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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.
7 January 2009
Three Staten Island, NY Men Indicted<br /> on Federal Hate Crime Conspiracy ChargesRead the Press Release
WASHINGTON – The Department of Justice announced today the unsealing of an indictment charging three Staten Island, N.Y., men with conspiring to assault African-Americans in retaliation for President-Elect Barack Obama’s election victory.
Ralph Nicoletti and Michael Contreras, both 18, and Brian Carranza, 21, were arrested late Tuesday and are scheduled for arraignment today before U.S. Magistrate Judge Roanne L. Mann in Brooklyn. As alleged in the indictment and other court filings, on the night of Nov. 4, 2008, shortly after learning of Barack Obama’s election victory, the group, along with a fourth friend, decided to find African-Americans to assault.
"It is shocking and sobering that allegations of racial violence continue in this day and age," said Acting Assistant Attorney General Grace Chung Becker. "The Justice Department takes these allegations very seriously and the Civil Rights Division, working with U.S. Attorneys Offices across the country, will continue to use federal laws to prosecute individuals who conspire to commit such acts of violence and intimidation."
As cited in the indictment and other court filings, Nicoletti allegedly drove the other defendants to Park Hill, a predominantly African-American neighborhood in Staten Island, where they came upon a 17-year-old African-American who was walking home after watching the election at a friend’s house. One of the defendants yelled "Obama!" as they passed the youth, and all four men then got out of the car and beat him, using a metal pipe and a collapsible police baton. The young man, who managed to escape and run home, suffered injuries to his head and legs.
The group then found an African-American man in the Port Richmond section of Staten Island and assaulted him, pushing him to the ground. The defendants also accosted a Latino man, demanding to know for whom he had voted, and later yelled profanities about Obama as they drove past an Election Night gathering of African-Americans at a hair salon.
The group’s final assault involved a man they mistakenly believed to be African-American, whom they spotted walking along Blackford Avenue in Port Richmond. Nicoletti hit him with the car, causing the victim to be thrown onto the hood of the car and into the front windshield, shattering it. Although the victim survived, he was in a coma for a period of time after the attack.
The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, each faces a sentence of up to 10 years in prison.
In addition to Becker, the charges were announced by Benton J. Campbell, United States Attorney for the Eastern District of New York, Joseph M. Demarest, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and Raymond W. Kelly, Commissioner of the New York City Police Department.
"Violence and intimidation aimed at interfering with the constitutional rights of every citizen, including the right to vote, which is the bedrock of democracy, will not be tolerated," stated United States Attorney Campbell. "Such conduct is loathsome and despicable, and those who engage in it will be arrested and prosecuted to the fullest extent of the law. We are grateful for our partnership with the Department of Justice Civil Rights Division, Criminal Section, the FBI, and the New York City Police Department, which has been vital to the success of this joint investigation and prosecution."
FBI Assistant Director-in-Charge Demarest stated, "The defendants, motivated by racial animus, committed violent assaults resulting in real, and in one case near-fatal, injuries. But the Election Night assaults, coming on the day when we participate most directly in our democracy, were also an attack on the democratic process and an affront to everyone. The FBI is committed to civil rights enforcement and policing hate crimes."
NYPD Commissioner Kelly stated, "I want to commend the NYPD detectives and their federal partners who pursued this case, particularly NYPD Inspector Michael J. Osgood, who as Commanding Officer of the NYPD Hate Crime Task Force had the foresight to assign a special team on Election Night until 4 a.m. the next morning. These officers were able to respond quickly to the bias attacks and begin an immediate investigation. They located an eyewitness to one of the attacks, and their subsequent distribution of flyers in the Rosebank area of Staten Island over three days led to the first major break in the case. History was made on Election Day. We wanted to make sure those who tried to retaliate did not escape justice."
The government’s case is being prosecuted by Assistant United States Attorneys Pamela K. Chen and Margo K. Brodie and Special Litigation Counsel Kristy Parker.
Settlement Reached in Virginia Stream and Stormwater CaseRead the Press Release
WASHINGTON—Five defendants associated with the construction of the Liberty Village housing development in Lynchburg, Va., will pay a $300,000 penalty and fund more than $1 million in stream and wetlands restoration work for alleged violations of the Clean Water Act and permit restrictions during construction, the Justice Department and U.S. Environmental Protection Agency (EPA) announced.
The settlement with Savoy Senior Housing Corporation, Savoy Liberty Village LLC, SDB Construction, Inc., Best G.C., Inc., and Acres of Virginia, Inc., was part of a consent decree lodged today in the Western District of Virginia by the U.S. Department of Justice on behalf of the EPA.
The consent decree would resolve allegations that the defendants discharged and/or controlled and directed the discharge of pollutants including dredged and/or fill material, sediment, and other pollutants carried by stormwater into waters of the United States during the construction of a housing development without required permits, and then in violation of the stormwater permit after one was obtained.
Specifically, the defendants allegedly buried existing streams on the site and filled wetlands that formed the headwaters of one of the filled streams. Silt and sediment from the construction activities were also discharged into streams on and off the site and flowed downstream to Pine Lake and beyond.
The current owner of the property, Liberty Ridge, LLC, which is not a defendant, has agreed to implement approximately $250,000 in on-site restoration work, which will be funded by the defendants. The defendants will also pay approximately $825,000 to purchase credits to fund stream and wetland restoration projects in the region.
The alleged Clean Water Act violations at the Liberty Village site, located at 5700 Candlers Mountain Road in Lynchburg, Va., occurred from July 2001 through January 2003 when the defendants cleared and graded the site, installed roads and utilities, and completed or partially built several housing units. In the process, the defendants allegedly destroyed approximately 3,765 feet of stream, and wetlands at the headwaters of tributaries to the Roanoke and James Rivers. Silt and sediment were discharged into streams on and off the site and flowed downstream to Pine Lake and beyond.
These waters are important for flood control, nutrient and sediment retention, filtration, water quality improvement and maintenance of healthy aquatic ecological communities for other water bodies down stream. As the result of defendants’ actions, water now flows downstream faster and at a higher temperature, killing or stressing aquatic animals and plants.
The site restoration plan requires restoration of one stream, restoration and enhancement of four ponds, installation of plantings, and eradication of invasive species in certain areas. The consent decree also prohibits future disturbances of the restoration project area. A copy of the decree will be filed with the Circuit Court in Virginia and each future deed, title, or other conveyance instrument must contain a notice stating that the property is subject to this consent decree.
The 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 about wetlands and permitting requirements, go to: http://www.epa.gov/owow/ . For more information on stormwater and permitting requirements, go to http://cfpub.epa.gov/npdes/home.cfm?program_id=6.
Justice Department Seeks Injunction <br /> Against New Black Panther PartyRead the Press Release
WASHINGTON - The Justice Department today filed a lawsuit under the Voting Rights Act against the New Black Panther Party for Self-Defense and three of its members alleging that the defendants intimidated voters and those aiding them during the Nov. 4, 2008, general election.
The complaint, filed in the United States District Court in Philadelphia, alleges that, during the election, Minister King Samir Shabazz and Jerry Jackson were deployed at the entrance to a Philadelphia polling location wearing the uniform of the New Black Panther Party for Self-Defense, and that Samir Shabazz repeatedly brandished a police-style baton weapon.
"Intimidation outside of a polling place is contrary to the democratic process," said Acting Assistant Attorney General Grace Chung Becker. "The Voting Rights Act of 1965 was passed to protect the fundamental right to vote and the Department takes allegations of voter intimidation seriously."
According to the complaint, party Chairman Malik Zulu Shabazz confirmed that the placement of Samir Shabazz and Jackson in Philadelphia was part of a nationwide effort to deploy New Black Panther Party members at polling locations on Election Day. The complaint alleges a violation of Section 11(b) of the Voting Rights Act of 1965, which prohibits intimidation, coercion or threats against "any person for voting or attempting to vote." The Department seeks an injunction preventing any future deployment of, or display of weapons by, New Black Panther Party members at the entrance to polling locations.
The New Black Panther Party for Self-Defense, which claims active chapters nationwide, is distinct from the Black Panther Party founded by Bobby Seale in the 1960s.
The Civil Rights Division enforces the Voting Rights Act of 1965. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931. More information about the Voting Rights Act and other federal voting laws is available on the Department of Justice’s web site at www.usdoj.gov/crt/voting/index.htm.
Court Orders Sacramento Employer to Timely Pay Withholding and Unemployment TaxesRead the Press Release
WASHINGTON – A federal court in Sacramento, Calif., issued a preliminary injunction ordering Capitol Waste Inc. and Iva and Kenneth Whitmire of Sacramento to comply with federal employment tax withholding requirements and to timely pay all present and future employment tax, unemployment tax and income tax liabilities, the Justice Department announced today. Capitol Waste, Inc. and the Whitmires agreed to the preliminary injunction order.
The Justice Department filed suit on Oct. 8, 2008, seeking to enjoin the defendants from interfering with the administration of the Internal Revenue laws. The complaint alleges that the defendants have failed to comply fully with Capitol Waste’s employment tax, unemployment tax and income tax obligations since 2000. According to the complaint, Capitol Waste failed to pay almost $2.6 million in federal employment and unemployment taxes between 2000 and 2007.
According to court documents, Capitol Waste is a commercial waste disposal business based in Sacramento County, Calif. The complaint also alleges that the Whitmires have failed to comply with their individual income tax obligations since 2000.
Capitol Waste, Inc. was also ordered to file of all of its back employment, unemployment and income tax returns, and the Whitmires are required to file all of their back individual income tax returns within 90 days. The court order also prevents Capitol Waste from transferring any assets that would prevent timely payment of all present and future tax liabilities.
"All employers must comply with federal employment tax laws," said Nathan J. Hochman, Assistant Attorney General for the Justice Department’s Tax Division. "Employers face not only a federal court injunction for failing to withhold and pay federal taxes, but also significant civil penalties and, in some cases, criminal prosecution. When employers fail to withhold FICA and income taxes, they are harming their employees as well as the United States, and the government will take action."
Assistant Attorney General Hochman thanked Tax Division trial attorney Adair F. Boroughs, who is handling the case for the government, for her efforts. More information about the Justice Department and its efforts to enforce the federal employment tax laws is available at http://www.usdoj.gov/tax/.
6 January 2009
U.S. District Court Judge Charged in Superseding Indictment with Aggravated Sexual Abuse <br /> and Abusive Sexual ContactRead the Press Release
WASHINGTON - A federal grand jury in Houston returned a superseding indictment today charging U.S. District Judge Samuel B. Kent, 59, with aggravated sexual abuse, abusive sexual contact and obstruction of justice, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division announced. Kent was previously indicted on Aug. 28, 2008, on one count of attempted aggravated sexual abuse and two counts of abusive sexual contact of a clerk’s office employee.
The superseding indictment charges three counts based on alleged offenses involving an additional victim who is also a court employee. The first two additional counts charge Kent with aggravated sexual abuse and abusive sexual contact. The third count of the superseding indictment charges obstruction of justice related to an inquiry by a special investigative committee of the U.S. Court of Appeals for the Fifth Circuit into a complaint of judicial misconduct filed against Kent by the clerk's office employee.
The case is being prosecuted by Senior Deputy Chief for Litigation Peter J. Ainsworth and Trial Attorneys John P. Pearson and AnnaLou T. Tirol of the Criminal Division’s Public Integrity Section, which is headed by Section Chief William M. Welch II. This case is being investigated by the FBI.
An indictment is merely an allegation. Defendants are presumed innocent until and unless proven guilty in a court of law.
Tyson Foods Pleads Guilty and Agrees to Pay Fine for OSHA Violation That Led to Worker DeathRead the Press Release
WASHINGTON—Tyson Foods Inc. pleaded guilty today in U.S. District Court in Arkansas and agreed to pay the maximum fine for willfully violating worker safety regulations that led to a worker’s death in its River Valley Animal Foods (RVAF) plant in Texarkana, Ark., the Justice Department announced.
According to the information filed along with a plea agreement, Tyson operated several RVAF plants that recycled poultry products into protein and fats for the animal food industry. As part of the rendering process in four of the plants, the company used high-pressure steam processors called hydrolyzers to convert the poultry feather into feather meal.
Decomposition of biological material such as poultry feathers produces hydrogen sulfide gas, an acute-acting toxic substance. Employees at the Tyson facilities often were exposed to the toxic gas when working on or near the hydrolyzers, which required frequent adjustment and replacement.
As of October 2003, corporate safety and regional management were aware that hydrogen sulfide gas was present in the RVAF facilities and three of the four facilities with hydrolizers had taken measures to protect employees from hydrogen sulfide gas near the hydrolyzers. However, Tyson Foods did not take sufficient steps to implement controls or protective equipment to reduce exposure within prescribed limits or provide effective training to employees on hydrogen sulfide gas at the Texarkana facility despite an identical exposure, resulting in hydrogen sulfide poisoning of an RVAF Texarkana employee in March 2002.
As a result, at approximately 1 a.m. on Oct. 10, 2003, RVAF maintenance employee Jason Kelley was overcome with hydrogen sulfide gas while repairing a leak from a hydrolyzer and later died. Another employee and two emergency responders were hospitalized due to exposure during the rescue attempt. Two employees also were treated at the scene.
"Federal laws require employers to undertake steps that limit exposure to dangerous substances like the gas that killed Jason Kelley. Tyson Foods willfully ignored these regulations and today is being held responsible," said Ronald J. Tenpas, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The Justice Department takes its enforcement responsibility seriously and companies that ignore these laws and risk their employees’ lives will be prosecuted."
The Occupational Safety and Health Act (OSHA) requires that employers furnish places of employment free from recognized hazards that are likely to cause death or serious physical harm to employees. This includes taking steps to ensure that employee exposure to dangerous substances such as hydrogen sulfide gas remains within prescribed limits. Tyson Foods pleaded guilty today to a "willful violation of an OSHA standard resulting in the death of an employee," the most serious offense available to OSHA.
According to today’s plea agreement, Tyson Food has agreed to pay $500,000, the maximum criminal fine. The company also will serve one year probation.
The investigation was conducted by the Department of Labor and prosecuted by the Justice Department's Environmental Crimes Section and the U.S. Attorney’s Office for the Western District of Arkansas under the Environmental Crimes Section’s worker endangerment initiative.
Settlement Clears Way for Continued Funding of New Jersey Superfund CleanupRead the Press Release
WASHINGTON—A multi-party settlement involving the federal government, the state of New Jersey and approximately 300 parties will ensure that clean-up efforts continue to be funded at the Combe Fill South Superfund Site Landfill (CFS) in Morris County, N.J., the Justice Department and the U.S. Environmental Protection Agency announced today.
Among the many parties potentially responsible for contamination at the site are Honeywell International Inc., Warner-Lambert Company doing business as Pfizer, the Colgate-Palmolive Company as a successor to The Mennen Company, Mars Inc., and Waste Management.
Under terms of a consent decree lodged in the U.S. District Court in Newark, N.J., the defendants will pay at least $61 million in past costs with interest running from Dec. 8, 2007 with up to an additional $8 million as other municipal defendants join; pay more than $3.2 million for natural resource damage claims to be used for restoration projects; and purchase a $27 million annuity paying $900,000 a year for 30 years for the continued performance of the remedy.
The CFS site is contaminated with both chemical wastes and refuse as a result of its use as a sanitary landfill from the early 1950s until it was closed down in 1981. A 1986 EPA Record of Decision called for the containment of the waste through a landfill cap and continuous operation of a pump and treat facility. The cap and pump and treat facility have been in place for more than 10 years. The state is currently conducting a study of the deep aquifer to determine what additional work may be required.
"Today’s agreement is an excellent result that recovers money spent by federal and state agencies to clean up contamination at the site and provides funding for the remaining work for years to come," said Michael Guzman, Principal Deputy Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This legal action, which has spanned more than 10 years, is an example of the Justice Department’s dedication to protecting the environment and taxpayer dollars while holding those responsible for the costs of cleanup."
"With this important settlement, we are recovering most of the money that EPA and the state spent to clean up this site," said Alan J. Steinberg, EPA Region 2 Administrator. "This is an example of Superfund working just as it should. We went forward with the cleanup while still pursuing those responsible for the contamination, with today’s successful result."
The CFS site is located in Chester and Washington Townships in Chester, N.J. Contaminants found in the ground and surface waters include benzene, ethylbenzene, toluene and chlorethane.
The consent decree, lodged in the U.S. District Court in Newark, New Jersey, is subject to a 30-day federal comment period and a statutory state comment period, as well as final court approval. The consent decree is available on the Justice Department Web site at www.usdoj.gov/enrd/Consent_Decrees.html.
Presidents Corporate Fraud Task Force Adds Six New Member AgenciesRead the Press Release
WASHINGTON – The President’s Corporate Fraud Task Force has been expanded to include six new agencies to help in the focus on mortgage and securitization fraud cases, Deputy Attorney General Mark R. Filip, the Task Force Chairman, announced today.
The Task Force’s expanded roster includes the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve, the Department of Housing and Urban Development, and the Special Inspector General for the Troubled Asset Relief Program (TARP). The new member agencies represent a continuing focus by the Task Force to crack down on mortgage fraud, particularly with regard to ongoing investigations into securitization fraud. The additions mark the largest expansion of the Task Force since it was formed in July 2002.
“The Task Force is uniquely suited to providing the kind of thoughtfulness and collaboration that can be invaluable in tackling mortgage fraud at the corporate level, and in trying to analyze whether and when law enforcement action is appropriate,” said Deputy Attorney General Filip. “These new members reflect the breadth and depth of the mortgage crisis that we are now confronting, and the urgency of the task before us.”
In addition to remarks by the Deputy Attorney General, the Task Force was briefed today by representatives from several of the regulatory agencies on their efforts to tackle mortgage fraud and heard from the Special Inspector General of the newly formed TARP.
The Task Force’s current members include the Assistant Attorneys General for the Justice Department’s Civil and Tax Divisions, the Director of the FBI, seven U.S. Attorneys Offices, the Secretaries of the Departments of Treasury and Labor, and the heads of the Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Energy Regulatory Commission, Federal Communications Commission, United States Postal Inspection Service, and the Department of Housing and Urban Development's Office of Federal Housing Enterprise Oversight.
Since July 2002, the task force has yielded remarkable results with nearly 1,300 corporate fraud convictions to date, including more than 200 chief executive officers and presidents, more than 120 corporate vice presidents, and more than 50 chief financial officers.
President Bush created the President’s Corporate Fraud Task Force on July 9, 2002 to restore public and investor confidence in America’s corporations following a wave of major corporate scandals. Since its inception, the Task Force has compiled a strong record of combating corporate fraud and punishing those who violate the trust of employees and investors. Prosecutors and agency attorneys who are part of the Task Force have brought charges for accounting fraud, securities fraud, insider trading, market manipulation, wire fraud, obstruction of justice, false statements, money laundering, Foreign Corrupt Practices Act violations, stock option backdating and conspiracy, among others. More information on the task force can be found at http://www.usdoj.gov/dag/cftf/ .
Former Chief Operating Officer Pleads Guilty in $132 Million Scheme <br /> to Defraud Clients of Funds Allegedly Held in TrustRead the Press Release
WASHINGTON - A former chief operating officer of Investment Properties of America, based in Richmond, Va., pleaded guilty today to conspiring to commit mail and wire fraud and to making a material false statement to federal investigators, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and Acting U.S. Attorney Dana Boentefor the Eastern District of Virginia announced.
On July 10, 2008, a federal grand jury returned a superseding indictment against Lara Coleman, 40, for her role in a scheme to defraud and obtain millions of dollars in client funds held by the 1031 Tax Group (1031TG), a qualified intermediary company owned by the same person who owned Investment Properties of America.
Coleman, a resident of Houston, entered the guilty plea in U.S. District Court in Richmond before U.S. District Judge Robert E. Payne. Coleman pleaded guilty to one count of the superseding indictment that charged her with conspiracy to commit mail and wire fraud and to a one-count information charging her with making a material false statement to federal investigators.
According to the plea agreement and statement of facts, Coleman and others used 1031TG and its subsidiaries in a scheme to obtain millions of dollars of client funds by false pretenses. Section 1031 of the Internal Revenue Code allows investment property owners to defer the capital gains tax that would otherwise be due on properties sold, if the proceeds are used to purchase new property in a specified time frame. To facilitate such exchanges, investment property owners deposit the proceeds from the sale of their property with qualified intermediaries and sign exchange agreements, which include various promises by the qualified intermediaries to clients regarding the safekeeping of exchange funds in trust.
In the plea agreement and statement of facts, Coleman admitted that 1031TG falsely represented that it would hold client funds solely to complete the clients’ 1031 exchanges. Coleman admitted that after obtaining clients’ exchange proceeds with that false promise, she and others misappropriated approximately $132 million in client funds to support the lavish lifestyle of the owner of 1031TG, pay operating expenses for the owner’s various companies, invest in commercial real estate and purchase additional qualified intermediary companies to obtain access to additional client funds. In addition, Coleman admitted that she lied to federal investigators about statements that she had made in 2006 to internal attorneys for Investment Properties of America about the amount of money that she and others had misappropriated.
Coleman has agreed, under the terms of the plea, to a sentence of 10 years in prison. At sentencing, scheduled for May 1, 2009, she also faces a $500,000 fine. In addition, the indictment seeks forfeiture of all funds and assets owned by Coleman that were derived from or connected to the misappropriation of the approximately $132 million in 1031TG funds.
In related cases, Robert D. Field II and Richard E. Simring have pleaded guilty to participating in the conspiracy to defraud 1031TG customers. Field was the chief financial officer and Simring was the chief legal officer of a holding company that was set up, in part, to oversee both Investment Properties of America and 1031TG, however neither company was ever officially made a subsidiary of the holding company. Both men are also scheduled to be sentenced on May 1, 2009.
This case is being prosecuted by Assistant U.S. Attorney Michael S. Dry for the Eastern District of Virginia and Trial Attorney Brigham Cannon of the Criminal Division’s Fraud Section. This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and the FBI.
Columbus, Ohio, Accountant Sentenced to 120 Months for FraudRead the Press Release
WASHINGTON – Dennis G. Sartain of Hilliard, Ohio, was sentenced to 120 months in prison by U.S. District Judge Michael H. Watson, the Justice Department and Internal Revenue Service (IRS) announced today. The judge found the tax loss to be more than $1million and the fraud loss to be nearly $3.7 million.
In November 2007, a federal grand jury returned a superseding indictment against Sartain, charging him with conspiracy to defraud the United States, four counts of aiding in the filing of false tax returns, one count of aiding and abetting credit and loan application fraud and one count of aiding and abetting money laundering. In February 2008, Sartain pleaded guilty to all charges. According to court documents, Sartain was the accountant for two Columbus, Ohio, businesses involved in home building and real estate brokerage services.
According to the indictment, Sartain conspired with others to pay the Realtors and others who worked for these two companies "under the table." Court documents asserted that Sartain either prepared false Forms 1099 that underreported the amount of compensation paid to the individuals working for the companies, or he did not prepare and file any Forms 1099 with the IRS reporting any compensation paid. In addition, the superseding indictment alleged that Sartain prepared or helped prepare false individual income tax returns that underreported the income earned and taxes owed by the individuals who had received payments from these companies. Finally, the indictment claimed that Sartain and others shredded and discarded documents and business records and concealed electronic records maintained on computers and memory sticks that were relevant to the investigation.
Sartain also pleaded guilty to filing false individual income tax returns on behalf of himself and his wife. He did not report all of the income he was paid by one of these companies in the years 2001 through 2004. According to the superseding indictment, in two of those four years, Sartain listed his occupation as "unemployed."
Additionally, Sartain admitted aiding in the submission of a false loan application by helping submit false payroll check stubs to a mortgage company. The false payroll stubs misrepresented the loan applicant’s position and salary for the purpose of fraudulently obtaining a mortgage.
Finally, Sartain aided and abetted money laundering by engaging in conduct that contributed to a $54,295 payment to the buyer of a home sold by a local real estate business, according to court documents. That payment represented excess fraudulently obtained loan proceeds derived from the credit and loan application fraud.
"Today’s sentence shows that taxpayers who fail to comply with their federal tax obligations or assist others in doing so will pay a heavy price," said Nathan J. Hochman, Assistant Attorney General of the Justice Department’s Tax Division. "Mr. Sartain has been branded a convicted felon for the rest of his life, will spend ten years in prison, and still has to pay back all of the taxes plus interest and steep penalties."
"Paying individuals ‘under the table’ in an effort to circumvent the tax laws is criminal activity," said Eileen Mayer, IRS Chief, Criminal Investigation. "Unfortunately, there are individuals who are relentless in their efforts to thwart our nation's tax laws; however, we are equally relentless in our efforts to investigative these individuals and hold them accountable."
In addition to the charges for which he was sentenced today, Sartain faces additional charges stemming from a September 2008 indictment for conspiracy, obstruction of justice and witness tampering. This matter is currently scheduled for a December 2008 trial.
Assistant Attorney General Hochman commended the IRS special agents who investigated the case, as well as Tax Division trial attorneys Richard M. Rolwing, Jill M. Cassara and Sean B. O’ Connell, who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/
Chicago Advertising Firm Pays United States $15.5 Million to Settle Overbilling Allegations on Army ContractRead the Press Release
WASHINGTON - Leo Burnett Company, a Chicago advertising firm, has agreed to pay the U.S. $15.5 million to settle allegations that the company submitted false claims to the U.S. Army, the Justice Department announced today. The firm had a contract from 2000 to 2005 with the Army to provide advertising services for the military service’s recruiting mission.
The settlement resolves allegations that Leo Burnett improperly billed the Army while developing the recruiting Web site and for advertising under the "Army of One" multimedia advertising campaign. Leo Burnett will make a cash payment of $12.1 million and credit the Army $3.4 million in work performed, but not billed.
"The Justice Department is committed to vigorously pursuing all those who knowingly submit false claims with respect to military contracts," said Gregory G. Katsas, Assistant Attorney General for the Civil Division.
The settlement resolves the lawsuit filed on behalf of the U.S. government by former Leo Burnett employees, Greg Hamilton and Michele Casey, who received $2,790,000 as their share of the recovery in the case. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery obtained by the government.
The litigation and settlement of this case were conducted by the U.S. Attorney’s Office for the Northern District of Illinois and the Justice Department’s Civil Division.
"The Pentagon’s Defense Criminal Investigative Service will aggressively pursue allegations of fraud that are perpetrated against the Department of Defense," said Sharon Woods, Defense Criminal Investigative Service director.
"The American people trust us to ensure their tax dollars are spent appropriately and we will continue to aggressively seek out and investigate those who intend to defraud the Army and the American taxpayer," said Brigadier General Rodney Johnson, Commanding General of the U.S. Army Criminal Investigation Command.
The case was investigated by the Defense Criminal Investigative Service of the Inspector General for the Department of Defense, the U.S. Department of the Army Criminal Investigation Command - Major Procurement Fraud Unit, and the Defense Contract Audit Agency.
This case was prosecuted as part of a National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, the U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrate the Justice Department’s commitment to helping ensure the integrity of the government procurement process.
5 January 2009
Statement of Attorney General Michael B. Mukasey on the Death of Former Attorney General Griffin BellRead the Press Release
"Judge Bell’s long record of public service, especially his efforts to enact FISA and champion civil rights, exemplified his dedication, integrity, and fearless pursuit of justice. He was not only an outstanding Attorney General, but also a true gentleman. The Justice Department mourns his passing."
Former South Carolina Highway Patrol Trooper Pleads Guilty to Civil Rights ViolationRead the Press Release
WASHINGTON – John B. Sawyer, a former trooper with the South Carolina Highway Patrol, pleaded guilty today in federal court in Charleston, S.C., to using excessive force during an arrest.
During his plea, Sawyer acknowledged that he abused his authority as a law enforcement officer when, on May 26, 2006, he unnecessarily and repeatedly kicked the head and neck area of a man who had been apprehended in Sumter County after a chase on Interstate 95. Sawyer agreed that his conduct violated federal law and the constitutional rights of the arrested man.
"The overwhelming majority of police officers perform their duties with honor and professionalism," said Grace Chung Becker, Acting Assistant Attorney General for the Civil Rights Division. "However, if an officer commits a criminal act by violating another person’s civil rights, the Justice Department will not hesitate to step in and vigorously enforce the law."
"This is an important case, as the public places great trust in law enforcement to protect and serve them," said Walt Wilkins, U.S. Attorney for the District of South Carolina. "When an officer violates this oath, and the civil rights of those he encounters, the public’s trust is eroded and fellow officers suffer as a result. We are dedicated to prosecuting those who engage in abusive police conduct, and who tarnish the reputation of the dedicated officers who serve each day with honor and distinction."
The case was investigated by the Federal Bureau of Investigation and the South Carolina Law Enforcement Division and was prosecuted by Assistant U.S. Attorney Alston C. Badger and Special Assistant U.S. Attorney Brent Alan Gray formerly of the Civil Rights Division.