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27 January 2009
Former AIG Vice President Sentenced to Four Years in Prison <br /> for Role in Fraudulent Manipulation SchemeRead the Press Release
WASHINGTON – The former vice president of reinsurance of American International Group Inc. (AIG), was sentenced today to four years in prison for his role in a fraudulent scheme to manipulate AIG’s financial statements, the Department of Justice announced.
Christian M. Milton, 61, of Wynnewood, Pa., who served as vice president of reinsurance at AIG from approximately 1982 to March 2005, was convicted by a federal jury on Feb. 25, 2008, on charges of conspiracy, securities fraud, false statements to the U.S. Securities and Exchange Commission (SEC) and mail fraud. In addition to the prison term, Milton was sentenced by U.S. District Judge Christopher F. Droney to two years of supervised release following his release from prison and a $200,000 fine. Milton was ordered to surrender himself to federal authorities in 60 days.
Evidence presented at trial proved that Milton and his co-defendants, Ronald E. Ferguson, Elizabeth A. Monrad, Robert D. Graham and Christopher P. Garand, all former General Reinsurance Corporation (Gen Re) executive officers, engaged in a scheme to falsely inflate AIG’s reported loss reserves, a key indicator of financial health to insurance industry analysts and investors. According to trial evidence, the fraud was carried out through the use of two sham reinsurance transactions between subsidiaries of AIG and Gen Re in response to analysts’ criticism of a $59 million decrease in AIG’s loss reserves for the third quarter of 2000.
The two sham transactions, evidence showed, increased AIG’s loss reserves by $250 million in the fourth quarter of 2000 and $250 million in the first quarter of 2001, masking a declining trend in loss reserves in the face of premium growth. Evidence showed that AIG restated the transactions at issue in filings with the SEC in May 2005. Evidence presented at trial established that when the investigation was disclosed to investors by AIG and through various media outlets between Feb. 14 and March 14, 2005, shares of AIG stock dropped from $73.12 to $61.92.
All five defendants were convicted on all counts presented against them in the 16-count superseding indictment. Subsequently, on Oct. 31, 2008, Judge Droney found that AIG’s shareholders lost between $544 million and $597 million as a consequence of the defendants’ fraudulent scheme.
According to evidence at trial, each of the defendants knew that the true purpose of the transactions was to permit AIG to falsely report increasing loss reserves in its statements to analysts, investors and in its SEC filings. The defendants structured a sham reinsurance transaction, according to trial evidence, and created a phony paper trail to make it appear as though Gen Re had solicited reinsurance from AIG when the evidence demonstrated that the parties knew AIG wanted the transaction to manipulate its financial statements. Additionally, evidence presented at trial proved that the defendants entered into a secret side deal whereby AIG would never have to pay any losses under the contracts; AIG would return to Gen Re the $10 million in premiums Gen Re paid to AIG and AIG paid Gen Re a $5 million fee for entering into the transaction.
The case was prosecuted by Principal Deputy Chief Paul E. Pelletier and Assistant Chief Adam Safwat of the Criminal Division’s Fraud Section as well as Assistant U.S. Attorneys Eric J. Glover of the District of Connecticut and Ray Patricco of the Eastern District of Virginia. Additional assistance was provided by Paralegal Specialists Sarah Marberg of the Fraud Section, and Amy Konarski of the District of Connecticut. The ongoing investigation is being conducted by the U.S. Postal Inspection Service.
26 January 2009
New York Man Pleads Guilty to Federal Hate Crime ConspiracyRead the Press Release
WASHINGTON – Brian Carranza, 21, pleaded guilty today before U.S. District Court Judge Carol B. Amon in Brooklyn, N.Y., to conspiring to assault African-American residents in Staten Island, N.Y., in retaliation for President Barack Obama winning last year’s presidential election, Acting Assistant Attorney General Loretta King for the Civil Rights Division and U.S. Attorney for the Eastern District of New York Benton J. Campbell announced.
Carranza, of Staten Island, N.Y., faces a maximum sentence of 10 years in prison and a 250,000 fine. A sentencing date has not been set by the court.
The case is being investigated by the FBI and the New York City Police Department. The case is being prosecuted by Special Litigation Counsel Kristy Parker of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Pamela Chen.
Former Oak Ridge Complex Employee Pleads Guilty to Unlawful Disclosure of Restricted Atomic Energy DataRead the Press Release
WASHINGTON – Roy Lynn Oakley, 67, a resident of Harriman, Tenn., pleaded guilty today in U.S. District Court in Knoxville, to count one of an indictment charging him with unlawful disclosure of Restricted Data under the Atomic Energy Act, in violation of 42 U.S.C., Section 2274(b).
The guilty plea was announced today by Matthew G. Olsen, Acting Assistant Attorney General for National Security, and James R. Dedrick, U.S. Attorney for the Eastern District of Tennessee.
Oakley had been scheduled to start trial today, but appeared instead before U.S. District Court Judge Thomas A. Varlan, to enter his plea of guilty. Oakley had formerly been employed as a laborer and escort by Bechtel Jacobs at the East Tennessee Technology Park (ETTP) in Oak Ridge, Tenn. The ETTP, formerly known as K-25, had previously been operated by the U.S. Department of Energy (DOE) as a facility to produce highly enriched uranium.
According to the plea agreement, while employed at the ETTP in 2006 through 2007, Oakley had a security clearance that permitted him to have access to classified and protected materials, including instruments, appliances and information relating to the gaseous diffusion process for enriching uranium. Some of the materials and information to which Oakley had access were classified as "Restricted Data" under the Atomic Energy Act, any disclosure of which was illegal. While he worked at the ETTP, Oakley had been instructed and informed that this Restricted Data could not be disclosed.
The plea agreement further states that based on the investigation the Federal Bureau of Investigation (FBI) determined that Oakley may have been in possession of protected materials that belonged to the DOE and was offering to sell the materials to a foreign government. The FBI initiated an undercover investigation and, in January 2007, the FBI contacted Oakley using an undercover agent assuming the role of an agent of a foreign government.
In recorded calls and during a face-to-face meeting with the FBI undercover agent, Oakley stated that he had taken certain parts of uranium enrichment fuel rods or tubes and other associated hardware items from the ETTP work site and that he wanted to sell these materials for $200,000 to the foreign government. Once Oakley handed over the pieces of tubes and associated items to the undercover FBI agent and received $200,000 in cash, he was confronted by agents of the FBI and admitted to his efforts to sell these materials to a foreign government.
The materials Oakley had tried to sell to a foreign government were, in fact, pieces of equipment known as "barrier" and associated hardware items that play a crucial role in the production of highly enriched uranium, a special nuclear material, through the gaseous diffusion process.
The maximum penalty for violation of the Atomic Energy Act by disclosing Restricted Data is a maximum of ten years imprisonment and a criminal fine of $250,000. A sentencing hearing has been set before Judge Varlan for May 14, 2009, at 10:00 a.m., in U.S. District Court in Knoxville.
Matthew G. Olsen, Acting Assistant Attorney General for National Security, said, "Today’s guilty plea should serve as a strong warning to anyone who would consider selling restricted U.S. nuclear materials to foreign governments. The facts of this case demonstrate the importance of safeguarding America’s atomic energy data and pursuing aggressive prosecutions against those who attempt to breach those safeguards."
U.S. Attorney James R. Dedrick said, "Vigorous enforcement of the law controlling the protection of national security information, especially that involving materials associated with atomic energy and weapons, is of the highest priority for the Department of Justice and is a vital part of our duty to protect national security and the nation’s defense system. The exposure of Oakley’s conduct and subsequent investigation by the FBI, the U.S. Attorney’s Office, and the Department of Justice reflects the Department’s dedication to combating any threat to the security of our nation’s atomic secrets wherever it may happen."
The indictment was the result of an investigation by the FBI, DOE’s Oak Ridge Counterintelligence Field Office, and DOE’s Headquarters Office of Intelligence and Counterintelligence. Assistant U.S. Attorney A. William Mackie from the U.S. Attorney’s Office for the Eastern District of Tennessee, and Trial Attorney Anthony P. Garcia, from the Counterespionage Section of the Justice Department’s National Security Division, represented the United States in this case.
For additional information, please contact U.S. Attorney James "Russ" Dedrick, Assistant U.S. Attorney William Mackie or Public Information Officer Sharry Dedman-Beard at (865) 545-4167.
Defendant Pleads Guilty to Conspiring to Export Military Aircraft Parts to IranRead the Press Release
WASHINGTON – Hassan Saied Keshari and his corporation, Kesh Air International, pleaded guilty this morning in the Southern District of Florida to charges of conspiring to illegally export military and commercial aircraft parts to Iran.
The guilty pleas were announced by Matt Olsen, Acting Assistant Attorney General for National Security; R. Alexander Acosta, U.S. Attorney for the Southern District of Florida; Michael Johnson, Special Agent in Charge, U.S. Department of Commerce; Office of Export Enforcement; Anthony V. Mangione, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Investigations; and Sharon Woods, Director, U.S. Department of Defense, Defense Criminal Investigative Service.
Keshari appeared on behalf of himself and Kesh Air International in federal court today to announce their guilty pleas. Charges are still pending against two remaining defendants charged in the indictment, Traian Bujduveanu and his corporation, Orion Aviation Corp. Sentencing is scheduled for April 8, 2009, at 8:30 a.m. before U.S. District Judge Patricia A. Seitz.
Count 1 of the Indictment, to which Keshari and Kesh Air International pleaded guilty, charges conspiracy to export and cause the export of goods from the United States to the Islamic Republic Iran, in violation of the embargo imposed upon that country by the United States and in violation of the International Emergency Economic Powers Act, and to export and cause to be exported defense articles, in violation of the Arms Export Control Act, all in violation of Title 18, United States Code, Section 371.
On the conspiracy count, Hassan Saied Keshari faces a maximum statutory term of five years’ imprisonment and a maximum fine of $250,000. Kesh Air International faces a statutory maximum fine of $500,000.
According to documents filed with the court during the plea hearing, Keshari, an Iranian national and naturalized United States citizen, by and through his Novato, Calif., corporation, Kesh Air International, purchased aircraft parts on behalf of purchasers in Iran and exported the aircraft parts to Iran by way of freight forwarders in Dubai, United Arab Emirates. The military aircraft parts were purchased from defendant Traian Bujduveanu, who operated through his Broward County, Fla., business, defendant Orion Aviation Corp.
Among the aircraft parts illegally exported to Iran through the conspiracy were parts designed exclusively for the F-14 Fighter Jet, the Cobra AH-1 Attack Helicopter, and the CH-53A Military Helicopter. All of these aircraft are part of the Iranian military fleet, while the F-14 is known to be used exclusively by the Iranian military.
Moreover, all of the parts supplied by Keshari as part of the conspiracy are manufactured in the United States, are designed exclusively for military use, and have been designated by the U.S. Department of State as "defense articles" on the United States Munitions List, thus requiring registration and licensing with the Department of State, Directorate of Defense Trade Controls. Neither Keshari nor his co-defendants are registered or had the required licenses to ship defense articles to Iran.
According to the Indictment and documents filed with the court during the plea hearing, Keshari received orders by email from buyers in Iran for specific aircraft parts. Keshari then requested quotes, usually by e-mail, from Bujduveanu and other suppliers and made arrangements for the sale and shipment of the parts to a company in Dubai through the use of false or misleading shipping documents. From Dubai, the parts were then shipped on to the purchasers in Iran.
Keshari has been in federal custody since his arrest in June 2008 and will remain in custody pending his sentencing. Co-defendant Bujduveanu also remains in federal custody awaiting trial, which is scheduled for May 2009.
The investigation was conducted by the U.S. Department of Commerce, Office of Export Enforcement, U.S. Immigration and Customs Enforcement, Office of Investigations, and the U.S. Department of Defense, Defense Criminal Investigative Service. The case is being prosecuted by Assistant U.S. Attorney Melissa Damian.
23 January 2009
Former New York Power Authority Employee Sentenced to 37 Months in Jail for Bribery and Fraud SchemeRead the Press Release
WASHINGTON — A former employee of the New York Power Authority (NYPA) was sentenced today to serve 37 months in jail and to pay a $5,000 criminal fine for his role in a kickback and bribery scheme, the Department of Justice announced.
Edward P. Goldblatt of Melville, N.Y., a former purchasing warehouse assistant at NYPA, pleaded guilty on Aug. 26, 2008, in the U.S. District Court in Brooklyn to conspiring to defraud NYPA in a bribery scheme where he accepted $167,000 in kickback payments from a vendor. Goldblatt also caused NYPA to pay approximately $86,000 in fraudulent overcharges. Half of these overcharges were included in Goldblatt’s kickback payments and half were retained by the vendor. Goldblatt also pleaded guilty to income tax evasion for failing to report as income any of the kickbacks that he received for the years 2005 through 2007.
Goldblatt was also ordered to pay, with another individual, $253,836 in restitution. He was arrested in connection with this investigation by Special Agents of the FBI and the Internal Revenue Service (IRS) Criminal Investigation on April 2, 2008.
"Today’s sentencing should make clear that those who conspire to subvert the competitive bidding process will be held accountable," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "The Department of Justice will not hesitate to prosecute those who defraud their employers, both public and private, for personal gain by ignoring competition standards."
NYPA is a nonprofit energy corporation established by New York State for the public benefit of the citizens of New York by providing low-cost power to government agencies, municipalities and private entities. NYPA finances its projects through bond sales to private investors and does not use tax revenue or state credit. NYPA is headquartered in Albany, N.Y., with power plants and offices located throughout New York.
Goldblatt was responsible for purchasing and awarding contracts for millions of dollars in goods and services annually for NYPA’s plants and offices. In addition, Goldblatt was responsible for issuing purchase orders, reviewing and authorizing vendor invoices for payment, and monitoring warehouse stock levels. NYPA’s policies and procedures include a competitive bidding policy to which Goldblatt was expected to adhere.
These charges arose from an ongoing federal antitrust investigation of bid rigging, bribery, fraud and tax-related offenses in the power generation industry. The investigation is being conducted by the Antitrust Division’s New York Field Office, with the assistance of the FBI and IRS Criminal Investigation. NYPA cooperated with the Department’s investigation.
Anyone with information concerning bid rigging, bribery, tax offenses or fraud in the power generation industry should contact the Antitrust Division’s New York Field Office at 212-264-9308 or the New York Division of the FBI at 212-384-3252.
Canadian Company to Pay U.S. More Than $1 Million Related to Sale of Defective Bullet-proof VestsRead the Press Release
WASHINGTON - Barrday Inc. and two related companies have agreed to pay the United States more than $1 million to resolve allegations that they violated the False Claims Act in connection with their role in the weaving of Zylon fabric used in the manufacture and sale of defective Zylon bullet-proof vests, the Justice Department announced today. Barrday, headquartered in Cambridge, Ontario, Canada, is a weaver of ballistic fabrics and designs and produces specialty industrial textiles.
The United States alleged that Barrday’s woven Zylon fabric was used in the manufacture of bullet-proof vests sold by Second Chance Body Armor Inc., Point Blank Body Armor Inc. and Gator Hawk Armor Inc. These vests were purchased by the United States, and by various state, local, and/or tribal law enforcement agencies, which were partially reimbursed by a Justice Department program. The government alleged that the Zylon in these vests lost its ballistic capability quickly, especially when exposed to heat and humidity.
Barrday was reportedly aware of the defective nature of the Zylon by at least December 2001, but continued to sell Zylon for use in ballistic armor until approximately 2003, when two police officers were shot through their Second Chance Zylon vests. In 2003, Barrday was the first weaver to permanently withdraw from the Zylon market.
"When a supplier of a component part distributes its product with knowledge of latent defects, that company violates the False Claims Act" said Michael F. Hertz, the acting Assistant Attorney General for the Civil Division. "This settlement will help ensure that component suppliers are held responsible for materials that put our first-responders at risk."
This settlement is part of a larger investigation of the body armor industry’s use of Zylon in body armor. As part of today’s agreement, Barrday has pledged its cooperation in the government’s on-going investigation. The United States previously has settled with four other participants in the Zylon body armor industry for over $46 million. Additionally, the government has pending lawsuits against Toyobo Co., Honeywell Inc., Second Chance Body Armor Inc. and four former Second Chance executives.
Today’s settlement with Barrday was the result of an ongoing investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, the General Services Administration Office of the Inspector General, the Department of Homeland Security Office of Inspector General, the Treasury Inspector General for Tax Administration, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigative Command, the Air Force Office of Special Investigations, the Department of Energy Office of the Inspector General, the U.S. Agency for International Development Office of the Inspector General, and the Defense Contracting Audit Agency.
22 January 2009
Twentieth Member of Casino-cheating Criminal Enterprise Pleads Guilty to Racketeering Conspiracy Targeting Casinos in the United States and CanadaRead the Press Release
WASHINGTON – Phat Ngoc Tran, 35, pleaded guilty today in San Diego to conspiring to participate in a racketeering enterprise, the "Tran Organization," in a scheme to cheat at least 12 casinos across the United States and Canada out of millions of dollars, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Karen P. Hewitt for the Southern District of California announced today. Tran admitted that he and his co-conspirators unlawfully obtained up to $2.5 million during card cheats.
A three-count indictment was returned May 22, 2007, and unsealed in the Southern District of California on May 24, 2007, charging Tran and 13 others each with one count of conspiracy to participate in the affairs of a racketeering enterprise; one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering. The indictment also charged five separate individuals each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering.
In his plea agreement, Tran admitted that on numerous occasions between approximately October 2002 and July 2006, he participated in gambling cheats together with other alleged members of the Tran Organization at casinos in the United States and Canada. Tran admitted to targeting at least 12 casinos in the racketeering conspiracy, including:
- Beau Rivage Casino, in Biloxi, Miss.;
- Casino Rama, in Orillia, Ontario, Canada;
- Foxwoods Resort Casino in Ledyard, Conn.;
- Gold Strike Casino in Tunica, Miss.;
- Horseshoe Casino, in Bossier City, La.;
- Horseshoe Casino and Hotel, in Tunica, Miss.;
- Isle of Capri Casino, in Westlake, La.;
- Majestic Star Casino, in Gary, Ind.;
- Mohegan Sun Resort Casino, in Uncasville, Conn.;
- Palace Station Casino, in Las Vegas, Nev.;
- Resorts East Chicago Hotel and Casino, in East Chicago, Ind.; and
- Sycuan Casino, in El Cajon, Calif.
According to the indictment, the defendants and others executed a "false shuffle" cheating scheme at casinos in the United States and Canada during blackjack and mini-baccarat games. The indictment alleges that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating "slugs" or groups, of un-shuffled cards. The indictment also alleges that after tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a "false shuffle," and members of the group would then bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy repeatedly won thousands of dollars during card games, including winning up to $868,000 on one occasion.
The indictment also alleges that the members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during mini-baccarat and blackjack games.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Tran’s sentencing is scheduled for June 1, 2009, in San Diego before U.S. District Judge John A. Houston. At sentencing, Tran faces a maximum sentence of 20 years in prison on the racketeering conspiracy charge. Tran agreed to a personal money judgment in the amount of $180,000, which will be entered by way of a preliminary order of forfeiture. He also acknowledged that the restitution that he may be ordered to pay by the court at sentencing is not limited by the forfeiture amount. Tran was also charged in Orillia, Ontario, Canada, for his admitted cheating activities at Casino Rama.
A second indictment has alleged that 11 additional defendants conspired to commit offenses on behalf of the Tran Organization. A one-count indictment, unsealed in the Southern District of California on Sept. 11, 2008, charged Bryan Arce; Don Man Duong; Hogan Ho; Thang Viet Huynh; Outtama Keovongsa; Leap Kong, a/k/a Lanida Kong; Qua Le; Khunsela Prom, a/k/a Danny Prom; James Root; Darrell Saicocie; and Dan Thich each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering.
To date, 20 defendants, including Tran, have pleaded guilty to charges relating to the casino-cheating conspiracy: Phuong Quoc Truong; Anh Phuong Tran; Martin Lee Aronson; Liem Thanh Lam; George Michael Lee; Tien Duc Vu; Son Hong Johnson; Barry Wellford; Willy Tran; Tuan Mong Le; Duc Cong Nguyen; Han Truong Nguyen; Roderick Vang Thor; Sisouvanh Mounlasy; Navin Nith; Renee Cuc Quang; Ui Suk Weller; Phally Ly; and Khunsela Prom. These defendants admitted to targeting, with the aid of coconspirators, a combined total of approximately 24 casinos during the course of the conspiracy.
The case is being investigated by the FBI’s San Diego Field Office; the Internal Revenue Service-Criminal Investigation; the San Diego Sheriff’s Department; and the California Department of Justice’s Bureau of Gambling Control. The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, Wash., and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission; and the Washington State Gambling Commission.
The prosecution of the case is led by the Criminal Division’s Organized Crime and Racketeering Section (OCRS). Department of Justice Trial Attorneys Joseph K. Wheatley, Robert S. Tully and Gavin A. Corn are prosecuting the indictment in San Diego.
LAN Cargo S.A., Aerolinhas Brasileiras S.A. and EL AL Israel Airlines Ltd. Agree to Plead Guilty for Fixing Prices on Air Cargo ShipmentsRead the Press Release
WASHINGTON — Three air cargo carriers, LAN Cargo S.A. (LAN Cargo), Aerolinhas Brasileiras S.A. (ABSA), and EL AL Israel Airlines Ltd. (EL AL), have each agreed to plead guilty and pay criminal fines totaling $124.7 million for their roles in a conspiracy to fix prices in the air cargo industry, the Department of Justice announced today. Under the plea agreements, LAN Cargo, a Chilean company, and ABSA, a Brazilian company that is substantially owned by LAN Cargo, have agreed to pay a single criminal fine of $109 million. EL AL, an Israeli company, has agreed to pay a criminal fine of $15.7 million.
Including today’s charges, a total of 12 airlines and three executives have pleaded guilty or agreed to plead guilty in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1 billion in criminal fines have been imposed and executives have been sentenced to serve a total of 20 months in jail.
According to the charges filed today in the U.S. District Court for the District of Columbia, each airline engaged in a conspiracy in the United States and elsewhere to eliminate competition by fixing the cargo rates charged to customers for international air shipments, including to and from the United States. LAN Cargo and ABSA are charged with engaging in the conspiracy from in or about February 2003 and continuing until at least Feb. 14, 2006. EL AL is charged with engaging in the conspiracy from in or about January 2003 until at least Feb. 14, 2006. The plea agreements are subject to court approval. Each airline has agreed to cooperate with the Department’s ongoing investigation.
"American consumers were forced to pay higher prices on the goods they buy every day as a result of the inflated and collusive shipping rates charged by these companies," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division.
LAN Cargo, ABSA and EL AL are charged with carrying out the price-fixing conspiracy with co-conspirators by:
- Participating in meetings, conversations and communications in the United States and elsewhere to discuss the cargo rates to be charged on certain routes to and from the United States;
- Agreeing, during those meetings, conversations and communications on certain components of the cargo rates to charge for shipments on certain routes to and from the United States;
- Levying cargo rates in the United States and elsewhere in accordance with the agreements reached; and
- Engaging in meetings, conversations and communications in the United States and elsewhere for the purpose of monitoring and enforcing adherence to the agreed-upon cargo rates.
The nine airlines that have pleaded guilty to date as a result of the Department’s ongoing investigation into the air transportation industry are: British Airways Plc (British Airways), Korean Air Lines Ltd., Qantas Airways Limited (Qantas), Japan Airlines International Co. Ltd., Martinair Holland N.V., Cathay Pacific Airways Limited, SAS Cargo Group A/S (SAS), Société Air France and Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines). The three airline executives who have pleaded guilty for their involvement in the illegal activity are Bruce McCaffrey of Qantas, Timothy Pfeil of SAS and Keith Packer of British Airways.
EL AL, LAN Cargo and ABSA are charged with price fixing in violation of the Sherman Act, a violation which carries a maximum sentence of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the Federal Bureau of Investigation (FBI). Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the National Criminal Enforcement Section of the Antitrust Division at 202-307-6694 or the FBI Washington Field Office, Northern Virginia Resident Agency at 703- 686-6000.
Foreign National Sentenced to Five Years in Prison for Smuggling East Africans to the United StatesRead the Press Release
WASHINGTON – A Ghanian man was sentenced today in the District of Columbia for his role in smuggling East Africans into the United States, Acting Assistant Attorney General of the Criminal Division Rita M. Glavin, U.S. Attorney for the District of Columbia Jeffrey A. Taylor and Acting Assistant Secretary of Immigration and Customs Enforcement (ICE) John Torres announced.
Mohammed Kamel Ibrahim, a/k/a Hakim, 27, a native of Ghana and naturalized citizen of Mexico, was sentenced to five years in prison by U.S. District Judge Ricardo M. Urbina after pleading guilty to one count of conspiracy and three counts of bringing aliens to the United States for profit.
According to his plea, Ibrahim operated an alien-smuggling organization in Mexico City that moved unauthorized aliens from East Africa across the southern U.S. border beginning as early as 2005. In plea documents Ibrahim admitted that between June 2006 and February 2007 he and co-defendant Sampson Lovelace Boateng conspired to smuggle unauthorized aliens to the United States by providing the aliens with fraudulently obtained Mexican visas. The visas, which Boateng obtained through a corrupt employee of the Mexican embassy in Belize, enabled East African aliens to travel into Mexico, then be smuggled across the southern U.S. border by Ibrahim’s Mexico City-based organization. According to the plea documents, Ibrahim’s organization smuggled the aliens by various means, including by concealing them for more than 12 hours in the sleeper compartments of commercial buses. In pleading guilty, Ibrahim admitted to smuggling between 25 and 99 aliens into the United States.
Ibrahim and Boateng were charged in a 28-count indictment returned by a federal grand jury in the District of Columbia on Oct. 31, 2007, and unsealed on Dec. 5, 2007. Ibrahim was arrested by Mexican authorities in Mexico City on Dec. 5, 2007, and extradited to the United States on April 24, 2008. Boateng was arrested at Miami International Airport on Nov. 5, 2007, after arriving on a commercial airline flight from Belize. Boateng pleaded guilty to conspiracy and alien-smuggling charges in the District of Columbia on April 22, 2008, and Ibrahim pleaded guilty on Sept. 22, 2008.
Boateng’s sentencing is scheduled for Feb. 10, 2009. Both men will be removed from the United States upon completion of their sentences.
The case was prosecuted by Trial Attorney Brian Rogers of the Criminal Division’s Domestic Security Section and Assistant U.S. Attorneys Jay Bratt, Colleen Covell and Michael Harvey of the U.S. Attorney’s Office for the District of Columbia. Valuable assistance was provided by Trial Attorney Mary Ann Snow and Paralegal Rachel Estabrook of the Criminal Division’s Office of International Affairs.
The investigation was conducted by ICE’s Los Angeles and Washington, D.C., offices, with assistance from the ICE attaché in Mexico City, the ICE attaché in Guatemala City, the Diplomatic Security Office of the U.S. Embassy in Belize and the Drug Enforcement Administration attaché in Belize. Valuable support was provided by U.S. Customs and Border Protection and the ICE Forensic Document Laboratory. Mexican and Belizean authorities also provided substantial support to the investigation.
Chicago Police Officer Pleads Guilty to Violating Federal Civil Rights of a Man Beaten While Restrained in a WheelchairRead the Press Release
WASHINGTON – A Chicago police officer pleaded guilty today to violating the federal civil rights of a man whom the officer struck repeatedly with a dangerous weapon while the man was handcuffed and shackled in a wheelchair, Acting Assistant Attorney General for the Civil Rights Division Loretta King, U.S. Attorney for the Northern District of Illinois Patrick Fitzgerald and Robert D. Grant, Special Agent-in-Charge of the FBI’s Chicago Field Office announced.
William Cozzi, 51, pleaded guilty to a one-count information in U.S. District Court in Chicago, admitting he used excessive or unreasonable force while acting under color of law. Cozzi joined the Chicago Police Department in 1992 and was assigned to the 25th District at the time of the alleged incident. He was subsequently suspended from duty. Cozzi was indicted in April 2008 for depriving the victim of his civil rights.
On Aug. 2, 2005, while performing his duties as a police officer, Cozzi admitted that he used a "sap," a dangerous weapon similar to a blackjack, to repeatedly strike the victim who was handcuffed and shackled in a wheelchair at Norwegian American Hospital, resulting in bodily injury. At the time, the victim was awaiting treatment in the hospital emergency room after being stabbed in the shoulder.
"The defendant violated the public trust by abusing his law enforcement authority," said Acting Assistant Attorney General Loretta King. "This prosecution demonstrates that the Civil Rights Division is committed to aggressively prosecuting law enforcement officers who willfully use excessive force."
"No law enforcement officer may use unreasonable force with impunity and every citizen, regardless of being in police custody, has a constitutional right to be free from the use of excessive force," U.S. Attorney Fitzgerald said.
Cozzi pleaded guilty while reserving his right to appeal a ruling last year denying his motion to dismiss the indictment on the grounds that the prosecution was based in part on compelled statements he made to the Chicago Police Department’s Office of Professional Standards and during a police review board hearing.
According to a plea agreement, Cozzi was dispatched to the hospital to respond to the stabbing and approached the victim who was being loud and verbally abusive while awaiting treatment for the stabbing. Shortly after approaching the victim, Cozzi placed him in handcuffs and left the emergency room to retrieve leg shackles, which he then placed on the victim. With the victim restrained, Cozzi used a sap to repeatedly strike him in the face and body. According to the plea agreement, at the time of the assault the victim posed no physical threat to Cozzi or anyone else at the hospital.
Cozzi also admitted that he subsequently prepared a false arrest report and misdemeanor complaints stating that the victim attempted to punch him and two hospital security guards, as well as a false tactical response report stating that he used an "open hand strike" on the victim but omitted that he struck the victim with a sap.
U.S. District Judge Blanche Manning set sentencing for March 26, 2009. Cozzi faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Assistant U.S. Attorney Scott Drury from the U. S. Attorney’s Office for the Northern District of Illinois and Trial Attorney Betsy Biffl of the Justice Department’s Civil Rights Division.
21 January 2009
Puerto Rico Senator Jorge De Castro Font Pleads Guilty to Honest Services Wire Fraud and Conspiracy to Commit ExtortionRead the Press Release
WASHINGTON – Jorge De Castro Font, 45, a former senator in the Commonwealth of Puerto Rico, pleaded guilty today to 20 counts of honest services wire fraud and one count of conspiracy to commit extortion, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez announced.
De Castro Font pleaded guilty to devising and engaging in a scheme that deprived the people of Puerto Rico of his honest services as a legislator, performed free from conflict of interest, concealment and improper influence. De Castro Font also pleaded guilty to one count of conspiracy to commit extortion through fear of economic harm and under color of official right. De Castro Font was indicted for these and other related offenses on Oct. 2, 2008.
De Castro Font entered his guilty plea before U.S. District Judge Francisco Augusto Besosa in the District of Puerto Rico. De Castro Font admitted that from Jan. 2, 2005, through August 2008, he directly and indirectly solicited between approximately $500,000 and $525,000 in cash payments and other benefits, such as campaign contributions in excess of the legal limits, lodging, private flights, meals and other things of value, from individuals. De Castro Font admitted that he engaged in official acts on behalf of some of these individuals who had provided him with these undisclosed benefits, including but not limited to, proposing legislation, preventing legislative projects to be voted or acted upon, and persuading other legislators to vote for or against legislation.
De Castro Font also admitted to participating in a conspiracy to obtain cash and other benefits from five individuals whom he admitted he knew felt that if they did not provide him with the financial benefits requested, De Castro Font could use his official position to harm their financial interests.
Judge Besosa scheduled a sentencing hearing on Apr. 23, 2009.
"Using an elected office for personal gain denies citizens the honest services of their elected leaders," said Acting Assistant Attorney General Rita M. Glavin. "The Department will continue to identify and prosecute public officials who corruptly use their position and influence to illegally benefit themselves."
"Senator De Castro Font has accepted responsibility for the acts of public corruption charged in the indictment. His conduct was an affront to the voters of Puerto Rico who placed their trust and confidence in him and the institution that he represented, the Senate of the Commonwealth of Puerto Rico. His blatant disregard for his oath of office and his breach of the public trust, for his personal enrichment, violated the very essence of our democratic government. We will continue our public corruption investigations against public officials and those who make illegal payments in exchange for official acts," said U.S. Attorney Rosa Emilia Rodriguez-Velez.
"Let this conviction send a stark message to all public servants that the sale of influence and public corruption will not be tolerated by the FBI or the law-abiding citizens of Puerto Rico," said Luis Fraticelli, Special Agent in Charge of the FBI-San Juan Field Office. "The FBI will continue to be vigilant so as to root out all public corruption. As I have said before, corruption affects every facet of society: the people, honest businessmen, education and public works."
On Dec. 4, 2008, Alberto Goachet, a political consultant and aide to De Castro Font, pleaded guilty to participating in the conspiracy to launder illegal campaign contributions and other payments. Goachet admitted that he and others laundered the money through the use of fake invoices purporting to reflect legitimate payments to a political consulting firm owned by Goachet. Goachet admitted that the false invoices were meant to conceal a businessman’s illegal payments to De Castro Font. Goachet also admitted that in August 2008 he falsely claimed in an interview with the FBI that the invoices were legitimately written for services rendered to the businessman and denied that the money was intended for De Castro Font.
The case was prosecuted by Assistant U.S. Attorneys Jacqueline Novas and Timothy R. Henwood of the District of Puerto Rico, and Trial Attorney Matthew L. Stennes of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI’s San Juan Field Office.
Factual Basis
Former Florida State Corrections Officer Convicted<br /> of Federal Civil Rights CrimeRead the Press Release
WASHINGTON – A federal jury in Jacksonville, Fla., found Paul Tillis, a former Florida Department of Corrections officer, guilty on Jan. 16, 2009, of a felony federal civil rights violation for an August 2005 assault on an inmate.
The evidence at trial showed that on Aug. 14, 2005, Tillis assaulted the victim by pouring a bottle of scalding water onto the victim’s chest. Tillis was on duty as a supervisory corrections officer at the Florida State Prison in Raiford. During his shift, one of the inmates in his custody allegedly feigned injury by lying on the floor of his cell. In response, the defendant filled a bottle from a nearby dispenser that provided water at near-boiling temperatures, then poured the scalding water onto the victim’s chest. Tillis also failed to arrange for medical treatment for the victim, who suffered second degree burns on his chest as a result of this assault.
"It is important that corrections officers realize they may not use their positions of authority to inflict physical harm on inmates as punishment," said Acting Assistant Attorney General Loretta King for the Civil Rights Division. "While the vast majority of law enforcement officers carry out their difficult duties in a lawful and professional manner, the Department of Justice will continue to vigorously prosecute those who cross the line and commit this type of unlawful act."
Tillis faces a maximum punishment of ten years in prison and a $250,000 fine. A sentencing date has not yet been scheduled by the court.
This case was investigated by agents from the FBI’s Jacksonville Division and the Florida Office of the Inspector General. The case was prosecuted by Assistant U.S. Attorney Mac Heavener of the U.S. Attorney’s Office for the Middle District of Florida and Department of Justice Civil Rights Division Trial Attorney Douglas Kern.
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit the willful use of excessive force 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.
Ex contralor de empresa de telecomunicaciones del Condado de Miami-Dade fue sentenciado a 24 meses en prisión por su papel en un ardid de cohecho en el extranjeroRead the Press Release
WASHINGTON - El ex contralor de una empresa de telecomunicaciones del Condado de Miami-Dade, Fla., fue sentenciado a 24 meses en prisión por su participación en una conspiración para pagar y ocultar sobornos a funcionarios gubernamentales haitianos, anunciaron el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal; el Fiscal Federal Wifredo A. Ferrer del Distrito Sur de Florida; y Daniel W. Auer, Agente Especial a Cargo del Servicio de Impuestos Internos, Oficina Local de Miami de Investigaciones Penales (IRS-CI).
Antonio Perez, 52, de Miami, también fue condenado por el Juez Federal de Distrito Jose E. Martinez a dos años de libertad bajo supervisión después de haber cumplido su sentencia en prisión, y a entregar $36,375 al gobierno. Perez se declaró culpable el 27 de abril de 2009, de conspirar para realizar pagos corruptos para una compañía de telecomunicaciones del Condado de Miami-Dade a funcionarios de la compañía de telecomunicaciones estatal de la República de Haití, Telecommunications D'Haiti, en violación de la Ley de Prácticas Corruptas en el Extranjero (FCPA) y leyes de lavado de dinero.
En su declaración de culpabilidad, Perez admitió haber conspirado para realizar pagos corruptos a funcionarios gubernamentales extranjeros con la finalidad de obtener ventajas comerciales para la empresa de telecomunicaciones por parte de Telecommunications D'Haiti. De acuerdo con el expediente judicial, Perez conspiró con Robert Antoine, el ex director de relaciones internacionales para Telecommunications D'Haiti y Juan Diaz, el propietario de J.D. Locator Services, junto con otros. Perez y sus coconspiradores ocultaros los pagos de sobornos en parte al conducir transacciones financieras en las que se realizaron transferencias telegráficas de dinero a empresas fantasma y a través de denominaciones falsas en facturas, cheques y libros contables. Perez admitió que él mismo estuvo involucrado en dos pagos de sobornos por un total de aproximadamente 36,375 dólares.
El 30 de julio de 2010, Diaz fue sentenciado a 57 meses en prisión después de haberse declarado culpable de pagar y ocultar 1,028,851 dólares en sobornos a ex funcionarios del gobierno de Haití mientras actuaba como intermediario para tres empresas privadas de telecomunicaciones. Antoine admitió que aceptó los sobornos, incluidos sobornos de Diaz, y se declaró culpable el 12 de marzo de 2010 a conspiración para cometer lavado de dinero. Antoine fue sentenciado a cuatro años en prisión.
Joel Esquenazi y Carlos Rodriguez, los propietarios de la empresa de telecomunicaciones en la que trabajaba Perez, así como Jean Rene Duperval, quien fue director de relaciones internacionales de Telecommunications D´'Haiti de junio de 2003 a abril de 2004, y la hermana de Duperval, Marguerite Grandison, fueron acusados formalmente junto con Antoine, el 4 de diciembre de 2009. El enjuiciamiento de los demás demandados tiene su inicio programado para el 28 de febrero de 2011 en el Tribunal Federal de Distrito en Miami. Una acusación formal es apenas una acusación, y se supone que los demandados son inocentes hasta que se pruebe lo contrario más allá de la duda razonable.
El Departamento de Justicia agradece al gobierno de Haití por su importante asistencia en recabar pruebas durante esta investigación. En particular, la unidad de inteligencia financiera de Haiti, la Unite Centrale de Renseignements Financiers, el Bureau des Affaires Financieres et Economiques, el cual es un componente especializado de la Policía Nacional Haitiana, y el Ministerio de Justicia y Seguridad Pública brindar importante cooperación y coordinación en la investigación.
Están a cargo de la acusación en el caso la Fiscal Federal Auxiliar Aurora Fagan de la Fiscalía Federal para el Distrito Sur de Florida, la Abogada Litigante Sénior Nicola J. Mrazek de la Sección de Fraude de la División de lo Penal y el Abogado Litigante Kevin Gerrity de la Sección de Confiscación de Activos y Lavado de Dinero de la División de lo Penal. La Oficina de Asuntos Internacionales de la División de lo Penal también brindó asistencia en este asunto. El caso fue investigado por la Oficina Local de Miami del IRS-CI.
19 January 2009
President George W. Bush Grants CommutationsRead the Press Release
WASHINGTON – On Jan. 19, 2009, President George W. Bush granted commutations of sentence to two individuals:
COMMUTATIONS:
- Jose Alonso Compean – El Paso, Texas
Offense: Assault with a dangerous weapon, and aiding and abetting, 18 USC § 7, 113 and 2; assault with serious bodily injury, and aiding and abetting, 18 USC § 7, 113 and 2; discharge of a firearm in relation to a crime of violence, 18 USC § 924; deprivation of rights under color of law, 18 USC § 242.
Sentence: Nov. 12, 2008; Western District of Texas; 12 years in prison, three years of supervised release following the prison term, $2,000 fine.
Terms of commutation: Prison sentence to expire on March 20, 2009, leaving intact and in effect the three year term of supervised release with all its conditions and the fine.
- Ignacio Ramos, a/k/a Ignacio Ramos Jr. – El Paso, Texas
Offense: Assault with a dangerous weapon, and aiding and abetting, 18 USC § 7, 113 and 2; assault with serious bodily injury, and aiding and abetting, 18 USC § 7, 113 and 2; discharge of a firearm in relation to a crime of violence, 18 USC § 924; deprivation of rights under color of law, 18 USC § 242.
Sentence: Nov. 13, 2008; Western District of Texas; 11 years and one day in prison, three years of supervised release following the prison term, $2,000 fine.
Terms of commutation: Prison sentence to expire on March 20, 2009, leaving intact and in effect the three year term of supervised release with all its conditions and the fine.
- Jose Alonso Compean – El Paso, Texas
16 January 2009
Justice Department Reaches Settlement Regarding Conditions at Two Tennessee State Veterans HomesRead the Press Release
WASHINGTON - The Justice Department today announced a settlement with the state of Tennessee regarding civil rights violations at the Tennessee State Veterans Homes (TSVHs) in Humboldt and Murfreesboro. The TSVHs are state-owned nursing homes, each serving approximately 140 residents, most of whom are veterans.
"Nursing home residents under the care of the state will now receive adequate services to meet their needs. It is particularly important that the state and federal governments work together to protect the health and well-being of the veterans who have served and sacrificed for our country," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "We are grateful for, and applaud, the efforts and leadership of state officials in working with the Department to improve care for TSVH residents."
The agreement, filed in U.S. District Court, is designed to ensure that the nursing home residents will be provided adequate medical and nursing care and protected from harm. During its investigation of the TSVHs, the Justice Department discovered numerous civil rights violations, including medical and nursing care that departed substantially from generally accepted professional standards, and psychiatric medication practices so deficient that they potentially contributed to the deaths of some residents. Further, staff at the veterans homes did not adequately protect residents from injuries associated with falling.
The Justice Department conducted its investigation pursuant to the Civil Rights of Institutionalized Persons Act (CRIPA), which authorizes the Attorney General to investigate and root out systemic deficiencies in care such as those found at the TSVHs, rather than focus on individual civil rights violations.
The Civil Rights Division has successfully resolved similar investigations in other nursing homes in California, Georgia, New Mexico, New Jersey, New York, Pennsylvania, Mississippi, West Virginia and Washington, D.C. The Division has open investigations of nursing homes in Alabama, Minnesota, Mississippi and South Carolina. The Department of Justice’s CRIPA enforcement effort reaches beyond nursing homes, and includes psychiatric hospitals, facilities for persons with developmental disabilities, juvenile justice facilities, prisons and jails.
Justice Department Reaches Settlement Over<br /> Conditions at South Carolina Nursing Care CenterRead the Press Release
WASHINGTON – The Justice Department today announced a settlement with the South Carolina Department of Mental Health regarding civil rights violations at the C.M. Tucker Jr. Nursing Care Center in Columbia, a state-owned nursing home serving approximately 360 residents, 70 of whom are veterans. The agreement requires reforms to ensure that residents are provided adequate medical, mental health and nursing care, and are protected from harm.
"We greatly appreciate the effort and cooperation of both the state and the Department of Mental Health in working with us to improve care for Tucker residents," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "This agreement establishes systems to ensure that nursing home residents receive adequate services to meet their needs."
"I credit the hard work of the Civil Rights Division for the fine result in this case. That office shares our commitment to enforce the federal civil rights laws for all South Carolinians, and we will certainly continue to partner with them in future cases," said United States Attorney Walt Wilkins.
Under the terms of the settlement agreement, Tucker residents will receive health care services sufficient to ensure that they obtain their highest practical, physical, mental and psychosocial well-being. Specifically, the state has agreed to take measures to ensure that residents are provided adequate:
- Medical, mental health and psychiatric care;
- Nutrition and hydration;
- Pain management and end-of-life care;
- Protection from harm, including falls; and
- Activities and psychosocial programs.
In addition, the state and the South Carolina Department of Mental Health will ensure that Tucker residents are being served in the most integrated setting appropriate to their needs.
The Justice Department conducted its investigation pursuant to the Civil Rights of Institutionalized Persons Act (CRIPA), which authorizes the Attorney General to investigate conditions in certain institutions owned or operated by, or on behalf of, state and local governments. CRIPA’s focus is on systemic deficiencies rather than individual, isolated problems.
The Civil Rights Division has successfully resolved similar investigations in other nursing homes in California, Georgia, New Mexico, New Jersey, New York, Pennsylvania, Mississippi, West Virginia and Washington, D.C. The Division has open investigations of nursing homes in Alabama, Minnesota and Mississippi. The Department of Justice’s CRIPA enforcement effort reaches beyond nursing homes and includes psychiatric hospitals, facilities for persons with developmental disabilities, juvenile justice facilities, prisons and jails.
More information about the Civil Rights Division of the Justice Department, and the laws it enforces, is available at www.usdoj.gov/crt.
Justice Department Announces Settlement on Disabled Access with Developers of Woodbridge, Virginia Apartment ComplexRead the Press Release
WASHINGTON - The Justice Department today announced a settlement that, pending court approval, will resolve allegations that those involved in the design and construction of the Crossings at Summerland Apartments, a 126-unit complex in Woodbridge, Va., discriminated on the basis of disability in the design and construction of the project.
The complaint, filed today in the U.S. District Court for the Eastern District of Virginia in conjunction with a consent decree, alleges that the defendants violated the federal Fair Housing Act. Specifically, it cites a failure to design and construct the Crossings at Summerland Apartments so that the public use and common use portions of covered multi-family dwellings are readily accessible to and usable by individuals with disabilities and so that all of the ground floor units contain features of accessible design.
"Accessible housing is a basic necessity for people with disabilities," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "These types of design and construction cases reflect the Justice Department’s commitment to enforcing fair housing laws on behalf of persons with disabilities."
Under the settlement, the defendants will pay all costs related to making the apartment complex accessible to persons with disabilities and establish a $30,000 fund to compensate individuals harmed by the inaccessible housing. The defendants will also pay a $20,000 civil penalty to vindicate the public interest and undergo training on the requirements of the Fair Housing Act.
The defendants are: Summerland Heights III LP; Summerland Heights III GP LLC; Cederquist, Rodriguez, Ripley PC; Bowman Consulting Group Ltd.; and the Marlyn Development Corporation.
Fighting illegal housing discrimination is a top priority of the Justice Department. Since Jan. 1, 2001, the Justice Department’s Civil Rights Division has filed 281 cases to enforce the Fair Housing Act, 130 of which have alleged discrimination based on disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt .
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability or familial status. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line (1-800-896-7743), e-mail the Justice Department at [email protected] or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Arrests Made in Springfield, Massachusetts Church ArsonRead the Press Release
WASHINGTON – Three individuals were arrested this morning in relation to a church arson on Nov. 5, 2008, in Springfield, Mass.
Benjamin Haskell,22, Michael Jacques, 24, andThomas Gleason,21, all of Springfield, Mass., were arrested early this morning on a civil rights violation, announced Acting Assistant Attorney General Grace Chung Becker; U.S. Attorney Michael J. Sullivan; 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 Federal Bureau of Investigation - 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.
"Today's arrests demonstrate the Department of Justice's unwavering commitment to enforcing the nation's civil rights laws," Becker said. "Racial violence tears at the fabric of our great nation and will not be tolerated."
In documents unsealed today, the government alleged that in the early morning hours of Nov. 5, 2008, Haskel, Jacques and Gleason engaged in a conspiracy to burn and succeeded at burning the Macedonia Church of God in Christ’s building, a newly constructed building where religious services were to be held for a predominantly African American congregation. The building was 75 percent completed at the time of the fire, which destroyed the entire structure, leaving only the metal superstructure and a small portion of the front corner intact. Investigators determined the fire to be incendiary in nature and caused by an unknown quantity of gasoline applied to the exterior and interior of the building.
Haskel, Jacques and Gleason have been arrested and charged in a complaint with conspiring to injure, oppress, threaten and intimidate the parishioners of the Macedonia Church of God in Christ in the free exercise or enjoyment of their rights as secured in the Constitution and laws of the United States.
"We will not tolerate those who victimize others," said U.S. Attorney Sullivan. "Racism has devastating effects on individuals, and stifles the quality of life in the community. I am angered and saddened that the neighborhood has endured such cruel acts by those living in the same community."
"This crime has caused a great deal of physical and emotional harm. It is a crime against our entire community. All of us have been injured. All of us are hurt, but we are also resolved to hold those responsible accountable," said District Attorney Bennett.
If convicted, Haskell, Jacques and Gleason could face a sentence of up to10 years in prison, followed by three years of supervised release.
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, Civil Rights Division, Department of Justice, and Assistant U.S. Attorneys Paul Smyth and Kevin O’Regan of Sullivan’s Springfield Branch.
The details contained in the complaint are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
15 January 2009
Statement of Dean Boyd, Justice Department Spokesman, on the Foreign Intelligence Surveillance Court of Review Opinion Published TodayRead the Press Release
"The Department of Justice is pleased with this important ruling by the Foreign Intelligence Surveillance Court of Review, which upholds the constitutionality of foreign intelligence surveillance conducted under the Protect America Act of 2007.
"The case involved a challenge by a private party to directives that were issued under the Protect America Act and that required the party to assist the Government in conducting foreign intelligence surveillance against targets reasonably believed to be located outside the United States. The Court of Review upheld the lawfulness of the directives, concluding that the surveillance at issue fell within the foreign intelligence exception to the warrant requirement and was otherwise reasonable under the Fourth Amendment.
"The Court issued a classified version of its opinion in August 2008 and subsequently requested publication of an unclassified version. Today, after a careful classification review process, the Court published the unclassified version of its opinion. The Court of Review's decision marks the second ruling published by the Court since it was established more than 30 years ago."
Medical Clinic Executives and Worker Plead Guilty to $5.3 Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owners and operators of two Miami medical clinics, along with a phlebotomist at one of the clinics, have pleaded guilty to defrauding the Medicare program in connection with a $5.3 million HIV and cancer infusion fraud scheme, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced today.
Juan A. "Tony" Marrero, 41, Belkis Marrero, 41, and Luz Borrego, 43, each pleaded guilty on Jan. 14, 2009, to conspiracy to commit healthcare fraud before U.S. District Judge Ursula Ungaro in the Southern District of Florida. In their pleas, Tony and Belkis Marrero admitted that they co-owned two Miami clinics named Medcore Group LLC (Medcore) and M&P Group of South Florida Inc. (M&P).
Medcore and M&P purported to specialize in the treatment of HIV-positive patients. The Marreros admitted that beginning in August 2004 and continuing through November 2006 they conspired with others to submit approximately $5.3 million in fraudulent claims to Medicare. Borrego acknowledged her role in the fraud at Medcore where she was a phlebotomist who administered unnecessary drugs intravenously to HIV patients. Tony Marrero also pleaded guilty to two separate conspiracies to launder the proceeds of the health care fraud. Sentencing for all three defendants is scheduled for April 3, 2009.
During their pleas, the defendants admitted that Medcore and M&P were operated for the purpose of defrauding Medicare and that the treatments for infused or injected drugs billed to Medicare were not medically necessary. Each of the defendants also admitted that all of the patients at the clinics were participants in the fraud. The defendants admitted that they, or their co-conspirators, entered into kickback arrangements with these Medicare beneficiaries whereby the beneficiaries were paid every week in exchange for their Medicare billing information, which allowed the clinics to submit the fraudulent bills.
To obtain all the cash necessary to pay the patients, Tony Marrero admitted that he and others would write checks that appeared legitimate to people who would cash the checks and then return the cash to them for a fee.
The defendants admitted that none of the Medicare beneficiaries needed the injection and infusion treatments billed to Medicare by the clinics. Tony and Belkis Marrero acknowledged that clinic employees intentionally manipulated patients’ blood samples so that they would appear to need treatment, when in fact they did not. Belkis Marrero and Borrego also admitted that they put together medical files to make them appear legitimate and that they supported the treatments being billed to Medicare.
On Jan. 7, 2009, Orlando Pascual Jr., a co-owner of Medcore and M&P, pleaded guilty to his role in the Medicare fraud and money laundering conspiracies. Pascual is currently incarcerated for Medicare fraud involving the operation of a separate durable medical equipment company that he operated from 2001 to 2003.
On Jan. 14, 2009, Harold Sio, the owner of pharmaceutical wholesale company named Lifecare Medical, was charged by criminal information with conspiracy to commit health care fraud and conspiracy to commit money laundering. Sio, whose company supplied Medcore and M&P with infusible drugs, allegedly conspired with Pascual and Tony Marrero to accomplish the health care fraud scheme by providing false invoices for the drugs allegedly used in the scheme.
Four co-defendants in the case are scheduled for trial beginning Feb. 9, 2009, in the Southern District of Florida. An indictment and an information are merely charges, 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 was investigated by the Department of Health and Human Services, Office of the Inspector General and the FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and 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.
Justice Department Resolves Investigation of King County, Washington Correctional FacilityRead the Press Release
WASHINGTON – The Department of Justice today announced a comprehensive agreement with King County, Wash., regarding the conditions of confinement at the King County Correctional Facility in Seattle. The agreement follows the Department’s investigation of the facility, which found substantial civil rights violations.
"I appreciate King County’s cooperation during our investigation and commend the leadership of the King County Executive and the County Council for their commitment to improve conditions at the jail," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "Today’s agreement will ensure that necessary measures are taken so that the County will meet its obligations under the law."
The Department’s investigation identified inadequate medical care and contagious disease prevention and treatment services, inadequate security and detention practices, and inadequate suicide prevention procedures. The agreement requires the implementation of measures to ensure that the identified deficiencies are remedied and that the services and systems to address the inadequate conditions are consistent with constitutional standards.
The Civil Rights Division conducted its investigation pursuant to the Civil Rights of Institutionalized Persons Act, which authorizes the federal government to identify and root out systemic abuses. The Civil Rights Division has successfully resolved similar investigations of other adult correctional facilities in numerous other jurisdictions, including Arkansas, Delaware, Georgia, Kentucky, Maryland, Mississippi, Montana, New Mexico, New York, Oklahoma, Tennessee, Texas and Wisconsin.
The Department of Justice’s enforcement effort reaches beyond adult correctional facilities. Since 2001, the Department of Justice has opened 97 similar investigations into conditions of confinement at correctional facilities, juvenile detention centers, nursing homes, mental health facilities and residences for persons with developmental disabilities throughout the United States.
More information about the Special Litigation Section of the Justice Department’s Civil Rights Division can be found at http://www.usdoj.gov/crt/split/index.html.
Justice Department Reaches Settlement with Georgia<br /> Regarding States Seven Psychiatric HospitalsRead the Press Release
WASHINGTON - The Justice Department today announced that it has reached a settlement with the State of Georgia regarding the conditions at Georgia’s seven psychiatric hospitals. The Department opened its investigation of Georgia’s psychiatric hospitals in 2007 and issued findings regarding Georgia Regional Hospital at Atlanta on May 30, 2008. The Department subsequently entered into negotiations regarding remedies the State was required to implement to correct unconstitutional conditions at all the hospitals. The other state facilities involved in today’s settlement include: Georgia Regional Hospital at Savannah, Central State Hospital in Milledgeville, Southwestern State Hospital, East Central State Hospital, West Central State Hospital, and Northwest Georgia Regional Hospital at Rome.
"When a state undertakes to care for persons with mental illness and developmental disabilities, it accepts responsibility to protect them from harm," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "The Department commends Governor Sonny Perdue, State Attorney General Thurbert Baker, and the Georgia Department of Human Resources for their willingness to work aggressively to address the conditions at these seven psychiatric hospitals. The leadership of the State in amicably resolving this matter has been paramount to today's exceptional result on behalf of the people of the State of Georgia. We are pleased that we have cooperatively achieved a settlement agreement that will benefit the lives of persons with mental health problems and developmental disabilities in Georgia’s psychiatric hospitals."
Under the terms of the settlement agreement, the State will work to ensure that patients at the seven hospitals are safe and receive the care and services necessary to meet their individualized needs. Specifically, the State has agreed to undertake a variety of measures, including improving medical and mental health care and ensuring that patients are free from undue bodily restraint. The State will also improve discharge planning and ensure that each patient is served in the most integrated setting appropriate.
Today's settlement with the State of Georgia is the result of a cooperative effort by State entities and the Justice Department to reach a settlement that will make meaningful changes to improve the care and treatment of patients at Georgia’s seven psychiatric hospitals. This Administration is firmly committed to the vigorous protection of the rights of persons with disabilities.
The Civil Rights Division is authorized to conduct investigations of public psychiatric hospitals under the Civil Rights of Institutionalized Persons Act (CRIPA). This statute allows the federal government to identify and root out systemic abuses such as those discovered in Georgia. The Civil Rights Division has successfully resolved similar investigations in other in-patient mental health facilities in the District of Columbia, Vermont, and California, among other states. The Civil Rights Division has open investigations of mental health facilities in Delaware, New Jersey, New York, North Carolina and Oregon.
CRIPA authorizes the Attorney General to investigate conditions in certain institutions owned or operated by, or on behalf of, state or local governments. These institutions include nursing homes, residential facilities serving people with mental or other developmental disabilities, mental health facilities, jails, prisons, and juvenile justice facilities.
Copies of the settlement documents were filed today in federal court and will be available on the Justice Department Web site upon approval by a federal judge. More information about the Civil Rights Division of the Justice Department, and the laws it enforces, is available at http://www.usdoj.gov/crt/index.html.
Four Executives Agree to Plead Guilty in<br /> Global LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON — Executives from LG Display Co. Ltd. and Chunghwa Picture Tubes Ltd. have agreed to plead guilty and serve jail time in the United States for participating in a global conspiracy to fix prices in the sale of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels, the U.S. Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court in San Francisco, Chang Suk "C.S." Chung, a Korean LG executive, conspired with unnamed employees from other panel makers to suppress and eliminate competition by fixing the prices of TFT-LCD panels from on or about Sept. 21, 2001, to on or about June 1, 2006. According to a separate one-count felony charge, also filed today in U.S. District Court in San Francisco, Chieng-Hon "Frank" Lin, a Taiwanese former executive from Chunghwa, and Chih-Chun "C.C." Liu and Hsueh-Lung "Brian" Lee, Taiwanese current employees of Chungwha, are charged with participating in the same conspiracy at various times during the period from Sept. 14, 2001, to on or about Dec. 1, 2006.
Under the plea agreements, which must be approved by the court, all four executives have agreed to serve a term of imprisonment, pay a criminal fine and assist the government in its ongoing TFT-LCD investigation.
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.
"These cases involve the first Taiwanese nationals to face imprisonment in the United States for an antitrust offense," said Deborah A. Garza, Acting Assistant Attorney General in charge of the Antitrust Division. "The Department of Justice is committed to holding accountable all conspirators who harm American consumers, no matter where they live or where they commit the crime."
During the conspiracy, Chang Suk Chung, a Korean citizen, worked as LG’s Vice President of Monitor Sales. Under the plea agreement, Chung has agreed to serve a seven-month prison sentence in the United States and pay a $25,000 criminal fine.
During the charged conspiracy period, Chieng-Hon Lin, a Taiwanese and U.S. citizen, was Chunghwa’s Chairman and Chief Executive Officer. Under the plea agreement, Lin has agreed to serve a nine-month prison sentence in the United States and pay a $50,000 criminal fine.
Chih-Chun Liu, a Taiwanese citizen, was Chunghwa’s Vice President of LCD Sales during the charged conspiracy period. Under the plea agreement, Liu has agreed to serve a seven-month prison sentence in the United States and pay a $30,000 criminal fine.
Hsueh-Lung Lee, a Taiwanese citizen, held various sales positions at Chunghwa during the charged conspiracy period, including Vice President of LCD Sales. Under the plea agreement, Lee has agreed to serve a six-month prison sentence in the United States and pay a $20,000 criminal fine.
These four foreign-based executives were charged with participating with co-conspirators in a conspiracy that was accomplished by:
- Participating in meetings, conversations and communications in Taiwan, South Korea and the United States to discuss the prices of TFT-LCD panels;
- Agreeing during these meetings, conversations and communications to charge prices of TFT-LCD panels at certain predetermined levels;
- Issuing price quotations in accordance with the agreements reached;
- Exchanging information on sales of TFT-LCD panels for the purpose of monitoring and enforcing adherence to the agreed-upon prices; and
- Authorizing, ordering and consenting to the participation of subordinate employees in the conspiracy.
"These are the first individuals to plead guilty to a charge of fixing prices in this active investigation into antitrust violations in the TFT-LCD industry," said Scott D. Hammond, the Antitrust Division’s Deputy Assistant Attorney General for Criminal Enforcement. "We will continue in our efforts to bring to justice other domestic and foreign-based executives who were involved with fixing TFT-LCD prices."
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.
The four executives are charged with price fixing in violation of the Sherman Act, which carries a maximum fine of $1 million and up to 10 years in prison for an individual. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
These pleas are the result of a joint investigation by the Antitrust Division’s San Francisco Field Office 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.
Eli Lilly and Company Agrees to Pay $1.415 Billion to Resolve Allegationsof Off-label Promotion of ZyprexaRead the Press Release
American pharmaceutical giant Eli Lilly and Company today agreed to plead guilty and pay $1.415 billion for promoting its drug Zyprexa for uses not approved by the Food and Drug Administration (FDA), the Department of Justice announced today. This resolution includes a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a United States criminal prosecution of any kind. Eli Lilly will also pay up to $800 million in a civil settlement with the federal government and the states.
Eli Lilly agreed to enter a global resolution with the United States to resolve criminal and civil allegations that it promoted its antipsychotic drug Zyprexa for uses not approved by the FDA, the Department said. Such unapproved uses are also known as "off-label" uses because they are not included in the drug’s FDA approved product label.
Assistant Attorney General for the Civil Division Gregory G. Katsas and acting U.S. Attorney for the Eastern District of Pennsylvania Laurie Magid today announced the filing of a criminal information against Eli Lilly for promoting Zyprexa for uses not approved by the FDA. Eli Lilly, headquartered in Indianapolis, is charged in the information with promoting Zyprexa for such off-label or unapproved uses as treatment for dementia, including Alzheimer’s dementia, in elderly people.
The company has signed a plea agreement admitting its guilt to a misdemeanor criminal charge. Eli Lilly also signed a civil settlement to resolve civil claims that by marketing Zyprexa for unapproved uses, it caused false claims for payment to be submitted to federal insurance programs such as Medicaid, TRICARE and the Federal Employee Health Benefits Program, none of which provided coverage for such off-label uses.
The plea agreement provides that Eli Lilly will pay a criminal fine of $515 million and forfeit assets of $100 million. The civil settlement agreement provides that Eli Lilly will pay up to an additional $800 million to the federal government and the states to resolve civil allegations originally brought in four separate lawsuits under the qui tam provisions of the federal False Claims Act. The federal share of the civil settlement amount is $438 million. Under the terms of the civil settlement, Eli Lilly will pay up to $361 million to those states that opt to participate in the agreement.
Under the Food, Drug, and Cosmetic Act (FDCA), a company must specify the intended uses of a product in its new drug application to the FDA. Before approving a drug, the FDA must determine that the drug is safe and effective for the use proposed by the company. Once approved, the drug may not be marketed or promoted for off-label uses.
The FDA originally approved Zyprexa, also known by the chemical name olanzapine, in Sept. 1996 for the treatment of manifestations of psychotic disorders. In March 2000, FDA approved Zyprexa for the short-term treatment of acute manic episodes associated with Bipolar I Disorder. In Nov. 2000, FDA approved Zyprexa for the short term treatment of schizophrenia in place of the management of the manifestations of psychotic disorders. Also in Nov. 2000, FDA approved Zyprexa for maintaining treatment response in schizophrenic patients who had been stable for approximately eight weeks and were then followed for a period of up to eight months. Zyprexa has never been approved for the treatment of dementia or Alzheimer’s dementia.
The criminal information, filed in the Eastern District of Pennsylvania, alleges that from Sept. 1999 through at least Nov. 2003, Eli Lilly promoted Zyprexa for the treatment of agitation, aggression, hostility, dementia, Alzheimer’s dementia, depression and generalized sleep disorder. The information alleges that Eli Lilly’s management created marketing materials promoting Zyprexa for off-label uses, trained its sales force to disregard the law and directed its sales personnel to promote Zyprexa for off-label uses.
The information alleges that beginning in 1999, Eli Lilly expended significant resources to promote Zyprexa in nursing homes and assisted-living facilities, primarily through its long-term care sales force. Eli Lilly sought to convince doctors to prescribe Zyprexa to treat patients with disorders such as dementia, Alzheimer’s dementia, depression, anxiety, and sleep problems, and behavioral symptoms such as agitation, aggression, and hostility.
The information further alleges that the FDA never approved Zyprexa for the treatment of dementia, Alzheimer's dementia, psychosis associated with Alzheimer's disease, or the cognitive deficits associated with dementia.
The information also alleges that building on its unlawful promotion and success in the long-term care market, Eli Lilly executives decided to market Zyprexa to primary-care physicians. In Oct. 2000, Eli Lilly began this off-label marketing campaign targeting primary care physicians, even though the company knew that there was virtually no approved use for Zyprexa in the primary-care market. Eli Lilly trained its primary-care physician sales representatives to promote Zyprexa by focusing on symptoms, rather than Zyprexa’s FDA approved indications.
The qui tam lawsuits alleged that between Sept. 1999 and the end of 2005, Eli Lilly promoted Zyprexa for use in patients of all ages and for the treatment of anxiety, irritability, depression, nausea, Alzheimer’s and other mood disorders. The qui tam lawsuits also alleged that the company funded continuing medical education programs, through millions of dollars in grants, to promote off-label uses of its drugs, in violation of the FDA’s requirements.
"Off-label promotion of pharmaceutical drugs is a serious crime because it undermines the FDA’s role in protecting the American public by determining that a drug is safe and effective for a particular use before it is marketed," said Gregory G. Katsas, Assistant Attorney General for the Civil Division. "This settlement demonstrates the Department’s ongoing diligence in prosecuting cases involving violations of the Food, Drug, and Cosmetic Act, and recovering taxpayer dollars used to pay for drugs sold as a result of off-label marketing campaigns."
"When pharmaceutical companies ignore the government’s process for protecting the public, they undermine the integrity of the doctor-patient relationship and place innocent people in harm’s way," said acting U.S. Attorney for the Eastern District of Pennsylvania, Laurie Magid. "Off-label marketing created unnecessary risks for patients. People have an absolute right to their doctor’s medical expertise, and to know that their health care provider’s judgment has not be clouded by misinformation from a company trying to build its bottom line."
The global resolution includes the following agreements:
- A plea agreement signed by Eli Lilly admitting guilt to the criminal charge of misbranding. Specifically, Eli Lilly admits that between Sept. 1999 and March 31, 2001, the company promoted Zyprexa in elderly populations as treatment for dementia, including Alzheimer’s dementia. Eli Lilly has agreed to pay a $515 million criminal fine and to forfeit an additional $100 million in assets.
- A civil settlement between Eli Lilly, the United States and various States, in which Eli Lilly will pay up to $800 million to the federal government and the states to resolve False Claims Act claims and related state claims by Medicaid and other federal programs and agencies including TRICARE, the Federal Employees Health Benefits Program, Department of Veterans Affairs, Bureau of Prisons and the Public Health Service Entities. The federal government will receive $438,171,544 from the civil settlement. The state Medicaid programs and the District of Columbia will share up to $361,828,456 of the civil settlement, depending on the number of states that participate in the settlement.
- The qui tam relators will receive $78,870,877 from the federal share of the settlement amount.
- A Corporate Integrity Agreement (CIA) between Eli Lilly and the Office of Inspector General of the Department of Health and Human Services. The five-year CIA requires, among other things, that a Board of Directors committee annually review the company’s compliance program and certify its effectiveness; that certain managers annually certify that their departments or functional areas are compliant; that Eli Lilly send doctors a letter notifying them about the global settlement; and that the company post on its website information about payments to doctors, such as honoraria, travel or lodging. Eli Lilly is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of the CIA and subject to monetary penalties for less significant breaches.
"OIG’s Corporate Integrity Agreement will increase the transparency of Eli Lilly’s interactions with physicians and strengthen Eli Lilly’s accountability for its compliance with the law," said Department of Health and Human Services Inspector General Daniel R. Levinson. "This historic resolution demonstrates the Government’s commitment to improvethe integrity of drug promotion activities."
In addition to the $1.415 billion criminal and civil settlement announced today, Eli Lilly previously agreed to pay $62 million to settle consumer protection lawsuits brought by 33 states. The state consumer protection settlements were announced on Oct. 7, 2008.
"Today's announcement of the filing of a criminal charge and the unprecedented terms of this settlement demonstrates the government's increasing efforts aimed at pharmaceutical companies that choose to put profits ahead of the public's health," said Special Agent-in-Charge Kim Rice of FDA's Office of Criminal Investigations. "The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the safeguards of the drug approval process and recklessly promote drugs for uses for which they have not been proven to be safe and effective."
"The illegal scheme used by Eli Lilly significantly impacted the integrity of TRICARE, the Department of Defense's healthcare system," said Ed Bradley, Special Agent-in-Charge, Defense Criminal Investigative Service. "This illegal activity increases patients’ costs, threatens their safety and negatively affects the delivery of healthcare services to the over nine million military members, retirees and their families who rely on this system. Today’s charges and settlement demonstrate the ongoing commitment of the Defense Criminal Investigative Service and its partners in law enforcement to investigate and prosecute those that abuse the government's healthcare programs at the expense of the taxpayers and patients."
"This case should serve as still another warning to all those who break the law in order to improve their profits," said Patrick Doyle, Special Agent-in-Charge of the Office of Inspector General for the Department of Health and Human Services in Philadelphia. "OIG, working with our law enforcement partners, will pursue and bring to justice those who would steal from vulnerable beneficiaries and the taxpayers."
The civil settlement resolves four qui tam actions filed in the Eastern District of Pennsylvania: United States ex rel. Rudolf, et al., v. Eli Lilly and Company, Civil Action No. 03-943 (E.D. Pa.); United States ex rel. Faltaous v. Eli Lilly and Company, Civil Action No. 06-2909 (E.D. Pa.); United States ex rel. Woodward v. Dr. George B. Jerusalem, et al., Civil Action No. 06-5526 (E.D. Pa.); and United States ex rel. Vicente v. Eli Lilly and Company, Civil Action No. 07-1791 (E.D. Pa.). All of those cases were filed by former Eli Lilly sales representatives.
The criminal case is being prosecuted by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Office of Consumer Litigation of the Justice Department’s Civil Division. The civil settlement was reached by the U.S. Attorney’s Office and the Commercial Litigation Branch of the Justice Department’s Civil Division.
This matter was investigated by the FDA’s Office of Criminal Investigations, the Defense Criminal Investigative Service and the Department of Health and Human Services Office of Inspector General.
Assistance was provided by representatives of FDA’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
The Corporate Integrity Agreement was negotiated by the Office of Inspector General of the Department of Health and Human Services.
Eli Lilly's guilty plea and sentence is not final until accepted by the U.S. District Court.
Court Orders Louisiana CPA to Stop Claiming<br /> False Tax Deductions for CustomersRead the Press Release
WASHINGTON - A federal court has ordered CPA Steven W. McCann, who operates a firm called SWMc Services in the Houma, La., area, to stop claiming improper tax deductions on federal income tax returns he prepares for customers, the Justice Department announced today. McCann agreed to the civil injunction order.
According to the government complaint filed in the case, McCann prepared nearly 1,000 federal income tax returns claiming fraudulent employee expense deductions for customers who work as mariners. The government alleged that these deductions were false because the expenses McCann claimed for his customers were never paid by the clients. Instead, their employers provided the items being deducted, including meals and other incidental expenses. In 2007, a federal court in Los Angeles barred another CPA, Martin A. Kapp, from promoting a similar scheme.
"The IRS and Justice Department are committed to stopping tax preparers who continue to promote the mariner’s tax deduction, which courts have held is frivolous," said Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division. "The Justice Department has obtained injunctions against more than 365 tax return preparers and tax-fraud promoters since 2001." Information about those cases is available on the Justice Department Web site.
Assistant Attorney General Hochman thanked trial attorney Grayson Hoffman and IRS revenue agent Phil Rampey for their efforts in obtaining this injunction for the government.
Chicago Cousins Plead Guilty to Conspiracy to Provide Material Support to TerroristsRead the Press Release
WASHINGTON – Zubair Ahmed, 29, and Khaleel Ahmed, 28, both residents of Chicago, pleaded guilty today in the Northern District of Ohio to conspiracy to provide material support to terrorists in connection with their efforts to travel abroad in order to murder or maim U.S. military forces in Iraq or Afghanistan.
Today’s guilty pleas were announced by Matthew Olsen, Deputy Assistant Attorney General for National Security; William J. Edwards, U.S. Attorney for the Northern District of Ohio; and C. Frank Figliuzzi, Special Agent in Charge, Cleveland Division of the Federal Bureau of Investigation (FBI).
Zubair Ahmed and his cousin Khaleel Ahmed each pleaded guilty before Chief U.S. District Judge James G. Carr in Toledo, Ohio, to a one-count, superseding information charging them with conspiracy to provide material support and resources, including the defendants themselves as personnel, to terrorists in violation of Title 18, U.S.C. Section 2339A. At sentencing, each defendant faces a statutory maximum of 15 years imprisonment and a $250,000 fine, followed by three years of supervised release.
According to the superseding information and other information entered into the court record today:
The criminal conspiracy involving Zubair and Khaleel Ahmed began no later than April 1, 2004, and continued until their arrests on Feb. 21, 2007. As part of the conspiracy, the defendants made preparations to travel overseas in order to engage in acts that would result in the murder or maiming of U.S. military forces in either Iraq or Afghanistan. On or about May 21, 2004, the defendants traveled to Cairo, Egypt, with the intent of engaging in acts that would result in the murder or maiming of U.S. military forces in Iraq or Afghanistan.
After their return from Egypt, on or about July 4, 2004, Zubair and Khaleel Ahmed discussed, sought and received instruction on firearms from another individual in Cleveland. The defendants also sought and discussed training in counter-surveillance techniques and sniper rifles with this individual. Specifically, defendant Zubair Ahmed discussed his desire to learn how to use and move with a .50-caliber machine gun.
As part of the conspiracy, the defendants also communicated with each other using code words and in a foreign language to disguise their preparations and plans to engage in acts abroad that would result in the murder or maiming of U.S. military forces in Iraq and Afghanistan.
Furthermore, Zubair and Khaleel Ahmed researched the purchase of firearms, methods of obtaining firearms instruction (including at least one visit to a firing range) and methods of obtaining instruction in gunsmithing. In addition, the defendants collected and distributed videos of attacks on U.S. military forces overseas, manuals on military tactics and military manuals on weaponry.
"Today’s guilty pleas should send a strong message to individuals who would use this country as a platform to plot attacks against U.S. military personnel in Iraq and Afghanistan," said Matthew Olsen, Deputy Assistant Attorney General for National Security. "This case also underscores the need for continued vigilance in identifying and dismantling extremist plots that develop within our nation."
William J. Edwards, U.S. Attorney for the Northern District of Ohio, said: "These guilty pleas are testament to the hard work and dedication of all the federal, state and local law enforcement officials who have spent years investigating this case and to the tireless efforts and perseverance of an extremely talented team of federal prosecutors who, with their law enforcement partners, keep this country safe from terrorists."
C. Frank Figliuzzi, Special Agent in Charge, Cleveland Division, FBI, said: "This case is an example of our continued efforts to detect terrorist planning and to prevent acts of terrorism before they occur. Through close cooperation with our law enforcement partners in Illinois and Ohio, this case resulted in the successful prosecution of these individuals."
This case was investigated by the FBI and the Joint Terrorism Task Force in Chicago, Illinois and Toledo, Ohio, with the assistance of the U.S. Immigration and Customs Enforcement; U.S. Customs and Border Protection; the Chicago Police Department; the Illinois State Police; the Ohio Highway Patrol; the Toledo Police Department; and the Lucas and Wood County Sheriff’s Departments.
This case is being prosecuted by Assistant U.S. Attorneys Thomas E. Getz and Justin E. Herdman of the National Security Unit of the U.S Attorney’s Office in Cleveland; as well Assistant U.S. Attorney Gregg N. Sofer of the U.S. Attorney’s Office in Austin, Texas (formerly of the Justice Department’s Counterterrorism Section); and Trial Attorneys Jerome J. Teresinski and Jolie F. Zimmerman of the Justice Department’s Counterterrorism Section. The U.S. Attorney’s Office in Chicago also provided assistance in this case.
CEMEX California Cement Agrees to Reduce Emissions and Pay $2 Million Fine to Settle Clean Air Act ClaimsRead the Press Release
WASHINGTON—In the largest settlement yet in the U.S. Environmental Protection Agency’s ongoing cement kiln enforcement initiative, the U.S. Department of Justice, on behalf of EPA, today lodged a consent decree with the U.S. District Court for the Central District of California resolving Clean Air Act claims against CEMEX California Cement LLC with respect to the company’s Victorville, Calif., Portland cement plant.
The settlement will resolve claims asserted in a 2007 complaint that CEMEX is releasing pollutants to the air, including nitrogen oxide, sulfur dioxide and carbon monoxide, without required permits setting emission limits under the Clean Air Act. Under the terms of the settlement, CEMEX must meet new limits for these pollutants at the Victorville plant, one of the largest cement plants in the United States, including stringent new limits for nitrogen oxide that will reduce emissions by 1,890 tons per year, a nearly 40 percent reduction. The cement manufacturer must also pay a $2 million civil penalty. EPA estimates that achieving and maintaining compliance with the new emission limits, depending on the control technology used, could cost CEMEX millions of dollars.
“Today’s settlement shows the federal government’s continued commitment to enforcing the federal environmental laws and protecting the nation’s air quality,” said Ronald J. Tenpas, Assistant Attorney General for the Environment and Natural Resources Division of the U.S. Department of Justice.
“This settlement will result in cleaner air for California,” said Deborah Jordan, director of the EPA’s Air Division in the Pacific Southwest region. “This facility is the largest source of nitrogen oxide—an air pollutant that causes smog—in California, so the state-of-the-art air pollution controls that CEMEX is installing will have a significant impact on air quality.”
The settlement resolves the EPA’s claims that on two separate occasions, in 1997 and 2000, CEMEX violated the Clean Air Act by undertaking major plant modifications resulting in significant increases in the Victorville plant’s capacity to pollute without first undergoing required regulatory review or obtaining required permits under the Clean Air Act’s Prevention of Significant Deterioration, or PSD, program and without installing state-of-the-art emission controls that would reduce contaminants such as nitrogen oxide.
Nitrogen oxide is a harmful air pollutant that causes smog and leads to respiratory problems in children and the elderly. The Victorville area fails to meet federal air quality standards for both ozone and particulate matter.
The proposed consent decree 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. For more information on the settlement and the Clean Air Act, please visit: http://www.epa.gov/region09/air/index.html.
Alabama-Based Hospice Company Pays U.S. $24.7 Million<br /> to Settle Health Care Fraud ClaimsRead the Press Release
WASHINGTON – SouthernCare Inc. and its shareholders have agreed to pay the United States a total of $24.7 million to settle allegations that the Birmingham, Ala.-based company submitted false claims to the government for patients treated at its hospice facilities, the Justice Department announced today. SouthernCare operates approximately 99 locations that provide hospice services in 15 states.
Hospices provide palliative care – any form of medical care or treatment that concentrates on reducing the severity of a disease’s symptoms – to patients who decide to forego curative care of their illness. Medicare beneficiaries are entitled to hospice care if they have a terminal prognosis of six months or less to live. The government alleged that SouthernCare was submitting false claims for hospice care for patients who were not eligible for such care.
"The Medicare hospice benefit is intended to provide compassionate end of life care to terminally ill patients," said Gregory G. Katsas, Assistant Attorney General of the Civil Division. "This settlement sends a clear message that the Department of Justice will not allow health care providers to take advantage of beneficiaries in their attempts to game the reimbursement system."
Today’s settlement results from two qui tam suits filed by two former SouthernCare employees, Tanya Rice and Nancy Romeo, on behalf of the United States. The False Claims Act authorizes private parties to file suit against those who defraud the United States and to receive a share of any recovery. The United States will pay $4.9 million to the individuals who filed the actions against SouthernCare.
"Our investigation showed a pattern and practice to falsely admit patients to hospice care who did not qualify and to bill Medicare for that care. This resulted in taxpayers bearing inappropriate costs. Today’s settlement evidences the Department of Justice’s efforts to both protect the public monies and safeguard Medicare beneficiaries," said Alice H. Martin, U.S. Attorney for the Northern District of Alabama.
"This significant settlement demonstrates our commitment to protect the Medicare trust fund from fraud and abuse and to ensure that Medicare beneficiaries receive quality care," said David E. Nahmias, United States Attorney for the Northern District of Georgia,. "Every provider that submits claims to the Medicare program must ensure that its services are billed appropriately. Falsely admitting people to hospice care who did not qualify for the benefit exposed these patients to potential harm and contributes to the soaring costs of health care for everyone."
As part of the settlement, SouthernCare will enter into a Corporate Integrity Agreement with the Office of Inspector General (OIG), Department of Health and Human Services (HHS), to address the allegations raised in the qui tam complaints.
"Today’s Corporate Integrity Agreement contains rigorous provisions specifically designed to ensure SouthernCare’s future compliance with Medicare and Medicaid hospice eligibility requirements," said Daniel R. Levinson, Inspector General for HHS. "This agreement demonstrates OIG’s commitment to protect the integrity of federal health care programs."
The investigation was jointly handled by the U.S. Attorney’s Office for the Northern District of Alabama, the U.S. Attorney’s Office for the Northen District of Georgia, the Justice Department’s Civil Division, Office of the Inspector General of the Department of Health and Human Services and the FBI.
14 January 2009
West Point Employee Charged in Nearly $3 Million <br /> Embezzlement SchemeRead the Press Release
WASHINGTON – A Highland Falls, N.Y., woman was arrested today and charged in a criminal complaint for her role in a scheme to defraud the U.S. government by authorizing nearly $3 million in payments to a non-existent corporation for staff training that she knew never occurred at the U.S. Military Academy in West Point, N.Y. (West Point), Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and Brig. Gen. Rodney Johnson, Commander of the U.S. Army Criminal Investigation Command announced.
According to a criminal complaint filed in U.S. District Court in the District of Columbia, Bobbie Cyana Ryan, 50, worked in the Information, Education and Technology Division in the Office of the Dean at West Point. According to the complaint, Ryan was responsible for coordinating information technology training programs for West Point staff. Based on irregularities found during a routine audit, U.S. Army investigators discovered that Ryan, acting as the requesting and approving official, used her government purchase card and cards of her unknowing subordinates to authorize $2.9 million in payments to CWG Enterprises. The complaint alleges that the payments were purportedly for either on-site training instructors or training reference materials when, in fact, no personnel were ever trained and no materials were ever provided.
According to the complaint, U.S. Army investigators subsequently discovered that Ryan conducted financial transactions and identified herself as doing business as CWG Enterprises. The complaint alleges that Ryan used a rented mail box as the company address for CWG Enterprises. Based on false invoices allegedly created by Ryan, transfers of government funds were allegedly made from a bank in Washington, D.C. to a bank account in the name of "Bobbie C. Ryan dba CWG Enterprises" at a bank in New Windsor, N.Y. Once the funds arrived in the purported CWG Enterprises bank account, Ryan allegedly transferred the funds to her personal account and then made substantial cash withdrawals.
The court today ordered that Ryan be released on a $30,000 bond and her travel was restricted pending her next court appearance, scheduled for Jan. 29, 2009, in U.S. District Court for the District of Columbia.
Charges in a criminal complaint are merely allegations and defendants are presumed innocent unless and until proven guilty in a court of law.
The case is being investigated by the U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit, Hartford Fraud Resident Agency. The case is being prosecuted by Senior Trial Attorney Andrew Levchuk of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II, with assistance from the U.S. Attorney’s Office for the Southern District of New York.
Six Telemarketers Charged in Florida with Business Opportunity ScamRead the Press Release
WASHINGTON – Five people have been indicted by a federal grand jury in Miami relating to the individuals’ participation in a fraudulent business opportunity sales operation, the Justice Department and the U.S. Postal Inspection Service announced today. A sixth individual was also charged in a criminal information.
According to the indictment, the defendants were involved with a firm called Global Resources Inc. The nine-count indictment charges five of the defendants with conspiracy to commit mail fraud and wire fraud. Some of the defendants are also charged with mail fraud, wire fraud, and aiding and abetting.
According to the indictment and information, from approximately June 2004 through Oct. 2004, Stewart Pope of Seminole, Fla.; John Maginnis of Miami; Lisa Cohan of Ft. Lauderdale; Laura Fadlon aka "Laura Sadlon" of North Miami; Larry Taylor and Frank DiMezza, both of Long Beach, Calif.; and others engaged in the fraudulent sale of business opportunities through Global. The information charges a sixth defendant, John Maginnis, with a single count of conspiracy to commit mail fraud and wire fraud.
The company purportedly sold prepaid business opportunities, along with assistance in establishing, maintaining and operating a prepaid business. According to the defendants and their co-conspirators, a business opportunity purchaser would earn substantial profits when members of the public purchased prepaid cell phones, phone minutes and various prepaid products and services from a distributor’s kiosk terminal.
Global promoted the business opportunities to consumers across the country through television commercials and other media, touting the profits that could be earned by purchasing a distributorship and urging consumers to call a telephone number that appeared in the advertisements. Potential purchasers were told that for a purchase price of approximately
$15,000 Global would provide three terminals, numerous prepaid cell phones and advertising material. Global salespeople told consumers that Global would find viable, high-traffic locations to place the terminals, relocate any terminals that underperformed, only sell distributorships in a limited geographic area, and provide ongoing technical support and customer service. According to the charges, these representations were all false. According to the indictment, the defendants and others also falsely represented to potential purchasers that they would earn their investment back in approximately six months to a year.
Defendants Lisa Cohan, Larry Taylor and John Maginnis were Global salespeople, referred to as closers. Closers made several misrepresentations about the profits that would be generated by the business, territorial limitations, the viability of locations and ongoing customer support and technical assistance that Global would provide. The closers also gave out the names of the company’s references, who falsely claimed to be successful Global distributors.
Defendant Stewart Pope was listed as Global’s president in the company’s marketing materials, communications with potential customers and disclosure documents. In reality, Pope was not an owner or principal of Global. Pope’s name was used to hide the involvement of Global’s true owners and principals, who, among other things, had a history of selling various sorts of failed business opportunities.
Defendants Frank DiMezza and Laura Fadlon were Global references who fraudulently held themselves out as successful Global distributors. In reality, neither DiMezza nor Fadlon ever purchased a Global distributorship, and they were paid to lie to prospective purchasers.
If convicted, the defendants face a maximum statutory term of imprisonment of 20 years on each count, a possible fine, and mandatory restitution.
It should be remembered that an indictment and information are not evidence of criminal activity, and all defendants are presumed innocent until proven otherwise.
Seven Defendants Convicted for Participation in International Child Exploitation EnterpriseRead the Press Release
WASHINGTON AND PENSACOLA, Fla. – Seven U.S. defendants charged for their activity in a global child pornography trafficking enterprise were convicted today in the Northern District of Florida following a six-day jury trial before Senior U.S. District Judge Lacey A. Collier, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division, Acting U.S. Attorney for the Northern District of Florida Thomas F. Kirwin and FBI Executive Assistant Director J. Stephen Tidwell announced.
The federal jury convicted the defendants of multiple charges, including: engaging in a child exploitation enterprise; conspiracy to advertise, transport, ship, receive and possess child pornography; advertising child pornography, transporting child pornography, receiving child pornography and obstruction of justice.
"This was a wide-scale, high volume, international trafficking enterprise that used sophisticated computer encryption technology and file-sharing techniques," said Acting Assistant Attorney General Matthew Friedrich of the Criminal Division. "Those who operate such enterprises can expect law enforcement, not only here but abroad, to react swiftly and aggressively, as we have done here."
The defendants convicted at trial were: James Freeman of Santa Rosa Beach, Fla.; Gary Lakey of Anderson, Ind.; Marvin Lambert of Indianapolis; Neville McGarity of Medina, Texas; Warren Mumpower of Spokane, Wash.; Daniel Castleman of Lubbock, Texas; and Ronald White of Burlington, N.C.
Seven additional U.S. defendants, also indicted in the case, previously pleaded guilty to offenses related to the child pornography enterprise. Members of the highly-sophisticated international network were charged in a 40-count superseding indictment on March 19, 2008.
Evidence presented at trial, including approximately 50 witnesses and 500 exhibits, established that the defendants participated in a well-organized criminal enterprise whose purpose was to proliferate child sex abuse images to its membership during a two-year period. According to trial testimony, members of the illegal organization used Internet newsgroups - large file-sharing networks where text, software, pictures and videos can be traded and shared - to traffic in illegal images and videos depicting prepubescent children, including toddlers, engaged in various sexual and sadistic acts. Specifically, an Australian constable who infiltrated the group in August 2006 testified about how group members employed a complex system of pseudonyms, screening tests for new members and sophisticated encryption methods to avoid detection. He also testified that the group traded more than 400,000 images and videos of child sexual abuse before it was dismantled by law enforcement.
Each defendant convicted at trial faces a minimum prison sentence of 20 years and a maximum of life in prison, in addition to statutory fines and the possibility of a lifetime period of supervised release following completion of any prison sentence. Sentencing is set April 14, 2009, for all defendants convicted today.
On the return of the guilty verdicts, Acting U.S. Attorney Kirwin said, "This jury verdict signals, once again, the community’s reprehension for the culture of abuse and torture that is child pornography. I am as proud as I can be of our investigative and trial team for the hard work and countless hours they devoted to the investigation and successful prosecution of this scourge. This was truly a team effort by U.S. and foreign law enforcers and by prosecutors from our office and the Criminal Division’s Child Exploitation and Obscenity Section. I want to specifically commend the dedication and superlative efforts of Assistant U.S. Attorney David L. Goldberg, CEOS Trial Attorney LisaMarie Freitas, Appellate Assistant U.S. Attorney Robert G. Davies, and Queensland, Australia Constable Brenden Power, and the agents of the Federal Bureau of Investigation."
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being prosecuted by Assistant U.S. Attorney David Goldberg of the Northern District of Florida and Trial Attorney LisaMarie Freitas of CEOS. The case is being investigated by the Innocent Images Unit of the FBI and the Queensland, Australia, Police Service, with the assistance of the Bundeskriminalamt (BKA) Child Pornography Unit in Germany and the Child Exploitation and Online Protection Centre in the United Kingdom.
Second Former State Department Employee Pleads Guilty to Illegally Accessing Confidential Passport FilesRead the Press Release
WASHINGTON – A second former State Department employee pleaded guilty today to illegally accessing hundreds of confidential passport application files, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division announced.
Dwayne F. Cross, 41, of Upper Marlboro, Md., pleaded guilty before U.S. Magistrate Judge John M. Facciola 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 August 2001 through February 2008, Cross served as an administrative assistant in the Bureau of Consular Affairs, Overseas Citizens Services, Children's Issues at the State Department. He returned to the State Department in March 2008 as a contract employee working as a contract specialist for the acquisitions office. According to information contained in plea documents, Cross 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, Cross admitted that between January 2002 and August 2007, he logged onto the PIERS database and viewed the passport applications of more than 150 celebrities, actors, musicians, comedians, models, politicians, athletes, members of the media, family members, friends, associates and other individuals. Cross 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.
Cross is the second 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. Sentencing for Cross is scheduled for March 23, 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
Agreement
Factual BasisJustice Department Settles Civil Contempt Claim<br /> Against AT&T Inc.Read the Press Release
WASHINGTON – AT&T Inc. has agreed to pay more than $2 million as part of a civil settlement with the Department of Justice that resolves AT&T’s alleged violations of two court orders entered in connection with AT&T’s acquisition of Dobson Communications Corporation.
The Department today filed a petition in the U.S. District Court for the District of Columbia asking it to find AT&T in civil contempt of a 2008 consent decree and a related court order. At the same time, the Department filed a settlement agreement and order, subject to court approval, that would resolve the Department’s concerns. The payment to the United States includes reimbursement to the government for the cost of its investigation into AT&T’s alleged violations.
"It is imperative that companies fully abide by their court-ordered obligations in order for our settlements to be effective in preserving competition and protecting consumers," said Deborah A. Garza, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "When companies fail to comply with a court order, the Antitrust Division will take swift and certain action to ensure that companies fulfill their responsibilities."
Under the consent decree entered by the court in March 2008, AT&T was required to divest mobile wireless telecommunications businesses in three rural service areas (RSAs) – two in Kentucky and one in Oklahoma. Pending divestiture, a management trustee was appointed to oversee the businesses to be divested. Under the consent decree and a related court order, AT&T was required to take all steps necessary to ensure that the divested businesses were operated independently of AT&T and that AT&T did not influence how they were managed. AT&T was also required to take all reasonable efforts to preserve the confidentiality of information material to the operation of the divested businesses and not give unauthorized personnel access to such information.
According to the petition filed by the Department, AT&T failed to fulfill its obligations under the two court orders. The petition alleges that AT&T failed to separate confidential customer account information of the divested businesses from its own customer records and to take other actions needed to prevent unauthorized disclosure. Consequently, AT&T personnel obtained unauthorized access to the divested businesses’ competitively sensitive customer information and in some situations used it to solicit and win away the divested businesses’ customers. The petition further alleges that AT&T, without authorization by the management trustee, waived early termination fees for several customers of the divested businesses to facilitate switching their wireless service from the divested businesses to AT&T.
Certain provisions of the orders were adopted by the Federal Communications Commission (FCC) in its Nov. 15, 2007 order approving the merger of AT&T and Dobson. The Department has coordinated with the FCC throughout its investigation.
AT&T, headquartered in Dallas, is the largest provider of mobile wireless voice and data services in the United States, serving approximately 73 million customers.
Former Oklahoma Corrections Officer<br /> Sentenced to 21 Months for Federal Civil Rights ViolationRead the Press Release
WASHINGTON - Acting Assistant Attorney General for the Civil Rights Division Grace Chung Becker and U.S. Attorney for the Eastern District of Oklahoma Sheldon J. Sperling today announced that Jarrod Anthony Yates, a former Sequoyah County, Okla., corrections officer, was sentenced to 21 months in prison for violating the civil rights of an arrestee.
On June 25, 2006, at the Sequoyah County Jail in Sallisaw, Okla., Yates punched, kneed and stomped an arrestee on his head and face, causing serious injuries, including a fractured orbital socket and severe lacerations that required stitches.
"While we all appreciate corrections officers have dangerous jobs, that doesn’t give them license to abuse their authority with this kind of physical violence," said Acting Assistant Attorney General Grace Chung Becker. "The vast majority exercise appropriate restraint, and because the rule of law is paramount in our society, we have an obligation to prosecute those who clearly don’t."
The case was investigated by the Federal Bureau of Investigation and was prosecuted by First Assistant U.S. Attorney Doug Horn, and Trial Attorneys Roy Conn and Michael Khoury from the Justice Department’s Civil Rights Division.
13 January 2009
Statement by Peter A. Carr, Acting Director of Public Affairs, Regarding Report on Civil Rights Division HiringRead the Press Release
"Today’s report describes troubling conduct by a former supervisor in the Civil Rights Division prior to his departure from the Division nearly three years ago. The mission of the Justice Department is the evenhanded application of the Constitution and the laws enacted under it, and that mission has to start with the evenhanded application of the laws within our own Department. As today’s report makes clear, Mr. Schlozman deviated from that strict standard.
"The Department agrees with the recommendations outlined in the report and has already taken steps to implement them. In addition, the Civil Rights Division has taken additional steps to update its own hiring policies and to increase the role of career employees in its hiring process. As a result of these reforms, and the procedures already in place for evaluating the work and conduct of lawyers throughout the Department, we are confident that the institutional problems identified in today’s report no longer exist and will not recur."
South Carolina Doctor Pleads Guilty to Filing False Tax ReturnRead the Press Release
WASHINGTON - Peter Zavell, a medical doctor in Florence, S.C., pleaded guilty to one count of filing a false tax return for the year 2000, the Justice Department and Internal Revenue Service(IRS) announced today. Zavell was scheduled to begin trial in Florence before Judge R. Bryan Harwell today.
Zavell was indicted in August 2007 for conspiracy to impede the IRS and for filing false returns for years 2000 and 2001. According to the indictment, Zavell used the "Look Back" and "Look Forward" programs, marketed by Anderson Ark and Associates (AAA) to create fictitious entities and business transactions intended to eliminate his tax obligations. The tax loss relative to the scheme was $244,784.
According to the indictment, Zavell used the AAA Look Back program to set up a sham partnership for the purpose of reporting false expenses and eliminating his individual tax liabilities. The indictment alleges that, through the AAA Look Forward program, Dr. Zavell created a sham partnership with which his medical practiced allegedly engaged in fictitious business contracts. The purpose and result of this fictitious business relationship was to generate false business expenses for his medical practice and substantially reduce the business tax obligations.
"Dr. Zavell joins more than a dozen other AAA customers who now wear the lifelong title ‘convicted felon’ for their participation in illegal tax fraud scams," said Nathan J. Hochman, Assistant Attorney General of the Justice Department’s Tax Division. "This is just one more example of the government’s commitment to investigate and prosecute those who fail to comply with their federal tax obligations."
"The IRS aggressively investigates those who use abusive financial arrangements to hide the true ownership of assets and income; it is a matter of maintaining public confidence in the fairness of the tax laws," said Eileen Mayer, Chief, IRS Criminal Investigation. "If individuals choose to participate in abusive tax schemes, they will be held accountable and criminally prosecuted."
As part of the plea agreement, the government agreed to dismiss charges against Zavell’s wife, Susan Zavell.
Judge Harwell did not set a sentencing date. Zavell faces up to three years in prison and a fine of $250,000.
Assistant Attorney General Hochman commended the IRS special agents who investigated the case, as well as Tax Division trial attorneys Kevin C. Lombardi and Gregory R. Bockin, who prosecuted the case.
KIK (Virginia) LLC Pleads Guilty and Agrees to Pay Finefor Negligent Discharges to Sewer SystemRead the Press Release
WASHINGTON — KIK (Virginia) LLC pleaded guilty today in U.S. District Court in the Western District of Virginia to a misdemeanor violation of the Clean Water Act and agreed to pay a $75,000 criminal fine and $25,000 in community service payments for negligent discharges of bleach to the sanitary sewer system in Salem, Va.
KIK (Virginia) operated a facility in Salem that manufactured bleach and other household products. On Sept. 4, 2003, local authorities discovered elevated concentrations of bleach in the sanitary sewer lines servicing the KIK (Virginia) facility. An investigation revealed that at that time and for a number of years before, under previous owners, employees at the plant washed bleach that had been spilled in the production and bottling process and off-specification bleach into the plant’s floor drains. The floor drains channeled the bleach into the plant’s drainage system, which lead to Salem’s sanitary sewer system, operated by the Western Virginia Water Authority. The plant did not have a permit to discharge bleach to the sewer system and did not monitor its discharges.
The Clean Water Act prohibits discharges into a sewer system of any pollutants that the discharger knows could cause property damage. Bleach is a corrosive chemical that, in sufficient concentration, may damage metal and other materials used in the sewer system and is considered a pollutant under the Clean Water Act.
"Keeping our sewer systems and public treatment works in good condition is a key part of maintaining and improving the quality of our waterways," said Eileen Sobek, Deputy Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "We take seriously our obligation to prosecute those whose conduct risks harm to these important systems."
The $25,000 in community service payments will be divided equally between the National Fish and Wildlife Foundation and the National Environmental Education Fund for use in projects to improve water quality in the Salem area. In addition to the criminal fine and community service payment, KIK (Virginia) has agreed to serve one year of probation, during which it will continue to develop and implement an environmental management system that it began developing during the investigation. It also will complete an environmental audit conducted by an independent auditor.
"Dumping bleach into the city's sewer system risked causing damage to both its sewage treatment equipment and the environment," said David Dillion, EPA's Special Agent in Charge in Philadelphia. "It is appropriate that, in addition to the fine, the company will be required
to institute a management system so that this never happens again."
The investigation was conducted by the Environmental Protection Agency with assistance from the U.S. Fish and Wildlife Service and members of the Blue Ridge Environmental Task Force, and was prosecuted by the U.S. Department of Justice’s Environmental Crimes Section and the U.S. Attorney’s Office for the Western District of Virginia.
12 January 2009
Sulfuric Acid Manufacturers Agree to Reduce Air Pollution at FacilitiesRead the Press Release
WASHINGTON — Three manufacturers of sulfuric acid have agreed to spend at least $12 million on air pollution controls that are expected to eliminate more than 3,000 tons of harmful emissions annually from six production plants in Louisiana, Ohio, Oklahoma, Texas and the Wind River Reservation in Wyoming, the U.S. Environmental Protection Agency and the Justice Department announced today. Chemtrade Logistics, Chemtrade Refinery Services and Marsulex also will pay a civil penalty of $700,000 under the Clean Air Act settlement.
"The companies are expected to reduce harmful air pollution by an estimated 3,000 tons per year, which is well over half of their annual emissions" said Granta Y. Nakayama, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "Today’s settlement will improve air quality for millions of people."
"This settlement is the product of our sustained effort to bring all sulfuric acid manufacturers into compliance with the Clean Air Act," said Michael Guzman, Principal Deputy Assistant Attorney General for the Justice Department's Environmental and Natural Resources Division. "We are pleased that the cooperative effort among us, our state counterparts, the Northern Arapaho Tribe and the defendants resulted in this victory for the environment."
Between January 2010 and January 2013, at its four production facilities in Beaumont, Texas; Shreveport, La.; Tulsa, Okla; and Riverton, Wyo., Chemtrade will upgrade existing pollution control equipment called scrubbers to meet new, lower emission limits for sulfur dioxide. At its facility in Oregon, Ohio, Marsulex will improve chemical processing equipment that will reduce sulfur dioxide emissions by no later than July 2011. Finally, Marsulex will install a new scrubber at Chemtrade’s sulfuric acid plant in Cairo, Ohio, to meet lower sulfur dioxide limits by July 2011.
This settlement is the third nationwide compliance agreement in a Clean Air Act initiative under which the Justice Department and EPA expect to reach similar agreements with other sulfuric acid manufacturers. The first and second nationwide sulfuric acid compliance agreements were announced in 2007 with Rhodia Inc. and Dupont. As a result of the three settlements, this initiative has now secured pollution controls at 20 plants and is expected to eliminate a combined total of 35,000 tons of sulfur dioxide emissions per year.
Chemtrade’s and Marsulex’s plants produce sulfuric acid by burning sulfur or used sulfuric acid, thereby creating sulfur dioxide, which poses a danger to children, the elderly and people with heart and lung conditions.
The government’s complaint, filed with the consent decree, alleges that Chemtrade and Marsulex made modifications to their plants, which increased emissions of sulfur dioxide without first obtaining pre-construction permits and installing required pollution control equipment. The Clean Air Act requires major sources of air pollution to obtain such permits before making changes that would result in a significant emissions increase of any pollutant.
Sulfuric acid has many applications and is one of the top products of the chemical industry. Principal uses include ore processing, fertilizer manufacturing, oil refining, wastewater processing and chemical synthesis.
EPA is focusing on improving compliance among industries that have the potential to cause significant amounts of air pollution, including the cement manufacturing, glass manufacturing and acid production industries.
The states of Louisiana, Ohio and Oklahoma, and the Northern Arapaho Tribe, joined the federal government in the agreement. Of the total penalty, $460,000 will be paid to the federal government and $240,000 will be paid to the three states. In Ohio, part of the money will be used to fund a clean diesel school bus project and a tree planting project.
The consent decree, lodged today in the U.S. District Court for the Northern District of Ohio, is subject to a 30-day public comment period and approval by the federal court.
More information on the settlement: http://www.usdoj.gov/enrd/Consent_Decrees.html
Rite Aid Corporation and Subsidiaries Agree to Pay $5 Million in Civil Penalties to Resolve Violations in Eight States of the Controlled Substances ActRead the Press Release
WASHINGTON- Rite Aid Corporation (Rite Aid) and nine of its subsidiaries in eight states have agreed to pay $5 million in civil penalties to settle allegations of violations of the Controlled Substances Act (CSA), the Department of Justice announced today.
In addition to the $5 million penalty, Rite Aid and all of its subsidiaries agreed to a compliance plan with the U.S. Drug Enforcement Administration (DEA) to ensure compliance with all requirements of the CSA and applicable DEA regulations and to prevent diversion of controlled substances. The compliance plan also requires Rite Aid to implement a pseudoephedrine and ephedrine tracking system in each of its 4,915 stores that is designed to prevent the abuse of pseudoephedrine and ephedrine products, which are used to make methamphetamine.
According to information contained in the agreement, the DEA conducted an investigation of 53 separate Rite Aid locations starting in 2004. The investigation revealed a pattern of violations of the CSA, including:
- At pharmacies in Kentucky and New York, Rite Aid knowingly filled prescriptions for controlled substances that were not issued for a legitimate medical purpose pursuant to a valid physician-patient relationship;
- At five pharmacies in Maryland, four pharmacies in New York and 13 pharmacies in California, Rite Aid failed to notify the DEA in a timely manner of significant thefts and losses of controlled substances, thus permitting the diversion of controlled substances to continue and undermining DEA’s ability to investigate such thefts and/or losses;
- At pharmacies in California, Pennsylvania and Maryland, Rite Aid either failed to maintain or failed to furnish to the DEA upon request records that are required to be kept under the CSA for a period of two years;
- At all 53 pharmacies in all eight states, Rite Aid failed to properly execute DEA forms used to ensure that the amount of Schedule II drugs ordered by Rite Aid were actually received.
Additionally, the DEA conducted accountability audits of controlled substances at 25 of the 53 stores investigated to determine whether Rite Aid could properly account for Schedule II and III controlled substances purchased and dispensed. The results of the accountability audits revealed significant shortages or surpluses of the most highly abused drugs, including oxycodone and hydrocodone products, reflecting a pattern of non-compliance with the requirements of the CSA and federal regulations that lead to the diversion of controlled substances in and around the communities of the Rite Aid pharmacies investigated.
"Congress regulates prescription medications because of their powerful and potentially harmful effects," said Deputy Attorney General Mark Filip. "Today's settlement will help to curb illegal access to these dangerous drugs that can often be abused."
"This settlement demonstrates the important responsibilities all pharmacies have to prevent dangerous drugs from being diverted from their intended use," said DEA Acting Administrator Michele M. Leonhart. "The civil penalties paid today are just one example of DEA's determination to combat the troubling prescription drug abuse problem in this country by pursuing pharmacies that fail to comply with the law. Our nation's pharmacies must play a major role in the fight against drug abuse, so that together we can protect public health and keep our communities safe."
As part of the compliance plan agreed to as part of the settlement, Rite Aid has agreed to audit each pharmacy to ensure that all of its controlled substances are maintained securely and that each pharmacy is compliant with the requirements of the CSA. Additionally, Rite Aid will physically count all Schedule II controlled substances quarterly and physically count hydrocodone and alprazolam products yearly. Currently, the CSA only requires registrants like Rite Aid to physically count Schedule II controlled substances biennially and estimate Schedule III products biennially.
Rite Aid has also agreed to design and implement an electronic system to document and link all sales transactions involving non-prescription products containing pseudoephedrine and ephedrine at each of the 4,915 Rite Aid locations in the country. The new system will be designed to prevent individuals from obtaining illegal amounts of these products by visiting different pharmacy locations. In the event an individual attempts to make a purchase that would exceed either the daily or 30-day limit for purchase of non-prescription products containing pseudoephedrine and ephedrine, the new system will alert the employee to halt the transaction and a record of the attempted purchase will be made and reported to the DEA.
The CSA is the primary federal law regulating the flow of controlled substances into the marketplace for medical purposes. Strict compliance with the CSA is required in order to prevent the illegal importation, manufacture, distribution, possession and improper use of controlled substances. The Act authorizes the imposition of a civil penalty of up to $10,000 for each record keeping or reporting violation and a penalty of up to $25,000 for each violation involving legally deficient prescriptions.
The settlement agreement is neither an admission of liability by Rite Aid nor a concession by the United States that its claims are not well founded.
Rite Aid is headquartered in Camp Hill, Pa., and operates 4,915 stores in 31 states. Violations resolved by the settlement occurred in eight states and 11 judicial districts, including the Middle District of Pennsylvania; Eastern, Northern, and Western Districts of New York; District of Maryland; Eastern District of Kentucky; Eastern and Central Districts of California; Eastern District of Virginia; District of New Jersey; and the Eastern District of Michigan. The settlement was handled by Assistant U.S. Attorneys from each of the 11 judicial districts in which violations occurred. Additional assistance was provided by the Criminal Division’s Narcotic and Dangerous Drug Section. The investigation in this matter was conducted by the DEA.
Justice Department Files Suit Against Paint Company to Defend Employment Rights of N.J. Army National GuardsmanRead the Press Release
WASHINGTON - The Department of Justice today filed a lawsuit on behalf of James O. Alston, a member of the New Jersey Army National Guard, against Hawthorne Paint Co. Inc., alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which prohibits an employer from discriminating against an employee because of the employee’s past, current or future military obligations.
The Department’s complaint, filed in the U.S. District Court in Newark, N.J., alleges that the company violated USERRA by terminating Mr. Alston from his position as a supervisor based on his military service in Operation Iraqi Freedom from June 2004 to June 2006, and by discharging him without cause, a week from his date of reinstatement.
"No one should lose their civilian job for serving our country as a member of the military," said Grace Chung Becker, Acting Attorney General for the Civil Rights Division. "Our servicemen and women sacrifice for our nation, and particularly in this time of conflict, the Justice Department is committed to fully protecting the employment rights of our men and women in uniform."
The Department of Justice’s lawsuit was filed after the Veterans’ Employment and Training Service of the Department of Labor referred a complaint filed by Mr. Alston under USERRA to the Department of Justice upon completion of its investigation and unsuccessful settlement efforts.
The Department’s Civil Rights Division places a high priority on the enforcement of service members’ rights under USERRA. Last year, the Division filed 12 USERRA suits, the largest number since receiving enforcement authority in September 2004.
Additional information about USERRA is available at www.servicemembers.gov, and on the Department of Labor Web site at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Files Lawsuit Alleging Race Discrimination Against Job Applicants by City of Gary, Ind.Read the Press Release
WASHINGTON - The Department of Justice announced today the filing of a lawsuit against the city of Gary, Ind., alleging job discrimination against six individuals on the basis of their race, in violation of Title VII of the Civil Rights Act of 1964 (as amended).
The Department’s complaint, filed in the U.S. District Court for the Northern District of Indiana, alleges that the six individuals applied for emergency medical technician (EMT) positions with the city and were subsequently placed on a hiring list that stated that offers of employment would be based on the rank order of the individuals listed. The complaint further alleges that the city failed to offer EMT positions to any of the six individuals, all of whom are white, while offering EMT positions to several other individuals, all of whom are African-American, and that each of these six complainants ranked higher than the lowest-ranked applicant to receive a job offer.
"Federal law guarantees equal access to employment opportunities without regard to race," said Grace Chung Becker, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. "The Department is committed to enforcing all the federal civil rights laws, including Title VII, under its jurisdiction."
Title VII prohibits discrimination in employment on the basis of sex, 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.
The continued enforcement of Title VII has been a priority of the Department of Justice’s Civil Rights Division. More information is available at http://www.usdoj.gov/crt/emp/index.html.
9 January 2009
Roy Belfast Jr., A/K/A Chuckie Taylor, Sentenced on Torture ChargesRead the Press Release
WASHINGTON – Roy M. Belfast Jr. was sentenced by U.S. District Court Judge Cecilia M. Altonaga today to 97 years in prison for crimes related to the torture of people in Liberia between April 1999 and July 2003, announced Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney R. Alexander Acosta for the Southern District of Florida.
Belfast, a/k/a Chuckie Taylor, Charles Taylor Jr., Charles Taylor II and Charles McArther Emmanuel, was convicted on October 30, 2008, by a federal jury after a six-week trial of five counts of torture, one count of conspiracy to torture, one count of using a firearm during the commission of a violent crime and one count of conspiracy to use a firearm during the commission of a violent crime.
"The lengthy prison term handed down today justly reflects the horror and torture that Taylor Jr. visited upon his victims. This case was made in no small part by the courage of individual victims who had the mettle to come forward and speak the truth about what had been done to them," Acting Assistant Attorney General Matthew Friedrich of the Criminal Division said. "Our message to human rights violators, no matter where they are, remains the same: We will use the full reach of U.S. law, and every lawful resource at the disposal of our investigators and prosecutors, to hold you fully accountable for your crimes."
According to trial testimony, Belfast, who was born in the United States and is the son of the former Liberian dictator Charles Taylor, commanded a paramilitary organization known as the Anti-Terrorist Unit, which was directed to provide protection for the Liberian president and additional dignitaries of the Liberian government. Between 1999 and 2003, in his role as commander of that unit, Belfast and his associates committed numerous and varied forms of torture, including burning victims with molten plastic, lit cigarettes, scalding water, candle wax and an iron; severely beating victims with firearms; cutting and stabbing victims; and shocking victims with an electric device.
"There is justice today for the many victims of Chuckie Taylor", said John P. Torres, Department of Homeland Security Acting Assistant Secretary for Immigration and Customs Enforcement. "This sentence ensures that he pays for his barbaric acts. I want to thank the more than one hundred ICE agents, attorneys, victim advocates and other federal partners whose meticulous investigative work and coordination led to this landmark conviction."
"This sentence sends a resounding message that torture will not be tolerated here at home or by U.S. nationals abroad," said Executive Assistant Director Arthur M. Cummings, II, of the FBI National Security Division. "The FBI and our law enforcement partners will continue to investigate such acts wherever they occur."
On March 30, 2006, Belfast attempted to enter the United States with a passport obtained through false statements submitted on his passport application, and was arrested. Belfast pleaded guilty on Sept. 15, 2006, to passport fraud and was sentenced on Dec. 7, 2007, to 11 months in prison on that charge.
Belfast’s prosecution on the torture charges was the first ever under a statute that criminalizes torture and provides U.S. courts jurisdiction to hear cases involving acts of torture committed outside the United States if the offender is a U.S. national or is present in the United States, regardless of nationality.
The case was jointly investigated by ICE and the FBI. The case was prosecuted by Assistant U.S. Attorneys Karen Rochlin and Caroline Heck Miller of the U.S. Attorney’s Office for the Southern District of Florida and Trial Attorney Chris Graveline of the Criminal Division’s Domestic Security Section. National Security Division Trial Attorney Brenda Sue Thornton and Criminal Division Attorneys John Cox, John-Alex Romano, Michael Surgalla, and Pragna Soni also provided assistance.
Lloyds TSB Bank Plc Agrees to Forfeit $350 Millionin Connection with Violations of the International Emergency Economic Powers ActRead the Press Release
WASHINGTON – Lloyds TSB Bank plc (Lloyds), a United Kingdom corporation headquartered in London, has agreed to forfeit $350 million to the United States and to the New York County District Attorney’s Office in connection with violations of the International Emergency Economic Powers Act (IEEPA), Acting Assistant Attorney General Matthew Friedrich of the Criminal Division, Internal Revenue Service (IRS) Commissioner Doug Shulman and Robert M. Morgenthau, District Attorney for the New York County District Attorney’s Office, announced today. The violations relate to transactions Lloyds illegally conducted on behalf of customers from Iran, Sudan and other countries sanctioned in programs administered by the Office of Foreign Assets Controls.
A criminal information was filed today in the U.S. District Court for the District of Columbia charging Lloyds with one count of violating the IEEPA. Lloyds waived indictment, agreed to the filing of the information, and has accepted and acknowledged responsibility for its criminal conduct. Lloyds agreed to forfeit the funds as part of deferred prosecution agreements with the Department of Justice and the New York County District Attorney’s Office.
Under the IEEPA, it is a crime to willfully violate, or attempt to violate, any regulation issued under the act, including the Iranian Transactions Regulations, which prohibit exportation of services from the United States to Iran, and the Sudanese Sanctions Regulations, which prohibit exportation of services from the United States to Sudan.
According to court documents, beginning as early as 1995 and continuing until January 2007, Lloyds, in both the United Kingdom and Dubai, falsified outgoing U.S. wire transfers that involved countries or persons on U.S. sanctions lists. Specifically, according to court documents, Lloyds deliberately removed material information—such as customer names, bank names and addresses—from payment messages so that the wire transfers would pass undetected through filters at U.S. financial institutions. This process of "repairing" or "stripping," as Lloyds commonly referred to it, allowed more than $350 million in transactions to be processed by U.S. correspondent banks used by Lloyds that might have otherwise been blocked or rejected due to sanctions regulations or for internal bank policy reasons. According to court documents, the criminal conduct by Lloyds was designed to evade, and to assist its customers in evading, U.S. economic sanctions imposed against Iran, Sudan and other countries.
"For more than 12 years, Lloyds facilitated the anonymous movement of hundreds of millions of dollars from U.S.-sanctioned nations through our financial system," said Acting Assistant Attorney General Matthew Friedrich. "More than $350 million moved from places such as Iran through locations around the world because Lloyds stripped identifying information from international wire transfers that would have raised a red flag at U.S. financial institutions and caused such payments to be scrutinized. The Department will continue to use criminal enforcement measures against the knowing and intentional evasion of U.S. sanctions laws, particularly where such conduct has the potential to finance terrorist activities."
"Today's global economy demands this type of high-level coordinated approach by multiple agencies and authorities," said IRS Commissioner Doug Shulman. "The IRS is proud to have shared its hallmark expertise in following the money trail in this and other increasingly sophisticated criminal schemes. Indeed, creating new strategies and models of cooperation among governments on international tax compliance is one of my top priorities for the IRS."
The bank’s forfeiture of $175 million to the United States and $175 million to New York County will settle forfeiture claims by the Department of Justice and the state of New York related to the misconduct. In light of the bank’s remedial actions to date and its willingness to acknowledge responsibility for its actions, the Department will recommend the dismissal of the information in two years, provided Lloyds fully cooperates with, and abides by, the terms of the agreement.
The case was prosecuted by Assistant Chief Mia Levine and Trial Attorney Frederick Reynolds of the Criminal Division's Asset Forfeiture and Money Laundering Section, which is headed by Chief Richard Weber. The case was investigated by the IRS-Criminal Investigation’s Washington Field Division.
Joint Motion Containing DPA and Factual Statement
Justice Department Sues New Mexico Community College<br /> for Sexual Harassment of Former EmployeeRead the Press Release
WASHINGTON - The Department of Justice today filed a lawsuit in the U.S. District Court in New Mexico against Luna Community College, alleging discrimination against former employee Charlene Ortiz-Cordova in the form of sexual harassment by a supervisor that resulted in a hostile work environment.
"Title VII protects women from discrimination in employment," said Grace Chung Becker, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division. "The Department of Justice will vigorously pursue cases when employers fail or refuse to take appropriate action to stop sexual harassment in the workplace."
The Department’s complaint alleges that the supervisor, Luna’s former president, subjected Ms. Ortiz-Cordova to sexual harassment over the course of several months by making unwanted physical contact of a sexual nature, unwanted sexual gestures, and repeated sexually explicit comments to her, among other allegations. The complaint further alleges that Luna failed or refused to take appropriate action to prevent and correct the sexual harassment.
Title VII of the Civil Rights Act of 1964, as amended, prohibits discrimination in employment on the basis of sex, 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.
The Department of Justice is committed to the vigorous enforcement of Title VII. The Department’s lawsuit against Luna is the first Title VII suit it has filed in 2009. Last year, the Department filed a total of twelve Title VII suits. 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.
Department of Justice Seeks to Recover Approximately $3 Million <br /> in Illegal Proceeds from Foreign Bribe PaymentsRead the Press Release
WASHINGTON – The Department of Justice has filed a forfeiture action against accounts worth nearly $3 million that are alleged to be the proceeds of a wide-ranging conspiracy to bribe public officials in Bangladesh and their family members in connection with various public work projects, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division announced today.
The forfeiture action was filed Jan. 8, 2009, in U.S. District Court in the District of Columbia against funds located in Singapore held by multiple account holders. The forfeiture complaint relates primarily to alleged bribes paid to Arafat "Koko" Rahman, the son of the former prime minister of Bangladesh, in connection with public works projects awarded by the government of Bangladesh to Siemens AG and China Harbor Engineering Company. According to the forfeiture complaint, the majority of funds in Koko’s account are traceable to bribes allegedly received in connection with the China Harbor project, which was a project to build a new mooring containment terminal at the port in Chittagong, Bangladesh.
"This action shows the lengths to which U.S. law enforcement will go to recover the proceeds of foreign corruption, including acts of bribery and money laundering," said Acting Assistant Attorney General Matthew Friedrich. "Not only will the Department, for example, prosecute companies and executives who violate the Foreign Corrupt Practices Act, we will also use our forfeiture laws to recapture the illicit facilitating payments often used in such schemes."
Siemens Aktiengesellschaft (Siemens AG), a German corporation, and three of its subsidiaries pleaded guilty on Dec. 15, 2008, to violations of and charges related to the Foreign Corrupt Practices Act (FCPA). Specifically, Siemens Bangladesh admitted that from May 2001 to August 2006, it caused corrupt payments of at least $5,319,839 to be made through purported business consultants to various Bangladeshi officials in exchange for favorable treatment during the bidding process on a mobile telephone project. At least one payment to each of these purported consultants was paid from a U.S. bank account.
According to the forfeiture complaint, the bribe payments from Siemens AG and China Harbor Engineering Company were made in U.S. dollars, and the illicit funds flowed through financial institutions in the United States before they were deposited in accounts in Singapore, thereby subjecting them to U.S. jurisdiction. Money laundering laws in the United States cover financial transactions that flow through the United States involving proceeds of foreign offenses, including foreign bribery and extortion.
In August 2006, the President announced a National Strategy to Internationalize Efforts Against Kleptocracy to fight high-level corruption around the world. This strategy combines the policy and law enforcement tools of several federal agencies, including the Departments of Justice, Treasury, State and Homeland Security.
The case is being prosecuted by Deputy Chief Linda Samuel and Trial Attorney Frederick Reynolds of the Criminal Division’s Asset Forfeiture and Money Laundering Section. Additional assistance was provided by the Criminal Division’s Office of International Affairs. The case was investigated by the FBI’s Washington Field Office in cooperation with Bangladeshi law enforcement.
8 January 2009
Two Former Oregon Residents Now Residing in Arizona Indicted for Obstructing IRS Investigation and Other Tax CrimesRead the Press Release
WASHINGTON – A federal grand jury in Portland, Ore., returned a superseding indictment against Micaela Renee Dutson and her husband, Tony Dutson, the Justice Department and Internal Revenue Service (IRS) announced today.
The Dutsons were originally indicted May 8, 2008, on charges that they conspired to defraud the United States of more than $8 million and failed to file income taxes. Both pleaded not guilty to all charges on June 5, 2008.
The superseding indictment adds charges that the Dutsons attempted to obstruct the IRS in its attempt to enforce the tax laws by filing lawsuits, baseless liens and multiple Forms 1099-OID against IRS employees. The indictment alleges that the baseless liens claimed a debt owed by the IRS employees to the defendants totalling $1,003,680,000,000. According to the superseding indictment, the Forms 1099-OID falsely claimed payment of millions of dollars to IRS employees who were investigating the defendants.
The superseding indictment also includes charges that the Dutsons presented five fictitious financial obligations totalling approximately $9,903,870 for use by their clients in purported payment of IRS debts. It further includes a charge that the Dutsons willfully aided and assisted the filing of a false 2002 federal tax return by clients.
"This indictment shows that the government will not tolerate taxpayers’ use of bogus financial instruments to pay tax debts and IRS forms as a means to harass IRS employees," said Tax Division Assistant Attorney General Nathan J. Hochman. "Under the National Tax Defier Initiative launched in April 2008, the Tax Division has committed to vigorously investigate and prosecute tax defiers and all others who use baseless arguments and fictitious documents to evade their tax liabilities."
"Obstruction is a crime that does not pay in Oregon - we will aggressively investigate and prosecute attempts by those who obstruct revenue agents and officers from doing their jobs," said U.S. Attorney Karin J. Immergut, U.S. Attorney for the District of Oregon.
"The IRS works quickly to identify and stop these nuisance schemes aimed at harassing honest taxpayers and the government," said IRS Criminal Investigation Chief Eileen Mayer. "We take seriously these types of actions that attempt to impede our ability to administer efficient tax administration. Today's indictment signals our determination to hold accountable those who engage in this type of frivolous activity."
Conspiracy carries a maximum sentence of five years in prison. Failure to file tax returns carries a maximum penalty of up to one year in prison for each offense. Obstructing the internal revenue laws carries a maximum penalty of up to three years for each offense. Using fictitious financial instruments carries a maximum penalty of up to 25 years for each count. Aiding and assisting the filing of false tax returns carries a maximum penalty of up to three years.
A criminal indictment is only an allegation and not evidence of guilt. Each of these defendants is presumed innocent unless and until proven guilty. The charges stem from an investigation by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Dwight C. Holton.
Retired Army Major Pleads Guilty in Bribery SchemeInvolving Department of Defense Contracts in KuwaitRead the Press Release
WASHINGTON — A retired major in the U.S. Army pleaded guilty today to charges of bribery and making a false statement arising out of his activities as both a contracting specialist and a contracting officer at Camp Arifjan, Kuwait, from 2005 through 2007, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and Acting Assistant Attorney General Deborah A. Garza of the Antitrust Division announced.
Christopher H. Murray, 41, a resident of Cataula, Ga., pleaded guilty today before U.S. District Judge Clay D. Land in U.S. District Court in Columbus, Ga., to a five-count information charging him with four counts of bribery and one count of making a false statement.
According to the information, in 2005 and 2006, Murray served as a contracting specialist in the small purchases branch of the contracting office at Camp Arifjan, Kuwait, where he was responsible for soliciting bids for military contracts, evaluating the sufficiency of those bids, and then recommending the award of contracts to particular contractors. In this capacity, Murray admitted he received approximately $225,000 in bribes from DOD contractors in exchange for recommending the award of contracts for various goods and services.
According to the information, Murray admitted that when he returned to Kuwait in fall 2006 as a contracting officer, he received an additional $20,000 in bribes from a Department of Defense (DOD) contractor in exchange for the award of a construction contract. When confronted with evidence of his criminal conduct, Murray admitted he made false statements to federal agents investigating this matter.
Murray faces up to 15 years in prison on each bribery count, as well as a criminal fine of $250,000 or three times the monetary equivalent of the thing of value for each count. Murray also faces up to five years in prison on the false statement charge as well as a fine of $250,000. The maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum fine.
"Murray abused his position of trust by awarding contracts to those willing to pay him bribes," said Acting Assistant Attorney General Matthew Friedrich. "There are no more important purchases made by the federal government than those of goods and services used by our men and women in uniform. Procurement officers who sacrifice their positions of trust for the sake of personal enrichment can expect to be prosecuted."
"The Antitrust Division will continue to vigorously prosecute those who commit bribery and other offenses, which deprive the U.S. military and, ultimately, U.S. taxpayers, of a competitive market," said Deborah A. Garza, Acting Assistant Attorney General in charge of the Department's Antitrust Division.
"SIGIR vigorously continues to pursue investigations into allegations of fraud in Iraq," said Stuart Bowen, Special Inspector General for Iraq Reconstruction. "Maj. Murray grossly abused his position of trust, committing multiple acts of fraud for which he will now pay a just price. This successful investigation was part of ongoing cooperative efforts being carried out by SIGIR and our law enforcement partners."
Brig. Gen. Rodney Johnson of the U.S. Army Criminal Investigation Command said this guilty plea is just another example of how seriously his criminal investigators and the U.S. Army take these criminal acts of greed and how determined he and his special agents are to bring these people to justice. "People who do business with the U.S. military should know by now that if they violate the public’s trust and commit criminal acts, they will be caught by a team of highly-trained professionals looking for this type of criminality. We will not stand for it," said Johnson.
"The American public expects military officers to behave in an aboveboard manner," said James R. Ives, Special Agent in Charge of the Defense Criminal Investigative Service’s Mid-Atlantic Field Office. "The vast majority of officers are disciplined, law abiding professionals who serve with honor. Duty, accountability, responsibility and integrity inspire their attitudes and actions. Officers who fail to live up to these standards erode public support for the military and undermine confidence in government. The Defense Criminal Investigative Service remains committed to working with the Department of Justice to ensure officials who betray the public trust are held firmly accountable."
Today’s charges represent the Department’s commitment to protecting U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prosecution, and prevention of procurement fraud associated with the increase in contracting activity for national security and other government programs.
The case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, which is headed by Chief William M. Welch II, and Trial Attorneys Mark W. Pletcher, Emily W. Allen and Finnuala Kelleher of the Antitrust Division’s National Criminal Enforcement Section, which is headed by Chief Lisa Phelan.
The case is being investigated by the Special Inspector General for Iraq Reconstruction; the Army Criminal Investigation Command, Defense Criminal Investigative Service; U.S. Immigration and Customs Enforcement; the FBI; and the Internal Revenue Service.
Plea Agreement
Oklahoma Pipeline Company to Pay Penalty for Jet Fuel SpillRead the Press Release
WASHINGTON—The Explorer Pipeline Company has agreed to pay a $3.3 million civil penalty in order to resolve an alleged violation of the Clean Water Act stemming from a July 14, 2007, spill of over 6,500 barrels (approximately 275,000 gallons) of jet fuel from its interstate pipeline at a location near Huntsville, Texas, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.
The United States’ complaint, which was filed on Oct. 2, 2008 in the U.S. District Court for the Southern District of Texas, alleges that Explorer discharged oil into navigable waters of the United States in violation of the Clean Water Act. On July 14, 2007, Explorer’s 28-inch interstate refined petroleum products pipeline ruptured near Huntsville and jet fuel spilled onto the surrounding area and into nearby Turkey Creek. Turkey Creek flows to the Trinity River at the upper reaches of Lake Livingston.
In earlier responses to the spill, Explorer replaced the section of pipe that ruptured, completed cleanup of the impacted waters and adjoining shorelines, is cooperating in a joint federal and state natural resource damage assessment, and commenced additional assessment and followup work under a Corrective Action Order issued by the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration.
"Oil spills into our nation’s waters endanger public health and the environment and warrant concerted enforcement efforts," said Ronald J. Tenpas, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "Today’s settlement achieves an appropriate result and furthers our enforcement mission."
"This settlement is the result of coordination and cooperation between a number of federal and state entities. EPA is committed to working with its state and federal partners to ensure a strong water protection program," said Richard E. Greene, EPA Regional Administrator.
The Clean Water Act makes it unlawful to discharge oil or hazardous substances into or upon the navigable waters of the United States or adjoining shorelines in quantities that may be harmful to the environment or public health. The penalty paid for this spill will be deposited in the federal Oil Spill Liability Trust Fund managed by the National Pollution Fund Center. The Oil Spill Liability Trust Fund is used to pay for federal response activities and to compensate for damages when there is a discharge or substantial threat of discharge of oil or hazardous substances to waters of the United States or adjoining shorelines.
The proposed consent decree, lodged in the Southern District of Texas, is subject to a 30-day public comment period and court review and approval. A copy of the consent decree is available on the Department of Justice website at http://www.usdoj.gov/enrd/Consent_Decrees.html.
Medical Clinic Owner Pleads Guilty to Role in $5.3 Million <br /> Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owner and operator of two Miami medical clinics has pleaded guilty to defrauding the Medicare program in connection with a $5.3 million HIV infusion fraud scheme, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced today.
Orlando Pascual Jr., 43, pleaded guilty on Jan. 7, 2009, to conspiracy to commit healthcare fraud before U.S. District Judge Ursula Ungaro. In his plea, Pascual admitted that he co-owned two Miami clinics named Medcore Group LLC (Medcore) and M&P Group of South Florida Inc. (M&P) that purported to specialize in the treatment of HIV-positive patients. Pascual admitted that beginning in August 2004 and continuing through November 2006 he conspired with others to submit approximately $5.3 million in fraudulent claims to Medicare. Pascual also pleaded guilty to two separate schemes to launder the proceeds of the health care fraud.
During the plea, Pascual admitted that Medcore and M&P were operated for the purpose of defrauding Medicare, that the treatments for infused or injected drugs were not medically necessary, and that he and others paid cash kickbacks to the patients for every visit to the clinic. To obtain all the cash necessary to pay the patients, Pascual stated that he and others would write checks that appeared legitimate to people who would cash the checks and then return the cash to them for a fee.
Pascual acknowledged that most patients were HIV-positive or were given false diagnoses of cancer. He stated during the plea that he and others used physicians, a physician’s assistant and phlebotomists to help facilitate the scheme. In addition, Pascual acknowledged that clinic employees intentionally manipulated patients’ blood samples so that they would appear to need treatment, when in fact they did not. Pascual stated that such tampering was done to make the medical files appear legitimate.
Pascual is currently incarcerated for Medicare fraud involving the operation of a durable medical equipment (DME) company in Miami from 2001 to 2003. Sentencing in this case is scheduled for April 3, 2009.
Seven co-defendants in the case are scheduled for trial beginning Feb. 9, 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 and Assistant Chief John S. "Jay" Darden 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 189 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.
Former Executive at California Valve Company<br /> Pleads Guilty to Bribing Foreign Government OfficialsRead the Press Release
WASHINGTON – A former executive of an Orange County, Calif.-based valve company pleaded guilty today in connection with his role in a conspiracy to pay approximately $1 million in bribes to numerous foreign government officials, Acting Assistant Attorney General Matthew Friedrich 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.
Mario Covino, 44, an Italian citizen and resident of Irvine, 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 valve company from state-owned enterprises in several countries, including Brazil, China, India, Korea, Malaysia and the United Arab Emirates (UAE), 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. Covino was the director of worldwide factory sales at the valve company from March 2003 through August 2007. In this position, Covino was responsible for overseeing new construction projects and the replacement of existing valves made by other companies and installed at customer plants in more than 30 countries.
In connection with his guilty plea, Covino admitted that from March 2003 through August 2007, he caused employees and agents of the valve company to make corrupt payments totaling approximately $1 million to foreign officials employed at state-owned enterprises in order to assist in obtaining and retaining business for the valve company. Covino also admitted that the valve company earned approximately $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, Petrobras (Brazil), Dingzhou Power (China), Datang Power (China), China Petroleum, China Resources Power, China National Offshore Oil Company, PetroChina, Maharashtra State Electricity Board (India), KHNP (Korea), Petronas (Malaysia), Dolphin Energy (UAE) and Abu Dhabi Company for Oil Operations (UAE).
Covino also admitted to providing false and misleading responses to internal auditors during a 2004 internal audit of the company’s commission payments, and to deleting emails and instructing others to delete emails that referred to corrupt payments, for the purpose of obstructing the internal audit.
As part of his plea agreement, Covino has agreed to cooperate with the Department in its ongoing investigation. At sentencing, scheduled for July 20, 2009, Covino faces a maximum of five years in prison.
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.