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11 February 2009
Two Sentenced to Prison for Environmental CrimesRead the Press Release
WASHINGTON— A federal judge has sentenced two operators of asbestos abatement companies to prison for environmental crimes related to the illegal removal and disposal of asbestos in upstate New York, the Justice Department announced.
John Wood of Plattsburgh, N.Y., and Curtis Collins, of Willsboro, N.Y., were sentenced on Feb. 6, 2009, to four years and two years in prison, respectively, by U.S. District Judge David N. Hurd for the Northern District of New York.
Wood was further sentenced to pay restitution $854,166.06 to victims and was placed on supervised release for three years following the completion of his prison term. Collins was ordered to pay $114, 902.89 in restitution to victims and ordered to serve three years of supervised release.
Both defendants pleaded guilty to conspiring to violate the Clean Air Act and the mail fraud statute. Wood further pleaded guilty to contempt of court based on numerous new asbestos crimes that he committed while awaiting trial on the original charges.
In 2005, after being released from prison for unrelated felonies, John Wood began operating an asbestos abatement company known as J & W Construction, Inc. Wood thereafter directed his employees to perform “rip and run” asbestos removals that, rather than removing all asbestos, dispersed and left substantial quantities behind, significantly contaminating numerous businesses and homes. Some of the asbestos was buried on a farm in Willsboro that required the expenditure of funds from EPA’s Superfund to clean up the contamination.To deceive clients into believing that all of the asbestos had been removed and that their businesses and homes were safe to reoccupy, Wood utilized the services of Mark Desnoyers, a licensed air monitor from Plattsburgh. Desnoyers falsified air samples so that laboratory results appeared to prove that all asbestos had been removed from homes and businesses when in fact they remained seriously contaminated. Wood testified against Desnoyers at trial last September.
Curtis Collins worked for Wood and also ran his own asbestos abatement business. Collins pleaded guilty and cooperated with the United States by testifying against Desnoyers at trial.
Desnoyers was convicted of all counts of an indictment charging him with a Clean Air Act and mail fraud conspiracy and related substantive violations. Desnoyers is scheduled to be sentenced on March 13, 2009 at 11 a.m. before Judge Hurd in Utica, N.Y.
Asbestos has been determined to cause lung cancer, asbestosis and mesothelioma, an invariably fatal disease. The Environmental Protection Agency has determined that there is no safe level of exposure to asbestos.
The investigation of this matter was conducted by Special Agents of the U.S. Environmental Protection Agency, with assistance from Inspectors with the New York State Department of Labor (Asbestos Control Bureau). The matter was jointly prosecuted by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Northern District of New York.
Kellogg Brown & Root LLC Pleads Guilty to Foreign Bribery<br /> Charges and Agrees to Pay $402 Million Criminal FineRead the Press Release
WASHINGTON – Kellogg Brown & Root LLC (KBR), a global engineering, construction and services company based in Houston, pleaded guilty today to charges related to the Foreign Corrupt Practices Act (FCPA) for its participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.
KBR entered guilty pleas to a five-count criminal information in federal court in Houston before U.S. District Judge Keith P. Ellison. As part of the plea agreement, KBR agreed to pay a $402 million criminal fine.
According to court documents, KBR was part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG, owning 49 percent of the company.
KBR pleaded guilty to conspiring with its joint-venture partners and others to violate the FCPA by authorizing, promising and paying bribes to a range of Nigerian government officials, including officials of the executive branch of the Nigerian government, NNPC officials, and NLNG officials, to obtain the EPC contracts. KBR also pleaded guilty to four counts of violating the FCPA related to the joint venture’s payment of tens of millions of dollars in "consulting fees" to two agents for use in bribing Nigerian government officials.
KBR admitted that, at crucial junctures before the award of the EPC contracts, KBR’s former CEO, Albert "Jack" Stanley, and others met with three successive former holders of a top-level office in the executive branch of the Nigerian government to ask the office holder to designate a representative with whom the joint venture should negotiate bribes to Nigerian government officials. Stanley and others negotiated bribe amounts with the office holders’ representatives and agreed to hire the two agents to pay the bribes. According to court documents, the joint venture paid approximately $132 million to the first agent, a consulting company incorporated in Gibraltar, and more than $50 million to the second agent, a global trading company headquartered in Tokyo, Japan, during the course of the bribery scheme. KBR admitted that it had intended for these agents’ fees to be used, in part, for bribes to Nigerian government officials.
Under the terms of the plea agreement, KBR agreed to retain an independent compliance monitor for a three-year period to review the design and implementation of KBR’s compliance program and to make reports to KBR and the Department of Justice. KBR also agreed to cooperate with the Department in its ongoing investigations.
In a related criminal case, Stanley pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme. Stanley’s sentencing is currently scheduled for May 6, 2009.
Today, KBR’s parent company, KBR Inc., and its former parent company, Halliburton Company, also reached a settlement of a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC). The SEC's complaint charged KBR Inc. with violating the FCPA’s anti-bribery provisions, and charged KBR and Halliburton with engaging in books and records and internal controls violations related to the bribery. KBR Inc. and Halliburton jointly agreed to pay $177 million in disgorgement of profits relating to those violations.
"Today's guilty plea by KBR ends one chapter in the Department’s long-running investigation of corruption in the award of $6 billion in construction contracts in Nigeria. This bribery scheme involved both senior foreign government officials and KBR corporate executives who took actions to insulate themselves from the reach of U.S. law enforcement," said Acting Assistant Attorney General Rita M. Glavin of the Criminal Division. "The successful prosecution of KBR, and its agreement to pay a more than $400 million fine, demonstrates that no one is above the law, and that the Department is determined to seek penalties that are commensurate with, and will deter, this kind of serious criminal misconduct."
"This case, which represents the second largest fine ever in an FCPA prosecution, demonstrates the FBI’s continued commitment to aggressively investigate violations of this law," said Andrew R. Bland III, Special Agent in Charge of the FBI’s Houston Field Office. "We will continue to investigate these matters by working in partnership with other law enforcement agencies, both foreign and domestic, to ensure that corporate executives who have been found guilty of bribing foreign officials in return for lucrative business contracts, are punished to the full extent of the law."
"FCPA violations have been and will continue to be dealt with severely by the SEC and other law enforcement agencies," said SEC Chairman Mary Schapiro. "Any company that seeks to put greed ahead of the law by making illegal payments to win business should beware that we are working vigorously across borders to detect and punish such illicit conduct."
The criminal case is being prosecuted by Senior Trial Attorneys William J. Stuckwisch and Patrick F. Stokes of the Criminal Division’s Fraud Section, with investigative assistance from the FBI and IRS-Criminal Investigation in Houston. The Criminal Division’s Office of International Affairs provided substantial assistance in gathering evidence abroad and facilitating international cooperation. Significant assistance was provided by the SEC’s Division of Enforcement and by the authorities in France, Italy, Switzerland and the United Kingdom.
Justice Department Seeks to Shut Down Texas Tax PreparersRead the Press Release
WASHINGTON – The United States has sued a Dallas tax preparer, Tina Preston, her tax-preparation firm – Preston Tax Services, Inc. – and several other individuals associated with the firm, seeking to bar them all permanently from the tax-preparation business, the Justice Department announced today. The civil injunction suit was filed in Dallas with the U.S. District Court for the Northern District of Texas.
According to the government complaint, Preston Tax Services prepares federal income tax returns for thousands of individual customers. The complaint alleges that Tina Preston taught employees how to list phony businesses on customers’ returns in order to report false business losses to offset the customers’ wage income and reduce or eliminate customers’ reported income. In other instances, the complaint alleges that the defendants used phony businesses to increase customers’ income in order to claim improper earned income tax credits, a benefit that is available under some circumstances to working people in certain income ranges. According to the complaint, the tax loss from the defendants’ misconduct could be as much as $60 million.
The complaint alleges that Preston held what she called "commission parties" to reward employees and customers at the end of each tax-filing season. Some parties allegedly featured performances by male and female strippers and drawings for valuable prizes, including a car, $1,000 in cash and a trip to Jamaica.
"Tax-preparer fraud is a serious problem," said John A. DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division. "The IRS and Justice Department are committed to putting fraudulent preparers out of business. Taxpayers should choose their preparer carefully and review their returns before signing to ensure that it is correct."
Since 2001 the Justice Department has obtained injunctions against more than 370 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website.
Justice Department Reaches Settlement with SmallTownPapers Inc., Regarding Employment Rights of Air Force ReservistRead the Press Release
WASHINGTON — The Justice Department announced today that it has reached a settlement that, if approved by the court, will resolve a lawsuit the Department filed on behalf of Air Force Reservist Frank Bonnin against SmallTownPapers Inc., (SmallTownPapers).
The complaint, filed in August 2008 in U.S. District Court in Seattle, alleged that SmallTownPapers violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) when it terminated Bonnin from his position as director of publisher relations due to his military obligation as an Air Force Reservist to attend active duty training. USERRA prohibits employment discrimination against individuals because of their service obligations in the uniformed services. Under the terms of the consent decree, SmallTownPapers will pay Bonnin $52,500 in back pay.
"This settlement represents the Department’s continued commitment to protecting the employment rights of those who serve our country," said Loretta King, Acting Assistant Attorney General for Civil Rights.
The Justice Department’s lawsuit was filed after receiving Bonnin’s complaint from the Veterans’ Employment and Training Service of the Department of Labor, upon completion of its investigation and settlement efforts.
The Civil Rights Division of the Department of Justice assumed responsibility in 2004 for the enforcement of USERRA with respect to state and local governments and private employers. Since 2004, the Division has filed 31 USERRA suits on behalf of service members.
Additional information about USERRA can be found on the Department of Justice Web site at http://www.servicemembers.gov, and on the Department of Labor Web site at http://www.dol.gov/vets/programs/userra/main.htm.
Hyannis, Mass., Man Pleads Guilty to Receiving and Possessing Child PornographyRead the Press Release
WASHINGTON – Harris Taubman, of Hyannis, Mass., pleaded guilty today in U.S. District Court in Boston to receiving and possessing child pornography, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Michael J. Sullivan for the District of Massachusetts announced.
Taubman, 48, pleaded before U.S. District Judge William G. Young to three counts of receipt of child pornography and one count of possession of child pornography. He was indicted on those charges on Feb. 6, 2008.
According to his plea agreement, Taubman was first identified by Barnstable, Mass., police as a result of a 911 call referencing a dispute during which Taubman allegedly pointed a loaded shotgun at a neighbor. According to court documents, when police arrived at Taubman’s residence, they found unlawful ammunition cartridges. A further search pursuant to a search warrant revealed numerous printed images of child pornography. The execution of additional search warrants resulted in the seizure of almost 2,000 computer disks containing child pornography, as well as more than 20 computer hard drives. In total, Taubman possessed tens of thousands of images and videos depicting prepubescent children engaged in sexually explicit conduct.
The court deferred formal acceptance of Taubman’s plea until a pre-sentence report has been conducted by the United States Probation Office. Sentencing is set for March 26. Pursuant to the plea agreement, once the court accepts the plea, Taubman may be sentenced to seven years in prison, forfeit all seized property, and serve a 10-year term of supervised release once his prison term ends.
The case is being prosecuted by Trial Attorney Elizabeth M. Yusi of the Child Exploitation and Obscenity Section of the Department of Justice’s Criminal Division and Assistant U.S. Attorney Dana Gershengorn of the District of Massachusett’s Major Crimes Unit. The case is being investigated by the Federal Bureau of Investigation and the Barnstable Police Department.
10 February 2009
Wyoming & Kansas Refiners Agree to Settle Clean Air Act ViolationsRead the Press Release
WASHINGTON—Two petroleum refiners have agreed in separate settlements to spend a total of more than $141 million in new air pollution controls at three refineries in Kansas and Wyoming, Justice Department and U.S. Environmental Protection Agency (EPA) announced today. The settlements are expected to reduce harmful emissions by 7,000 tons per year.
Frontier Refining and Frontier El Dorado Refining (Frontier) have agreed to pay a civil penalty of $1.23 million and spend approximately $127 million in pollution control upgrades for alleged violations at its refineries in Cheyenne, Wyo., and El Dorado, Kan. Wyoming Refining Co. (WRC) has agreed to pay a civil penalty of $150,000 and spend approximately $14 million in similar upgrades for alleged violations at its Newcastle, Wyo., refinery.
The state of Wyoming joined the federal government in the agreement with WRC. Both the states of Wyoming and Kansas joined the federal government in the agreement with Frontier.
The three refineries are required to install advanced control technologies that, when fully implemented, will reduce annual emissions of sulfur dioxide by approximately 3,775 tons, nitrogen oxide by approximately 2,100 tons and other pollutants by approximately 1,200 tons. The refineries have a combined production capacity of approximately 168,000 barrels per day.
In addition, each refinery will upgrade leak-detection and repair practices to reduce harmful emissions from pumps and valves, implement programs to minimize the number and severity of flaring events and adopt new strategies for ensuring continued compliance with benzene waste requirements under the Clean Air Act. Flaring, the process by which byproduct-gas from the refining process is burned off, can cause respiratory problems and exacerbate asthma.
As part of the settlement, Frontier agreed to implement environmentally-beneficial projects valued at more than $1.3 million, including several projects at its refineries to reduce volatile organic compound (VOC) emissions by installing dome covers on refinery storage tanks. VOC’s are a prime ingredient in the formation of smog.
“Today’s agreements will bring three important refineries, two in Wyoming and one in Kansas, into compliance with the Clean Air Act,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The settlements, done in coordination with the states of Wyoming and Kansas, require new pollution controls, reduce significant amounts of air pollutants, secure sizeable penalties, and will ultimately benefit the environment and impacted communities.”
“Today’s settlements demonstrate EPA's continuing efforts to reduce emissions of nitrogen oxide and sulfur dioxide, which are the largest sources of pollution from refineries,” said Catherine McCabe, Acting Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Nitrogen oxide and sulfur dioxide can cause severe respiratory problems and contribute to childhood asthma, smog and haze, as well as other health and environmental effects.”
The settlement requires Frontier to correct deficiencies in the refinery's risk management program that were identified during a 2006 EPA inspection. These deficiencies included overdue inspections and tests of storage vessels containing toxic and flammable substances.
Under the Clean Air Act, facilities that handle large amounts of chemicals are required to develop a risk management program, which assesses the hazards associated with dangerous chemicals. The program must include an accident prevention program and an emergency response plan to deal with accidental releases.
Today’s agreements are the latest in a series of comprehensive, company-wide settlements under an EPA initiative to reduce air pollution from refineries nationwide. With today’s settlements, 99 refineries operating in 29 states, or 88 percent of the nation’s refining capacity, have agreed to federally-enforceable judicial consent decrees that will significantly reduce emissions and achieve compliance with the Clean Air Act.
The consent decrees, lodged today in the U.S. District Courts in Kansas and Wyoming, are subject to a 30-day public comment period and approval by the federal court. Copies of the consent decrees are available on the Department of Justice Web site at: http://www.usdoj.gov/enrd/Consent_Decrees.html.
Former Velda City, Mo., Reserve Police Officer Pleads Guilty to Civil Rights and Obstruction ChargesRead the Press Release
WASHINGTON - A former Velda City, Mo., auxiliary reserve police officer pleaded guilty today to violating the federal civil rights of a woman he sexually assaulted during a traffic stop and to concealing evidence of his crime from federal investigators, announced Acting Assistant Attorney General Loretta King of the Civil Rights Division and U.S. Attorney Catherine L. Hanaway for the Eastern District of Missouri.
According to facts presented in court, on or about July 9, 2006, Joe Ernest Phillips, 38, then an auxiliary reserve police officer for the Velda City Police Department sexually assaulted a woman while acting under color of law and deprived her of her civil rights. While on-duty in a marked patrol car, Phillips admitted he pulled the female motorist over and searched her purse and the interior and trunk of her car. After completing his search, Phillips instructed the victim to follow him in her car to a poorly lit and isolated parking lot where he sexually assaulted her.
Phillips also admitted that after the sexual assault, he repeatedly lied to the FBI during its inquiry, and concealed evidence in an effort to thwart the federal investigation into his crime.
"Law enforcement officers who betray the public trust by stepping outside the law to assault and abuse the rights of others will be vigorously prosecuted," said Loretta King, Acting Assistant Attorney General. "This shameful and unlawful conduct undermines the tireless efforts of the vast majority of law enforcement officers who perform their duties with honor and professionalism."
U.S. District Judge E. Richard Webber scheduled sentencing for April 30, 2009. Phillips faces a maximum penalty of life in prison and a $250,000 fine for the civil rights violation. He faces up to 20 years in prison and a $250,000 fine for destroying evidence.
The case was investigated by the FBI’s St. Louis Division and is being prosecuted by Trial Attorneys Eric L. Gibson and Avner Shapiro of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Hal Goldsmith.
Former Tulsa Businessman Sentenced to 11 Years in Prison for Receiving Child PornographyRead the Press Release
UPDATE
The conviction of the defendant in this case, Terry Dobbs, was reversed on appeal.
WASHINGTON - Terry Brian Dobbs, an Oklahoma businessman, was sentenced today to 11 years in prison for receiving images of child pornography, Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and U.S. Attorney for the Northern District of Oklahoma David E. O’Meilia announced.
Dobbs, 51, was also sentenced to lifetime supervised release following his term in prison by U.S. District Judge Gregory Frizzel, and was ordered to pay an $8,000 fine. Dobbs was found guilty after a six-day jury trial in November 2008 of receiving picture and video files of child pornography, which were found on his home computer by federal investigators in July 2006. According to testimony presented at trial, the computer files of child pornography were downloaded by Dobbs between December 2005 and April 2006.
The original indictment charging Dobbs was issued by a federal grand jury in September 2007. A superseding indictment adding to the original charge was issued by the grand jury in July 2008. After the verdict in his trial, Dobbs was ordered to be detained by the U.S. Marshal’s Service without bond.
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 the 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 Barak Cohen of CEOS and Assistant U.S. Attorney Susan Morgan of the U.S. Attorney’s Office in Tulsa. CEOS’ High-Tech Investigative Unit and the Tulsa Police Department provided forensic analysis of Dobbs’ computer. The charges were the result of an investigation by the U.S. Postal Inspection Service.
Former Member of Armed Services Pleads Guilty to Participating in Bribery and Extortion ConspiracyRead the Press Release
WASHINGTON – A former member of the U.S. armed services pleaded guilty today in the U.S. District Court for the District of Arizona in Tucson for his role in a widespread bribery and extortion conspiracy, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced today.
The charges arise from Operation Lively Green, an undercover investigation conducted by the FBI that began in December 2001. To date, 56 additional defendants have been sentenced for their roles in the conspiracy.
Rommel I. Schroer, 33, a former sergeant in the U.S. Air Force, pleaded guilty today to one count of conspiring to enrich himself by obtaining cash bribes from people he believed to be narcotics traffickers in return for his assistance, protection, and participation in the activities of what he believed to be an illegal narcotics-trafficking organization that distributed cocaine from Arizona to other locations in the southwestern United States. In reality, the narcotics traffickers were undercover FBI agents. According to court documents, in order to protect the shipments of cocaine, Mr. Schroer and his co-conspirators wore official uniforms, carried official forms of identification, and used official vehicles, when necessary, to prevent police stops, searches and seizures of the narcotics as they drove the cocaine shipments through checkpoints manned by the U.S. Border Patrol, the Arizona Department of Public Safety and Nevada law enforcement officers.
The case is part of a joint investigation being conducted by the Southern Arizona Corruption Task Force (SACTF), which is comprised of the FBI, the Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement (ICE) at the Department of Homeland Security and the Tucson Police Department. The Arizona Air National Guard, Air Force Office of Special Investigations, Defense Criminal Investigative Service and the Criminal Investigation Division of the Internal Revenue Service are also participating in the investigation. The case is being prosecuted by Trial Attorneys Michael Ferrara and Peter Koski of the Criminal Division’s Public Integrity Section, headed by Chief William M. Welch II. The U.S. Attorney’s Office for the Western District of Oklahoma has also secured the guilty pleas of 14 defendants in a related investigation, Operation Tarnish Star.
Former Executive Indicted for His Role in Two Cathode Ray Tube Price-Fixing ConspiraciesRead the Press Release
WASHINGTON – A federal grand jury in San Francisco today returned a two-count indictment against the former Chairman and Chief Executive Officer of Chunghwa Picture Tubes Ltd. for his participation in global conspiracies to fix prices of two types of cathode ray tubes (CRTs) used in computer monitors and televisions, the U.S. Department of Justice announced today. This is the first charge as a result of the Antitrust Division’s ongoing investigation into the cathode ray tubes industry.
The indictment, filed today in U.S. District Court in San Francisco, charges Cheng Yuan Lin, aka C.Y. Lin, a resident of Taiwan, with conspiring with others to suppress and eliminate competition by fixing prices, reducing output and allocating market shares of color display tubes (CDTs) to be sold in the U.S. and elsewhere, beginning at least as early as Jan. 28, 1997, until at least as late as April 7, 2003. The indictment also charges C.Y. Lin with conspiring with others to suppress and eliminate competition by fixing prices for color picture tubes (CPTs) to be sold in the U.S. and elsewhere, beginning at least as early as March 12, 1997, until at least as late as April 7, 2003.
CRTs consist of evacuated glass envelopes that contain an electron gun and a phosphorescent screen. When electrons strike the screen, light is emitted, creating an image on the screen. CDTs and CPTs are each types of CRTs. CDTs are used in computer monitors and other specialized applications, while CPTs are used in color televisions. The worldwide market for CRTs, including CPTs and CDTs, in 1997, at the start of the conspiracies has been estimated as approximately $26 billion.
"This conspiracy harmed countless Americans who purchased computers and televisions using cathode ray tubes sold at fixed prices," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Antitrust Division. "The Antitrust Division will continue to prosecute individuals, wherever they are located and however high their position on the corporate ladder, who engage in price fixing aimed at U.S. businesses and consumers."
According to the charges, C.Y. Lin and co-conspirators carried out the CDT conspiracy by, among other things:
- Attending meetings and engaging in conversations and communications in Taiwan, Korea, Malaysia, China and elsewhere to discuss the prices, output and market shares of CDTs;
- Agreeing during those meetings, conversations and communications to charge prices of CDTs at certain target levels or ranges;
- Agreeing during those meetings, conversations and communications to reduce output of CDTs by shutting down CDT production lines for certain periods of time;
- Agreeing during those meetings, conversations and communications to allocate target market shares for the CDT market overall and for certain CDT customers;
- Exchanging CDT sales, production, market share and pricing information for the purpose of implementing, monitoring and enforcing adherence to the agreed-upon prices, output reduction and market share allocation;
- Implementing an auditing system that permitted co-conspirators to visit each other’s production facilities to verify that CDT production lines had been shut down as agreed;
- Authorizing and approving the participation of subordinate employees in the conspiracy;
- Issuing price quotations and reducing output in accordance with the agreements reached; and
- Taking steps to conceal the conspiracy and conspiratorial contacts through various means.
C.Y. Lin is charged with carrying out the CPT conspiracy with his co-conspirators by, among other things:
- Attending meetings and engaging in conversations and communications in Taiwan, Korea, Malaysia, China, Thailand, Indonesia and elsewhere to discuss the prices of CPTs;
- Agreeing during those meetings, conversations and communications to charge prices of CPTs at certain target levels or ranges;
- Exchanging CPT pricing information for the purpose of implementing, monitoring and enforcing adherence to the agreed-upon prices;
- Authorizing and approving the participation of subordinate employees in the conspiracy;
- Issuing price quotations in accordance with the agreements reached; and
- Taking steps to conceal the conspiracy and conspiratorial contacts through various means.
On Feb. 3, 2009, Lin was indicted for his participation in a separate conspiracy to suppress and eliminate competition by fixing the prices of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels.
Lin is charged with violating the Sherman Act, which carries a maximum penalty of three years imprisonment and a fine of $350,000 for individuals for violations occurring before June 22, 2004. The maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either of those amounts is greater than the Sherman Act maximum fines.
This case is part of an ongoing joint investigation by the San Francisco Field Office of the Antitrust Division of the U.S. Department of Justice and the Federal Bureau of Investigation in San Francisco. Anyone with information concerning illegal conduct in the CRT industry is urged to call the San Francisco Field Office of the Antitrust Division at 415-436-6660.
Five Individuals Indicted for Devising and Participating in Stock Manipulation SchemeRead the Press Release
WASHINGTON - A 24-count indictment charging five individuals with various crimes arising from an alleged scheme to defraud investors through the manipulation of the publicly traded stocks of three companies was unsealed today in Tulsa, Okla., announced Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and U.S. Attorney for the Northern District of Oklahoma David E. O’Meilia.
The indictment, returned by a federal grand jury in Tulsa on Jan. 15, 2009, alleges the scheme reaped the defendants in excess of $41 million.
G. David Gordon, 47, a Tulsa, Okla., attorney, and Richard Clark, 61, also of Tulsa, were arrested and are scheduled to make their initial appearance today in the U.S. District Court for the Northern District of Oklahoma. Louisville, Ky., attorney James Reskin, 50, was also arrested today and is scheduled to make his initial appearance in the U.S. District Court for the Western District of Kentucky. Dean Sheptycki, 41, a resident of the Bahamas, was arrested by Bahamian authorities today and currently awaits extradition to the United States. The indictment also charges Dallas-area resident Joshua Wayne Lankford, 35, in the scheme to defraud.
Two companies based in Tulsa at the time of the alleged scheme were among those whose stock was manipulated: Deep Rock Oil & Gas, Inc. and Global Beverage Solutions, Inc., formerly known as Pacific Peak Investments. The third company, National Storm Management Group, Inc., is based in Glen Ellyn, Ill.
The indictment alleges that between April 2004 and December 2006, the defendants devised and engaged in a scheme to defraud investors known as a "pump and dump," in which they manipulated three publicly traded penny stocks. A penny stock is a common stock that trades for less than $5 per share in the over the counter market, rather than on national exchanges.
According to the indictment, the defendants executed the scheme by obtaining a majority of the free-trading shares of stock of the company they intended to manipulate, using fraudulent and deceptive means to acquire the stock and/or remove the trading restrictions on the shares they obtained.
According to the indictment, the defendants hid and "parked" their shares with various nominees, such as friends, relatives, or other entities that they owned and controlled. Subsequently, they allegedly engaged in coordinated trading in order to create the appearance of an emerging market for these stocks, after which they conducted massive promotional campaigns in which unsolicited fax and e-mail "blasts" were sent to millions of recipients. According to the indictment, these blasts touted the respective stocks without accurately disclosing who was paying for the promotions, omitted that the defendants intended to sell their shares, and induced unsuspecting legitimate investors to purchase stock in the companies. The defendants and their nominees allegedly took significant profits by selling large amounts of shares after they had artificially inflated the stock price. For each of the three manipulated stocks, the defendants’ alleged sell-off caused declines of the stock price and left legitimate investors holding stock of significantly reduced value.
The indictment charges all five defendants with one count of conspiracy to commit securities fraud, wire fraud, and money laundering, nine counts of wire fraud, five counts of securities fraud, and six counts of money laundering in connection with the manipulation of three penny stocks. Gordon is also charged with one count of making a false statement in a matter within the jurisdiction of the Securities and Exchange Commission (SEC) regarding the scheme to defraud. Additionally, the indictment charges Gordon with one count of wire fraud in connection with a fourth penny stock, that of International Power Group Ltd., based in New Jersey, and one count of obstruction of justice of an investigation into the alleged wire fraud violation.
According to the indictment, the defendants profited more than $41 million from the overall scheme. The indictment seeks the criminal forfeiture of $41.4 million from all five defendants in connection with the three penny stocks. Additionally, the indictment seeks criminal forfeiture of $2.74 million from Gordon in connection with the wire fraud involving the fourth penny stock.
A grand jury indictment is one method of charging defendants with alleged violations of federal law, and all defendants are presumed innocent unless and until the charges are proved beyond a reasonable doubt in a court of law.
The conspiracy and false statement charges each carry a maximum sentence of five years in prison and a $250,000 fine. Each charge of wire fraud as well as the obstruction of justice count carries a maximum sentence of 20 years in prison and a $250,000 fine. The maximum sentence for each securities fraud count is 20 years in prison and a $5,000,000 fine and the maximum sentence for each money laundering count is 10 years in prison and a $250,000 fine.
In a related action, the SEC today filed a civil enforcement action against Gordon, Lankford and Sheptycki.
On July 22, 2008, Mark Byron Lindberg, 40, of the Dallas area, pleaded guilty to a conspiracy alleging the same wire and securities fraud scheme and agreed to a $6,229,354 forfeiture judgment for his participation in the scheme that bilked investors across the nation out of millions of dollars. Lindberg admitted that he and other unnamed co-conspirators, two of them from Tulsa, attempted to illegally manipulate the stock price of various companies through a number of means including: acquiring a substantial amount of free-trading shares of stock in the companies that were concealed in various brokerage accounts; creating and distributing to the public false and misleading promotional materials; and engaging in coordinated trading of stock in order to manipulate the price of the stocks being traded, including selling their stock while at the same time encouraging the public to buy.
The case is being prosecuted by Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Catherine Depew for the Northern District of Oklahoma, and Special Assistant U.S. Attorney Kevin Muhlendorf, who is detailed to the U.S. Attorney’s Office from the SEC. The case is being investigated by the FBI, the IRS-Criminal Investigation Division and the U.S. Postal Inspection Service.
California Man Sentenced to 18 Months in Community Correctional Facility in Connection with Scheme to Defraud First International Bank and Export-Import BankRead the Press Release
WASHINGTON – Carlos Serrano, 64, of Glendale, Calif., was sentenced to 18 months in a community correctional facility in connection with a $1.3 million scheme to defraud the First International Bank of Connecticut (FIB) and the Export-Import Bank of the United States (Ex-Im Bank), Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Thomas P. O’Brien of the Central District of California announced today.
Serrano was sentenced on Feb. 9, 2009, in U.S. District Court for the Central District of California by Judge Christina A. Snyder. In addition to his prison sentence, Serrano was placed on five years of probation and ordered to pay restitution of $924,569 to the Ex-Im Bank.
Following a four-day trial, Serrano was convicted on Sept. 18, 2008, of conspiring to commit bank fraud and committing bank fraud in connection with a fraudulent $1.3 million loan transaction involving FIB and the Ex-Im Bank. At trial, the jury heard testimony that in approximately November 2000, Serrano met with alleged co-conspirators and agreed to act as an exporter in a loan transaction between a company in the Philippines and FIB, in which the Ex-Im Bank acted as guarantor. According to trial testimony, Serrano’s sole job in the transaction was to obtain a $200,000 down payment from the Philippine company, purchase $1.3 million in U.S. goods on behalf of the Philippine company, ship the purchased goods to the Philippine company and certify to FIB and the Ex-Im Bank that he had purchased and shipped those goods. The jury heard testimony that Serrano contacted U.S. suppliers using a fake name for the purpose of obtaining price quotes, but that he never actually purchased any goods. Jurors also heard testimony that Serrano certified in documents sent to and relied upon by FIB and the Ex-Im Bank that he had purchased $1.3 million in U.S. goods and shipped those goods to the Philippines.
In reliance on Serrano’s false statements, FIB sent Serrano $1.1 million in loan proceeds. Testimony revealed that after receiving the loan proceeds, Serrano paid himself approximately $28,000, sent approximately $949,000 to an alleged co-conspirator and sent approximately $160,000 to a company in Singapore. As a result of the fraud, the Ex-Im Bank lost $924,569.
This case is part of a broader investigation into an $80 million scheme to defraud the Ex-Im Bank between November 1999 and December 2005. To date, eight individuals – Serrano, Daniel Curran, Christina Song, Edward Chua, David Villongco, Robert Delgado, Jaime Galvez and Edward Javier – have been convicted for their involvement in the fraud scheme. Curran was sentenced on April 23, 2008, to 41 months in prison; Song was sentenced on Oct. 2, 2008, to 37 months in prison; Chua was sentenced on May 14, 2008, to 37 months in prison; Villongco was sentenced on Feb. 29, 2008, to 33 months in prison; Delgado was sentenced on Oct. 5, 2007, to two years in prison; Galvez was sentenced on Jan. 7, 2008, to one year in prison; and Javier was sentenced on July 18, 2008, to six months in prison.
In addition, four other individuals – Marilyn Ong, Ildefonso Ong, Nelson Ti and Joseph Tirona – have been indicted by a federal grand jury in the District of Columbia for their alleged involvement in the scheme. An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
The case was prosecuted by Assistant Chief Hank Bond Walther of the Criminal Division’s Fraud Section and Jason P. Gonzalez of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the U.S. Postal Inspection Service and the FBI.
Arizona Man Sentenced to Five Years for Distribution of Child PornographyRead the Press Release
WASHINGTON – Theodore Allan, 54, of Glendale, Ariz., was sentenced today to five years in prison for distribution of child pornography, Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and U.S. Attorney for the District of Arizona Diane J. Humetewa announced.
Allan was indicted on charges of distribution, receipt and possession of child pornography on March 6, 2007. The charges followed a July 14, 2006, U.S. Immigration and Customs Enforcement (ICE) search of Allan’s home. According to court documents, ICE agents discovered approximately nine videos and 267 images depicting the sexual abuse of children.
Allan pleaded guilty on Aug. 4, 2008, to one count of distribution. As part of the plea agreement, Allan admitted to distributing child pornography via e-mail.
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 the 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 and Senior Litigation Counsel Vincent Q. Kirby of the District of Arizona. ICE conducted the investigation.
6 February 2009
Las Vegas Minister and Conspirator Sentenced in Tax Evasion SchemeRead the Press Release
WASHINGTON - Michael Haynes, a practicing minister, and David Jett, both of Las Vegas, were sentenced to 37 months in prison and five years probation, respectively, by Chief U.S. District Judge Robert L. Hunt in Las Vegas, the Justice Department and Internal Revenue Service (IRS) announced today. Haynes and Jett were also ordered to pay restitution of $834,000 and $150,000, respectively, to the U.S. Treasury.
In September 2008, a jury convicted Haynes for conspiring to evade taxes through a scheme involving the fraudulent sale of One Voice Technologies Inc. stock. Jett pleaded guilty to conspiracy in March 2008.
According to the indictment and evidence presented at trial, Haynes and Jett orchestrated the fraudulent sale of $7 million in One Voice stock. Haynes and Jett used at least ten stock certificates to generate the $7 million in gross proceeds; all of these stock certificates were in different nominee names. As part of the scheme, new stock certificates in the name of One Voice were issued to at least five nominees, two of whom testified at trial. With the assistance of the transfer agent for One Voice, Haynes had the nominees sign documents that stated they had lost their original stock certificates and assigned their rights to the stock.
According to court documents and evidence presented at trial, Haynes directed the $7 million in stock proceeds to be deposited in a nominee bank account at the Bank of Nova Scotia. At Haynes’ instruction, the proceeds were transferred via checks and wire transfers to U.S. bank accounts in his and Jett’s control. Jett and Haynes then used funds obtained from the sale of One Voice stock for their personal benefit. Haynes failed to report the proceeds of the stock sale on his personal income taxes.
Acting Attorney General John A. DiCicco commended the IRS special agents who investigated the case, as well as Tax Division trial attorneys Lori H. Hendrickson and Timothy J. Stockwell who prosecuted the case.
5 February 2009
U.S. Court Rejects Two Prominent L.A. Real Estate Investors Attempt to Use Tax Avoidance SchemeRead the Press Release
WASHINGTON - A federal court in Los Angeles invalidated an abusive tax shelter scheme engaged in by prominent real estate investors James Thomas and Edward Fox, the Justice Department announced today. U.S. District Judge John F. Walter also imposed the maximum penalty - forty percent - allowed by the tax code against them.
Thomas, a former Internal Revenue Service (IRS) attorney, and Fox owned real estate, including interests in the Library Tower, the Gas Company Tower and the Wells Fargo Center, all located in Los Angeles. In 2001 they sought out an abusive tax shelter that has become known as "Son of BOSS." In the Son of BOSS scheme used by Thomas and Fox, they purchased an exotic form of a financial option that they claim would have protected them against a catastrophic decline in real estate values, which they feared in the immediate aftermath of the terrorist attacks of September 11.
Thomas and Fox paid the accounting firm of Arthur Andersen and insurance giant AIG more than $2 million in fees to obtain financial options, but Judge Walter agreed with the government that the true value of the options was less than $1,000. Notwithstanding the low value of the options, Thomas and Fox claimed that the scheme created more than $145 million of tax "basis." That tax basis, if valid, could have been used to shield from the income tax more than $145 million of future profits had Thomas and Fox sold their real estate at a gain.
Judge Walter determined that the tax avoidance scheme had no real economic substance and was simply designed to fabricate tax basis in certain partnerships. The court rejected Thomas’s attempt to claim an increase in tax basis of $100 million despite paying only $1.5 million for the transaction at issue. Similarly, the court rejected Fox’s attempt to claim a $45 million increase in tax basis despite paying only $675,000. According to the court, Thomas and Fox, and their tax advisor, Martin Griffiths, "obviously recognized" the tax benefits to this fabricated basis. The court also rejected Thomas and Fox’s contention that the abusive tax shelter accomplished a reasonable business purpose.
Most of the more than 2000 taxpayers who used the "Son of BOSS" scheme settled their cases with the IRS, paying the full tax and part of the penalties owed, and the IRS announced in 2005 that it had collected nearly $4 billion as a result of those settlements. The government warned taxpayers who did not settle that it would pursue those cases in court and seek the maximum penalty allowed.
"The court’s decision today is yet another victory for the American taxpayer," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "Too many individuals in the last decade have turned to abusive tax shelters to keep from paying their fair share of taxes. This decision serves as yet another reminder that these abusive schemes are not valid."
Acting Assistant Attorney General DiCicco and Thomas P. O’Brien, U.S. Attorney for the Central District of California, thanked Assistant U.S. Attorney Andrew Pribe, Tax Division trial attorney Rick Watson and IRS Chief Counsel attorney Jonathan Sloat who represented the government.
Two Individuals Arrested on Federal Sex Trafficking ChargesRead the Press Release
WASHINGTON – Two men have been arrested and charged in an indictment unsealed today with crimes related to sex trafficking, Acting Assistant Attorney General Loretta King of the Civil Rights Division and U.S. Attorney for the Eastern District of Arkansas Jane W. Duke announced.
Tommy Handy, aka "Tom Tom" and his nephew, Everett Cooney, aka "Bear," were indicted by a federal grand jury in Little Rock, Ark., for conspiracy to commit sex trafficking and sex trafficking for their roles in using force, fraud and coercion to cause juvenile girls and adult women to engage in commercial sex acts. Handy and Cooney allegedly benefitted financially from the conspiracy, which took place from January 2002 to May 2008. Handy was also charged with possession of a firearm in furtherance of a crime of violence.
If convicted, Handy and Cooney both face a maximum sentence of life in prison and fines of more than $1 million.
An indictment is only an allegation, and the defendants are presumed innocent unless and until proven guilty.
The prosecution of human trafficking offenses is a top priority of the Justice Department. In Fiscal Year 2008, the Department filed a record number of both labor trafficking and sex trafficking cases.
The case will be prosecuted by Assistant U.S. Attorney Joe J. Volpe and Civil Rights Division Trial Attorney Jim Felte. The charges are the result of an investigation conducted by the FBI.
Patriot Coal to Pay $6.5 Million to Settle Clean Water Act ViolationsRead the Press Release
WASHINGTON - Patriot Coal Corporation, one of the largest coal mining companies in the United States, has agreed to pay a $6.5 million civil penalty to settle violations of the Clean Water Act, the Justice Department and U.S. Environmental Protection Agency (EPA), and the state of West Virginia announced today.
The settlement includes the third largest penalty ever paid in a federal Clean Water Act case for discharge permit violations. In addition, Patriot has agreed to extensive measures designed to ensure Clean Water Act compliance at its mines in West Virginia. The consent decree includes innovative and heightened operating standards which should serve as a model for the coal mining industry in Central Appalachia.
“This settlement represents a very important step in making sure that the coal mining industry is in compliance with the Clean Water Act,” said John C. Cruden, Acting Assistant Attorney General in charge of the Justice Department's Environment and Natural Resources Division. “It will benefit the citizens of West Virginia and helps make sure that the Mountain State's streams and rivers are not damaged.”
“This settlement continues to set the bar high for the coal industry and Clean Water Act enforcement in general. Today's settlement reiterates EPA's commitment to maintaining clean and healthy waterways,” said William T. Wisniewski, acting Regional Administrator for EPA’s mid-Atlantic region.
In a joint complaint filed concurrently with the consent decree, the United States and the State of West Virginia alleged that Patriot violated its Clean Water Act permits more than 1,400 times -- representing over 22,000 days of violations between January 2003 and December 2007 at its mining complexes in West Virginia. During this time, Patriot and its subsidiaries allegedly discharged excess amounts of metals, sediment, and other pollutants into dozens of rivers and streams in West Virginia. Excess discharges of these pollutants can significantly harm water quality and aquatic life in West Virginia's streams.
As part of the settlement, Patriot has agreed to implement extensive measures to prevent future violations and to perform environmental projects, at a total estimated cost of $6 million. Specifically, Patriot will develop and implement a company-wide compliance-focused environmental management system including creating a database to track information relevant to compliance efforts; conduct regular internal and third-party environmental compliance audits; implement a system of tiered response actions for any possible future violations; and conduct annual training for all employees and contractors with environmental responsibilities. The company will also perform five stream restoration projects in local watersheds and perform assessments of mining impacts on aquatic life.
With corporate headquarters in St. Louis, Patriot owns and operates 16 mining complexes in West Virginia and Kentucky.
The consent decree, lodged in the U.S. District Court for the Southern District of West Virginia, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Department of Justice Web site at: http://www.usdoj.gov/enrd/Consent_Decrees.html.
Minnesota Man Arrested in Connection with Ponzi SchemeRead the Press Release
WASHINGTON – A Minnesota man was arrested today on charges related to an alleged Ponzi scheme involving commodity pools, Acting Assistant Attorney General Rita M. Glavin for the Criminal Division and U.S. Attorney Frank J. Magill for the District of Minnesota announced.
Charles "Chuck" E. Hays, of Rosemount, Minn., was charged in a criminal complaint filed in the District of Minnesota with one count of wire fraud and one count of mail fraud. According to the complaint, Hays allegedly induced investors to provide funds to Crossfire Trading, LLC (Crossfire), a company for which the listed operating address was the same as Hays’ residence.
According to the complaint, Hays allegedly told investors their money had been invested in a "pooled" commodities trading account, using misrepresentations such as false statements from a commodities brokerage firm, when in reality no such investments were ever made. The complaint alleges that Crossfire had no commodities trading account and the documents shown and sent to victim investors were fabrications. The complaint also alleges that Hays used the money wired to his bank accounts by investors for his personal expenses, including the purchase of an approximately $3 million yacht, as well as for payments to other investors.
Hays is scheduled to appear today before a magistrate judge for the U.S. District Court for the District of Minnesota.
Additionally, the government has seized the yacht Hays purchased with investor funds as well as bank accounts, which contain approximately $1 million in funds allegedly obtained through the fraudulent scheme.
In a related action, the U.S. Commodity Futures Trading Commission today filed a civil enforcement action against Hays and Crossfire.
A complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant Chief Robertson Park and Trial Attorney Laura Perkins of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ann Anaya for the District of Minnesota. Significant assistance is also being provided by Assistant U.S. Attorney Jim Alexander for the District of Minnesota. The case is being investigated by the U.S. Postal Inspection Service.
Member of Human Trafficking Ring Pleads Guilty to Sex Trafficking ChargesRead the Press Release
WASHINGTON - Raul Cortes-Meza, 21, aka "Oscar", a Mexican national, pleaded guilty today in U.S. District Court in Atlanta to sex trafficking of a minor from Mexico, Acting Assistant Attorney General Loretta King of the Civil Rights Division and U.S. Attorney David E. Nahmias for the Northern District of Georgia announced.
According to the information presented in court, Cortes-Meza harbored a 17-year-old girl in the United States after she was pursued romantically by Cortes-Meza’s alleged co-conspirator in Mexico, then smuggled into the United States and brought to the Norcross, Ga., area. After the victim’s arrival in Norcross, Cortes-Meza, knowing that the victim was under 18 years of age, drove her to numerous apartments in the Atlanta metropolitan area to have sex with paying clients. Cortes-Meza instructed the victim to enter the apartments and provide fifteen minutes of sexual services to each man who was present, and subsequently collected money from the men with whom the victim engaged in commercial sex.
"Human trafficking occurs in hidden corners across the country," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Few crimes are more reprehensible than profiting from the sexual exploitation of a minor. The Department is committed to enforcing laws that put human traffickers behind bars."
"Human trafficking violates basic human rights and will not be tolerated," said U.S. Attorney David E. Nahmias. "Using girls under the age of 18 to engage in commercial sex acts is a serious violation of federal law. The victimization of the young woman in this case was unfortunately made easier by her illegal status, unfamiliarity with U.S. laws, and fear of law enforcement instilled in her by the trafficker. Federal laws protect all victims of such heinous crimes, whether or not they are U.S. citizens. No victim should fear coming forward to report illegal activity."
The sex trafficking of a minor charge to which Cortes-Meza pleaded guilty carries a mandatory minimum sentence of 10 years in federal prison A sentencing date has not yet been scheduled by the court.
The prosecution of human trafficking offenses is a top priority of the Justice Department. In fiscal year 2008, the Section filed the largest number of federal criminal civil rights cases ever in a single year in the history of the Civil Rights Division., including a recod number of both sex trafficking and labor trafficking cases.
The case is being investigated by special agents of U.S. Immigration and Customs Enforcement. The case is being prosecuted by Civil Rights Division Trial Attorney Karima Maloney and Assistant U.S. Attorneys Corey Steinberg and Susan Coppedge for the Northern District of Georgia.
Government Contractor Sentenced to 30 Months in Prison on Bribery ChargesRead the Press Release
WASHINGTON – A government contractor and former employee of the U.S. Department of the Treasury was sentenced in Washington today in connection with a bribery scheme involving contracts at the U.S. Tax Court in the District of Columbia, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Daniel Money, 44, of Shady Side, Md., was sentenced by U.S. District Judge Ricardo M. Urbina of the U.S. District Court for the District of Columbia, to 30 months in prison, three years supervised release and a $7,500 fine. Money pleaded guilty on Sept. 5, 2008, to one count of bribery. As part of the plea agreement and by order of the court, Money also will forfeit $95,000, which constitutes the profit that Money made on the contract that he performed as part of the bribery scheme. As part of the plea agreement, Money also agreed to pay restitution of $2,250 to the U.S. Department of the Treasury related to his theft of diesel fuel from the Treasury.
According to court documents, Money was a Maryland-based contractor who provided maintenance, repair, electrical, construction and other related services for government agencies, including the General Services Administration (GSA) and the U.S. Tax Court. Through his company, Daniel Construction, Money obtained and performed government contract work and was also employed as a planner for the U.S. Department of the Treasury. Between March 2007 and May 2008, Money admitted he agreed to provide a government official with a total of $55,000 in bribe payments in exchange for the award of two contracts to Daniel Construction, including a contract in the amount of $188,000 at the U.S. Tax Court.
The case was prosecuted by Trial Attorneys Daniel A. Petalas, Richard B. Evans and Peter M. Koski of the Public Integrity Section, headed by Section Chief William M. Welch II. The case was investigated jointly by the GSA Office of the Inspector General, the U.S. Treasury Office of the Inspector General and the FBI.
Former Memphis Police Officer Found Guilty on 44 Counts<br /> of Civil Rights, Narcotics, Robbery and Firearms ChargesRead the Press Release
WASHINGTON – A federal jury in Memphis, Tenn., today found Arthur Sease IV, a former Memphis Police Department officer, guilty on forty-four counts of civil rights, narcotics, robbery and firearms offenses, Acting Assistant Attorney General Loretta King of the Civil Rights Division and U.S. Attorney Lawrence J. Laurenzi for the Western District of Tennessee announced.
The evidence at trial showed that from November 2003 through April 2006, Sease conspired with other Memphis police officers to use their authority as law enforcement officers, including their service weapons, to rob suspected drug dealers of cash, cocaine and marijuana. Sease and his co-conspirators would then resell the stolen drugs for their own profit. The government introduced proof of 16 separate robberies, as well as one attempted robbery. In each robbery, Sease or another uniformed Memphis police officer, would pull over a car containing suspected drug dealers and steal whatever drugs and cash that they found.
According to evidence presented at trial, Sease conspired with other Memphis drug dealers to arrange drug deals so that he could rob the other dealers when they arrived. On one occasion, evidence showed that Sease had a co-conspirator resell cocaine that Sease had stolen from one drug dealer to another drug dealer. Sease then pulled the buyer’s car over, stole the cocaine again and resold it. Sease and his co-conspirators kidnapped several drug dealers in an effort to get them to set up additional drug deals for Sease to rob.
Sease was a Memphis police officer from 2001 through 2005. He was discharged in 2005 for misconduct relating to one of the robberies. After he was fired, one of Sease’s co-conspirators, Andrew Hunt, became a Memphis reserve police officer and the two continued to rob drug dealers while pretending to be police officers, according to evidence presented at trial.
Five other individuals have already pleaded guilty in this case. Hunt pleaded guilty in September 2006 to a federal civil rights conspiracy, robbery affecting interstate commerce and drug distribution, and was sentenced in December 2006 to 19 years in prison. Former Memphis police officers Antoine Owens, Harold McCall and Alexander Johnson pleaded guilty to civil rights conspiracy charges and are currently awaiting sentencing. Laterrica Woods, a civilian who helped Sease and Hunt with one of their robberies, also pleaded guilty to a civil rights conspiracy and is scheduled to be sentenced in March 2009.
"It is a shame that as crime in our community is ever present that we have to spend our limited resources on investigating and prosecuting those people who have taken an oath to serve and protect our community," said Lawrence J. Laurenzi, U.S. Attorney for the Western District of Tennessee. "Effective law enforcement begins with honest law enforcement. We will continue to vigorously and tirelessly investigate and prosecute those law enforcement officials who break the law. Our community demands honest law enforcement."
"The city of Memphis put its trust in Arthur Sease to protect and serve, and Arthur Sease abused that trust," said Acting Assistant Attorney General Loretta King for the Civil Rights Division. "A badge is not a license to do what you want; it carries an obligation to do what is right."
"It is never easy to investigate one of your own; however, civil rights and public corruption investigations remain a top priority," said Perrye K. Turner, Assistant Special Agent in Charge of the FBI’s Memphis Field Office. "Citizens have the right to expect honest services from its law enforcement officers, at the local, state and federal levels. The FBI will continue to work in cooperation with its partners to identify, investigate and prosecute those who would violate the public’s trust for personal gain."
"This represents a very small percentage of the fine men and women in blue. Those officers who choose to violate the law and the trust of our citizens will face harsh punishment. The Memphis Police Department will continue to work with the federal and local government agencies to send the message that criminal activities involving Memphis police officers will not be tolerated," said Police Director Larry Godwin. "The shield of law enforcement shall not be tarnished," added Godwin.
Sease faces a minimum punishment of 275 years in prison. A sentencing date has been set for May 14, 2009.
This case was investigated by Special Agents Tracey Harris, Maria Irizarri and Jaime Corman from the FBI’s Memphis Division and Sergeants Matt Whittington and Billy Greenwood of the Memphis Police Department Security Squad. Officers Tony Parks and Thurmond Richardson contributed to the initial investigation. Assistant U.S. Attorney Steve Parker from the U.S. Attorney’s Office for the Western District of Tennessee and Trial Attorney Jonathan Skrmetti from the Civil Rights Division’s Criminal Section prosecuted the case.
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit unreasonable search and seizure, deprivation of property without due process of law, or other acts of misconduct by law enforcement and other government officials. In FY2008, the Criminal Section filed the largest-ever number of federal criminal civil rights cases in a single year in the section’s history, and the second-highest ever number of official misconduct prosecutions.
Former Employee at U.S. Embassy in Haiti Pleads Guilty to Theft of More Than $800,000Read the Press Release
WASHINGTON – A former employee at the U.S. Embassy in Haiti pleaded guilty today to one count of theft for stealing more than $800,000 from the U.S. Department of State, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
According to court documents, Jean G. Saint-Joy, 25, a/k/a Gary Saint-Joy, a/k/a Garry Saint-Joy, a citizen of Haiti, was employed as a cashier by the U.S. Embassy in Port-au-Prince, Haiti, from approximately 1995 until July 2008.
Beginning in approximately 2003 and continuing until early 2008, Saint-Joy admitted he engaged in a scheme to embezzle funds from the State Department. As part of this scheme, Saint- Joy admitted he submitted and caused to be submitted false and fraudulent documents to the State Department claiming that he required reimbursement for the payment of legitimate embassy expenses. According to court documents, Saint-Joy illegally obtained approximately $428,639 from the State Department as a result of the scheme. Saint-Joy also admitted he provided and caused to be provided false and fraudulent requests for cash advances from the embassy’s cash advance accounts with two banks in Port-au-Prince. According to court documents, Saint-Joy illegally obtained approximately $50,000 from one account and approximately $371,627 from the other account. The total amount of Saint-Joy’s theft was approximately $849,000.
The charge to which Saint-Joy pleaded guilty carries a maximum penalty of 10 years in prison and a maximum fine of $250,000. Sentencing was scheduled for May 26, 2009.
The case is being prosecuted by Trial Attorneys Ethan H. Levisohn and Marc Levin of the Criminal Division’s Public Integrity Section, which is headed by William M. Welch, II. The case was investigated by the Office of Inspector General for the U.S. Department of State.
4 February 2009
United States Files Clean Air Lawsuit Against Westar EnergyRead the Press Release
WASHINGTON — The United States has filed a complaint against Westar Energy alleging that the company violated the Clean Air Act by making major modifications to the Jeffrey Energy Center, a coal-fired power plant in St. Marys, Kan., without also installing and operating modern pollution control equipment, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.
The complaint alleges that for more than a decade, the Jeffrey Energy Center has operated without the best available emissions-control technology required by the New Source Review provisions of the Clean Air Act to control emissions of sulfur dioxide, nitrogen oxide and particulate matter, contributing to formation of fine particulate matter, smog and acid rain.
The lawsuit, filed by the Justice Department on behalf of the EPA, asks the court to order Westar Energy to install and operate appropriate air pollution control technology in order to substantially reduce sulfur dioxide, nitrogen oxide and particulate matter emissions from the Jeffrey Energy Center. The United States also seeks civil penalties up to the maximum amount authorized by law, as well as actions by the energy provider to mitigate the adverse effects alleged to have been caused by the violations.
Coal-fired power plants collectively produce more pollution than any other industry in the United States. They account for nearly 70 percent of sulfur dioxide emissions each year and 20 percent of nitrogen oxides emissions. Emissions from coal-fired power plants have detrimental health effects on asthma sufferers, the elderly and children. Additionally, these emissions have been linked to forest degradation, waterway damage, reservoir contamination and deterioration of stone and copper in buildings.
To combat these adverse effects, the EPA and the Justice Department are pursuing a national initiative, targeting electric utilities whose coal-fired power plants violate the law. The suit was filed in the U.S. District Court in Kansas City, Kan.
Former Mississippi County Deputy Sheriffs Plead Guilty to Civil Rights ViolationsRead the Press Release
WASHINGTON – Former Tippah County, Miss., Deputy Sheriff Jeffrey Rogers, 35, pleaded guilty today to a one-count information charging him and former Deputy Sheriff William Rogers with violating the civil rights of an arrestee, the Justice Department announced. William Rogers, 56, who is Jeffrey Rogers’ father, pleaded guilty on Jan. 20, 2009, to the same charge of violating the civil rights of an arrestee.
In pleading guilty, the defendants admitted that in June 2007 they used their Tasers to attack an arrestee 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 to the wall of an isolation cell. After bragging about the incident to fellow employees, Jeffrey Rogers misled federal agents who were investigating the incident. In an effort to cover up his crimes, William Rogers also filed a misleading police report about the incident. The Tippah County Sheriff’s Department fired Jeffrey Rogers after the incident.
"The vast majority of America’s law enforcement officers do their jobs bravely and with appropriate restraint," said Acting Assistant Attorney General for the Civil Rights Division Loretta King. "Those who use excessive force not only hurt their immediate victims but also the reputations of their peers, and will be prosecuted vigorously."
Sentencing dates have not yet been scheduled by the court for either Jeffrey or William Rogers.
The case was investigated by the FBI and is being prosecuted by Trial Attorneys Kathleen J. Monaghan and Michael J. Frank from the Justice Department’s Civil Rights Division and by Assistant U.S. Attorney Robert W. Coleman II from the U.S. Attorney’s Office for the Northern District of Mississippi.
The Civil Rights Division is committed to the vigorous enforcement of federal criminal civil rights statutes, such as those prohibiting the willful use of excessive force or other acts of misconduct by law enforcement officials.
Federal Court Bars Connecticut Woman from Preparing Tax Returns for OthersRead the Press Release
WASHINGTON – A federal district court in Connecticut has permanently barred Elda Sinani, a resident of that state, from preparing federal tax returns for others, the Justice Department announced today. Sinani consented to the civil injunction order.
According to the government complaint, Sinani operated two businesses – Eagle Notary Public & Tax Service in Waterbury, Conn., from November 2001 through April 2004 and later Universe Travel & Legal Services in Hartford, Conn. The complaint alleges that she provided tax return preparation services through both of these businesses. The complaint further alleges that Sinani inflated deductions for her customers to which they otherwise were not entitled. An example identified in the complaint asserts that she frequently improperly reported her customers’ transfer of monies to family members as charitable contributions.
The complaint states that Sinani prepared more than 1,500 returns for the tax years 2003 through 2006. According to the complaint, the IRS has determined that the U.S. Treasury has incurred more than $300,000 in losses from tax returns prepared by Sinani and may have incurred losses exceeding $2.9 million.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division trial attorney Lisa Bellamy for her handling of the government’s case. The Justice Department has obtained injunctions against more than 370 tax return preparers and tax-fraud promoters since 2001. Information about the Justice Department’s Tax Division and its efforts to stop fraudulent return preparers is available on the Justice Department website.
3 February 2009
Three Foreign Executives Indicted for Their Roles in LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON - A federal grand jury in San Francisco returned an indictment against two former executives from Chunghwa Picture Tubes Ltd. (Chunghwa) and one former executive from LG Display Co. Ltd. (LG) for their participation in a global conspiracy to fix prices of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels, the U.S. Department of Justice announced today.
The indictment, filed today in U.S. District Court in San Francisco, charges that Cheng Yuan Lin, aka C.Y. Lin, Wen Jun Cheng, aka Tony Cheng, and Duk Mo Koo conspired with unnamed co-conspirators to suppress and eliminate competition by fixing the prices of TFT-LCD panels. The three executives participated in the conspiracy at various times during the charged conspiracy period, which began on or about Sept. 14, 2001, and continued to on or about Dec. 1, 2006.
- Lin participated in the conspiracy from Sept. 14, 2001 to Apr. 7, 2003 as Chunghwa’s Chairman and Chief Executive Officer. Lin is a resident of Taiwan, Republic of China.
- Cheng participated in the conspiracy from Oct. 5, 2001 to Sept. 24, 2004. For most of this period, Cheng was Chunghwa’s Assistant Vice President of Sales and Marketing. Cheng is a resident of Taiwan, Republic of China.
- Koo participated in the conspiracy from Dec. 11, 2001 to Dec. 1, 2005 as Executive Vice President and Chief Sales Officer for LG. Koo is a citizen and resident of the Republic of Korea.
"The Antitrust Division will vigorously pursue individuals who engage in antitrust crimes targeting U.S. businesses and consumers no matter where those individuals live or commit the crime," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Antitrust Division. "Today’s charges should make clear that there are no safe havens for international cartels that violate the U.S. antitrust laws."
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.
Including today’s charge, three companies and seven individuals have been charged in the Department’s ongoing antitrust investigation into the TFT-LCD industry. To date, more than $585 million in criminal fines have been imposed as a result of the ongoing investigation.
These three foreign-based executives were charged with participating with co-conspirators in a conspiracy that was accomplished by the following means:
- Attending meetings and engaging in conversations and communications in Taiwan, Korea and the United States to discuss the prices of TFT-LCD panels;
- Agreeing during those meetings, conversations and communications to charge prices of TFT-LCD panels at certain levels;
- Attending regular group meetings, commonly referred to as "crystal meetings," in hotel rooms in Taiwan and agreeing during those meetings to charge prices for standard-sized TFT-LCD panels at certain target levels;
- Exchanging TFT-LCD shipping, production, supply, demand and pricing information, for the purpose of implementing, monitoring and enforcing adherence to the agreed-upon prices;
- Authorizing, ordering and consenting to the participation of subordinate employees in the conspiracy;
- Issuing price quotations in accordance with the agreements reached;
- Accepting payment for the supply of TFT-LCD panels sold at collusive, noncompetitive prices to customers in the United States and elsewhere; and
- Taking steps to conceal the conspiracy and conspiratorial contacts through various means.
Lin, Cheng and Koo are each charged with participating in the conspiracy to suppress competition in violation of the Sherman Act. The maximum penalty for the conviction of a Sherman Act violation occurring before June 22, 2004, is three years imprisonment and a fine of $350,000 for individuals. The maximum penalty for a violation occurring after June 22, 2004, is 10 years imprisonment and a fine of $1 million for individuals. The maximum fines may be increased, however, to twice the gain derived from the crime or twice the loss suffered by the victims if either or those amounts is greater than the Sherman Act maximum fines. Of the three executives charged today, only Lin’s violation occurred before June 22, 2004.
On Jan. 15, 2009, former Chunghwa CEO Chieng-Hon "Frank" Lin and two Chunghwa executives, Chih-Chun "C.C." Liu and Hsueh-Lung "Brian" Lee, were charged with participating in the same conspiracy and agreed to plead guilty. Under their plea agreements, which must be approved by the court, Chieng-Hon Lin agreed to serve nine months in prison and pay a $50,000 criminal fine; Chih-Chun Liu agreed to serve seven months in prison and pay a $30,000 criminal fine; and Hsueh-Lung Lee agreed to serve six months in prison and pay a $20,000 criminal fine. Also on Jan. 15, 2009, LG executive Chang Suk "C.S." Chung agreed to plead guilty for his role in the conspiracy. Under his plea agreement, which must be approved by the court, Chung agreed to serve a seven-month prison sentence and pay a $25,000 criminal fine.
In total, three companies have been charged with price fixing in the TFT-LCD investigation. On Dec. 15, 2008, LG pleaded guilty to participating in this conspiracy and was sentenced to pay a $400 million criminal fine – the second largest fine in Antitrust Division history. On Jan. 14, 2009, Chunghwa pleaded guilty to participating in the same conspiracy and was sentenced to pay a $65 million criminal fine. On Dec. 16, 2008, Sharp Corp. pleaded guilty to three separate conspiracies to fix the prices of TFT-LCD panels sold to Dell Inc., Apple Computer Inc., and Motorola Inc., and was sentenced to pay a $120 million criminal fine.
Today’s charge is the result of a joint investigation by the San Francisco Field Office of the Antitrust Division of the U.S. Department of Justice and the Federal Bureau of Investigation in San Francisco.
Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the San Francisco Field Office of the Antitrust Division at 415-436-6660.
Justice Department Settles Religious Discrimination Lawsuit Against Washington Metropolitan Area Transit AuthorityRead the Press Release
WASHINGTON — The Department of Justice announced today that it has entered into a settlement agreement with the Washington Metropolitan Area Transit Authority (WMATA) that, if approved by the court, will resolve the complaint of pattern or practice religious discrimination filed by the United States against WMATA under Title VII of the Civil Rights Act of 1964.
The United States filed a complaint in U.S. District Court for the District of Columbia in September 2008, alleging that WMATA violated Title VII by failing to reasonably accommodate and provide equal employment opportunities to employees and prospective employees whose religious practices require an accommodation from WMATA’s uniform policy for bus operators and similarly situated employees. The United States also alleged that WMATA discriminated against Gloria Jones who applied and met all of the minimum qualifications for bus operator position, but could not comply for religious reasons with the portion of WMATA’s uniform policy that required bus operators to wear pants. At the start of the orientation process, Ms. Jones requested an accommodation that would allow her to wear a skirt instead of pants, consistent with her religious practice, along with the rest of the bus operator uniform. WMATA summarily denied her request for a religious accommodation and terminated the hiring process.
Under the terms of the settlement agreement, WMATA is required to implement and distribute a religious accommodation policy consistent with Title VII’s requirement to reasonably accommodate the religious practices of all employees and prospective employees. WMATA also is required to provide mandatory training on religious discrimination and accommodation for its supervisory employees. Additionally, WMATA will pay $47,324 to Jones and $2,500 to each of the two other individuals who requested but were denied an accommodation from WMATA’s uniform policy, according to terms of the agreement.
"This settlement agreement sends a clear message that the Department of Justice will not tolerate religious discrimination by employers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "I am pleased that WMATA has agreed to end its discriminatory practice and put into place mechanisms to protect the religious practices of its current and future employees."
Title VII prohibits discrimination in employment on the basis of gender, race, color, national origin or religion, and prohibits retaliation against an employee who opposes an unlawful employment practice, or because the employee has made a charge or participated in an investigation, proceeding or hearing under the Act. More information about Title VII and other federal employment laws is available on the Department of Justice Web site at http://www.usdoj.gov/crt/emp/index.html
Former Finance Director of California Valve Company Pleads Guilty to Bribing Foreign Government OfficialsRead the Press Release
WASHINGTON – The former finance director of an Orange County, Calif.-based valve company pleaded guilty today in connection with his role in a conspiracy to pay approximately $628,000 in bribes to numerous foreign government officials, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division, U.S. Attorney Thomas P. O’Brien of the Central District of California, and Joseph Persichini Jr., Assistant Director in Charge of the FBI’s Washington Field Office, announced.
Richard Morlok, 55, a resident of Rancho Santa Margarita, Calif., pleaded guilty before U.S. District Judge James V. Selna in Santa Ana, Calif., to a one-count information charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for the Orange County-based valve company from state-owned enterprises in several countries, including China, Korea, Romania and Saudi Arabia, in violation of the Foreign Corrupt Practices Act (FCPA).
According to court documents, the valve company designed and manufactured service control valves for use in the nuclear, oil and gas, and power generation industries worldwide. Morlok was the finance director at the valve company from 2002 through 2007. In this position, Morlok oversaw the finance department and had responsibility for approving certain commission payments and signing off on wire transfers to the recipients of those commission payments.
In connection with his guilty plea, Morlok admitted that from 2003 through 2006, he caused employees and agents of the valve company to make corrupt payments totaling approximately $628,000 to foreign officials employed at state-owned enterprises in order to assist in obtaining and retaining business for the valve company. Morlok also admitted that the valve company earned approximately $3.5 million in profits from the contracts it obtained as a result of these corrupt payments. According to the court documents, the corrupt payments were made to foreign officials at state-owned entities including, but not limited to, China National Offshore Oil Company, PetroChina, Jiangsu Nuclear Power Corporation (China), KHNP (Korea), Rovinari Power (Romania) and Safco (Saudi Arabia).
Morlok also admitted to providing false and misleading information to auditors during a 2004 internal audit of the valve company’s commission payments, and to providing false and misleading information to external auditors during a 2004 external audit.
As part of his plea agreement, Morlok has agreed to cooperate with the Department in its ongoing investigation. At sentencing, scheduled for July 20, 2009, Morlok faces a maximum of five years in prison.
In a related case, Mario Covino pleaded guilty on Jan. 8, 2009, to conspiring to make corrupt payments totaling approximately $1 million to numerous foreign government officials for the purpose of securing business for the same Orange County valve company from state-owned enterprises in several countries, including Brazil, China, India, Korea, Malaysia and the United Arab Emirates. Covino, an Italian citizen and resident of Irvine, Calif., was responsible for overseeing new construction projects for the valve company and for the replacement of existing valves made by other companies and installed at customer plants in more than 30 countries. Covino’s sentencing is scheduled for July 20, 2009.
The case was prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Douglas McCormick of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI’s Washington Field Office.
Federal Court Bars Maine Resident from Preparing Tax Returns for OthersRead the Press Release
WASHINGTON – A federal court in Maine has permanently barred Robert A. Grover from preparing federal tax returns for others, the Justice Department announced today. The court also ordered the Maine resident to provide his customer lists to the government and to mail copies of the complaint and court order to his customers. Grover consented to the civil injunction order.
According to the government complaint, Grover operated a tax return preparation service under the name Grover Tax Preparation LLC in Kennebec County, Maine. The complaint noted that Grover had a history of violating state tax laws in that he was indicted on 41 counts of income tax evasion in violation of a Maine statute. On Dec. 17, 2008, Grover entered pleas of nollo contendre (no contest) to these charges and is scheduled to be sentenced in the state matter in March 2009.
The government’s complaint alleges that Grover prepared more than 2,600 federal tax returns during a four-year period. According to the complaint, Grover fabricated and/or inflated deductions and understated gross receipts on his customers’ Schedule C forms. In addition, the complaint alleges that Grover failed to report capital gains from the sale of assets on some of his customers’ Schedule D forms. Grover also allegedly fabricated and/or inflated deductions related to his customers’ rental properties on Schedule E forms. In the complaint, the government estimates that the U.S. Treasury has incurred from $1 million up to $29.5 million in losses from tax returns prepared by Grover.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division trial attorney Lisa Bellamy for her handling of the government’s case. The Justice Department has obtained injunctions against more than 365 tax return preparers and tax-fraud promoters since 2001.
Information about the Justice Department’s Tax Division and its efforts to stop fraudulent return preparers is available on the Justice Department Web site.
Coal-Fired Power Plant to Spend More Than $135 Million to Settle Clean Air ViolationsRead the Press Release
WASHINGTON—Kentucky Utilities (KU), a coal-fired electric utility, has agreed to pay a $1.4 million civil penalty and spend approximately $135 million on pollution controls to resolve violations of the Clean Air Act, the Justice Department and the U.S. Environmental Protection Agency announced today.
KU has agreed to install new pollution control equipment on its largest generating unit that will reduce combined emissions of sulfur dioxide and nitrogen oxides by more than 31,000 tons per year, which is 90 percent below the 2007 emission levels. KU will also install controls to reduce particulate matter emissions by approximately 1,000 tons per year.
The company will spend approximately $3 million on projects to benefit the environment and mitigate the adverse effects of the alleged violations including:
- Contribute $1.8 million to a pilot project on the effectiveness of storing compressed carbon dioxide gas, a by-product of coal combustion, in deep injection wells;
- Spend $1 million to retrofit school buses with filters or other controls to reduce emissions of particulate matter; and
- Pay $200,000 to the National Park Service to help restore Mammoth Cave National Park, located in Kentucky.
KU has agreed to surrender the excess nitrogen oxide and sulfur dioxide allowances it will have after installing the pollution controls. Coal-fired power plants are allowed to emit sulfur dioxide and nitrogen oxides as allowances, which are granted under federal or state acid rain permits. Once surrendered, these allowances cannot be used again, thus removing the emissions from the environment permanently.
“This settlement will result in the substantial reduction of harmful emissions, and will benefit air quality in Kentucky and downwind areas,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. “The Justice Department will spare no effort in its pursuit of emission reductions from power plants across the country to achieve the benefits envisioned by the Clean Air Act.”
“Today’s settlement sets the most stringent limit for nitrogen oxide emissions ever imposed in a federal settlement with a coal-fired power plant,” said Catherine McCabe, Acting Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA is committed to ensuring our nation's coal-fired power plants comply with the Clean Air Act. Pollutants from these facilities can cause severe respiratory problems, contribute to childhood asthma, and contribute to smog and haze.”
In a complaint filed in March of 2007, the government alleged that KU modified the largest coal-fired electrical generating unit at the E. W. Brown Generating Station in Mercer County, Ky., without installing required pollution control equipment or complying with applicable emission limits, in violation of the Clean Air Act. The unit has been operating since 1971, and the modifications made in 1997 allowed the unit to increase the amount of coal it burned and increase the amount and rate of emissions for sulfur dioxide, nitrogen oxide and particulate matter. The government discovered the violations through an information request issued to KU.
The settlement is part of the EPA’s enforcement initiative to control harmful emissions from coal-fired power plants under the Clean Air Act’s New Source Review requirements. The total combined sulfur dioxide and nitrogen oxide emission reductions secured from these settlements will exceed more than 1.8 million tons each year once all the required pollution controls have been installed and implemented.Coal-fired plants release sulfur dioxides and nitrogen oxides, which are a primary cause of acid rain that harms trees and lakes and impairs visibility. These pollutants cause severe respiratory problems, contribute to childhood asthma, and contribute to smog and haze. Air pollution from power plants can drift significant distances downwind and degrade air quality in nearby areas.
Kentucky Utilities, based in Lexington, Ky., generates and distributes electricity to more than 500,000 customers in Kentucky and Virginia. It owns and operates five coal-fired electrical generating stations in Kentucky. The settlement applies to the largest boiler unit at the E.W. Brown Generating Station located on Lake Herrington in Mercer County, Ky.
The settlement was lodged in the U.S. District Court for the Eastern District of Kentucky in Lexington and is subject to a 30-day public comment period and final court approval. A copy of the consent decree is available on the Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
2 February 2009
U.S. Recovers $19 Million from AMEC Construction Management<br /> to Settle Litigation Regarding Fraud, False Claims, Kickbacks<br /> & Re-Procurement Costs on Federal Construction ContractsRead the Press Release
WASHINGTON – The United States has recovered more than $19 million from AMEC Construction Management Inc. (ACMI) to resolve allegations of fraud, false claims and kickbacks on four General Services Administration (GSA) construction contracts, as well as litigation over claims by the GSA for excess re-procurement costs incurred by GSA after it terminated ACMI’s contract to build the Thomas F. Eagleton United States Courthouse in St. Louis, Missouri, the Department of Justice announced today. ACMI was formerly known as Morse Diesel International Inc.
In counterclaims filed in the U.S. Court of Federal Claims, the United States sought damages and penalties under the False Claims Act, the Anti-Kickback Act and common law theories for false bond reimbursement claims submitted by ACMI to the GSA and bond premium kickbacks paid by the company’s bond broker to ACMI’s United Kingdom parent company, AMEC plc, on four federal contracts: two for the construction of the Eagleton Courthouse; a third for the construction of the U.S. courthouse and federal building in Sacramento, Calif.; and a fourth for renovations to the U.S. customs house in San Francisco. The government also sought a declaration from the court that ACMI’s claims against the government were forfeited on account of its fraud, as provided by the Forfeiture of Fraudulent Claims Act.
In July 2005 and January 2007, the U.S. Court of Federal Claims granted summary judgment against ACMI and held the company liable to the United States for its violations of the Anti-Kickback Act and the False Claims Act. The court also held that ACMI had forfeited its right to pursue its own claims against the government. In October 2007, the federal claims court awarded the government damages and penalties totaling nearly $7.3 million. The government obtained a writ of garnishment for the damages and penalties owed it in the U.S. District Court for the District of New Jersey, and ACMI has agreed to have a total of more than $8 million paid to the government as part of the settlement.
The settlement also will resolve litigation in the Court of Federal Claims regarding the excess re-procurement costs incurred by the GSA when it undertook the completion of the Eagleton Courthouse after terminating ACMI for default in 1999. ACMI has agreed to settle those claims for a total of more than $11 million, including amounts that the GSA retained as set-offs from other matters involving ACMI.
"Federal contractors who commit fraud against the government will be pursued aggressively and will be held accountable for their violations of law," said Michael F. Hertz, Acting Assistant Attorney General of the Department of Justice's Civil Division. "This settlement is an example of the Department’s determination to ensure that federal funds are protected from fraud and abuse."
The case was filed after an audit and investigation by the GSA’s Office of the Inspector General revealed the bond fraud. The kickbacks were uncovered during the litigation. ACMI also entered guilty pleas to felony fraud in the U.S. District Court for the Eastern District of Missouri in December 2000 and in the U.S. District Court for the Eastern District of California in March 2002 for the bond frauds involved in today’s civil settlement.
Two Oklahoma County Corrections Officers Indicted for Federal Civil Rights Violation in Death of Oklahoma City ManRead the Press Release
WASHINGTON – A federal grand jury indictment was unsealed today in Oklahoma City charging corrections officers Gavin Littlejohn, 25, of Oklahoma City, and Justin Isch, 21, of Edmond, Okla., with a federal civil rights violation for the fatal assault of Christopher Beckman at the Oklahoma County Detention Center in May 2007, announced Acting Assistant Attorney General Loretta King of the Civil Rights Division, U.S. Attorney John C. Richter for the Western District of Oklahoma and James Finch, Special Agent in Charge of the FBI’s Oklahoma City Field Office.
The indictment alleges that on May 26, 2007, at the Oklahoma County Detention Center, corrections officers Isch and Littlejohn assaulted Beckman and used excessive force amounting to punishment resulting in bodily injury and the death of Beckman. Specifically, it is alleged that officer Isch allegedly used Beckman’s head to open a steel door and officer Littlejohn repeatedly struck Beckman about his head and face.
Littlejohn and Isch were arrested this afternoon without incident. Both men appeared for arraignment this afternoon before U.S. Magistrate Judge Valerie Couch. The court ordered the defendants released on bond under certain conditions pending trial.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.
The maximum possible penalties for the civil rights violations are life in prison, without the possibility of parole, or death. By statute, the Attorney General must decide whether or not to pursue a sentence involving the death penalty.
The case was investigated by the Oklahoma City Division of the FBI. The case is being prosecuted by Assistant U.S. Attorney Susan Dickerson Cox from the U.S. Attorney’s Office and Trial Attorney Michael Khoury from the Justice Department’s Civil Rights Division.
Justice Department Settles Lawsuit on Behalf of New Jersey Air Force National Guard MemberRead the Press Release
WASHINGTON — The Department of Justice announced today the settlement of a lawsuit filed on behalf of Anthony D. Jackson, an Air Force National Guard member, against Union County College (UCC) under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
Jackson and UCC jointly submitted a consent decree to the court that, if approved, will resolve all claims asserted by Jackson in the case. The consent decree requires UCC to pay Jackson for lost wages and other damages.
The complaint, filed on Dec.14, 2007, alleged that UCC suspended Jackson from his job as a security officer, discharged him from that job while he was on active military duty and failed promptly to re-employ him upon his return from active military duty, because of his membership in, or obligation to perform service in, the uniformed services.
"Service members should not be made to fear for their livelihood because they answered our country’s call," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Department of Justice is committed to protecting the rights of the brave women and men who sacrifice to serve and protect America."
The Department’s Civil Rights Division places a high priority on the enforcement of service-members’ rights under USERRA. Additional information about USERRA can be found on the Department of Justice Web site at the following link http://www.servicemembers.gov, and on the Department of Labor website at the following link http://www.dol.gov/vets/programs/userra/main.htm.
Justice Department Settles Lawsuit on Behalf of Kansas Air Force ReservistRead the Press Release
WASHINGTON – The Justice Department today announced a settlement that, if approved by the court, will resolve allegations in a lawsuit the Department filed on behalf of Randall A. Slocum, an Air Force Reservist, against the city of Iola, Kan.
The complaint, filed in U.S. District Court in Kansas City, Kan., in December 2008, alleged that the city of Iola violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by taking into consideration Slocum’s military service obligations when it disciplined him and denied him a wage increase. USERRA was enacted in 1994 to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Among other things, USERRA prohibits employers from discriminating against service members because of their military service obligations.
Under the terms of the settlement, the city is required to pay Slocum back wages, liquidated damages, and to provide him the wage increase the city denied him based on his military service. The settlement also requires the city to correct its employment records to remove references of Slocum’s unjustified discipline based on military service.
"The settlement reached today continues this nation’s commitment to service members who sacrifice to serve this country. The agreement demonstrates that reservists should be allowed to serve without fear of being penalized in their civilian careers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in our nation’s military."
The Department of Justice filed the lawsuit after receiving Slocum’s complaint from the Veterans’ Employment and Training Service of the Department of Labor, upon completion of its investigation and settlement efforts.
The Department’s Civil Rights Division places a high priority on the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Department of Justice Web site at the following link: http://www.servicemembers.gov, and on the Department of Labor Web site at the following link: http://www.dol.gov/vets/programs/userra/main.htm.
Final Defendant Pleads Guilty to Anti-Obama AssaultsRead the Press Release
WASHINGTON - Ralph Nicoletti pleaded guilty in Brooklyn, N.Y., federal court today before U.S. District Judge Carol B. Amon to committing three assaults targeting African-American residents in Staten Island, N.Y., on the night of President Barack Obama’s election victory. Nicoletti was the last of four defendants to plead guilty in the federal prosecution stemming from the attacks. The other three defendants – Bryan Garaventa, Michael Contreras and Brian Carranza – previously pleaded guilty to conspiring to commit the hate crime assaults and each face sentences of up to 10 years in prison. As part of his plea, Nicoletti has agreed to a sentence of 12 years, subject to the court’s approval.
The guilty plea was announced by Loretta King, Acting Assistant Attorney General for the Department of Justice’s Civil Rights Division; Benton J. Campbell, U.S. Attorney for the Eastern District of New York; Joseph M. Demarest, Jr., Assistant Director-in-Charge, FBI, New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department.
At the plea proceeding, Nicoletti admitted that on Nov. 4, 2008, the night of the presidential election, the defendants decided to assault African-Americans in Staten Island after President Obama was declared the winner of the election. The defendants targeted African-Americans believing that they had voted for President Obama. Nicoletti drove the group to the Park Hill section of Staten Island, a predominantly African-American neighborhood, where they came upon an African-American teenager and assaulted him. Nicoletti struck the teenager with a metal pipe and Garaventa hit him with a collapsible police baton.
Nicoletti then drove to the Port Richmond section of Staten Island, where the defendants assaulted an unidentified African-American man. During that assault, Garaventa tripped the victim and pushed him to the ground.
The third assault was against an individual whom the defendants mistakenly believed was African-American. The plan was for Contreras to hit the victim with the police baton as the defendants drove by him. Instead, Nicoletti deliberately drove his car into the victim’s body. The victim was thrown onto the hood of the car and hit the front windshield, smashing it. The victim was seriously injured and remained in a coma for several weeks after the attack.
"This successful prosecution sends a clear message that racially-motivated acts of violence targeted at those who are exercising their right to vote are intolerable and will be aggressively investigated and prosecuted," said Acting Assistant Attorney General King. "It is a tragedy that these crimes occur at all, but the Department of Justice will remain vigilant in our efforts to combat hate crimes, as they tear at the very fabric of our great nation."
"The conduct of the defendants is shocking and deplorable," stated U.S. Attorney Campbell. "On a night of historic significance, these four angry men assaulted their victims in an attempt to punish them for exercising a fundamental right of all Americans – the right to vote. Those who commit such crimes will be swiftly apprehended, prosecuted and punished. We are grateful for our partnership with the Department of Justice Civil Rights Division, the FBI and the New York City Police Department, which has been vital to the success of this case, and I particularly wish to thank the Richmond County District Attorney’s Office for its assistance in this matter."
"The crimes these defendants have now admitted to were violent assaults that in one case nearly killed a man," said FBI Assistant Director-in-Charge Demarest of the New York Field Office. "In attempting to intimidate voters, the defendants also violated the victims’ civil rights in a way that was an attack on the democratic process. These were serious crimes that prompted the serious response the FBI will always bring to bear in civil rights enforcement."
"It was important to make certain that those who seriously injured individuals, based on their race, did not escape justice," said Police Commissioner Raymond W. Kelly. "NYPD Inspector Michael J. Osgood, Commanding Officer of the NYPD Hate Crime Task Force, had the foresight to assign a special team on Election Night until 4 a.m. the next morning. As a result, his investigators were in position to respond quickly to the bias attacks as reports of them began to emerge. Detectives located an eyewitness to one of the attacks, and their subsequent distribution of flyers in the Rosebank area of Staten Island over three days led to the first major break in the case. I also want to thank the FBI agents who helped, and the federal prosecutors who succeeded in winning the guilty pleas."
The government’s case is being prosecuted by Assistant U.S. Attorneys Pamela K. Chen and Margo K. Brodie, and Department of Justice Special Litigation Counsel Kristy Parker.
Brothers Plead Guilty to Conspiring to Steal Military Optics from U.S. Marine Corps and Export Them OverseasRead the Press Release
WASHINGTON – Timothy Oldani, 24, of Scott Depot, W.Va., and Joseph Oldani, 21, of Camp Lejeune, N.C., both pleaded guilty today in the Southern District of West Virginia to conspiring to steal military optics from the U.S. Marine Corps and illegally export them from the United States, the Justice Department announced.
At his hearing, Joseph Oldani admitted that while on active duty with the U.S. Marine Corps, he stole high-grade optics from his station in Kings Bay, Ga. Timothy, Joseph’s brother, is a former member of the U.S. Marine Corps reserves. Joseph admitted he transported the stolen optics to Timothy, in Scott Depot, where Timothy subsequently sold the stolen items on the Internet – mainly on eBay.
The convictions stem from a joint investigation conducted by the U.S. Department of Defense, Office of Inspector General -- Defense Criminal Investigative Service and by U.S. Immigration and Customs Enforcement.
The stolen optics are not the type available for public purchase, but are specially designed for military purposes. In fact, these stolen optics are on the U.S. Munitions List and subject to presidential control as defense articles prohibited from export without a special license. Neither Oldani had a license.
The investigation revealed that the Oldanis sold and shipped the stolen optics to purchasers in Hong Kong, Japan and Taiwan.
The duo each face up to 60 months in prison and a $250,00 fine when they are sentenced on May 18, 2009. Assistant U.S. Attorney Steven I. Loew is handling the prosecution in coordination with the Counterespionage Section of the Justice Department’s National Security Division .
30 January 2009
Justice Department Settles Lawsuit Alleging Gender Discrimination and Retaliation by the Puerto Rico Police DepartmentRead the Press Release
WASHINGTON — The Department of Justice today announced that it has reached a consent decree with the Policía de Puerto Rico (Puerto Rico Police Department or PRPD) that will, if approved by the federal district court, resolve a complaint the Department filed in March 2008 alleging that the PRPD engaged in unlawful employment discrimination based on gender and retaliation, in violation of Title VII of the Civil Rights Act. Title VII prohibits employment discrimination on the basis of race, color, sex, national origin and religion, and also prohibits retaliation against persons for filing charges of discrimination.
The U.S. government alleged in its March 2008 complaint that the PRPD discriminated against Officer Jeannette Caraballo Lopez (Caraballo) on the basis of her sex by, among other ways, requiring her to perform secretarial tasks not required of male officers and by subjecting her to sexually discriminatory comments. For example, while working as an agent-investigator in the Division of Investigation of Stolen Vehicles for the Fajardo Area, she was told that the Division was, "not for females," or words to that effect, in violation of Title VII. The complaint also alleged that the PRPD retaliated against Officer Caraballo because she opposed employment practices that she reasonably believed to be unlawful, and because she filed a charge with the Equal Employment Opportunity Commission under Title VII. The complaint further alleged that the PRPD retaliated against Officer Manuel Bonilla Carrasquillo (Bonilla) because he opposed employment practices that he reasonably believed to be unlawful.
Under the terms of the consent decree, the PRPD will offer monetary awards totaling $125,000, including attorney’s fees, to the two officers. Officer Caraballo also will be offered reinstatement to an agent-investigator position with remedial seniority and related benefits and compensation. Officer Bonilla, who retired in September 2007, will be offered all the benefits and compensation to which he would have been entitled had he remained in his previous position without interruption until his retirement. The PRPD will also provide training on equal employment opportunity law, including discrimination based on gender and retaliation, to all supervisors in the Fajardo Area.
"We are pleased that the PRPD has agreed to resolve this case by entering into an appropriate consent decree," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The law does not allow employers to discriminate against women by only allowing them to perform duties that have been traditionally deemed ‘female’ assignments, or to retaliate against employees because they participate in an employment discrimination investigation."
The enforcement of Title VII continues to be a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its Web site at http://www.usdoj.gov/crt/.
Former Shipping Executive Sentenced to 48 Months in Jail<br /> for His Role in Antitrust ConspiracyRead the Press Release
WASHINGTON — A former high-level shipping executive was sentenced today to serve 48 months in jail and to pay a $20,000 criminal fine for his role in an antitrust conspiracy involving the transportation of goods to and from the continental United States and Puerto Rico by ocean vessel, the Department of Justice announced today. This is the longest jail sentence ever imposed for a single antitrust charge.
Peter Baci of Jacksonville, Fla., pleaded guilty on Oct. 20, 2008, in the U.S. District Court in Jacksonville for his role in the conspiracy, which began at least as early as May 2002 and continued until as late as April 2008. Baci was charged with engaging in a conspiracy to suppress and eliminate competition in the coastal water freight transportation services between the continental United States and Puerto Rico by agreeing to allocate customers, agreeing to rig bids submitted to government and commercial buyers, and agreeing to fix the prices of rates, surcharges, and other fees charged to customers.
Related antitrust charges remain pending in the U.S. District Court in Jacksonville against three other shipping executives: R. Kevin Gill and Gregory Glova, of Charlotte, N.C. and Gabriel Serra, of San Juan, Puerto Rico. A related obstruction of justice charge is also pending against a fifth shipping executive, Alexander Chisholm, of Jacksonville.
"Today’s sentencing should make clear that individuals who violate the antitrust laws will be prosecuted to the fullest extent of the law," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "Significant jail time will be a consequence of harming consumers and competition in both the continental United States and Puerto Rico."
Baci worked for a large U.S. company that provides freight shipping services to customers transporting goods between the continental United States and Puerto Rico. These companies transport a variety of cargo shipments, such as heavy equipment, medicine, food and consumer goods. Sales of freight services in the United States to Puerto Rico shipping lane total hundreds of millions of dollars every year, as ocean shipping is a primary way for people in Puerto Rico to receive essential goods.
In June 2004, Congress raised the maximum sentence for antitrust crimes from three years imprisonment to 10 years imprisonment. While longer jail sentences have been imposed against individuals who violated the antitrust laws together with other crimes, this case represents the first time that an individual was sentenced to more than three years for a single antitrust charge.
The current prosecution and pending charges arose from an ongoing federal antitrust investigation into bid rigging and other anticompetitive conduct in the shipping industry, which is being conducted by the National Criminal Enforcement Section of the Antitrust Division and the Jacksonville Field Office of the Federal Bureau of Investigation (FBI). Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, or the FBI’s Jacksonville Field Office at 904-721-1211.
Former Mendenhall, Miss., Police Chief Pleads Guilty to Using Excessive ForceRead the Press Release
WASHINGTON – Jimmy "Jimbo" Sullivan, the former chief of police in Mendenhall, Miss., pleaded guilty today to a felony civil rights violation, admitting that he used excessive force when he repeatedly stomped on the head of an arrestee, Acting Assistant Attorney General Loretta King for the Civil Rights Division and U.S. Attorney Dunn Lampton for the Southern District of Mississippi announced.
On July 22, 2005, Sullivan joined other law enforcement officers in the apprehension of a man who had led police on a car chase. Today in court, Sullivan admitted that at the end of the car chase, he pulled the man from his car and then repeatedly stomped on the man’s head as the man lay face-down in the street. A local hospital treated the man for injuries sustained during the assault.
"The defendant, who was sworn to serve and protect the people, went from enforcing the law to breaking the law," said Acting Assistant Attorney General Loretta King. "The Department of Justice will continue to prosecute vigorously those law enforcement officers who abuse their power by willfully using excessive force."
The case was investigated by the Jackson office of the FBI, and was prosecuted by Trial Attorney Patti Sumner of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Glenda Haynes of the Southern District of Mississippi.
Former Lobbyist Pleads Guilty to Conspiracy to Commit Honest Services FraudRead the Press Release
WASHINGTON – A former lobbyist pleaded guilty today to conspiring with others to commit honest services fraud, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Todd A. Boulanger, 37, pleaded guilty before U.S. District Judge Richard W. Roberts in the District of Columbia. According to court documents, Boulanger worked as a lobbyist from 1999 through 2004 with Jack Abramoff and others. Boulanger, Abramoff, and other lobbyists working with them, sought to advance the interests of groups and companies they represented by lobbying federal legislative and executive branch officials. According to court documents, Boulanger admitted that he, Abramoff and others established contacts with federal legislative and executive branch officials who could use their influence and positions to take official actions favorable to Boulanger and the other lobbyists. After establishing contacts with certain public officials, Boulanger admitted that he, Abramoff, and others offered and gave numerous things of value to these public officials in an effort to reward them for actions they had taken, to influence the public officials in their official actions, and to make them more receptive to requests for official actions in the future.
Boulanger admitted that the things of value he and others provided as part of this conspiracy included all-expenses-paid travel, tens of thousands of dollars-worth of tickets to professional sporting events, concerts and other events, and frequent and expensive meals and drinks at Washington, D.C.-area restaurants and bars. According to court documents, the public officials, in turn, agreed to take and took favorable official actions, which included the insertion or protection of legislative appropriations; the insertion, protection, removal or prevention of legislative amendments; and lobbying by the public officials of other legislative and executive branch officials to take or abstain from taking official action. According to court documents, Boulanger admitted that he, Abramoff and others attempted to conceal their practice of providing things of value to public officials.
Specifically, according to the plea agreement, Boulanger sought the assistance of a staff member who worked on the U.S. House of Representatives, Committee on Transportation and Infrastructure. One of Boulanger’s clients was an equipment rental company, on whose behalf Boulanger and another lobbyist, James Hirni, sought to have two legislative amendments inserted into the Federal Highway Bill in 2003. Boulanger admitted that, with his knowledge and approval, Hirni and another individual provided an all-expenses-paid trip on Oct. 18 and 19, 2003, to game one of the Baseball World Series in New York City to the committee staff member and to Trevor Blackann, a former staff member to a U.S. Senator. On Oct. 22, 2003, Boulanger and Hirni provided information about the amendments they were seeking to the committee staff member and Blackann. Later, after one of the amendments had been inserted into the Senate version of the Federal Highway Bill, Boulanger, Hirni, Blackann, the committee staff member and another individual took steps to protect that amendment
Boulanger also admitted that he and others provided a stream of things of value to a different Senate staff member in order to influence that individual to take official action favorable to Boulanger’s lobbying firm and one of Abramoff’s Native American tribal clients. From March 2002 through March 2004, Boulanger and others provided more than $25,000 worth of tickets, meals and drinks to the Senate staff member. During the same time period, the Senate staff member provided and agreed to provide official actions sought by Boulanger and others on repeated occasions. In addition, Boulanger admitted that he provided more than $10,000 worth of tickets, meals and drinks to the legislative director for a U.S. Senator. Boulanger admitted he met the legislative director on July 16, 2002, and provided the things of value for 20 months following their first meeting.
The case is part of the ongoing investigation into the activities of former lobbyist Jack Abramoff and his associates. Abramoff pleaded guilty in January 2006 to conspiracy to commit honest services fraud, honest services fraud and tax evasion. Abramoff was sentenced in September 2008 to 48 months in prison and is cooperating in the investigation. Both Hirni and Blackann have pleaded guilty for their roles in the scheme and are cooperating with the investigation. In all, seventeen individuals, including lobbyists and public officials, have pleaded guilty, been convicted at trial, or are awaiting trial as a result of the investigation.
This case is being prosecuted by trial attorneys M. Kendall Day and Peter C. Sprung of the Public Integrity Section, headed by Section Chief William M. Welch II. The investigation is being conducted by the FBI.
Former Employees of Emergency Vehicle Vendors Sentenced for Conspiring to Defraud Employers on Homeland Security ContractRead the Press Release
WASHINGTON – Two Florida homeland security vendor employees were sentenced today for conspiracy to commit wire fraud and honest services fraud by depriving their employers of money and the right of honest services, the Department of Justice announced today.
Luis M. Candelario, a former sales representative for JPS Communications Inc., was sentenced to serve 18 months in jail. Thomas E. Vander Luitgaren (Vander), a former general manager of AK Specialty Vehicles LLC (AKSV), was sentenced today to serve 18 months of home confinement except for employment and four years probation. Candelario and Vander were ordered to pay jointly $238, 371 in restitution to JPS and $11,050 in restitution to Advanced Vehicle Systems LLC, a subcontractor of AKSV. Candelario and Vander were convicted of the charges on Oct. 1, 2008, following a two-week trial.
Candelario and Vander originally were indicted on Dec. 5, 2007, in U. S. District Court in Orlando, Fla., for participating in a kickback scheme with Angel L. Rodriguez-Vasquez (Rodriguez-Vasquez), a former sales representative for Fisher Scientific International LLC, to defraud their respective employers. The kickback scheme involved federal emergency vehicle contracts with the U.S. Virgin Islands government. According to the charges, the scheme began in September 2003 and continued through July 2005. Rodriguez-Vasquez pleaded guilty to participating in the conspiracy in October 2007 and is awaiting sentencing.
"Today’s sentencing demonstrates that those who seek to enrich themselves by engaging in kickback schemes designed to defraud their employers will be held accountable," said Scott D. Hammond, Acting Assistant Attorney General of the Department’s Antitrust Division.
"American taxpayers deserve honesty from those who serve them," General Services Administration Inspector General Brian Miller said. "Contractors who defraud the government will be punished."
This ongoing investigation is being conducted by the Antitrust Division’s Atlanta Field Office in conjunction with the General Services Administration’s Office of Inspector General (New York Field Office) and the U.S. Attorney’s Office for the Middle District of Florida. Anyone with information concerning price fixing, bid rigging or kickback schemes involving homeland security contracting in the Southeast United States, Virgin Islands, or Puerto Rico should contact the Atlanta Field Office of the Antitrust Division at 404-331-7100.
Eight Charged with Illegally Harvesting and Selling Striped BassRead the Press Release
WASHINGTON— Five commercial fishermen in St. Mary’s County, Md., a fish wholesaler, its owner and an employee have been charged in Maryland and Washington, D.C., for their role in the illegal harvest, sale, and purchase of hundreds of thousands of pounds of striped bass from the Chesapeake Bay and Potomac River from 2003 through 2007, the Justice Department announced today.
According to the criminal informations, the individuals and corporation have been charged with violating the Lacey Act, which is a federal law that prohibits individuals or corporations from creating false records for fish or wildlife, and from transporting, selling, or buying fish and wildlife harvested illegally. Specifically, the informations allege that the commercial fishermen transported and sold striped bass, knowing that they had falsely recorded on their permit allocation cards the numbers and weight of the striped bass they caught and failed to accurately record the times when the fish were actually harvested.
Individuals charged include:
- Thomas L. Crowder Jr. of Leonardtown, Md.
- John W. Dean of Scotland, Md.
- Charles Quade of Churchtown, Md.
- Thomas L. Hallock of Catharpin, Va.
- Keith A. Collins of Deale, Md.
- Robert Moore Sr. of Falls Church, Va.
- Robert Moore Jr. of Ashburn, Va.
The company charged is Cannon Seafood Inc., located in Washington, D.C., with Robert Moore Sr., as its owner.
Two additional St. Mary’s County commercial fishermen were indicted in October 2008 for similar conduct. Joseph Peter Nelson and Joseph Peter Nelson, Jr., are charged in the District of Maryland in a seven count felony indictment, alleging one count of felony conspiracy to violate the Lacey Act, and six substantive felony Lacey Act counts. The indictment also seeks forfeiture of vessels and vehicles allegedly used by the Nelsons in carrying out the offenses. The indictment alleges that from September 2003 through March 2007 the defendants exceeded their quota of Maryland striped bass by failing to check in all the fish they caught and by falsely inflating the numbers of fish that they allegedly checked-in in order to secure additional Maryland tags. It also alleges that the defendants placed Maryland tags on fish that were not caught in that state’s regulated waters, and placed tags on fish that falsely indicated that they were caught by hook and line when they were not. The indictment further alleges that the Nelsons engaged in a series of sales of unlawfully caught fish to undercover agents who were posing as out of state fish wholesalers.
In early spring each year, wild coastal striped bass (Morone saxatilis), known regionally as rockfish, enter the estuary or river where they were born to spawn, and then return to ocean waters to live, migrating along the coastline. Fish spawned from the Chesapeake Bay ecosystem contribute the greatest number of striped bass to the Atlantic coastal fishery, and the commercial fishery for Atlantic coastal striped bass is based primarily on migrations of fish born in the Chesapeake Bay area. Striped bass do not die after spawning. They may live up to 30 years and reach 50 pounds or more. The population of coastal Atlantic striped bass depends heavily upon the capability of older, larger, female striped bass to successfully reproduce.
Maryland regulates the commercial catch of striped bass from its waters and enforces the regulations of the Potomac River Fisheries Commission, which regulates the commercial catch of striped bass from Maryland waters located in the main stem of the Potomac River. The striped bass management and protection measures, including tagging requirements, closed seasons, size limits, and quota amounts, are focused on maintaining a target spawning stock to protect the fishery from over-fishing. Maryland also requires that all fish caught by a commercial fisherman be weighed and counted at a designated state check-in station, with the total number and total weight of the fish caught recorded on the commercial fisherman’s permit allocation card and transmitted to the state of Maryland on a check station daily catch reporting sheet.
A criminal information and indictment are not a finding of guilt. An individual charged by criminal information or indictment is presumed innocent unless and until proven guilty in a court of law.
The Lacey Act carries a maximum penalty of 5 years imprisonment and a fine of up to $250,000, plus the potential forfeiture of the vessels and vehicles used in committing the offense.
The charges are a result of the investigation by an interstate task force formed by the U.S. Fish and Wildlife Service, the Maryland Natural Resources Police and the Virginia Marine Police, Special Investigative Unit in 2003. The task force conducted undercover purchases and sales of striped bass in 2003, engaged in covert observation of commercial fishing operations in the Chesapeake Bay and Potomac River area, and conducted detailed analysis of area striped bass catch reporting and commercial business sales records from 2003 through 2007. The investigation is continuing, and charges against others are possible.
These cases are being prosecuted by Senior Trial Attorney Wayne Hettenbach of the Justice Department’s Environmental Crimes Section, and Assistant U.S. Attorney Stacy Belf of the U.S. Attorney’s Office for the District of Maryland with assistance from the U.S. Attorneys’ Office for the District of Columbia.
29 January 2009
Justice Department Sues Ypsilanti, Mich., Landlords for Sexual HarassmentRead the Press Release
WASHINGTON — The Justice Department today filed suit against Ronald D. Peterson and Glen E. Johnson, the owner and rental manager, respectively, of 11 single family homes in Ypsilanti, Mich., alleging a pattern or practice of sexual harassment of female tenants.
The complaint, filed today in U.S. District Court for the Eastern District of Michigan, alleges that Johnson subjected female tenants to discrimination on the basis of sex, including severe, pervasive and unwelcome sexual harassment. The complaint alleges that Johnson made unwanted verbal sexual advances, entered the apartment of female tenants without permission or notice, granted and denied tangible housing benefits based on sex, and took adverse action against female tenants when they refused or objected to his sexual advances. The complaint also alleges that Peterson, the owner of the properties, is liable for Mr. Johnson’s alleged misconduct, and that he knew or should have known of Johnson’s alleged misconduct but failed to take reasonable preventive or corrective measures. This case is being handled jointly by the Civil Rights Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Michigan in Detroit.
"No woman should have to live in fear of sexual harassment in her home," said Acting Assistant Attorney General Loretta King. "Landlords should be on notice that the Justice Department vigorously enforces the Fair Housing Act throughout the United States."
Acting U.S. Attorney, Terrence Berg added: "The conduct alleged in today’s complaint is unacceptable – as well as a violation of our federal fair housing laws. We are taking action because no one should face such inappropriate harassment in their own homes."
The suit seeks monetary damages for victims, civil penalties and a court order barring future discrimination. Individuals who are or have been tenants in properties owned or managed by Peterson or Johnson who believe they may be victims of sexual harassment, or who have other relevant information about the case, are encouraged to call the Department of Justice’s tip line at 1-800-896-7743 and leave a message in Box 994 or email the Department at [email protected]. They may also call the United States’ Attorney’s Office at 313-226-9727.
Fighting illegal housing discrimination is a top priority of the Justice Department. The Federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Additional information about the Fair Housing Act is also available at www.HUD.gov.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Justice Department Settles Allegations of Disability and Religious Discrimination Against Nashville, Tenn.Read the Press Release
WASHINGTON - The Justice Department today announced a settlement resolving allegations that the Metropolitan Government of Nashville and Davidson County (Metropolitan Government) violated the Fair Housing Act (FHA) and the Religious Land Use and Institutionalized Persons Act (RLUIPA) by discriminating against Teen Challenge, a Christian substance abuse treatment program.
In a federal lawsuit filed in September 2008, the U.S. government alleged that the Metropolitan Government discriminated against individuals with disabilities in violation of the FHA and imposed a substantial burden on religious exercise in violation of RLUIPA. According to the complaint filed by the U.S. government, the Metropolitan Government denied Teen Challenge a building permit to operate in Goodlettsville, Tenn., and amended its zoning code in a manner that prevented Teen Challenge from using the property. The settlement resolves the U.S. government’s claims as well as a related lawsuit filed by Teen Challenge and participants in Teen Challenge’s program.
"Cases like this show how the FHA and RLUIPA work together to ensure that persons with disabilities are not discriminated against and that religious groups seeking to aid those persons can operate without unjustifiable burdens," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
"Discrimination of the type alleged in this case should never be tolerated by a free society," said U. S. Attorney Ed Yarbrough following the settlement. "Substance abuse programs perform a valuable service to persons suffering from addiction." he added.
The settlement, which must still be approved by the court, requires the Metropolitan Government to train nearly 100 employees and officials who make zoning and land use decisions on the requirements of the FHA and RLUIPA, to appoint a compliance officer to receive complaints and ensure compliance with the settlement, and to provide periodic reports to the Justice Department. As part of the settlement, the Metropolitan Government rescinded the amendment to its zoning code that affected Teen Challenge and adopted a reasonable accommodation policy for individuals with disabilities.
The Metropolitan Government will also pay a $20,000 civil penalty to the United States and $50,000 to participants in Teen Challenge’s program. Monetary relief to Teen Challenge is being determined by the final court order in the related case of Teen Challenge International, Nashville Headquarters, et al. v. Metropolitan Government of Nashville and Davidson County.
More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Justice Department Files Lawsuit on Behalf of North Dakota Army National Guard MemberRead the Press Release
WASHINGTON — The Department of Justice today filed a lawsuit on behalf of Suzanne L. Halverson, an Army National Guard member, against Grand Forks County, N.D., alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which prohibits employers from discriminating against service-members because of their past, current or future military service obligations.
The Department’s complaint, filed in the U.S. District Court in Grand Forks, alleges that Grand Forks County violated USERRA by taking into consideration Ms. Halverson’s military service obligations when it denied her promotion to a permanent juvenile detention officer position in the county’s correctional center.
"Our men and women in uniform must be able to serve their country without fear of being penalized in their civilian careers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Justice Department remains committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in our nation’s military."
The Department of Justice filed the lawsuit after receiving Ms. Halverson’s complaint from the Veterans’ Employment and Training Service of the Department of Labor (DOL), once DOL’s investigation and settlement efforts were complete.
The Department’s Civil Rights Division places a high priority on the enforcement of service-members’ rights under USERRA. In 2008, the Civil Rights Division’s Employment Section filed a record high number of USERRA suits. Additional information about USERRA can be found on the Department of Justice Web site at the following link: http://www.servicemembers.gov, and on the DOL Web site at: http://www.dol.gov/vets/programs/userra/main.htm.
Imprisoned Spy and His Son Indicted on Charges of Actingas Russian Agents and Money LaunderingRead the Press Release
WASHINGTON -- A federal indictment was unsealed today in U.S. District Court for the District of Oregon charging Harold James Nicholson, 58, of Sheridan, Ore., and Nathaniel James Nicholson, 24, of Eugene, Ore., with two counts of Conspiracy, one count of Acting as Agents of a Foreign Government, and four counts of Money Laundering.
Both defendants are scheduled to appear today at 1:30 p.m. before U.S. Magistrate Janice M. Stewart for arraignment on the indictment. The maximum penalty for the substantive charge of acting as an agent of a foreign government is ten years imprisonment, while the maximum penalty for conspiracy to act as an agent of a foreign government is five years imprisonment. Each money laundering count, including the money laundering conspiracy, carries a maximum of twenty years imprisonment. The indictment also seeks forfeiture of funds provided to Nathaniel J. Nicholson by the Russian Federation, which the indictment alleges are the proceeds of his father’s past espionage activities.
As set forth in the indictment, Harold J. Nicholson, a former CIA employee, is serving a 283-month (more than 23-year) sentence at the Federal Correctional Institution in Sheridan, Ore., for a 1997 conviction of conspiracy to commit espionage. The indictment further alleges that defendant Harold J. Nicholson, working through his son Nathaniel J. Nicholson, received cash proceeds of his past espionage activities from, and passed information to, agents of the Russian Federation between 2006 and 2008.
As described in the indictment, during the course of the conspiracy, Nathaniel J. Nicholson met with his father Harold J. Nicholson on several occasions to obtain information that was intended to be provided to the Russian Federation. Defendant Nathaniel J. Nicholson then travelled to various places to meet with representatives of the Russian Federation, including San Francisco, Calif.; Mexico City, Mexico; Lima, Peru; and Cyprus, where he collected money from them and received additional instructions. Defendant Nathaniel J. Nicholson then brought the funds he received back to Oregon to disperse to family members at the direction of his imprisoned father.
The indictment further alleges that the funds paid by the Russian Federation to defendant Nathaniel J. Nicholson represented proceeds of his father’s past espionage activities. For more information, please refer to the indictment and search warrant affidavit.
- http://www.usdoj.gov/usao/or/PressReleases/2009/NicholsonIndictment.pdf
U.S. Attorney for District of Oregon, Karin J. Immergut stated, "The conduct alleged in the indictment shows a sinister and continuing scheme by a former senior CIA officer turned spy to betray the United States of America for financial gain. Thanks to the continued vigilance of the FBI, and the extraordinary cooperation of the Bureau of Prisons, we expect to hold a former spy, and the son who joined him in his criminal conduct, responsible for their actions."
Matthew G. Olsen, Acting Assistant Attorney General for National Security, said, "Today’s indictment alleges that an imprisoned spy recruited and trained his own 24-year-old son to travel the globe to collect on past spying debts and channel information to foreign agents. These charges underscore the continuing threat posed by foreign intelligence services and should send a clear message to others who would consider selling out their country for money."
"Harold James Nicholson, already convicted of spying and compromising national security, thought he could profit from his previous espionage despite being behind bars," said Executive Assistant Director Arthur M. Cummings, II, of the FBI National Security Division. "Now, along with his son, he again acted against the interests of the United States, according to the charges."
"This is an amazing case," said David Ian Miller, Special Agent in Charge of the FBI in Oregon. "Harold James Nicholson, a convicted spy, was allowed to serve time in a federal prison in Oregon to be near his family. Without regret, he used that proximity to his family to continue contact with the foreign country for which he was previously convicted of spying."
The FBI and the Federal Bureau of Prisons investigated this case. Assistant U. S. Attorneys Pamala Holsinger and Ethan Knight are prosecuting this case. Trial Attorney Patrick Murphy of the Counterespionage Section of the Justice Department’s National Security Division is also assisting.
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.
Former NFL Player, Ex-Casino Owner and Nevada Businessman Indicted in Massive Tax Fraud SchemeRead the Press Release
WASHINGTON - A Las Vegas federal grand jury has returned an indictment charging Alan Rodrigues, a former pit boss and casino owner from Henderson, Nev.; Weston Coolidge, a businessman from Las Vegas; and Joseph Prokop, a former National Football League punter from Upland, Calif., with a tax fraud scheme for their promotion of a fraudulent tax product through the now defunct National Audit Defense Network (NADN), the Justice Department and Internal Revenue Service (IRS) announced today.
The defendants were charged with one count of conspiracy to defraud the United States, 15 counts of aiding in the preparation of false tax returns, and five counts of mail fraud for their part in the scheme. According to the indictment, Rodrigues was NADN’s general manager, Coolidge was NADN’s chairman and president and Prokop was the national marketing director of Oryan Management and Financial Services. It is alleged that Oryan Management and Financial Services is a sole proprietorship, operating in Upland, Calif., that paid NADN a commission to sell Tax Break 2000.
According to the indictment, in early 2001, NADN began selling Tax Break 2000, a shopping Web site that the defendants fraudulently stated would allow customers to claim legitimate income tax credits and deductions under the Americans with Disabilities Act of 1990 (ADA) and the Internal Revenue Code. NADN allegedly marketed its services nationwide through radio advertisements and promotional appearances on talk radio programs. The indictment further alleges that, from 2001 through 2004, the defendants caused NADN to sell Tax Break 2000 approximately 21,610 times to customers around the country. Throughout the scheme, Tax Break 2000 was also known as tb2000.com, shopn2000.com and mallforall.com.
According to the indictment, Tax Break 2000 was an attempt to abuse a provision of the ADA that provides a "disabled access credit" to help offset necessary, reasonable expenditures made by eligible small businesses to comply with the ADA’s requirement that their facilities be accessible to disabled persons. The indictment alleges that these expenditures include amounts paid to remove architectural barriers, to remove communication barriers, to provide interpreters, to acquire or to modify equipment, or to provide other similar services, modifications, materials or equipment.
The indictment further alleges that the defendants defrauded the United States and their customers in a number of ways. Some of the ways alleged in the indictment included creating Tax Break 2000 as a Web site that was not accessible to the disabled so that they could sell modifications that purported to make it accessible to the disabled; falsely telling customers that purchasing the modifications entitled them to a lawful income tax credit and deduction for having made their Web sites accessible to the disabled; and choosing the sale price for the modifications, $10,475.00, solely to maximize the fraudulent income tax credits and deductions.
Additionally, the indictment alleges the defendants induced customers to sign supposed promissory notes for approximately 80% of the $10,475.00 purchase price of the modifications, when they had no expectation that the customers would make payments on the promissory notes; paying attorneys to write favorable opinion letters about Tax Break 2000 to refute a legal memorandum in which NADN’s own tax experts determined that Tax Break 2000 was illegal and could subject those who sold it to criminal penalties; creating false IRS Forms 1099 to create the appearance that customers’ Web sites were generating commission income and that the purported promissory notes were being paid off; and preparing false tax returns on their customers’ behalf.
On April 13, 2004, the Justice Department’s Tax Division filed a complaint seeking to enjoin, among others, NADN, Rodrigues, Coolidge and Prokop from selling fraudulent tax schemes, including Tax Break 2000. NADN ceased operations in May 2004. In June 2004, a federal bankruptcy court in Las Vegas entered a permanent injunction against NADN. Prokop was also enjoined in June 2004, after consenting to entry of a permanent injunction. In April 2005, Rodrigues and Coolidge both consented to permanent injunctions.
An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, the defendants face maximum potential sentences of 150 years in prison and millions of dollars in fines.
The case is being prosecuted by Tax Division trial attorneys Jay R. Nanavati and Timothy J. Stockwell. The case was investigated by the IRS, Criminal Investigation Division.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site http://www.ustreas.gov/irs/ci/.
28 January 2009
Owner of Pharmaceutical Wholesale Company Pleads Guilty to Medicare FraudRead the Press Release
WASHINGTON – The owner and operator of HME Solutions Inc., dba Lifecare Medical (Lifecare Medical), a licensed pharmaceutical wholesale company in Miami, pleaded guilty today to defrauding the Medicare program in connection with a $5.3 million HIV-infusion fraud scheme, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced.
Harold Sio, 33, pleaded guilty to conspiracy to commit healthcare fraud and conspiracy to commit money laundering before U.S. District Judge Ursula Ungaro in Miami. At the plea hearing, Sio admitted that between August 2004 and November 2006, he conspired with Juan A. Marrero and Orlando Pascual Jr., the owners of Medcore Group LLC (Medcore), to commit health care fraud and launder the proceeds of that health care fraud.
In his plea, Sio admitted that he supplied pharmaceuticals to Marrero and Pascual for the purpose of committing Medicare fraud. Sio also admitted providing invoices that documented huge quantities of pharmaceuticals, which were received by Medcore, when in fact he only delivered small amounts. Sio acknowledged that he accepted payment from Marrero and Pascual then returned cash to them so that the cash could ultimately be used to pay patients. Marrero and Pascual pleaded guilty in January 2009 to Medicare fraud and are scheduled for sentencing on April 3, 2009. Sio is scheduled to be sentenced on March 24, 2009.
In pleading guilty, Marrero and Pascual both admitted that they falsely billed Medicare more than $5.3 million for unnecessary infusion treatments. Both Marrero and Pascual acknowledged that all the patients who received injections or infusions at Medcore were paid cash kickbacks to induce them to visit to the clinic.
Marrero and Pascual acknowledged that clinic employees intentionally manipulated patients’ blood samples to make the patients’ need for treatment appear legitimate, when in fact it was not, as well as to make the patients' medical files appear legitimate. According to court documents, physicians, a physician's assistant and phlebotomists, were used by Marrero and Pascual to help facilitate the scheme.
Four co-defendants in the case are scheduled for trial beginning Feb. 23, 2009, in the Southern District of Florida. An indictment is merely a charge, and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case was prosecuted by Deputy Chief Kirk Ogrosky, Assistant Chief John S. (Jay) Darden, and Trial Attorney Charles Reed of the Criminal Division’s Fraud Section and investigated by the Department of Health and Human Services, Office of the Inspector General and FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and U.S. Attorney Acosta of the Southern District of Florida. Since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 190 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.
27 January 2009
Three Men Indicted for Racially-Motivated Church Arson in Springfield, Mass.Read the Press Release
WASHINGTON – Three individuals were indicted today by a federal grand jury in the District of Massachusetts for conspiring to interfere with the civil rights of members of the Macedonia Church of God in Christ, a Springfield, Mass., church with a predominantly African-American congregation.
The indictment was announced by Loretta King, Acting Assistant Attorney General for the Civil Rights Division; U.S. Attorney Michael J. Sullivan for the District of Massachusetts; Glenn N. Anderson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Boston Field Division; Warren T. Bamford, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Mark Delaney, Superintendent of the Massachusetts State Police; William Bennett, Hampden County District Attorney; and Commissioner William J. Fitchet of the Springfield Police Department.
The church’s newly constructed building burned to the ground on Nov. 5, 2008, hours after the election of President Barack Obama. The indictment alleges that Benjamin Haskell, 22, Michael Jacques, 24, and Thomas Gleason, 21, all of Springfield, conspired to burn the church in retaliation for the election of the country’s first African-American president.
"These allegations of racial violence connected with the presidential election are serious and disturbing," said Acting Assistant Attorney General Loretta King. "The Justice Department will aggressively prosecute individuals who conspire to commit such acts of violence and intimidation."
The indictment alleges that several hours after Barack Obama was elected President, Haskell, Jacques and Gleason conspired to burn the Macedonia Church of God in Christ’s new under-construction church building, which was 75 percent complete at the time of the fire. According to the indictment, on Election Night, Haskell, Jacques and Gleason used racial slurs and expressed anger with the election of Barack Obama and discussed burning the Macedonia Church of God in Christ’s new church building because the church members, congregants and bishop were African-American. They then obtained gasoline, poured it on the interior and exterior of the new church building and started a fire that destroyed nearly the entire structure. Some of the responding firefighters suffered injuries as they worked to extinguish the blaze.
"Racism has devastating effects on individuals, and stifles the quality of life in the community," said U.S. Attorney Sullivan. "We will not tolerate those who victimize others and I am angered and saddened that the neighborhood has endured such cruel acts by those allegedly living in the same community."
If convicted, Haskell, Jacques and Gleason face a maximum prison sentence of 10 years to be followed by three years of supervised release. The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI; Bureau of Alcohol, Tobacco, Firearms and Explosives; Massachusetts State Police; Hampden County District Attorney’s Office and the Springfield Police Department. It is being prosecuted by Trial Attorney Erin Aslan of the Justice Department’s Civil Rights Division and Assistant U.S. Attorneys Paul Smyth and Kevin O’Regan of the U.S. Attorney’s Office for the District of Massachusetts.
Third Individual Pleads Guilty to Illegally Accessing Confidential Passport FilesRead the Press Release
WASHINGTON – A third individual pleaded guilty today to illegally accessing numerous confidential passport application files, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Gerald R. Lueders, 65, of Woodbridge, Va., pleaded guilty before U.S. Magistrate Judge Alan Kay in U.S. District Court for the District of Columbia to a one-count criminal information charging him with unauthorized computer access.
According to court documents, from June 1974 through September 2001, Lueders served as a Foreign Service Officer at the State Department. From fall 2005 to February 2008, he worked as a watch officer within the Office of Consular Affairs. Lueders has also been a retired annuitant since October 2001, serving as a recruitment coordinator in various State Department bureaus. According to information contained in plea documents, Lueders admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains, among other data, all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Lueders admitted that between July 2005 and February 2008, he logged onto the PIERS database and viewed the passport applications of more than 50 celebrities, actors, politicians, musicians, athletes, family members, members of the media, business professionals, colleagues and other individuals identified in the press. Lueders admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.
Lueders is the third current or former State Department employee to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing hundreds of confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing hundreds of confidential passport files. Cross’ sentencing is scheduled for March 23, 2009 and Lueders sentencing is scheduled for March 26, 2009.
The case is being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II. The case is being investigated by the State Department Office of Inspector General.
Information
Plea Agreement
Factual Basis for Plea