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10 February 2009
California Man Sentenced to 18 Months in Community Correctional Facility in Connection with Scheme to Defraud First International Bank and Export-Import BankRead the Press Release
WASHINGTON – Carlos Serrano, 64, of Glendale, Calif., was sentenced to 18 months in a community correctional facility in connection with a $1.3 million scheme to defraud the First International Bank of Connecticut (FIB) and the Export-Import Bank of the United States (Ex-Im Bank), Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Thomas P. O’Brien of the Central District of California announced today.
Serrano was sentenced on Feb. 9, 2009, in U.S. District Court for the Central District of California by Judge Christina A. Snyder. In addition to his prison sentence, Serrano was placed on five years of probation and ordered to pay restitution of $924,569 to the Ex-Im Bank.
Following a four-day trial, Serrano was convicted on Sept. 18, 2008, of conspiring to commit bank fraud and committing bank fraud in connection with a fraudulent $1.3 million loan transaction involving FIB and the Ex-Im Bank. At trial, the jury heard testimony that in approximately November 2000, Serrano met with alleged co-conspirators and agreed to act as an exporter in a loan transaction between a company in the Philippines and FIB, in which the Ex-Im Bank acted as guarantor. According to trial testimony, Serrano’s sole job in the transaction was to obtain a $200,000 down payment from the Philippine company, purchase $1.3 million in U.S. goods on behalf of the Philippine company, ship the purchased goods to the Philippine company and certify to FIB and the Ex-Im Bank that he had purchased and shipped those goods. The jury heard testimony that Serrano contacted U.S. suppliers using a fake name for the purpose of obtaining price quotes, but that he never actually purchased any goods. Jurors also heard testimony that Serrano certified in documents sent to and relied upon by FIB and the Ex-Im Bank that he had purchased $1.3 million in U.S. goods and shipped those goods to the Philippines.
In reliance on Serrano’s false statements, FIB sent Serrano $1.1 million in loan proceeds. Testimony revealed that after receiving the loan proceeds, Serrano paid himself approximately $28,000, sent approximately $949,000 to an alleged co-conspirator and sent approximately $160,000 to a company in Singapore. As a result of the fraud, the Ex-Im Bank lost $924,569.
This case is part of a broader investigation into an $80 million scheme to defraud the Ex-Im Bank between November 1999 and December 2005. To date, eight individuals – Serrano, Daniel Curran, Christina Song, Edward Chua, David Villongco, Robert Delgado, Jaime Galvez and Edward Javier – have been convicted for their involvement in the fraud scheme. Curran was sentenced on April 23, 2008, to 41 months in prison; Song was sentenced on Oct. 2, 2008, to 37 months in prison; Chua was sentenced on May 14, 2008, to 37 months in prison; Villongco was sentenced on Feb. 29, 2008, to 33 months in prison; Delgado was sentenced on Oct. 5, 2007, to two years in prison; Galvez was sentenced on Jan. 7, 2008, to one year in prison; and Javier was sentenced on July 18, 2008, to six months in prison.
In addition, four other individuals – Marilyn Ong, Ildefonso Ong, Nelson Ti and Joseph Tirona – have been indicted by a federal grand jury in the District of Columbia for their alleged involvement in the scheme. An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
The case was prosecuted by Assistant Chief Hank Bond Walther of the Criminal Division’s Fraud Section and Jason P. Gonzalez of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the U.S. Postal Inspection Service and the FBI.
Arizona Man Sentenced to Five Years for Distribution of Child PornographyRead the Press Release
WASHINGTON – Theodore Allan, 54, of Glendale, Ariz., was sentenced today to five years in prison for distribution of child pornography, Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and U.S. Attorney for the District of Arizona Diane J. Humetewa announced.
Allan was indicted on charges of distribution, receipt and possession of child pornography on March 6, 2007. The charges followed a July 14, 2006, U.S. Immigration and Customs Enforcement (ICE) search of Allan’s home. According to court documents, ICE agents discovered approximately nine videos and 267 images depicting the sexual abuse of children.
Allan pleaded guilty on Aug. 4, 2008, to one count of distribution. As part of the plea agreement, Allan admitted to distributing child pornography via e-mail.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was prosecuted by Trial Attorney James Silver of CEOS and Senior Litigation Counsel Vincent Q. Kirby of the District of Arizona. ICE conducted the investigation.
6 February 2009
Las Vegas Minister and Conspirator Sentenced in Tax Evasion SchemeRead the Press Release
WASHINGTON - Michael Haynes, a practicing minister, and David Jett, both of Las Vegas, were sentenced to 37 months in prison and five years probation, respectively, by Chief U.S. District Judge Robert L. Hunt in Las Vegas, the Justice Department and Internal Revenue Service (IRS) announced today. Haynes and Jett were also ordered to pay restitution of $834,000 and $150,000, respectively, to the U.S. Treasury.
In September 2008, a jury convicted Haynes for conspiring to evade taxes through a scheme involving the fraudulent sale of One Voice Technologies Inc. stock. Jett pleaded guilty to conspiracy in March 2008.
According to the indictment and evidence presented at trial, Haynes and Jett orchestrated the fraudulent sale of $7 million in One Voice stock. Haynes and Jett used at least ten stock certificates to generate the $7 million in gross proceeds; all of these stock certificates were in different nominee names. As part of the scheme, new stock certificates in the name of One Voice were issued to at least five nominees, two of whom testified at trial. With the assistance of the transfer agent for One Voice, Haynes had the nominees sign documents that stated they had lost their original stock certificates and assigned their rights to the stock.
According to court documents and evidence presented at trial, Haynes directed the $7 million in stock proceeds to be deposited in a nominee bank account at the Bank of Nova Scotia. At Haynes’ instruction, the proceeds were transferred via checks and wire transfers to U.S. bank accounts in his and Jett’s control. Jett and Haynes then used funds obtained from the sale of One Voice stock for their personal benefit. Haynes failed to report the proceeds of the stock sale on his personal income taxes.
Acting Attorney General John A. DiCicco commended the IRS special agents who investigated the case, as well as Tax Division trial attorneys Lori H. Hendrickson and Timothy J. Stockwell who prosecuted the case.
5 February 2009
U.S. Court Rejects Two Prominent L.A. Real Estate Investors Attempt to Use Tax Avoidance SchemeRead the Press Release
WASHINGTON - A federal court in Los Angeles invalidated an abusive tax shelter scheme engaged in by prominent real estate investors James Thomas and Edward Fox, the Justice Department announced today. U.S. District Judge John F. Walter also imposed the maximum penalty - forty percent - allowed by the tax code against them.
Thomas, a former Internal Revenue Service (IRS) attorney, and Fox owned real estate, including interests in the Library Tower, the Gas Company Tower and the Wells Fargo Center, all located in Los Angeles. In 2001 they sought out an abusive tax shelter that has become known as "Son of BOSS." In the Son of BOSS scheme used by Thomas and Fox, they purchased an exotic form of a financial option that they claim would have protected them against a catastrophic decline in real estate values, which they feared in the immediate aftermath of the terrorist attacks of September 11.
Thomas and Fox paid the accounting firm of Arthur Andersen and insurance giant AIG more than $2 million in fees to obtain financial options, but Judge Walter agreed with the government that the true value of the options was less than $1,000. Notwithstanding the low value of the options, Thomas and Fox claimed that the scheme created more than $145 million of tax "basis." That tax basis, if valid, could have been used to shield from the income tax more than $145 million of future profits had Thomas and Fox sold their real estate at a gain.
Judge Walter determined that the tax avoidance scheme had no real economic substance and was simply designed to fabricate tax basis in certain partnerships. The court rejected Thomas’s attempt to claim an increase in tax basis of $100 million despite paying only $1.5 million for the transaction at issue. Similarly, the court rejected Fox’s attempt to claim a $45 million increase in tax basis despite paying only $675,000. According to the court, Thomas and Fox, and their tax advisor, Martin Griffiths, "obviously recognized" the tax benefits to this fabricated basis. The court also rejected Thomas and Fox’s contention that the abusive tax shelter accomplished a reasonable business purpose.
Most of the more than 2000 taxpayers who used the "Son of BOSS" scheme settled their cases with the IRS, paying the full tax and part of the penalties owed, and the IRS announced in 2005 that it had collected nearly $4 billion as a result of those settlements. The government warned taxpayers who did not settle that it would pursue those cases in court and seek the maximum penalty allowed.
"The court’s decision today is yet another victory for the American taxpayer," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. "Too many individuals in the last decade have turned to abusive tax shelters to keep from paying their fair share of taxes. This decision serves as yet another reminder that these abusive schemes are not valid."
Acting Assistant Attorney General DiCicco and Thomas P. O’Brien, U.S. Attorney for the Central District of California, thanked Assistant U.S. Attorney Andrew Pribe, Tax Division trial attorney Rick Watson and IRS Chief Counsel attorney Jonathan Sloat who represented the government.
Two Individuals Arrested on Federal Sex Trafficking ChargesRead the Press Release
WASHINGTON – Two men have been arrested and charged in an indictment unsealed today with crimes related to sex trafficking, Acting Assistant Attorney General Loretta King of the Civil Rights Division and U.S. Attorney for the Eastern District of Arkansas Jane W. Duke announced.
Tommy Handy, aka "Tom Tom" and his nephew, Everett Cooney, aka "Bear," were indicted by a federal grand jury in Little Rock, Ark., for conspiracy to commit sex trafficking and sex trafficking for their roles in using force, fraud and coercion to cause juvenile girls and adult women to engage in commercial sex acts. Handy and Cooney allegedly benefitted financially from the conspiracy, which took place from January 2002 to May 2008. Handy was also charged with possession of a firearm in furtherance of a crime of violence.
If convicted, Handy and Cooney both face a maximum sentence of life in prison and fines of more than $1 million.
An indictment is only an allegation, and the defendants are presumed innocent unless and until proven guilty.
The prosecution of human trafficking offenses is a top priority of the Justice Department. In Fiscal Year 2008, the Department filed a record number of both labor trafficking and sex trafficking cases.
The case will be prosecuted by Assistant U.S. Attorney Joe J. Volpe and Civil Rights Division Trial Attorney Jim Felte. The charges are the result of an investigation conducted by the FBI.
Patriot Coal to Pay $6.5 Million to Settle Clean Water Act ViolationsRead the Press Release
WASHINGTON - Patriot Coal Corporation, one of the largest coal mining companies in the United States, has agreed to pay a $6.5 million civil penalty to settle violations of the Clean Water Act, the Justice Department and U.S. Environmental Protection Agency (EPA), and the state of West Virginia announced today.
The settlement includes the third largest penalty ever paid in a federal Clean Water Act case for discharge permit violations. In addition, Patriot has agreed to extensive measures designed to ensure Clean Water Act compliance at its mines in West Virginia. The consent decree includes innovative and heightened operating standards which should serve as a model for the coal mining industry in Central Appalachia.
“This settlement represents a very important step in making sure that the coal mining industry is in compliance with the Clean Water Act,” said John C. Cruden, Acting Assistant Attorney General in charge of the Justice Department's Environment and Natural Resources Division. “It will benefit the citizens of West Virginia and helps make sure that the Mountain State's streams and rivers are not damaged.”
“This settlement continues to set the bar high for the coal industry and Clean Water Act enforcement in general. Today's settlement reiterates EPA's commitment to maintaining clean and healthy waterways,” said William T. Wisniewski, acting Regional Administrator for EPA’s mid-Atlantic region.
In a joint complaint filed concurrently with the consent decree, the United States and the State of West Virginia alleged that Patriot violated its Clean Water Act permits more than 1,400 times -- representing over 22,000 days of violations between January 2003 and December 2007 at its mining complexes in West Virginia. During this time, Patriot and its subsidiaries allegedly discharged excess amounts of metals, sediment, and other pollutants into dozens of rivers and streams in West Virginia. Excess discharges of these pollutants can significantly harm water quality and aquatic life in West Virginia's streams.
As part of the settlement, Patriot has agreed to implement extensive measures to prevent future violations and to perform environmental projects, at a total estimated cost of $6 million. Specifically, Patriot will develop and implement a company-wide compliance-focused environmental management system including creating a database to track information relevant to compliance efforts; conduct regular internal and third-party environmental compliance audits; implement a system of tiered response actions for any possible future violations; and conduct annual training for all employees and contractors with environmental responsibilities. The company will also perform five stream restoration projects in local watersheds and perform assessments of mining impacts on aquatic life.
With corporate headquarters in St. Louis, Patriot owns and operates 16 mining complexes in West Virginia and Kentucky.
The consent decree, lodged in the U.S. District Court for the Southern District of West Virginia, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Department of Justice Web site at: http://www.usdoj.gov/enrd/Consent_Decrees.html.
Minnesota Man Arrested in Connection with Ponzi SchemeRead the Press Release
WASHINGTON – A Minnesota man was arrested today on charges related to an alleged Ponzi scheme involving commodity pools, Acting Assistant Attorney General Rita M. Glavin for the Criminal Division and U.S. Attorney Frank J. Magill for the District of Minnesota announced.
Charles "Chuck" E. Hays, of Rosemount, Minn., was charged in a criminal complaint filed in the District of Minnesota with one count of wire fraud and one count of mail fraud. According to the complaint, Hays allegedly induced investors to provide funds to Crossfire Trading, LLC (Crossfire), a company for which the listed operating address was the same as Hays’ residence.
According to the complaint, Hays allegedly told investors their money had been invested in a "pooled" commodities trading account, using misrepresentations such as false statements from a commodities brokerage firm, when in reality no such investments were ever made. The complaint alleges that Crossfire had no commodities trading account and the documents shown and sent to victim investors were fabrications. The complaint also alleges that Hays used the money wired to his bank accounts by investors for his personal expenses, including the purchase of an approximately $3 million yacht, as well as for payments to other investors.
Hays is scheduled to appear today before a magistrate judge for the U.S. District Court for the District of Minnesota.
Additionally, the government has seized the yacht Hays purchased with investor funds as well as bank accounts, which contain approximately $1 million in funds allegedly obtained through the fraudulent scheme.
In a related action, the U.S. Commodity Futures Trading Commission today filed a civil enforcement action against Hays and Crossfire.
A complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant Chief Robertson Park and Trial Attorney Laura Perkins of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ann Anaya for the District of Minnesota. Significant assistance is also being provided by Assistant U.S. Attorney Jim Alexander for the District of Minnesota. The case is being investigated by the U.S. Postal Inspection Service.
Member of Human Trafficking Ring Pleads Guilty to Sex Trafficking ChargesRead the Press Release
WASHINGTON - Raul Cortes-Meza, 21, aka "Oscar", a Mexican national, pleaded guilty today in U.S. District Court in Atlanta to sex trafficking of a minor from Mexico, Acting Assistant Attorney General Loretta King of the Civil Rights Division and U.S. Attorney David E. Nahmias for the Northern District of Georgia announced.
According to the information presented in court, Cortes-Meza harbored a 17-year-old girl in the United States after she was pursued romantically by Cortes-Meza’s alleged co-conspirator in Mexico, then smuggled into the United States and brought to the Norcross, Ga., area. After the victim’s arrival in Norcross, Cortes-Meza, knowing that the victim was under 18 years of age, drove her to numerous apartments in the Atlanta metropolitan area to have sex with paying clients. Cortes-Meza instructed the victim to enter the apartments and provide fifteen minutes of sexual services to each man who was present, and subsequently collected money from the men with whom the victim engaged in commercial sex.
"Human trafficking occurs in hidden corners across the country," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Few crimes are more reprehensible than profiting from the sexual exploitation of a minor. The Department is committed to enforcing laws that put human traffickers behind bars."
"Human trafficking violates basic human rights and will not be tolerated," said U.S. Attorney David E. Nahmias. "Using girls under the age of 18 to engage in commercial sex acts is a serious violation of federal law. The victimization of the young woman in this case was unfortunately made easier by her illegal status, unfamiliarity with U.S. laws, and fear of law enforcement instilled in her by the trafficker. Federal laws protect all victims of such heinous crimes, whether or not they are U.S. citizens. No victim should fear coming forward to report illegal activity."
The sex trafficking of a minor charge to which Cortes-Meza pleaded guilty carries a mandatory minimum sentence of 10 years in federal prison A sentencing date has not yet been scheduled by the court.
The prosecution of human trafficking offenses is a top priority of the Justice Department. In fiscal year 2008, the Section filed the largest number of federal criminal civil rights cases ever in a single year in the history of the Civil Rights Division., including a recod number of both sex trafficking and labor trafficking cases.
The case is being investigated by special agents of U.S. Immigration and Customs Enforcement. The case is being prosecuted by Civil Rights Division Trial Attorney Karima Maloney and Assistant U.S. Attorneys Corey Steinberg and Susan Coppedge for the Northern District of Georgia.
Government Contractor Sentenced to 30 Months in Prison on Bribery ChargesRead the Press Release
WASHINGTON – A government contractor and former employee of the U.S. Department of the Treasury was sentenced in Washington today in connection with a bribery scheme involving contracts at the U.S. Tax Court in the District of Columbia, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Daniel Money, 44, of Shady Side, Md., was sentenced by U.S. District Judge Ricardo M. Urbina of the U.S. District Court for the District of Columbia, to 30 months in prison, three years supervised release and a $7,500 fine. Money pleaded guilty on Sept. 5, 2008, to one count of bribery. As part of the plea agreement and by order of the court, Money also will forfeit $95,000, which constitutes the profit that Money made on the contract that he performed as part of the bribery scheme. As part of the plea agreement, Money also agreed to pay restitution of $2,250 to the U.S. Department of the Treasury related to his theft of diesel fuel from the Treasury.
According to court documents, Money was a Maryland-based contractor who provided maintenance, repair, electrical, construction and other related services for government agencies, including the General Services Administration (GSA) and the U.S. Tax Court. Through his company, Daniel Construction, Money obtained and performed government contract work and was also employed as a planner for the U.S. Department of the Treasury. Between March 2007 and May 2008, Money admitted he agreed to provide a government official with a total of $55,000 in bribe payments in exchange for the award of two contracts to Daniel Construction, including a contract in the amount of $188,000 at the U.S. Tax Court.
The case was prosecuted by Trial Attorneys Daniel A. Petalas, Richard B. Evans and Peter M. Koski of the Public Integrity Section, headed by Section Chief William M. Welch II. The case was investigated jointly by the GSA Office of the Inspector General, the U.S. Treasury Office of the Inspector General and the FBI.
Former Memphis Police Officer Found Guilty on 44 Counts<br /> of Civil Rights, Narcotics, Robbery and Firearms ChargesRead the Press Release
WASHINGTON – A federal jury in Memphis, Tenn., today found Arthur Sease IV, a former Memphis Police Department officer, guilty on forty-four counts of civil rights, narcotics, robbery and firearms offenses, Acting Assistant Attorney General Loretta King of the Civil Rights Division and U.S. Attorney Lawrence J. Laurenzi for the Western District of Tennessee announced.
The evidence at trial showed that from November 2003 through April 2006, Sease conspired with other Memphis police officers to use their authority as law enforcement officers, including their service weapons, to rob suspected drug dealers of cash, cocaine and marijuana. Sease and his co-conspirators would then resell the stolen drugs for their own profit. The government introduced proof of 16 separate robberies, as well as one attempted robbery. In each robbery, Sease or another uniformed Memphis police officer, would pull over a car containing suspected drug dealers and steal whatever drugs and cash that they found.
According to evidence presented at trial, Sease conspired with other Memphis drug dealers to arrange drug deals so that he could rob the other dealers when they arrived. On one occasion, evidence showed that Sease had a co-conspirator resell cocaine that Sease had stolen from one drug dealer to another drug dealer. Sease then pulled the buyer’s car over, stole the cocaine again and resold it. Sease and his co-conspirators kidnapped several drug dealers in an effort to get them to set up additional drug deals for Sease to rob.
Sease was a Memphis police officer from 2001 through 2005. He was discharged in 2005 for misconduct relating to one of the robberies. After he was fired, one of Sease’s co-conspirators, Andrew Hunt, became a Memphis reserve police officer and the two continued to rob drug dealers while pretending to be police officers, according to evidence presented at trial.
Five other individuals have already pleaded guilty in this case. Hunt pleaded guilty in September 2006 to a federal civil rights conspiracy, robbery affecting interstate commerce and drug distribution, and was sentenced in December 2006 to 19 years in prison. Former Memphis police officers Antoine Owens, Harold McCall and Alexander Johnson pleaded guilty to civil rights conspiracy charges and are currently awaiting sentencing. Laterrica Woods, a civilian who helped Sease and Hunt with one of their robberies, also pleaded guilty to a civil rights conspiracy and is scheduled to be sentenced in March 2009.
"It is a shame that as crime in our community is ever present that we have to spend our limited resources on investigating and prosecuting those people who have taken an oath to serve and protect our community," said Lawrence J. Laurenzi, U.S. Attorney for the Western District of Tennessee. "Effective law enforcement begins with honest law enforcement. We will continue to vigorously and tirelessly investigate and prosecute those law enforcement officials who break the law. Our community demands honest law enforcement."
"The city of Memphis put its trust in Arthur Sease to protect and serve, and Arthur Sease abused that trust," said Acting Assistant Attorney General Loretta King for the Civil Rights Division. "A badge is not a license to do what you want; it carries an obligation to do what is right."
"It is never easy to investigate one of your own; however, civil rights and public corruption investigations remain a top priority," said Perrye K. Turner, Assistant Special Agent in Charge of the FBI’s Memphis Field Office. "Citizens have the right to expect honest services from its law enforcement officers, at the local, state and federal levels. The FBI will continue to work in cooperation with its partners to identify, investigate and prosecute those who would violate the public’s trust for personal gain."
"This represents a very small percentage of the fine men and women in blue. Those officers who choose to violate the law and the trust of our citizens will face harsh punishment. The Memphis Police Department will continue to work with the federal and local government agencies to send the message that criminal activities involving Memphis police officers will not be tolerated," said Police Director Larry Godwin. "The shield of law enforcement shall not be tarnished," added Godwin.
Sease faces a minimum punishment of 275 years in prison. A sentencing date has been set for May 14, 2009.
This case was investigated by Special Agents Tracey Harris, Maria Irizarri and Jaime Corman from the FBI’s Memphis Division and Sergeants Matt Whittington and Billy Greenwood of the Memphis Police Department Security Squad. Officers Tony Parks and Thurmond Richardson contributed to the initial investigation. Assistant U.S. Attorney Steve Parker from the U.S. Attorney’s Office for the Western District of Tennessee and Trial Attorney Jonathan Skrmetti from the Civil Rights Division’s Criminal Section prosecuted the case.
The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as those laws that prohibit unreasonable search and seizure, deprivation of property without due process of law, or other acts of misconduct by law enforcement and other government officials. In FY2008, the Criminal Section filed the largest-ever number of federal criminal civil rights cases in a single year in the section’s history, and the second-highest ever number of official misconduct prosecutions.
Former Employee at U.S. Embassy in Haiti Pleads Guilty to Theft of More Than $800,000Read the Press Release
WASHINGTON – A former employee at the U.S. Embassy in Haiti pleaded guilty today to one count of theft for stealing more than $800,000 from the U.S. Department of State, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
According to court documents, Jean G. Saint-Joy, 25, a/k/a Gary Saint-Joy, a/k/a Garry Saint-Joy, a citizen of Haiti, was employed as a cashier by the U.S. Embassy in Port-au-Prince, Haiti, from approximately 1995 until July 2008.
Beginning in approximately 2003 and continuing until early 2008, Saint-Joy admitted he engaged in a scheme to embezzle funds from the State Department. As part of this scheme, Saint- Joy admitted he submitted and caused to be submitted false and fraudulent documents to the State Department claiming that he required reimbursement for the payment of legitimate embassy expenses. According to court documents, Saint-Joy illegally obtained approximately $428,639 from the State Department as a result of the scheme. Saint-Joy also admitted he provided and caused to be provided false and fraudulent requests for cash advances from the embassy’s cash advance accounts with two banks in Port-au-Prince. According to court documents, Saint-Joy illegally obtained approximately $50,000 from one account and approximately $371,627 from the other account. The total amount of Saint-Joy’s theft was approximately $849,000.
The charge to which Saint-Joy pleaded guilty carries a maximum penalty of 10 years in prison and a maximum fine of $250,000. Sentencing was scheduled for May 26, 2009.
The case is being prosecuted by Trial Attorneys Ethan H. Levisohn and Marc Levin of the Criminal Division’s Public Integrity Section, which is headed by William M. Welch, II. The case was investigated by the Office of Inspector General for the U.S. Department of State.
4 February 2009
United States Files Clean Air Lawsuit Against Westar EnergyRead the Press Release
WASHINGTON — The United States has filed a complaint against Westar Energy alleging that the company violated the Clean Air Act by making major modifications to the Jeffrey Energy Center, a coal-fired power plant in St. Marys, Kan., without also installing and operating modern pollution control equipment, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.
The complaint alleges that for more than a decade, the Jeffrey Energy Center has operated without the best available emissions-control technology required by the New Source Review provisions of the Clean Air Act to control emissions of sulfur dioxide, nitrogen oxide and particulate matter, contributing to formation of fine particulate matter, smog and acid rain.
The lawsuit, filed by the Justice Department on behalf of the EPA, asks the court to order Westar Energy to install and operate appropriate air pollution control technology in order to substantially reduce sulfur dioxide, nitrogen oxide and particulate matter emissions from the Jeffrey Energy Center. The United States also seeks civil penalties up to the maximum amount authorized by law, as well as actions by the energy provider to mitigate the adverse effects alleged to have been caused by the violations.
Coal-fired power plants collectively produce more pollution than any other industry in the United States. They account for nearly 70 percent of sulfur dioxide emissions each year and 20 percent of nitrogen oxides emissions. Emissions from coal-fired power plants have detrimental health effects on asthma sufferers, the elderly and children. Additionally, these emissions have been linked to forest degradation, waterway damage, reservoir contamination and deterioration of stone and copper in buildings.
To combat these adverse effects, the EPA and the Justice Department are pursuing a national initiative, targeting electric utilities whose coal-fired power plants violate the law. The suit was filed in the U.S. District Court in Kansas City, Kan.
Former Mississippi County Deputy Sheriffs Plead Guilty to Civil Rights ViolationsRead the Press Release
WASHINGTON – Former Tippah County, Miss., Deputy Sheriff Jeffrey Rogers, 35, pleaded guilty today to a one-count information charging him and former Deputy Sheriff William Rogers with violating the civil rights of an arrestee, the Justice Department announced. William Rogers, 56, who is Jeffrey Rogers’ father, pleaded guilty on Jan. 20, 2009, to the same charge of violating the civil rights of an arrestee.
In pleading guilty, the defendants admitted that in June 2007 they used their Tasers to attack an arrestee without justification. The arrestee suffered multiple burns and contusions from the Taser attack. After the attack, the defendants stripped the arrestee of his clothing and chained him overnight to the wall of an isolation cell. After bragging about the incident to fellow employees, Jeffrey Rogers misled federal agents who were investigating the incident. In an effort to cover up his crimes, William Rogers also filed a misleading police report about the incident. The Tippah County Sheriff’s Department fired Jeffrey Rogers after the incident.
"The vast majority of America’s law enforcement officers do their jobs bravely and with appropriate restraint," said Acting Assistant Attorney General for the Civil Rights Division Loretta King. "Those who use excessive force not only hurt their immediate victims but also the reputations of their peers, and will be prosecuted vigorously."
Sentencing dates have not yet been scheduled by the court for either Jeffrey or William Rogers.
The case was investigated by the FBI and is being prosecuted by Trial Attorneys Kathleen J. Monaghan and Michael J. Frank from the Justice Department’s Civil Rights Division and by Assistant U.S. Attorney Robert W. Coleman II from the U.S. Attorney’s Office for the Northern District of Mississippi.
The Civil Rights Division is committed to the vigorous enforcement of federal criminal civil rights statutes, such as those prohibiting the willful use of excessive force or other acts of misconduct by law enforcement officials.
Federal Court Bars Connecticut Woman from Preparing Tax Returns for OthersRead the Press Release
WASHINGTON – A federal district court in Connecticut has permanently barred Elda Sinani, a resident of that state, from preparing federal tax returns for others, the Justice Department announced today. Sinani consented to the civil injunction order.
According to the government complaint, Sinani operated two businesses – Eagle Notary Public & Tax Service in Waterbury, Conn., from November 2001 through April 2004 and later Universe Travel & Legal Services in Hartford, Conn. The complaint alleges that she provided tax return preparation services through both of these businesses. The complaint further alleges that Sinani inflated deductions for her customers to which they otherwise were not entitled. An example identified in the complaint asserts that she frequently improperly reported her customers’ transfer of monies to family members as charitable contributions.
The complaint states that Sinani prepared more than 1,500 returns for the tax years 2003 through 2006. According to the complaint, the IRS has determined that the U.S. Treasury has incurred more than $300,000 in losses from tax returns prepared by Sinani and may have incurred losses exceeding $2.9 million.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division trial attorney Lisa Bellamy for her handling of the government’s case. The Justice Department has obtained injunctions against more than 370 tax return preparers and tax-fraud promoters since 2001. Information about the Justice Department’s Tax Division and its efforts to stop fraudulent return preparers is available on the Justice Department website.
3 February 2009
Three Foreign Executives Indicted for Their Roles in LCD Price-Fixing ConspiracyRead the Press Release
WASHINGTON - A federal grand jury in San Francisco returned an indictment against two former executives from Chunghwa Picture Tubes Ltd. (Chunghwa) and one former executive from LG Display Co. Ltd. (LG) for their participation in a global conspiracy to fix prices of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels, the U.S. Department of Justice announced today.
The indictment, filed today in U.S. District Court in San Francisco, charges that Cheng Yuan Lin, aka C.Y. Lin, Wen Jun Cheng, aka Tony Cheng, and Duk Mo Koo conspired with unnamed co-conspirators to suppress and eliminate competition by fixing the prices of TFT-LCD panels. The three executives participated in the conspiracy at various times during the charged conspiracy period, which began on or about Sept. 14, 2001, and continued to on or about Dec. 1, 2006.
- Lin participated in the conspiracy from Sept. 14, 2001 to Apr. 7, 2003 as Chunghwa’s Chairman and Chief Executive Officer. Lin is a resident of Taiwan, Republic of China.
- Cheng participated in the conspiracy from Oct. 5, 2001 to Sept. 24, 2004. For most of this period, Cheng was Chunghwa’s Assistant Vice President of Sales and Marketing. Cheng is a resident of Taiwan, Republic of China.
- Koo participated in the conspiracy from Dec. 11, 2001 to Dec. 1, 2005 as Executive Vice President and Chief Sales Officer for LG. Koo is a citizen and resident of the Republic of Korea.
"The Antitrust Division will vigorously pursue individuals who engage in antitrust crimes targeting U.S. businesses and consumers no matter where those individuals live or commit the crime," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Antitrust Division. "Today’s charges should make clear that there are no safe havens for international cartels that violate the U.S. antitrust laws."
TFT-LCD panels are used in computer monitors and notebooks, televisions, mobile phones and other electronic devices. In 2006, the worldwide market for TFT-LCD panels was approximately $70 billion.
Including today’s charge, three companies and seven individuals have been charged in the Department’s ongoing antitrust investigation into the TFT-LCD industry. To date, more than $585 million in criminal fines have been imposed as a result of the ongoing investigation.
These three foreign-based executives were charged with participating with co-conspirators in a conspiracy that was accomplished by the following means:
- Attending meetings and engaging in conversations and communications in Taiwan, Korea and the United States to discuss the prices of TFT-LCD panels;
- Agreeing during those meetings, conversations and communications to charge prices of TFT-LCD panels at certain levels;
- Attending regular group meetings, commonly referred to as "crystal meetings," in hotel rooms in Taiwan and agreeing during those meetings to charge prices for standard-sized TFT-LCD panels at certain target levels;
- Exchanging TFT-LCD shipping, production, supply, demand and pricing information, for the purpose of implementing, monitoring and enforcing adherence to the agreed-upon prices;
- Authorizing, ordering and consenting to the participation of subordinate employees in the conspiracy;
- Issuing price quotations in accordance with the agreements reached;
- Accepting payment for the supply of TFT-LCD panels sold at collusive, noncompetitive prices to customers in the United States and elsewhere; and
- Taking steps to conceal the conspiracy and conspiratorial contacts through various means.
Lin, Cheng and Koo are each charged with participating in the conspiracy to suppress competition in violation of the Sherman Act. The maximum penalty for the conviction of a Sherman Act violation occurring before June 22, 2004, is three years imprisonment and a fine of $350,000 for individuals. The maximum penalty for a violation occurring after June 22, 2004, is 10 years imprisonment and a fine of $1 million for individuals. The maximum fines may be increased, however, to twice the gain derived from the crime or twice the loss suffered by the victims if either or those amounts is greater than the Sherman Act maximum fines. Of the three executives charged today, only Lin’s violation occurred before June 22, 2004.
On Jan. 15, 2009, former Chunghwa CEO Chieng-Hon "Frank" Lin and two Chunghwa executives, Chih-Chun "C.C." Liu and Hsueh-Lung "Brian" Lee, were charged with participating in the same conspiracy and agreed to plead guilty. Under their plea agreements, which must be approved by the court, Chieng-Hon Lin agreed to serve nine months in prison and pay a $50,000 criminal fine; Chih-Chun Liu agreed to serve seven months in prison and pay a $30,000 criminal fine; and Hsueh-Lung Lee agreed to serve six months in prison and pay a $20,000 criminal fine. Also on Jan. 15, 2009, LG executive Chang Suk "C.S." Chung agreed to plead guilty for his role in the conspiracy. Under his plea agreement, which must be approved by the court, Chung agreed to serve a seven-month prison sentence and pay a $25,000 criminal fine.
In total, three companies have been charged with price fixing in the TFT-LCD investigation. On Dec. 15, 2008, LG pleaded guilty to participating in this conspiracy and was sentenced to pay a $400 million criminal fine – the second largest fine in Antitrust Division history. On Jan. 14, 2009, Chunghwa pleaded guilty to participating in the same conspiracy and was sentenced to pay a $65 million criminal fine. On Dec. 16, 2008, Sharp Corp. pleaded guilty to three separate conspiracies to fix the prices of TFT-LCD panels sold to Dell Inc., Apple Computer Inc., and Motorola Inc., and was sentenced to pay a $120 million criminal fine.
Today’s charge is the result of a joint investigation by the San Francisco Field Office of the Antitrust Division of the U.S. Department of Justice and the Federal Bureau of Investigation in San Francisco.
Anyone with information concerning illegal conduct in the TFT-LCD industry is urged to call the San Francisco Field Office of the Antitrust Division at 415-436-6660.
Justice Department Settles Religious Discrimination Lawsuit Against Washington Metropolitan Area Transit AuthorityRead the Press Release
WASHINGTON — The Department of Justice announced today that it has entered into a settlement agreement with the Washington Metropolitan Area Transit Authority (WMATA) that, if approved by the court, will resolve the complaint of pattern or practice religious discrimination filed by the United States against WMATA under Title VII of the Civil Rights Act of 1964.
The United States filed a complaint in U.S. District Court for the District of Columbia in September 2008, alleging that WMATA violated Title VII by failing to reasonably accommodate and provide equal employment opportunities to employees and prospective employees whose religious practices require an accommodation from WMATA’s uniform policy for bus operators and similarly situated employees. The United States also alleged that WMATA discriminated against Gloria Jones who applied and met all of the minimum qualifications for bus operator position, but could not comply for religious reasons with the portion of WMATA’s uniform policy that required bus operators to wear pants. At the start of the orientation process, Ms. Jones requested an accommodation that would allow her to wear a skirt instead of pants, consistent with her religious practice, along with the rest of the bus operator uniform. WMATA summarily denied her request for a religious accommodation and terminated the hiring process.
Under the terms of the settlement agreement, WMATA is required to implement and distribute a religious accommodation policy consistent with Title VII’s requirement to reasonably accommodate the religious practices of all employees and prospective employees. WMATA also is required to provide mandatory training on religious discrimination and accommodation for its supervisory employees. Additionally, WMATA will pay $47,324 to Jones and $2,500 to each of the two other individuals who requested but were denied an accommodation from WMATA’s uniform policy, according to terms of the agreement.
"This settlement agreement sends a clear message that the Department of Justice will not tolerate religious discrimination by employers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "I am pleased that WMATA has agreed to end its discriminatory practice and put into place mechanisms to protect the religious practices of its current and future employees."
Title VII prohibits discrimination in employment on the basis of gender, race, color, national origin or religion, and prohibits retaliation against an employee who opposes an unlawful employment practice, or because the employee has made a charge or participated in an investigation, proceeding or hearing under the Act. More information about Title VII and other federal employment laws is available on the Department of Justice Web site at http://www.usdoj.gov/crt/emp/index.html
Former Finance Director of California Valve Company Pleads Guilty to Bribing Foreign Government OfficialsRead the Press Release
WASHINGTON – The former finance director of an Orange County, Calif.-based valve company pleaded guilty today in connection with his role in a conspiracy to pay approximately $628,000 in bribes to numerous foreign government officials, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division, U.S. Attorney Thomas P. O’Brien of the Central District of California, and Joseph Persichini Jr., Assistant Director in Charge of the FBI’s Washington Field Office, announced.
Richard Morlok, 55, a resident of Rancho Santa Margarita, Calif., pleaded guilty before U.S. District Judge James V. Selna in Santa Ana, Calif., to a one-count information charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for the Orange County-based valve company from state-owned enterprises in several countries, including China, Korea, Romania and Saudi Arabia, in violation of the Foreign Corrupt Practices Act (FCPA).
According to court documents, the valve company designed and manufactured service control valves for use in the nuclear, oil and gas, and power generation industries worldwide. Morlok was the finance director at the valve company from 2002 through 2007. In this position, Morlok oversaw the finance department and had responsibility for approving certain commission payments and signing off on wire transfers to the recipients of those commission payments.
In connection with his guilty plea, Morlok admitted that from 2003 through 2006, he caused employees and agents of the valve company to make corrupt payments totaling approximately $628,000 to foreign officials employed at state-owned enterprises in order to assist in obtaining and retaining business for the valve company. Morlok also admitted that the valve company earned approximately $3.5 million in profits from the contracts it obtained as a result of these corrupt payments. According to the court documents, the corrupt payments were made to foreign officials at state-owned entities including, but not limited to, China National Offshore Oil Company, PetroChina, Jiangsu Nuclear Power Corporation (China), KHNP (Korea), Rovinari Power (Romania) and Safco (Saudi Arabia).
Morlok also admitted to providing false and misleading information to auditors during a 2004 internal audit of the valve company’s commission payments, and to providing false and misleading information to external auditors during a 2004 external audit.
As part of his plea agreement, Morlok has agreed to cooperate with the Department in its ongoing investigation. At sentencing, scheduled for July 20, 2009, Morlok faces a maximum of five years in prison.
In a related case, Mario Covino pleaded guilty on Jan. 8, 2009, to conspiring to make corrupt payments totaling approximately $1 million to numerous foreign government officials for the purpose of securing business for the same Orange County valve company from state-owned enterprises in several countries, including Brazil, China, India, Korea, Malaysia and the United Arab Emirates. Covino, an Italian citizen and resident of Irvine, Calif., was responsible for overseeing new construction projects for the valve company and for the replacement of existing valves made by other companies and installed at customer plants in more than 30 countries. Covino’s sentencing is scheduled for July 20, 2009.
The case was prosecuted by Assistant Chief Hank Bond Walther and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Douglas McCormick of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the FBI’s Washington Field Office.
Federal Court Bars Maine Resident from Preparing Tax Returns for OthersRead the Press Release
WASHINGTON – A federal court in Maine has permanently barred Robert A. Grover from preparing federal tax returns for others, the Justice Department announced today. The court also ordered the Maine resident to provide his customer lists to the government and to mail copies of the complaint and court order to his customers. Grover consented to the civil injunction order.
According to the government complaint, Grover operated a tax return preparation service under the name Grover Tax Preparation LLC in Kennebec County, Maine. The complaint noted that Grover had a history of violating state tax laws in that he was indicted on 41 counts of income tax evasion in violation of a Maine statute. On Dec. 17, 2008, Grover entered pleas of nollo contendre (no contest) to these charges and is scheduled to be sentenced in the state matter in March 2009.
The government’s complaint alleges that Grover prepared more than 2,600 federal tax returns during a four-year period. According to the complaint, Grover fabricated and/or inflated deductions and understated gross receipts on his customers’ Schedule C forms. In addition, the complaint alleges that Grover failed to report capital gains from the sale of assets on some of his customers’ Schedule D forms. Grover also allegedly fabricated and/or inflated deductions related to his customers’ rental properties on Schedule E forms. In the complaint, the government estimates that the U.S. Treasury has incurred from $1 million up to $29.5 million in losses from tax returns prepared by Grover.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division trial attorney Lisa Bellamy for her handling of the government’s case. The Justice Department has obtained injunctions against more than 365 tax return preparers and tax-fraud promoters since 2001.
Information about the Justice Department’s Tax Division and its efforts to stop fraudulent return preparers is available on the Justice Department Web site.
Coal-Fired Power Plant to Spend More Than $135 Million to Settle Clean Air ViolationsRead the Press Release
WASHINGTON—Kentucky Utilities (KU), a coal-fired electric utility, has agreed to pay a $1.4 million civil penalty and spend approximately $135 million on pollution controls to resolve violations of the Clean Air Act, the Justice Department and the U.S. Environmental Protection Agency announced today.
KU has agreed to install new pollution control equipment on its largest generating unit that will reduce combined emissions of sulfur dioxide and nitrogen oxides by more than 31,000 tons per year, which is 90 percent below the 2007 emission levels. KU will also install controls to reduce particulate matter emissions by approximately 1,000 tons per year.
The company will spend approximately $3 million on projects to benefit the environment and mitigate the adverse effects of the alleged violations including:
- Contribute $1.8 million to a pilot project on the effectiveness of storing compressed carbon dioxide gas, a by-product of coal combustion, in deep injection wells;
- Spend $1 million to retrofit school buses with filters or other controls to reduce emissions of particulate matter; and
- Pay $200,000 to the National Park Service to help restore Mammoth Cave National Park, located in Kentucky.
KU has agreed to surrender the excess nitrogen oxide and sulfur dioxide allowances it will have after installing the pollution controls. Coal-fired power plants are allowed to emit sulfur dioxide and nitrogen oxides as allowances, which are granted under federal or state acid rain permits. Once surrendered, these allowances cannot be used again, thus removing the emissions from the environment permanently.
“This settlement will result in the substantial reduction of harmful emissions, and will benefit air quality in Kentucky and downwind areas,” said John C. Cruden, Acting Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. “The Justice Department will spare no effort in its pursuit of emission reductions from power plants across the country to achieve the benefits envisioned by the Clean Air Act.”
“Today’s settlement sets the most stringent limit for nitrogen oxide emissions ever imposed in a federal settlement with a coal-fired power plant,” said Catherine McCabe, Acting Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA is committed to ensuring our nation's coal-fired power plants comply with the Clean Air Act. Pollutants from these facilities can cause severe respiratory problems, contribute to childhood asthma, and contribute to smog and haze.”
In a complaint filed in March of 2007, the government alleged that KU modified the largest coal-fired electrical generating unit at the E. W. Brown Generating Station in Mercer County, Ky., without installing required pollution control equipment or complying with applicable emission limits, in violation of the Clean Air Act. The unit has been operating since 1971, and the modifications made in 1997 allowed the unit to increase the amount of coal it burned and increase the amount and rate of emissions for sulfur dioxide, nitrogen oxide and particulate matter. The government discovered the violations through an information request issued to KU.
The settlement is part of the EPA’s enforcement initiative to control harmful emissions from coal-fired power plants under the Clean Air Act’s New Source Review requirements. The total combined sulfur dioxide and nitrogen oxide emission reductions secured from these settlements will exceed more than 1.8 million tons each year once all the required pollution controls have been installed and implemented.Coal-fired plants release sulfur dioxides and nitrogen oxides, which are a primary cause of acid rain that harms trees and lakes and impairs visibility. These pollutants cause severe respiratory problems, contribute to childhood asthma, and contribute to smog and haze. Air pollution from power plants can drift significant distances downwind and degrade air quality in nearby areas.
Kentucky Utilities, based in Lexington, Ky., generates and distributes electricity to more than 500,000 customers in Kentucky and Virginia. It owns and operates five coal-fired electrical generating stations in Kentucky. The settlement applies to the largest boiler unit at the E.W. Brown Generating Station located on Lake Herrington in Mercer County, Ky.
The settlement was lodged in the U.S. District Court for the Eastern District of Kentucky in Lexington and is subject to a 30-day public comment period and final court approval. A copy of the consent decree is available on the Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
2 February 2009
U.S. Recovers $19 Million from AMEC Construction Management<br /> to Settle Litigation Regarding Fraud, False Claims, Kickbacks<br /> & Re-Procurement Costs on Federal Construction ContractsRead the Press Release
WASHINGTON – The United States has recovered more than $19 million from AMEC Construction Management Inc. (ACMI) to resolve allegations of fraud, false claims and kickbacks on four General Services Administration (GSA) construction contracts, as well as litigation over claims by the GSA for excess re-procurement costs incurred by GSA after it terminated ACMI’s contract to build the Thomas F. Eagleton United States Courthouse in St. Louis, Missouri, the Department of Justice announced today. ACMI was formerly known as Morse Diesel International Inc.
In counterclaims filed in the U.S. Court of Federal Claims, the United States sought damages and penalties under the False Claims Act, the Anti-Kickback Act and common law theories for false bond reimbursement claims submitted by ACMI to the GSA and bond premium kickbacks paid by the company’s bond broker to ACMI’s United Kingdom parent company, AMEC plc, on four federal contracts: two for the construction of the Eagleton Courthouse; a third for the construction of the U.S. courthouse and federal building in Sacramento, Calif.; and a fourth for renovations to the U.S. customs house in San Francisco. The government also sought a declaration from the court that ACMI’s claims against the government were forfeited on account of its fraud, as provided by the Forfeiture of Fraudulent Claims Act.
In July 2005 and January 2007, the U.S. Court of Federal Claims granted summary judgment against ACMI and held the company liable to the United States for its violations of the Anti-Kickback Act and the False Claims Act. The court also held that ACMI had forfeited its right to pursue its own claims against the government. In October 2007, the federal claims court awarded the government damages and penalties totaling nearly $7.3 million. The government obtained a writ of garnishment for the damages and penalties owed it in the U.S. District Court for the District of New Jersey, and ACMI has agreed to have a total of more than $8 million paid to the government as part of the settlement.
The settlement also will resolve litigation in the Court of Federal Claims regarding the excess re-procurement costs incurred by the GSA when it undertook the completion of the Eagleton Courthouse after terminating ACMI for default in 1999. ACMI has agreed to settle those claims for a total of more than $11 million, including amounts that the GSA retained as set-offs from other matters involving ACMI.
"Federal contractors who commit fraud against the government will be pursued aggressively and will be held accountable for their violations of law," said Michael F. Hertz, Acting Assistant Attorney General of the Department of Justice's Civil Division. "This settlement is an example of the Department’s determination to ensure that federal funds are protected from fraud and abuse."
The case was filed after an audit and investigation by the GSA’s Office of the Inspector General revealed the bond fraud. The kickbacks were uncovered during the litigation. ACMI also entered guilty pleas to felony fraud in the U.S. District Court for the Eastern District of Missouri in December 2000 and in the U.S. District Court for the Eastern District of California in March 2002 for the bond frauds involved in today’s civil settlement.
Two Oklahoma County Corrections Officers Indicted for Federal Civil Rights Violation in Death of Oklahoma City ManRead the Press Release
WASHINGTON – A federal grand jury indictment was unsealed today in Oklahoma City charging corrections officers Gavin Littlejohn, 25, of Oklahoma City, and Justin Isch, 21, of Edmond, Okla., with a federal civil rights violation for the fatal assault of Christopher Beckman at the Oklahoma County Detention Center in May 2007, announced Acting Assistant Attorney General Loretta King of the Civil Rights Division, U.S. Attorney John C. Richter for the Western District of Oklahoma and James Finch, Special Agent in Charge of the FBI’s Oklahoma City Field Office.
The indictment alleges that on May 26, 2007, at the Oklahoma County Detention Center, corrections officers Isch and Littlejohn assaulted Beckman and used excessive force amounting to punishment resulting in bodily injury and the death of Beckman. Specifically, it is alleged that officer Isch allegedly used Beckman’s head to open a steel door and officer Littlejohn repeatedly struck Beckman about his head and face.
Littlejohn and Isch were arrested this afternoon without incident. Both men appeared for arraignment this afternoon before U.S. Magistrate Judge Valerie Couch. The court ordered the defendants released on bond under certain conditions pending trial.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until proven guilty.
The maximum possible penalties for the civil rights violations are life in prison, without the possibility of parole, or death. By statute, the Attorney General must decide whether or not to pursue a sentence involving the death penalty.
The case was investigated by the Oklahoma City Division of the FBI. The case is being prosecuted by Assistant U.S. Attorney Susan Dickerson Cox from the U.S. Attorney’s Office and Trial Attorney Michael Khoury from the Justice Department’s Civil Rights Division.
Justice Department Settles Lawsuit on Behalf of New Jersey Air Force National Guard MemberRead the Press Release
WASHINGTON — The Department of Justice announced today the settlement of a lawsuit filed on behalf of Anthony D. Jackson, an Air Force National Guard member, against Union County College (UCC) under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
Jackson and UCC jointly submitted a consent decree to the court that, if approved, will resolve all claims asserted by Jackson in the case. The consent decree requires UCC to pay Jackson for lost wages and other damages.
The complaint, filed on Dec.14, 2007, alleged that UCC suspended Jackson from his job as a security officer, discharged him from that job while he was on active military duty and failed promptly to re-employ him upon his return from active military duty, because of his membership in, or obligation to perform service in, the uniformed services.
"Service members should not be made to fear for their livelihood because they answered our country’s call," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Department of Justice is committed to protecting the rights of the brave women and men who sacrifice to serve and protect America."
The Department’s Civil Rights Division places a high priority on the enforcement of service-members’ rights under USERRA. Additional information about USERRA can be found on the Department of Justice Web site at the following link http://www.servicemembers.gov, and on the Department of Labor website at the following link http://www.dol.gov/vets/programs/userra/main.htm.
Justice Department Settles Lawsuit on Behalf of Kansas Air Force ReservistRead the Press Release
WASHINGTON – The Justice Department today announced a settlement that, if approved by the court, will resolve allegations in a lawsuit the Department filed on behalf of Randall A. Slocum, an Air Force Reservist, against the city of Iola, Kan.
The complaint, filed in U.S. District Court in Kansas City, Kan., in December 2008, alleged that the city of Iola violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by taking into consideration Slocum’s military service obligations when it disciplined him and denied him a wage increase. USERRA was enacted in 1994 to protect service members from being disadvantaged in their civilian careers due to serving in the uniformed services. Among other things, USERRA prohibits employers from discriminating against service members because of their military service obligations.
Under the terms of the settlement, the city is required to pay Slocum back wages, liquidated damages, and to provide him the wage increase the city denied him based on his military service. The settlement also requires the city to correct its employment records to remove references of Slocum’s unjustified discipline based on military service.
"The settlement reached today continues this nation’s commitment to service members who sacrifice to serve this country. The agreement demonstrates that reservists should be allowed to serve without fear of being penalized in their civilian careers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division is committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in our nation’s military."
The Department of Justice filed the lawsuit after receiving Slocum’s complaint from the Veterans’ Employment and Training Service of the Department of Labor, upon completion of its investigation and settlement efforts.
The Department’s Civil Rights Division places a high priority on the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Department of Justice Web site at the following link: http://www.servicemembers.gov, and on the Department of Labor Web site at the following link: http://www.dol.gov/vets/programs/userra/main.htm.
Final Defendant Pleads Guilty to Anti-Obama AssaultsRead the Press Release
WASHINGTON - Ralph Nicoletti pleaded guilty in Brooklyn, N.Y., federal court today before U.S. District Judge Carol B. Amon to committing three assaults targeting African-American residents in Staten Island, N.Y., on the night of President Barack Obama’s election victory. Nicoletti was the last of four defendants to plead guilty in the federal prosecution stemming from the attacks. The other three defendants – Bryan Garaventa, Michael Contreras and Brian Carranza – previously pleaded guilty to conspiring to commit the hate crime assaults and each face sentences of up to 10 years in prison. As part of his plea, Nicoletti has agreed to a sentence of 12 years, subject to the court’s approval.
The guilty plea was announced by Loretta King, Acting Assistant Attorney General for the Department of Justice’s Civil Rights Division; Benton J. Campbell, U.S. Attorney for the Eastern District of New York; Joseph M. Demarest, Jr., Assistant Director-in-Charge, FBI, New York Field Office; and Raymond W. Kelly, Commissioner, New York City Police Department.
At the plea proceeding, Nicoletti admitted that on Nov. 4, 2008, the night of the presidential election, the defendants decided to assault African-Americans in Staten Island after President Obama was declared the winner of the election. The defendants targeted African-Americans believing that they had voted for President Obama. Nicoletti drove the group to the Park Hill section of Staten Island, a predominantly African-American neighborhood, where they came upon an African-American teenager and assaulted him. Nicoletti struck the teenager with a metal pipe and Garaventa hit him with a collapsible police baton.
Nicoletti then drove to the Port Richmond section of Staten Island, where the defendants assaulted an unidentified African-American man. During that assault, Garaventa tripped the victim and pushed him to the ground.
The third assault was against an individual whom the defendants mistakenly believed was African-American. The plan was for Contreras to hit the victim with the police baton as the defendants drove by him. Instead, Nicoletti deliberately drove his car into the victim’s body. The victim was thrown onto the hood of the car and hit the front windshield, smashing it. The victim was seriously injured and remained in a coma for several weeks after the attack.
"This successful prosecution sends a clear message that racially-motivated acts of violence targeted at those who are exercising their right to vote are intolerable and will be aggressively investigated and prosecuted," said Acting Assistant Attorney General King. "It is a tragedy that these crimes occur at all, but the Department of Justice will remain vigilant in our efforts to combat hate crimes, as they tear at the very fabric of our great nation."
"The conduct of the defendants is shocking and deplorable," stated U.S. Attorney Campbell. "On a night of historic significance, these four angry men assaulted their victims in an attempt to punish them for exercising a fundamental right of all Americans – the right to vote. Those who commit such crimes will be swiftly apprehended, prosecuted and punished. We are grateful for our partnership with the Department of Justice Civil Rights Division, the FBI and the New York City Police Department, which has been vital to the success of this case, and I particularly wish to thank the Richmond County District Attorney’s Office for its assistance in this matter."
"The crimes these defendants have now admitted to were violent assaults that in one case nearly killed a man," said FBI Assistant Director-in-Charge Demarest of the New York Field Office. "In attempting to intimidate voters, the defendants also violated the victims’ civil rights in a way that was an attack on the democratic process. These were serious crimes that prompted the serious response the FBI will always bring to bear in civil rights enforcement."
"It was important to make certain that those who seriously injured individuals, based on their race, did not escape justice," said Police Commissioner Raymond W. Kelly. "NYPD Inspector Michael J. Osgood, Commanding Officer of the NYPD Hate Crime Task Force, had the foresight to assign a special team on Election Night until 4 a.m. the next morning. As a result, his investigators were in position to respond quickly to the bias attacks as reports of them began to emerge. Detectives located an eyewitness to one of the attacks, and their subsequent distribution of flyers in the Rosebank area of Staten Island over three days led to the first major break in the case. I also want to thank the FBI agents who helped, and the federal prosecutors who succeeded in winning the guilty pleas."
The government’s case is being prosecuted by Assistant U.S. Attorneys Pamela K. Chen and Margo K. Brodie, and Department of Justice Special Litigation Counsel Kristy Parker.
Brothers Plead Guilty to Conspiring to Steal Military Optics from U.S. Marine Corps and Export Them OverseasRead the Press Release
WASHINGTON – Timothy Oldani, 24, of Scott Depot, W.Va., and Joseph Oldani, 21, of Camp Lejeune, N.C., both pleaded guilty today in the Southern District of West Virginia to conspiring to steal military optics from the U.S. Marine Corps and illegally export them from the United States, the Justice Department announced.
At his hearing, Joseph Oldani admitted that while on active duty with the U.S. Marine Corps, he stole high-grade optics from his station in Kings Bay, Ga. Timothy, Joseph’s brother, is a former member of the U.S. Marine Corps reserves. Joseph admitted he transported the stolen optics to Timothy, in Scott Depot, where Timothy subsequently sold the stolen items on the Internet – mainly on eBay.
The convictions stem from a joint investigation conducted by the U.S. Department of Defense, Office of Inspector General -- Defense Criminal Investigative Service and by U.S. Immigration and Customs Enforcement.
The stolen optics are not the type available for public purchase, but are specially designed for military purposes. In fact, these stolen optics are on the U.S. Munitions List and subject to presidential control as defense articles prohibited from export without a special license. Neither Oldani had a license.
The investigation revealed that the Oldanis sold and shipped the stolen optics to purchasers in Hong Kong, Japan and Taiwan.
The duo each face up to 60 months in prison and a $250,00 fine when they are sentenced on May 18, 2009. Assistant U.S. Attorney Steven I. Loew is handling the prosecution in coordination with the Counterespionage Section of the Justice Department’s National Security Division .
30 January 2009
Justice Department Settles Lawsuit Alleging Gender Discrimination and Retaliation by the Puerto Rico Police DepartmentRead the Press Release
WASHINGTON — The Department of Justice today announced that it has reached a consent decree with the Policía de Puerto Rico (Puerto Rico Police Department or PRPD) that will, if approved by the federal district court, resolve a complaint the Department filed in March 2008 alleging that the PRPD engaged in unlawful employment discrimination based on gender and retaliation, in violation of Title VII of the Civil Rights Act. Title VII prohibits employment discrimination on the basis of race, color, sex, national origin and religion, and also prohibits retaliation against persons for filing charges of discrimination.
The U.S. government alleged in its March 2008 complaint that the PRPD discriminated against Officer Jeannette Caraballo Lopez (Caraballo) on the basis of her sex by, among other ways, requiring her to perform secretarial tasks not required of male officers and by subjecting her to sexually discriminatory comments. For example, while working as an agent-investigator in the Division of Investigation of Stolen Vehicles for the Fajardo Area, she was told that the Division was, "not for females," or words to that effect, in violation of Title VII. The complaint also alleged that the PRPD retaliated against Officer Caraballo because she opposed employment practices that she reasonably believed to be unlawful, and because she filed a charge with the Equal Employment Opportunity Commission under Title VII. The complaint further alleged that the PRPD retaliated against Officer Manuel Bonilla Carrasquillo (Bonilla) because he opposed employment practices that he reasonably believed to be unlawful.
Under the terms of the consent decree, the PRPD will offer monetary awards totaling $125,000, including attorney’s fees, to the two officers. Officer Caraballo also will be offered reinstatement to an agent-investigator position with remedial seniority and related benefits and compensation. Officer Bonilla, who retired in September 2007, will be offered all the benefits and compensation to which he would have been entitled had he remained in his previous position without interruption until his retirement. The PRPD will also provide training on equal employment opportunity law, including discrimination based on gender and retaliation, to all supervisors in the Fajardo Area.
"We are pleased that the PRPD has agreed to resolve this case by entering into an appropriate consent decree," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The law does not allow employers to discriminate against women by only allowing them to perform duties that have been traditionally deemed ‘female’ assignments, or to retaliate against employees because they participate in an employment discrimination investigation."
The enforcement of Title VII continues to be a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its Web site at http://www.usdoj.gov/crt/.
Former Shipping Executive Sentenced to 48 Months in Jail<br /> for His Role in Antitrust ConspiracyRead the Press Release
WASHINGTON — A former high-level shipping executive was sentenced today to serve 48 months in jail and to pay a $20,000 criminal fine for his role in an antitrust conspiracy involving the transportation of goods to and from the continental United States and Puerto Rico by ocean vessel, the Department of Justice announced today. This is the longest jail sentence ever imposed for a single antitrust charge.
Peter Baci of Jacksonville, Fla., pleaded guilty on Oct. 20, 2008, in the U.S. District Court in Jacksonville for his role in the conspiracy, which began at least as early as May 2002 and continued until as late as April 2008. Baci was charged with engaging in a conspiracy to suppress and eliminate competition in the coastal water freight transportation services between the continental United States and Puerto Rico by agreeing to allocate customers, agreeing to rig bids submitted to government and commercial buyers, and agreeing to fix the prices of rates, surcharges, and other fees charged to customers.
Related antitrust charges remain pending in the U.S. District Court in Jacksonville against three other shipping executives: R. Kevin Gill and Gregory Glova, of Charlotte, N.C. and Gabriel Serra, of San Juan, Puerto Rico. A related obstruction of justice charge is also pending against a fifth shipping executive, Alexander Chisholm, of Jacksonville.
"Today’s sentencing should make clear that individuals who violate the antitrust laws will be prosecuted to the fullest extent of the law," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "Significant jail time will be a consequence of harming consumers and competition in both the continental United States and Puerto Rico."
Baci worked for a large U.S. company that provides freight shipping services to customers transporting goods between the continental United States and Puerto Rico. These companies transport a variety of cargo shipments, such as heavy equipment, medicine, food and consumer goods. Sales of freight services in the United States to Puerto Rico shipping lane total hundreds of millions of dollars every year, as ocean shipping is a primary way for people in Puerto Rico to receive essential goods.
In June 2004, Congress raised the maximum sentence for antitrust crimes from three years imprisonment to 10 years imprisonment. While longer jail sentences have been imposed against individuals who violated the antitrust laws together with other crimes, this case represents the first time that an individual was sentenced to more than three years for a single antitrust charge.
The current prosecution and pending charges arose from an ongoing federal antitrust investigation into bid rigging and other anticompetitive conduct in the shipping industry, which is being conducted by the National Criminal Enforcement Section of the Antitrust Division and the Jacksonville Field Office of the Federal Bureau of Investigation (FBI). Anyone with information concerning the focus of this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, or the FBI’s Jacksonville Field Office at 904-721-1211.
Former Mendenhall, Miss., Police Chief Pleads Guilty to Using Excessive ForceRead the Press Release
WASHINGTON – Jimmy "Jimbo" Sullivan, the former chief of police in Mendenhall, Miss., pleaded guilty today to a felony civil rights violation, admitting that he used excessive force when he repeatedly stomped on the head of an arrestee, Acting Assistant Attorney General Loretta King for the Civil Rights Division and U.S. Attorney Dunn Lampton for the Southern District of Mississippi announced.
On July 22, 2005, Sullivan joined other law enforcement officers in the apprehension of a man who had led police on a car chase. Today in court, Sullivan admitted that at the end of the car chase, he pulled the man from his car and then repeatedly stomped on the man’s head as the man lay face-down in the street. A local hospital treated the man for injuries sustained during the assault.
"The defendant, who was sworn to serve and protect the people, went from enforcing the law to breaking the law," said Acting Assistant Attorney General Loretta King. "The Department of Justice will continue to prosecute vigorously those law enforcement officers who abuse their power by willfully using excessive force."
The case was investigated by the Jackson office of the FBI, and was prosecuted by Trial Attorney Patti Sumner of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Glenda Haynes of the Southern District of Mississippi.
Former Lobbyist Pleads Guilty to Conspiracy to Commit Honest Services FraudRead the Press Release
WASHINGTON – A former lobbyist pleaded guilty today to conspiring with others to commit honest services fraud, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Todd A. Boulanger, 37, pleaded guilty before U.S. District Judge Richard W. Roberts in the District of Columbia. According to court documents, Boulanger worked as a lobbyist from 1999 through 2004 with Jack Abramoff and others. Boulanger, Abramoff, and other lobbyists working with them, sought to advance the interests of groups and companies they represented by lobbying federal legislative and executive branch officials. According to court documents, Boulanger admitted that he, Abramoff and others established contacts with federal legislative and executive branch officials who could use their influence and positions to take official actions favorable to Boulanger and the other lobbyists. After establishing contacts with certain public officials, Boulanger admitted that he, Abramoff, and others offered and gave numerous things of value to these public officials in an effort to reward them for actions they had taken, to influence the public officials in their official actions, and to make them more receptive to requests for official actions in the future.
Boulanger admitted that the things of value he and others provided as part of this conspiracy included all-expenses-paid travel, tens of thousands of dollars-worth of tickets to professional sporting events, concerts and other events, and frequent and expensive meals and drinks at Washington, D.C.-area restaurants and bars. According to court documents, the public officials, in turn, agreed to take and took favorable official actions, which included the insertion or protection of legislative appropriations; the insertion, protection, removal or prevention of legislative amendments; and lobbying by the public officials of other legislative and executive branch officials to take or abstain from taking official action. According to court documents, Boulanger admitted that he, Abramoff and others attempted to conceal their practice of providing things of value to public officials.
Specifically, according to the plea agreement, Boulanger sought the assistance of a staff member who worked on the U.S. House of Representatives, Committee on Transportation and Infrastructure. One of Boulanger’s clients was an equipment rental company, on whose behalf Boulanger and another lobbyist, James Hirni, sought to have two legislative amendments inserted into the Federal Highway Bill in 2003. Boulanger admitted that, with his knowledge and approval, Hirni and another individual provided an all-expenses-paid trip on Oct. 18 and 19, 2003, to game one of the Baseball World Series in New York City to the committee staff member and to Trevor Blackann, a former staff member to a U.S. Senator. On Oct. 22, 2003, Boulanger and Hirni provided information about the amendments they were seeking to the committee staff member and Blackann. Later, after one of the amendments had been inserted into the Senate version of the Federal Highway Bill, Boulanger, Hirni, Blackann, the committee staff member and another individual took steps to protect that amendment
Boulanger also admitted that he and others provided a stream of things of value to a different Senate staff member in order to influence that individual to take official action favorable to Boulanger’s lobbying firm and one of Abramoff’s Native American tribal clients. From March 2002 through March 2004, Boulanger and others provided more than $25,000 worth of tickets, meals and drinks to the Senate staff member. During the same time period, the Senate staff member provided and agreed to provide official actions sought by Boulanger and others on repeated occasions. In addition, Boulanger admitted that he provided more than $10,000 worth of tickets, meals and drinks to the legislative director for a U.S. Senator. Boulanger admitted he met the legislative director on July 16, 2002, and provided the things of value for 20 months following their first meeting.
The case is part of the ongoing investigation into the activities of former lobbyist Jack Abramoff and his associates. Abramoff pleaded guilty in January 2006 to conspiracy to commit honest services fraud, honest services fraud and tax evasion. Abramoff was sentenced in September 2008 to 48 months in prison and is cooperating in the investigation. Both Hirni and Blackann have pleaded guilty for their roles in the scheme and are cooperating with the investigation. In all, seventeen individuals, including lobbyists and public officials, have pleaded guilty, been convicted at trial, or are awaiting trial as a result of the investigation.
This case is being prosecuted by trial attorneys M. Kendall Day and Peter C. Sprung of the Public Integrity Section, headed by Section Chief William M. Welch II. The investigation is being conducted by the FBI.
Former Employees of Emergency Vehicle Vendors Sentenced for Conspiring to Defraud Employers on Homeland Security ContractRead the Press Release
WASHINGTON – Two Florida homeland security vendor employees were sentenced today for conspiracy to commit wire fraud and honest services fraud by depriving their employers of money and the right of honest services, the Department of Justice announced today.
Luis M. Candelario, a former sales representative for JPS Communications Inc., was sentenced to serve 18 months in jail. Thomas E. Vander Luitgaren (Vander), a former general manager of AK Specialty Vehicles LLC (AKSV), was sentenced today to serve 18 months of home confinement except for employment and four years probation. Candelario and Vander were ordered to pay jointly $238, 371 in restitution to JPS and $11,050 in restitution to Advanced Vehicle Systems LLC, a subcontractor of AKSV. Candelario and Vander were convicted of the charges on Oct. 1, 2008, following a two-week trial.
Candelario and Vander originally were indicted on Dec. 5, 2007, in U. S. District Court in Orlando, Fla., for participating in a kickback scheme with Angel L. Rodriguez-Vasquez (Rodriguez-Vasquez), a former sales representative for Fisher Scientific International LLC, to defraud their respective employers. The kickback scheme involved federal emergency vehicle contracts with the U.S. Virgin Islands government. According to the charges, the scheme began in September 2003 and continued through July 2005. Rodriguez-Vasquez pleaded guilty to participating in the conspiracy in October 2007 and is awaiting sentencing.
"Today’s sentencing demonstrates that those who seek to enrich themselves by engaging in kickback schemes designed to defraud their employers will be held accountable," said Scott D. Hammond, Acting Assistant Attorney General of the Department’s Antitrust Division.
"American taxpayers deserve honesty from those who serve them," General Services Administration Inspector General Brian Miller said. "Contractors who defraud the government will be punished."
This ongoing investigation is being conducted by the Antitrust Division’s Atlanta Field Office in conjunction with the General Services Administration’s Office of Inspector General (New York Field Office) and the U.S. Attorney’s Office for the Middle District of Florida. Anyone with information concerning price fixing, bid rigging or kickback schemes involving homeland security contracting in the Southeast United States, Virgin Islands, or Puerto Rico should contact the Atlanta Field Office of the Antitrust Division at 404-331-7100.
Eight Charged with Illegally Harvesting and Selling Striped BassRead the Press Release
WASHINGTON— Five commercial fishermen in St. Mary’s County, Md., a fish wholesaler, its owner and an employee have been charged in Maryland and Washington, D.C., for their role in the illegal harvest, sale, and purchase of hundreds of thousands of pounds of striped bass from the Chesapeake Bay and Potomac River from 2003 through 2007, the Justice Department announced today.
According to the criminal informations, the individuals and corporation have been charged with violating the Lacey Act, which is a federal law that prohibits individuals or corporations from creating false records for fish or wildlife, and from transporting, selling, or buying fish and wildlife harvested illegally. Specifically, the informations allege that the commercial fishermen transported and sold striped bass, knowing that they had falsely recorded on their permit allocation cards the numbers and weight of the striped bass they caught and failed to accurately record the times when the fish were actually harvested.
Individuals charged include:
- Thomas L. Crowder Jr. of Leonardtown, Md.
- John W. Dean of Scotland, Md.
- Charles Quade of Churchtown, Md.
- Thomas L. Hallock of Catharpin, Va.
- Keith A. Collins of Deale, Md.
- Robert Moore Sr. of Falls Church, Va.
- Robert Moore Jr. of Ashburn, Va.
The company charged is Cannon Seafood Inc., located in Washington, D.C., with Robert Moore Sr., as its owner.
Two additional St. Mary’s County commercial fishermen were indicted in October 2008 for similar conduct. Joseph Peter Nelson and Joseph Peter Nelson, Jr., are charged in the District of Maryland in a seven count felony indictment, alleging one count of felony conspiracy to violate the Lacey Act, and six substantive felony Lacey Act counts. The indictment also seeks forfeiture of vessels and vehicles allegedly used by the Nelsons in carrying out the offenses. The indictment alleges that from September 2003 through March 2007 the defendants exceeded their quota of Maryland striped bass by failing to check in all the fish they caught and by falsely inflating the numbers of fish that they allegedly checked-in in order to secure additional Maryland tags. It also alleges that the defendants placed Maryland tags on fish that were not caught in that state’s regulated waters, and placed tags on fish that falsely indicated that they were caught by hook and line when they were not. The indictment further alleges that the Nelsons engaged in a series of sales of unlawfully caught fish to undercover agents who were posing as out of state fish wholesalers.
In early spring each year, wild coastal striped bass (Morone saxatilis), known regionally as rockfish, enter the estuary or river where they were born to spawn, and then return to ocean waters to live, migrating along the coastline. Fish spawned from the Chesapeake Bay ecosystem contribute the greatest number of striped bass to the Atlantic coastal fishery, and the commercial fishery for Atlantic coastal striped bass is based primarily on migrations of fish born in the Chesapeake Bay area. Striped bass do not die after spawning. They may live up to 30 years and reach 50 pounds or more. The population of coastal Atlantic striped bass depends heavily upon the capability of older, larger, female striped bass to successfully reproduce.
Maryland regulates the commercial catch of striped bass from its waters and enforces the regulations of the Potomac River Fisheries Commission, which regulates the commercial catch of striped bass from Maryland waters located in the main stem of the Potomac River. The striped bass management and protection measures, including tagging requirements, closed seasons, size limits, and quota amounts, are focused on maintaining a target spawning stock to protect the fishery from over-fishing. Maryland also requires that all fish caught by a commercial fisherman be weighed and counted at a designated state check-in station, with the total number and total weight of the fish caught recorded on the commercial fisherman’s permit allocation card and transmitted to the state of Maryland on a check station daily catch reporting sheet.
A criminal information and indictment are not a finding of guilt. An individual charged by criminal information or indictment is presumed innocent unless and until proven guilty in a court of law.
The Lacey Act carries a maximum penalty of 5 years imprisonment and a fine of up to $250,000, plus the potential forfeiture of the vessels and vehicles used in committing the offense.
The charges are a result of the investigation by an interstate task force formed by the U.S. Fish and Wildlife Service, the Maryland Natural Resources Police and the Virginia Marine Police, Special Investigative Unit in 2003. The task force conducted undercover purchases and sales of striped bass in 2003, engaged in covert observation of commercial fishing operations in the Chesapeake Bay and Potomac River area, and conducted detailed analysis of area striped bass catch reporting and commercial business sales records from 2003 through 2007. The investigation is continuing, and charges against others are possible.
These cases are being prosecuted by Senior Trial Attorney Wayne Hettenbach of the Justice Department’s Environmental Crimes Section, and Assistant U.S. Attorney Stacy Belf of the U.S. Attorney’s Office for the District of Maryland with assistance from the U.S. Attorneys’ Office for the District of Columbia.
29 January 2009
Justice Department Sues Ypsilanti, Mich., Landlords for Sexual HarassmentRead the Press Release
WASHINGTON — The Justice Department today filed suit against Ronald D. Peterson and Glen E. Johnson, the owner and rental manager, respectively, of 11 single family homes in Ypsilanti, Mich., alleging a pattern or practice of sexual harassment of female tenants.
The complaint, filed today in U.S. District Court for the Eastern District of Michigan, alleges that Johnson subjected female tenants to discrimination on the basis of sex, including severe, pervasive and unwelcome sexual harassment. The complaint alleges that Johnson made unwanted verbal sexual advances, entered the apartment of female tenants without permission or notice, granted and denied tangible housing benefits based on sex, and took adverse action against female tenants when they refused or objected to his sexual advances. The complaint also alleges that Peterson, the owner of the properties, is liable for Mr. Johnson’s alleged misconduct, and that he knew or should have known of Johnson’s alleged misconduct but failed to take reasonable preventive or corrective measures. This case is being handled jointly by the Civil Rights Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Michigan in Detroit.
"No woman should have to live in fear of sexual harassment in her home," said Acting Assistant Attorney General Loretta King. "Landlords should be on notice that the Justice Department vigorously enforces the Fair Housing Act throughout the United States."
Acting U.S. Attorney, Terrence Berg added: "The conduct alleged in today’s complaint is unacceptable – as well as a violation of our federal fair housing laws. We are taking action because no one should face such inappropriate harassment in their own homes."
The suit seeks monetary damages for victims, civil penalties and a court order barring future discrimination. Individuals who are or have been tenants in properties owned or managed by Peterson or Johnson who believe they may be victims of sexual harassment, or who have other relevant information about the case, are encouraged to call the Department of Justice’s tip line at 1-800-896-7743 and leave a message in Box 994 or email the Department at [email protected]. They may also call the United States’ Attorney’s Office at 313-226-9727.
Fighting illegal housing discrimination is a top priority of the Justice Department. The Federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Additional information about the Fair Housing Act is also available at www.HUD.gov.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Justice Department Settles Allegations of Disability and Religious Discrimination Against Nashville, Tenn.Read the Press Release
WASHINGTON - The Justice Department today announced a settlement resolving allegations that the Metropolitan Government of Nashville and Davidson County (Metropolitan Government) violated the Fair Housing Act (FHA) and the Religious Land Use and Institutionalized Persons Act (RLUIPA) by discriminating against Teen Challenge, a Christian substance abuse treatment program.
In a federal lawsuit filed in September 2008, the U.S. government alleged that the Metropolitan Government discriminated against individuals with disabilities in violation of the FHA and imposed a substantial burden on religious exercise in violation of RLUIPA. According to the complaint filed by the U.S. government, the Metropolitan Government denied Teen Challenge a building permit to operate in Goodlettsville, Tenn., and amended its zoning code in a manner that prevented Teen Challenge from using the property. The settlement resolves the U.S. government’s claims as well as a related lawsuit filed by Teen Challenge and participants in Teen Challenge’s program.
"Cases like this show how the FHA and RLUIPA work together to ensure that persons with disabilities are not discriminated against and that religious groups seeking to aid those persons can operate without unjustifiable burdens," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division.
"Discrimination of the type alleged in this case should never be tolerated by a free society," said U. S. Attorney Ed Yarbrough following the settlement. "Substance abuse programs perform a valuable service to persons suffering from addiction." he added.
The settlement, which must still be approved by the court, requires the Metropolitan Government to train nearly 100 employees and officials who make zoning and land use decisions on the requirements of the FHA and RLUIPA, to appoint a compliance officer to receive complaints and ensure compliance with the settlement, and to provide periodic reports to the Justice Department. As part of the settlement, the Metropolitan Government rescinded the amendment to its zoning code that affected Teen Challenge and adopted a reasonable accommodation policy for individuals with disabilities.
The Metropolitan Government will also pay a $20,000 civil penalty to the United States and $50,000 to participants in Teen Challenge’s program. Monetary relief to Teen Challenge is being determined by the final court order in the related case of Teen Challenge International, Nashville Headquarters, et al. v. Metropolitan Government of Nashville and Davidson County.
More information about the Civil Rights Division and the laws it enforces is available at http://www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.
Justice Department Files Lawsuit on Behalf of North Dakota Army National Guard MemberRead the Press Release
WASHINGTON — The Department of Justice today filed a lawsuit on behalf of Suzanne L. Halverson, an Army National Guard member, against Grand Forks County, N.D., alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which prohibits employers from discriminating against service-members because of their past, current or future military service obligations.
The Department’s complaint, filed in the U.S. District Court in Grand Forks, alleges that Grand Forks County violated USERRA by taking into consideration Ms. Halverson’s military service obligations when it denied her promotion to a permanent juvenile detention officer position in the county’s correctional center.
"Our men and women in uniform must be able to serve their country without fear of being penalized in their civilian careers," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "The Justice Department remains committed to vigorously enforcing federal laws that protect the employment rights of men and women who are serving in our nation’s military."
The Department of Justice filed the lawsuit after receiving Ms. Halverson’s complaint from the Veterans’ Employment and Training Service of the Department of Labor (DOL), once DOL’s investigation and settlement efforts were complete.
The Department’s Civil Rights Division places a high priority on the enforcement of service-members’ rights under USERRA. In 2008, the Civil Rights Division’s Employment Section filed a record high number of USERRA suits. Additional information about USERRA can be found on the Department of Justice Web site at the following link: http://www.servicemembers.gov, and on the DOL Web site at: http://www.dol.gov/vets/programs/userra/main.htm.
Imprisoned Spy and His Son Indicted on Charges of Actingas Russian Agents and Money LaunderingRead the Press Release
WASHINGTON -- A federal indictment was unsealed today in U.S. District Court for the District of Oregon charging Harold James Nicholson, 58, of Sheridan, Ore., and Nathaniel James Nicholson, 24, of Eugene, Ore., with two counts of Conspiracy, one count of Acting as Agents of a Foreign Government, and four counts of Money Laundering.
Both defendants are scheduled to appear today at 1:30 p.m. before U.S. Magistrate Janice M. Stewart for arraignment on the indictment. The maximum penalty for the substantive charge of acting as an agent of a foreign government is ten years imprisonment, while the maximum penalty for conspiracy to act as an agent of a foreign government is five years imprisonment. Each money laundering count, including the money laundering conspiracy, carries a maximum of twenty years imprisonment. The indictment also seeks forfeiture of funds provided to Nathaniel J. Nicholson by the Russian Federation, which the indictment alleges are the proceeds of his father’s past espionage activities.
As set forth in the indictment, Harold J. Nicholson, a former CIA employee, is serving a 283-month (more than 23-year) sentence at the Federal Correctional Institution in Sheridan, Ore., for a 1997 conviction of conspiracy to commit espionage. The indictment further alleges that defendant Harold J. Nicholson, working through his son Nathaniel J. Nicholson, received cash proceeds of his past espionage activities from, and passed information to, agents of the Russian Federation between 2006 and 2008.
As described in the indictment, during the course of the conspiracy, Nathaniel J. Nicholson met with his father Harold J. Nicholson on several occasions to obtain information that was intended to be provided to the Russian Federation. Defendant Nathaniel J. Nicholson then travelled to various places to meet with representatives of the Russian Federation, including San Francisco, Calif.; Mexico City, Mexico; Lima, Peru; and Cyprus, where he collected money from them and received additional instructions. Defendant Nathaniel J. Nicholson then brought the funds he received back to Oregon to disperse to family members at the direction of his imprisoned father.
The indictment further alleges that the funds paid by the Russian Federation to defendant Nathaniel J. Nicholson represented proceeds of his father’s past espionage activities. For more information, please refer to the indictment and search warrant affidavit.
- http://www.usdoj.gov/usao/or/PressReleases/2009/NicholsonIndictment.pdf
U.S. Attorney for District of Oregon, Karin J. Immergut stated, "The conduct alleged in the indictment shows a sinister and continuing scheme by a former senior CIA officer turned spy to betray the United States of America for financial gain. Thanks to the continued vigilance of the FBI, and the extraordinary cooperation of the Bureau of Prisons, we expect to hold a former spy, and the son who joined him in his criminal conduct, responsible for their actions."
Matthew G. Olsen, Acting Assistant Attorney General for National Security, said, "Today’s indictment alleges that an imprisoned spy recruited and trained his own 24-year-old son to travel the globe to collect on past spying debts and channel information to foreign agents. These charges underscore the continuing threat posed by foreign intelligence services and should send a clear message to others who would consider selling out their country for money."
"Harold James Nicholson, already convicted of spying and compromising national security, thought he could profit from his previous espionage despite being behind bars," said Executive Assistant Director Arthur M. Cummings, II, of the FBI National Security Division. "Now, along with his son, he again acted against the interests of the United States, according to the charges."
"This is an amazing case," said David Ian Miller, Special Agent in Charge of the FBI in Oregon. "Harold James Nicholson, a convicted spy, was allowed to serve time in a federal prison in Oregon to be near his family. Without regret, he used that proximity to his family to continue contact with the foreign country for which he was previously convicted of spying."
The FBI and the Federal Bureau of Prisons investigated this case. Assistant U. S. Attorneys Pamala Holsinger and Ethan Knight are prosecuting this case. Trial Attorney Patrick Murphy of the Counterespionage Section of the Justice Department’s National Security Division is also assisting.
An indictment is only an accusation of a crime, and a defendant should be presumed innocent unless and until proven guilty.
Former NFL Player, Ex-Casino Owner and Nevada Businessman Indicted in Massive Tax Fraud SchemeRead the Press Release
WASHINGTON - A Las Vegas federal grand jury has returned an indictment charging Alan Rodrigues, a former pit boss and casino owner from Henderson, Nev.; Weston Coolidge, a businessman from Las Vegas; and Joseph Prokop, a former National Football League punter from Upland, Calif., with a tax fraud scheme for their promotion of a fraudulent tax product through the now defunct National Audit Defense Network (NADN), the Justice Department and Internal Revenue Service (IRS) announced today.
The defendants were charged with one count of conspiracy to defraud the United States, 15 counts of aiding in the preparation of false tax returns, and five counts of mail fraud for their part in the scheme. According to the indictment, Rodrigues was NADN’s general manager, Coolidge was NADN’s chairman and president and Prokop was the national marketing director of Oryan Management and Financial Services. It is alleged that Oryan Management and Financial Services is a sole proprietorship, operating in Upland, Calif., that paid NADN a commission to sell Tax Break 2000.
According to the indictment, in early 2001, NADN began selling Tax Break 2000, a shopping Web site that the defendants fraudulently stated would allow customers to claim legitimate income tax credits and deductions under the Americans with Disabilities Act of 1990 (ADA) and the Internal Revenue Code. NADN allegedly marketed its services nationwide through radio advertisements and promotional appearances on talk radio programs. The indictment further alleges that, from 2001 through 2004, the defendants caused NADN to sell Tax Break 2000 approximately 21,610 times to customers around the country. Throughout the scheme, Tax Break 2000 was also known as tb2000.com, shopn2000.com and mallforall.com.
According to the indictment, Tax Break 2000 was an attempt to abuse a provision of the ADA that provides a "disabled access credit" to help offset necessary, reasonable expenditures made by eligible small businesses to comply with the ADA’s requirement that their facilities be accessible to disabled persons. The indictment alleges that these expenditures include amounts paid to remove architectural barriers, to remove communication barriers, to provide interpreters, to acquire or to modify equipment, or to provide other similar services, modifications, materials or equipment.
The indictment further alleges that the defendants defrauded the United States and their customers in a number of ways. Some of the ways alleged in the indictment included creating Tax Break 2000 as a Web site that was not accessible to the disabled so that they could sell modifications that purported to make it accessible to the disabled; falsely telling customers that purchasing the modifications entitled them to a lawful income tax credit and deduction for having made their Web sites accessible to the disabled; and choosing the sale price for the modifications, $10,475.00, solely to maximize the fraudulent income tax credits and deductions.
Additionally, the indictment alleges the defendants induced customers to sign supposed promissory notes for approximately 80% of the $10,475.00 purchase price of the modifications, when they had no expectation that the customers would make payments on the promissory notes; paying attorneys to write favorable opinion letters about Tax Break 2000 to refute a legal memorandum in which NADN’s own tax experts determined that Tax Break 2000 was illegal and could subject those who sold it to criminal penalties; creating false IRS Forms 1099 to create the appearance that customers’ Web sites were generating commission income and that the purported promissory notes were being paid off; and preparing false tax returns on their customers’ behalf.
On April 13, 2004, the Justice Department’s Tax Division filed a complaint seeking to enjoin, among others, NADN, Rodrigues, Coolidge and Prokop from selling fraudulent tax schemes, including Tax Break 2000. NADN ceased operations in May 2004. In June 2004, a federal bankruptcy court in Las Vegas entered a permanent injunction against NADN. Prokop was also enjoined in June 2004, after consenting to entry of a permanent injunction. In April 2005, Rodrigues and Coolidge both consented to permanent injunctions.
An indictment is merely a formal charge by the grand jury. Each defendant is presumed innocent unless and until proven guilty in U.S. District Court. If convicted, the defendants face maximum potential sentences of 150 years in prison and millions of dollars in fines.
The case is being prosecuted by Tax Division trial attorneys Jay R. Nanavati and Timothy J. Stockwell. The case was investigated by the IRS, Criminal Investigation Division.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation Web site http://www.ustreas.gov/irs/ci/.
28 January 2009
Owner of Pharmaceutical Wholesale Company Pleads Guilty to Medicare FraudRead the Press Release
WASHINGTON – The owner and operator of HME Solutions Inc., dba Lifecare Medical (Lifecare Medical), a licensed pharmaceutical wholesale company in Miami, pleaded guilty today to defrauding the Medicare program in connection with a $5.3 million HIV-infusion fraud scheme, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney R. Alexander Acosta of the Southern District of Florida announced.
Harold Sio, 33, pleaded guilty to conspiracy to commit healthcare fraud and conspiracy to commit money laundering before U.S. District Judge Ursula Ungaro in Miami. At the plea hearing, Sio admitted that between August 2004 and November 2006, he conspired with Juan A. Marrero and Orlando Pascual Jr., the owners of Medcore Group LLC (Medcore), to commit health care fraud and launder the proceeds of that health care fraud.
In his plea, Sio admitted that he supplied pharmaceuticals to Marrero and Pascual for the purpose of committing Medicare fraud. Sio also admitted providing invoices that documented huge quantities of pharmaceuticals, which were received by Medcore, when in fact he only delivered small amounts. Sio acknowledged that he accepted payment from Marrero and Pascual then returned cash to them so that the cash could ultimately be used to pay patients. Marrero and Pascual pleaded guilty in January 2009 to Medicare fraud and are scheduled for sentencing on April 3, 2009. Sio is scheduled to be sentenced on March 24, 2009.
In pleading guilty, Marrero and Pascual both admitted that they falsely billed Medicare more than $5.3 million for unnecessary infusion treatments. Both Marrero and Pascual acknowledged that all the patients who received injections or infusions at Medcore were paid cash kickbacks to induce them to visit to the clinic.
Marrero and Pascual acknowledged that clinic employees intentionally manipulated patients’ blood samples to make the patients’ need for treatment appear legitimate, when in fact it was not, as well as to make the patients' medical files appear legitimate. According to court documents, physicians, a physician's assistant and phlebotomists, were used by Marrero and Pascual to help facilitate the scheme.
Four co-defendants in the case are scheduled for trial beginning Feb. 23, 2009, in the Southern District of Florida. An indictment is merely a charge, and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case was prosecuted by Deputy Chief Kirk Ogrosky, Assistant Chief John S. (Jay) Darden, and Trial Attorney Charles Reed of the Criminal Division’s Fraud Section and investigated by the Department of Health and Human Services, Office of the Inspector General and FBI. The case was brought as part of the Medicare Fraud Strike Force (MFSF), supervised by the Criminal Division’s Fraud Section and U.S. Attorney Acosta of the Southern District of Florida. Since the inception of MFSF operations, federal prosecutors have indicted 106 cases with 190 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.
27 January 2009
Three Men Indicted for Racially-Motivated Church Arson in Springfield, Mass.Read the Press Release
WASHINGTON – Three individuals were indicted today by a federal grand jury in the District of Massachusetts for conspiring to interfere with the civil rights of members of the Macedonia Church of God in Christ, a Springfield, Mass., church with a predominantly African-American congregation.
The indictment was announced by Loretta King, Acting Assistant Attorney General for the Civil Rights Division; U.S. Attorney Michael J. Sullivan for the District of Massachusetts; Glenn N. Anderson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Boston Field Division; Warren T. Bamford, Special Agent in Charge of the FBI’s Boston Field Office; Colonel Mark Delaney, Superintendent of the Massachusetts State Police; William Bennett, Hampden County District Attorney; and Commissioner William J. Fitchet of the Springfield Police Department.
The church’s newly constructed building burned to the ground on Nov. 5, 2008, hours after the election of President Barack Obama. The indictment alleges that Benjamin Haskell, 22, Michael Jacques, 24, and Thomas Gleason, 21, all of Springfield, conspired to burn the church in retaliation for the election of the country’s first African-American president.
"These allegations of racial violence connected with the presidential election are serious and disturbing," said Acting Assistant Attorney General Loretta King. "The Justice Department will aggressively prosecute individuals who conspire to commit such acts of violence and intimidation."
The indictment alleges that several hours after Barack Obama was elected President, Haskell, Jacques and Gleason conspired to burn the Macedonia Church of God in Christ’s new under-construction church building, which was 75 percent complete at the time of the fire. According to the indictment, on Election Night, Haskell, Jacques and Gleason used racial slurs and expressed anger with the election of Barack Obama and discussed burning the Macedonia Church of God in Christ’s new church building because the church members, congregants and bishop were African-American. They then obtained gasoline, poured it on the interior and exterior of the new church building and started a fire that destroyed nearly the entire structure. Some of the responding firefighters suffered injuries as they worked to extinguish the blaze.
"Racism has devastating effects on individuals, and stifles the quality of life in the community," said U.S. Attorney Sullivan. "We will not tolerate those who victimize others and I am angered and saddened that the neighborhood has endured such cruel acts by those allegedly living in the same community."
If convicted, Haskell, Jacques and Gleason face a maximum prison sentence of 10 years to be followed by three years of supervised release. The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI; Bureau of Alcohol, Tobacco, Firearms and Explosives; Massachusetts State Police; Hampden County District Attorney’s Office and the Springfield Police Department. It is being prosecuted by Trial Attorney Erin Aslan of the Justice Department’s Civil Rights Division and Assistant U.S. Attorneys Paul Smyth and Kevin O’Regan of the U.S. Attorney’s Office for the District of Massachusetts.
Third Individual Pleads Guilty to Illegally Accessing Confidential Passport FilesRead the Press Release
WASHINGTON – A third individual pleaded guilty today to illegally accessing numerous confidential passport application files, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced.
Gerald R. Lueders, 65, of Woodbridge, Va., pleaded guilty before U.S. Magistrate Judge Alan Kay in U.S. District Court for the District of Columbia to a one-count criminal information charging him with unauthorized computer access.
According to court documents, from June 1974 through September 2001, Lueders served as a Foreign Service Officer at the State Department. From fall 2005 to February 2008, he worked as a watch officer within the Office of Consular Affairs. Lueders has also been a retired annuitant since October 2001, serving as a recruitment coordinator in various State Department bureaus. According to information contained in plea documents, Lueders admitted he had access to official State Department computer databases in the regular course of his employment, including the Passport Information Electronic Records System (PIERS), which contains, among other data, all imaged passport applications dating back to 1994. The imaged passport applications on PIERS contain, among other things, a photograph of the passport applicant as well as certain personal information including the applicant’s full name, date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information. These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.
In pleading guilty, Lueders admitted that between July 2005 and February 2008, he logged onto the PIERS database and viewed the passport applications of more than 50 celebrities, actors, politicians, musicians, athletes, family members, members of the media, business professionals, colleagues and other individuals identified in the press. Lueders admitted that he had no official government reason to access and view these passport applications, but that his sole purpose in accessing and viewing these passport applications was idle curiosity.
Lueders is the third current or former State Department employee to plead guilty in this continuing investigation. On Sept. 22, 2008, Lawrence C. Yontz, a former Foreign Service Officer and intelligence analyst, pleaded guilty to unlawfully accessing hundreds of confidential passport files. Yontz was sentenced on Dec. 19, 2008, to 12 months of probation and ordered to perform 50 hours of community service. On Jan. 14, 2009, Dwayne F. Cross, a former administrative assistant and contract specialist, pleaded guilty to unlawfully accessing hundreds of confidential passport files. Cross’ sentencing is scheduled for March 23, 2009 and Lueders sentencing is scheduled for March 26, 2009.
The case is being prosecuted by Trial Attorney Armando O. Bonilla of the Criminal Division’s Public Integrity Section, headed by Section Chief William M. Welch II. The case is being investigated by the State Department Office of Inspector General.
Information
Plea Agreement
Factual Basis for Plea
Former AIG Vice President Sentenced to Four Years in Prison <br /> for Role in Fraudulent Manipulation SchemeRead the Press Release
WASHINGTON – The former vice president of reinsurance of American International Group Inc. (AIG), was sentenced today to four years in prison for his role in a fraudulent scheme to manipulate AIG’s financial statements, the Department of Justice announced.
Christian M. Milton, 61, of Wynnewood, Pa., who served as vice president of reinsurance at AIG from approximately 1982 to March 2005, was convicted by a federal jury on Feb. 25, 2008, on charges of conspiracy, securities fraud, false statements to the U.S. Securities and Exchange Commission (SEC) and mail fraud. In addition to the prison term, Milton was sentenced by U.S. District Judge Christopher F. Droney to two years of supervised release following his release from prison and a $200,000 fine. Milton was ordered to surrender himself to federal authorities in 60 days.
Evidence presented at trial proved that Milton and his co-defendants, Ronald E. Ferguson, Elizabeth A. Monrad, Robert D. Graham and Christopher P. Garand, all former General Reinsurance Corporation (Gen Re) executive officers, engaged in a scheme to falsely inflate AIG’s reported loss reserves, a key indicator of financial health to insurance industry analysts and investors. According to trial evidence, the fraud was carried out through the use of two sham reinsurance transactions between subsidiaries of AIG and Gen Re in response to analysts’ criticism of a $59 million decrease in AIG’s loss reserves for the third quarter of 2000.
The two sham transactions, evidence showed, increased AIG’s loss reserves by $250 million in the fourth quarter of 2000 and $250 million in the first quarter of 2001, masking a declining trend in loss reserves in the face of premium growth. Evidence showed that AIG restated the transactions at issue in filings with the SEC in May 2005. Evidence presented at trial established that when the investigation was disclosed to investors by AIG and through various media outlets between Feb. 14 and March 14, 2005, shares of AIG stock dropped from $73.12 to $61.92.
All five defendants were convicted on all counts presented against them in the 16-count superseding indictment. Subsequently, on Oct. 31, 2008, Judge Droney found that AIG’s shareholders lost between $544 million and $597 million as a consequence of the defendants’ fraudulent scheme.
According to evidence at trial, each of the defendants knew that the true purpose of the transactions was to permit AIG to falsely report increasing loss reserves in its statements to analysts, investors and in its SEC filings. The defendants structured a sham reinsurance transaction, according to trial evidence, and created a phony paper trail to make it appear as though Gen Re had solicited reinsurance from AIG when the evidence demonstrated that the parties knew AIG wanted the transaction to manipulate its financial statements. Additionally, evidence presented at trial proved that the defendants entered into a secret side deal whereby AIG would never have to pay any losses under the contracts; AIG would return to Gen Re the $10 million in premiums Gen Re paid to AIG and AIG paid Gen Re a $5 million fee for entering into the transaction.
The case was prosecuted by Principal Deputy Chief Paul E. Pelletier and Assistant Chief Adam Safwat of the Criminal Division’s Fraud Section as well as Assistant U.S. Attorneys Eric J. Glover of the District of Connecticut and Ray Patricco of the Eastern District of Virginia. Additional assistance was provided by Paralegal Specialists Sarah Marberg of the Fraud Section, and Amy Konarski of the District of Connecticut. The ongoing investigation is being conducted by the U.S. Postal Inspection Service.
26 January 2009
New York Man Pleads Guilty to Federal Hate Crime ConspiracyRead the Press Release
WASHINGTON – Brian Carranza, 21, pleaded guilty today before U.S. District Court Judge Carol B. Amon in Brooklyn, N.Y., to conspiring to assault African-American residents in Staten Island, N.Y., in retaliation for President Barack Obama winning last year’s presidential election, Acting Assistant Attorney General Loretta King for the Civil Rights Division and U.S. Attorney for the Eastern District of New York Benton J. Campbell announced.
Carranza, of Staten Island, N.Y., faces a maximum sentence of 10 years in prison and a 250,000 fine. A sentencing date has not been set by the court.
The case is being investigated by the FBI and the New York City Police Department. The case is being prosecuted by Special Litigation Counsel Kristy Parker of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Pamela Chen.
Former Oak Ridge Complex Employee Pleads Guilty to Unlawful Disclosure of Restricted Atomic Energy DataRead the Press Release
WASHINGTON – Roy Lynn Oakley, 67, a resident of Harriman, Tenn., pleaded guilty today in U.S. District Court in Knoxville, to count one of an indictment charging him with unlawful disclosure of Restricted Data under the Atomic Energy Act, in violation of 42 U.S.C., Section 2274(b).
The guilty plea was announced today by Matthew G. Olsen, Acting Assistant Attorney General for National Security, and James R. Dedrick, U.S. Attorney for the Eastern District of Tennessee.
Oakley had been scheduled to start trial today, but appeared instead before U.S. District Court Judge Thomas A. Varlan, to enter his plea of guilty. Oakley had formerly been employed as a laborer and escort by Bechtel Jacobs at the East Tennessee Technology Park (ETTP) in Oak Ridge, Tenn. The ETTP, formerly known as K-25, had previously been operated by the U.S. Department of Energy (DOE) as a facility to produce highly enriched uranium.
According to the plea agreement, while employed at the ETTP in 2006 through 2007, Oakley had a security clearance that permitted him to have access to classified and protected materials, including instruments, appliances and information relating to the gaseous diffusion process for enriching uranium. Some of the materials and information to which Oakley had access were classified as "Restricted Data" under the Atomic Energy Act, any disclosure of which was illegal. While he worked at the ETTP, Oakley had been instructed and informed that this Restricted Data could not be disclosed.
The plea agreement further states that based on the investigation the Federal Bureau of Investigation (FBI) determined that Oakley may have been in possession of protected materials that belonged to the DOE and was offering to sell the materials to a foreign government. The FBI initiated an undercover investigation and, in January 2007, the FBI contacted Oakley using an undercover agent assuming the role of an agent of a foreign government.
In recorded calls and during a face-to-face meeting with the FBI undercover agent, Oakley stated that he had taken certain parts of uranium enrichment fuel rods or tubes and other associated hardware items from the ETTP work site and that he wanted to sell these materials for $200,000 to the foreign government. Once Oakley handed over the pieces of tubes and associated items to the undercover FBI agent and received $200,000 in cash, he was confronted by agents of the FBI and admitted to his efforts to sell these materials to a foreign government.
The materials Oakley had tried to sell to a foreign government were, in fact, pieces of equipment known as "barrier" and associated hardware items that play a crucial role in the production of highly enriched uranium, a special nuclear material, through the gaseous diffusion process.
The maximum penalty for violation of the Atomic Energy Act by disclosing Restricted Data is a maximum of ten years imprisonment and a criminal fine of $250,000. A sentencing hearing has been set before Judge Varlan for May 14, 2009, at 10:00 a.m., in U.S. District Court in Knoxville.
Matthew G. Olsen, Acting Assistant Attorney General for National Security, said, "Today’s guilty plea should serve as a strong warning to anyone who would consider selling restricted U.S. nuclear materials to foreign governments. The facts of this case demonstrate the importance of safeguarding America’s atomic energy data and pursuing aggressive prosecutions against those who attempt to breach those safeguards."
U.S. Attorney James R. Dedrick said, "Vigorous enforcement of the law controlling the protection of national security information, especially that involving materials associated with atomic energy and weapons, is of the highest priority for the Department of Justice and is a vital part of our duty to protect national security and the nation’s defense system. The exposure of Oakley’s conduct and subsequent investigation by the FBI, the U.S. Attorney’s Office, and the Department of Justice reflects the Department’s dedication to combating any threat to the security of our nation’s atomic secrets wherever it may happen."
The indictment was the result of an investigation by the FBI, DOE’s Oak Ridge Counterintelligence Field Office, and DOE’s Headquarters Office of Intelligence and Counterintelligence. Assistant U.S. Attorney A. William Mackie from the U.S. Attorney’s Office for the Eastern District of Tennessee, and Trial Attorney Anthony P. Garcia, from the Counterespionage Section of the Justice Department’s National Security Division, represented the United States in this case.
For additional information, please contact U.S. Attorney James "Russ" Dedrick, Assistant U.S. Attorney William Mackie or Public Information Officer Sharry Dedman-Beard at (865) 545-4167.
Defendant Pleads Guilty to Conspiring to Export Military Aircraft Parts to IranRead the Press Release
WASHINGTON – Hassan Saied Keshari and his corporation, Kesh Air International, pleaded guilty this morning in the Southern District of Florida to charges of conspiring to illegally export military and commercial aircraft parts to Iran.
The guilty pleas were announced by Matt Olsen, Acting Assistant Attorney General for National Security; R. Alexander Acosta, U.S. Attorney for the Southern District of Florida; Michael Johnson, Special Agent in Charge, U.S. Department of Commerce; Office of Export Enforcement; Anthony V. Mangione, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Investigations; and Sharon Woods, Director, U.S. Department of Defense, Defense Criminal Investigative Service.
Keshari appeared on behalf of himself and Kesh Air International in federal court today to announce their guilty pleas. Charges are still pending against two remaining defendants charged in the indictment, Traian Bujduveanu and his corporation, Orion Aviation Corp. Sentencing is scheduled for April 8, 2009, at 8:30 a.m. before U.S. District Judge Patricia A. Seitz.
Count 1 of the Indictment, to which Keshari and Kesh Air International pleaded guilty, charges conspiracy to export and cause the export of goods from the United States to the Islamic Republic Iran, in violation of the embargo imposed upon that country by the United States and in violation of the International Emergency Economic Powers Act, and to export and cause to be exported defense articles, in violation of the Arms Export Control Act, all in violation of Title 18, United States Code, Section 371.
On the conspiracy count, Hassan Saied Keshari faces a maximum statutory term of five years’ imprisonment and a maximum fine of $250,000. Kesh Air International faces a statutory maximum fine of $500,000.
According to documents filed with the court during the plea hearing, Keshari, an Iranian national and naturalized United States citizen, by and through his Novato, Calif., corporation, Kesh Air International, purchased aircraft parts on behalf of purchasers in Iran and exported the aircraft parts to Iran by way of freight forwarders in Dubai, United Arab Emirates. The military aircraft parts were purchased from defendant Traian Bujduveanu, who operated through his Broward County, Fla., business, defendant Orion Aviation Corp.
Among the aircraft parts illegally exported to Iran through the conspiracy were parts designed exclusively for the F-14 Fighter Jet, the Cobra AH-1 Attack Helicopter, and the CH-53A Military Helicopter. All of these aircraft are part of the Iranian military fleet, while the F-14 is known to be used exclusively by the Iranian military.
Moreover, all of the parts supplied by Keshari as part of the conspiracy are manufactured in the United States, are designed exclusively for military use, and have been designated by the U.S. Department of State as "defense articles" on the United States Munitions List, thus requiring registration and licensing with the Department of State, Directorate of Defense Trade Controls. Neither Keshari nor his co-defendants are registered or had the required licenses to ship defense articles to Iran.
According to the Indictment and documents filed with the court during the plea hearing, Keshari received orders by email from buyers in Iran for specific aircraft parts. Keshari then requested quotes, usually by e-mail, from Bujduveanu and other suppliers and made arrangements for the sale and shipment of the parts to a company in Dubai through the use of false or misleading shipping documents. From Dubai, the parts were then shipped on to the purchasers in Iran.
Keshari has been in federal custody since his arrest in June 2008 and will remain in custody pending his sentencing. Co-defendant Bujduveanu also remains in federal custody awaiting trial, which is scheduled for May 2009.
The investigation was conducted by the U.S. Department of Commerce, Office of Export Enforcement, U.S. Immigration and Customs Enforcement, Office of Investigations, and the U.S. Department of Defense, Defense Criminal Investigative Service. The case is being prosecuted by Assistant U.S. Attorney Melissa Damian.
23 January 2009
Former New York Power Authority Employee Sentenced to 37 Months in Jail for Bribery and Fraud SchemeRead the Press Release
WASHINGTON — A former employee of the New York Power Authority (NYPA) was sentenced today to serve 37 months in jail and to pay a $5,000 criminal fine for his role in a kickback and bribery scheme, the Department of Justice announced.
Edward P. Goldblatt of Melville, N.Y., a former purchasing warehouse assistant at NYPA, pleaded guilty on Aug. 26, 2008, in the U.S. District Court in Brooklyn to conspiring to defraud NYPA in a bribery scheme where he accepted $167,000 in kickback payments from a vendor. Goldblatt also caused NYPA to pay approximately $86,000 in fraudulent overcharges. Half of these overcharges were included in Goldblatt’s kickback payments and half were retained by the vendor. Goldblatt also pleaded guilty to income tax evasion for failing to report as income any of the kickbacks that he received for the years 2005 through 2007.
Goldblatt was also ordered to pay, with another individual, $253,836 in restitution. He was arrested in connection with this investigation by Special Agents of the FBI and the Internal Revenue Service (IRS) Criminal Investigation on April 2, 2008.
"Today’s sentencing should make clear that those who conspire to subvert the competitive bidding process will be held accountable," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division. "The Department of Justice will not hesitate to prosecute those who defraud their employers, both public and private, for personal gain by ignoring competition standards."
NYPA is a nonprofit energy corporation established by New York State for the public benefit of the citizens of New York by providing low-cost power to government agencies, municipalities and private entities. NYPA finances its projects through bond sales to private investors and does not use tax revenue or state credit. NYPA is headquartered in Albany, N.Y., with power plants and offices located throughout New York.
Goldblatt was responsible for purchasing and awarding contracts for millions of dollars in goods and services annually for NYPA’s plants and offices. In addition, Goldblatt was responsible for issuing purchase orders, reviewing and authorizing vendor invoices for payment, and monitoring warehouse stock levels. NYPA’s policies and procedures include a competitive bidding policy to which Goldblatt was expected to adhere.
These charges arose from an ongoing federal antitrust investigation of bid rigging, bribery, fraud and tax-related offenses in the power generation industry. The investigation is being conducted by the Antitrust Division’s New York Field Office, with the assistance of the FBI and IRS Criminal Investigation. NYPA cooperated with the Department’s investigation.
Anyone with information concerning bid rigging, bribery, tax offenses or fraud in the power generation industry should contact the Antitrust Division’s New York Field Office at 212-264-9308 or the New York Division of the FBI at 212-384-3252.
Canadian Company to Pay U.S. More Than $1 Million Related to Sale of Defective Bullet-proof VestsRead the Press Release
WASHINGTON - Barrday Inc. and two related companies have agreed to pay the United States more than $1 million to resolve allegations that they violated the False Claims Act in connection with their role in the weaving of Zylon fabric used in the manufacture and sale of defective Zylon bullet-proof vests, the Justice Department announced today. Barrday, headquartered in Cambridge, Ontario, Canada, is a weaver of ballistic fabrics and designs and produces specialty industrial textiles.
The United States alleged that Barrday’s woven Zylon fabric was used in the manufacture of bullet-proof vests sold by Second Chance Body Armor Inc., Point Blank Body Armor Inc. and Gator Hawk Armor Inc. These vests were purchased by the United States, and by various state, local, and/or tribal law enforcement agencies, which were partially reimbursed by a Justice Department program. The government alleged that the Zylon in these vests lost its ballistic capability quickly, especially when exposed to heat and humidity.
Barrday was reportedly aware of the defective nature of the Zylon by at least December 2001, but continued to sell Zylon for use in ballistic armor until approximately 2003, when two police officers were shot through their Second Chance Zylon vests. In 2003, Barrday was the first weaver to permanently withdraw from the Zylon market.
"When a supplier of a component part distributes its product with knowledge of latent defects, that company violates the False Claims Act" said Michael F. Hertz, the acting Assistant Attorney General for the Civil Division. "This settlement will help ensure that component suppliers are held responsible for materials that put our first-responders at risk."
This settlement is part of a larger investigation of the body armor industry’s use of Zylon in body armor. As part of today’s agreement, Barrday has pledged its cooperation in the government’s on-going investigation. The United States previously has settled with four other participants in the Zylon body armor industry for over $46 million. Additionally, the government has pending lawsuits against Toyobo Co., Honeywell Inc., Second Chance Body Armor Inc. and four former Second Chance executives.
Today’s settlement with Barrday was the result of an ongoing investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, the General Services Administration Office of the Inspector General, the Department of Homeland Security Office of Inspector General, the Treasury Inspector General for Tax Administration, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigative Command, the Air Force Office of Special Investigations, the Department of Energy Office of the Inspector General, the U.S. Agency for International Development Office of the Inspector General, and the Defense Contracting Audit Agency.
22 January 2009
Twentieth Member of Casino-cheating Criminal Enterprise Pleads Guilty to Racketeering Conspiracy Targeting Casinos in the United States and CanadaRead the Press Release
WASHINGTON – Phat Ngoc Tran, 35, pleaded guilty today in San Diego to conspiring to participate in a racketeering enterprise, the "Tran Organization," in a scheme to cheat at least 12 casinos across the United States and Canada out of millions of dollars, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney Karen P. Hewitt for the Southern District of California announced today. Tran admitted that he and his co-conspirators unlawfully obtained up to $2.5 million during card cheats.
A three-count indictment was returned May 22, 2007, and unsealed in the Southern District of California on May 24, 2007, charging Tran and 13 others each with one count of conspiracy to participate in the affairs of a racketeering enterprise; one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering. The indictment also charged five separate individuals each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering.
In his plea agreement, Tran admitted that on numerous occasions between approximately October 2002 and July 2006, he participated in gambling cheats together with other alleged members of the Tran Organization at casinos in the United States and Canada. Tran admitted to targeting at least 12 casinos in the racketeering conspiracy, including:
- Beau Rivage Casino, in Biloxi, Miss.;
- Casino Rama, in Orillia, Ontario, Canada;
- Foxwoods Resort Casino in Ledyard, Conn.;
- Gold Strike Casino in Tunica, Miss.;
- Horseshoe Casino, in Bossier City, La.;
- Horseshoe Casino and Hotel, in Tunica, Miss.;
- Isle of Capri Casino, in Westlake, La.;
- Majestic Star Casino, in Gary, Ind.;
- Mohegan Sun Resort Casino, in Uncasville, Conn.;
- Palace Station Casino, in Las Vegas, Nev.;
- Resorts East Chicago Hotel and Casino, in East Chicago, Ind.; and
- Sycuan Casino, in El Cajon, Calif.
According to the indictment, the defendants and others executed a "false shuffle" cheating scheme at casinos in the United States and Canada during blackjack and mini-baccarat games. The indictment alleges that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating "slugs" or groups, of un-shuffled cards. The indictment also alleges that after tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a "false shuffle," and members of the group would then bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy repeatedly won thousands of dollars during card games, including winning up to $868,000 on one occasion.
The indictment also alleges that the members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during mini-baccarat and blackjack games.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Tran’s sentencing is scheduled for June 1, 2009, in San Diego before U.S. District Judge John A. Houston. At sentencing, Tran faces a maximum sentence of 20 years in prison on the racketeering conspiracy charge. Tran agreed to a personal money judgment in the amount of $180,000, which will be entered by way of a preliminary order of forfeiture. He also acknowledged that the restitution that he may be ordered to pay by the court at sentencing is not limited by the forfeiture amount. Tran was also charged in Orillia, Ontario, Canada, for his admitted cheating activities at Casino Rama.
A second indictment has alleged that 11 additional defendants conspired to commit offenses on behalf of the Tran Organization. A one-count indictment, unsealed in the Southern District of California on Sept. 11, 2008, charged Bryan Arce; Don Man Duong; Hogan Ho; Thang Viet Huynh; Outtama Keovongsa; Leap Kong, a/k/a Lanida Kong; Qua Le; Khunsela Prom, a/k/a Danny Prom; James Root; Darrell Saicocie; and Dan Thich each with one count of conspiracy to commit several offenses against the United States, including conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering.
To date, 20 defendants, including Tran, have pleaded guilty to charges relating to the casino-cheating conspiracy: Phuong Quoc Truong; Anh Phuong Tran; Martin Lee Aronson; Liem Thanh Lam; George Michael Lee; Tien Duc Vu; Son Hong Johnson; Barry Wellford; Willy Tran; Tuan Mong Le; Duc Cong Nguyen; Han Truong Nguyen; Roderick Vang Thor; Sisouvanh Mounlasy; Navin Nith; Renee Cuc Quang; Ui Suk Weller; Phally Ly; and Khunsela Prom. These defendants admitted to targeting, with the aid of coconspirators, a combined total of approximately 24 casinos during the course of the conspiracy.
The case is being investigated by the FBI’s San Diego Field Office; the Internal Revenue Service-Criminal Investigation; the San Diego Sheriff’s Department; and the California Department of Justice’s Bureau of Gambling Control. The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, Wash., and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission; and the Washington State Gambling Commission.
The prosecution of the case is led by the Criminal Division’s Organized Crime and Racketeering Section (OCRS). Department of Justice Trial Attorneys Joseph K. Wheatley, Robert S. Tully and Gavin A. Corn are prosecuting the indictment in San Diego.
LAN Cargo S.A., Aerolinhas Brasileiras S.A. and EL AL Israel Airlines Ltd. Agree to Plead Guilty for Fixing Prices on Air Cargo ShipmentsRead the Press Release
WASHINGTON — Three air cargo carriers, LAN Cargo S.A. (LAN Cargo), Aerolinhas Brasileiras S.A. (ABSA), and EL AL Israel Airlines Ltd. (EL AL), have each agreed to plead guilty and pay criminal fines totaling $124.7 million for their roles in a conspiracy to fix prices in the air cargo industry, the Department of Justice announced today. Under the plea agreements, LAN Cargo, a Chilean company, and ABSA, a Brazilian company that is substantially owned by LAN Cargo, have agreed to pay a single criminal fine of $109 million. EL AL, an Israeli company, has agreed to pay a criminal fine of $15.7 million.
Including today’s charges, a total of 12 airlines and three executives have pleaded guilty or agreed to plead guilty in the Justice Department’s ongoing investigation into price fixing in the air transportation industry. To date, more than $1 billion in criminal fines have been imposed and executives have been sentenced to serve a total of 20 months in jail.
According to the charges filed today in the U.S. District Court for the District of Columbia, each airline engaged in a conspiracy in the United States and elsewhere to eliminate competition by fixing the cargo rates charged to customers for international air shipments, including to and from the United States. LAN Cargo and ABSA are charged with engaging in the conspiracy from in or about February 2003 and continuing until at least Feb. 14, 2006. EL AL is charged with engaging in the conspiracy from in or about January 2003 until at least Feb. 14, 2006. The plea agreements are subject to court approval. Each airline has agreed to cooperate with the Department’s ongoing investigation.
"American consumers were forced to pay higher prices on the goods they buy every day as a result of the inflated and collusive shipping rates charged by these companies," said Scott D. Hammond, Acting Assistant Attorney General in charge of the Department’s Antitrust Division.
LAN Cargo, ABSA and EL AL are charged with carrying out the price-fixing conspiracy with co-conspirators by:
- Participating in meetings, conversations and communications in the United States and elsewhere to discuss the cargo rates to be charged on certain routes to and from the United States;
- Agreeing, during those meetings, conversations and communications on certain components of the cargo rates to charge for shipments on certain routes to and from the United States;
- Levying cargo rates in the United States and elsewhere in accordance with the agreements reached; and
- Engaging in meetings, conversations and communications in the United States and elsewhere for the purpose of monitoring and enforcing adherence to the agreed-upon cargo rates.
The nine airlines that have pleaded guilty to date as a result of the Department’s ongoing investigation into the air transportation industry are: British Airways Plc (British Airways), Korean Air Lines Ltd., Qantas Airways Limited (Qantas), Japan Airlines International Co. Ltd., Martinair Holland N.V., Cathay Pacific Airways Limited, SAS Cargo Group A/S (SAS), Société Air France and Koninklijke Luchtvaart Maatschappij N.V. (KLM Royal Dutch Airlines). The three airline executives who have pleaded guilty for their involvement in the illegal activity are Bruce McCaffrey of Qantas, Timothy Pfeil of SAS and Keith Packer of British Airways.
EL AL, LAN Cargo and ABSA are charged with price fixing in violation of the Sherman Act, a violation which carries a maximum sentence of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the Federal Bureau of Investigation (FBI). Anyone with information concerning price fixing or other anticompetitive conduct in the air transportation industry is urged to call the National Criminal Enforcement Section of the Antitrust Division at 202-307-6694 or the FBI Washington Field Office, Northern Virginia Resident Agency at 703- 686-6000.
Foreign National Sentenced to Five Years in Prison for Smuggling East Africans to the United StatesRead the Press Release
WASHINGTON – A Ghanian man was sentenced today in the District of Columbia for his role in smuggling East Africans into the United States, Acting Assistant Attorney General of the Criminal Division Rita M. Glavin, U.S. Attorney for the District of Columbia Jeffrey A. Taylor and Acting Assistant Secretary of Immigration and Customs Enforcement (ICE) John Torres announced.
Mohammed Kamel Ibrahim, a/k/a Hakim, 27, a native of Ghana and naturalized citizen of Mexico, was sentenced to five years in prison by U.S. District Judge Ricardo M. Urbina after pleading guilty to one count of conspiracy and three counts of bringing aliens to the United States for profit.
According to his plea, Ibrahim operated an alien-smuggling organization in Mexico City that moved unauthorized aliens from East Africa across the southern U.S. border beginning as early as 2005. In plea documents Ibrahim admitted that between June 2006 and February 2007 he and co-defendant Sampson Lovelace Boateng conspired to smuggle unauthorized aliens to the United States by providing the aliens with fraudulently obtained Mexican visas. The visas, which Boateng obtained through a corrupt employee of the Mexican embassy in Belize, enabled East African aliens to travel into Mexico, then be smuggled across the southern U.S. border by Ibrahim’s Mexico City-based organization. According to the plea documents, Ibrahim’s organization smuggled the aliens by various means, including by concealing them for more than 12 hours in the sleeper compartments of commercial buses. In pleading guilty, Ibrahim admitted to smuggling between 25 and 99 aliens into the United States.
Ibrahim and Boateng were charged in a 28-count indictment returned by a federal grand jury in the District of Columbia on Oct. 31, 2007, and unsealed on Dec. 5, 2007. Ibrahim was arrested by Mexican authorities in Mexico City on Dec. 5, 2007, and extradited to the United States on April 24, 2008. Boateng was arrested at Miami International Airport on Nov. 5, 2007, after arriving on a commercial airline flight from Belize. Boateng pleaded guilty to conspiracy and alien-smuggling charges in the District of Columbia on April 22, 2008, and Ibrahim pleaded guilty on Sept. 22, 2008.
Boateng’s sentencing is scheduled for Feb. 10, 2009. Both men will be removed from the United States upon completion of their sentences.
The case was prosecuted by Trial Attorney Brian Rogers of the Criminal Division’s Domestic Security Section and Assistant U.S. Attorneys Jay Bratt, Colleen Covell and Michael Harvey of the U.S. Attorney’s Office for the District of Columbia. Valuable assistance was provided by Trial Attorney Mary Ann Snow and Paralegal Rachel Estabrook of the Criminal Division’s Office of International Affairs.
The investigation was conducted by ICE’s Los Angeles and Washington, D.C., offices, with assistance from the ICE attaché in Mexico City, the ICE attaché in Guatemala City, the Diplomatic Security Office of the U.S. Embassy in Belize and the Drug Enforcement Administration attaché in Belize. Valuable support was provided by U.S. Customs and Border Protection and the ICE Forensic Document Laboratory. Mexican and Belizean authorities also provided substantial support to the investigation.
Chicago Police Officer Pleads Guilty to Violating Federal Civil Rights of a Man Beaten While Restrained in a WheelchairRead the Press Release
WASHINGTON – A Chicago police officer pleaded guilty today to violating the federal civil rights of a man whom the officer struck repeatedly with a dangerous weapon while the man was handcuffed and shackled in a wheelchair, Acting Assistant Attorney General for the Civil Rights Division Loretta King, U.S. Attorney for the Northern District of Illinois Patrick Fitzgerald and Robert D. Grant, Special Agent-in-Charge of the FBI’s Chicago Field Office announced.
William Cozzi, 51, pleaded guilty to a one-count information in U.S. District Court in Chicago, admitting he used excessive or unreasonable force while acting under color of law. Cozzi joined the Chicago Police Department in 1992 and was assigned to the 25th District at the time of the alleged incident. He was subsequently suspended from duty. Cozzi was indicted in April 2008 for depriving the victim of his civil rights.
On Aug. 2, 2005, while performing his duties as a police officer, Cozzi admitted that he used a "sap," a dangerous weapon similar to a blackjack, to repeatedly strike the victim who was handcuffed and shackled in a wheelchair at Norwegian American Hospital, resulting in bodily injury. At the time, the victim was awaiting treatment in the hospital emergency room after being stabbed in the shoulder.
"The defendant violated the public trust by abusing his law enforcement authority," said Acting Assistant Attorney General Loretta King. "This prosecution demonstrates that the Civil Rights Division is committed to aggressively prosecuting law enforcement officers who willfully use excessive force."
"No law enforcement officer may use unreasonable force with impunity and every citizen, regardless of being in police custody, has a constitutional right to be free from the use of excessive force," U.S. Attorney Fitzgerald said.
Cozzi pleaded guilty while reserving his right to appeal a ruling last year denying his motion to dismiss the indictment on the grounds that the prosecution was based in part on compelled statements he made to the Chicago Police Department’s Office of Professional Standards and during a police review board hearing.
According to a plea agreement, Cozzi was dispatched to the hospital to respond to the stabbing and approached the victim who was being loud and verbally abusive while awaiting treatment for the stabbing. Shortly after approaching the victim, Cozzi placed him in handcuffs and left the emergency room to retrieve leg shackles, which he then placed on the victim. With the victim restrained, Cozzi used a sap to repeatedly strike him in the face and body. According to the plea agreement, at the time of the assault the victim posed no physical threat to Cozzi or anyone else at the hospital.
Cozzi also admitted that he subsequently prepared a false arrest report and misdemeanor complaints stating that the victim attempted to punch him and two hospital security guards, as well as a false tactical response report stating that he used an "open hand strike" on the victim but omitted that he struck the victim with a sap.
U.S. District Judge Blanche Manning set sentencing for March 26, 2009. Cozzi faces a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Assistant U.S. Attorney Scott Drury from the U. S. Attorney’s Office for the Northern District of Illinois and Trial Attorney Betsy Biffl of the Justice Department’s Civil Rights Division.
21 January 2009
Puerto Rico Senator Jorge De Castro Font Pleads Guilty to Honest Services Wire Fraud and Conspiracy to Commit ExtortionRead the Press Release
WASHINGTON – Jorge De Castro Font, 45, a former senator in the Commonwealth of Puerto Rico, pleaded guilty today to 20 counts of honest services wire fraud and one count of conspiracy to commit extortion, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division and U.S. Attorney for the District of Puerto Rico Rosa Emilia Rodríguez-Vélez announced.
De Castro Font pleaded guilty to devising and engaging in a scheme that deprived the people of Puerto Rico of his honest services as a legislator, performed free from conflict of interest, concealment and improper influence. De Castro Font also pleaded guilty to one count of conspiracy to commit extortion through fear of economic harm and under color of official right. De Castro Font was indicted for these and other related offenses on Oct. 2, 2008.
De Castro Font entered his guilty plea before U.S. District Judge Francisco Augusto Besosa in the District of Puerto Rico. De Castro Font admitted that from Jan. 2, 2005, through August 2008, he directly and indirectly solicited between approximately $500,000 and $525,000 in cash payments and other benefits, such as campaign contributions in excess of the legal limits, lodging, private flights, meals and other things of value, from individuals. De Castro Font admitted that he engaged in official acts on behalf of some of these individuals who had provided him with these undisclosed benefits, including but not limited to, proposing legislation, preventing legislative projects to be voted or acted upon, and persuading other legislators to vote for or against legislation.
De Castro Font also admitted to participating in a conspiracy to obtain cash and other benefits from five individuals whom he admitted he knew felt that if they did not provide him with the financial benefits requested, De Castro Font could use his official position to harm their financial interests.
Judge Besosa scheduled a sentencing hearing on Apr. 23, 2009.
"Using an elected office for personal gain denies citizens the honest services of their elected leaders," said Acting Assistant Attorney General Rita M. Glavin. "The Department will continue to identify and prosecute public officials who corruptly use their position and influence to illegally benefit themselves."
"Senator De Castro Font has accepted responsibility for the acts of public corruption charged in the indictment. His conduct was an affront to the voters of Puerto Rico who placed their trust and confidence in him and the institution that he represented, the Senate of the Commonwealth of Puerto Rico. His blatant disregard for his oath of office and his breach of the public trust, for his personal enrichment, violated the very essence of our democratic government. We will continue our public corruption investigations against public officials and those who make illegal payments in exchange for official acts," said U.S. Attorney Rosa Emilia Rodriguez-Velez.
"Let this conviction send a stark message to all public servants that the sale of influence and public corruption will not be tolerated by the FBI or the law-abiding citizens of Puerto Rico," said Luis Fraticelli, Special Agent in Charge of the FBI-San Juan Field Office. "The FBI will continue to be vigilant so as to root out all public corruption. As I have said before, corruption affects every facet of society: the people, honest businessmen, education and public works."
On Dec. 4, 2008, Alberto Goachet, a political consultant and aide to De Castro Font, pleaded guilty to participating in the conspiracy to launder illegal campaign contributions and other payments. Goachet admitted that he and others laundered the money through the use of fake invoices purporting to reflect legitimate payments to a political consulting firm owned by Goachet. Goachet admitted that the false invoices were meant to conceal a businessman’s illegal payments to De Castro Font. Goachet also admitted that in August 2008 he falsely claimed in an interview with the FBI that the invoices were legitimately written for services rendered to the businessman and denied that the money was intended for De Castro Font.
The case was prosecuted by Assistant U.S. Attorneys Jacqueline Novas and Timothy R. Henwood of the District of Puerto Rico, and Trial Attorney Matthew L. Stennes of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI’s San Juan Field Office.
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