that defendants knowingly and falsely represented to AMS that all cattle at their slaughtering facility are humanely handled in accordance with federal regulations and that no meat from disabled, non-ambulatory cattle was included in AMS’ purchases.
"The alleged misrepresentations by Hallmark and Westland could have impacted the health of many of our nation’s most vulnerable citizens--our schoolchildren," said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. "Our intervention in this case demonstrates how seriously we will pursue allegations such as these."
Under qui tam statute, a private party, known as a "relator," can file an action on behalf of the United States and receive a portion of the recovery. Under the FCA, the government is entitled to treble damages plus civil penalties ranging from $5,500 to $11,000 per violation.
The Department’s Civil Division and the U.S. Attorney’s Office for the Central District of California will pursue the case. The government plans to file an amended complaint. The U.S. Department of Agriculture’s Office of Inspector General investigated the matter.
Two South Florida Men Indicted in Connection with Fraudulent ATM Business Opportunity VentureRead the Press Release
WASHINGTON – A Miami federal grand jury has charged two South Florida men with conspiracy, mail and wire fraud in connection with the operation of a fraudulent ATM business opportunity, the Justice Department announced. The criminal charges are part of the government’s continued nationwide crackdown on business opportunity fraud.
The indictment returned Thursday by the grand jury alleges that Andrew Steinberg, 39, of Lake Worth, Fla., Stephen Duffie, 32, of Miramar, Fla., and their co-conspirators fraudulently marketed and sold business opportunities nationwide under the name Fidelity ATM. Fidelity representatives allegedly told customers that, for purchase prices of $29,995 or more, they would receive ATMs installed in profitable, high-traffic locations. The indictment alleges that the conspirators falsely claimed that current Fidelity customers earned substantial profits and that new customers would also reap significant earnings. According to the indictment, Fidelity operated out of Palm Beach County, Fla., from approximately August 2004 to November 2006.
The indictment alleges that existing Fidelity customers complained to the defendants and their co-conspirators about low transaction levels and unprofitable locations, but that the defendants concealed this fact from new customers. According to the indictment, Fidelity provided potential new customers with the names and phone numbers of "references," or supposedly satisfied existing customers. The indictment alleges that Fidelity employees and friends of Steinberg pretended to be Fidelity customers during these reference calls.
Steinberg, Duffie and several others involved with Fidelity ATM previously were named as defendants in a 2006 civil suit brought by the Federal Trade Commission in the Southern District of Florida. Filings in that case show that more than 100 people from around the country paid Fidelity approximately $4.2 million for the ATM business opportunities.
"Business opportunity fraud is a very serious crime," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "Working closely with the FBI and Postal Inspection Service, we have charged more than 100 individuals with felonies in the past five years. We will continue to investigate and prosecute those who prey on unsuspecting entrepreneurs and commit business opportunity fraud."
Steinberg and Duffie both were charged with one count of conspiracy to commit mail and wire fraud, seven counts of mail fraud and eight counts of wire fraud. If convicted, the defendants face a maximum statutory term of 20 years in prison, a possible fine and mandatory
restitution on the conspiracy count. They also face a maximum statutory prison term of 20 years on each of the mail and wire fraud counts, a possible fine and mandatory restitution.
Assistant Attorney General West and Alexander R. Acosta, U.S. Attorney for the Southern District of Florida, commended the efforts of the FBI, which investigated the criminal case, and the Federal Trade Commission. The case is being prosecuted by trial attorney Alan Phelps of the U.S. Department of Justice Office of Consumer Litigation.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Three Teamsters Local 743 Workers in Chicago Convicted of Labor Fraud and Theft of Union Ballots in Bid to Rig Contested 2004 ElectionsRead the Press Release
WASHINGTON – A former officer and two employees of Teamsters Local 743 (Local 743) were convicted today in federal court in Chicago of federal labor fraud and theft charges in connection with stealing union ballots in an effort to rig two elections in favor of an incumbent slate of officers in 2004, officials of the U.S. Justice and Labor Departments announced.
A federal jury returned guilty verdicts today, after deliberating since April 29, 2009, against the three defendants whose trial began on April 6, 2009, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; Patrick J. Fitzgerald, U.S Attorney for the Northern District of Illinois; Andrew Auerbach, Deputy Director of the Labor Department’s Office of Labor-Management Standards; James Vanderberg, Special Agent-in-Charge of the Labor Department’s Chicago Office of Inspector General; and Thomas P. Brady, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
In two closely-contested elections just months apart, the three trial defendants — together with former Local 743 President Robert Walston and two other defendants who pleaded guilty before trial — diverted to their friends, family and confidantes hundreds of mailed, official ballot packages that were intended for delivery to Local 743 members, and then cast the ballots or caused them to be cast to ensure election of the incumbent slate. Local 743 of the International Brotherhood of Teamsters, based in Chicago, represents more than 12,000 members engaged in warehouse, office, medical, service and other industries, and is one of the largest Teamsters locals in the country.
The defendants convicted at trial are: Richard Lopez, 55, of Maywood, Ill., who was secretary-treasurer of Local 743 between 2005 and 2007 and recording secretary from 1999 to 2005; Thaddeus Bania, 54, of Forest Park, Ill., who was Local 743’s comptroller from approximately 2001 to late 2007; and David Rodriguez, 36, of Chicago, who was an organizer for Local 743 between 2003 and 2007. Lopez and Bania were each convicted of all counts against them, including conspiracy to commit mail fraud and theft of union property. In addition, Lopez was convicted of two substantive counts of mail fraud and one count of theft of union property, and Bania was also found guilty on four counts of mail fraud and six counts of theft of union property. Rodriguez was convicted of two counts of mail fraud and three counts of theft of union property, and he was acquitted of conspiracy, two mail fraud counts and two theft counts.
U.S. District Judge Charles Kocoras set sentencing for Aug. 27, 2009. Each count of mail fraud carries a maximum penalty of 20 years in prison, and the conspiracy and theft counts each carry a maximum of five years in prison. All charges carry a maximum fine of $250,000 on each count.
Walston, 65, of Chicago, who was Local 743 president from 2001 until he retired in August 2007, pleaded guilty to related charges in March 2009 and testified as a government witness at trial. Mark Jones, 49, of Joliet, Ill., a Local 743 business agent from 2003 to 2006, also pleaded guilty and testified as a government witness. Cassandra Mosley, 52, of Gary, Ind., another Local 743 business agent from 2003 to 2006, also pleaded guilty in the case.
The jury found that the defendants deprived Local 743 of their honest services and of the ballots, which belonged to the union.
Evidence at trial and the plea agreements showed that Local 743 held elections for its officers every three years and had scheduled a mail ballot election for October 2004. Local 743 purchased official ballot packages consisting of an outer envelope in which a ballot would be delivered by mail to each member, a secret ballot, an envelope in which the secret ballot could be sealed, and a return envelope in which the sealed secret ballot could be mailed to Local 743 for tallying. In October 2004, two days after the ballot counting began, Local 743’s executive board suspended the tallying before its conclusion and scheduled a rerun election in December 2004. The incumbent slate of officers won the December 2004 election, and the Labor Department later filed a civil lawsuit challenging the election results. Under the terms of a court-ordered settlement in July 2007, the Labor Department’s Office of Labor-Management Standards supervised Local 743’s October 2007 election, in which a challenging slate of candidates prevailed.
Between August and December 2004, the defendants engaged in rigging the elections by diverting official ballot packages to their friends, family and associates, and casting the ballots or causing them to be cast in both October and December for incumbent officers, known as the "Unity Slate," to ensure their election. The defendants caused the addresses of certain Local 743 members to be changed in union records so that official ballot packages would be diverted in the mail to their friends, family and associates, rather then being delivered to Local 743 members in good standing who were eligible to vote in those elections. The defendants caused the addresses of Local 743 members in a computer database to be changed from the members’ previously recorded addresses to new addresses collected and provided by the defendants that in fact belonged to their friends, family and confidantes. The defendants then collected the fraudulently delivered ballot packages, and the ballots later were cast or caused to be cast in favor of the incumbent slate of officers. In addition, dozens of mailed ballots were stolen from a post office box after they had been returned as undeliverable and those ballots were voted in favor of the incumbent Unity Slate.
The government is being represented by Assistant U.S. Attorneys David Buvinger and Nathalina Hudson of the U.S. Attorney’s Office for the Northern District of Illinois and Vincent J. Falvo Jr., a Trial Attorney in the Labor Racketeering Unit of the Criminal Division’s Organized Crime and Racketeering Section.
President of Long Island Defense Contractor Pleads Guilty to Customer AllocationRead the Press Release
WASHINGTON — The owner and president of a Ronkonkoma, N.Y., designing and manufacturing company pleaded guilty to conspiring to allocate a U.S. Navy contract for Navy straps, the Department of Justice announced today. Navy straps are a type of tiedown equipment used by the U.S. Navy to secure munitions and other supplies for transport on ships and airplanes.
Thomas J. DeGirolamo pleaded guilty in the U.S. District Court in Islip, N.Y., to one count of participating in a conspiracy to allocate a U.S. Navy contract for Navy straps from at least March 2004 until November 2007.
"These charges should serve as a reminder that we will prosecute those who seek to deny the military competitive bids when it purchases good and services, which would help ensure the military’s access to quality goods and services at lower prices," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division.
DeGirolamo is charged with carrying out the conspiracy with co-conspirators by:
- Engaging in discussions regarding the sale of Navy straps to the U.S. Department of Defense;
- Agreeing during those discussions not to compete on a certain contract with the U.S. Department of Defense;
- Developing products and submitting prices in accordance with the agreement reached;
- Selling Navy straps to the U.S. Department of Defense under the agreement at collusive and non-competitive prices; and
- Accepting payments for Navy straps sold at collusive and noncompetitive prices.
This is the 11th plea agreement to arise from an investigation into the military restraints industry. Military restraints are used to secure vehicles, aircraft, munitions, shipping containers and other specialized military cargo for land, sea and air transportation. Thomas Cunningham and Richard Barko, executives of a Pennsylvania supplier of military goods, pleaded guilty to rigging bids on U.S. Navy contracts for metal sling hoist assemblies and were sentenced in September 2008 to pay criminal fines of $10,000 each. In August 2008, Peck & Hale, a Long Island, N.Y., defense firm, was sentenced to pay a $275,000 criminal fine for bid rigging. In June 2008, Frank Granizo, the former president of a freight forwarding company, pleaded guilty to honest services wire fraud. Granizo was sentenced today to five months of home confinement.
Three Peck & Hale employees also have pleaded guilty in this investigation. Wilson Freire, a former government contracts manager, pleaded guilty to one count of bid rigging and one count of conspiracy to accept kickbacks. On April 8, 2009, he was sentenced to one year and one day in jail and to pay restitution in the amount of $20,750. In April 2008, Ransom Soper III, a former sales employee, pleaded guilty to one count of bid rigging and one count of conspiracy to commit wire fraud. Soper is scheduled to be sentenced May 26, 2009. A former sales director, Robert Fishetti, pleaded guilty to two counts of bid rigging. Fishetti also pleaded guilty to soliciting and accepting a kickback from another lower-tiered sub-contractor in return for favorable treatment in the award of subcontracts for finishing work on products supplied to the U.S. Department of Defense. In September 2008, he was sentenced to pay a criminal fine in the amount of $10,000 and to serve one year and two months of home confinement.
Certified Slings & Supply Inc., a Florida defense firm, pleaded guilty to one count of bid rigging and was sentenced in May 2008 to pay a $150,000 criminal fine. Roger Jacobi, the owner and president of a New York supplier of military goods, also pleaded guilty to one count of bid rigging and in April 2008 was sentenced to pay a $20,000 criminal fine.
Yong Zhu, the president of a Chino, Calif.-based importing and exporting company pleaded guilty to a one count charge of conspiracy to commit honest services wire fraud. On April 20, 2009, he was sentenced to pay a criminal fine in the amount of $5,000, restitution in the amount of $10,000 and four months of home confinement.
DeGiralamo is charged with allocating a contract in violation of the Sherman Act, which carries a maximum sentence of 10 years imprisonment and a fine of $1 million for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is an example of the Department’s commitment to protect U.S. taxpayers from public procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the Defense Criminal Investigative Service of the U.S. Department of Defense. Anyone with information concerning bid rigging, kickbacks, fraud or other anti-competitive conduct regarding military tiedown equipment or cargo securing systems is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or the Long Island Office of the Defense Criminal Investigative Service at 631-420-4302.
Justice Department Sues Fitchburg, Mass., Housing Authority <br /> for Disability DiscriminationRead the Press Release
The Department today filed suit against the Fitchburg Housing Authority in Fitchburg, Mass., and its Executive Director Robert W. Hill alleging that they violated the Fair Housing Act when they refused to allow a tenant to transfer to a different apartment as a reasonable accommodation for her disabilities.
The suit seeks monetary damages for the victims, a court order barring future discrimination, and a civil penalty. The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Fighting illegal housing discrimination is a top priority of the Justice Department. The Federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt . Additional information about the Fair Housing Act is also available at www.HUD.gov .
The suit, filed in the U.S. District Court for the District of Massachusetts, also alleges that the defendants have engaged in a denial of rights to a group of persons or a pattern or practice of discrimination because they implemented reasonable accommodation and transfer policies that discriminated against persons with disabilities other than mobility impairments.
The lawsuit originated from a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by the complainant. After an investigation, HUD found reasonable cause to believe that unlawful discrimination had occurred and referred the matter to the Justice Department.
"Public housing authorities must operate under the full scope of the Fair Housing Act and not engage in any pattern or practice of discrimination. Reasonable accommodations must be made available to those who need them," said Acting Assistant Attorney General Loretta King for the Civil Rights Division.
"Landlords need to exercise flexibility and open-mindedness when people with disabilities seek an exception to policies, practices or procedures that may be necessary to afford that person the same enjoyment of an apartment that is enjoyed by others," said Bryan Greene, General Deputy Assistant Secretary for HUD’s Office of Fair Housing and Equal Opportunity. "Rigid policies that make only limited exceptions for people with disabilities do not take into consideration the variety of challenges that people face and the need to tailor accommodations to the needs of a specific individual."
Former Mississippi Deputy Sheriffs <br /> Sentenced to Serve Time on Civil Rights ViolationsRead the Press Release
Former Tippah County, Miss., Deputy Sheriff William Rogers and his son, former Tippah County Deputy Sheriff Jeffrey Rogers, were sentenced in federal court on April 30, 2009, for violating the civil rights of an arrestee by shooting him with a taser unnecessarily.
Chief Judge Michael P. Mills of the U.S. District Court for the Northern District of Mississippi sentenced William Rogers to serve three months in prison and pay a $12,500 fine. He sentenced Jeffrey Rogers to serve five days, and ordered him to be taken into custody immediately. The judge also ordered both defendants to surrender their law enforcement certifications and never to seek law enforcement positions in the future.
The defendants previously pleaded guilty to the civil rights offense and admitted that in June 2007, they used their tasers to attack the victim without justification. The arrestee suffered multiple burns and contusions from the taser attack. After the attack, the defendants stripped the arrestee of his clothing and chained him overnight in an isolation cell. After bragging about the incident to his fellow employees, defendant Jeffrey Rogers misled federal agents who were investigating the incident. In an effort to coverup his misdeeds, defendant William Rogers also filed a misleading police report about the incident.
The case was investigated by the FBI and was prosecuted by two trial attorneys from the Justice Department’s Civil Rights Division, Kathleen J. Monaghan and Michael J. Frank, and by Assistant U.S. Attorney Robert W. Coleman III of the Northern District of Mississippi
Five Donaldson, Arkansas, Men Indictedon Federal Civil Rights ChargesRead the Press Release
A federal grand jury in Fort Smith, Ark., has indicted five men from the Donaldson, Ark., area on federal civil rights charges as well as charges of making false statements to the FBI. The indictment was returned under seal on April 21, 2009.
The grand jury alleged that from June 15, 2008, through June 21, 2008, Jacob Wingo, 20, Dustin Nix, 21, Darren McKim, 38, Richard Robins, 42, and Clayton Morrison, 29, conspired to drive a woman and her young children from their home in Donaldson because they believed the woman was associating with African American men. The indictment also alleges that on June 21, 2008, Wingo, Nix and Morrison attempted to interfere with the victims’ federally protected housing rights by erecting a cross in the victims’ yard and attempting to set it on fire. Finally, the indictment charges Wingo, McKim, Robins and Morrison with making false statements to the FBI during the course of its investigation.
The five defendants were arraigned today before U.S. Magistrate Judge Barry Bryant and each entered a not guilty plea. A jury trial date has been set for June 12, 2009, in U.S. District court in Hot Springs, Ark., before U.S. District Judge Robert Dawson.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty. If convicted on the conspiracy charge, each defendant faces a maximum prison sentence of ten years and a fine of up to $250,000. Wingo, Nix and Morrison also face an additional maximum prison sentence of ten years and a fine of up to $250,000 on the cross-burning charge. Finally, Wingo, McKim, Robins and Morrison face an additional maximum prison sentence of five years and a fine of up to $250,000 for the false statement counts.
Agents from the FBI’s Little Rock Division investigated this matter. The case is being prosecuted by Assistant U.S. Attorney Matthew Quinn for the Western District of Arkansas and Special Litigation Counsel Gerard Hogan and Trial Attorney Benjamin Hawk of the Civil Rights Division of the Justice Department.
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit race-motivated acts of violence that interfere with federally protected activities.
Chinese Baby Furniture Company Pleads Guilty to Smuggling Internationally Protected WoodRead the Press Release
WASHINGTON— Style Craft Furniture Co. Ltd., pleaded guilty today in U.S. District Court in Camden, N.J., to one count of smuggling cribs containing internationally protected wood known as "ramin," the Justice Department announced.
The company was sentenced, according to the terms of a plea agreement, to pay $40,000 fine and serve three years of probation. In addition, the corporation must pay for an advertisement in a publication in China, and a second in a publication in the United States, advising other members of the industry of its actions and the consequences.
The company, a manufacturer of wooden baby furniture located primarily in China, imported approximately $15 million in declared value of wood furniture between 2004 and 2005.
"The Justice Department is committed to enforcing laws that protect timber, like the tropical hardwood ramin, from overharvesting and exploitation," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Illegal timber harvesting is a growing problem and the Department is increasing its efforts to enforce the laws designed to protect plant species from extinction."
According to documents filed with the court, on approximately May 23, 2005, Style Craft Furniture had a container of baby furniture, including cribs and changing tables, shipped from China into the United States at Port Elizabeth, N.J. The furniture contained ramin wood. According to the factual statement, the invoice that Style Craft Furniture initially submitted to federal authorities when the shipment arrived stated that the wood was Brazilian Marupa and New Zealand Raduata Pine. Neither of these wood species is protected by international or U.S. law.
After the shipment was detained for further examination, Style Craft Furniture provided a re-export certificate, issued according to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), for the shipment. The certificate authorized on May 25, 2005, the re-export of 1.08 cubic meters of ramin from China. Sampling of the shipment indicated that the volume of ramin wood contained in the shipment was approximately 6.121 cubic meters.
The president of Style Craft Furniture Co. Ltd., Danny Chien, was also charged at the same time as Style Craft Furniture for the smuggling violation. Chien has agreed to participate in the District of New Jersey’s pretrial diversion program. Under his agreement, Chien accepts responsibility for his conduct, agrees to comply with conditions for a period of six months and, if he successfully completes the program, the charge against him will be dismissed.
Ramin is a light colored hardwood found in tropical forests in parts of Southeast Asia, including Indonesia and Malaysia. These forests also serve in part as habitat for endangered orangutan. Indonesia has one of the highest rates of deforestation of any county, much of it due to illegal timber harvest. As a result, the Indonesian government is attempting to combat the illegal harvest of timber, including ramin, in part to protect the remaining orangutan habitat. They have done this through a variety of means including listing ramin in CITES Appendix III, since 2001. International efforts to curb the illegal harvest of ramin, used in the manufacture of baby cribs, include its listing in Appendix II of CITES, effective Jan. 12, 2005.
CITES protects certain species of fish, wildlife and plants against overexploitation by regulating trade in the species. Species listed in Appendix II are those that may become threatened with extinction unless trade is strictly regulated.
For any trade of these species, CITES requires that the country of origin must issue a valid export permit. A permit can only be obtained if it has been determined that the export of the species will not be detrimental to the species’ survival and that the specimen was not obtained in violation of wildlife protection laws. The country of re-export must issue a valid re-export certificate. The export permit or re-export certificate must be obtained prior to importation into the United States.
The government’s tools to combat the over-harvesting and exploitation of timber and plants were expanded last year when Congress passed the Food, Conservation and Energy Act of 2008 which became effective May 22, 2008. The law amended the Lacey Act by extending its protection to a broader range of plants and plant products. The Lacey Act now, among other things, makes it unlawful, beginning Dec. 15, 2008, to import certain plants and plant products without an import declaration. The purpose of the amendments is to protect timber and plants from illegal harvest such as is occurring in parts of tropical rainforests and from exploitation before they need protection under CITES.
The investigation was conducted by special agents of the Office of the Inspector General of the U.S. Department of Agriculture. The case was prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the District of New Jersey.
30 April 2009
Three South Carolina Men Indicted on Federal Civil Rights ChargesRead the Press Release
A federal grand jury in Florence, S.C., indicted three men from Marlboro County, S.C., on charges relating to their attack on an African-American man and two white men in December 2007.
Thomas Howard Blue Sr., 48, Thomas Howard Blue Jr., 28, and Judson Hartley Talbert, 34, were charged in a 21-count indictment with violating and conspiracy to violate the civil rights of three South Carolina citizens, carjacking, use of fire to commit a felony, use of a firearm in relation to a crime of violence, evidence tampering and grand jury perjury. Each civil rights count carries a sentence of up to 10 years in prison and $250,000 fine. A trial has not yet been scheduled. An indictment is merely an accusation and defendants are presumed innocent unless proven guilty.
The grand jury charged that Thomas Howard Blue Sr. forcibly escorted Dahndre Moore out of his establishment known as the Stop and Shop because Moore is African-American. Once outside, Thomas Howard Blue Sr. forced Moore to the ground and Thomas Howard Blue Jr. threatened Moore with a chainsaw. While Moore was being attacked by the father and son, Judson Hartley Talbert stole Moore’s car and drove it to a site along the Great Pee Dee River known as Blue’s Landing. After being chased by the Blues, Moore escaped by running up the road and seeking refuge in a local home.
According to the indictment, Thomas Howard Blue Sr. retrieved a pistol and attacked Jackson Hayes, a white man whom Blue believed to be aiding Moore, and used the pistol to threaten another white man, Jamie Gray, who came to the Stop and Shop to retrieve Moore’s car. Thomas Howard Blue Sr. and Judson Hartley later burnt Moore’s car in an attempt to cover up their crimes. The indictment also alleges the three defendants committed perjury when testifying before a federal grand jury that was investigating the incident.
The case is being investigated by FBI Special Agent Steven Stokes with assistance from Special Agent Jeff Key of the Bureau of Alcohol, Tobacco, Firearms & Explosives and Investigator Shawn Feldner of the Marlboro County Sheriff’s Department.
Assistant U.S. Attorney A. Bradley Parham and Civil Rights Division Trial Attorney Michael J. Frank are prosecuting this case.
Statement of Attorney General Eric Holder on Guilty Plea by Ali Al-MarriRead the Press Release
"A short while ago, in an Illinois courtroom, Ali Saleh Kahlah Al-Marri pleaded guilty to conspiracy to provide material support to the al-Qaeda terrorist network. By entering into this agreement, al-Marri admitted that he worked for and provided material support to al-Qaeda with the intent to further its terrorism objectives and activities here in the United States.
"Without a doubt, this case is a grim reminder of the seriousness of the threat we, as a nation, still face. But it also reflects what we can achieve when we have faith in our criminal justice system and are unwavering in our commitment to the values upon which this nation was founded and the rule of law.
"Just days after taking the oath of office, President Obama directed me to lead an interagency review of the al-Marri case. At the time, al-Marri had been sitting in a naval brig in South Carolina for more than five years facing no charges.
"As a result of that review and an examination of the evidence gathered during the extensive investigation of al-Marri by the FBI and Justice Department prosecutors, we decided to charge al-Marri in federal court. In February, a federal grand jury in Illinois indicted al-Marri on two counts of providing and conspiring with others to provide material support to al-Qaeda.
"That led us to where we are today - the resolution of this case that will send al-Marri to prison for up to 15 years.
"There are many milestones we achieve today, not the least of which are –
--The conviction of an al-Qaeda sleeper agent captured in the United States;
-- The certainty that our criminal justice system can and will hold terrorists accountable for their actions, and;
-- The triumph of the exhaustive efforts of dedicated professionals at the Justice Department and many other agencies involved in this case.
"The Department of Justice is resolved to protect the American people in a manner consistent with our values and to prosecute alleged terrorists to the full extent of the law.
"Our nation will be stronger – and safer – for that approach.
"There are many goals to which we aspire, but none more important than defending our nation and its citizens from acts of terrorism while ensuring we abide by the rule of law and the spirit of our Constitution.
"I can say to you today that the Justice Department met that challenge in this case.
"We will be unwavering in the defense of our country, its citizens and the values that define us as a nation. We will keep the American people safe and our civil liberties intact – there is not a tension between the two. Let this serve as a warning to all those who might do us harm: you will be hunted down, you will be held accountable. Nothing will prevent the full might of the American government and its people and allies from vanquishing those who might try to do us harm, wherever you are.
"I would like to thank all of the law enforcement officers and prosecutors who dedicated so much to this case and this outcome, including the National Security Division’s Counterterrorism Section, the FBI Joint Terrorism Task Force in Springfield, Illinois, the U.S. Attorneys offices for the Central District of Illinois and the District of South Carolina, and many other federal, state and local agencies."
More Commercial Fishermen Sentenced for Illegal Harvesting of RockfishRead the Press Release
WASHINGTON—Three more commercial fishermen were sentenced this week in U.S. District Court in Greenbelt, Md., for illegally harvesting and under-reporting their catch of striped bass, also known as rockfish, the Justice Department announced. The sentencings are part of the on-going prosecution of individuals and wholesalers who have participated in a black market to overfish and under-report rockfish catch from the Chesapeake Bay and surrounding waterways, which is the largest spawning ground for striped bass on the East Coast.
John W. Dean of Scotland, Md., was sentenced today to one month in prison followed by five months of home detention. He was also fined $1,000 and ordered to pay $10,000 in restitution. Dean was responsible for overharvesting over $100,267 worth of rockfish.
Thomas Crowder Jr. of Leonardtown, Md., was sentenced on April 28, 2009, to serve 15 months in prison followed by three years supervised release. He was also ordered to pay a $5,000 fine and $96,250 in restitution. Crowder was responsible for overharvesting over $956,200 worth of rockfish.
Charles Quade of Churchtown, Md., was sentenced on April 27, 2009, to five months in prison followed by five months home detention as part of three years of supervised release. He was also ordered to pay a $1,000 fine and $15,000 in restitution. Quade was responsible for overharvesting over $151,500 worth of rockfish.
The restitution from each sentence is being paid to the congressionally-established National Fish and Wildlife Foundation, which has established a Chesapeake Bay Rockfish Restoration Account. The fines paid by the defendants will be paid into the Cooperative Endangered Species Conservation Fund, which is maintained by the U.S. Fish and Wildlife Service.
Dean, Crowder and Quade each pleaded guilty on Feb. 19, 2009, and admitted that from 2003 to 2007 they illegally harvested rockfish with the assistance of a Maryland designated fish check-in station. In each year, they failed to record some of the striped bass that was caught or recorded a lower weight of striped bass than was actually caught. The three commercial fishermen and the check-in station operator 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 defendants 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 defendants allowing them to catch striped bass above their maximum poundage quota amount.
Charges were filed on April 20, 2009, against the fish wholesaler and its owner who operated the check-in station that assisted Dean, Crowder and Quade in violating the law. Golden Eye Seafood LLC and owner, Robert Lumpkins of St. Mary’s County, Md., were charged with four felony counts including conspiracy to violate the Lacey Act and three substantive violations of the Act.
Sentencing dates for the remaining commercial fishermen who have pleaded guilty to similar charges are listed below.
Keith A. Collins, May 28, 2009, 9:30 AM
Kenneth Dent, July 2, 2009, 9:30 AM
Jerry Decatur, Sr., July 1, 2009, 9:30 AM
Additionally, Cannon Seafood, a Washington, D.C., fish wholesaler, its owner, Robert Moore Sr. and his son Robert Moore Jr. are scheduled for sentencing on May 8, 2009, at 9:30 AM in U.S. District Court for the District of Columbia. Two 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.
As a result of the investigation and prosecution, two fish wholesalers and a total of 14 individuals have been charged, including today’s defendants. Additionally, four defendants have been sentenced to prison as a result of the investigation.
The case is being prosecuted by Assistant U.S. Attorney Stacy Dawson Belf for the District of Maryland and Senior Trial Attorney Wayne Hettenbach of the Justice Department’s Environmental Crimes Section.
Justice Department Settles Lawsuit Against Americraft Carton Inc. <br /> on Behalf of Michigan Army National GuardsmanRead the Press Release
The Department announced a settlement that, if approved by the court, will resolve its lawsuit filed on behalf of David D. Sweatt, a Michigan Army National Guard member currently serving in Iraq, against his former employer, Americraft Carton Inc. (Americraft).
The complaint was filed on March 13, 2009, in the U.S. District Court for the Western District of Michigan and alleged that Americraft violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The company discriminated against Sweatt by failing or refusing to reemploy him in his previous position as a production worker upon his return from National Guard duty, or, in the alternative, by terminating him without cause. After returning home from National Guard duty assisting the Border Patrol, Sweatt was deployed to Iraq, where he is currently serving.
Under the terms of the consent decree jointly submitted to the court by the parties, Americraft is required to pay Sweatt $6,075 in back wages and liquidated damages, and to reemploy Sweatt upon his return from his present military service. The consent decree also requires Americraft to modify its employment policies to comply with USERRA.
"The Civil Rights Division takes great pride in enforcing the employment rights of committed servicemembers such as Mr. Sweatt under USERRA," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
The Department’s lawsuit was filed after the Labor Department’s Veterans’ Employment and Training Service’s completion of an investigation of Sweatt’s complaint and settlement efforts.
Additional information about USERRA can be found on the Justice Department Web site at www.servicemembers.gov, and the Labor Department’s Web site at www.dol.gov/vets/programs/userra/main.htmhttp://www.usdoj.gov/crt/emp.
Justice Department Obtains $200,000 in Housing Discrimination Settlement with Lakewood, New Jersey, Apartment ComplexRead the Press Release
The Department announced an agreement with the owners, a manager and a former manager of Cottage Manor Apartments in Lakewood, N.J., to settle allegations of discrimination on the basis of religion, national origin and race. Under the settlement, which must be approved by the U.S. District Court in New Jersey, the defendants must pay a total of $170,000 to identified victims of discrimination and an additional $30,000 to the government as a civil penalty.
The lawsuit originated from charges filed by the Department of Housing and Urban Development on behalf of current and former tenants of Cottage Manor Apartments. The complaint alleges that the apartment owners of Cottage Manor Apartments, Triple H. Realty LLC, its principal manager Harry Kantor and former managing agent Vincent Ortiz, violated the Fair Housing Act when they discriminated against Hispanic and African American tenants.
The defendants transferred or attempted to transfer Hispanic and African American tenants from their apartments located in its most desirable building to make room for Orthodox Jews whom they courted as new tenants from 2002 to 2004. The defendants then assigned the non-Jewish tenants to less desirable apartments in the rear of the property, which had fewer amenities and were less well maintained than the most desirable building at the front of the property. The defendants charged the incoming Jewish tenants less rent than they did to non-Jewish tenants for apartments of similar size.
"Segregating tenants and providing discounted rents based upon religion, national origin or race, is degrading and discriminatory," said Acting Assistant Attorney General Loretta King of the Civil Rights Division. "The Civil Rights Division will vigorously pursue such discrimination."
"Federal law has long made it illegal to favor or steer anyone to housing based on race, national origin or religion," said Bryan Greene, HUD's General Deputy Assistant Secretary for Fair Housing and Equal Opportunity. "This month commemorates the 41st anniversary of the Federal Fair Housing Act and for as many years, HUD and the Justice Department have worked hand in hand to eliminate discriminatory housing practices and recover relief for those harmed."
Fighting illegal housing discrimination is a top priority of the Justice Department. The Federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.
More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Persons who believe they have experienced or witnessed unlawful housing discrimination may call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777. More information about the Fair Housing Act can also be found at www.usdoj.gov/fairhousing or www.hud.gov/fairhousing.
Former Oklahoma Water Treatment Supervisor Pleads Guilty for Falsifying Drinking Water Safety ReportsRead the Press Release
WASHINGTON— Christopher Neil Gauntt, the former supervisor of the Fort Gibson Water Treatment Plant in Fort Gibson, Okla., pleaded guilty today in U.S. District Court in Muskogee, Okla., to falsifying a monthly operating report that certified the safety of drinking water from the facility, the Justice Department announced.
Gauntt pleaded guilty to a one-count information charging him with a felony count of making a false statement. He admitted that on or about June 12, 2008, he submitted a monthly operating report containing false data for drinking water that is provided to residents of Fort Gibson as well as residents of Muskogee Rural Water Districts 4 and 7, Cherokee Water drinking water systems, and the water systems for Corral Creek Subdivision and Ozark Water Inc.
Under the federal Safe Water Drinking Act, which is administered and enforced by the Oklahoma Department of Environmental Quality, as well as the U.S. Environmental Protection Agency (EPA), the Fort Gibson water treatment plant must provide drinking water that meets standards to ensure that the water is safe for human consumption. Two of the standards that must be met include turbidity and chlorine. If turbidity, the measure of clarity of drinking water, or chlorine levels are not within levels required by the Safe Drinking Water Act, there is a potential risk that the water could retain microorganisms that carry waterborne diseases.
Gauntt admitted that he recorded levels in the monthly operating report submitted to Oklahoma DEQ that indicated the turbidity and chlorine levels were in compliance with required standards when he knew in fact they were not. In August 2008, Fort Gibson had sent a notice concerning this to residents who receive their drinking water from the Fort Gibson water treatment plant. Fort Gibson did not receive any information that anyone experienced any ill effects from the drinking water during that time period.
"All citizens should be confident that they are receiving drinking water that is safe for consumption. Those who knowingly compromise the regulatory protections of the Safe Drinking Water Act will be prosecuted," said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The prosecution in this case demonstrates that the government vigorously acts to ensure all of our citizens have good drinking water and the Safe Drinking Water Act’s requirements are being complied with."
"Accurate information is essential for the federal government and the State of Oklahoma to assure good drinking water for the public," said Warren Amburn, Special Agent in Charge of EPA’s criminal enforcement program in Dallas. "Individuals who submit false reports or bogus data undermine those efforts and they will be vigorously pursued."
"Falsifying information about the safety of the drinking water supply is dangerous," Oklahoma Attorney General Drew Edmondson said. "Ensuring an adequate supply of safe, clean water is an important public health issue. We will continue to work with our partners at all levels of government to protect the people of this state and the water they drink."
As a result of the felony conviction, Gauntt could be sentenced up to five years in prison and fined up to $250,000.
The case was prosecuted by the Department of Justice Environmental Crimes Section and was investigated by EPA’s Criminal Investigation and the Oklahoma Attorney General’s Office.
If there are any questions from the public regarding the case, please contact the Department of Justice Environmental Crimes Section at (202) 305-0321.
Computer Administrator Pleads Guilty to Hacking <br /> Former Employers Computer SystemRead the Press Release
The former director of information technology for a non-profit organ and tissue donation center has entered a guilty plea to intruding into her former employer’s computer network.
At a hearing before U.S. District Judge David Hittner, Danielle Duann, 51, admitted to illegally accessing the computer network of LifeGift Organ Donation Center and then intentionally deleting organ donation database records, accounting invoice files, database and accounting software applications and various backup files without authorization.
LifeGift is the sole provider of organ procurement services for more than 200 hospitals throughout 109 counties in North, Southeast and West Texas. Duann was previously indicted on this charge by a federal grand jury on June 24, 2008.
According to the statement of facts in the case, LifeGift terminated Duann from her position as their director of information technology on Nov. 5, 2005, and the organization revoked all of Duann’s previous administrative rights and access to the LifeGift computer network. Beginning in the evening of Nov. 7, 2005, and continuing into Nov. 8, 2005, Duann repeatedly gained unauthorized access to the LifeGift computer network via a remote connection from her home and intentionally caused damage by deleting numerous database files and software applications, as well as their backups, relating to LifeGift’s organ and tissue recovery operations.
Further, according to the statement of facts, in an attempt to conceal her activities, Duann disabled the computer logging functions on several LifeGift computer servers and erased the computer logs that recorded her remote access to the LifeGift computer network. LifeGift suffered damage and losses in excess of $94,200 as a result of Duann’s computer intrusion and intentional, unauthorized deletion of programs and files.
Duann is scheduled to be sentenced by Judge Hittner on July 28, 2009. She faces a maximum punishment of 10 years in prison and/or a fine of up to $250,000.
This case was investigated by the FBI and is being jointly prosecuted by Trial Attorney Thomas Dukes of the Criminal Division's Computer Crime and Intellectual Property Section and by Special Assistant U.S. Attorney Bret W. Davis of the Southern District of Texas.
Ali Al-Marri Pleads Guilty to Conspiracy <br /> to Provide Material Support to Al-QaedaRead the Press Release
Ali Saleh Kahlah al-Marri, 43, a dual national of Saudi Arabia and Qatar, has pleaded guilty to one count of conspiracy to provide material support to al-Qaeda.
Al-Marri entered his guilty plea at a hearing this afternoon before Judge Michael M. Mihm in U.S. District Court for the Central District of Illinois. In so doing, al-Marri admitted that he agreed with others to provide material support or resources to al-Qaeda in the form of personnel, including himself, to work under al-Qaeda’s direction and control with the intent to further the terrorist activity or terrorism objectives of al-Qaeda.
Judge Mihm scheduled sentencing for July 30, 2009. At sentencing, al-Marri faces up to 15 years imprisonment, a $250,000 fine, a life term of supervised release, and a $100 mandatory special assessment.
"Without a doubt, this case is a grim reminder of the seriousness of the threat we as a nation still face," said Attorney General Holder. "But it also reflects what we can achieve when we have faith in our criminal justice system and are unwavering in our commitment to the values upon which the nation was founded and the rule of law."
"The facts admitted by al-Marri today demonstrate that he attended terrorist training camps, learned al-Qaeda tradecraft and was dispatched by the highest levels of al-Qaeda to carry out its terrorist objectives in America," said David Kris, Assistant Attorney General for the National Security Division. "The many agents, analysts and prosecutors who worked tirelessly on this investigation and prosecution deserve special thanks for their efforts."
"Ali al-Marri was an al-Qaeda ‘sleeper’ operative working on U.S. soil and directed by the chief planner of the 9-11 attacks. Al-Marri researched the use of chemical weapons, potential targets and maximum casualties," said Arthur M. Cummings, II, Executive Assistant Director of the FBI’s National Security Branch. "The investigation that disrupted his plot began with tips from local police partners. The investigation that followed took the FBI agents and task force officers around the globe to develop the intelligence to prevent any potential attack and the evidence to bring al-Marri to justice."
"Ali al-Marri today admitted that he traveled to central Illinois as an al-Qaeda operative the day before the Sept.11, 2001, attacks to plan and prepare for future acts of terrorism within the United States," said Jeffrey B. Lang, Acting U.S. Attorney for the Central District of Illinois. "Al-Marri’s admissions, in open court and after again being advised of his right to a jury trial, confirm the many details of the government’s findings as a result of the exemplary investigative efforts by the FBI and other agencies."
On Jan. 22, 2009, the President directed the Attorney General to lead an interagency review of the case involving al-Marri, who had been detained as an enemy combatant by the Defense Department since June 2003. As a result of that review and an examination of the evidence gathered during the long-term investigation of al-Marri, the Justice Department decided to charge al-Marri in federal court. On Feb. 26, 2009, a federal grand jury in the Central District of Illinois returned a two-count indictment charging al-Marri with conspiring with others to provide material support to al-Qaeda and providing material support to al-Qaeda.
Al-Marri was later transferred from the custody of the Defense Department to the custody of the Justice Department and brought to the Central District of Illinois for trial on the two-count indictment. As part of the plea agreement announced today, the Justice Department has agreed to dismiss the second count of the indictment. In pleading guilty, al-Marri has admitted the following facts, as spelled out in the plea agreement.
Statement of Facts
Between 1998 to 2001, al-Marri attended various terrorist training camps where he learned the use of weapons and operational security tradecraft that al-Qaeda employed to avoid detection, conceal their communications and protect their operations. These methods included prearranged codes and other techniques to protect communications, counter-surveillance techniques and the protection of information on computers.
During these trips, al-Marri stayed in safe houses in Pakistan, which he agrees the government would prove were run by al-Qaeda. While in the terrorist training camps and safe houses, he used the nickname "Abdul-Rahman al-Qatari," and provided al-Qaeda operatives with his family contact information so they could inform his family should he be killed or "martyred" during an al-Qaeda mission.
In 2001, al-Marri was approached by Khalid Sheikh Mohammed, who was then the external operations chief for al-Qaeda, about assisting al-Qaeda operations in the United States. Al-Marri agreed to do so and knew at the time that he entered into the agreement with Khalid Sheikh Mohammed that he was providing himself to al-Qaeda to further their terrorist objectives. Al-Marri was also aware that al-Qaeda was responsible for attacks against the United States, including the 1998 bombings of two U.S. Embassies in East Africa, and the 2000 attack on the USS Cole. In addition, he was aware of the 1996 and 1998 "fatwas" issued by Usama bin Laden against the United States.
Al-Marri was instructed by Khalid Sheikh Mohammed to enter the United States no later than Sept. 10, 2001, with an understanding that he was to remain in the United States for an undetermined length of time. Khalid Sheikh Mohammed also directed al-Marri to meet with Mustafa al-Hawsawi (hereinafter al-Hawsawi) in Dubai, United Arab Emirates, where al-Hawsawi provided him with $10,000. Al-Marri knew that al-Hawsawi was associated with al-Qaeda and agrees that the government would prove at trial that al-Hawsawi was a primary financier of the September 11th attacks.
Communications in Code
Khalid Sheikh Mohammed and al-Marri also set up a code through which they communicated. Al-Marri was instructed to conceal telephone numbers and other numbers to be used in e-mail addresses by using a numeric code (hereinafter, "10-code"). This code was used by al-Qaeda members, including al-Hawsawi and some of the Sept. 11th hijackers to conceal telephone numbers so as to avoid detection. Al-Marri was also provided contact information for several al-Qaeda associates which he stored in his personal PDA (Personal Digital Assistant) using the 10-code.
Khalid Sheikh Mohammed and al-Mari also used a pre-arranged code to disguise their email communications. The pre-arranged communication method referred to Khalid Sheikh Mohammed as "Muk." Al-Marri was to refer to himself as "Abdo" in these communications and to send emails to [email protected], an email account used by Khalid Sheikh Mohammed. Through these emails, al-Marri was to keep Khalid Sheikh Mohammed apprised of his efforts to enter the United States, his contact information and his efforts to advance al Qaeda’s mission in the United States. Khalid Sheikh Mohammed was to use these emails to pass on instructions to al-Marri.
Details of the prearranged code were stored in an address book that was found in an al-Qaeda safe house in Pakistan. The book contained the email address to be used by al-Marri, which was listed as [email protected] , along with the identification number for al-Marri of "038." From this coded information, al-Marri used the email address of [email protected]. The address book also listed Khalid Sheikh Mohammed’s email address as HOR70@hot[mail.com].
From approximately June 2001 through August 2001, al-Marri communicated via email with Khalid Sheikh Mohammed, as directed and agreed upon, about his attempts to gain entry into the United States via a student visa from Bradley University in Peoria, Ill.. He applied online to Bradley University using the same email address he used to communicate with Khalid Sheikh Mohammed. To expedite his admission, he applied for a second bachelor’s degree instead of a master’s degree.
Once al-Marri learned he had been re-enrolled in Bradley University, he traveled to Dubai and met with al-Hawsawi, who provided him $10,000. Al-Marri then traveled to Pakistan to meet Khalid Sheikh Mohammed. Upon his return to Qatar, al-Marri applied for a new Qatari passport. He also obtained his student visa, but did not admit on his visa application that he had taken a trip to the United States in 2000, where he had established a fictitious business using a false name and stolen Social Security number, fraudulently obtaining a number of credit cards and opening several business accounts.
Arrival in the United States
Al-Marri and his family arrived in the United States on Sept. 10, 2001. On Sept. 21, 2001, he traveled to another university in Illinois and created five new email accounts under different aliases. By this time, he knew al-Qaeda was responsible for the Sept. 11, 2001 attacks and understood why Khalid Sheikh Mohammed had directed him to be in the United States before that date. Al-Marri used these new e-mail accounts to inform Khalid Sheikh Mohammed that he had arrived safely in the United States. He also provided Khalid Sheikh Mohammed with his Peoria cellular telephone number.
From Sept. 23, 2001 through Nov. 4, 2001, al-Marri made several unsuccessful attempts to call al-Hawsawi and others he knew were al-Qaeda operatives. To conceal his communications efforts, he used prepaid calling cards at public pay phones in and around central and northern Illinois. Although the initial calls were made from payphones in the Peoria area, after al-Marri was interviewed by the FBI on Oct. 2, 2001, he expanded the calling area, sometimes traveling more 160 miles away to place calls.
Al-Marri also conducted online research of various cyanide compounds, including hydrogen cyanide, potassium cyanide, and sodium cyanide. He reviewed toxicity levels, locations where these items could be purchased, and specific pricing of the compounds. He also explored obtaining sulfuric acid, a well-known binary agent used in a hydrogen cyanide binary device to create cyanide gas. Al-Marri agrees that the government would prove at trial this is the method taught by al Qaeda for manufacturing cyanide gas.
Al-Marri agrees that the government would prove at trial that his research into cyanide compounds is consistent with research conducted by persons trained in camps teaching advanced poisons courses to terrorist organizations, including al Qaeda. He also agrees that the government would prove at trial that an almanac recovered in his residence was bookmarked at pages showing dams, waterways and tunnels in the United States, consistent with al Qaeda attack planning regarding the use of cyanide gases.
Finally, al-Marri used an "anonymizer" program on his laptop when surfing the internet. He agrees that the government would prove at trial that these types of programs are designed to allow individuals to anonymously search internet websites and programs, and that the program on his computer also erased all historical internet searches on a regular basis.
In December 2001, al-Marri was arrested on a material witness warrant issued in connection with the investigation of the Sept. 11, 2001 attacks. He was later indicted on credit card fraud, false statements and identity fraud charges. These charges were dismissed on June 23, 2003, when al-Marri was designated by President Bush as an enemy combatant and transported to the Naval Consolidated Brig in South Carolina. Al-Marri remained detained by the Defense Department until his transfer to Justice Department custody this year in connection with this case.
The al-Marri investigation was conducted by the FBI Joint Terrorism Task Force in Springfield, Illinois, with assistance from numerous other federal, state, and local agencies.
The case is being prosecuted by Trial Attorneys Joanna Baltes and Sharon Lever of the Counterterrorism Section of the Justice Department’s National Security Division, and Assistant U.S. Attorney David E. Risley of the U.S. Attorney’s Office for the Central District of Illinois. Assistant U.S. Attorney Kevin F. McDonald of the U.S. Attorney’s Office for the District of South Carolina also provided critical assistance.
29 April 2009
Two Additional Defendants Sentenced for Conspiring to Kill U.S. SoldiersRead the Press Release
WASHINGTON – The remaining two men convicted of plotting to kill members of the U.S. military during an armed attack on a military base were sentenced today to federal prison terms of life for one defendant and 33 years for the other for conspiring to kill members of the U.S. military, Ralph J. Marra Jr., Acting U.S. Attorney for the District of New Jersey; David Kris, Assistant Attorney General for National Security; and Janice K. Fedarcyk, Special Agent in Charge of the Philadelphia Division of the FBI, announced.
U.S. District Judge Robert B. Kugler sentenced Mohamad Ibrahim Shnewer to a term of life in prison plus an additional, consecutive 30 years. Judge Kugler sentenced Serdar Tatar to 33 years in prison. There is no parole in the federal system.
Judge Kugler, who presided over a 12-week trial for the five defendants, also ordered Shnewer and Tatar to pay $125,000 in restitution to the Department of the Army for the costs of added security measures undertaken in response to the plot.
Yesterday, Judge Kugler sentenced Dritan Duka and Shain Duka to prison terms of life plus 30 years. The third brother, Eljvir Duka, received a life prison term. The same $125,000 restitution order was imposed for them as well.
The case was tried by Deputy Assistant U.S. Attorney William E. Fitzpatrick and Assistant U.S. Attorney Michael A. Hammer, Jr., Chief of the U.S. Attorney’s Office Counter-Terrorism Unit.
"The sentences are appropriate in each instance and we are pleased and gratified by the results," said Marra. "Over the last few years, this investigation and prosecution was of the highest priority for us and our law enforcement partners. Now that the case is behind us, I want to commend the trial attorneys, agents, investigators and all others who worked tirelessly to keep our soldiers, civilian employees and military bases safe."
"The sentences handed down today, along with the sentences in this case yesterday, reaffirm for all of us the value of the commitment we have made to live free from the tyranny of fear," said Special Agent in Charge Janice K. Fedarcyk, of the Philadelphia Division of the FBI. "The FBI’s top priority is to protect this nation from terrorism, and addressing threats of terrorist acts quickly and aggressively is the only way to succeed in this important mission."
"These sentences are the culmination of an extensive federal, state and local law enforcement operation," said David Kris, Assistant Attorney General for National Security. "While these defendants were not members of an international terrorist organization, their homegrown plot to murder U.S. military personnel at Fort Dix was no less serious or potentially deadly."
The defendants’ arrests occurred on May 7, 2007, in Cherry Hill as Dritan and Shain Duka were meeting a confidential government witness to purchase four automatic M-16 rifles and three semi-automatic AK-47 rifles to be used in a future attack on military personnel. The other defendants were arrested at various locations at about the same time.
On Dec. 22, 2008, after 5½ days of deliberations, a jury convicted the three Duka brothers, Shnewer and Tatar on Count One of the seven-count Superseding Indictment that charged them with conspiracy to murder members of the U.S. military. The jury also convicted the Dukas and Shnewer of firearm offenses, including possession of machine guns.
The evidence proved that one member of the group conducted surveillance at Fort Dix and Fort Monmouth in New Jersey, Dover Air Force Base in Delaware and the U.S. Coast Guard in Philadelphia. The co-conspirators obtained a detailed map of Fort Dix, where they hoped to use assault rifles to kill as many soldiers as possible, according to trial testimony and evidence.
During the trial, the jury viewed secretly recorded videotapes of the defendants performing small-arms training at a shooting range in the Pocono Mountains in Pennsylvania and watching training videos amongst themselves that included depictions of American soldiers being killed and of known foreign Islamic radicals urging jihad against the United States.
The defendants and the charges on which each was convicted are as follows:
- Mohamad Ibrahim Shnewer, 24, of Cherry Hill: conspiracy to murder members of the U.S. military, and the attempted possession of AK-47 semi-automatic assault weapons to be used in the attack.
- Dritan Duka, 30 of Cherry Hill: conspiracy to murder members of the U.S. military; possession of machine guns; possession and attempted possession of machine guns in furtherance of a crime of violence; and two counts of possession of firearms by an illegal alien.
- Shain Duka, 28, of Cherry Hill: conspiracy to murder members of the U.S. military; possession of machine guns; possession and attempted possession of machine guns in furtherance of a crime of violence; and two counts of possession of firearms by an illegal alien.
- Eljvir Duka, 25, of Cherry Hill: conspiracy to murder members of the U.S. military, and possession of firearms by illegal aliens. The jury acquitted on one count of possession and attempted possession of machine guns in furtherance of a crime of violence.
- Serdar Tatar, 25, of Philadelphia: conspiracy to murder members of the U.S. military.
A sixth co-defendant, Agron Abdullahu, 26, of Buena Vista Township, Atlantic County, pleaded guilty before Judge Kugler on Oct. 31, 2007, to aiding and abetting the Duka brothers’ illegal possession of weapons. Abdullahu was arrested on May 7, 2007, along with the defendants convicted today. On March 31, 2008, Judge Kugler sentenced Abdullahu to 20 months in federal prison.
Marra and Kris credited the Special Agents of the FBI’s Philadelphia Division and the FBI South Jersey Joint Terrorism Task Force, under the direction of Special Agent in Charge Fedarcyk, in Philadelphia, for investigation of the case.
Marra, Kris and Fedarcyk also thanked investigators with member agencies of the FBI South Jersey Joint Terrorism Task Force, which comprises ICE’s Philadelphia Division, under the direction of Special Agent in Charge John P. Kelleghan, the Camden County Prosecutor’s Office, under the direction of the Prosecutor Warren W. Faulk, N.J. State Police, under the direction of Col. Joseph "Rick" Fuentes, Superintendent, and the Delaware River Port Authority Police, under the direction of Chief Dave McClintock, for their tireless efforts on the investigation, and trial attorney John Van Lunkhuysen of the Counterterrorism Section of the Justice Department’s National Security Division, for his trial preparation assistance.
Additionally, Marra, Kris and Fedarcyk would like to thank the following agencies for their assistance and support: the U.S. military services at Fort Dix, Fort Monmouth, Dover Air Force Base, the U.S. Coast Guard in Philadelphia and the Naval Criminal Investigative Service, along with the Cherry Hill Police Department, Mt. Laurel Police Department, Cherry Hill Fire Department, Camden County Sheriff's Department, Philadelphia Police Department, Pennsylvania State Police, the Burlington County Prosecutor’s Office, and N.J. Homeland Security.
Justice Department Sues Nobel Learning Communities Inc. for Discrimination Against Children with DisabilitiesRead the Press Release
WASHINGTON – The Justice Department announced today it has filed a lawsuit in U.S. District Court in Philadelphia against Nobel Learning Communities Inc. (Nobel) alleging the company violated Title III of the Americans with Disabilities Act by excluding children with autism spectrum disorders and other disabilities from its schools and programs.
The complaint identifies children with disabilities denied admission to or removed from Nobel schools in several states. Nobel is a network of more than 180 private preschools, elementary schools and secondary schools in fifteen states, operating under various names including Chesterbrook Academies, Evergreen Academies, Bethesda Country Day School and Merryhill Schools. Nobel also provides child care services and summer programs.
"All parents want their child to have the opportunity to reach his or her full potential," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Justice Department will vigorously enforce Title III of the ADA to ensure that children with disabilities have a full and equal opportunity to participate in academic and non-academic activities."
Title III of the ADA prohibits public accommodations, including private schools such as Nobel, from excluding individuals with disabilities from programs or services offered by the public accommodation. Covered entities must also make reasonable modifications if such modifications would permit the individual with a disability a full and equal opportunity to participate in or benefit from the programs and services offered. Parents or guardians who believe their child may have been discriminated against on the basis of disability can contact the Justice Department’s Civil Rights Division.
Those interested in finding out more about federal disability rights statutes can call the Justice Department’s toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY), or access the ADA Web site at www.ada.gov.
Former Head Securities Trader for Lancer Group Hedge Funds Pleads Guilty to Conspiracy to Commit Mail, Wire and Securities FraudRead the Press Release
WASHINGTON - The former head securities trader for Lancer Group hedge funds pleaded guilty on April 28, 2009, to one count of conspiracy to commit mail, wire and securities fraud, Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney R. Alexander Acosta for the Southern District of Florida announced today.
Eric Hauser, 65, pleaded guilty before U.S. District Court Judge Adalberto Jordan in Miami. Hauser admitted to participating in a scheme to manipulate trading of stocks owned by the Lancer Group hedge funds. Sentencing for Hauser is scheduled for July 10, 2009.
Hauser was one of five defendants charged in an indictment unsealed in February 2008 in Miami. Also charged in the indictment are Michael Lauer and Martin Garvey who, along with Hauser, were co-owners of management companies that directed Lancer Group hedge funds’ activities, and Laurence Isaacson and Milton Barbarosh, who the indictment alleges had financial interests in Boca Raton, Fla.-based "shell" companies in which the hedge funds invested. All of the defendants were charged with one count of conspiracy to commit mail, wire and securities fraud, and six counts of wire fraud. A trial date has not yet been set for Lauer, Garvey, Isaacson or Barbarosh.
According to the indictment, Lauer, as founder and primary manager, formed and directed several hedge funds, collectively known as the Lancer Group hedge funds. From October 1999 to July 2003, Lauer and others allegedly manipulated the closing market price of thinly-traded shell company securities to falsely inflate the value of the Lancer Group hedge funds. Lauer, Isaacson and Barbarosh allegedly identified "shell" companies, including ones owned by Barbarosh, in which the Lancer Group would buy large quantities of "restricted" stock at pennies per share in private transactions. According to the indictment, Lauer, Garvey and Hauser next allegedly directed brokers to buy a small amount of the same securities for the Lancer Group at a much higher open market price and to make additional small purchases to drive up the price to a closing "target price." Lauer then allegedly falsely valued all of the securities held by the Lancer Group, including those restricted shares obtained for pennies per share, at the much higher closing price, which falsely boosted the 20 percent performance fees paid to the management companies; induced new investors to buy into the funds; and kept existing investors in the funds.
To cover up and perpetuate the scheme, the indictment alleges, Lauer also created fake portfolios of the securities supposedly held by the Lancer Group and allegedly obtained falsely inflated appraisals of the shell companies through Isaacson and Barbarosh.
An indictment is merely a charge. All defendants are presumed innocent until proven guilty.
The case was investigated by the FBI and is being prosecuted by Senior Litigation Counsel Jack Patrick of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Harold Schimkat of the U.S. Attorney’s Office for the Southern District of Florida.
Dutch Airline Executive Agrees to Plead Guilty for Fixing Prices on Air Cargo ShipmentsRead the Press Release
WASHINGTON — A Dutch citizen and executive of Martinair Holland N.V. (Martinair) has agreed to plead guilty, serve time in jail and pay a criminal fine for participating in a conspiracy to fix cargo rates for international air shipments, the Department of Justice announced today.
Including today’s charge, a total of 15 airlines and four executives have pleaded guilty or agreed to plead guilty in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. Collectively, the companies have paid or agreed to pay criminal fines totaling more that $1.6 billion and three executives have already been sentenced to jail time.
According to the charge filed in U.S. District Court in the District of Columbia, Franciscus Johannes de Jong, aka Frank de Jong, the former vice president of cargo sales in Europe for Martinair, and his co-conspirators engaged in a conspiracy to fix the cargo rates charged to customers for international air shipments, including to and from the United States. Under the plea agreement, which is subject to court approval, de Jong has agreed to serve eight months in jail, pay a $20,000 criminal fine and cooperate with the Department’s ongoing investigation.
"By fixing prices for the shipment of products to and from the United States, this cartel targeted a critical piece of our country’s economy," said Scott D. Hammond, Deputy Assistant Attorney General in charge of the Antitrust Division’s Criminal Enforcement Program. "The Department remains dedicated to aggressively pursuing those who conspire to cheat American businesses and consumers with price-fixing schemes."
According to the charge, from at least as early as April 2002 and continuing until at least Feb. 14, 2006, de Jong and his co-conspirators carried out the price-fixing conspiracy by:
- Participating in meetings, conversations and communications to discuss the cargo rates to be charged on certain routes to and from the United States;
- Agreeing, during those meetings, conversations and communications, on certain components of the cargo rates to charge on shipments on certain routes to and from the United States;
- Levying cargo rates in the United States and elsewhere in accordance with the agreements reached; and
- Engaging in meetings, conversations and communications in the United States and elsewhere for the purpose of monitoring and enforcing adherence to the agreed-upon cargo rates.
The 15 airlines that have pleaded guilty or agreed to plead guilty to date as a result of the Department’s ongoing investigation into the air transportation industry are: British Airways Plc, Korean Air Lines Co. Ltd., Qantas Airways Limited, Japan Airlines International Co. Ltd., Martinair, Cathay Pacific Airways Limited, SAS Cargo Group A/S, Société Air France, Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines), EL AL Israel Airlines Ltd., LAN Cargo S.A., Aerolinhas Brasileiras S.A., Cargolux Airlines International S.A., Nippon Cargo Airlines Co. Ltd., and Asiana Airlines Inc. Airline executives who have already pleaded guilty for their involvement in the illegal activity are Bruce McCaffrey of Qantas, Timothy Pfeil of SAS and Keith Packer of British Airways.
De Jong is charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $1 million and up to 10 years in prison for an individual. 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.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section, the Federal Bureau of Investigation (FBI), the Department of Transportation Office of Inspector General and the United States Postal Service Office of the Inspector General. Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the National Criminal Enforcement Section of the Antitrust Division at 202-307-6694 or the FBI Washington Field Office, Northern Virginia Resident Agency at 703-686-6000.
Attorney General Holder Announces Recovery Act Grants to Save or Create Justice Related JobsRead the Press Release
U.S. Attorney General Eric Holder today announced that more than $424 million in Recovery Act funds will go to 20 states, territories and the District of Columbia to maintain or increase public safety, while creating or retaining jobs within the law enforcement community. These Edward Byrne Memorial Justice Assistance Grant (JAG) Program funds are part of more than $4 billion in Justice Department Recovery Act funds available to assist state, local and tribal law enforcement and for other criminal justice activities that help to prevent crime and improve the criminal justice system in the United States while supporting the creation of jobs and much needed resources for states and local communities.
All applicants named job creation and retention as their top priority, and states plans include funding for a variety of justice related projects such as support for drug and gang task force activities, expansion of domestic violence shelter staffs, funding for community crime prevention and treatment programs, purchase of updated equipment, and retention and creation of criminal justice-related jobs in areas such as drug courts, correctional facilities, community crime prevention, and crime victim and witness programs.
"By addressing states’ economic challenges while simultaneously meeting the their public safety priorities, these funds represent the best of what the Recovery Act can do for our communities," Attorney General Eric Holder said. "This vital funding will help fight crime and build safer communities, and we look forward to continued work with state and local governments to address these criminal justice goals."
The procedure for allocating JAG grants is based on a formula of population and violent crime statistics, in combination with a minimum allocation to ensure that each state and territory receives an appropriate share of funding. Sixty percent of the allocation is awarded directly to a state and 40 percent is set aside for units of local government. States are required to sub-grant a portion of the funds to local units of government, such as a city, county, township or town. Faith-based and other community organizations are also eligible to receive pass-through funding from the state, as are Tribal governments.
Local Recovery Act JAG awards will be announced at a later date. The deadline for local units of government to submit their Recovery Act applications to the Department of Justice is May 18, 2009.
The JAG Program is the primary provider of federal criminal justice funding to state and local jurisdictions and is managed by the Department’s Office of Justice Programs’ Bureau of Justice Assistance. JAG funds support all components of the criminal justice system, from multi-jurisdictional drug and gang task forces to crime prevention and domestic violence programs, courts, corrections, treatment, and justice information sharing initiatives. Projects may address crime through the provision of services directly to individuals and/or communities and by improving the effectiveness and efficiency of criminal justice systems, processes, and procedures. For more details on the JAG Program or to track the use of Recovery Act funds, visit www.ojp.gov/recovery. For more details on how to apply for the state managed,
pass-through funding, visit http://www.ojp.usdoj.gov/saa/index.htm.
The Office of Justice Programs, headed by Acting Assistant Attorney General Laurie O. Robinson, provides federal leadership in developing the nation's capacity to prevent and control crime, administer justice, and assist victims. OJP has five component bureaus: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; and the Office for Victims of Crime. Additionally, OJP has two program offices: the Community Capacity Development Office, which incorporates the Weed and Seed strategy, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information can be found at www.ojp.gov.
State plan summaries are as follows:
Alabama, $18.7 million:
The Alabama Department of Economic and Community Affairs (ADECA), Law Enforcement and Traffic Safety Division (LETS) plans to support testing capabilities to detect use of illegal drugs, identify drug abusers, and provide a treatment system; provide systems for intelligence-gathering, data collection and analysis to assist in coordinating enforcement efforts; and support state projects to stabilize the government budgets to minimize and avoid reductions in essential services and counter-productive state and local tax increases.
Arizona, $25 million:
The Arizona Criminal Justice Commission (ACJC) plans to support the statewide effort to fight drug trafficking and violent crime. Priority will be given to job creation and retention, particularly jobs key to multi-agency, multi-jurisdictional drug, gang, and violent crime task forces; the associated prosecution projects and statewide civil forfeiture efforts; criminal justice information sharing projects; adjudication, forensic analysis, detention, and criminal justice system support services; and proven substance abuse prevention and education programs.
Connecticut, $12 million:
The Connecticut Office of Policy and Management (OPM) plans to expand the Department of Corrections case management system; upgrade automated fingerprinting systems; support drug task force activities; increase the number of DNA samples obtained from inmates and expedite sample processing; increase the visibility of state police vehicles to reduce collisions; expand domestic violence shelter staffs; establish a sexual assault forensic examiner program; provide more effective facility and community based corrections programs; and translate community outreach, education and media materials.
Colorado, $18 million:
The Colorado Division of Criminal Justice Services plans to support efforts to prevent and control crime; improve the criminal and juvenile justice systems; improve law enforcement’s operational effectiveness; improve the corrections system, including treatment in prisons and jails; improve the operational effectiveness of the court process; address the treatment needs of adult and juvenile substance abuse and mentally ill offenders; and respond to the needs of crime victims.
Delaware, $6 million:
The Delaware Criminal Justice Council plans to support efforts to prevent and control crime by enhancing gang and gun trafficking initiatives; police/parole and probation partnerships; witness protection and multi-agency initiatives to incarcerate fugitives; sex offender monitoring; drug/mental health courts; targeting violent adult and juvenile offenders; upgrading officer safety equipment; retaining correctional officers; and expanding the successful Operation Safe Streets initiative.
District of Columbia, $11.7 million:
The District Of Columbia Justice Grants Administration plans to support efforts to prevent and control crime; improve technology for core operations; law enforcement initiatives; prevention and education efforts; technology and research; and corrections and community corrections with special emphasis on at-risk youth/status offender diversion initiatives and prisoner re-entry.
Florida, $81 million:
The Florida Department of Law Enforcement plans to support law enforcement efforts such as eradicating marijuana, dismantling clandestine laboratories; disrupting illicit commerce; targeting white collar, computer, and organized crimes; along with prevention initiatives such as anti drug and gang education programs; school resource officers; community crime prevention, policing, and corrections programs.
Kansas, $12 million:
The Kansas Criminal Justice Coordinating Council (KCJCC) plans to preserve or create criminal justice-related jobs for parole officers, community corrections officers, juvenile correctional officers, special criminal investigations agents, criminal prosecutor, and technical specialists; while also supporting initiatives in community corrections, juvenile supervision and case management; internet safety; criminal investigations and prosecutions; forensic evidence analysis; training and prevention efforts; and equipment upgrades.
Louisiana, $21 million:
The Louisiana Commission on Law Enforcement and Administration of Criminal Justice (LCLE) plans to establish or continue programs to impact drug and violent crime problems across the state; address recidivism by strengthening prevention of crime and drug abuse intervention, treatment, and rehabilitation; provide specialized law enforcement training; and enhance forensics laboratories.
Maryland, $26.5 million:
The Maryland Governor’s Office of Crime Control and Prevention (GOCCP) plans to support the creation and retention of public safety-related jobs while also removing warranted fugitives from the streets; upgrading communications and forensic equipment; purchasing computer and software technology; improving prison and jail security; investing in data-driven policing strategies to include intelligence-based parole and probation supervision and partnerships, cross-border collaborations with neighboring States, and gang enforcement and gun trafficking initiatives.
Massachusetts, $25 million:
The Massachusetts Executive Office of Public Safety and Security (EOPS) will use the funding to maintain or increase public safety in the Commonwealth, while creating or retaining jobs. EOPS plans to support summer youth employment programming, community-based prevention programs, district attorneys’ prosecution, victim witness advocacy, community programs, sheriffs’ department re-entry programs, local law enforcement policing and programs, and state public safety agencies’ core services.
Michigan, $41 million:
The Michigan Office of Drug Control Policy will use the funding to maintain or increase public safety in the state, while creating or retaining jobs within the law enforcement community. The Office of Drug Control Policy estimates that the jobs created or saved will be for case managers, court liaisons, and peer support advocates in mental health courts as well as continued employment of State Appellate Defender Office staff who provide state-funded appellate services for felony convictions for indigent clients. The state also plans to support strategies for multi-jurisdictional task forces, prescription and over-the-counter drug abuse community awareness programs; community policing and community prosecution strategies; technology enhancement projects; local correctional resources and problem solving courts including drug treatment, domestic violence, family dependency, and mental health.
Mississippi, $11 million:
The Mississippi Division of Public Safety Planning will use the funding to maintain or increase public safety in the state, while creating or retaining jobs within the law enforcement community. The state also plans to use the funds to support multi-jurisdictional drug task force programs and initiatives, community crime prevention and treatment programs; drug court operations; juvenile justice programs; cold case initiatives; law enforcement training programs; crime labs; and victims of domestic violence, sexual assault and child abuse.
Nevada, $13.8 million:
The Nevada Department of Public Safety (NDPS) anticipates the retention and hiring of gang and task force personnel; and plans to support anti drug and violent crime initiatives to include anti drug and gang prevention, education, and treatment programs; information sharing and coordination; alternative sentencing programs; multifaceted community response programs; rural K-9 program; law enforcement training; and a statewide records management system.
New Hampshire, $6 million:
The New Hampshire Department of Justice plans to support cold case and narcotics investigative resources; enhancements of prosecution resources for consumer protection, county and local district court; victim witness advocates and child advocacy centers; recidivism reduction and specialty court programs; and initiatives to increase the efficiency, and reduction of crime and victimization.
New Jersey, $29.7 million:
The New Jersey Department of Law and Public Safety plans to support the state's Safe Streets and Neighborhoods Program focusing on law enforcement, prevention, and reentry; including multilevel task forces targeting violent gangs, guns, and narcotics; workforce readiness skills programs; job placement; education and youth development; expanding intervention and prevention programs; reducing recidivism; enhancing discharge planning for juvenile and offenders with mental health needs; and establishing a pilot program for intervention counselors to address technical parole violators.
New Mexico, $11 million:
The New Mexico Department of Public Safety plans to focus on preserving and creating jobs and promoting economic recovery while supporting improvements to the state's criminal justice system to reduce violent crime and the sale of illicit drugs; identifying and reporting drug and gang trends; updating the state's Drug and Gang Policy; and promoting strategies to identify, prevent, and respond to terrorism networks.
Northern Mariana Islands, $1.6 million:
The Northern Mariana Islands’ Criminal Justice Planning Agency (CJPA) plans to create new full-time positions that will support or directly impact efforts to stabilize local budgets to avoid a decline in essential services or an increase in local taxes; multi-jurisdictional drug and gang task forces; crime prevention programs; law enforcement programs; domestic violence programs; courts; corrections; treatment; and justice information sharing initiatives.
South Carolina, $23 million:
The South Carolina Department of Public Safety plans to support efforts to hire personnel; purchase equipment; conduct training and technical assistance; projects to control crime and drugs; and enhancements to the criminal justice information systems to increase the apprehension, prosecution, adjudication, detention, and rehabilitation of persons who violate laws.
Tennessee, $30.8 million:
The Tennessee Department of Finance and Administration, Office of Criminal Justice Program (OCJP) plans to require grant recipient agencies to use the Recovery Act JAG funds for the retention and creation of jobs supporting the criminal justice system in areas such as drug courts; correctional programming; crime victim and witness programs; multi-jurisdictional drug and violent crime task forces; criminal justice professional enhancement training; pretrial service delivery; technology improvement; and community crime prevention.
28 April 2009
Three Brothers Sentenced to Life Prison Terms for Conspiring to Kill U.S. SoldiersRead the Press Release
WASHINGTON -- Three brothers who were convicted of plotting to kill members of the U.S. military during an armed attack on a military base were sentenced today to life prison terms, Ralph J. Marra Jr., Acting U.S. Attorney for the District of New Jersey; David Kris, Assistant Attorney General for National Security; and Janice K. Fedarcyk, Special Agent in Charge of the Philadelphia Division of the FBI, announced.
U.S. District Judge Robert B. Kugler sentenced Dritan Duka and Shain Duka to prison terms of life plus an additional, consecutive 30 years. The third brother, Eljvir Duka, received a life prison term. There is no parole in the federal system.
Judge Kugler, who presided over a 12-week trial of the Dukas and two other co-defendants, also ordered the Dukas to pay $125,000 in restitution to the Department of the Army for the costs of added security measures undertaken in response to the plot..
The final two defendants, Mohamad Ibrahim Shnewer and Serdar Tatar, are scheduled to be sentenced tomorrow by Judge Kugler.
"The hatred and contempt these young men hold for America and the rule of law was made abundantly clear during the investigation, at trial and even today as they spoke at their sentencings," said Acting U.S. Attorney Marra. "Not one word of contrition was heard from any of them, only more hatred and contempt. For their actions and their words, the sentences are appropriate to both protect the public from them and their deeply held, radical beliefs and to deter others who would act similarly."
"The sentences handed down today against these defendants underscore the importance of vigilance," said Special Agent in Charge Janice K. Fedarcyk, of the Philadelphia Division of the FBI. "We in law enforcement, at every level, must work together with the public to remain alert to, and responsive to, every threat to insure that terrorism threats do not become terrorist acts. Defeating terrorism remains the FBI’s top priority."
"These sentences are the culmination of an extensive federal, state and local law enforcement operation," said David Kris, Assistant Attorney General for National Security. "While these defendants were not members of an international terrorist organization, their homegrown plot to murder U.S. military personnel was no less serious or potentially deadly."
The case was tried by Deputy Assistant U.S. Attorney William E. Fitzpatrick and Assistant U.S. Attorney Michael A. Hammer, Jr., Chief of the U.S. Attorney’s Office Counter-Terrorism Unit.
The defendants’ arrests occurred on May 7, 2007, in Cherry Hill as Dritan and Shain Duka were meeting a confidential government witness to purchase four automatic M-16 rifles and three semi-automatic AK-47 rifles to be used in a future attack on military personnel. The other defendants were arrested at various locations at about the same time.
On Dec. 22, 2008, after 5½ days of deliberations, a jury convicted the three Duka brothers, Shnewer and Tatar on Count One of the seven-count Superseding Indictment that charged them with conspiracy to murder members of the U.S. military. The jury also convicted the Dukas and Shnewer of firearm offenses; including possession of machine guns. See below for conviction details on each of the defendants.
The evidence proved that one member of the group conducted surveillance at Fort Dix and Fort Monmouth in New Jersey, Dover Air Force Base in Delaware and the U.S. Coast Guard in Philadelphia. The co-conspirators obtained a detailed map of Fort Dix, where they hoped to use assault rifles to kill as many soldiers as possible, according to trial testimony and evidence.
During the trial, the jury viewed secretly recorded videotapes of the defendants performing small-arms training at a shooting range in the Pocono Mountains in Pennsylvania and watching training videos amongst themselves that included depictions of American soldiers being killed and of known foreign Islamic radicals urging jihad against the United States.
The defendants and the charges on which each was convicted are as follows:
- Mohamad Ibrahim Shnewer, 24, of Cherry Hill: conspiracy to murder members of the members of the U.S. military, and the attempted possession of AK-47 semi-automatic assault weapons to be used in the attack.
- Dritan Duka, 30 of Cherry Hill: conspiracy to murder members of the U.S. military; possession of machine guns; possession and attempted possession of machine guns in furtherance of a crime of violence; and two counts of possession of firearms by an illegal alien.
- Shain Duka, 28, of Cherry Hill: conspiracy to murder members of the U.S. military; possession of machine guns; possession and attempted possession of machine guns in furtherance of a crime of violence; and two counts of possession of firearms by an illegal alien.
- Eljvir Duka, 25, of Cherry Hill: conspiracy to murder members of the U.S. military, and possession of firearms by illegal aliens. The jury acquitted on one count of possession and attempted possession of machine guns in furtherance of a crime of violence.
- Serdar Tatar, 25, of Philadelphia: conspiracy to murder members of the U.S. military.
A sixth co-defendant, Agron Abdullahu, 26, of Buena Vista Township, Atlantic County, pleaded guilty before Judge Kugler on Oct. 31, 2007, to aiding and abetting the Duka brothers’ illegal possession of weapons. Abdullahu was arrested on May 7, 2007, along with the defendants convicted today. On March 31, 2008, Judge Kugler sentenced Abdullahu to 20 months in federal prison.
In determining the sentences, Judge Kugler consulted the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant's criminal history, if any, and other factors. The judge, however, was not bound by those guidelines in determining a sentence.
Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.
Marra and Kris credited the Special Agents of the FBI’s Philadelphia Division and the FBI South Jersey Joint Terrorism Task Force, under the direction of Special Agent in Charge Fedarcyk, in Philadelphia, for investigation of the case.
Marra, Kris, and Fedarcyk also thanked investigators with member agencies of the FBI South Jersey Joint Terrorism Task Force, which comprises ICE’s Philadelphia Division, under the direction of Special Agent in Charge John P. Kelleghan, the Camden County Prosecutor’s Office, under the direction of the Prosecutor Warren W. Faulk, NJ State Police, under the direction of Col. Joseph "Rick" Fuentes, Superintendent, and the Delaware River Port Authority Police, under the direction of Chief Dave McClintock, for their tireless efforts on the investigation.
Additionally, Marra, Kris, and Fedarcyk would like to thank the following agencies for their assistance and support: the U.S. military services at Fort Dix, Fort Monmouth, Dover Air Force Base, the U.S. Coast Guard in Philadelphia and the Naval Criminal Investigative Service, along with the Cherry Hill Police Department, Mt. Laurel Police Department, Cherry Hill Fire Department, Camden County Sheriff’s Department, Philadelphia Police Department, Pennsylvania State Police, the Burlington County Prosecutor’s Office, and N.J. Homeland Security.
Justice Department Settles Lawsuit to Enforce N.Y. Army Servicemembers Employment RightsRead the Press Release
The Department today has reached a settlement that, if approved by the U.S. District Court in Philadelphia, will resolve its lawsuit filed on behalf of Frantz Julien against Symphony Diagnostic Services Inc., doing business as MobilexUSA (Mobilex).
The complaint was filed in March 2009 and alleged that Mobilex violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by failing to reemploy Frantz Julien in either his mobile radiologic technician position or in a like position upon his honorable discharge from active duty in the U.S. Army. Under the terms of the settlement, which is embodied in a consent decree that has been submitted to the court, Mobilex is required to pay Julien a back pay award of $24,000 to compensate him for his lost earnings as a result of Mobilex’s actions.
"Employers must not evade their responsibilities to employees who return from honorable duty in the uniformed services," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division works to vigorously uphold the rights of those who serve in the military to be free from violations of USERRA."
The Department’s lawsuit was filed after the Labor Department’s Veterans’ Employment and Training Service completed an investigation of Julien’s complaint.
The Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information can be found on the Web sites at www.servicemembers.gov and www.usdoj.gov/crt/emp.
Indiana Man Sentenced on Child Pornography ChargeRead the Press Release
James W. Dotts Jr., 33, of Georgetown, Ind., pleaded guilty today in New Albany, Ind., to one count of possession of child pornography and was sentenced to 37 months in prison and lifetimesupervised release following completion of his prison term.
During today’s plea and sentencing hearing before U.S. District Court Judge Richard L. Young, Dotts admitted to subscribing to a commercial child pornography Web site, and possessing visual depictions of prepubescent minors engaging in sexually explicit conduct.
This case was brought as part of an U.S. Department of Homeland Security Immigration and Customs Enforcement (ICE) nationwide investigation called "Operation Emissary," which targeted a Web site that offered images and movies of hardcore child pornography. The Web site alerted would-be customers that subscribing to the site was illegal and warned them to be discreet about their purchases.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case against Dotts was prosecuted by Assistant U.S. Attorney Steven D. DeBrota of the Southern District of Indiana and CEOS Trial Attorney Bonnie L. Kane. The investigation was handled by ICE and CEOS’ High Technology Investigative Unit.
Defendant Sentenced to Life for Participation<br /> in International Child Exploitation EnterpriseRead the Press Release
James Freeman of Santa Rosa Beach, Fla., was sentenced to life in prison today for his activity in a global child pornography trafficking enterprise, Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the Northern District of Florida Thomas F. Kirwin and FBI Executive Assistant Director Thomas J. Harrington announced.
Freeman, a registered sex offender, was found guilty following a six-day trial in January 2009 of six counts relating to his criminal activities as a member of the child exploitation enterprise. The charges alleged in these counts included engaging in a child exploitation enterprise; conspiracy to advertise, transport, ship, receive and possess child pornography; advertising, transporting and receiving child pornography and obstruction of justice.
Five of the defendants previously sentenced by Senior U.S. District Judge Lacey A. Collier: Daniel Castleman of Lubbock, Texas; Gary Lakey of Anderson, Ind.; Marvin Lambert of Indianapolis; Neville McGarity of Medina, Texas; and Ronald White of Burlington, N.C., also received life sentences. Five additional U.S. defendants also indicted in the case were sentenced on March 10, 2009.
According to evidence introduced at trial, the defendants were members of a highly sophisticated international network. The group was a well-organized criminal enterprise whose purpose was to proliferate child sex abuse images to its membership during a two-year period.
The defendants were found guilty of participating in an illegal organization that used Internet newsgroups - large file-sharing networks where text, software, pictures and videos can be traded and shared - to traffic in illegal images and videos depicting prepubescent children, including toddlers, engaged in various sexual and sadistic acts. Specifically, an Australian constable who infiltrated the group in August 2006 testified at trial about how group members employed a complex system of pseudonyms, screening tests for new members and sophisticated encryption methods to avoid detection. He also testified that the group traded more than 400,000 images and 1,000 videos of child sexual abuse before it was dismantled by law enforcement.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child
Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.projectsafechildhood.gov./
The case is being prosecuted by Assistant U.S. Attorney David Goldberg of the Northern District of Florida and Trial Attorney LisaMarie Freitas of CEOS. The case is being investigated by the Innocent Images Unit of the FBI and the Queensland, Australia, Police Service, with the assistance of the Bundeskriminalamt (BKA) Child Pornography Unit in Germany and the Child Exploitation and Online Protection Centre in the United Kingdom.
27 April 2009
Korean Executive Agrees to Plead Guilty and Serve One Year in Prison for Participation in LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON – A high-level Korean executive from LG Display Co. Ltd. (LG) has agreed to plead guilty and serve a year in jail in the United States for participating in a global conspiracy to fix prices in the sale of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels, the U.S. Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court in San Francisco, Bock Kwon, an executive of LG, conspired with employees from other TFT-LCD panel makers to suppress and eliminate competition by fixing the prices of TFT-LCD panels from on or about Sept. 21, 2001, to on or about June 1, 2006. During the charged conspiracy, Kwon, a citizen of the Republic of Korea, held several high-level positions at LG, including president of LG’s Taiwan subsidiary, vice president of notebook sales, vice president of sales planning, and executive vice president of sales and marketing. Under the plea agreement, which must be approved by the court, Kwon has agreed to serve a 12-month prison sentence in the United States and to pay a $30,000 criminal fine.
"The participants in the LCD conspiracy committed a serious fraud upon American consumers by fixing the prices of a product that is in almost every American home," said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. "The charges against top-level executives who participated in the LCD conspiracy show the commitment of the Department of Justice to finding and prosecuting those at the highest levels, no matter where they live or where these crimes against American consumers were committed."
Including today’s charges, four companies and nine individuals have been charged in the Department’s ongoing antitrust investigation into the TFT-LCD industry. To date, more than $616 million in criminal fines have been imposed, or agreed to, as a result of this investigation, and four individuals have pleaded guilty and have been sentenced to serve jail time.
TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. In 2006, the worldwide market for TFT-LCD panels was approximately $70 billion.
Kwon was charged with participating in a conspiracy that was accomplished by:
- Participating in meetings, conversations and communications in Taiwan, Korea and the United States to discuss the prices of TFT-LCD panels;
- Agreeing during these meetings, conversations and communications to charge prices of TFT-LCD panels at certain predetermined levels;
- Issuing price quotations in accordance with the agreements reached;
- Exchanging information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices; and
- Authorizing, ordering and consenting to the participation of subordinate employees in the conspiracy.
On Dec. 15, 2008, LG pleaded guilty to participating in a worldwide conspiracy to fix the price of TFT-LCD panels and was sentenced to pay a $400 million criminal fine – the second-largest fine in Antitrust Division history. On Dec. 16, 2008, Sharp Corp. pleaded guilty to participating in three separate conspiracies to fix the prices of TFT-LCD panels sold to Dell, Apple Computer Inc. and Motorola Inc. and was sentenced to pay a $120 million criminal fine. On Jan. 14, 2009, Chunghwa Picture Tubes Ltd. (Chunghwa) pleaded guilty to participating in the same worldwide conspiracy as LG, and was sentenced to pay a $65 million criminal fine. On March 10, 2009, Hitachi Displays Ltd. was charged with participating in a conspiracy to fix the prices of TFT-LCD panels sold to Dell Inc. for use in desktop monitors and notebook computers from April 1, 2001, to March 31, 2004. Hitachi Displays Ltd. has agreed to plead guilty and pay a $31 million fine.
In February 2009, former Chunghwa CEO Chieng-Hon "Frank" Lin and two Chunghwa executives, Chih-Chun "C.C." Liu and Hsueh-Lung "Brian" Lee, pleaded guilty to and were sentenced for participating in the same conspiracy as LG and Chunghwa. Lin was sentenced to serve nine months in prison and pay a $50,000 criminal fine. Liu was sentenced to serve seven months in prison and pay a $30,000 criminal fine. Lee was sentenced to serve six months in prison and pay a $20,000 criminal fine. Also in February 2009, LG executive Chang Suk "C.S." Chung pleaded guilty for his role in the same conspiracy as LG and Chunghwa. Chung was sentenced to serve seven months in prison and pay a $25,000 criminal fine.
On Feb. 3, 2009, a federal grand jury in San Francisco returned an indictment against a former LG executive, Duk Mo Koo, and two former Chunghwa executives, Cheng Yuan Lin, aka C.Y. Lin and Wen Jun Cheng, aka Tony Cheng, for their participation in the same conspiracy as LG and Chunghwa. On March 31, 2009, a federal grand jury in San Francisco returned an indictment against Sakae Someya, an executive at Hitachi, for his participation in the same conspiracy as Hitachi.
Today’s charge is the result of a joint investigation by the Antitrust Division’s San Francisco Field Office and the FBI in San Francisco.
Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the Antitrust Division’s San Francisco Field Office at 415-436-6660.
Iowa Man Convicted of Interfering withHousing Rights of African-American FamilyRead the Press Release
Justin Hanson, 21, of Mason City, Iowa, pleaded guilty today in federal court in Cedar Rapids to violating the civil rights of an African-American family.
In a plea agreement, Hanson admitted that on May 9, 2008, he placed a racially offensive sign in the yard of a neighboring African-American family and the next day he fired a B.B. gun into the victims’ home, breaking a bedroom window. By placing the sign and firing upon his victims, Hanson was attempting to injure, intimidate or interfere with the family’s enjoyment of their home. Hanson admitted he placed the sign in the yard and fired upon the house because of his neighbors’ race and because they were living in his "white" neighborhood, town and country.
Sentencing before U.S. District Court Chief Judge Linda R. Reade has been set for July 16, 2009. Hanson was convicted of one count of interfering with housing rights and faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, a $100 special assessment and three years of supervised release following any imprisonment.
The case was investigated by the FBI and the Mason City Police Department. The case is being prosecuted by the Justice Department Civil Rights Trial Attorney Kevonne Small and Assistant U.S. Attorney Forde Fairchild.
Houston Man Sentenced for Human Trafficking and Alien<br /> Smuggling ChargesRead the Press Release
Maximino Mondragon, 57, was sentenced today for his role in a scheme to smuggle Central American women and girls into the United States and to hold them in a condition of forced labor in the Houston area. U.S. District Judge Vanessa D. Gilmore sentenced Mondragon to 156 months incarceration, three years post release supervision, $200 special assessment and further ordered that he, jointly with his co-defendants, pay $ $1,715,588.05 in restitution to the victims.
Maximino Mondragon is the last of eight defendants to be convicted and sentenced in connection with this scheme to compel the victims into service in restaurants, bars and cantinas, using threats to harm the victims and their families if they attempted to leave before paying off their smuggling debts.
Mondragon previously pleaded guilty to violations of conspiracy to hold persons in a condition of indentured servitude and to illegally and knowingly recruiting, harboring, transporting persons for labor and services, and conspiracy to bring, harbor, and transport known illegal aliens for purposes of commercial advantage and private financial gain.
The defendants lured Central American women to the United States with promises of good jobs. However, once the young women arrived, they were forced to work in the defendants’ bars and cantinas selling high-priced drinks to male customers. The women were subjected to threats of harm to them and their families in order to compel their servitude.
"The defendant ruthlessly exploited these women’s hopes for a better life through coercion, false promises and threats of harm. The victims were forced into modern day slavery," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Justice Department will devote its efforts to prosecuting those who commit such abhorrent and exploitative crimes."
"The victims in this case were subjected to horrible treatment at the hands of these defendants," said Tim Johnson, Acting U.S. Attorney for the Southern District of Texas. "We will use every resource available to make certain that violations of this sort result in the maximum prison term available."
Co-defendants Oscar Mondragon and Walter Corea were also convicted of both conspiracy counts and each sentenced to prison terms of 180 months. Co-defendant Victor Omar Lopez was sentenced to 109 months in prison on both conspiracy counts. Co-defendant Olga Mondragon, who was convicted of multiple charges stemming from her involvement in these schemes to hold young Central American victims in a condition of forced labor and to smuggle the young women to the United States for financial gain, was sentenced to a prison term of 84 months. Co-defendant Maria Fuentes was convicted of harboring the young women for financial gain and sentenced to 30 months in prison. Co-defendant Lorenza Reyes-Nunez was convicted of obstruction of justice and has been sentenced to 19 months in prison. Co-defendant Kerin Silva was convicted of conspiracy to smuggle aliens and sentenced to 12 months’ home detention followed by three years of probation.
In announcing the sentencing, Acting Assistant Attorney General King and Acting U.S. Attorney Johnson commended the FBI, the Department of Homeland Security Security Bureau of Immigration and Customs Enforcement, the Texas Alcohol and Beverage Commission, the Harris County Constable Precinct Five Office, and the Human Trafficking Rescue Alliance, a federally funded multi-agency human trafficking task force, for their work on this cooperative investigation and prosecution.
Assistant U.S. Attorneys Ruben Perez and Joseph Magliolo and Civil Rights Division attorneys Jim Felte and Hilary Axam prosecuted this case for the government.
Five Charged in $70 Million Dream Home Mortgage Fraud SchemeRead the Press Release
WASHINGTON - A federal grand jury has indicted four defendants, and an information has been filed against a fifth defendant, for their participation in a massive mortgage fraud scheme that allegedly promised to pay off homeowners’ mortgages on their "Dream Homes," but left them to fend for themselves, Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the District of Maryland Rod J. Rosenstein announced today.
The indictment was returned on April 22, 2009, and unsealed today.
"The Criminal Division and the U.S. Attorneys’ Offices are jointly committed to redoubling our efforts to uncover and prosecute fraud and abuse in all facets of the housing market – a market upon which so many American families have pinned their hopes and their futures for so many years," said Assistant Attorney General of the Criminal Division Lanny A. Breuer. "I want to assure the American public that we will not rest until the tide of this criminal activity is turned."
"The indictment alleges that the defendants used slick marketing to conceal empty promises," said U.S. Attorney Rod J. Rosenstein. "They convinced many victims to invest at least $50,000 by refinancing their existing homes or buying new homes at inflated prices, while claiming that Metro Dream Homes would repay the mortgages with revenue from profitable businesses. The indictment alleges that there was no revenue to pay the mortgage payments. Instead, the conspirators used some of the investors' money to repay earlier investors in the Ponzi scheme and spent the remainder on themselves."
"The effects of this wide-ranging mortgage fraud scheme are particularly disturbing within the backdrop of today’s economic environment. With our federal, state and local partners working on 18 mortgage fraud task forces and 47 mortgage fraud working groups across the country, the FBI is committed to combating mortgage fraud and other financial crimes nationwide to protect the American homeowner and the national economy," said Executive Assistant Director Thomas J. Harrington, FBI Criminal, Cyber, Response, and Services Branch.
"IRS Criminal Investigation takes allegations of mortgage fraud seriously," said "Eileen Mayer, Chief, IRS Criminal Investigation. "These types of crimes drive home owners into foreclosure, erode the integrity of our tax system and threaten the financial health of our communities."
According to the indictment, from 2005 to 2007 the defendants allegedly used corporate names such as "Metropolitan Grapevine LLC," "Metro Dream Homes," "POS Dream Homes," and "POS DH LLC" (collectively, MDH) to target homeowners and home purchasers to participate in a purported mortgage payment program called the "Dream Homes Program." To participate, an investor had to provide a minimum of $50,000 for each home enrolled in the program, in addition to an "administrative fee" of up to $5,000. In exchange, the program promised to make the homeowner’s future monthly mortgage payments, and pay off the homeowner’s mortgage within five to seven years. Thereafter, the homeowner and MDH would own an equal interest in the home.
The indictment alleges that Andrew Hamilton Williams, Jr., 58, of Hollywood, Fla., was the founder and owner of MDH; Michael Anthony Hickson, 46, of Commack, N.Y., was the chief financial officer; Isaac Jerome Smith, 46, of Spotsylvania, Va., was the president; and Alvita Karen Gunn, 31, of Hanover, Md., was the vice president of operations. The information alleges that Carole Nelson, age 50, of Washington, D.C., was the chief financial officer of POS Dream Homes.
The indictment further alleges that Dream Homes Program representatives explained to investors that the homeowners’ initial payments would be used to fund investments in automated teller machines (ATMs), flat-screen televisions that would show paid business advertisements, and "Touch-N-Buy" electronic kiosks that sold telephone calling cards and other items. To give the Dream Homes Program a veneer of legitimacy and financial success, the defendants marketed the program through live presentations at luxury hotels in Maryland, Washington, D.C., and Beverly Hills, Calif., among other locations. The defendants allegedly told some of the investors that they should not worry about the price of the homes or monthly mortgage payments because MDH would make mortgage payments on their behalf.
The indictment alleges that the defendants failed to advise investors that: the ATMs, flat-screen televisions and kiosks never generated any meaningful revenue; the defendants used the funds from later investors to pay the mortgages of earlier investors; and MDH had not filed any federal income tax returns throughout its existence. The defendants also allegedly failed to advise investors that their investments were being used for the personal enrichment of select MDH employees, including the defendants, to: pay salaries of up to $200,000 a year as well as their mortgages; employ a staff of 10 chauffeurs and maintain a fleet of luxury cars; and travel to and attend the 2007 National Basketball Association All-Star game and the 2007 National Football League Super Bowl, staying in luxury accommodations in both instances. Nor were investors told that investor funds were allegedly used to: pay off investors in a prior failed ATM investment venture that Williams had founded called Bankcard Group; make multiple donations of up to $50,000 each to charitable organizations to allegedly give MDH the appearance of being financially successful; and fund investments in third-party businesses that had not been disclosed to investors.
On Aug. 15, 2007, the Maryland Securities Commissioner issued a cease-and-desist order to Williams, MDH and other related companies directing them to immediately cease the offering and sale of unregistered securities in connection with their promotion of the Dream Homes Program. However, the defendants thereafter allegedly called additional meetings in which they made additional misrepresentations about the financial success of MDH’s operations. On Sept. 4, 2007, the defendants filed a legal challenge in federal court in Maryland to the cease-and-desist order. The indictment alleges that at a hearing on Sept. 12, 2007, Hickson testified that the financial success of the Dream Homes Program did not rely upon new investor funds, when in fact Hickson knew that the sole source of meaningful revenue for MDH was new investor funds.
As a result of the scheme, more than 1,000 investors in the Dream Homes Program invested approximately $70 million. When the defendants stopped making the mortgage payments, the homeowners were left to attempt to make the mortgage payments MDH had promised to make in full.
The four indicted defendants face a maximum sentence of 20 years in prison for the fraud conspiracy; 20 years in prison on each of the 15 counts of wire fraud; and 20 years in prison for conspiracy to commit money laundering. Hickson also faces a maximum sentence of five years in prison for making false statements. Smith also faces a maximum sentence of 30 years in prison for bank fraud arising out of his alleged misrepresentation of his income in order to obtain a bank loan to purchase a new Bentley automobile. Nelson was charged by information with money laundering, which carries a maximum penalty of ten years in prison. The indictment seeks forfeiture of the fraud proceeds, including $70 million.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceeding.
This prosecution is being brought jointly by the Maryland and Washington, D.C. Mortgage Fraud Task Forces, which are comprised of federal, state and local law enforcement agencies in Maryland, Washington, D.C. and Northern Virginia. The Task Forces were formed to promote the early detection, identification, prevention and prosecution of various kinds of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Forces, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and help to ensure the integrity of the mortgage market and other credit markets. Information about mortgage fraud prosecutions is available on the internet at http://www.usdoj.gov/usao/md/Mortgage-Fraud/index.html
Assistant Attorney General Lanny A. Breuer and U.S. Attorney Rod J. Rosenstein praised the FBI, IRS - CI, the Maryland Attorney General’s Office, Securities Division and the Federal Deposit Insurance Corporation, Office of Inspector General for their investigative work; and thanked Assistant U.S. Attorneys for the District of Maryland Jonathan C. Su and Bryan E. Foreman, who are prosecuting the case.
Colombian National Arraigned on Charges of Providing Material Support to the FARCRead the Press Release
WASHINGTON - A 32-year-old Colombian citizen, Luz Mery Gutierrez Vergara, who was extradited from the Republic of Colombia on Thursday, made her initial appearance today in federal court in Washington, D.C., to face charges for allegedly participating in a conspiracy to provide material support to the Fuerzas Armadas Revolucionarias de Colombia, commonly known as the "FARC," announced Jeffrey A. Taylor, U.S. Attorney for the District of Columbia, David S. Kris, Assistant Attorney General for the National Security Division, Jonathan I. Solomon, Special Agent in Charge of the Federal Bureau of Investigation ("FBI") Miami Field Office, Anthony V. Mangione, Special Agent in Charge of the Department of Homeland Security, U.S. Immigration and Customs Enforcement ("ICE") Miami Field Office, and Chris K. Amato, Special Agent in Charge of the Department of Defense, Defense Criminal Investigative Service ("DCIS") Southeast Field Office. Gutierrez Vergara was arraigned and pleaded not guilty to the charges against her.
In September of 2007, a federal grand jury in the District of Columbia indicted Gutierrez Vergara, along with a number of her co-conspirators, on two counts: conspiracy to provide material support or resources to a foreign terrorist organization and providing material support or resources to a terrorist organization. The indictment alleges that Gutierrez Vergara was involved in a conspiracy to assist the FARC by establishing and personally serving in a logistical support and supply network designed to procure weapons, ammunition, high technology devices, money, and other materials and supplies, and to transport and deliver these and other commodities, including hostages, to and among the FARC.
The FARC, an armed and violent organization in Colombia, has been designated by the United States as a foreign terrorist organization since 1997. The FARC has been involved in murders and hostage takings, and was responsible for holding three Americans – Marc D. Gonsalves, Thomas R. Howes and Keith D. Stansell – hostage from February 2003 until they were rescued in a Colombian military operation in July of 2008.
The FARC is divided into seven guerrilla blocs, which are further divided into fronts. Gutierrez Vergara is alleged to be affiliated with the First Front. The First Front is a large and trusted FARC logistical network which was controlled by Gerardo Antonio Aguilar Ramirez, also known as "Cesar." Colombian law enforcement apprehended Cesar during the daring July 2008 hostage rescue. Gutierrez Vergara was arrested by Colombian military and law enforcement officials in February of 2008. Throughout the investigation, Colombian law enforcement and prosecution authorities worked cooperatively with the FBI, ICE and DCIS.
In August of 2008, the United States filed a formal request with the Republic of Colombia seeking extradition on these charges. The extradition request was subsequently granted by the Colombian Supreme Court, and then by the Colombian Ministry of Justice and Colombian President Alvaro Uribe.
If convicted of the charges in the criminal indictment, Gutierrez Vergara faces a maximum of fifteen years' imprisonment.
In announcing the arrest, U.S. Attorney Taylor thanked Department of Justice Trial Attorney David P. Cora of the Counterterrorism Section of the Department of Justice, and Assistant U.S. Attorneys M. Jeffrey Beatrice and Anthony Asuncion, who are prosecuting this matter.
An indictment is merely a formal charge that a defendant violated a criminal law. All defendants are presumed innocent unless and until proven guilty.
24 April 2009
Promoter of Fraudulent Tax Defiance Scheme Pleads Guilty to Mail FraudRead the Press Release
WASHINGTON - Jerry R. Williamson, a promoter of the American Rights Litigators/Guiding Light of God Ministries (ARL) formerly based in Florida, pleaded guilty today to mail fraud, the Justice Department and Internal Revenue Service (IRS) announced. Williamson appeared today before Judge Henry H. Kennedy Jr. in Washington, D.C., and admitted that he that he sent a fictitious "Bill of Exchange" purporting to be drawn upon the U.S. Treasury to the Bureau of Land Management of the Department of the Interior.
In September 2008, Williamson and four co-defendants, Eddie Ray Kahn, Stephen C. Hunter, Danny True and Allan J. Tanguay, were indicted by a federal grand jury and charged with conspiracy to defraud the United States and mail fraud. According to the indictment, the defendants sold worthless "Bills of Exchange" and promoted other schemes to orchestrate tax fraud.
The indictment further alleges that Kahn founded and led ARL from 1996 through 2004. During that time period, ARL enrolled more than 4,000 customers from all 50 states, the District of Columbia and several foreign countries. Defendants Hunter, True, Williamson and Tanguay allegedly worked at ARL with Kahn to develop and sell tax defiance schemes based on deliberate misrepresentations of the legal foundation of the tax system.
Judge Kennedy scheduled Williamson’s sentencing for Sept. 18, 2009. The trial for Kahn, Hunter, True and Tanguay is scheduled to begin in November 2009.
Acting Assistant Attorney General DiCicco of the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division attorneys Jeffrey McLellan, Kenneth Vert and Tino Lisella, who are prosecuting the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax.