District Not Recorded

ST. LOUIS – On Wednesday, a jury convicted Oscar Dillon, 47, of St. Charles County, Missouri, guilty of drug conspiracy, attempted obstruction of justice and money laundering.

The same jury also convicted Michael Grady, 65, of St. Louis, Missouri, guilty of drug conspiracy, attempted obstruction of justice and money laundering. The jury found Grady not guilty on an additional charge of witness tampering.

United States District Judge Henry E. Autrey presided over the trial, which lasted more than two weeks.

The evidence at trial proved that Dillon and Grady provided long-term assistance to some of the area’s most prolific and violent drug traffickers in an effort to allow the drug trafficking to continue unimpeded by federal investigators. Among other things, Dillon and Grady routinely attempted to gain information about on-going federal investigations and prosecutions and the identities of cooperating witnesses so these organizations could continue their high-level drug distribution which generated significant proceeds and maintained prowess by violence. More specifically to the charged crimes, Dillon and Grady assisted in the flight of a known drug trafficker to Texas following federal indictment and concealed the source and ownership of drug proceeds. 

“We are grateful the jury carefully considered the complex evidence presented in this case and arrived at the verdicts justice demanded,” said U.S. Attorney Sayler A. Fleming. “As was demonstrated throughout the trial, Defendants Dillon and Grady have each long provided vital assistance to the continued successful operation of violent drug distribution rings and have attempted to thwart federal prosecutions at every turn.”

The Court has scheduled sentencing for both Dillon and Grady on July 13, 2021.

The Drug Enforcement Administration, Federal Bureau of Investigation and the St. Louis Metropolitan Police Department Intelligence Section investigated the case. Assistant United States Attorneys Michael Reilly and Donald Boyce handled the case.

A California man pleaded guilty yesterday to employment tax fraud.

According to court documents, Michael Todd Lucas, CEO of i3 Brands Inc., controlled a number of inventory software development businesses from 2008 through 2017, including i3 Brands Inc., Trademotion Inc. (formerly known as Trademotion LLC), Intelligentz Automotive Corporation, and Intelligentz Corporation. Lucas had significant control over the finances of these companies and had a legal duty to account for and pay employment taxes to the IRS. Lucas caused these entities to withhold taxes from employees’ paychecks, but he did not fully pay the withheld taxes to the IRS. Rather, Lucas caused the businesses to spend thousands of dollars for his personal benefit. In total, from 2008 to 2017, Lucas’ entities failed to pay over more than $4.9 million in payroll taxes, penalties, and interest.

Lucas pleaded guilty to failing to account for and pay over employment taxes. He is scheduled to be sentenced on Oct. 4, 2021, and faces a maximum penalty of five years in prison. The defendant also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Randy S. Grossman for the Southern District of California made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorney Charles A. O’Reilly and Assistant U.S. Attorney Stephen K. Moulton, now of the Middle District of Alabama, prosecuted the case.

A Missouri man pleaded guilty today to rigging online bids submitted to the General Services Administration (GSA).

According to court documents, Alan Gaines pleaded guilty to the one-count indictment filed in the U.S. District Court in Minneapolis on Jan. 30, 2020. According to the indictment, Gaines conspired with others to rig bids at online public auctions of surplus government equipment conducted by the GSA from about July 2012 until as late as May 2018. Gaines is the third individual charged and the third individual to plead guilty in the investigation.

“For years, the defendant’s self-serving scheme stole from the government and robbed American taxpayers,” said Acting Assistant Attorney General Richard A. Powers of the Department of Justice Antitrust Division. “I commend the team of GSA Office of Inspector General (OIG) agents and Antitrust Division prosecutors and paralegals for their dedication to safeguarding online auctions from collusion.”

“Competition is a fundamental component of any fair auction,” said Inspector General Carol F. Ochoa of the GSA. “GSA OIG will continue to investigate allegations of collusive activities that undermine the integrity of GSA Auctions and short-change the taxpayer.”

The GSA operates GSA Auctions, which offers the general public the opportunity to bid electronically on a wide variety of federal assets, including computer equipment that is no longer needed by government agencies. GSA Auctions sells that equipment via its online auctions, and the proceeds of the auctions are distributed to the government agencies or the U.S. Treasury general fund.

According to the indictment, the primary purpose of the conspiracy was to suppress and eliminate competition. The indictment further alleges that Gaines and his co-conspirators obtained the equipment by agreeing which co-conspirators would submit bids for particular lots offered for sale by GSA Auctions and which co-conspirator would be designated to win a particular lot.

Gaines pleaded guilty to a violation of the Sherman Act. He faces a maximum of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The GSA Office of Inspector General Great Lakes Regional Investigations Office in Chicago is investigating the case.

The Antitrust Division’s Chicago Office is prosecuting the case.

Anyone with information concerning bid rigging or fraud related to GSA auctions should contact the Chicago Office of the Antitrust Division at 312-984-7200, the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit www.justice.gov/atr/contact/newcase.html or email the GSA Office of Inspector General at fraudnet@gsaig.gov.

An Arkansas man was sentenced today to three years in prison for income tax evasion.

According to court documents, James Brassart of Bentonville filed a 2006 individual income tax return that reported adjusted gross income of $1,502,749 and taxes due to the IRS of $486,438. Brassart failed to pay all of the taxes owed and was assessed penalties and interest. To evade his tax liabilities, Brassart took extensive steps to conceal his income and assets. He used three nominee corporations, Eagle Creek Construction and Development Inc., Mono Pro LLC, and Sierra Madre Contracting LLC, to conduct business and purchase assets.

Moreover, between 2010 and 2016, Brassart filed four false bankruptcy petitions to discharge his tax debt. In those bankruptcies, Brassart made false statements and filed fraudulent documents in which he concealed his ownership interests in the nominee corporations. Through his actions, Brassart caused a total tax loss of approximately $1,360,682 to the IRS.

In addition to the term of imprisonment, U.S. District Judge Timothy L. Brooks ordered Brassart to serve three years of supervised release and to pay approximately of $1,360,682.29 in restitution to the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS-Criminal Investigation investigated the case.

Trial Attorney Robert Kemins of the Tax Division prosecuted the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Western District of Arkansas (Fayetteville Division) for their substantial assistance.

Principal Deputy Assistant Attorney General for Civil Rights Pamela S. Karlan issued the following statement and attached resource guide to assist Federal agencies, state and local governments, and recipients of Federal financial assistance in addressing ongoing civil rights challenges related to the COVID-19 pandemic:

The COVID-19 pandemic has stressed our Nation’s commitment to an open, equal, and inclusive society. We have seen hateful and xenophobic rhetoric and violence aimed at Asian American and Pacific Islander (AAPI) communities and businesses. We have also seen Black, Indigenous, Latino, and Pacific Islander communities, as well as people with disabilities, suffer disproportionately high rates of death and greater risk of infection and hospitalization. COVID-19 has magnified social, economic, and environmental inequalities that we cannot ignore.

As a Nation, we cannot adequately respond to, and recover from, COVID-19 if we do not protect all of our neighbors. That requires us to pursue justice on behalf of those targeted because of their race, color, religion, national origin, sex (including sexual orientation and gender identity), disability, or citizenship.

The Department of Justice will vigorously enforce Federal civil rights as we continue the process of national reckoning, recovery, and healing. Civil rights protections and responsibilities still apply, even during emergencies. They cannot be waived. Federal agencies, state and local governments, and recipients of Federal financial assistance are an integral part of our shared effort to uphold civil rights.

The following principles should assist in meeting these nondiscrimination obligations:

1. Combat hate crimes, harassment, and other discrimination against the AAPI community. There has been a disturbing rise in violence, harassment, and discrimination directed at the AAPI community. Laws prohibiting such conduct must be vigorously enforced by the Federal government, acting with its state and local partners. We must support and provide services to victims of hate crimes, harassment, or unlawful discrimination and ensure the safety of schools, workplaces, and communities through prompt and thorough investigation of complaints. The attached guide includes resources to support prevention and reporting of hate crimes in communities. It also explains how to report discrimination, harassment, or hate incidents in housing, education, employment or other civil rights violations. The Civil Rights Division is prepared to work with sister Federal agencies to support state and local efforts aimed at preventing pandemic-related harassment and discrimination targeting AAPI communities. For more information on preventing hate crimes in your community, visit the Department of Justice’s hate crimes resource page: https://www.justice.gov/hatecrimes.

2. Ensure equal access for people with disabilities and avoid disability discrimination. COVID-19 has had a devastating and disproportionate impact on people with disabilities. Governments, health care providers, and long-term care facilities must comply with the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act (Section 504). This includes when making decisions about who will receive medical care, including vaccines and hospital beds. It also includes crafting and implementing policies such as crisis standards of care, visitation rules, and vaccine distribution plans. People living in nursing homes and other long-term care facilities have been placed at particular risk of COVID-19 infection and death. Some reports show that more than one-third of all deaths from COVID-19 in the U.S.—over 172,000 people—are linked to nursing homes and other long-term care facilities. Providing services in home- and community- based settings instead of in long-term care facilities can satisfy the ADA integration mandate by preventing unnecessary institutionalization. It can also reduce COVID-19 risk. As governments, employers, and businesses lift pandemic-related restrictions and reopen, they must comply with the ADA and Section 504. This includes providing reasonable accommodations and modifications, physical access, and effective communication. For information about rights and responsibilities under these statutes, please contact the ADA Information Line at 800-514-0301 (voice) or 800- 514-0383 (TTY) or visit https://www.ada.gov/. Additional relevant information can be found on the U.S. Department of Health and Human Services’ Office for Civil Rights’ website at https://www.hhs.gov/civil-rights/for-providers/civil-rights-covid19/.

3. Reduce further learning loss for vulnerable students. Education inequalities have worsened as COVID-19 continues to disrupt learning for millions of students. Students of color are experiencing disproportionate failure rates, a growing digital divide disadvantages students who cannot access the internet and miss school as a result, and students with limited English proficiency and/or a disability are suffering serious educational consequences. Students who are homeless or in juvenile justice facilities are particularly at risk of learning disruptions. Schools contribute to these challenges when they fail to communicate with limited English proficient families in a language they understand about how to access online learning and other important information about school activities. Whether schools begin to reopen or continue to teach virtually, they must do so in compliance with Titles IV and VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, the Equal Educational Opportunities Act of 1974, the ADA, and Section 504. COVID-19 resources for schools, students, and families can be found at https://www.ed.gov/coronavirus?src=feature.

4. Protect correctional staff, incarcerated and detained people, and their families. Studies have shown that compared to the general population, a disproportionate number of COVID-19 outbreaks and deaths occur in jails, prisons, and detention facilities across the country. Certain communities of color, including Black, Indigenous, and Latino people, as well as people with disabilities, are more likely to have comorbidities, and suffer serious and even fatal COVID-19 infections, both in the general population and in jails, prisons, and detention centers. Individuals with limited English proficiency and those with disabilities can face increased isolation and lack meaningful access to essential information during COVID-19. This can limit their ability to obtain treatment and timely escalation of care when needed. State and local jails, prisons, and detention centers that receive Federal financial assistance must not discriminate on the basis of race, color, and national origin under Title VI of the Civil Rights Act of 1964 and other statutes. They must also comply with the ADA’s and Section 504’s disability nondiscrimination mandate. In addition to the statutory prohibitions on discrimination, these facilities may not deprive prisoners of their rights guaranteed by the Eighth and Fourteenth Amendments. Federal prisons and detention facilities are subject to Executive Order 13166 and other authorities that protect the civil rights of Federal detainees and inmates. For further guidance on managing pandemic response and recovery in correction and detention facilities, see https://nicic.gov/coronavirus and https://www.cdc.gov/coronavirus/2019-ncov/community/correction-detention/guidance-correctional-detention.html.

5. Protect vulnerable populations facing housing instability. COVID-19 has exacerbated existing racial and economic disparities in access to safe and affordable housing. Despite these challenges, individuals retain their fundamental right to obtain housing free from discrimination. Direct providers of housing must still comply with the Fair Housing Act. Our country already faced a severe shortage in affordable housing before the economic impacts of COVID-19 caused significant increases in housing instability. With studies showing that certain communities of color are more likely to be at risk of eviction, we must ensure that discrimination is not an additional barrier. Information on where to find housing assistance during the pandemic can be found here: https://www.benefits.gov/news/article/402. The Department of Housing and Urban Development also maintains a list of resources, found at https://www.hud.gov/coronavirus.

6. Provide information in languages other than English. Large numbers of people in the United States do not read or understand English well. Yet all people need to understand the symptoms, when to stay home, and how to protect themselves and their families to prevent the spread of the virus. Federal, state, and local public messaging on pandemic safety measures and recovery efforts should be provided in the wide array of languages spoken by people with limited English proficiency. Likewise, it is important that we ensure language accessibility in law enforcement, courts, and victim services so that victims of hate crimes and discrimination can vindicate their rights. Title VI requires recipients of Federal financial assistance to provide meaningful access to Federally-funded programs and activities to people with limited English proficiency. More information about ensuring language access and the concentration of, and languages spoken by, persons with limited English proficiency in a particular community can be found at https://www.lep.gov/ and https://www.lep.gov/maps/.

7. Collect data to monitor, track, and ensure equitable outcomes. COVID-19 requires accountability and action to address longstanding disparities for Black, Indigenous, Latino, AAPI, and other people of color, as well as people with disabilities. Complete, consistent, and accurate data collection and reporting on race, ethnicity, disability, and limited English proficient status are essential to our ability to recognize and address disparities and inequality. Federal civil rights offices are authorized to use qualitative (studies, news reports, and other sources of information) and quantitative data to conduct outreach, technical assistance, and enforcement to ensure compliance with Title VI of the Civil Rights Act of 1964. The Civil Rights Division is available to consult with Federal agencies on approaches to data collection and assessments to determine whether policies or practices may have a discriminatory impact. For more information on identifying discrimination under Title VI and on data collection, see https://www.justice.gov/crt/fcs/T6Manual7#Z; see also Executive Order 13985 (addressing the need for race, ethnicity, and disability data collection).

The Civil Rights Division will do its part to facilitate a coordinated federal response to these issues. Under Executive Order 12250, the Department of Justice is responsible for ensuring the consistent and effective implementation of Federal civil rights laws “prohibiting discriminatory practices in Federal programs and programs receiving federal financial assistance.” Accordingly, I have directed the Civil Rights Division’s Federal Coordination and Compliance Section and the Disability Rights Section to ensure that Federal agencies use their authority to pursue a comprehensive approach to advance equity and redress inequities in pandemic response and recovery. Finally, the Civil Rights Division will continue to convene meetings of Federal civil rights offices to:

1) exchange information and resources for agencies to take action on COVID-19-related harassment and discrimination;

2) monitor and address civil rights issues related to COVID-19 and recipients of Federal financial assistance;

3) identify strategies to ensure Federal, state and local efforts achieve equitable outcomes in current and future emergency planning and response;

4) work with the Federal agencies to develop and identify data sources or indices that will assist recipients of Federal financial assistance to collect data from communities of color and other underserved populations. The Civil Rights Division, together with other agencies throughout the Federal government, will continue to monitor civil rights issues related to COVID-19 and vigorously enforce civil rights laws. To file a complaint with the Civil Rights Division, please fill out our online form at https://civilrights.justice.gov.

Two defendants indicted on tax fraud and obstruction charges made their first appearances in the U.S. District Court for the Eastern District of Michigan today.

According to the indictment returned on March 3, 2021, Harold Walls, of Clare, Michigan, managed the day-to-day operations of the Days Inn Clare, a hotel owned by his father, Karl Walls. Rather than pay himself regular wages through the hotel’s payroll system, Harold Walls allegedly caused himself to be paid by other means, including by paying personal expenses from the hotel’s operating account. Harold Walls then allegedly filed individual income tax returns for 2013 through 2017 that did not report any income from the hotel. Rather, Harold Walls allegedly only reported wages from his employment as a professor of hospitality management and income from the rental of farmland.

The indictment further charges that Karl Walls reported income and expenses for the Days Inn Clare on Schedules C attached to his individual tax returns. From 2012 through 2017, Harold Walls allegedly provided and caused his father to provide false and incomplete information to Karl Walls’ return preparer, which resulted in the preparation of Schedules C for the hotel that understated its gross receipts and overstated its expenses. In particular, the information allegedly provided to the tax return preparer did not include revenue for 11 “off book” rooms that were not tracked in the hotel’s reservation system and, as a result, the revenue for these rooms was not reported on the Schedules C. The information allegedly provided to the tax return preparer also included inflated expense figures for the hotel’s property taxes for 2013, 2014, and 2017.

Finally, the indictment charges that both Harold Walls and Karl Walls attempted to obstruct the criminal investigation of Harold Walls. In January 2017, after IRS-Criminal Investigation (IRS-CI) special agents notified Harold Walls that he was the subject of a criminal tax investigation, Harold Walls allegedly made false statements to the special agents about his work at the hotel and attempted to cause a hotel employee to make similar false statements. In October 2018, Karl Walls also allegedly attempted to corruptly persuade two witnesses to provide false testimony to the grand jury regarding his son’s employment at the hotel.

Harold Walls is charged with filing false tax returns, aiding in the preparation of false tax returns, and endeavoring to obstruct the IRS. If convicted, Harold Walls faces a maximum term of imprisonment of three years on each of the tax and obstruction charges. Karl Walls is charged with two counts of witness tampering. Karl Walls faces a maximum term of imprisonment of 20 years on each count of witness tampering. Both defendants also face a period of supervised release and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS-CI is investigating the case.

Trial Attorneys Melissa S. Siskind and Samuel B. Bean of the Justice Department’s Tax Division are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

U.S. Attorney General Merrick B. Garland today issued the following statement:

“The entire Department of Justice mourns with the U.S. Capitol Police and the family of Officer William Evans. Our thoughts are also with the other brave officer injured in the attack.

“As the members of the U.S. Capitol Police have demonstrated this year, they will give their all to defend the seat of our democracy. The Washington Field Office of the FBI is assisting the Metropolitan Police Department with their investigation of this tragic attack.”

 A South Carolina man was arrested on March 30 on Lacey Act and firearms charges. A federal judge in the Middle District of Georgia, unsealed the indictment today.

Ashtyn Michael Rance, 35, of Dalzell, was charged by a federal grand jury in the Middle District of Georgia on March 9 for trafficking vipers and turtles, as well as illegally possessing two firearms. U.S. Fish and Wildlife Service (USFWS) agents arrested Rance in Dalzell on a warrant to face the charges in the Middle District of Georgia.

The indictment alleges that in February 2018, Rance sold 16 spotted turtles and three eastern box turtles to a buyer in Florida. He shipped the reptiles from Valdosta in a package falsely labeled as containing tropical fish and lizards. The indictment also alleges that in May 2018, Rance sent a second package to Florida with a label stating that it contained harmless reptiles and ball pythons. In reality, Rance had shipped 15 Gaboon vipers, which are venomous snakes. Finally, the indictment alleges that on May 11, 2018, law enforcement authorities executed a search warrant at Rance’s Valdosta home, where they recovered a Bushmaster Carbine .223 caliber rifle and a Mossberg 12-gauge shotgun. It is a violation of federal law for a convicted felon to possess a firearm, and Rance has a prior felony conviction.

“Rance’s reckless shipment of venomous snakes and illegal possession of firearms demonstrate the dangers of wildlife trafficking,” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division (ENRD). “I applaud our federal and state law enforcement partners for keeping the public and delivery couriers safe.”

“Illegal wildlife trafficking can have devastating effects, and our office will prosecute individuals found in violation of the Lacey Act and other environmental protection laws,” said Acting U.S. Attorney Peter D. Leary of the U.S. Attorney’s Office for the Middle District of Georgia. “I want to thank the U.S. Fish and Wildlife Service, ATF and Georgia DNR for their work investigating this case.”

“Wildlife trafficking is a serious crime that impacts species at home and abroad,”said Special Agent in Charge Stephen Clark for the USFWS Office of Law Enforcement. “I would like to thank the Justice Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Georgia and South Carolina Departments of Natural Resources for their assistance with this case. Together, we have stopped highly venomous snakes, and our nation’s own wildlife, from being smuggled.”

Rance possessed and sold the reptiles in violation of Georgia laws. The federal Lacey Act is the nation’s oldest wildlife trafficking statute and prohibits, among other things, transporting wildlife in interstate commerce if the wildlife was possessed illegally under state laws. It also is a Lacey Act violation to falsely label a package containing wildlife.

The spotted turtle (Clemmys guttata) is a semi-aquatic turtle native to the eastern United States and Great Lakes region. The eastern box turtle (Terrapene carolina carolina) is endemic to forested regions of the East Coast and Midwest. Collectors prize both species in the domestic and foreign pet trade market. The Gaboon viper (Bitis gabonica) is native to central Sub-Saharan Africa. Its venom can cause shock, loss of consciousness or death in humans.

The maximum sentence under the Lacey Act and firearms charges are five and 10 years’ imprisonment, respectively, and a $250,000 fine for each charge.

The USFWS Office of Law Enforcement in Vero Beach, Florida; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Georgia Department of Natural Resources conducted the investigation as part of Operation Middleman. The operation focused on the trafficking of reptiles from the United States to China.

Trial Attorney Ryan Connors of ENRD’s Environmental Crimes Section and Assistant U.S. Attorney Sonja Profit for the Middle District of Georgia are prosecuting the case.

An indictment is only an accusation, and the defendant is presumed innocent until proven otherwise before a jury at trial.

A federal court in the Northern District of Texas, Dallas Division, has permanently enjoined a Dallas-area tax return preparer from preparing federal income tax returns for others pursuant to a stipulated permanent injunction.

The civil complaint filed in the case alleged that Keysha Briseño continually and repeatedly included false business losses and fabricated business expenses on some of her clients’ returns. According to the complaint, she and her spouse allegedly own and operate a tax preparation business known under the names Tax Genius LLC; Tax Genie; and K&J Tax Service. The complaint alleged that Briseño controls Tax Genius and has prepared over 4,200 tax returns between 2017 through 2019, more than 25% of which contained fabricated business losses. The complaint further alleged that after the IRS revoked her federal return preparer identification in 2012, Briseño continued to prepare tax returns using her sister’s preparer identification. According to the complaint, Briseño’s fraudulent return preparation activities have caused significant harm to her customers and resulted in millions of dollars in tax losses to the United States.

Briseño consented to the entry of the injunction, which permanently bars her from acting as a federal tax preparer either as herself or doing business as Tax Genius, Tax Genie, or K&J Tax Service. The injunction further bars her from assisting or advising anyone in connection with any tax matter and from having an ownership interest or working for any other entity that prepares tax returns or represents clients before the IRS.

Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

A federal court in the District of Massachusetts entered an order today authorizing the IRS to serve a John Doe summons on Circle Internet Financial Inc., or its predecessors, subsidiaries, divisions, and affiliates, including Poloniex LLC (collectively “Circle”), seeking information about U.S. taxpayers who conducted at least the equivalent of $20,000 in transactions in cryptocurrency during the years 2016 to 2020. The IRS is seeking the records of Americans who engaged in business with or through Circle, a digital currency exchanger headquartered in Boston.

“Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “The Department of Justice will continue to work with the IRS to ensure that cryptocurrency owners are paying their fair share of taxes.”

“Tools like the John Doe summons authorized today send the clear message to U.S. taxpayers that the IRS is working to ensure that they are fully compliant in their use of virtual currency,” said IRS Commissioner Chuck Rettig. “The John Doe summons is a step to enable the IRS to uncover those who are failing to properly report their virtual currency transactions. We will enforce the law where we find systemic noncompliance or fraud.”

Cryptocurrency, as generally defined, is a digital representation of value. Because transactions in cryptocurrencies can be difficult to trace and have an inherently pseudo-anonymous aspect, taxpayers may be using them to hide taxable income from the IRS. In the court’s order, U.S. Judge Richard G. Stearns found that there is a reasonable basis for believing that cryptocurrency users may have failed to comply with federal tax laws.

The court’s order grants the IRS permission to serve what is known as a “John Doe” summons on Circle. The United States’ petition does not allege that Circle has engaged in any wrongdoing in connection with its digital currency exchange business. Rather, according to the court’s order, the summons seeks information related to the IRS’s “investigation of an ascertainable group or class of persons” that the IRS has reasonable basis to believe “may have failed to comply with any provision of any internal revenue laws[.]” According to the copy of the summons filed with the petition, the IRS is requesting that Circle produce records identifying the U.S. taxpayers described above, along with other documents relating to their cryptocurrency transactions.

The IRS issued guidance regarding the tax treatment of virtual currencies in IRS Notice 2014-21, which provides that virtual currencies that can be converted into traditional currency are property for tax purposes. The guidance explains that receipt of virtual currency as payment for goods or services is treated as income and that a taxpayer can have a gain or loss on the sale or exchange of a virtual currency, depending on the taxpayer’s cost to purchase the virtual currency (that is, the taxpayer’s tax basis).

PABLO — The U.S. Attorney’s Office for the District of Montana, the Confederated Salish and Kootenai Tribes (CSKT) of the Flathead Indian Reservation and the FBI today announced the completion of the nation’s first Tribal Community Response Plan (TCRP) as part of a pilot project to address cases of Missing and Murdered Indigenous Persons.

Acting U.S. Attorney Leif Johnson, CSKT Chairwoman Shelly R. Fyant and FBI Executive Assistant Director Terry Wade presented the TCRP to tribal representatives during a meeting today at tribal headquarters in Pablo.

The U.S. Attorney’s Office in Montana and CSKT on Dec. 1 launched the pilot project in accordance with the U.S. Department of Justice’s Missing and Murdered Indigenous Persons (MMIP) Initiative, and the President’s Operation Lady Justice Task Force, and in furtherance of the goals in Savanna’s Act.

CSKT, with participation from federal, tribal, state and local law enforcement representatives and community organizations, developed guidelines for the TCRP through a series of working group meetings.

 “CSKT’s development of a community response plan is a historic milestone in addressing this serious national issue. CSKT’s initiative to join in this pilot project will help other tribes across the country as they develop their own TCRPs.  I want to thank our office’s Missing and Murdered Indigenous Persons Coordinator, Ernie Weyand, CSKT Chairwoman Fyant, Council member and secretary, Ellie Bundy, CSKT policy analyst, Jami Pluff, and all of the partners and stakeholders who participated in this process,” Acting U.S. Attorney Johnson said.

“I’m honored to say that a lot of hard work went into reaching this milestone,” said CSKT Chairwoman Fyant. “By coming together in this effort, we have shown how true partnerships work, that by collaborating we can achieve incredible goals. We are not slowing down now. We will continue to bring light to this crisis as long as it is necessary and provide the essential law and order, victim services, media/public communications and community outreach work with all available resources. Thanks to everyone for their dedication and commitment to supporting the CSKT Community Response Plan.”

FBI Executive Assistant Director (EAD) Terry Wade, who oversees the Criminal, Cyber, Response, and Services Branch (CCRSB), stated: “The FBI has been dedicated to the Missing and Murdered Indigenous Persons (MMIP) Initiative since its inception and remains committed to the initiative. Working directly with forward leaning partners like the Confederated Salish & Kootenai Tribes (CSKT) is critical to improving the safety and security of our communities. The development of the Tribal Community Response Plan (TCRP) is yet another step in the right direction and will facilitate a coordinated response in these time sensitive investigations.”

After pilot projects are completed, Savanna’s Act directs the U.S. Attorney’s Office to continue working with other tribal governments to ensure guidelines are developed across Montana.

CSKT was selected for the pilot project in Montana because it had expressed an interest in participating, has worked on the MMIP issue, including establishing a tribal task force, and has significant community impact related to cases involving tribal members. In addition, CSKT was able to meet despite COVID-19 restrictions.

The working group meetings included representatives from the U.S. Attorney’s Office, CSKT, federal, state, tribal and local law enforcement (including the Flathead Tribal Police Department, Lake County Sheriff’s Office, Missoula County Sheriff’s Office, Flathead County Sheriff’s Office, Sanders County Sheriff’s Office, Polson Police Department, Ronan Police Department, FBI, U.S. Marshals Service, and the Montana Department of Justice) and community organizations.

A Washington man pleaded guilty today to defrauding Tyson Foods Inc. (Tyson) and another company (Company 1) out of more than $244 million by charging them under various agreements for the purported costs of purchasing and feeding hundreds of thousands of cattle that did not actually exist.

According to court documents, Cody Allen Easterday, 49, of Mesa, used his company, Easterday Ranches Inc., to enter into a series of agreements with Tyson and Company 1 under which Easterday Ranches agreed to purchase and feed cattle on behalf of Tyson and Company 1. Per the agreements, Tyson and Company 1 would advance Easterday Ranches the costs of buying and raising the cattle. Once the cattle were slaughtered and sold at market price, Easterday Ranches would repay the costs advanced (plus interest and certain other costs), retaining as profit the amount by which the sale price exceeded the sum repaid to Tyson and Company 1.

Beginning in approximately 2016 and continuing through November 2020, Easterday submitted and caused others to submit false and fraudulent invoices and other information to Tyson and Company 1. These false and fraudulent invoices sought and obtained reimbursement from the victim companies for the purported costs of purchasing and growing hundreds of thousands of cattle that neither Easterday nor Easterday Ranches ever purchased, and that did not actually exist. As a result of the scheme, Tyson and Company 1 paid Easterday Ranches over $244 million for the purported costs of purchasing and feeding these ghost cattle.

Easterday used the fraud proceeds for his personal use and benefit, and for the benefit of Easterday Ranches, including to cover approximately $200 million in commodity futures contracts trading losses that Easterday had incurred on behalf of Easterday Ranches. In connection with his commodity futures trading, Easterday also defrauded the CME Group Inc. (CME), which operates the world’s largest financial derivatives exchange. On two separate occasions, Easterday submitted falsified paperwork to the CME that resulted in the CME exempting Easterday Ranches from otherwise-applicable position limits in live cattle futures contracts.

“For years, Cody Easterday perpetrated a fraud scheme on a massive scale, increasing the cost of producing food for American families,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “The Criminal Division’s prosecutors are committed to swiftly and thoroughly prosecuting frauds affecting our nation’s agricultural and other commodities markets, whether in the heartland or on Wall Street.”

“I commend the agents with the Federal Deposit Insurance Company Office of the Inspector General and the U.S. Postal Inspection Service for their dedication to investigating this case and tenacity in ferreting out the fraudulent activity to which the defendant has pleaded guilty,” said Acting U.S. Attorney Joseph H. Harrington for the Eastern District of Washington.

“Today’s guilty plea holds the defendant responsible for his extensive and coordinated fraud over many years, resulting in more than $240 million of illicit gains,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG). “The defendant submitted false and fraudulent documentation, and then brazenly used the proceeds to cover his losses and for his personal benefit. This scheme was unraveled through rigorous and diligent investigative work with our law enforcement partners, and the FDIC-OIG remains committed to helping preserve the integrity of the banking sector.”

“Producing and providing false invoices and information on goods and services never delivered, were the fundamental key in defrauding an American multinational company out of hundreds of millions of dollars,” said Inspector in Charge Delany De León-Colón of the U.S. Postal Inspection Service Criminal Investigations Group. “This case highlights the collaborative investigative work undertaken by the U.S. Postal Inspection Service and its law enforcement partners to protect consumers and businesses from duplicitous practices. Anyone who engages in these fraudulent and deceptive activities will be brought to justice.”

Easterday pleaded guilty to one count of wire fraud and agreed to repay $244,031,132 in restitution.  He is scheduled to be sentenced on August 4 and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Federal Deposit Insurance Corporation Office of Inspector General and the U.S. Postal Inspection Service are investigating the case. 

Acting Principal Assistant Chief Avi Perry and Trial Attorney John “Fritz” Scanlon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Russell E. Smoot of the Eastern District of Washington are prosecuting the case.

The Fraud Section plays a pivotal role in the Justice Department’s fight against white collar crime around the country and is the national leader in prosecuting fraud and manipulation in the U.S. commodity markets.

The Department of Justice has received reports that fraudsters are creating fraudulent COVID-19 vaccine surveys for consumers to fill out with the promise of a prize or cash at the conclusion of the survey. In reality, the surveys are used to steal money from consumers and unlawfully capture consumers’ personal information.

Consumers receive the surveys via email and text message, and are told that, as a gift for filling out the survey, they can choose from various free prizes, such as an iPad Pro. The messages claim that the consumers need only pay shipping and handling fees to receive their prize. Victims provide their credit card information and are charged for shipping and handling fees, but never receive the promised prize. Victims also are exposing their personally identifiable information (PII) to scammers, thereby increasing the probability of identity theft.

Unless from a known and verified source, consumers should never click on links in text messages or emails claiming to be a vaccine survey.

Schemes that use links embedded in unsolicited text messages and emails in attempts to obtain personally identifiable information are commonly referred to as phishing schemes. Phishing messages may look like they come from government agencies, financial intuitions, shipping companies, and social media companies, among many others. Carefully examine any message purporting to be from a company and do not click on a link in an unsolicited email or text message. Remember that companies generally do not contact you to ask for your username or password. When in doubt, contact the entity purportedly sending you the message, but do not rely on any contact information in the potentially fraudulent message. 

If you receive a text message or email claiming to be a COVID-19 vaccine survey and containing a link or other contact information, please report the communication to the National Center for Disaster Fraud (NCDF) by calling 866-720-5721 or via the NCDF Web Complaint Form at: www.justice.gov/disaster-fraud. Intellectual property crimes such as these also may be reported to federal law enforcement at the National Intellectual Property Rights Coordination Center (IPR Center) at http://www.IPRCenter.gov.

If you believe you may have entered information into a fraudulent website, you can find resources on how to protect your information at: www.identitytheft.gov.

To learn more about identifying and protecting yourself from phishing attempts, visit https://www.consumer.ftc.gov/articles/how-recognize-and-avoid-phishing-scams or https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/spoofing-and-phishing.

Further information about major scams targeting American consumers can be found at the Justice Department’s Transnational Elder Fraud Strike Force website: https://www.justice.gov/civil/consumer-protection-branch/transnational-elder-fraud-strike-force.

This alert is provided by the IPR Center and the Consumer Protection Branch of the department’s Civil Division.

For more information about the Consumer Protection Branch, visit http://www.justice.gov/civil/consumer-protection-branch.

The Justice Department today announced that it has reached a settlement agreement with Spike Inc., a moving and storage company doing business as Olympia Moving and Storage.

The settlement resolves the department’s claims that Spike violated the anti-discrimination provision of the Immigration and Nationality Act (INA) by failing to consider four U.S. workers for employment opportunities that it instead filled with H-2B visa workers at two of its locations in the Philadelphia, PA and Washington, DC metropolitan areas.  

“Employers should hire workers based on their qualifications, not their citizenship or immigration status,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “The Civil Rights Division is committed to protecting workers from this type of discrimination.”

The department’s investigation determined that from at least Feb. 1, 2019, to March 11, 2019, Spike discriminated against four U.S. workers by failing to consider them for temporary mover positions. Despite receiving applications from these available workers, Spike filled the positions with H-2B visa workers, claiming that it could not find qualified and available U.S. workers. The INA prohibits employers from refusing to recruit or hire U.S. workers – i.e., U.S. citizens and nationals, asylees, refugees, and recent lawful permanent residents – because of their citizenship or immigration status.    

Under the settlement, Spike will pay $12,000 in civil penalties to the United States, pay up to an amount of $70,000 in back pay to the affected U.S. workers, and conduct enhanced U.S. worker recruitment and advertising for future positions. The settlement also requires Spike to train employees on the requirements of the INA’s anti-discrimination provision and be subject to departmental monitoring and reporting requirements. 

The Civil Rights Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits discrimination based on citizenship status and national origin in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation. 

Learn more about IER’s work and how to get assistance through this brief video. More information on how employers can avoid citizenship status discrimination is available here. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status, or national origin in hiring, firing, recruitment, or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public can also call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email IER@usdoj.gov; sign up for a free webinar; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.

The Justice Department today announced that it reached a settlement agreement with G4S Secure Solutions, Inc. (G4S), a private security services company based in Jupiter, Florida. The settlement resolves a claim that the company discriminated against a worker by requiring him to provide unnecessary documentation to prove his immigration status because the worker was not a U.S. citizen, in violation of the anti-discrimination provision of the Immigration and Nationality Act (INA).

“Employers are not allowed to ask workers for additional, unnecessary documents because of their citizenship or immigration status,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “The Justice Department looks forward to working with G4S to ensure its compliance with the INA’s anti-discrimination requirements in the future.”

The department initiated its investigation after a lawful permanent resident filed a charge alleging that G4S required him to provide additional employment eligibility documentation before assigning him to a worksite, even though he had already presented sufficient documents to prove his identity and legal right to work in the United States, which is all that workers are required to demonstrate. The investigation determined that a G4S Human Resources manager declined to place the newly hired security guard at a worksite because he had presented a Permanent Resident Card along with a notice showing that the card had been extended for one year past the expiration date listed on the card, and because the guard did not yet have his new Permanent Resident Card.  Lawful permanent residents are authorized to work permanently.

In addition to showing his extended Permanent Resident Card, the investigation also revealed that the security guard had already provided G4S his unrestricted Social Security card, which alone is sufficient to establish indefinite employment authorization. The INA’s anti-discrimination provision generally prohibits employers from asking workers for more or different documents than are required by law for the employment eligibility verification process based on a worker’s citizenship status or national origin.

Under the terms of the settlement agreement, G4S will, among other things, pay more than $13,000 in back pay to the former employee and $1,400 to the U.S. Treasury; train its workers; and be subject to departmental monitoring for a two-year period.

The Civil Rights Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation. Learn more about how to avoid discrimination in verifying employment eligibility here.

Learn more about IER’s work and how to get assistance through this brief video. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status, or national origin in hiring, firing, recruitment, or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public also may contact IER’s worker hotline at 1-800-255-7688; call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email IER@usdoj.gov; sign up for a free webinar; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.

The Justice Department today announced that it reached a settlement with Adaequare Inc. (Adaequare), a company that recruits workers for other companies. The settlement resolves the department’s claim that Adaequare only considered applicants who were U.S. citizens and lawful permanent residents when filling a job for a client. Based on its investigation, the department concluded that by only considering applicants who are U.S. citizens and permanent residents, Adaequare discriminated against refugees, asylees, and non-citizen nationals, based on their citizenship or immigration status.

“Recruiters cannot illegally exclude applicants based on their citizenship or immigration status,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department's Civil Rights Division. “We applaud Adaequare for immediately taking steps to ensure that this discrimination does not happen again.”

The department’s investigation determined that when a client asked Adaequare to only recruit U.S. citizens or lawful permanent residents for a job, the company did not first check to make sure that the client was legally allowed to limit jobs to those statuses. Instead, the Civil Rights Division’s Immigrant and Employee Rights Section (IER) determined, the company unlawfully screened out applicants based on their citizenship or immigration status.

The Immigration and Nationality Act (INA) protects U.S. citizens, non-citizen nationals, refugees, asylees, and recent lawful permanent residents from this type of discrimination. The law has an exception if an employer or recruiter is required to limit jobs due to a law, regulation, executive order, or government contract. The department’s investigation determined that Adaequare did not have a legal justification for screening out these workers based on their citizenship or immigration status. To help prevent future discrimination, Adaequare now asks clients for a legal justification if a client requests the company to limit candidates for a job to certain citizenship or immigration statuses.

Today’s settlement agreement requires Adaequare to take several steps to ensure it follows the law in the future, including training its employees who recruit to fill positions. The company also must pay a civil penalty. As with its other settlements, IER will also monitor Adaequare to make sure the company is complying with the agreement.

IER is responsible for enforcing discrimination protections under the INA. The law prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation. Learn more about citizenship status discrimination under the INA here.

Learn more about IER’s work and how to get assistance through this brief video. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status, or national origin in hiring, firing, recruitment, or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public also may contact IER’s worker hotline at 1-800-255-7688; call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email IER@usdoj.gov; sign up for a free webinar; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.

The United States filed a complaint in the U.S. District Court for the Middle District of Georgia seeking to bar a Tifton, Georgia, tax return preparer from preparing tax returns for others.

The civil suit against Alicia Coarsey, aka Meredith Coarsey, and Tax Xpress of Tifton LLC, alleges that Coarsey owns Tax Xpress and prepares federal individual income tax returns claiming fabricated medical expenses and charitable contributions. In addition, according to the complaint, Coarsey fabricates claimed business losses, in some cases for non-existent businesses, in order to claim improper earned income tax credits. As one example, the complaint alleges that she claimed over $19,000 in medical deductions for tax year 2019 for one customer, who has since stated that he did not have significant medical expenses in that year. The complaint further alleges that returns prepared by Coarsey use these bogus claims to falsely understate her customers’ tax liabilities and inflate their refund claims. According to the complaint, the United States has likely lost millions of dollars in tax revenue as a result of her activities.

Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

The Department of Justice announced today that Republic Services Inc. (Republic) will be required to divest waste collection and disposal assets in five states in order to proceed with its acquisition of Santek Waste Services LLC (Santek). The department said that without the divestiture, the proposed acquisition would substantially lessen competition for small container commercial waste collection and municipal solid waste disposal services in six local markets across the southeastern United States.

The department’s Antitrust Division — along with the Alabama Attorney General — filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the department’s complaint.

“The waste collection and disposal services provided by Republic and Santek are essential services for businesses, municipalities, and towns,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “Today’s settlement, which requires Republic and Santek to divest numerous facilities and assets in five states, will ensure that these customers continue to benefit from competition for these critical services.”

According to the complaint, Republic and Santek both provide small container commercial waste collection and municipal solid waste disposal services. In each of the local markets alleged in the complaint, Republic and Santek compete vigorously against each other and are two of only a few significant providers of one or both of these essential services. The combination of the two companies would eliminate head-to-head competition between them and threaten the lower prices and better service that customers have realized from that competition. 

The complaint further alleges that, in the Chattanooga, Tennessee, and northern Georgia area, the proposed acquisition would limit the ability of collection rivals to compete with the merged company’s collection operations. The combination of these two vertically-integrated companies that are both strong in collection and disposal in this market would give the merged company an increased incentive and ability to weaken its collection competitors by raising the price of disposal, a key input for collection services. With limited alternative disposal options left in the market, collection rivals would have to incur higher disposal costs or cease their operations, thereby reducing competition in the collection market.

Under the terms of the proposed settlement, Republic and Santek must divest landfills, transfer stations, hauling locations, and waste collection routes in Alabama, Georgia, Tennessee, and Mississippi to Kinderhook Industries LLC (Kinderhook), or to an alternate acquirer approved by the United States. Kinderhook, based in New York, New York, is a private investment firm whose portfolio companies include Capital Waste Services LLC and EcoSouth Services of Mobile LLC, two providers of waste management services in the United States.

The proposed settlement also requires that Republic and Santek divest waste collection routes and associated assets in Texas to Waste Connections Inc. (WCN), or to an alternate acquirer approved by the United States. WCN, based in Ontario, Canada, is a provider of small container commercial waste collection and municipal solid waste disposal services in local markets in Canada and the United States.

Republic, a Delaware corporation headquartered in Phoenix, Arizona, generated total revenues of approximately $10.2 billion in 2020.

Santek, a Tennessee limited liability company headquartered in Cleveland, Tennessee, generated total revenues of approximately $140 million in 2019, the last year for which information is publicly available.

As required by the Tunney Act, the proposed consent decree, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Katrina Rouse, Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon a finding that it serves the public interest.

A federal grand jury in Houston, Texas, returned an indictment on March 17, 2021, charging Michael Andrew McCann with conspiring to defraud the United States, endeavoring to obstruct the IRS, failing to file tax returns, and making false bankruptcy declarations.

The grand jury also returned an indictment charging Toni Gale Engeling with conspiring to defraud the United States and obstructing the grand jury. The defendants made their initial court appearance today before U.S. Magistrate Judge Sam Sheldon of the U.S. District Court for the Southern District of Texas.

According to the indictment, McCann is a dentist in Brazoria and Engeling is a bookkeeper and McCann’s sister. From 2010 to 2015, McCann and Engeling allegedly employed a variety of methods to prevent the IRS from assessing and collecting McCann’s individual income taxes, including using nominee entities, commingling personal and business finances, and lying to the IRS. The indictment further alleges that McCann corruptly endeavored to obstruct IRS collection efforts as early as 2002; that McCann made false declarations on schedules he filed in connection with multiple bankruptcy cases; and that McCann willfully failed to file tax returns for the years 2014 through 2018. The indictment further alleges that in September 2019, Engeling obstructed the grand jury’s investigation into McCann by making false and misleading statements.

If convicted, McCann faces a maximum sentence of five years in prison for the conspiracy charge; five years in prison for each charge of bankruptcy fraud; three years in prison for the IRS obstruction charge; and one year for each charge of willful failure to file. If convicted, Engeling faces a maximum sentence of five years in prison for the conspiracy charge and ten years in prison for the grand jury obstruction charge.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS-Criminal Investigation is investigating the case.

Senior Litigation Counsel Jen Ihlo and Trial Attorneys Mitchell Galloway and William Guappone of the Tax Division are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A Michigan man pleaded guilty today to a federal hate crime for attacking a Black teenager.

Lee Mouat, 43, of Newport, willfully caused bodily injury to a Black teenager because of the teenager’s race.

According to the plea agreement, Mouat confronted a group of Black teenagers, including the victim, at a state park in Monroe. Mouat repeatedly used racial slurs and said that Black people had no right to use the public beach where the incident occurred. Mouat then struck one of the teens in the face with a bike lock, knocking out several of the victim’s teeth, lacerating his face and mouth, and fracturing his jaw. Mouat also attempted to strike another Black teenager with the bike lock.

“Hate-fueled incidents like this one have no place in a civilized society,” said Principal Deputy Assistant Attorney General Pamela Karlan for the Civil Rights Division. “The Justice Department is committed to using all the tools in our law enforcement arsenal to prosecute violent acts motivated by hate.”

“Our office is committed to protecting the rights of all citizens, and prosecuting hate crimes is a top priority,” said Acting U.S. Attorney Saima Mohsin for the Eastern District of Michigan. “The young victim in this case suffered tremendously from this vicious, racially motivated assault. Every individual citizen has the right to not live in fear of violence or attack based on the color of their skin.”

“Mouat’s hateful and violent conduct, motivated by racial intolerance, was intended to physically harm the victim as well as create fear within the African-American community,” said Special Agent in Charge Timothy Waters of the FBI’s Detroit Division. “The FBI and our law enforcement partners will continue to ensure that if a crime is motivated by bias, it will be investigated as a hate crime and the perpetrators will be held responsible for their actions. We encourage anyone who has been the victim of or witness to such a crime to report it to the FBI.”

Mouat will be sentenced at a hearing scheduled for June 24, 2021. He faces a maximum penalty of 10 years in prison, three years of supervised release, and a fine of up to $250,000.

This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Frances Carlson of the Eastern District of Michigan and Trial Attorney Tara Allison of the Civil Rights Division.

The Justice Department announced today that its Civil Rights Division, together with the U.S. Attorney’s Office for the Eastern District of New York, has reached a settlement with Village Realty of Staten Island Ltd. and Denis Donovan, a sales and former rental agent at Village Realty, to resolve a lawsuit filed last year alleging discrimination against African Americans in violation of the Fair Housing Act.

Today’s agreement, which is in the form of a consent decree, must still be approved by the U.S. District Court for the Eastern District of New York. The settlement resolves claims that Donovan discriminated against prospective renters on the basis of race by treating African Americans who inquired about available rental units differently and less favorably than similarly-situated white persons and that Village Realty is legally responsible for Donovan’s alleged discrimination because he was acting as Village Realty’s agent. The lawsuit was based on the results of testing conducted by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices. The department’s complaint alleges that Donovan told African-American testers about fewer rental units than white testers, offered white testers rental discounts and opportunities to inspect units that were not offered to African-American testers, generally offered African-American testers units only in racially mixed neighborhoods while offering white testers units in both overwhelmingly white and racially mixed neighborhoods, and made more encouraging comments to white testers about available rental units.   

 “For 30 years – since its establishment in 1991 – the Fair Housing Testing Program has played a critical role in helping the Justice Department root out discrimination that might otherwise go undetected,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Civil Rights Division. “Today’s settlement reflects the department’s continued commitment to uncover and eliminate discrimination in all forms and to ensure equal access to housing regardless of race.”

“Today’s settlement underscores the importance of making housing equally available to all residents of this district, regardless of race,” said Acting U.S. Attorney Mark J. Lesko of the Eastern District of New York. “This office is committed to ending racial discrimination and to achieving fairness and equality in housing.”

Under the consent decree, the defendants will establish a settlement fund of $15,000 to compensate victims of Donovan’s alleged discriminatory practices and pay a civil penalty of $2,500 to the United States. The agreement prohibits the defendants from engaging in further acts of discrimination and requires them to implement nondiscriminatory standards and procedures, undergo fair housing training, and provide periodic reports to the department.

Individuals who believe they may have experienced discrimination at Village Realty should contact the Justice Department toll-free at 1-800-896-7743 or by email at fairhousing@usdoj.gov. Individuals may be entitled to relief from the settlement fund if they (1) are African-American; (2) visited or called Village Realty to inquire about units available for rent prior to March 31, 2019; and (3) were denied the opportunity to rent a unit or provided untrue or incomplete information about available rental units.

The Justice Department’s Civil Rights Division enforces the federal Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the department’s fair housing enforcement can be found at www.justice.gov/fairhousing.

A federal grand jury in Las Vegas, Nevada, returned an indictment today charging VDA OC LLC (formerly Advantage On Call LLC), a health care staffing company, and Ryan Hee, a former manager of the company, with entering into and engaging in a conspiracy with a competitor to allocate employee nurses and to fix the wages of those nurses, in violation of the Sherman Act.

According to the one-count felony indictment filed today in the U.S. District Court for the District of Nevada, Hee, a resident of Las Vegas, along with a co-conspirator, agreed not to recruit or hire nurses staffed by their respective companies at Clark County School District facilities and to refrain from raising the wages of those nurses. During the alleged conspiracy, from about October 2016 until July 2017, Advantage was one of two primary providers of contract nursing services to the school district and employed Hee as a regional manager in its Las Vegas office. Advantage changed its name to VDA OC LLC after its assets were acquired by another company in July 2017.

“When employers conspire to allocate employees and fix wages, it robs American workers of higher pay and the ability to bargain for better, higher-paying jobs,” said Acting Assistant Attorney General Richard A. Powers of the Department of Justice’s Antitrust Division. “Ensuring that American workers receive the benefits of free and fair competition is a top priority, so we will use every investigative tool at our disposal to investigate these crimes and prosecute perpetrators to the full extent of the law.”

“Our office is committed to investigating and prosecuting employers that harm the livelihood of American workers by conspiring to suppress wages,” said Acting U.S. Attorney Christopher Chiou for the District of Nevada. “Working closely with the Antitrust Division, we will continue protecting the integrity of Nevada’s labor market against illegal wage-fixing and no-poach agreements.”

“The FBI is committed to investigating potential corruption that impedes our economy,” said Assistant Director Calvin Shivers of the FBI Criminal Investigative Division. “The FBI works daily to disrupt illegal activity, like wage-fixing in this case, protecting honest American workers from those who would unfairly enrich themselves. We work hand-in-hand with our partners at the Department of Justice to stop this type of alleged activity and ensure Justice is served.”

A violation of the Sherman Act carries a statutory maximum penalty of 10 years in prison and a $1 million fine for individuals and a maximum penalty of a $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum. 

Today’s announcement is the result of a federal investigation being conducted by the Antitrust Division’s San Francisco Office and the International Corruption Unit of the FBI, with assistance from the U.S. Attorney’s Office for the District of Nevada.

The charges in this case were brought in connection with the Antitrust Division’s ongoing commitment to prosecute anticompetitive conduct affecting American labor markets. Anyone with information on market allocation or price fixing by employers should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

ALBUQUERQUE, N.M. – Tonya Mae Dale, 28, of the Navajo Nation, NM, pleaded guilty in federal court on March 24 to a charge of involuntary manslaughter in Indian Country.

              A grand jury previously returned an indictment against Dale on Sept. 25, 2019.  According to the indictment and other court records, Dale committed the offense in San Juan County on or about June 26, 2019. In her plea, Dale admitted to driving while intoxicated with her children in the vehicle, and her intoxication contributed to her vehicle becoming stuck. The next day Dale decided to leave her vehicle and began walking.  At some point, she decided to leave her children, a baby and a young child, and seek help on her own.  When she returned with assistance to the location she had left her kids, only the baby was still there. The other child had wandered away and was found deceased the next day.

              Dale is currently in custody pending sentencing.  She faces up to eight years in prison.

              The FBI investigated this case with assistance from the Navajo Nation Police Department. Assistant U.S. Attorney Nicholas Marshall is prosecuting the case.

The Justice Department announced today that it has reached a settlement, through a consent decree, with the City of Orlando resolving allegations that the city violated Title VII of the Civil Rights Act of 1964 when it discriminated and retaliated against Dawn Sumter, a female Assistant Fire Chief with the Orlando Fire Department (“Fire Department”).

Title VII is a federal law that prohibits discrimination in employment on the basis of race, color, religion, sex, and national origin and retaliation for engaging in activities protected by Title VII, such as complaining about discrimination. The complaint and consent decree, filed in a federal district court in Orlando, resolve allegations that Assistant Chief Sumter was sexually harassed by the former fire chief and then retaliated against by Fire Department leadership for complaining about the discrimination and harassment that she faced. 

 “Sexual harassment in the workplace is intolerable under any circumstance and is particularly pernicious where the victim is a public servant engaged in protecting fellow members of the community,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “The type of sexual harassment and retaliation allegedly suffered by the assistant fire chief in this case prevents women who work in jobs historically dominated by men from protecting and serving the public on an equal basis. This consent decree reflects the Civil Rights Division’s commitment to ensuring that all workers are entitled to a workplace free from sexual harassment and that no person should fear retaliation for seeking help when harassed.” 

“Protecting the civil rights of our citizens, including public sector employees, remains a paramount priority for the Middle District of Florida,” said Acting U.S. Attorney Karin Hoppmann for the Middle District of Florida. “Sexual harassment and retaliation in the workplace will not be tolerated and the type of discrimination suffered by Assistant Chief Sumter can only be prevented when employers unequivocally promote a workplace free from discrimination.”

The United States’ complaint, filed today in the U.S. District Court for the Middle District of Florida, alleges that Assistant Chief Sumter’s immediate supervisor, the former fire chief, regularly subjected her to sexual harassment in the workplace. After Ms. Sumter filed a charge with the Equal Employment Opportunity Commission (EEOC) complaining about discrimination, the Fire Department began to retaliate against her, according to the complaint filed today. Fire Department leadership, including the former chief and deputy chiefs, took several harassing, retaliatory actions designed to derail Ms. Sumter’s career and prohibit her from advancement within the Fire Department because of her discrimination complaint. 

Under the terms of the consent decree, the City of Orlando will develop and submit to the United States for approval its discrimination and retaliation policies, complaint investigation procedures, and trainings that will be used at the Fire Department.  The consent decree further requires the city to provide training for all Fire Department employees on these policies and provides for future annual training on these subjects. The city will also pay Ms. Sumter $251,500 in compensatory damages and $182,640 in attorney’s fees to her private counsel. 

The EEOC received a charge of sex discrimination and an amended charge of retaliation filed by Ms. Sumter. The EEOC investigated the matter and found reasonable cause to believe that the Fire Department discriminated against and retaliated against its employee. After unsuccessful conciliation efforts, the EEOC referred the matter to the Justice Department.

Today’s agreement is part of the Civil Rights Division’s Sexual Harassment in the Workplace Initiative announced in February 2018. The Initiative is aimed at eradicating sexual harassment in state and local government workplaces. It focuses on litigation, outreach, and development of effective remedial measures to address and prevent future sex discrimination and harassment.

The Civil Rights Division’s Employment Litigation Section brought this case in collaboration with the U.S. Attorney’s Office for the Middle District of Florida. The case was brought by Employment Litigation Section Attorneys Brian McEntire and Ejaz Baluch Jr. and Assistant U.S. Attorney Yohance Pettis of the Middle District of Florida.

The full and fair enforcement of Title VII is a top priority of the Justice Department’s Employment Litigation Section of the Civil Rights Division.  Additional information about the Civil Rights Division and the jurisdiction of the Employment Litigation Section is available on its websites at www.justice.gov/crt/ and https://www.justice.gov/crt/employment-litigation-section. 

The United States has filed a complaint in the U.S. District Court for the Southern District of Florida, Miami Division, seeking to bar two Miami-area tax return preparers from preparing federal income tax returns for others.

The civil complaint was filed against Gerald Vito, James Eleby, and Gerald Vito LLC dba Income Tax Services and alleges that defendants prepared federal income tax returns for numerous Miami-area taxpayers that significantly understated their customers’ tax liabilities. The complaint further alleges that in reporting their customers’ itemized deductions, defendants fabricated or inflated charitable deductions, medical expenses, and employee business expenses. According to the complaint, claiming false or inflated deductions allows a fraudulent tax preparer to underreport the customer’s taxable income and reduce their reported tax liability, which in many cases leads to bogus and fraudulent refund claims. The complaint also alleges that defendants significantly understated their customers’ tax liabilities by reporting false or inflated business losses.

According to the complaint, defendants prepared more than 1,900 tax returns during the 2018 and 2019 calendar years, and each such return, on average, understates the tax the customer owes by thousands of dollars. As a result, the complaint alleges, defendants have likely cost the United States millions of dollars in lost tax revenue. The complaint further alleges that defendants have harmed their customers, who could potentially be required to pay tax deficiencies, interests, and penalties as a result of defendants’ conduct.

Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

A federal grand jury in New Orleans, Louisiana, returned an indictment today charging three Louisiana residents with conspiracy to defraud the IRS. One defendant, Matthew Reck, was additionally charged with making a false statement to federal agents, and the other defendants, Dawn Farrell Ruiz and David Farrell, were charged with aiding in the preparation of false returns.

According to the indictment, from 2011 to at least June 2019, Matthew Reck and Dawn Farrell Ruiz, both of St. Tammany Parish, and David Farrell, of Jefferson Parish, allegedly conspired to defraud the IRS by underreporting their individual compensation and causing to be filed false individual tax returns. Further, Reck and Ruiz allegedly caused to be filed false corporate tax returns, relating to SES Construction Consulting Group (SES) and Global Technical Solutions (Global). Reck co-owned the two construction businesses through at least December 2015, and Farrell worked as a project manager and Ruiz as a bookkeeper for both businesses. The indictment further alleges that Reck, Farrell, and Ruiz paid some workers “off the books” in cash and did not report the workers’ full compensation to the IRS. When federal agents from IRS-Criminal Investigation subsequently interviewed Reck, he allegedly falsely stated that he had no communications with the accountant for SES and Global regarding the preparation of the companies’ corporate tax returns.

The defendants are scheduled for their initial court appearance on April 9, 2021, in the U.S. District Court for the Eastern District of Louisiana. If convicted, they face a maximum penalty of five years in prison on the conspiracy charge. Reck also faces a maximum of five years in prison on the charge of making false statements to federal agents, and Farrell and Ruiz face a maximum of three years in prison on each of the charges of aiding in the preparation of a false tax return. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and the U.S. Attorney’s Office for the Eastern District of Louisiana made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys William Montague and Parker Tobin of the Justice Department’s Tax Division and Assistant U.S. Attorney Nicholas Moses of the Eastern District of Louisiana are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Department of Justice announced an update today on criminal and civil enforcement efforts to combat COVID-19 related fraud, including schemes targeting the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program and Unemployment Insurance (UI) programs.

As of today, the Department of Justice has publicly charged 474 defendants with criminal offenses based on fraud schemes connected to the COVID-19 pandemic. These cases involve attempts to obtain over $569 million from the U.S. government and unsuspecting individuals through fraud and have been brought in 56 federal districts around the country. These cases reflect a degree of reach, coordination, and expertise that is critical for enforcement efforts against COVID-19 related fraud to have a meaningful impact and is also emblematic of the Justice Department’s response to criminal wrongdoing.

“The Department of Justice has led an historic enforcement initiative to detect and disrupt COVID-19 related fraud schemes,” said Attorney General Merrick B. Garland. “The impact of the department’s work to date sends a clear and unmistakable message to those who would exploit a national emergency to steal taxpayer-funded resources from vulnerable individuals and small businesses. We are committed to protecting the American people and the integrity of the critical lifelines provided for them by Congress, and we will continue to respond to this challenge.”

“To anyone thinking of using the global pandemic as an opportunity to scam and steal from hardworking Americans, my advice is simple – don’t,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “No matter where you are or who you are, we will find you and prosecute you to the fullest extent of the law.”

“We will not allow American citizens or the critical benefits programs that have been created to assist them to be preyed upon by those seeking to take advantage of this national emergency,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “We are proud to work with our law enforcement partners to hold wrongdoers accountable and to safeguard taxpayer funds.” 

In March 2020, Congress passed a $2.2 trillion economic relief bill known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. Anticipating the need to protect the integrity of these taxpayer funds and to otherwise protect Americans from fraud related to the COVID-19 pandemic, the Department of Justice immediately stood up multiple efforts dedicated to identifying, investigating, and prosecuting such fraud. Leveraging data analysis capabilities and partnerships developed through its vast experience combatting economic crime and fraud on government programs, the Justice Department’s response to COVID-19 related fraud serves as a model for proactive, high-impact white-collar enforcement, and demonstrates our agility in responding to new and emerging threats. This rapid and nationwide response enabled the Justice Department to quickly ensure accountability for wrongdoing amid a national crisis and sent a forceful message of deterrence during an ongoing crisis. The multifaceted and multi-district approach to enforcement during this national health emergency continues and is expected to yield numerous additional criminal and civil enforcement actions in the coming months.

On criminal matters, the Justice Department’s efforts to combat COVID-19 related fraud schemes have proceeded on numerous fronts, including:

• Paycheck Protection Program (PPP) fraud: Prominent among the department’s efforts have been cases brought by the Criminal Division’s Fraud Section involving at least 120 defendants charged with PPP fraud. The cases involve a range of conduct, from individual business owners who have inflated their payroll expenses to obtain larger loans than they otherwise would have qualified for, to serial fraudsters who revived dormant corporations and purchased shell companies with no actual operations to apply for multiple loans falsely stating they had significant payroll, to organized criminal networks submitting identical loan applications and supporting documents under the names of different companies. Most charged defendants have misappropriated loan proceeds for prohibited purposes, such as the purchase of houses, cars, jewelry, and other luxury items. In one case, U.S. v. Dinesh Sah, in the Northern District of Texas, the defendant applied for 15 different PPP loans to eight different lenders, using 11 different companies, seeking a total of $24.8 million. The defendant obtained approximately $17.3 million and used the proceeds to purchase multiple homes, jewelry, and luxury vehicles. In another case, U.S. v. Richard Ayvazyan, et al., in the Central District of California, eight defendants applied for 142 PPP and EIDL loans seeking over $21 million using stolen and fictitious identities and sham companies, and laundered the proceeds through a web of bank accounts to purchase real estate, securities, and jewelry.
• Economic Injury Disaster Loans (EIDL) fraud: The department has also focused on fraud against the EIDL program, which was designed to provide loans to small businesses, agricultural and non-profit entities. Fraudsters have targeted the program by applying for EIDL advances and loans on behalf of ineligible newly-created, shell, or non-existent businesses, and diverting the funds for illegal purposes. The department has responded, primarily through the efforts of the U.S. Attorney's Office for the District of Colorado and their partners at the U.S. Secret Service, acting swiftly to seize loan proceeds from fraudulent applications, with $580 million seized to date and seizures ongoing. The EIDL Fraud Task Force in Colorado, comprised of personnel from five federal law enforcement agencies and federal prosecutors, is investigating a broad swath of allegedly fraudulently loans and their applicants. It is working to identify individual wrongdoers and networks of fraudsters appropriate for prosecution.
• Unemployment Insurance (UI) fraud: Due to the COVID-19 pandemic, more than $860 billion in federal funds has been appropriated for UI benefits through September 2021. Early investigation and analysis indicate that international organized criminal groups have targeted these funds by using stolen identities to file for UI benefits. Domestic fraudsters, ranging from identity thieves to prison inmates, have also committed UI fraud. In response, the department established the National Unemployment Insurance Fraud Task Force, a prosecutor-led multi-agency task force with representatives from more than eight different federal law enforcement agencies. Additionally, the department is hiring Assistant U.S. Attorneys in multiple U.S. Attorney’s Offices whose focus will be UI fraud prosecutions. Since the start of the pandemic, over 140 defendants have been charged and arrested for federal offenses related to UI fraud. In one case, U.S. v. Leelynn Danielle Chytka, in the Western District of Virginia, a defendant recently pleaded guilty for her role in a scheme that successfully stole more than $499,000 in UI benefits using the identities of individuals ineligible for UI, including a number of prisoners.

Through the department’s International Computer Hacking and Intellectual Property (ICHIP) program, ICHIP advisors have provided assistance and case-based mentoring to foreign counterparts around the globe to help detect, investigate and prosecute fraud related to the pandemic. The ICHIPs have helped counterparts combat cyber-enabled crime (e.g., online fraud) and intellectual property crime, including fraudulent and mislabeled COVID-19 treatments and sales of counterfeit pharmaceuticals. ICHIPs conducted webinars for foreign prosecutors and law enforcement in Asia, Africa, Europe, and South America on how to take down fraudulent COVID-19 websites. These webinars addressed methods for finding the registrar for a particular domain and requesting a voluntary takedown as well as the U.S. legal processes necessary for obtaining a court order that would bind a U.S. registrar. This has resulted in the take down of multiple online COVID-19 scams and significant seizures of counterfeit medicines and medical supplies such as masks, gloves, hand sanitizers and other illicit goods.

The department has also brought actions to combat coronavirus-related fraud schemes targeting American consumers. With scammers around the world attempting to sell fake and unlawful cures, treatments, and personal protective equipment, the department has brought dozens of civil and criminal enforcement actions to safeguard Americans’ health and economic security. The department has prosecuted or secured civil injunctions against dozens of defendants who sold products — including industrial bleach, ozone gas, vitamin supplements, and colloidal silver ointments — using false or unapproved claims about the products’ abilities to prevent or treat COVID-19 infections. The department has also worked to shutter hundreds of fraudulent websites that were facilitating consumer scams, and it has taken scores of actions to disrupt financial networks supporting such scams. The department is also coordinating with numerous agency partners to prevent and deter vaccine-related fraud.

The department is also using numerous civil tools to address fraud in connection with CARES Act programs. For example, in the Eastern District of California, the department obtained the first civil settlement for fraud involving the Paycheck Protection Program, resolving civil claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and the False Claims Act (FCA) against an internet retail company and its president and chief executive officer arising from false statements to federally insured banks to influence those banks to approve, and the SBA to guarantee, a PPP loan. FIRREA allows the government to impose civil penalties for violations of enumerated federal criminal statutes, including those that affect federally-insured financial institutions. The FCA is the government’s primary civil tool to redress false claims for federal funds and property involving a multitude of government operations and functions. The FCA permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Such whistleblower complaints have been on the rise as unscrupulous actors take advantage of vulnerabilities created by the COVID-19 pandemic and the new government programs disbursing federal relief, and whistleblower cases will continue to be an essential source of new leads to help root out the misuse and abuse of taxpayer funds.

Indictments and other criminal charges referenced above are merely allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.   

The unprecedented pace and tempo of these efforts is made possible only through the diligent work of a wide range of Justice Department partners, including the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section, the Civil Division’s Commercial Litigation Branch (Fraud Section) and Consumer Protection Branch, U.S. Attorneys’ Offices throughout the country, and law enforcement partners from the FBI, Department of Labor Office of Inspector General, U.S. Secret Service, IRS-Criminal Investigation, Defense Criminal Investigative Service, Homeland Security Investigations, U.S. Postal Inspection Service, the Offices of Inspectors General from the Small Business Administration, Department of Homeland Security, Social Security Administration, Federal Deposit Insurance Corporation, Department of Health and Human Services, Department of Veterans Affairs, Federal Housing Finance Agency and Federal Reserve Board, Food and Drug Administration’s Office of Criminal Investigations, Treasury Inspector General for Tax Administration, Financial Crimes Enforcement Network,  Special Inspector General for Pandemic Relief, Pandemic Response Accountability Committee, OCDETF Fusion Center and OCDETF’s International Organized Crime Intelligence and Operations Center. 

To learn more about the department’s COVID response, visit: https://www.justice.gov/coronavirus. For further information on the Criminal Division’s enforcement efforts on PPP fraud, including court documents from significant cases, visit the following website: https://www.justice.gov/criminal-fraud/ppp-fraud. For further information on the Civil Division’s enforcement efforts, visit the following website: https://www.justice.gov/civil.

To report a COVID-19-related fraud scheme or suspicious activity, contact the National Center for Disaster Fraud (NCDF) by calling the NCDF Hotline at 1-866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

A New York man pleaded guilty today to illegally removing and disposing of asbestos.

According to court documents, during the summer of 2016, Gunay Yakup, 31, of Newburgh, joined an existing conspiracy to illegally remove asbestos from a former IBM site in Kingston. The facility in question contained over 400,000 square feet of regulated asbestos-containing material (RACM), as well as an additional 6,000 linear feet of RACM pipe wrap. Yakup, who had special asbestos abatement training, was hired as a worker and supervisor by an asbestos abatement company. On the job, he was pressured by other conspirators to expedite the removal of asbestos at the site. Doing so meant that Yakup and his crew violated the Clean Air Act’s “work practice standards,” which address how asbestos can be stripped, bagged, removed, and disposed of with relative safety. Yakup is scheduled to be sentenced on July 27 at 10 a.m. and faces a maximum penalty of five years in prison.

 “Nowadays, it can be no surprise that asbestos is present in older commercial and industrial buildings,” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division. “What is surprising is that criminals still try to deal with that problem in dangerous ways to save a little cash. This prosecution serves to remind everyone of the real, personal risks of cutting those corners.”

“Yakup had the supervisor responsibility to ensure his workers properly removed hazardous asbestos material on this large project yet he knowingly broke the law,” said Special Agent Tyler Amon of the Environmental Protection Agency (EPA)'s Criminal Investigation Division in New York. “Impeding inspectors from discovering the full scale and scope of the illegal conduct is underscored in the serious federal charges plead to today.”

Yakup admitted that he and his co-conspirators removed substantial amounts of RACM from the former IBM site in violation of these work practice standards, oftentimes dry and in a way that produced visible emissions. They also stored bulk quantities of RACM waste on site in open containers. Yakup and his crew were also pressured to do work in areas that were not properly prepped to prevent the release of RACM to the outside air. Upon finding Yakup’s crew working on Aug. 1, 2016, New York State Department of Labor (NYSDOL) inspectors documented bulk quantities of uncontained RACM inside and outside of containment, dry debris, and evidence of sweeping and other dry removal abatement techniques. NYSDOL inspectors then “red-tagged” the site and prohibited further abatement work. 

The site was later deemed to be contaminated by the Environmental Protection Agency (EPA) and other municipal authorities. Cleanup costs associated with asbestos contamination at the site are estimated to be in the millions. Asbestos has been determined to cause lung cancer, asbestosis, and mesothelioma, an invariably fatal disease. The EPA has determined that there is no safe level of exposure to asbestos.

Special agents of the EPA and individuals from the New York Departments of Labor and Environmental Conservation investigated the case.

Todd W. Gleason and Gary N. Donner of the Environment and Natural Resources Division’s Environmental Crimes Section prosecuted the case with the assistance of paralegal Chloe Harris. 

A Texas man was sentenced to 20 months in prison for trafficking protected species and ordered to pay a $2,000 fine and be placed on supervised release for a period of two years after completing his prison term.

Alejandro Carrillo, 62, of El Paso, pleaded guilty on July 9, 2020, to a two-count information charging him with one count of conspiracy to traffic wildlife and one count of smuggling. Carrillo admitted to being part of a conspiracy to smuggle wildlife from the Mexico into the United States via El Paso since May 2016. Carrillo was the middleman between several Mexico-based suppliers of wildlife and their U.S.-based customers. Carrillo’s role as middleman was to pick up wildlife from a co-conspirator in Juarez, Mexico, and transport (smuggle) that wildlife in his car into the United States at an El Paso border crossing. His status as a U.S. citizen with a Secure Electronic Network for Travelers Rapid Inspection card made his transits easy. Once in the United States, Carrillo would ship the wildlife via FedEx or U.S. Postal Service to the U.S.-based customers. On many occasions, animals died during transport.

The sentencing was announced by Acting Assistant Attorney General Jean Williams of the Justice Department’s Environment and Natural Resources Division and Edward Grace, Assistant Director of the U.S. Fish and Wildlife Service (USFWS) Office of Law Enforcement. 

“Trafficking in protected species in violation of U.S. and international law is harmful to the animals and their native habitats,” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division. “The Justice Department remains determined to work with our law enforcement partners to ensure that these endangered animals are protected.”

“Wildlife trafficking is decimating much of the world’s natural resources,” said the USFWS Office of Law Enforcement Assistant Director Edward Grace. “It is paramount to deter and dismantle wildlife traffickers in order to ensure the sustainability of our natural resources, protect against zoonotic diseases from spreading, and so that future generations will be able to benefit from the world’s diverse species of wildlife and plants.”

Between April 2015 and December 2019, Carrillo illegally transported wildlife across the U.S.-Mexico border with a market value of over $3,500,000. Carrillo received a “crossing fee” for each border crossing, the amount of which depended on the number of animals transported, the size of the packages, and, in some cases, the level of risk of being detected by the authorities. In that time period, Carrillo was paid more than $198,000 to transport wildlife across the U.S.-Mexico border.

On Sept. 22, 2016, Carrillo picked up several reptiles from a supplier in Juarez, including a Central American river turtle (Dermatemys mawaii), which is a Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)-protected and endangered species, and transported them across the U.S.-Mexico border to his residence in El Paso. He then re-packaged the animals and sent them to a buyer in Oklahoma. The total value of the shipment was $1,650. Carrillo did not have a CITES import permit for any of the smuggled animals, nor were any permits issued in the name of any of the suppliers. In addition, Carrillo did not submit the necessary import wildlife declaration form to the USFWS.

The USFWS Office of Law Enforcement and the Environment and Natural Resources Division’s Environmental Crimes Section investigated the case.

Trial Attorneys Mary Dee Carraway and Gary Donner of the Environmental Crimes Section prosecuted the case.

A federal grand jury in Detroit, Michigan, returned an indictment yesterday charging a Bloomfield Hills businessman with tax evasion, attempting to obstruct the internal revenue laws, making a false statement, and willful failure to file his own individual income tax return.

According to the indictment, Ryan Richmond owned and operated Relief Choices LLC, a medical marijuana dispensary in Warren. The indictment alleges that from 2011 through at least 2014, Richmond caused Relief Choices to make extensive use of cash to pay business operating expenses and routed customer business credit card payments through an unrelated third-party bank account to conceal his actual business gross receipts from the IRS. In 2015 and 2016, Richmond allegedly made false statements about his control of, profit from, and work responsibilities for Relief Choices to an IRS auditor.

If convicted, Richmond faces a statutory maximum sentence of five years in prison for each count of  tax evasion and false statements, three years in prison for the obstruction of the IRS count, and a maximum sentence of one year in prison for the failure to file a tax return count. Richmond also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Saima S. Moshin for the Eastern District of Michigan made the announcement.

The IRS-Criminal Investigation is investigating the case.

Trial Attorneys Mark McDonald and Sean Green of the Tax Division are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A California man pleaded guilty Wednesday to a multiyear conspiracy to engage in commodities price manipulation.

According to court documents and statements made in court, Emilio Jose Heredia Collado, 49, of Lafayette, was employed as a trader at Company A, an oil trading company, and later at Company B, a multinational commodity trading company, after it had acquired Company A. Between approximately September 2012 and August 2016, Heredia conspired with other employees at Company A, and later at Company B, to manipulate the price of fuel oil bought from, and sold to, a particular counterparty, Company C, through private, bilateral contracts.

“The defendant and his co-conspirators unlawfully manipulated the fuel oil market for their own gain by creating artificial prices that undermined the legitimate forces of supply and demand in one of our nation’s key commodity markets,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “This prosecution demonstrates the department’s commitment to working with our law enforcement partners to identify and prosecute individuals who would seek to manipulate commodities benchmark prices while trading in the open market.”

“Individuals profiteering, through the manipulation of daily price assessments of a valuable commodity, fuel oil, prior to the purchasing or selling of it, goes against the most fundamental concepts of a supply-and-demand market economy,” said Assistant Inspector in Charge Raimundo Marrero of the U.S. Postal Inspection Service Criminal Investigation Group. “These fraudulent practices have no place in the international marketplace. This guilty plea showcases the U.S. Postal Inspection Service’s tenacity to hold individuals accountable for their dishonest actions and the resolve to continue to protect consumers and businesses. To criminals out there, the U.S. Postal Inspection Service and our federal partners will ensure your criminal endeavors are brought to justice.”

Heredia and his co-conspirators sought to unlawfully enrich themselves, Company A, and Company B by increasing profits and reducing costs on the fuel oil contracts with Company C. The price terms of the contracts were set by reference to the daily benchmark price assessment published by S&P Global Platts (Platts) for intermediate fuel oil 380 CST at the Port of Los Angeles (Los Angeles 380 CST Bunker Fuel) on a certain day or days plus or minus a fixed premium. As part of the price manipulation conspiracy, Heredia directed his co-conspirators to submit orders to buy and sell (bids and offers) to Platts during the daily trading “window” for the Platts Los Angeles 380 CST Bunker Fuel price assessment with the intent to artificially push the price assessment up or down.

For example, if Company A or Company B had a contract to buy fuel oil from Company C, Heredia directed his co-conspirators to submit offers during the Platts “window” for the express purpose of pushing down the price assessment and hence the price of fuel oil bought from Company C. The bids and offers were not submitted to Platts for any legitimate economic reason by Heredia’s and his co-conspirators, but rather for the purpose of artificially affecting the Platts Los Angeles 380 CST Bunker Fuel price assessment so that the benchmark price, and hence the price of fuel oil that Company A or Company B bought from, and sold to, Company C, did not reflect legitimate forces of supply and demand.

The U.S. Postal Inspection Service is investigating the case.

Acting Principal Assistant Chief Avi Perry and Trial Attorney Matthew F. Sullivan of the Justice Department’s Fraud Section are prosecuting the case.

The Criminal Division’s Fraud Section plays a pivotal role in the Justice Department's fight against white collar crime around the country and is the national leader in prosecuting fraud and manipulation in the U.S. commodity markets.

Earlier today, U.S. Attorney General Merrick B. Garland met virtually with the Home Affairs Ministers of France, Germany, Italy, Poland, Spain, and the United Kingdom to advance cooperation against transnational crime, terrorism, and malign foreign interference. During the constructive dialogue, leaders discussed enhancing international sharing of law enforcement information, including through INTERPOL, and also addressed particular threats such as online child sexual exploitation and abuse, and trafficking and smuggling of humans. The ministerial was the Attorney General’s first international engagement in office.

U.S. Attorney General Garland was joined by U.S. Department of Homeland Security (DHS) Secretary Alejandro Mayorkas.  The meeting was hosted and chaired by United Kingdom Home Secretary Priti Patel. Other G6 attendees included French Interior Minister Gerald Darmanin, German Interior Minister Horst Seehofer, Italian Interior Minister Luciana Lamorgese, Polish Interior Minister Mariusz Kamiński, Spanish Interior Minister Fernando Grande-Marlaska, EU Vice-President Margaritis Schinas, and EU Commissioner Ylva Johansson.

Attorney General Garland addresses officials of the G6 Countries

 

 

A Montana businessman pleaded guilty today to employment tax fraud.

According to court documents, Thomas O’Connell owned and operated three plumbing businesses, Quality Plumbing and Heating, Orbit Plumbing and Heating, and Orbit PHC, each based in Great Falls. From at least 2005 through 2016, O’Connell did not pay employment taxes for several quarters, despite being obligated to ensure such taxes were paid to the IRS. Instead, he directed payments to other creditors and to his own personal expenses. The total tax loss to the IRS from O’Connell’s conduct is more than $550,000.

O’Connell is scheduled to be sentenced on June 24, 2021, and faces a maximum sentence of five years in prison. He also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Leif M. Johnson for the District of Montana made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorney Mark S. Determan of the Justice Department’s Tax Division and Assistant U.S. Attorney Ryan G. Weldon of the District of Montana are prosecuting the case.

The Department of Justice’s Antitrust Division today issued the 2021 edition of its annual Spring Newsletter. The newsletter highlights the division’s recent activities and successes on civil and criminal enforcement, diversity initiatives, international cooperation, and competition advocacy. The newsletter also includes a message from Acting Assistant Attorney General Richard Powers.

“Thanks to the dedication of the division’s employees, we’ve continued our efforts on behalf of American consumers, workers, and taxpayers despite the crisis posed by COVID-19,” said Acting Assistant Attorney General Richard A. Powers. “As the Acting Assistant Attorney General, it is my privilege to work with the division’s phenomenal staff as we continue our critical work through this transition period. The civil servants who work for the division are deeply invested in promoting competition and making the economy fairer for all Americans. I am grateful to them and intend to make sure that all employees are fully supported and empowered to do their important work and that we remain a process driven organization.”

The newsletter highlights the division’s accomplishments and features profiles of division staff. It can be found at https://www.justice.gov/atr/division-operations/division-update-spring-2021.

The Justice Department announced today that it has reached a settlement with Cumberland County, Tennessee, to resolve allegations that the county discriminated against ten female employees because of their sex in violation of Title VII of the Civil Rights Act of 1964. 

Title VII is a federal statute that prohibits employment discrimination on the basis of race, sex, color, national origin and religion. Under the terms of the settlement, which still must be approved by the court in the form of a consent decree, Cumberland County will pay approximately $1.1 million in compensatory damages to ten women whom the United States alleged were sexually harassed by the former director of the county’s Solid Waste Department. Cumberland County will also revise its policies, procedures, and training to better prevent sexual harassment in the workplace.

“Today’s resolution, through settlement, will bring some measure of closure and vindication to the vulnerable women who were victimized by the egregious and abusive behavior in this case,” said Pamela S. Karlan, Principal Deputy Assistant Attorney General of the Civil Rights Division. “Sexual harassment must not be tolerated in the workplace, and we remain committed to eliminating it root and branch through our vigorous enforcement of Title VII.”

“No individual should have to endure the unwanted sexual advances of another, especially from someone who wields a position of authority over another as alleged here,” said Acting U.S. Attorney Mary Jane Stewart for the Middle District of Tennessee. “We will seek all available remedies to address such unwanted and unlawful conduct and will continue to protect the civil rights of all of our citizens. They deserve nothing less.”

“State and local governments are among our largest employers. It is important that they understand that the federal anti-discrimination laws also apply to them,” said Delner Franklin-Thomas, District Director of the Memphis District of the Equal Employment Opportunity Commission (EEOC). “The egregious sexual harassment that these women were subjected to contravenes Title VII. The EEOC will continue to collaborate with the Justice Department to ensure the protection of our workers in governmental workplaces.”

The Justice Department’s complaint, filed March 8, in the U.S. District Court for the Middle District of Tennessee, alleged, among other things, that Cumberland County failed to take adequate precautions to prevent the former director of the county’s Solid Waste Department from sexually harassing the women. According to the complaint, the former director regularly subjected the women, who all worked for him, to unwanted sexual contact, including kissing and groping; unwelcome sexual advances, including propositioning the women for sexual favors; and offensive sexual remarks about their bodies and sex acts. The former director has been indicted on criminal charges and is awaiting trial in state court. 

Four of the women had filed charges of discrimination with the EEOC. The EEOC’s Nashville Area Office, in its Memphis District, investigated the charges and found reasonable cause to believe Cumberland County discriminated against the four women and other similarly situated employees. After unsuccessful conciliation efforts, the EEOC referred the charges to the Justice Department’s Civil Rights Division. The Justice Department brought this lawsuit as part of a joint effort to enhance collaboration between the Department and the EEOC in the vigorous enforcement of Title VII. 

This lawsuit is part of the Civil Rights Division’s Sexual Harassment in the Workplace Initiative, which is aimed at eradicating sexual harassment in state and local government workplaces. It focuses on litigation, outreach and development of effective remedial measures to address and prevent future sex discrimination and harassment.

This lawsuit was handled by Trial Attorneys Jen Swedish and Julia Quinn of the Civil Rights Division’s Employment Litigation Section and by Assistant U.S. Attorney Kara Sweet of the U.S. Attorney’s Office for the Middle District of Tennessee.

The full and fair enforcement of Title VII is a top priority of the Employment Litigation Section of the Civil Rights Division. Additional information about the Civil Rights Division and the jurisdiction of the Employment Litigation Section is available on its websites at www.justice.gov/crt/ and https://www.justice.gov/crt/employment-litigation-section.

Indian drug manufacturer Fresenius Kabi Oncology Limited (FKOL) was sentenced to pay $50 million in fines and forfeiture after pleading guilty to concealing and destroying records prior to a 2013 U.S. Food and Drug Administration (FDA) plant inspection.

In a criminal information previously filed in federal court in the District of Nevada, the United States charged FKOL with violating the Federal Food, Drug and Cosmetic Act by failing to provide certain records to FDA investigators. As part of a criminal resolution with the Department of Justice, FKOL agreed to plead guilty to the misdemeanor offense. U.S. District Judge Jennifer A. Dorsey accepted the company’s guilty plea and sentenced FKOL to pay a criminal fine of $30 million, forfeit an additional $20 million, and implement a compliance and ethics program designed to prevent, detect, and correct violations of U.S. law relating to FKOL’s manufacture of cancer drugs intended for terminally ill patients. 

“By concealing and destroying drug manufacturing records, FKOL undermined FDA’s regulatory authority and placed vulnerable consumers at risk,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Today’s sentence holds the company accountable for its past conduct and seeks to ensure it will fully comply with its obligations to the FDA going forward.” 

According to court documents, FKOL owned and operated a manufacturing plant in Kalyani, West Bengal, India, that manufactured active pharmaceutical ingredients (APIs) used in various cancer drug products distributed to the United States. Prior to a January 2013 FDA inspection of the Kalyani facility, FKOL plant management directed employees to remove certain records from the premises and delete other records from computers that would have revealed FKOL was manufacturing drug ingredients in contravention of FDA requirements. Kalyani plant employees removed computers, hardcopy documents, and other materials from the plant and deleted spreadsheets that contained evidence of the plant’s noncompliant practices.

“Today’s sentencing reflects our office’s and the department’s commitment to holding accountable companies that disregard FDA regulations, at the risk of consumers’ health and safety,” said Acting U.S. Attorney Christopher Chiou for the District of Nevada. “Together with our agency partners, we will continue to ensure that drug manufacturers fully comply with their obligations to maintain the integrity of records and data.”

“FDA inspections of pharmaceutical manufacturing facilities help ensure the strength, quality and purity of our medicines,” said Judy McMeekin, Pharm.D., Associate Commissioner for Regulatory Affairs of the FDA. “Today’s sentencing proves that we will continue to aggressively investigate and bring to justice those who attempt to subvert requirements that protect the public health.”

The FDA Office of Criminal Investigations, Los Angeles Field Office, investigated the case. The Central Bureau of Investigation in India provided invaluable assistance to U.S. authorities in the investigation of this matter. The Justice Department’s Office of International Affairs provided investigative assistance.

This case was prosecuted by Assistant Director Clint Narver and Trial Attorney Natalie Sanders of the Civil Division’s Consumer Protection Branch, with assistance from Assistant U.S. Attorney Nicholas D. Dickinson of the U.S. Attorney’s Office for the District of Nevada.

An Ecuadorian and Italian national was sentenced today to 51 months in prison for his role in a scheme to launder bribes paid to him in exchange for helping three U.K. reinsurance companies obtain and retain reinsurance business from Ecuador’s public surety company. 

Juan Ribas Domenech, 52, pleaded guilty to one count of conspiracy to commit money laundering on Sept. 16, 2020. According to court documents, between 2013 and 2017, Ribas was the chairman of Seguros Sucre, Ecuador’s state-owned and -controlled surety company and an advisor to the then-president of Ecuador. In those capacities, Ribas had authority over the awarding of Seguros Sucre business. During that time, Ribas accepted approximately $5,036,465 in bribes from his co-conspirators in exchange for using his official position to allow three U.K.-based reinsurance brokers to obtain and retain contracts with Seguros Sucre. These bribe payments were paid through various intermediaries, including two reinsurance introducer companies. A portion of the bribes were laundered through the United States.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Special Agent in Charge Kelly R. Jackson of the IRS-Criminal Investigation (IRS-CI) Washington, D.C. Field Office; Special Agent in Charge Raymond Villanueva of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C. Field Office; and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.

IRS-CI’s and HSI’s Washington, D.C. offices, jointly under the auspices of the Global Illicit Financial Team, and the FBI’s Miami International Corruption Squad investigated the case.

Trial Attorneys Katherine Raut, La’Nese Clarke, and Alexander Kramer of the Justice Department’s Fraud Section prosecuted the case.

The Fraud Section is responsible for investigating and prosecuting all Foreign Corrupt Practices Act (FCPA) matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

A senior member of the Big Hazard street gang was sentenced today to 192 months in federal prison for orchestrating and executing the nighttime firebombing of African-American families at the Ramona Gardens Housing Development in Boyle Heights in 2014 in order to force the residents out of their homes.

Carlos Hernandez, 36, aka “Rider” or “Creeper,” was sentenced by The Honorable U.S. District Judge Christina A. Snyder. During the hearing, Judge Snyder explained that her sentence was intended to “send a message to the community that hate crimes will not be tolerated” and that this was “not a time for any court to tolerate hate crimes.”

Hernandez pleaded guilty in April 2019 to five felony counts: conspiracy to violate civil rights, violent crime in aid of racketeering, criminal interference with fair housing rights, use of fire in the commission of a federal felony, and carrying a firearm in the commission of a crime of violence.

“The defendant planned, coordinated, and led these racially-motivated attacks that targeted vulnerable families, including grandparents and infants, while they were sleeping peacefully in their own homes,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “The Justice Department will continue to prioritize the prosecution of hate-fueled violence.”

“The defendants in this case perpetrated hate crimes that targeted innocent victims in their homes simply because of their skin color,” said Acting U.S. Attorney Tracy Wilkison of the Central District of California. “These despicable acts are simply unacceptable in our society. We are committed to protecting everyone’s civil rights, and anyone who participates in this type of conduct will find that the federal government will marshal all of its resources to ensure they are brought to justice.”

"There is absolutely no place for race-based violence in a civilized society," said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. "Investigators worked diligently to identify Mr. Hernandez as the one who masterminded this crime and arrested Hernandez and others before they could target another innocent victim. The FBI will continue to protect the civil rights of our community by holding responsible anyone so filled with hate that they would attempt to commit murder based on the color of a victim's skin.”

On the evening of May 11, 2014, which was Mother’s Day, Hernandez organized and led seven co-defendants – all members of the Big Hazard street gang – in a plan to firebomb several apartments in the Ramona Gardens housing complex. Hernandez and his co-defendants targeted each of the residences because African-Americans lived there. Hernandez divided the defendants into groups to carry out the fire-bombings, assigned each defendant a specific role within those groups, and provided various defendants with a lighter or hammer to be used in the attacks, as well as masks to conceal their identities. The defendants stashed their cell phones to prevent law enforcement tracking and traveled a predetermined route designed to evade surveillance cameras. Heightening the dangerousness of the attacks, Hernandez armed himself with a semiautomatic handgun.

Once the gang members located the targeted apartments, they smashed the windows of four apartments to allow for cleaner entry of the firebombs to maximize damage. Hernandez and his co-defendants then threw lit Molotov cocktails into the residences. Three of the four targeted apartments were occupied by African American families who were sleeping at the time of the unprovoked attack. A mother who was sleeping with her infant baby on her chest at the time of the attack barely evaded being hit by a firebomb when she rolled off the couch with her baby after hearing a window shatter. A federal task force with numerous federal agencies and local partners was established to investigate the attack, which remained unsolved for two years until prosecutors unsealed the charges in this matter.

Today’s sentencing hearing follows the sentencings of several other defendants in this case: Jose Saucedo, aka “Lil Mo,” 156 months; Josue Garibay, aka “Malo,” 144 months; Jonathan Portillo, aka “Pelon,” 63 months; Francisco Farias, aka “Bones,” 42 months; and Edwin Felix, aka “Boogie,” 92 months.

All of the defendants who participated in the firebombing were charged in 2016 and have pleaded guilty to federal hate crime and related offenses. Those defendants also all admitted that they participated in the firebombing attacks because of the victims’ race and color and with the intent to force the victims to move away from the federally funded housing complex.

The investigation into the firebombing was conducted by agents and detectives with the FBI; the Los Angeles Police Department; the Los Angeles Fire Department; and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

This case is being prosecuted by Assistant U.S. Attorney Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section and Justice Department Special Litigation Counsel Julia Gegenheimer of the Civil Rights Division’s Criminal Section.

For more information and resources on the Department’s efforts to combat hate crimes, visit www.justice.gov/hatecrimes. If you believe you have been a victim of a civil rights violation please visit: https://civilrights.justice.gov/ to file a report.

A Florida medical doctor was sentenced to 63 months in prison after pleading guilty to her role in a scheme to falsify clinical trial data regarding an asthma medication. 

Dr. Yvelice Villaman Bencosme, 64, of Miami, previously pleaded guilty in U.S. District Court for the Southern District of Florida to one count of conspiracy to commit wire fraud related to her work at Unlimited Medical Research in Miami. Bencosme is the second defendant to be sentenced in connection with the scheme. On March 5, 2021, Lisett Raventos, 46, of Miami, was sentenced to 30 months in prison after also pleading guilty to conspiracy to commit wire fraud.

Bencosme was a licensed medical doctor who served as the primary investigator for clinical trials purportedly conducted at Unlimited Medical Research. Raventos was the site director, the director of clinical operations, and a study coordinator at the clinic. In pleading guilty, Bencosme and Raventos admitted that they participated in a scheme to defraud an unnamed pharmaceutical company by fabricating the data and participation of subjects in a clinical trial at Unlimited Medical Research.

The clinical trial was designed to investigate the safety and efficacy of an asthma medication in children between the ages of four and 11. Bencosme and Raventos admitted that they falsified medical records to make it appear as though pediatric subjects made scheduled visits to Unlimited Medical Research, took study drugs as required, and received checks as payment. In sentencing Raventos, U.S. District Judge Beth Bloom said that if the defendants’ actions had been left unchecked, the scheme “could have negatively impacted the treatment and well-being of children with asthma throughout the country.” 

“Falsifying clinical trial data risks the health of those who might later rely on the drugs being tested,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The Department of Justice will continue working with its partners at the Food and Drug Administration to investigate and prosecute anyone who endangers the public for personal gain.” 

“Clinical trials are an essential part of the medical research process, as they ensure the effectiveness and safety to patients of new drugs,” said U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida. “Those who manipulate clinical data risk the public’s health and such criminal behavior will be prosecuted.”

“FDA’s evaluation of a new drug begins with an analysis of reliable and accurate data from clinical trials. Compromised clinical trial data could impact the agency’s decisions about the safety and effectiveness of the drug under review,” said Special Agent in Charge Justin C. Fielder of the Food and Drug Administration (FDA) Office of Criminal Investigations, Miami Field Office. “We will continue to investigate and bring to justice those whose actions may subvert the FDA drug approval process and put the public health at risk.”

Another defendant in the case, Maytee Lledo, pleaded guilty in February 2021 to conspiracy to commit wire fraud. She is scheduled to be sentenced on April 16, 2021, in Miami.

Trial Attorneys Joshua Rothman and Kara M. Traster of the Civil Division’s Consumer Protection Branch are prosecuting the case. The FDA’s Office of Criminal Investigations, Miami Field Office investigated the case and the U.S. Attorney’s Office of the Southern District of Florida has provided critical assistance.

The United States has filed four civil injunction suits in federal court in the U.S. District Court for the Eastern District of Michigan. The suits seek to enjoin a Detroit-area tax preparation franchisor from owning, operating and franchising tax preparation businesses and to prohibit the franchisor, as well as certain others that have agreements to operate using her business’s name, from preparing tax returns for others. The complaints also request that the court require all defendants to disgorge the return preparation fees they obtained by preparing allegedly false and fraudulent tax returns.

The complaint against Jeanisia Allen alleges that she owns, operates, and franchises a tax return preparation business known as “The Tax Experts” through co-defendants First Choice Tax Solutions LLC, The Tax Experts Inc., The Tax Experts LLC, and Top Notch Taxes Inc. The other three complaints allege that Jennifer Sherman, Erica McGowan, Annetta Powell, and Jasmine Powell have each entered into agreements with Jeanisia Allen and her entity, The Tax Experts LLC, to use the name “The Tax Experts.”

Each of the government’s complaints allege that the defendants and their entities prepare and file tax returns to falsely increase their customers’ refunds, and profit through high and often undisclosed preparation fees at the expense of their customers and the U.S. Treasury. The complaints allege that the defendants engaged in misconduct, including falsely claiming the earned income tax credit; fabricating businesses, business income and expenses, resulting in understated tax liabilities; claiming false education credits; and claiming improper filing statuses. The complaints each allege that defendants’ activities have harmed their customers, who now may be liable for sizable penalties and interest.

According to the complaint against Allen, The Tax Experts has operated at least 32 stores, primarily in metro-Detroit, but also in Chicago and Los Angeles. Over the course of three years (2017, 2018, and 2019), businesses operating as “The Tax Experts” allegedly prepared more than 17,000 federal tax returns claiming over $82 million in tax refunds. The complaint alleges that Allen and The Tax Experts failed to train, oversee and control businesses that operate under an agreement to use that name, including failing to review tax returns prepared at franchise stores, resulting in the preparation of false or fraudulent tax returns exhibiting common and widespread false income, expenses, claims, credits and deductions. According to the complaint against Allen, the IRS examined 716 federal tax returns prepared by The Tax Experts, resulting in a total additional tax owed to the United States of $3,552,114, or an average of $5,349.57 for each adjusted return. 

“Particularly during this time of year when honest taxpayers are filing  their returns, we want the public to know that, working with our partners at the IRS, the Justice Department will pursue those who would abuse our nation’s tax laws,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “Fraudulent tax return preparers too often seek to take advantage of their customers and the U.S. Treasury, undermining our tax system.”

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers.  The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronic federal tax forms that can be filled out and filed online for free.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

The Justice Department today announced it has reached a settlement agreement with the Colorado Office of Administrative Courts (OAC) to help people with limited English proficiency (LEP) access timely and competent language assistance in the court system.

The OAC is an administrative court that hears workers’ compensation claims, as well as claims in other critical areas such as civil rights, environmental justice, education, and transportation. The agreement resolves a Justice Department investigation of the OAC under Title VI of the Civil Rights Act of 1964. Title VI prohibits discrimination on the basis of race, color and national origin by recipients of federal assistance, such as the OAC. The Justice Department’s review uncovered concerns with OAC’s Title VI compliance, including a rule that prohibited the OAC from providing qualified interpreters to help limited English proficient individuals understand and participate in their court proceedings.

“For people with limited English proficiency, not getting the language services they need to participate meaningfully in a court proceeding can have truly devastating consequences," said Pamela S. Karlan, Principal Deputy Assistant Attorney General for the Civil Rights Division. "We can’t achieve our nation’s promise of access to justice for all without dismantling language barriers in our judicial system. I commend the OAC’s Chief Judge and leadership for taking action to realize this promise and for their commitment to provide critical services for court users with limited English proficiency.”

“This agreement will result in real help for people who seek justice in Colorado’s administrative court system but who don’t speak English,” said Acting U.S. Attorney for the District of Colorado Matt T. Kirsch. “I appreciate that Colorado’s Office of Administrative Courts recognized an opportunity to work with our office and the Civil Rights Division in crafting an agreement that will benefit communities in Colorado that speak languages other than English.” 

A key aspect of the OAC’s implementation of the settlement will be a revision to its Rule 21, which will now require the OAC to provide qualified interpreters at no cost to LEP individuals in court proceedings. In addition, the OAC has created a language access policy and plan and agreed to provide notice of language assistance services in at least the top eight languages it encounters. The OAC will create and publicize a language access complaint process, and require annual training on LEP issues for judges, staff, and contractors. The strong support and active participation of the OAC’s Chief Judge and Colorado Office of the Attorney General have been key to the swift and cooperative resolution of this matter.

Under the terms of the agreement signed today, the Justice Department will monitor the OAC’s compliance for two years.

The enforcement of Title VI of the Civil Rights Act of 1964 is a top priority of the Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt, and information about limited English proficiency and Title VI is available at www.lep.gov. Members of the public may report possible civil rights violations at https://civilrights.justice.gov/report/.

The United States filed a complaint in the U.S. District Court for the Southern District of Mississippi seeking to bar a Mississippi tax return preparer from owning or operating a tax return preparation business and preparing tax returns for others.

The civil complaint was filed against Terance Price, both individually and doing business as Superior Taxes. It alleges that Price knowingly took unreasonable positions on returns he prepared that led to understatements of the tax customers owed or overstatements of the refunds to which they were entitled to receive. In particular, the complaint alleges that Price prepared returns that claimed residential energy credits, fuel tax credits, or unreimbursed employee business expenses that he knew were false. According to the complaint, the IRS has assessed penalties against Price for failing to comply with due diligence requirements that obligate a tax return preparer to make reasonable inquiries to ensure that a customer is legitimately entitled to various tax credits, including the earned income tax credit. The complaint alleges that Price has not paid the penalties incurred for past violations of those due diligence requirements.

The complaint further alleges that Price filed hundreds of tax returns each filing season since 2015, the year in which he began operating his tax preparation business, and that he has filed tax returns using other tax preparers’ personal identifying information. According to the complaint, the potential tax losses from the returns that Price prepared for tax years 2017 and 2018 could exceed $1 million, and actual losses from his activities could surpass that estimate. In addition, the complaint alleges that Price’s conduct harms his customers, who are responsible for these tax deficiencies and, potentially, interest and penalties.

Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

El Departamento de Justicia anunció hoy que ha llegado a un acuerdo conciliatorio con la Oficina de Tribunales Administrativos de Colorado (OAC, por sus siglas en inglés) para ayudar a las personas con dominio limitado del inglés (LEP, por sus siglas en inglés) a acceder a asistencia lingüística oportuna y competente en el sistema judicial.

La OAC es un tribunal administrativo que atiende las reclamaciones de indemnización laboral, así como las reclamaciones en otras áreas críticas como los derechos civiles, la justicia ambiental, la educación y el transporte. El acuerdo resuelve una investigación del Departamento de Justicia de la OAC bajo el Título VI de la ley de Derechos Civiles de 1964. El Título VI prohíbe la discriminación por motivos de raza, color de piel y origen nacional por parte de las entidades beneficiarias de asistencia federal, como la OAC. La revisión del Departamento de Justicia descubrió inquietudes con el cumplimiento del Título VI de parte de la OAC, incluida una regla que prohibía a la OAC proporcionar intérpretes calificados para ayudar a las personas con dominio limitado del inglés a comprender y participar en sus procedimientos judiciales.

“Para las personas con dominio limitado del inglés, el no recibir los servicios lingüísticos que necesitan para participar de manera significativa en un procedimiento judicial puede tener consecuencias realmente devastadoras. No podemos cumplir la promesa de nuestra Nación de acceso a la justicia para todos sin desmantelar las barreras del idioma en nuestro sistema judicial”, señaló Pamela S. Karlan, fiscal general auxiliar adjunta principal de la División de Derechos Civiles. “Felicito al juez presidente y al liderazgo de la OAC por tomar medidas para cumplir esta promesa y por su compromiso de brindar servicios críticos para los usuarios de los tribunales con un dominio limitado del inglés.”

“Este acuerdo redundará en una ayuda real para las personas que buscan justicia en el sistema de tribunales administrativos de Colorado pero que no hablan inglés”, comentó el fiscal federal interino para el Distrito de Colorado Matt Kirsch. “Agradezco que la Oficina de Tribunales Administrativos de Colorado haya reconocido la oportunidad de trabajar con nuestra oficina y la División de Derechos Civiles en la elaboración de un acuerdo que beneficiará a las comunidades de Colorado que hablan otros idiomas que no son el inglés.” 

Un aspecto clave de la implementación del acuerdo por parte de la OAC será una revisión de su Regla 21, que ahora exigirá que la OAC proporcione intérpretes calificados sin costo para las personas LEP en los procedimientos judiciales. Además, la OAC ha creado una política y un plan de acceso lingüístico, y ha acordado notificar los servicios de asistencia lingüística en al menos los ocho idiomas principales con que se encuentra. La OAC creará y publicará un proceso de quejas de acceso lingüístico y exigirá la capacitación anual sobre cuestiones de LEP para jueces, personal y contratistas. El fuerte apoyo y la participación activa del juez presidente de la OAC y la Fiscalía General de Colorado han sido clave para la resolución rápida y cooperativa de este asunto.

Según los términos del acuerdo firmado hoy, el Departamento de Justicia supervisará el cumplimiento de la OAC durante dos años.

La aplicación del Título VI de la ley de Derechos Civiles de 1964 es una de las principales prioridades de la División de Derechos Civiles. Hay disponible más información sobre la División de Derechos Civiles en su sitio web en https://www.justice.gov/crt-espanol, y la información sobre el dominio limitado del inglés y el Título VI está disponible en www.lep.gov/SPA. Los miembros del público pueden reportar posibles violaciones de los derechos civiles en https://civilrights.justice.gov/report/.

Attorney General Merrick B. Garland today announced that former acting Attorney General Monty Wilkinson has been appointed as the Director of the Executive Office for U.S. Attorneys (EOUSA). Wilkinson previously served as the Director of EOUSA from 2014 until December 2017, and prior to that as its Principal Deputy Director and Chief of Staff.

During his career with the Department of Justice, Mr. Wilkinson has served as Counselor and Deputy Chief of Staff to the Attorney General, as an Associate Deputy Attorney General, and as the Deputy Assistant Attorney General for Human Resources and Administration. He also held senior management positions for nearly a decade in the U.S. Attorney’s Office for the District of Columbia. Mr. Wilkinson started his career at the Department of Justice as a trial attorney in the Criminal Division.

Norman Wong, who has been serving as the Acting Director of EOUSA since January 20, 2021, will return to his position as Principal Deputy Director. “Norm Wong has served at EOUSA with distinction for a number of years and provided exemplary leadership to the U.S. Attorney’s Offices as Acting Director over the past seven weeks,” said Attorney General Garland. “Norm’s commitment to public service is exceptional and I thank him for his service.” 

“I look forward to working with Monty again as I did 25 years ago when I was the Principal Associate Deputy Attorney General,” said Attorney General Garland. “Monty ensured that the Department continued to work and to honor its proud traditions during the leadership transition between new administrations. The Department is fortunate to have Monty back at EOUSA and I am confident he will help continue to build upon our many successes in enforcing our country’s laws, bringing criminals to justice and ensuring equal justice under the law.”

Learn more about EOUSA at https://www.justice.gov/usao.

The United States has filed a complaint in the U.S. District Court for the Northern District of Mississippi seeking to bar a Senatobia, Mississippi, tax return preparer from preparing federal income tax returns for others.

The civil complaint was filed against Kathy R. Moton and alleges that she owns and operates defendant K&M Tax Essentials LLC. According to the complaint, Moton and K&M Tax Essentials prepared and filed hundreds of tax returns from 2018 through 2020. The complaint alleges that defendants prepared returns that claimed false American Opportunity Tax Credits, which provide a tax credit for tuition and expenses for an undergraduate or other recognized education credential. The complaint further alleges that defendants submitted forms to the IRS falsely attesting that they confirmed the taxpayer’s eligibility for the credits, but concealed the fraudulent claims from their customers by omitting forms from the copies of returns provided to those customers. According to the complaint, defendants’ practices resulted in a loss to the IRS of over $1 million.

Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronic federal tax forms that can be filled out and filed online for free.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

 

The United States has filed a complaint in the U.S. District Court for the Eastern District of California seeking to bar a Visalia, California tax return preparer from owning or operating a tax return preparation business and preparing federal income tax returns for others.

The civil complaint was filed against Esther Oregon both individually and doing business as “Mex Tax Service,” which the complaint alleges is a sole proprietorship. The complaint alleges Oregon and Mex Tax Service prepared federal income tax returns for taxpayers that underreported their customers’ federal tax liabilities for the 2017 and 2018 tax years by including, among other things, inflated or false claims for tax credits, itemized deductions, and income or business expense deductions.

According to the complaint, defendants prepared over 3,600 tax returns in aggregate for tax years 2017 and 2018. The complaint alleges that the IRS interviewed certain customers of Oregon and/or Mex Tax Service about their 2017 and 2018 tax returns and calculated, based on those interviews, an average underreporting of $4,120 per return in 2017 and $2,714 per return in 2018. According to the complaint, the estimated total direct harm to the Treasury, based on those calculations, exceeds $6.9 million.

Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers.  The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

A North Carolina man pleaded guilty today to smuggling drugs and other contraband into Caledonia Correctional Institution in exchange for bribe payments.

According to court documents, Kenneth Farr, 47, of Rocky Mount, worked as a correctional officer at Caledonia Correctional Institution, a state prison in Halifax County. On at least six occasions in 2018, Farr used his position to smuggle contraband, including marijuana, tobacco, and what he believed to be oxycodone pills, to inmates in the prison. In exchange for smuggling the contraband, Farr received payments ranging from $300 to $500 in cash or via a mobile application and pocketed at least $2,200 from inmates and their associates. 

Farr pleaded guilty to one count of conspiracy to use a facility in interstate commerce in furtherance of unlawful activity. He is scheduled to be sentenced in mid-June and faces a maximum of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division and Special Agent in Charge Robert R. Wells of the FBI’s Charlotte Field Office made the announcement.

The FBI is investigating the case, with significant assistance from the North Carolina Department of Public Safety.

Trial Attorneys Rebecca M. Schuman and Lauren E. Britsch of the Criminal Division’s Public Integrity Section are prosecuting the case.

Two foreign nationals — one Russian, the other Macedonian — were sentenced today for their role in the Infraud Organization, a transnational cybercrime enterprise engaged in the mass acquisition and sale of fraud-related goods and services, including stolen identities, compromised credit card data, computer malware, and other contraband.

Sergey Medvedev, aka “Stells,” “segmed,” and “serjbear,” 33, of Russia, pleaded guilty in the District of Nevada to one count of racketeering conspiracy in June 2020 and was sentenced today to 10 years in prison. According to court documents, Medvedev was a co-founder of Infraud along with Syvatoslav Bondarenko of Ukraine. From November 2010 until Infraud was taken down by law enforcement in February 2018, Medvedev was an active participant in the Infraud online forum, operating an “escrow” service to facilitate illegal transactions among Infraud members. For several years, Medvedev served as Infraud’s administrator, handling day-to-day management, deciding membership, and meting out discipline to those who violated the enterprise’s rules.

Marko Leopard, aka “Leopardmk,” 31, of North Macedonia, pleaded guilty in the District of Nevada to one count of racketeering conspiracy in November 2019 and was sentenced today to five years in prison. According to court documents, Leopard joined Infraud in June 2011, offering his services as an “abuse immunity” web hoster to Infraud members who wished to create websites to sell contraband. Unlike a legitimate host, Leopard would knowingly cater to websites offering illegal goods and services, ignoring any abuse reports from internet users. He hosted a number of sites for Infraud members in this fashion, providing the infrastructure that allowed his co-conspirators to profit off of their criminal activities.

“Dismantling a cybercrime organization like Infraud requires aggressive pursuit of not only those who steal, sell, and use personal data, but also those who provide the infrastructure that allows cybercrime organizations to operate,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “Today’s sentences should serve as a warning to any web host who willingly looks the other way for a quick buck — and that the United States will hold these bad actors accountable, even when they operate behind a computer screen halfway across the world.”

“While criminal operators lurk in the deepest corners of the internet, they ultimately do not escape the reach of law enforcement,” said Special Agent in Charge Francisco Burrola of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Las Vegas. “We will continue to aggressively investigate, disrupt, and dismantle hidden illegal networks that pose a threat in cyberspace. HSI and our partners are at the forefront of combating cyber financial crimes and illicit activities spread by online criminals looking for financial gain.”

Infraud was a criminal enterprise that existed to enrich its members and associates through a myriad of criminal acts of identity theft and financial fraud. Infraud facilitated the sale of contraband by its members, including counterfeit documents, stolen bank account and credit account information, and stolen personal identifying information. Members and associates of Infraud operated throughout the world and the United States, to include Las Vegas. The enterprise, which boasted over 10,000 members at its peak and operated for more than seven years under the slogan “In Fraud We Trust,” is among the largest ever prosecuted by the Department of Justice.

Infraud was responsible for the sale and/or purchase of over 4 million compromised credit and debit card numbers. The actual loss associated with Infraud was in excess of $568 million USD.

HSI Las Vegas and the Police Department of Henderson, Nevada, investigated the case. The Justice Department’s Office of International Affairs provided significant assistance in securing the defendant’s extradition from Croatia.  

Deputy Chief Kelly Pearson and Trial Attorneys Chad McHenry and Alexander Gottfried of the Justice Department’s Organized Crime and Gang Section prosecuted the case.

A federal grand jury in Fort Lauderdale returned an indictment on Tuesday, March 16, 2021, charging two tax preparers with conspiring to defraud the United States and preparing false tax returns. The defendants made their initial court appearance before U.S. Magistrate Judge Patrick M. Hunt today.

According to the indictment, Nikency Alexis owned and operated Unity Tax & Financial Services, a return preparation business in Broward County.  From 2011 through at least 2016, Alexis and Thony Guillaume, a return preparer at Unity Tax, allegedly conspired to defraud the IRS by preparing returns for clients that fraudulently increased their clients’ tax refunds. The returns allegedly falsely claimed business and education expenses that the clients did not in fact incur. The indictment also charges that Alexis made false statements on his own personal income tax returns.

If convicted, each defendant faces a maximum sentence of five years in prison on the conspiracy charge and three years in prison on each count of preparing false tax returns for their clients.  Alexis also faces a maximum sentence of three years in prison on each count related to his own false tax returns. In addition, the defendants face a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida made the announcement.

Special agents of IRS-Criminal Investigation are investigating the case.

Trial Attorney Lauren Archer of the Tax Division and Assistant U.S. Attorney Deric Zacca are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The U.S. Department of Justice, U.S. Environmental Protection Agency (EPA) and Bureau of Land Management (BLM) announced that they have reached a proposed settlement with John Raftopoulos, Diamond Peak Cattle Company LLC and Rancho Greco Limited LLC (collectively, the defendants) to resolve violations of the Clean Water Act (CWA) and the Federal Land Policy and Management Act (FLPMA) involving unauthorized discharges of dredged or fill material into waters of the United States and trespass on federal public lands in northwest Moffat County, Colorado.

On Oct. 22, 2020, the United States filed suit in federal district court alleging that beginning in approximately 2012, and as recently as approximately 2015, the defendants discharged dredged or fill material into Vermillion Creek and its adjacent wetlands in order to route the creek into a new channel, facilitate agricultural activities and construct a bridge. These alleged unauthorized activities occurred on private land owned by the defendants and on public land managed by BLM, constituting a trespass in violation of the FLPMA. Vermillion Creek and its adjacent wetlands are waters of the United States and may not be filled without a CWA Section 404 permit from the U.S. Army Corps of Engineers (Corps), which was not obtained. EPA develops and interprets the policy, guidance and environmental criteria the Corps uses in evaluating permit applications. 

“This proposed settlement will result in restoration of important waters in the arid west, deter future similar violations of the Clean Water Act and help ensure accountability and a level playing field,” said Acting Assistant Attorney General Jean E. Williams for the Justice Department’s Environment and Natural Resources Division. 

“The U.S. Attorney’s Office and Department of Justice will take all necessary steps to protect our precious waters, wetlands, and wildlife,” said Acting United States Attorney Matt T. Kirsch for the District of Colorado. “Western rivers are a treasure and require protection from all threats, including damage to their vital creeks, streams, and tributaries.”

“Unauthorized dredging and filling of waters of the U.S. will not be tolerated,” said Acting Assistant Administrator Larry Starfield for the EPA’s Office of Enforcement and Compliance Assurance. “With this action, EPA is ensuring the proper restoration of vital creek and wetland resources.”

“This proposed settlement will allow the public lands impacted to begin the process of recovery for the future use and benefit of all the public,” said BLM Colorado State Director Jamie Connell.

The United States’ lawsuit further contended that the defendants’ alleged trespass also included unauthorized irrigation, removal of minerals and destruction of numerous cottonwood trees on federal public land. The fill and related activities on BLM lands were conducted without BLM authorization. The defendants’ trespass actions not only interfered with the public’s right to current enjoyment of federal public lands, but also jeopardized the future health and maintenance of these lands for use by all.

Under a proposed settlement filed in the U.S. District Court for the District of Colorado to resolve the lawsuit, the defendants agreed to: pay a $265,000 civil penalty for CWA violations; pay $78,194 in damages and up to $20,000 in future oversight costs for trespass on public lands managed by BLM; remove the unauthorized bridge constructed on public lands; restore approximately 1.5 miles of Vermillion Creek to its location prior to defendants’ unauthorized construction activities; restore the 8.47 acres of wetlands impacted adjacent to the creek; and plant dozens of cottonwood trees to replace those previously removed from federal lands. Additionally, under the terms of the proposed settlement, the defendants will place a deed restriction on their property to protect the restored creek and wetlands in perpetuity.  

This proposed settlement will repair important environmental resources damaged by the defendants. The portions of Vermillion Creek and its adjacent wetlands impacted by the defendants’ unauthorized activities provided aquatic and wildlife habitat, runoff conveyance and groundwater recharge.  The straightening of Vermillion Creek contributed to erosion of the bed and banks of the stream and detrimental sediment deposition downstream of the channelization. Browns Park National Wildlife Refuge, which provides important habitat for the endangered Colorado pikeminnow, is located at the confluence of Vermillion Creek and the Green River, approximately one mile downstream from the impacted area.  Similarly, the destruction of numerous cottonwood trees located adjacent to the creek eliminated nesting, perching, and roosting habitat for raptor species, including bald eagle, golden eagle and red-tailed hawk. Cottonwood galleries with riparian vegetation also provide nesting habitat for a variety of migratory birds.   

The proposed settlement, which is subject to a 30-day public comment period and final court approval, is available for review at: https://www.justice.gov/enrd/consent-decrees

For more information on the Clean Water Act, visit EPA's compliance web page: http://www.epa.gov/compliance. Help EPA protect our nation's land, air, and water by reporting violations: http://www.epa.gov/tips/

For more information on Section 404 of the Clean Water Act  please visit: https://www.epa.gov/cwa-404/permit-program-under-cwa-section-404.