District Not Recorded

The Department of Justice today announced that it reached a settlement agreement with United General Bakery Inc., or Upper Crust Bakery (UCB), a baked goods supplier located in Phoenix, Arizona. The settlement resolves the Department of Justice’s investigation into whether the company discriminated against authorized workers based on their citizenship status in violation of the Immigration and Nationality Act (INA) when verifying their authorization to work.

“Employers must not request additional, unnecessary work authorization documents from employees based on their citizenship status,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “We look forward to working with Upper Crust Bakery to ensure its compliance in the future.”

The investigation concluded that UCB discriminated against non-U.S. citizen workers by requiring them to present unnecessary and specific immigration documents to prove their work authorization at both initial hire and reverification, even when the workers had other valid, legally acceptable documents proving that they were authorized to work in the United States. The antidiscrimination provision of the INA prohibits employers from making unnecessary requests for documentation to prove work authorization based on a worker’s citizenship status or national origin.

Under the settlement, UCB will pay $45,000 in civil penalties to the United States, train its human resources personnel on the requirements of the INA’s antidiscrimination provision, and be subject to compliance monitoring by the Department of Justice over 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. Among other things, the statute prohibits discrimination against work-authorized individuals based on citizenship status and national origin in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation.

Employers can find information on how to avoid unlawful discrimination based on citizenship status or national origin here. Workers can find information about their rights under the antidiscrimination provision of the INA here. For more information about protections against employment discrimination under the INA, 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); sign up for a free webinar; email IER@usdoj.gov; or visit IER’s English and Spanish websites.  Subscribe to GovDelivery to receive updates from IER.

Applicants or employees who believe they were subjected to discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral for a fee; discrimination in the employment eligibility verification process (Form I-9 and E-Verify) based on their citizenship, immigration status, or national origin; or retaliation can file a charge or contact IER’s worker hotline for assistance.

The Department of Justice today announced a series of settlements to resolve allegations that several California-based mortgage loan modification service providers engaged in national origin discrimination in violation of the federal Fair Housing Act when they targeted Hispanic homeowners for predatory mortgage loan modification services and interfered with those individuals’ ability to keep their homes.

The Settlement Agreements resolve a lawsuit that the Department filed in the U.S. District Court for the Northern District of California.  Among other relief, the agreements establish a restitution fund of more than $148,000 to reimburse the discrimination victims for fees collected by defendants as part of the predatory scheme. The lawsuit arose from complaints filed with the U.S. Department of Housing and Urban Development (HUD) by two of the defendants’ former clients, Eberardo Perez and Roberto Hernandez, who intervened in the lawsuit along with their attorney, Housing & Economic Rights Advocates (HERA), and members of Hernandez’s family.

“The defendants in this case violated federal law and harmed working families when they exploited Hispanic homeowners and targeted them with predatory mortgage services,” said Assistant Attorney General Eric Dreiband of the Department of Justice’s Civil Rights Division. “These settlements reflect the Department’s unwavering commitment to stop such schemes and to ensure that all homeowners can access mortgage services free from discrimination.”

“Hispanic families struggling to stay in the homes they worked hard to purchase need real help, not phony loan services that make a bad situation worse,” said Anna María Farías, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue working with the Justice Department to take action when individuals and companies take advantage of homeowners because of where they come from or because they speak Spanish or other languages.”      

The Department of Justice alleged in its Amended Complaint that in 2009 and 2010 three companies based in Modesto, California – The Home Loan Auditors LLC (THLA), Century Law Center LLC (CLC), and SOE Assistance Center Inc. (SOE) – along with the principals of these entities and a law firm, convinced as many as 400 Hispanic homeowners to pay approximately $5,000 for unnecessary loan audits. The defendants told homeowners that audits were essential for loan modifications, but in fact the audits had no impact on the loan modification process and provided no financial benefit. The Department of Justice also alleged that the defendants, as part of their advertised loan modification service, encouraged their clients to stop making mortgage payments and instructed them to cease contact with their lenders. This advice resulted in many homeowners defaulting on their mortgage payments and ultimately losing their homes.

The three companies named in the lawsuit – THLA, CLC, and SOE – ceased operations several years ago.  As of today, the Justice Department resolved its lawsuit against individuals who owned and operated those companies: Raul Luna, Omar Alcaraz, Hortencia Leon, Oralia Gutierrez, Elena Ramirez, and Araceli Castro. It also resolved its lawsuit against David Spieker, an attorney who worked for the companies on aspects of their scheme. As part of their settlements, the defendants agreed to refrain from engaging in discriminatory conduct. Collectively, the defendants also agreed to contribute more than $148,000 into a restitution fund that will be used to reimburse former clients for fees paid to THLA, CLC, or SOE, with five defendants agreeing to an additional $405,699 in suspended judgments, which would be collected only if they have misrepresented their current financial situations.  

In addition to the restitution fund established in connection with the United States’ claims, HERA, Perez, and Hernandez have reached separate settlement agreements with defendants, which include additional compensation totaling $91,650.

Fighting illegal housing discrimination is a top priority of the Justice Department. The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, email the Justice Department at fairhousing@usdoj.gov or contact HUD at 1-800-669-9777.

WASHINGTON, D.C. – El Departamento de Justicia anunció hoy que ha llegado a un acuerdo con United General Bakery Inc., o Upper Crust Bakery (UCB), un proveedor de productos de panadería ubicado en Phoenix, Arizona. El acuerdo resuelve la investigación del Departamento de Justicia, cuya meta era determinar si la empresa había discriminado a trabajadores autorizados con base en su estatus de ciudadanía, en contra de la ley de Inmigración y Nacionalidad («INA», por sus siglas en inglés), a la hora de verificar su autorización para trabajar.

«Los empleadores no deben pedir que sus empelados entreguen documentos adicionales e innecesarias de autorización para trabajar por motivos del estatus de ciudadanía de ellos», afirma Eric Dreiband, el Fiscal General Auxiliar de la División de Derechos Civiles. «Esperamos colaborar con Upper Crust Bakery para garantizar su cumplimiento en el futuro».

La investigación concluyó que UCB había discriminado a trabajadores que no eran ciudadanos de los EE. UU. al requerir que presentasen documentos migratorios específicos e innecesarios para demostrar su autorización para trabajar, tanto para la contratación inicial como para la reverificación, incluso cuando aquellos trabajadores disponían de otros documentos válidos y legalmente aceptables que probaban que estaban autorizados para trabajar en los Estados Unidos. La disposición antidiscriminatoria de la INA prohíbe que los empleadores realicen solicitudes innecesarias de documentos basadas en el estatus de ciudadanía o la nacionalidad de origen de un trabajador para demostrar su autorización para trabajar.

Conforme al acuerdo, UCB pagará $45,000 en sanciones civiles a los Estados Unidos, capacitará a su personal de recursos humanos en cuanto a los requisitos de la disposición antidiscriminatoria de la INA y se someterá a la supervisión del cumplimiento por el Departamento de Justicia durante un período de dos años.

La Sección de Derechos de Inmigrantes y Empleados («IER», por sus siglas en inglés), de la División de Derechos Civiles, es responsable de hacer cumplir la disposición antidiscriminatoria de la INA. Entre otras cosas, la ley prohíbe que se discrimine a individuos con autorización para trabajar por motivos de su estatus de ciudadanía y nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión; las prácticas documentales injustas; las represalias o la intimidación.

Los empleadores pueden buscar más información aquí sobre cómo evitar la discriminación ilícita por motivos del estatus de ciudadanía o la nacionalidad de origen. Los trabajadores pueden buscar más información aquí sobre sus derechos en virtud de la disposición antidiscriminatoria de la INA. Para más información sobre protecciones al amparo de la INA contra la discriminación en el empleo, llame a la línea directa de la IER para trabajadores al 1-800-255-7688 (1-800-237-2515, TTY para personas con discapacidades auditivas); llame a la línea directa de la IER para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidades auditivas); inscríbase a un seminario en línea gratuito; mande un correo electrónico a IER@usdoj.gov o visite las páginas web de la IER en inglés y español. Inscríbase a GovDelivery para recibir información actualizada de la IER.

Aquellos postulantes o empleados que creen haber sido sometidos a la discriminación por motivos de su ciudadanía, estatus migratorio o nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión; la discriminación en el proceso de verificación de la elegibilidad para trabajar (Formulario I-9 e E-Verify) por motivos de su ciudadanía, estatus migratorio o nacionalidad de origen; o represalias pueden presentar una denuncia o llamar a la línea directa de la IER para trabajadores para pedir ayuda.

WASHINGTON, D.C. – El Departamento de Justicia anunció hoy una serie de acuerdos cuyo objetivo es resolver las alegaciones de que varios proveedores de servicios de modificación de préstamos hipotecarios con sede en California discriminaron a ciertos individuos con base en su origen nacional, en contra de la ley federal de Vivienda Justa, al tener como público objetivo para sus servicios depredadores de modificación de préstamos hipotecarios a propietarios de viviendas hispanos y al interferir en la posibilidad de estos individuos conservar sus viviendas.

El Acuerdo resuelve un pleito que el Departamento presentó ante el Tribunal de Distrito de los EE. UU. para el Distrito Norte de California. Entre otros tipos de compensación, los acuerdos establecen un fondo de restitución de más de 148.000 $ para reembolsar a las víctimas de discriminación por los honorarios cobrados por los demandados como parte del plan depredador. El Pleito es el resultado de las denuncias presentadas ante el Departamento de la Vivienda y Desarrollo Urbano de los EE. UU. (HUD) por dos ex clientes de los demandados, Eberardo Pérez y Roberto Hernández, quienes se intervinieron en el pleito junto con su abogado, Housing & Economic Rights Advocates (HERA) y algunos miembros de la familia de Hernández.

«Los demandados en este caso vulneraron la ley federal y perjudicaron a las familias trabajadoras al explotar a propietarios de viviendas hispanos y tenerlos como público objetivo para sus servicios hipotecarios depredadores», indicó Eric Dreiband, el Fiscal General Auxiliar de la División de Derechos Civiles del Departamento de Justicia. «Estos acuerdos reflejan el compromiso inquebrantable del Departamento a poner fin a tales esquemas y a asegurar que todo propietario pueda acceder a servicios hipotecarios libres de discriminación».

«Las familias hispanas que están luchando por permanecer en las viviendas que trabajaron duro por comprar necesitan una ayuda real y no unos servicios hipotecarios falsos que empeoran una situación que ya de por sí está mal», declaró Anna María Farías, la Secretaria Auxiliar del HUD para la Vivienda Justa y la Igualdad de Oportunidades. «HUD seguirá colaborando con el Departamento de Justicia para tomar medidas contra aquellas personas y empresas que se aprovechen de propietarios de viviendas debido a su lugar de origen o porque hablen español u otros idiomas».

En su Denuncia Enmendada, el Departamento de Justicia alegó que del 2009 al 2010 tres compañías con sede en Modesto, California —The Home Loan Auditors LLC (THLA), Century Law Center LLC (CLC) y SOE Assistance Center Inc. (SOE)— junto con los directores de estas entidades y un bufete de abogados, convencieron a hasta 400 propietarios de viviendas hispanos que pagaran aproximadamente 5.000 $ para auditorías de préstamo innecesarias. Los demandados les dijeron a los propietarios de viviendas que las auditorías eran necesarias para las modificaciones de préstamo, pero en realidad las auditorías no tuvieron ningún impacto sobre el proceso de modificación de préstamo y no ofrecieron ningún beneficio financiero. Asimismo, el Departamento de Justicia alegó que como parte del servicio de modificación de préstamo que anunciaron, los demandados animaron a sus clientes a dejar de realizar pagos hipotecarios y les indicaron que dejaran de comunicarse con sus prestamistas. Estos consejos llevaron a que muchos propietarios de viviendas no pagaran sus hipotecas y que finalmente perdieran sus viviendas.

Las tres compañías nombradas en el pleito —THLA, CLC y SOE— cesaron sus actividades hace varios años. Hasta la fecha, el Departamento de Justicia ha resuelto su pleito contra los individuos que eran dueños y operadores de dichas compañías: Raúl Luna, Omar Alcarez, Hortencia León, Oralia Gutierrez, Elena Ramírez y Araceli Castro. También ha resuelto su pleito contra David Spieker, un abogado que trabajó para las compañías en ciertos aspectos de su esquema. Como parte de los acuerdos, los demandados acordaron abstenerse de conductas discriminatorias. Colectivamente, los demandados también acordaron contribuir más de 148.000 $ a un fondo de restitución que se utilizará para reembolsar a ex clientes por los honorarios pagados a THLA, CLC o SOE, y cinco de los demandados acordaron contribuir otros 405.699 $ por concepto de fallos suspendidos, lo cual solamente se podría cobrar si han hecho representaciones falsas en cuanto a su situación financiera actual.

Además del fondo de restitución establecido en conexión con las alegaciones de los Estados Unidos, HERA, Peréz y Hernández han llegado a acuerdos por aparte con los demandados, los que incluyen una indemnización adicional de 91.650 $.

La lucha contra la discriminación ilícita en la vivienda es de máxima prioridad para el Departamento de Justicia. La ley de Vivienda Justa prohíbe la discriminación en la vivienda por motivos de raza, color de piel, religión, género, estatus familiar, origen nacional y discapacidad. Para más información sobre la División de Derechos Civiles y las leyes que hace cumplir, consulte www.justice.gov/crt-espanol. Aquellos individuos que creen haber sido víctimas de la discriminación en la vivienda pueden llamar al Departamento de Justicia al 1-800-896-7743, enviar un correo electrónico al Departamento de Justicia a fairhousing@usdoj.gov o comunicarse con HUD al 1-800-669-9777.

President Donald Trump today signed into law H.R. 1327, The Never Forget the Heroes: James Zadroga, Ray Pfeifer, and Luis Alvarez Permanent Authorization of the September 11th Victim Compensation Fund (VCF) (VCF Permanent Authorization Act).  The Act extends the VCF’s claim filing deadline from Dec. 18, 2020, to Oct. 1, 2090, and appropriates such funds as may be necessary to pay all approved claims.   

Attorney General William P. Barr noted the Department’s strong support for the VCF and its continuing commitment to providing compensation to those who have suffered as a result of the terrorist attacks of September 11, 2001.  “The VCF is an extraordinarily successful program, having awarded over $5.2 billion in compensation on more than 23,000 claims from individuals who have suffered physical health conditions, or from families of those who have died, as a result of exposure at the sites in New York City, at the Pentagon, and in Shanksville.  With 20,000 claims currently awaiting consideration, and more certain to be filed in the months and years ahead, today’s action ensures that the VCF can continue in its successful effort to compensate every deserving individual impacted by the tragic events of September 11,” said Attorney General Barr.

The VCF’s Special Master Rupa Bhattacharyya, who was appointed to her position by the Attorney General in July 2016, reflected on the significance of today’s signing: “This is a momentous day for the VCF and the 9/11 community, and we are extremely grateful for this show of confidence from Congress and the President.  The entire VCF team is ready and eager to move forward into the next phase of this successful program with renewed energy and a reinvigorated clarity of purpose, and, as always, we remain dedicated to serving the needs of the 9/11 community.” 

In February of this year, the Special Master announced that she had determined that the $7.375 billion of appropriated available funding was insufficient to compensate all pending claims and all claims anticipated to be filed by the previous claim filing deadline of Dec. 18, 2020.  As a result, she implemented reductions to awards to ensure, as required by law, that the VCF did not expend funds beyond its appropriated limit.  With the enactment of the VCF Permanent Authorization Act, the Special Master has determined that the VCF’s funding is now sufficient to pay all pending and projected claims without the need for any continued reductions in awards. 

Under the Act, the VCF is required to issue payments to any claimants who were impacted by the reductions in order to make up the difference between the reduced award that was paid and the unreduced value that would have been awarded had the reductions not been necessary.  The law requires that the VCF issue these payments in the first fiscal year beginning after enactment of the VCF Permanent Authorization Act, which is the government’s fiscal year 2020 beginning on Oct. 1, 2019.  Recognizing the urgent needs of this community, the VCF is committed to beginning this process immediately, taking the steps necessary to notify each of the nearly 1,700 affected individuals of their unreduced award prior to Sept. 11, 2019.  The VCF will begin processing the additional payment immediately following that notification, assuming the VCF has the documentation required to pay the claim. 

“By this year’s anniversary of the September 11, 2001, terrorist attacks, we hope to have begun the payment process on unreduced awards for all previously-reduced claims,” said VCF Special Master Bhattacharyya.  “We look forward to completing that process as quickly as possible so that we can continue the important work of providing needed compensation to those who are suffering.” 

For additional information about the VCF and how to file a claim, and for detailed information about the implementation of the VCF Permanent Authorization Act, please visit the VCF’s website at www.vcf.gov.  If you have any questions about the claim form, the website, or the VCF process, please contact the VCF’s toll-free Helpline at 1-855-885-1555.  

NHK Spring Co. Ltd. (NHK Spring), a Japanese manufacturer of suspension assemblies used in hard disk drives, has agreed to plead guilty for its role in a global conspiracy to fix prices, the Department of Justice announced today.

According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan in Detroit, NHK Spring reached agreements with co-conspirators to refrain from price competition and allocate their respective market shares for suspension assemblies used in hard disk drives.  Pursuant to their agreements not to compete, NHK Spring and its co-conspirators exchanged pricing information including anticipated pricing quotes, which they used to inform their negotiations with U.S. and foreign customers that purchased suspension assemblies and produced hard disk drives for sale in, or delivery to, the U.S. and elsewhere.  NHK Spring participated in the conspiracy from at least as early as May 2008 and continuing until at least April 2016.  Subject to court approval, the company has agreed to plead guilty, to pay a $28.5 million criminal fine, and to cooperate in the ongoing investigation.

“Today’s charge affirms the Antitrust Division’s commitment to eradicate price fixing by companies, foreign or domestic,” said Assistant Attorney General Makan Delrahim of the Antitrust Division.  “While these parts are physically small, they are critical to the operation and performance of electronic devices, and their impact on American consumers and businesses is direct and substantial.” 

“The FBI will aggressively investigate price-fixing schemes to ensure American businesses and consumers are not negatively impacted,” said Assistant Director of the FBI’s Criminal Investigative Division Robert Johnson.  “Our international corruption squads will pursue these cases at home or abroad in order to uncover this type of illegal activity.  No one should underestimate the broad reach of the FBI.”

“Activities related to illegal price-fixing and market allocation do not promote an environment conducive to open competition.  When this occurs, the consumer is not guaranteed the best products at the lowest prices,” said Special Agent in Charge Scott Pierce, U.S. Postal Service Office of Inspector General.  “The U.S. Postal Service spends hundreds of millions of dollars every year on supplies and services related to information technology, including computers and associated hardware.  Along with the Department of Justice and our federal law enforcement partners, the USPS Office of Inspector General will aggressively investigate those who would engage in this type of harmful conduct.”

Suspension assemblies are components of hard disk drives, which are used to store information electronically and are incorporated into computers or sold as stand-alone electronic storage devices.  Hard disk drives use magnetic recording heads to read from and write onto rapidly spinning disks.  Suspension assemblies hold the recording heads in close proximity to the disks and provide the electrical connection from the recording heads to the hard disk drives’ circuitry.

The charge against NHK Spring resulted from an ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Office, the International Corruption Unit of the FBI, and the United States Postal Service Office of Inspector General.  Anyone with information in connection with this investigation is urged to call the Washington Criminal II Section at 202-598-4000, or visit https://www.justice.gov/atr/contact/newcase.html.

Makan Delrahim, Assistant Attorney General in charge of the Department's Antitrust Division, today announced that current Senior Counsel Rene Augustine will serve as Acting Deputy Assistant Attorney General responsible for the Division’s international and policy matters.  Augustine will replace outgoing Deputy Assistant Attorney General Roger Alford, who will return to Notre Dame Law School as a tenured professor of law.

“Rene has distinguished herself in her service as Senior Counsel in the Antitrust Division’s Front Office, overseeing both the Competition Policy and Advocacy section, and the Media, Entertainment and Professional Services section.  Her proven effectiveness, sound judgment, and excellent diplomacy skills make her uniquely qualified for this position,” said Delrahim.

Recently, Augustine represented the Antitrust Division in Seoul, South Korea, alongside the Office of the U.S. Trade Representative (USTR) in the first-ever consultations on competition-related matters pursuant to the U.S. – Korea Free Trade Agreement. 

Augustine has served in all three branches of government and in the private sector.  Prior to coming to the Antitrust Division at the Department of Justice, she was Special Assistant to the President and Senior Associate Counsel to the President.  She also served as Associate Counsel to the President in the George W. Bush Administration.  Previously, Augustine was Senior Counsel to the U.S. Senate Committee on the Judiciary, where she was responsible for Antitrust, Business Rights and Competition issues, and was a lead counsel to the Chairman on passage of legislation increasing the Hart-Scott-Rodino filing threshold and improving the second request process.  Augustine clerked for Judge John Hargrove of the U.S. District Court for the District of Maryland.  In the private sector, Augustine was an attorney at a national law firm, worked at the Neighborhood Legal Services Program, and was an adjunct faculty member at George Mason University Law School.

Augustine earned her bachelor’s degree from Duke University and her J.D. from Vanderbilt University Law School, where she was an editor of the Vanderbilt Law Review, served on the Vanderbilt Moot Court Board, and graduated Order of the Coif. 

The Department of Justice announced today that it and the Attorneys General for five states reached a settlement with T-Mobile and Sprint regarding their proposed merger.  The settlement requires a substantial divestiture package in order to enable a viable facilities-based competitor to enter the market.  Further, the settlement will facilitate the expeditious deployment of multiple high-quality 5G networks for the benefit of American consumers and entrepreneurs.

The Department’s Antitrust Division, along with the offices of five state Attorneys General (Plaintiff States), 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 and the Plaintiff States filed a proposed settlement that, if approved by the court, would resolve the Department’s and the Plaintiff States’ competitive concerns. The participating state Attorneys General offices represent Nebraska, Kansas, Ohio, Oklahoma, and South Dakota.

Under the terms of the proposed settlement, T-Mobile and Sprint must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish Network Corp., a Colorado-based satellite television provider.  The proposed settlement also provides for the divestiture of certain spectrum assets to Dish.  Additionally, T-Mobile and Sprint must make available to Dish at least 20,000 cell sites and hundreds of retail locations.  T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish builds out its own 5G network.

“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “Today’s settlement will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide.  I want to thank our state partners for joining us in this settlement.”  Delrahim added, “In crafting this remedy, we are also mindful of the significant commitments T-Mobile, Sprint, and Dish have made to the Federal Communications Commission.”

The Department and the Plaintiff States said that, without the divestiture, the proposed acquisition would eliminate competition between two of only four facilities-based suppliers of nationwide mobile wireless services.  According to the complaint, T-Mobile and Sprint both operate mobile networks and offer nationwide coverage to consumers, and they are particularly close competitors to each other for the roughly 30% of retail subscribers who purchase prepaid mobile wireless service.  The combination of T-Mobile and Sprint would eliminate head-to-head competition between the companies and threaten the benefits that customers have realized from that competition in the form of lower prices and better service. 

T-Mobile US Inc. is a Delaware corporation headquartered in Bellevue, Washington.  In 2018, T-Mobile posted revenues of more than $43 billion.  Deutsche Telekom AG, a German corporation headquartered in Bonn, Germany, is the controlling shareholder of T-Mobile US Inc. 

Sprint Corporation is a Delaware corporation headquartered in Overland Park, Kansas.  In 2018, its posted revenue was over $32 billion.  Sprint is controlled by SoftBank Group Corp., a Japanese Corporation headquartered in Tokyo, Japan.

As required by the Tunney Act, the proposed consent decree, along with the Department’s competitive impact statement, will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Scott Scheele, Chief, Telecommunications and Broadband Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 7000, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

A Brooklyn, New York, business owner pleaded guilty today in the Eastern District of New York to failing to pay over employment taxes to the Internal Revenue Service (IRS) announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. 

From 2011 through 2014, Michael Jaramillo (Jaramillo), 49, was the president, part owner and sole operator of MT Electric Corp. (MT Electric), a business in Brooklyn.  During this time, Jaramillo cashed business receipt checks at a local check casher and used the cash to pay employees more than $3 million in wages “under the table.”  Jaramillo also filed false employment tax returns, which failed to report the cash wages and the employment taxes due.  Jaramillo admitted that he caused a tax loss of approximately $453,460.

The Honorable Kiyo A. Matsumoto scheduled sentencing for Nov. 21, 2019.  Jaramillo faces a statutory maximum sentence of five years in prison, as well as restitution and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jessica Moran and Kathryn Sparks of the Tax Division, who prosecuted this case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Detloff Marketing and Asset Management Inc. (Detloff Marketing), a real estate company based in Hopkins, Minnesota; its owner, Jeffery J. Detloff; and its accountant, Lori K. Detloff, pleaded guilty today in the U.S. District Court in St. Paul, Minnesota, for their participation in a long-running fraudulent bidding and kickback scheme in connection with foreclosed properties, the Department of Justice announced today.

According to court documents, from September 2007 and continuing until June 2015, Jeffery Detloff, of Minnetonka, Minnesota, conspired to defraud mortgage lenders and guarantors who had hired Detloff, a realtor, to oversee maintenance and repairs on foreclosed homes in the Minneapolis-St. Paul area.  Jeffery Detloff steered maintenance and repair contracts to contractors who would pay a kickback to Detloff Marketing.  Unbeknownst to his customers, Jeffery Detloff and Detloff Marketing included the kickbacks within bids and invoices sent to the lender or guarantor for reimbursement on maintenance and repairs.  Lori Detloff, also of Minnetonka, Minnesota, was an accountant responsible for ensuring the kickbacks were paid by contractors to Detloff Marketing.  In all, Detloff Marketing received over $291,505 in kickbacks. 

“For years, the defendants orchestrated and executed a scheme that allowed them to reap illicit profits from homes in foreclosure,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “These plea agreements demonstrate the Justice Department’s continued commitment, and that of our law enforcement partners, to protect victims, including Fannie Mae and Freddie Mac, from those who subvert competition using false, fraudulent, and sham bids.”

“In this case, the Detloffs abused their power and position with self-serving behavior that essentially increased mortgage costs to customers of the victim lenders,” said Jill Sanborn, Special Agent in Charge of the FBI's Minneapolis Division.  “The FBI works hand in hand with federal prosecutors to root out this type of fraud and hopes this case has a chilling effect on others who may have designs on similar behavior when put in positions of trust by lenders.”

Detloff Marketing and Jeffery Detloff pleaded guilty to Count 1 of the Indictment, which charged a conspiracy to commit mail and wire fraud affecting a financial institution.  Lori Detloff pleaded guilty to aiding and abetting the principal offense described in Count 4 of the indictment, mail fraud affecting a financial institution.  As part of their plea agreements, the Antitrust Division agreed to move to dismiss the remaining counts against Detloff Marketing, Jeffery Detloff, and Lori Detloff upon sentencing. 

This is the second case involving fraud and kickbacks relating to maintenance and repair contracts for foreclosed properties in the Minneapolis-St. Paul area.  The conspiracy and fraud charges carry a maximum penalty of 30 years in prison and a fine of $1,000,000.  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.

In addition to their guilty pleas, the defendants agreed to pay restitution in the amount of $291,505.  The terms of the plea agreements are subject to the approval of the Court. 

The plea agreements announced today are the result of a federal investigation of housing repair contracts in the Minneapolis area.  The investigation is being conducted by the Antitrust Division’s Chicago Office and the FBI’s Minneapolis Division.  Anyone with information on customer allocation, bid rigging, price fixing, or other anticompetitive conduct related to the real estate industry in Minnesota should contact the Antitrust Division’s Chicago Office at 312-984-7200.

A former precious metals trader at the New York offices of a U.S. bank and a Canadian bank pleaded guilty today to attempted price manipulation of precious metals futures contracts, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.

Corey Flaum, 41, of Mount Kisco, New York, pleaded guilty in the Eastern District of New York to an information charging him with one count of attempted commodities price manipulation.  Sentencing is scheduled for Oct. 29, 2019, before U.S. District Judge Brian M. Cogan of the Eastern District of New York, who accepted his plea today.

According to admissions made as part of his plea and other statements made in court, between approximately June 2007 and July 2016, Flaum placed thousands of orders to manipulate the prices of gold, silver, platinum and palladium futures contracts traded on the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by CME Group Inc.  Flaum routinely placed orders for precious metals futures contracts with the intent to cancel those orders before execution.  This trading strategy was intended to deceive other market participants about the existence of supply and demand, and to artificially move the price of precious metals futures contracts in a direction that was favorable to Flaum and the two banks for which he worked.

This case is the result of an ongoing investigation by the FBI’s New York Field Office. Trial Attorneys Avi Perry, Matthew F. Sullivan and Alexander Kramer of the Criminal Division’s Fraud Section are prosecuting the case.  The Commodity Futures Trading Commission’s Division of Enforcement provided assistance in this case.

The defendant is cooperating with the ongoing investigation.

Individuals who believe that they may be a victim in these cases should visit the Fraud Section’s Victim Witness website for more information.

Attorney General William P. Barr has directed the Federal Bureau of Prisons (BOP) to adopt a proposed Addendum to the Federal Execution Protocol—clearing the way for the federal government to resume capital punishment after a nearly two decade lapse, and bringing justice to victims of the most horrific crimes.  The Attorney General has further directed the Acting Director of the BOP, Hugh Hurwitz, to schedule the executions of five death-row inmates convicted of murdering, and in some cases torturing and raping, the most vulnerable in our society—children and the elderly.

“Congress has expressly authorized the death penalty through legislation adopted by the people’s representatives in both houses of Congress and signed by the President,” Attorney General Barr said.  “Under Administrations of both parties, the Department of Justice has sought the death penalty against the worst criminals, including these five murderers, each of whom was convicted by a jury of his peers after a full and fair proceeding.  The Justice Department upholds the rule of law—and we owe it to the victims and their families to carry forward the sentence imposed by our justice system.”

The Federal Execution Protocol Addendum, which closely mirrors protocols utilized by several states, including currently Georgia, Missouri, and Texas, replaces the three-drug procedure previously used in federal executions with a single drug—pentobarbital.  Since 2010, 14 states have used pentobarbital in over 200 executions, and federal courts, including the Supreme Court, have repeatedly upheld the use of pentobarbital in executions as consistent with the Eighth Amendment.

Upon the Attorney General’s direction, Acting Director Hurwitz adopted the Addendum to the Federal Execution Protocol and, in accordance with 28 C.F.R. Part 26, scheduled executions for the following individuals:

• Daniel Lewis Lee, a member of a white supremacist group, murdered a family of three, including an eight-year-old girl. After robbing and shooting the victims with a stun gun, Lee covered their heads with plastic bags, sealed the bags with duct tape, weighed down each victim with rocks, and threw the family of three into the Illinois bayou.  On May 4, 1999, a jury in the U.S. District Court for the Eastern District of Arkansas found Lee guilty of numerous offenses, including three counts of murder in aid of racketeering, and he was sentenced to death.  Lee’s execution is scheduled to occur on Dec. 9, 2019.
• Lezmond Mitchell stabbed to death a 63-year-old grandmother and forced her nine-year-old granddaughter to sit beside her lifeless body for a 30 to 40-mile drive. Mitchell then slit the girl’s throat twice, crushed her head with 20-pound rocks, and severed and buried both victims’ heads and hands.  On May 8, 2003, a jury in the U.S. District Court for the District of Arizona found Mitchell guilty of numerous offenses, including first degree murder, felony murder, and carjacking resulting in murder, and he was sentenced to death.  Mitchell’s execution is scheduled to occur on Dec. 11, 2019.
• Wesley Ira Purkey violently raped and murdered a 16-year-old girl, and then dismembered, burned, and dumped the young girl’s body in a septic pond. He also was convicted in state court for using a claw hammer to bludgeon to death an 80-year-old woman who suffered from polio and walked with a cane.  On Nov. 5, 2003, a jury in the U.S. District Court for the Western District of Missouri found Purkey guilty of kidnapping a child resulting in the child’s death, and he was sentenced to death. Purkey’s execution is scheduled to occur on Dec. 13, 2019.
• Alfred Bourgeois physically and emotionally tortured, sexually molested, and then beat to death his two-and-a-half-year-old daughter. On March 16, 2004, a jury in the U.S. District Court for the Southern District of Texas found Bourgeois guilty of multiple offenses, including murder, and he was sentenced to death.  Bourgeois’ execution is scheduled to occur on Jan. 13, 2020.
• Dustin Lee Honken shot and killed five people—two men who planned to testify against him and a single, working mother and her ten-year-old and six-year-old daughters. On Oct. 14, 2004, a jury in the U.S. District Court for the Northern District of Iowa found Honken guilty of numerous offenses, including five counts of murder during the course of a continuing criminal enterprise, and he was sentenced to death.  Honken’s execution is scheduled to occur on Jan. 15, 2020.

Each of these inmates has exhausted their appellate and post-conviction remedies, and currently no legal impediments prevent their executions, which will take place at U.S. Penitentiary Terre Haute, Indiana.  Additional executions will be scheduled at a later date.

John Riazzi of Dayton, Ohio, pleaded guilty in federal court today to a felony charge stemming from the illegal removal of asbestos-containing roofing material from a building located in downtown Dayton (known as the “Steam Plant”).

According to court documents and statements made in court, in September 2015, Riazzi, the sole owner and operator of St. Peters Partners LLC, purchased the Steam Plant from the City of Dayton for $10. Later, after being told by his contractor that the roof of the Steam Plant contained asbestos and would cost approximately $20,000 to remove, Riazzi hired two men to remove the roofing over a weekend for $5000 – without warning them about the asbestos. Riazzi admitted that he knew, or should have known, that the roof contained asbestos. He also admitted that he did not have the roof inspected for asbestos prior to its removal, as the law required.

“Mr. Riazzi purposefully cut corners and endangered the health of those performing the roof removal. To make matters worse, he then lied to and misled investigators when asked about his wrongdoing” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “The Department of Justice is committing to prosecuting all who deliberately harm the environment and risk public health in order to save money.”

“Renovating old buildings is great. Doing so without regard to air safety is not. And knowingly declining to inspect a roof before removing it, after having been warned that the original materials contained asbestos, is a federal crime,” said U.S. Attorney Benjamin Glassman for the Southern District of Ohio. “This case is a good example of federal and state authorities working together to hold accountable someone who jeopardized his workers’ safety, as well as the quality of the air in Dayton, just to save a few bucks in construction costs.”

As part of his plea, Riazzi also acknowledged that he had personally used a leaf blower to blow roofing debris from the outside of the Steam Plant into the median of Third Street and had dumped a load of roofing material in some bushes opposite the Steam Plant. He likewise admitted to making several false statements to the Regional Air Pollution Control Agency (RAPCA), which was investigating the roof removal.

This investigation was conducted by the U.S. Environmental Protection Agency, Criminal Investigation Division, and the Ohio Attorney General’s Bureau of Criminal Investigations, with the assistance of the Ohio Environmental Protection Agency. The case is being prosecuted by Deputy Criminal Chief Laura Clemmens of the U.S. Attorney’s Office for the Southern District of Ohio, and Adam Cullman, Trial Attorney for the Department of Justice, Environmental Crimes Section.

A former candidate for the U.S. House of Representatives was sentenced today after pleading guilty to wire fraud and willfully violating the Federal Election Campaign Act (FECA) by operating fraudulent and unregistered political action committees.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office made the announcement.

Harold Russell Taub, 30, of Cranston, Rhode Island, was sentenced to serve 36 months in prison followed by three years of supervised release by U.S. District Judge William E. Smith for the District of Rhode Island.  Taub was also ordered to pay $1,102,439 in restitution to the victims of his crimes.

According to Taub’s guilty plea, in late 2016, Taub began soliciting donations to an organization he called Keeping America in Republican Control (KAIRC), which he represented to be a legitimate political committee organized in accordance with federal law to support Republican candidates at the state and federal level.  In March 2018, Taub began soliciting donations to another purported political action committee, Keeping Ohio in Republican Control (KOIRC), with the stated purpose of supporting Republican candidates in Ohio.  Taub collected a total of approximately $1,630,439 in contributions to KAIRC and KOIRC, but never registered either entity with the FEC or made required reports to the FEC, as required by FECA.

Taub admitted as part of the plea that he held KAIRC and KOIRC out as legitimate, federally-registered political actions committees on his website, in social media posts, and in email solicitations that reached hundreds of donors.  Taub represented that all of KAIRC and KOIRC’s staff were volunteers and that “100 percent” of donations were used to support candidates.  However, of the more than $1.6 million in contributions to KAIRC and KOIRC, Taub used more than $1 million for purely personal expenses.  In furtherance of his fraudulent scheme, Taub also repeatedly used the name of a former Ambassador and high-level military officer without the knowledge or permission of the person, even after being instructed not to do so. 

The FBI investigated the case.  Trial Attorney Peter M. Nothstein of the Criminal Division’s Public Integrity Section is prosecuting the case.

An indictment was unsealed today from a federal grand jury sitting in Tampa, Florida, which charges Novita Indah, 48, and Larry Malugin, 51, of Port Richey, Florida, with conspiracy and trafficking in protected wildlife. The indictment charges the couple with smuggling wildlife from Indonesia to the United States and reselling the wildlife from their Florida home.

The U.S. Fish and Wildlife Service (USFWS) seized approximately 369 wildlife articles from their home during the execution of search warrant on Jan. 12, 2017. The agents recovered assorted Javan spitting cobra, reticulated python, and monitor lizard mounts, belts, and wallets, as well as a babirusa skull. A babirusa is a rare Indonesian pig prized for its distinctive curving tusks.

The indictment alleges that beginning in 2011, Indah and Malugin sold wildlife on eBay from their Indonesian home to buyers across the world. They would smuggle the items to purchasers in the United States in packages falsely labeled to conceal their contents. Indah and Malugin continued to sell wildlife after they moved to Puerto Rico and ultimately Florida in 2013. All of the wildlife was protected by an international treaty, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

The United States, Indonesia, and approximately 181 other countries are signatories to CITES, which provides a mechanism for regulating international trade in species whose continued survival is threatened by trade. In addition to the seized wildlife, Indah and Malugin also trafficked in taxidermy mounts and bones of leopard cats, owls, and Southeast Asian primates, including slow loris, macaques, lutungs, and langurs.

“The CITES agreement was created to prevent the international trade of protected wildlife, and the Department of Justice will seek to prosecute individuals who flout this treaty and other important environmental laws,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “The Department commends the actions taken by USFWS and will continue to work with our law enforcement partners to combat illegal wildlife trafficking.”

“The U.S. Fish and Wildlife Service Office of Law Enforcement is committed to combating wildlife trafficking and protecting imperiled species at home and abroad,” said Edward Grace, Assistant Director of the U.S. Fish and Wildlife Service, Office of Law Enforcement. “The increased use of the internet has opened a growing pathway for the illegal wildlife trade and wildlife traffickers go to great lengths to smuggle reptiles, birds, primates, and other species in and out of the U.S. The Service would like to thank the U.S. Department of Justice for their assistance with this case. Together, we can combat wildlife trafficking and protect species across the world.”

From 2011 to 2017, Indah and Malugin made approximately 4,596 online sales of CITES-protected wildlife worth about $211,212. USFWS and Customs inspectors repeatedly seized packages shipped by Indah and Malugin, but they continued to sell wildlife using various eBay and PayPal accounts. This investigation was part of Operation Global Reach, a USFWS long-term taskforce into the flow of illegal wildlife from Indonesia to the United States.

If convicted, Indah and Malugin face a maximum sentence of 20 years’ incarceration on the smuggling charges and five years for the Lacey Act violations. The indictment also seeks to forfeit the wildlife seized from their residence.

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

The USFWS Office of Law Enforcement in Redmond, Washington, led the investigation, with assistance from agents in Tampa. The government is represented by Trial Attorneys Ryan Connors and Matthew Evans of the Environmental Crimes Section.

The Department of Justice, together with the Federal Trade Commission (FTC), today announced a settlement that requires Facebook to implement a comprehensive, multi-faceted set of compliance measures designed to improve user privacy and provide additional protections for user information. The settlement also requires Facebook to pay an unprecedented $5 billion civil penalty — the most ever imposed in an FTC case and among the largest civil penalties ever obtained by the federal government.

In a complaint filed today, the United States alleges that Facebook violated an administrative order issued by the FTC in 2012 by misleading users about the extent to which third-party application developers could access users’ personal information. The complaint further alleges that Facebook violated the Federal Trade Commission Act by deceiving users about their use of this and additional sensitive information.

As reflected in the stipulated order filed with the complaint, Facebook has agreed to settle these allegations by paying a $5 billion civil penalty and implementing robust, new compliance measures that will change how Facebook prioritizes and approaches user privacy issues. These new compliance measures include appointment of an independent assessor to monitor Facebook’s conduct, privacy reviews for all new or modified Facebook products, establishment of a new Independent Privacy Committee on Facebook’s Board of Directors, annual compliance certifications by Facebook CEO Mark Zuckerberg, and various reporting and record-keeping requirements. Under the stipulated order, the Department of Justice and FTC will share responsibility for monitoring and enforcing Facebook’s compliance.

“The Department of Justice is committed to protecting consumer data privacy and ensuring that social media companies like Facebook do not mislead individuals about the use of their personal information,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “This settlement’s historic penalty and compliance terms will benefit American consumers, and the Department expects Facebook to treat its privacy obligations with the utmost seriousness.”

“Despite repeated promises to its millions of world-wide users that they could control how their personal information is shared, Facebook took steps to undermine consumers’ choices,” said FTC Chairman Joe Simons. “The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC.  The relief is designed not only to punish previous violations but, more importantly, to change Facebook’s entire privacy culture to decrease the likelihood of continued violations.  The Commission takes consumer privacy seriously, and will enforce FTC orders to the fullest extent of the law.”

This matter was handled by attorneys in the Civil Division’s Consumer Protection Branch, including Deputy Assistant Attorney General David M. Morrell, Director Gustav W. Eyler, Assistant Director Andrew E. Clark, Senior Litigation Counsel Lisa K. Hsiao, and Trial Attorneys Patrick R. Runkle and Jason Lee, in conjunction with staff at the FTC’s Division of Enforcement.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.

The Department of Justice announced today that Quad/Graphics Inc. and LSC Communications Inc. have abandoned their planned merger. 

The Department filed suit on June 20, 2019, to block the merger, alleging the transaction would combine the only two significant providers of magazine, catalog, and book printing services, denying publishers and retailers throughout the country the benefits of competition that has spurred lower prices, improved quality, and greater printing output.  The case was scheduled for trial in the U.S. District Court in Chicago on Nov. 14, 2019.

“This result is a victory for American consumers and publishers, and a testament to the Division’s resolve to enforce the antitrust laws,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “Had this merger gone forward, it would have harmed competition that benefits publishers, retailers, and, ultimately, consumers through lower prices and greater availability of printed products from popular books to grade school textbooks.”

The magazine, catalog, and book printing services offered by Quad and LSC include the printing, finishing, and distribution of publications to newsstands, retail facilities, or the postal service for delivery to consumers’ homes.  Quad and LSC are by far the most significant integrated printers in the United States and are relied upon by many of the largest publishers and retailers to ensure that high-quality products are printed and distributed on time.

Quad/Graphics Inc. is a Wisconsin corporation headquartered in Sussex, Wisconsin.  It offers a variety of printing services, including magazine, catalog, and book printing services, to publishers across the country.  In 2018, Quad’s revenues were approximately $4.2 billion.

LSC Communications Inc. is a Delaware corporation headquartered in Chicago, Illinois.  In 2016, it was spun off from printing firm R.R. Donnelley.  LSC offers a similar set of magazine, catalog, and book printing services as Quad.  In 2018, LSC’s revenues were approximately $3.8 billion. 

The Department of Justice announced today that the Department’s Antitrust Division is reviewing whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.

The Department’s review will consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online. The Department’s Antitrust Division is conferring with and seeking information from the public, including industry participants who have direct insight into competition in online platforms, as well as others. 

“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Assistant Attorney General Makan Delrahim of the Antitrust Division. “The Department’s antitrust review will explore these important issues.”

The goal of the Department’s review is to assess the competitive conditions in the online marketplace in an objective and fair-minded manner and to ensure Americans have access to free markets in which companies compete on the merits to provide services that users want.  If violations of law are identified, the Department will proceed appropriately to seek redress.

A Palm Beach County, Florida, resident pleaded guilty today in Flint, Michigan, to conspiring to steal from an organization receiving federal funds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. In May 2018, John Capella also pleaded guilty to conspiring to impede the lawful functions of the Internal Revenue Service (IRS) in connection with this scheme.

According to court documents, from August 2012 through May 2018, John Capella and his co-defendants, using the company Blue Horseshoe Consulting Inc. (Blue Horseshoe), obtained police reports, stolen from the Detroit Police Department, which contained automobile crash victim information.  Capella and his co-conspirators used the stolen information to solicit automobile accident victims for medical and chiropractic services. Capella and his co-conspirators also underreported to the IRS gross receipts they received from Blue Horseshoe operations and the total wages Blue Horseshoe paid to its employees.

United States District Court Judge Matthew F. Leitman scheduled sentencing for Capella for Jan. 15, 2020. Capella faces a maximum sentence of five years in prison and a $250,000 fine for each of the two conspiracy counts.  Capella also faces a period of supervised release, restitution and monetary penalties.

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS-Criminal Investigation and the Federal Bureau of Investigation, who conducted the investigation, and Tax Division Trial Attorneys Mark McDonald and William Guappone, who are prosecuting the case.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

The Department of Justice announced today that it has signed an Addendum to a non-prosecution agreement with Banque Bonhôte & Cie SA, Ltd. (Bonhôte) of Neuchâtel Switzerland.  The original non-prosecution agreement was signed on Nov. 3, 2015.  At that time, Bonhôte reported that it held and managed 63 U.S. Related Accounts, with assets under management exceeding $88 million, and paid a penalty of $624,000. In reaching today’s agreement, Bonhôte acknowledges it should have disclosed additional U.S.-related accounts to the Department at the time of the signing of the non-prosecution agreement.

The Swiss Bank Program, announced on Aug. 29, 2013, provided a path for Swiss banks to resolve potential criminal liabilities in the United States relating to offshore banking services provided to United States taxpayers. Swiss banks eligible to enter the program were required to advise the Department that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. As participants in the program, they were required to make a complete disclosure of their cross-border activities, provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers had a direct or indirect interest, cooperate in treaty requests for account information, and provide detailed information about the transfer of funds into and out of U.S.-related accounts, including undeclared accounts, that identifies the sending and receiving banks involved in the transactions.

The Department executed non-prosecution agreements with 80 banks between March 2015 and January 2016.  The Department imposed a total of more than $1.36 billion in Swiss Bank Program penalties.  Pursuant to today’s agreement, Bonhôte will pay an additional sum of $1,200,000 and will provide supplemental information regarding its U.S.-related account population, which now includes eight additional accounts with assets under management of approximately $33 million. 

Every bank that signed a non-prosecution agreement in the Swiss Bank Program represented that it had disclosed all known U.S.-related accounts that were open at each bank between Aug. 1, 2008, and Dec. 31, 2014.  Each bank also represented that during the term of each non-prosecution agreement it would continue to disclose all material information relating to its U.S.-related accounts. Other than the failure to disclose the additional eight U.S.-related accounts, Bonhôte has otherwise fully cooperated with the Department with respect to the bank’s obligations under the non-prosecution agreement and with the additional U.S.-related accounts.  

“The Department of Justice continues to examine the information provided by Swiss banks to the Department and will continue to work closely with our partners at the Internal Revenue Service to ensure that American taxpayers are meeting their reporting and tax obligations with respect to foreign bank accounts,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman, head of the Tax Division.  “We expect banks to fully cooperate with the Department and continue to provide information about U.S. offshore accounts.”

Principal Deputy Assistant Attorney General Zuckerman thanked Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis, and Trial Attorney Kimberle E. Dodd of the Tax Division.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

The Department of Justice today announced three major developments related to the implementation of the First Step Act of 2018 (FSA):

• Over 3,100 federal prison inmates will be released from the Bureau of Prisons’ (BOP) custody as a result of the increase in good conduct time under the Act. In addition, the Act’s retroactive application of the Fair Sentencing Act of 2010 (reducing the disparity between crack cocaine and powder cocaine threshold amounts triggering mandatory minimum sentences) has resulted in 1,691 sentence reductions.
• The prioritization of $75 million in existing resources to fully fund the FSA implementation from the 2019 budget. The Department will continue its work with Congress to ensure additional funding is appropriated for FY2020 and future years.
• The publication of the FSA Risk and Needs Assessment System (RNAS) that will help identify all federal prison inmates who may qualify for pre-release custody by participating in authorized recidivism reduction programming and/or productive activities.

“Our communities are safer when we do a better job of rehabilitating offenders in our custody and preparing them for a successful transition to life after incarceration,” said Attorney General William P. Barr. “The Department is committed to and has been working towards full implementation of the First Step Act, which will help us effectively deploy resources to help reduce risk, recidivism, and crime.”

Implementation Progress, New and Expanded BOP Programs Under FSA

In preparation for the release, the BOP coordinated with US Probation Offices and created individualized release plans for every inmate to ensure a seamless transition.

The Department has taken active steps to implement the FSA:

Compassionate Release.  The BOP updated its policies to reflect the new procedures for inmates to obtain “compassionate release” sentence reductions under 18 U.S.C. Section 3582 and 4205(g). Since the Act was signed into law, 51 requests have been approved, as compared to 34 total in 2018.

Expanded Use of Home Confinement. The FSA authorizes BOP to maximize the use of home confinement for low risk offenders. Currently, there are approximately 2,000 inmates on Home Confinement. The legislation also expands a pilot program for eligible elderly and terminally ill offenders to be transitioned to Home Confinement as part of a pilot program. Since enactment of the law, 201 inmates have qualified to be transitioned under the pilot program.

Drug Treatment. The BOP has always had a robust drug treatment strategy. Offenders with an identified need are provided an individualized treatment plan to address their need. About 16,000 BOP inmates are currently enrolled in drug treatment programs, including the well-regarded Residential Drug Abuse Program (RDAP).

Medication Assisted Treatment (MAT). The FSA requires BOP to assess the availability of and the capacity to treat heroin and opioid abuse through evidence-based programs, including medication-assisted treatment. In the wake of the opioid crisis, this initiative is important to improve reentry outcomes. Every inmate within 15 months of release who might qualify for MAT has been screened.

Effective Re-Entry Programming. FSA implementation includes helping offenders successfully reintegrate into the community – a critical factor in preventing recidivism and, in turn, reducing the number of crime victims. Finding gainful employment is an important part of that process. In furtherance of this goal, the BOP launched a “Ready to Work” initiative to connect private employers with inmates nearing release under the FSA.

Other BOP programs directed towards the full implementation of the FSA include the operation of twenty-one pilot dog programs, the development of a youth mentoring program, the identification of a dyslexia screening tool, and issuance of a new policy for its employees to carry and store personal weapons on BOP institution property. BOP has also updated existing guidance and training concerning the use of restraints on pregnant inmates, as well as verified that existing policies and contracts comply with the FSA requirement to provide sanitary products to female offenders free of charge. BOP also offers de-escalation training to its employees and officers in accordance with the Act. Finally, BOP has updated its mental health awareness training regarding inmates with psychiatric disorders, and more than 31,700 BOP employees have already received the updated training.

Funding For FSA Implementation

Congress has authorized $75 million for each fiscal year from 2019 to 2023 for the Justice Department to implement the First Step Act. The Department has re-directed $75 million in existing funds for FSA implementation from the 2019 budget. The Department will continue its work with Congress to ensure additional funding is appropriated for FY2020 and future years.

Re-directed funds in FY2019 for FSA implementation activities will include:

• Increasing Vocational Training Opportunities: Expands automotive vocational training and programs by providing opportunities for inmates to maintain and repair BOP vehicles and obtain CDL licenses; also expands the existing National Roofing and Paving Program.
• Expanding Education Programs: Updates and expands access to the computer-based Inmate Education Network computer-based courseware.
• Providing Certifications for Vocational Training: Enhances Career Technical Education job readiness services by purchasing both the programs and the industry recognized credentials for occupational and vocational training, such as production technician and mechanic.
• Increasing Volunteers/Partnership Opportunities: Provides resources for institutions to complete required background checks for volunteers and partner organizations.
• Enhancing Medication Assisted Treatment (MAT): Increases expertise and further develops evidence-based protocols in addition to expanding the types of treatment available to inmates.
• Providing English as Second Language (ESL) Workbooks and Textbooks: Enhances English literacy by providing educational services to inmates for are not English- proficient and standardizes teaching materials agency-wide.
• Meeting Needs of the Female Inmate Population: Expands inmate access to existing gender-responsive programs developed specifically to female inmates’ needs.
• Performing Evaluations for Evidence-Based Programs: Facilitates program evaluations of evidence-based programs by external organizations.
• Developing a Needs Assessment System: Provides resources to support a consultative meeting with practitioners who have expertise in needs assessment systems.

The Risk and Needs Assessment Tool – PATTERN

The Attorney General’s publication of a risk and needs assessment system was a key requirement of the FSA, signed into law by President Trump on Dec. 21, 2018. The publication of the RNAS report makes the changes in the law to good conduct time effective.

The RNAS is among several robust measures the Department has taken to implement the FSA, which seeks to reduce risk and recidivism among the prison population and assist inmates’ successful reintegration into society. The new system will be used to assess all federal inmates for risk and identify criminogenic needs that can be addressed by evidence-based programs, such as drug treatment, job training, and education. The system was developed in consultation with the FSA-established Independent Review Committee (IRC), the BOP, the National Institute of Justice (NIJ), the Administrative Office of the U.S. Courts, the National Institute of Corrections, and over two dozen stakeholders groups.

The new tool to be used by the BOP is called the Prisoner Assessment Tool Targeting Estimated Risk and Needs (PATTERN). PATTERN is designed to predict the likelihood of general and violent recidivism for all BOP inmates. As required by the FSA, PATTERN contains static risk factors (e.g. age and crime of conviction) as well as dynamic items (i.e. participation or lack of participation in programs like education or drug treatment) that are associated with either an increase or a reduction in risk of recidivism. The PATTERN assessment tool provides predictive models, or scales, developed and validated for males and females separately.

The PATTERN assessment, modeled specifically for the federal prison population, achieves a higher level of predictability and surpasses what is commonly found for risk assessment tools for correctional populations in the U.S.

The RNAS report will be available on the department’s website later today at www.nij.gov.

The RNAS will be subject to a 45-day study period beginning with the publication of the System. Starting Monday, July 22, the public may send comments to FirstStepAct@ojp.usdoj.gov. This study period allows stakeholders to review and analyze the System. After the study period, NIJ will hold a special listening session on the RNAS in early September.

The G7 Finance Ministers and Central Bank Governors met on July 17-18, 2019 in Chantilly, France.  The United States was represented by Secretary of the Treasury Steven Mnuchin.  One of the items on the agenda was Competition and the Digital Economy.  In preparation for this meeting, Assistant Attorney General Makan Delrahim met on June 5 with his G7 counterparts in Paris, and drafted a Common Understanding of G7 Competition Authorities on Competition and the Digital Economy to inform the discussion in Chantilly.  The Common Understanding was publicly released today.

The Common Understanding acknowledges that competitive markets are key to well-functioning economies and can help unlock the benefits of digital transformation for innovation and growth while safeguarding consumer welfare.  The paper notes that competition law is flexible and can adapt to the challenges the digital economy presents to competition enforcers.  It also states that “[f]or effective enforcement and policy engagement, it is important that competition authorities have the tools and means to deepen their knowledge of new business models and their impact on competition, for example, through market studies or sector inquiries and by adding in-house capabilities to keep current with issues raised by the digital economy.”  The paper recognizes that “…G7 competition authorities will pursue their efforts in this area by continuing their cooperation in existing international fora and group exchanges to deepen their common understanding” and “where considered useful and relevant, the G7 competition authorities will continue to assist G7 on these issues.”

“Digital technologies improve our lives in a myriad of ways, but also present challenges for competition authorities,” said Assistant Attorney General Makan Delrahim.  “I welcome the opportunity to work closely with our G7 counterparts and other competition agencies to address the important issues arising from the digital economy.”

One year ago, the Justice Department announced the formation of Operation Synthetic Opioid Surge (S.O.S.), a program designed to reduce the supply of deadly synthetic opioids in high impact areas as well as identifying wholesale distribution networks and international and domestic suppliers.  

Over the past year, 10 districts with some of the highest drug overdose death rates in the country, each targeted a county where they focused on prosecuting every readily available case involving fentanyl, fentanyl analogues, and other synthetic opioids, regardless of the drug quantity. These districts worked with DEA Special Operations Division to track and coordinate these street-level cases and also received additional assistance from the Organized Crime and Drug Enforcement Task Forces (OCDETF).

“Our attorneys and law enforcement agents have spent the past year working tirelessly to disrupt the networks engaged in the trafficking of synthetic opioids. Today we are proud to share their successes in 10 of the districts most affected by this scourge,” Deputy Attorney General Jeffrey A. Rosen said. “The Department of Justice’s efforts have resulted in countless successes from California to Maine. We have successfully sought enhanced sentences in cases that resulted in deadly overdoses, and we have boosted cooperation among the partners involved. There remains much work to be done, but Operation S.O.S. marks a crucial turning point in the fight against synthetic opioids.”

The 10 participating districts and some of their successes are listed below:

• The Eastern District of California has reported a total of 27 Operation S.O.S. investigations in which the narcotics seized have included kilogram-quantities of fentanyl, heroin, cocaine, methamphetamine, oxycodone, and hydrocodone.
• The Eastern District of Kentucky has reported 15 investigations with six to eight new investigations being added monthly and has charged nine sentence-enhanced “death resulting” cases.
• The District of Maine has an additional 30 cases as a result of Operation S.O.S.
• The District of New Hampshire has had 41 cases through Operation S.O.S. that have resulted in indictments with fentanyl being distributed in 39 of those cases amongst other drugs.
• The Northern District of Ohio has indicted 71 defendants under Operation S.O.S., and has seen a 12 percent decrease in overdose deaths from the previous year.
• The Southern District of Ohio has 58 Operation S.O.S. investigations of the 58 investigations, 52 involve fentanyl distribution.
• The Western District of Pennsylvania noticed the decline in overdose deaths in the county they originally had targeted. This decline was attributed to a large number of people moving out of the targeted county to attempt to circumvent the U.S. Attorney’s Office’s efforts.  The U.S. Attorney’s Office has refocused their resources to target the county where fatal overdoses have increased the most.
• The Eastern District of Tennessee has reported seven Operation S.O.S. cases involving 39 defendants, with a number of those including “death resulting” cases.
• The Northern District of West Virginia has 22 Operation S.O.S. cases with one “death resulting” prosecution. One of these investigations resulted in eight separate cases involving 35 defendants.
• The Southern District of West Virginia has 62 cases pending as a result of Operation S.O.S. with 13 convictions. Just recently, a 1.2 kilogram mixture of fentanyl and heroin was seized from a defendant in one of those cases.

A federal court in Miami, Florida, permanently barred Georgina Gonzalez and GeorginagonzalezLLC, Ideal Tax Pros LLC, and Trinity Tax Service LLC, from preparing federal tax returns for others and owning or operating a tax preparation business, the Justice Department announced today. The court also ordered that Gonzalez and Trinity Tax Service LLC disgorge $48,214.30, representing the ill-gotten gains that they received for the preparation of tax returns making false claims. 

The government’s complaint alleged that the defendants prepared tax returns that included fraudulent claims for the Earned Income Tax Credit (EITC) based on fabricated income or business expenses. The complaint further alleged that defendants prepared returns for some customers that reported bogus “Household Help” work income, and returns claiming phony business loss deductions so as to falsely maximize their customers’ claim to the EITC. The complaint also alleged that defendants falsely claimed education credits on the tax returns of customers who did not attend college and had no qualifying education expenses.

The court’s disgorgement determination is based on ill-gotten gains stemming from tax returns filed in 2018 that falsely claimed either “Household Help” income, self-employed business income or expenses, or the EITC.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2019 and taxpayers seeking a return preparer should remain vigilant. The IRS has information on its website about selecting a return preparer and has launched a free directory of federal tax preparers.

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.

Tomorrow, a joint Interim Final Rule (IFR) issued by the Departments of Justice and Homeland Security will publish in the Federal Register.

This IFR uses the authority delegated by Congress in section 208(b)(2)(C) of the Immigration and Nationality Act to enhance the integrity of the asylum process by placing further restrictions or limitations on eligibility for aliens who seek asylum in the United States. Specifically, the Departments of Justice and Homeland Security are revising 8 C.F.R. § 208.13(c) and 8 C.F.R. § 1208.13(c) to add a new bar to eligibility for asylum for an alien who enters or attempts to enter the United States across the southern border, but who did not apply for protection from persecution or torture where it was available in at least one third country outside the alien’s country of citizenship, nationality, or last lawful habitual residence through which he or she transited en route to the United States.

Attorney General William P. Barr issued the following statement:

 “This Rule is a lawful exercise of authority provided by Congress to restrict eligibility for asylum. The United States is a generous country but is being completely overwhelmed by the burdens associated with apprehending and processing hundreds of thousands of aliens along the southern border. This Rule will decrease forum shopping by economic migrants and those who seek to exploit our asylum system to obtain entry to the United States—while ensuring that no one is removed from the United States who is more likely than not to be tortured or persecuted on account of a protected ground.”

The bar is subject to three limited exceptions, including:

(1) an alien who demonstrates that he or she applied for protection from persecution or torture in at least one of the countries through which the alien transited en route to the United States, and the alien received a final judgment denying the alien protection in such country;

(2) an alien who demonstrates that he or she satisfies the definition of “victim of a severe form of trafficking in persons” provided in 8 C.F.R. § 214.11; or,

(3) an alien who has transited en route to the United States through only a country or countries that were not parties to the 1951 Convention relating to the Status of Refugees, the 1967 Protocol, or the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment.

Asylum is a discretionary benefit offered by the United States Government to those fleeing persecution on account of race, religion, nationality, membership in a particular social group, or political opinion.

Department of Homeland Security Acting Secretary Kevin K. McAleenan issued the following statement:

"While the recent supplemental funding was absolutely vital to helping confront the crisis, the truth is that it will not be enough without targeted changes to the legal framework of our immigration system. Until Congress can act, this interim rule will help reduce a major 'pull' factor driving irregular migration to the United States and enable DHS and DOJ to more quickly and efficiently process cases originating from the southern border, leading to fewer individuals transiting through Mexico on a dangerous journey. Ultimately, today's action will reduce the overwhelming burdens on our domestic system caused by asylum-seekers failing to seek urgent protection in the first available country, economic migrants lacking a legitimate fear of persecution, and the transnational criminal organizations, traffickers, and smugglers exploiting our system for profits.”

The United States has experienced a dramatic increase in the number of aliens encountered along or near the southern land border with Mexico.  This increase corresponds with a sharp increase in the number, and percentage, of aliens claiming fear of persecution or torture when apprehended or encountered by DHS.  The number of cases referred to DOJ for proceedings before an immigration judge has also risen exponentially, more than tripling between 2013 and 2018.  These numbers are projected to continue to increase throughout the remainder of Fiscal Year 2019 and beyond. 

Only a small minority of these individuals, however, are ultimately granted asylum.  The large number of meritless asylum claims places an extraordinary strain on the nation’s immigration system, undermines many of the humanitarian purposes of asylum, has exacerbated the humanitarian crisis of human smuggling, and adversely impacts the United States’ ongoing diplomatic negotiations with foreign countries.  This rule mitigates the strain on the country’s immigration system by more efficiently identifying aliens who are misusing the asylum system to enter and remain in the United States rather than legitimately seeking urgent protection from persecution or torture. 

The IFR is immediately effective upon publication and can be found here.

A Boca Raton, Florida, resident pleaded guilty today in Flint, Michigan, to conspiring to impede the lawful functions of the Internal Revenue Service (IRS) and conspiring to steal from an organization receiving federal funds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

According to court documents, from January 2013 through December 2017, Scott Jawetz and his co-defendants executed a scheme, using the company Blue Horseshoe Consulting Inc. (Blue Horseshoe), to obtain police reports, stolen from the Detroit Police Department, which contained automobile crash victim information. Jawetz and his co-conspirators used the stolen information to solicit automobile accident victims for medical and chiropractic services. Jawetz and his co-conspirators also underreported to the IRS gross receipts they received from Blue Horseshoe business operations and the total wages Blue Horseshoe paid to its employees.

United States District Court Judge Matthew F. Leitman scheduled sentencing for Jawetz for Jan. 15, 2020. Jawetz faces a maximum sentence of five years in prison and a $250,000 fine on each of the two conspiracy counts. Jawetz also faces a period of supervised release, restitution, and monetary penalties.

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS-Criminal Investigation and the Federal Bureau of Investigation, who conducted the investigation, and Tax Division Trial Attorneys Mark McDonald and William Guappone, who are prosecuting the case.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

Global consumer goods conglomerate Reckitt Benckiser Group plc (RB Group) has agreed to pay $1.4 billion to resolve its potential criminal and civil liability related to a federal investigation of the marketing of the opioid addiction treatment drug Suboxone. The resolution – the largest recovery by the United States in a case concerning an opioid drug – includes the forfeiture of proceeds totaling $647 million, civil settlements with the federal government and the states totaling $700 million, and an administrative resolution with the Federal Trade Commission for $50 million.

Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment. Suboxone and its active ingredient, buprenorphine, are powerful and addictive opioids. 

“The opioid epidemic continues to be a serious crisis for our nation, and I’m proud of the work the Department of Justice and our partners are doing to address this epidemic,” said Principal Deputy Associate Attorney General Claire Murray.

 “We are confronting the deadliest drug crisis in our nation’s history. Opioid withdrawal is difficult, painful, and sometimes dangerous; people struggling to overcome addiction face challenges that can often seem insurmountable,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Drug manufacturers marketing products to help opioid addicts are expected to do so honestly and responsibly.”

Resolution of the Criminal Investigation

Until December 2014, RB Group’s wholly owned subsidiary, Indivior Inc. (then known as Reckitt Benckiser Pharmaceuticals Inc.) marketed and sold Suboxone throughout the United States. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. On April 9, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone. The United States’ criminal trial against Indivior is scheduled to begin on May 11, 2020, in the United States District Court in Abingdon, Virginia. Indivior is presumed innocent until proven guilty.

To resolve its potential criminal liability stemming from the conduct alleged in the indictment of Indivior, RB Group has executed a non-prosecution agreement that requires the company to forfeit $647 million of proceeds it received from Indivior and not to manufacture, market, or sell Schedule I, II, or III controlled substances in the United States for three years. In addition, RB Group has agreed to cooperate fully with all investigations and prosecutions by the Department of Justice related, in any way, to Suboxone.

“Today’s announcement demonstrates that this office will work tirelessly to address all facets of the opioid epidemic,” First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia said. “This historic resolution is the product of a continued partnership with the Virginia Medicaid Fraud Control Unit, FDA, HHS, and the U.S. Postal Service.”

“This is a landmark moment in our fight to hold drug companies responsible for their role in the opioid crisis,” said Virginia Attorney General Mark Herring. “We will not allow anyone to put profits over people, or to exacerbate or exploit the opioid crisis for their own benefit. The Virginia Medicaid Fraud Control Unit’s expertise, capacity, and diligent investigation, combined with strong relationships with local, state, and federal partners, helped make this resolution possible.”

“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one the FDA’s highest priorities,” said Acting FDA Commissioner Ned Sharpless, M.D. “Providing misleading information about product benefits puts the public at risk. We also are particularly concerned with schemes to game the drug approval process to prevent generic competition for important medicines. The FDA, including criminal investigators in our Office of Regulatory Affairs and the lawyers in our Office of Chief Counsel, will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”

“The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact our special agents at www.uspsoig.gov or 888-USPS-OIG.”

According to the indictment, Indivior—including during the time when it was a subsidiary of RB Group—promoted the film version of Suboxone (Suboxone Film) to physicians, pharmacists, Medicaid administrators, and others across the country as less-divertible and less-abusable and safer around children, families, and communities than other buprenorphine drugs, even though such claims have never been established.

The indictment further alleges that Indivior touted its “Here to Help” internet and telephone program as a resource for opioid-addicted patients. Instead, however, Indivior used the program, in part, to connect patients to doctors it knew were prescribing Suboxone and other opioids to more patients than allowed by federal law, at high doses, and in a careless and clinically unwarranted manner.

The indictment also alleges that, to further its scheme, Indivior announced a “discontinuance” of its tablet form of Suboxone based on supposed “concerns regarding pediatric exposure” to tablets, despite Indivior executives’ knowledge that the primary reason for the discontinuance was to delay the Food and Drug Administration’s approval of generic tablet forms of the drug.

The indictment alleges Indivior’s scheme was highly successful, fraudulently converting thousands of opioid-addicted patients over to Suboxone Film and causing state Medicaid programs to expand and maintain coverage of Suboxone Film at substantial cost to the government.

The Civil Settlement

Under the civil settlement, RB Group has agreed to pay a total of $700 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $700 million settlement amount includes $500 million to the federal government and up to $200 million to states that opt to participate in the agreement. The claims settled by the civil agreement are allegations only and there has been no determination of liability.

The civil settlement addresses allegations by the United States that, from 2010 through 2014, RB Group directly or through its subsidiaries knowingly: (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions without any counseling or psychosocial support and for uses that were unsafe, ineffective, and medically unnecessary and that were often diverted for uses that lacked a legitimate medical purpose; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone in order to improperly control pricing of Suboxone, including pricing to federal healthcare programs.

“With the nation continuing to battle the opioid crisis, the availability of quality addiction treatment options is critical. When treatment medications are used, it is essential they be prescribed carefully, legally, and based on accurate information, to protect the health and safety of patients in federal healthcare programs,” said Gary L. Cantrell, Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services. “Along with our federal and state law enforcement partners we will continue working to protect these vulnerable beneficiaries.”

“Opioid manufacturers – like all drug manufacturers – have a duty to market their products both truthfully and safely,” said Craig Carpenito, U.S. Attorney for New Jersey. “Opioid manufacturers have an additional and critically important duty to maintain effective controls to prevent their highly dangerous products from being abused and diverted.”

“The opioid crisis has caused devastation throughout the country, including in the lives of Federal employees, annuitants, and their families,” said Thomas W. South, Deputy Assistant Inspector General for Investigations for the Office of Personnel Management. “The OPM OIG is committed to working with the Department of Justice and our other law enforcement partners to combat this epidemic. As always, patient safety is our number one priority.”

The civil settlement resolves the claims against RB Group in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.

FTC Resolution

Under a separate agreement with the Federal Trade Commission (FTC), RB Group has agreed to pay $50 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC is filing a complaint in the United States District Court for the Western District of Virginia alleging anticompetitive activities by RB Group designed to impede competition from generic equivalents of Suboxone. RB Group no longer manufactures or markets drug products. As part of a consent decree, RB Group agreed that it would notify the FTC if it began marketing drug products in the United States. RB Group further agreed that if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. RB Group further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.

“Buprenorphine products are approved for use in the treatment of Americans struggling to overcome opioid addiction, and, in the middle of the nation’s opioid crisis, RB Group allegedly sought to deny those consumers a lower-cost generic alternative to maintain its lucrative monopoly on the branded drug,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition.

A Multilateral Effort

The criminal resolution with RB Group was handled by the U.S. Attorney’s Office for the Western District of Virginia and the Department of Justice’s Consumer Protection Branch based on an investigation by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General. The civil settlement was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Virginia, and the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.

          A Japanese fishing company, Fukuichi Gyogyo Kabushiki Kaisha (“Fukuichi”), was convicted and sentenced today in the District of Guam for two violations of the Act to Prevent Pollution from Ships and one count of obstruction of an agency proceeding.

          The charges stemmed from discharges of waste oil and oily bilge water from the F/V Fukuichi Maru No. 112 (“the vessel”) into international waters and the attempt to cover up those discharges when the vessel was inspected by the U.S. Coast Guard in Apra Harbor, Guam. The charges also included failing to properly document the discharge of fishing gear and plastics from the vessel, and obstructing a Coast Guard Port State Control inspection.

          “When Fukuichi broke the law when they intentionally discharged oily bilge waste into the ocean. To make matters worse, they tried to cover up their unlawful acts by obstructing the routine Coast Guard inspection, said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “The Department will continue to work with its partners to ensure that companies, both foreign and domestic, comply with the rule of law.”

          U.S. Attorney Shawn N. Anderson stated, “Fukuichi’s fishing vessel plied the waters of the Western Pacific for decades in disregard of basic environmental precautions. It would have continued to do so but for the United States asserting jurisdiction in this criminal prosecution. Our waters and reefs are worthy of protection through punitive enforcement action. We will target any companies or persons who engage in similar unlawful conduct.”

          Fukuichi pleaded guilty to one count of obstruction of an agency proceeding, and two counts of violating the Act to Prevent Pollution from Ships. The company was ordered to pay a $1.5 million criminal fine and serve a five-year term of probation, during which vessels owned and/or operated by the company will be banned from entering the Exclusive Economic Zone, Territorial Sea, or a port or terminal belonging to the United States without prior approval. Fukuichi will also be required to implement a comprehensive Environmental Compliance Plan (ECP) that includes vessel audits. The ECP and associated audits must be sent to the nearest U.S. Coast Guard Captain of the Port prior to any of the company’s vessels entering U.S. waters or a U.S. port. The COTP will have the discretion whether to allow such entry based upon the company’s compliance with international and domestic laws governing pollution and safety.

          Fukuichi was the owner and operator of the vessel, which conducted fishing operations throughout the Pacific Ocean. The vessel entered Apra Harbor, Guam, on April 1, 2019, for repairs to its cargo refrigeration system. Members of the U.S. Coast Guard boarded the vessel and discovered fifteen pollution and safety deficiencies and detained the vessel. The inspectors discovered numerous leaks of water and oil into the bilges, and asked the Chief Engineer to demonstrate operation of the Oil Water Separator (OWS). The Chief Engineer was unable to demonstrate how to operate the OWS and the inspectors determined the OWS had not been used. According to court documents, the Chief Engineer confessed that the practice on the vessel was to discharge waste oil and oily bilge water directly into the ocean using an emergency bilge pump system and buckets. The inspectors discovered these systems coated with heavy oil. The inspectors examined the vessel’s Oil Record Book, which, oddly, was a single volume that spanned thirty years. The inspectors discovered two hundred and thirty-three incorrect or false entries in the ORB. Later during the inspection, the inspector discovered that the Chief Engineer obstructed their proceeding by erasing forty-two of the fraudulent or incorrect entries and replacing them with new information. The inspectors also examined the vessel’s Garbage Record Book (GRB) and discovered that it contained a series of “ditto” marks instead of the signature of the officer in charge of managing the garbage. The inspectors determined based on crew interviews that animal carcasses and fishing gear, which included plastic, had been discharged from the vessel and not recorded in the GRB.

          “I want to highlight the diligent work of the marine investigators who first identified these issues and worked closely with the vessel crew and the Department of Justice for several months to bring it to a conclusion," said Capt. Christopher Chase, Captain of the Port Coast Guard Sector Guam. "Marine pollution prevention and response is a cooperative effort requiring the support of many partner agencies in order to hold those who violate international and U.S. law accountable for their actions. The preservation of the ecosystem here and throughout the Pacific is a top priority for the Coast Guard, and this case is one example of how we complete that mission.”

          “This exceptional collaborative effort continues to deter maritime organizations from these types of devastating illegal practices that threaten to destroy our natural living marine resources as well as level the playing field for the many responsible companies who obey the laws and regulations created to protect these finite resources,” said Coast Guard Special Agent-in-Charge Kelly Hoyle.

          The case was investigated by U.S. Coast Guard Marine Safety Unit Guam, with assistance from the Coast Guard Investigative Service. The prosecution was handled by Senior Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the U.S. Department of Justice and Assistant United States Attorneys Mikel Schwab and Marivic David of the District of Guam.

A Japanese fishing company, Fukuichi Gyogyo Kabushiki Kaisha (Fukuichi), was convicted and sentenced today in the District of Guam for two violations of the Act to Prevent Pollution from Ships and one count of obstruction of an agency proceeding.

The charges stemmed from discharges of waste oil and oily bilge water from the F/V Fukuichi Maru No. 112 (the vessel) into international waters and the attempt to cover up those discharges when the vessel was inspected by the U.S. Coast Guard in Apra Harbor, Guam. The charges also included failing to properly document the discharge of fishing gear and plastics from the vessel, and obstructing a Coast Guard Port State Control inspection.

“Fukuichi broke the law when the company intentionally discharged oily bilge waste into the ocean. To make matters worse, Fukuichi tried to cover up their unlawful acts by obstructing the routine Coast Guard inspection,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “The Department will continue to work with its partners to ensure that companies, both foreign and domestic, comply with the rule of law.”

U.S. Attorney Shawn N. Anderson stated, “Fukuichi’s fishing vessel plied the waters of the Western Pacific for decades in disregard of basic environmental precautions. It would have continued to do so but for the United States asserting jurisdiction in this criminal prosecution. Our waters and reefs are worthy of protection through punitive enforcement action. We will target any companies or persons who engage in similar unlawful conduct.”

Fukuichi pleaded guilty to one count of obstruction of an agency proceeding, and two counts of violating the Act to Prevent Pollution from Ships. The company was ordered to pay a $1.5 million criminal fine and serve a five-year term of probation, during which vessels owned and/or operated by the company will be banned from entering the Exclusive Economic Zone, Territorial Sea, or a port or terminal belonging to the United States without prior approval. Fukuichi will also be required to implement a comprehensive Environmental Compliance Plan (ECP) that includes vessel audits. The ECP and associated audits must be sent to the nearest U.S. Coast Guard Captain of the Port prior to any of the company’s vessels entering U.S. waters or a U.S. port. The COTP will have the discretion whether to allow such entry based upon the company’s compliance with international and domestic laws governing pollution and safety.

Fukuichi was the owner and operator of the vessel, which conducted fishing operations throughout the Pacific Ocean. The vessel entered Apra Harbor, Guam, on April 1, 2019, for repairs to its cargo refrigeration system. According to court documents, members of the U.S. Coast Guard boarded the vessel and discovered fifteen pollution and safety deficiencies and detained the vessel. The inspectors discovered numerous leaks of water and oil into the bilges and the Chief Engineer confessed that the practice on the vessel was to discharge waste oil and oily bilge water directly into the ocean using an emergency bilge pump system and buckets. The inspectors discovered these systems coated with heavy oil. The inspectors examined the vessel’s Oil Record Book and discovered two hundred and thirty-three incorrect or false entries. Later during the inspection, the inspector discovered that the Chief Engineer obstructed their proceeding by erasing forty-two of the fraudulent or incorrect entries and replacing them with new information. The inspectors also examined the vessel’s Garbage Record Book (GRB) and discovered that it contained a series of “ditto” marks instead of the signature of the officer in charge of managing the garbage. The inspectors determined based on crew interviews that animal carcasses and fishing gear, which included plastic, had been discharged from the vessel and not record in the GRB. 

“I want to highlight the diligent work of the marine investigators who first identified these issues and worked closely with the vessel crew and the Department of Justice for several months to bring it to a conclusion," said Capt. Christopher Chase, Captain of the Port Coast Guard Sector Guam. "Marine pollution prevention and response is a cooperative effort requiring the support of many partner agencies in order to hold those who violate international and U.S. law accountable for their actions. The preservation of the ecosystem here and throughout the Pacific is a top priority for the Coast Guard, and this case is one example of how we complete that mission.” 

“This exceptional collaborative effort continues to deter maritime organizations from these types of devastating illegal practices that threaten to destroy our natural living marine resources as well as level the playing field for the many responsible companies who obey the laws and regulations created to protect these finite resources,” said Coast Guard Special Agent-in-Charge Kelly Hoyle.

The case was investigated by U.S. Coast Guard Marine Safety Unit Guam, with assistance from the Coast Guard Investigative Service. The prosecution was handled by Senior Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the U.S. Department of Justice and Assistant United States Attorneys Mikel Schwab and Marivic David of the District of Guam.

The U.S. Department of Justice announced today a new tool giving tribal governments the ability to directly input data and gain access to the FBI’s National Sex Offender Registry (NSOR) using the Tribe and Territory Sex Offender Registry System (TTSORS).  The system connection will be available to all tribal governments already participating in the Tribal Access Program (TAP), which allows information sharing between tribal and federal government criminal information systems.

TTSORS is a no-cost registry system provided by the Justice Department’s Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART).  The Department’s Office of the Chief Information Officer (OCIO) developed the connections which allows tribes to seamlessly submit new and updated sex offender information directly from TTSORS to NSOR. 

“The Department of Justice is dedicated to addressing the public safety crisis in American Indian and Alaska Native communities, including the high rates of sexual violence against women and children,” said Attorney General William P. Barr.  “Providing a direct connection to the FBI National Sex Offender Registry gives tribal law enforcement the information they need to investigate and prevent these heinous offenses.”

American Indian and Alaska Native people suffer persistently high rates of victimization, including from sexual assault. According to a 2016 study funded by the National Institute of Justice, more than four in five American Indian and Alaska Native adults have experienced some form of violence in their lifetime, and more than half of all American Indian and Alaska Native women have experienced violence from an intimate partner.  In June, the department extended a deadline for tribes to apply for up to $167 million in federal funds through August 16, 2019, to support crime victims throughout Indian country.

“The direct connection between the National Sex Offender Registry and Tribe and Territory Sex Offender Registry System provides increased resources for identifying, tracking, and sharing information about persons convicted of committing these crimes,” said Gwendena L. Gatewood, Chairwoman of the White Mountain Apache Tribe of the Fort Apache Indian Reservation.  “It will also allow for further improvements in providing a safer community for all involved to integrate tribal law, custom, tradition and practices in a comprehensive fashion consistent with holding offenders accountable.”

“Standing Rock has always had a priority of ensuring public safety,” said Mike Faith, Chairman of the Standing Rock Sioux Tribe.  “Technological advances to our systems ensure that our SORNA staff are able to input offender information and get back in the field while ensuring compliance is maintained.”

The Sex Offender Registration and Notification Act, Title I of the Adam Walsh Child Protection and Safety Act of 2006, requires that, when an offender initially registers or updates his or her information in a jurisdiction, that the state, tribe, territory or District of Columbia must submit immediately the information to NSOR as well as other jurisdictions where the offender has to register. TTSORS is a fully functioning registry system that complies with SORNA requirements. TTSORS was created to assist the Indian tribes that have elected to implement SORNA.

Since 2015, the SMART Office, OCIO, the FBI, the Office of Tribal Justice, Community Oriented Policing Services and the Office for Victims of Crime, have worked together to develop the Tribal Access Program to provide tribes direct access to national crime information systems for both criminal and non-criminal justice purposes. This includes the ability to directly enter NSOR data and enhance the capacity to collect and submit fingerprints and palm prints to the FBI. TAP has been instrumental in assisting tribes with ongoing implementation of SORNA. In fiscal year 2019, the department expanded TAP to 25 more tribes, for a total of 72 participating tribes.

During remarks today, Assistant Attorney General Makan Delrahim announced the Antitrust Division’s new policy for incentivizing antitrust compliance. For the first time, the Division will consider compliance at the charging stage in criminal antitrust investigations, a change which is reflected in the Justice Manual. The Division also announced revisions to its Manual and published a document to guide prosecutors’ evaluation of corporate compliance programs at the charging and sentencing stage.

“The Antitrust Division is committed to rewarding corporate efforts to invest in and instill a culture of compliance,” said Assistant Attorney General Delrahim. “The Division’s Leniency Policy has long provided the ultimate credit for effective antitrust compliance programs. Beyond leniency, recently we have credited prospective compliance efforts at sentencing. Crediting compliance at charging is the next step in our continued efforts to deter antitrust violations and reward good corporate citizenship. We also remain dedicated to predictability and transparency. As such, in concert with today’s policy changes, the Division issued a public guidance document that outlines what prosecutors look for when evaluating antitrust compliance programs.”

The Justice Manual previously explained the Antitrust Division’s policy “that credit should not be given at the charging stage for a compliance program.” That text has been deleted.

The Division also updated its Manual. The revisions address evaluating compliance programs at the charging and sentencing stage, and Division processes for recommending indictments, plea agreements, and selecting monitors.

For the first time, the Division also published a guidance document that focuses on evaluating compliance programs in the context of criminal violations of the Sherman Act. It is intended to assist Division prosecutors in their evaluation of compliance programs at both the charging and sentencing stage of investigations, and to provide compliance officers and the public greater transparency of the Division’s compliance analysis. To that end, it contains two sections: the first relates to evaluating antitrust compliance programs at the charging stage, and the second addresses compliance considerations at sentencing.

A former U.S. government contractor pleaded guilty today to making counterfeit training certificates for individuals seeking employment on government contracts in Afghanistan.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko, Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office, Director Frank Robey of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit and Assistant Director Robert Johnson of the FBI’s Criminal Investigative Division made the announcement.

Antonio Jones, 40, of Yorktown, Virginia, pleaded guilty to one count of making false statements before U.S. District Judge Donald C. Coggins of the District of South Carolina.  Sentencing has not yet been scheduled.

As part of his guilty plea, Jones admitted to making and/or causing to have made false Department of Transportation hazardous material (HAZMAT) training certificates to help an individual get a job handling HAZMAT in Afghanistan.  A South Carolina-based contractor accepted the fake HAZMAT certificate as proof that Jones’s client had attended a training course prescribed by federal regulation and was otherwise suitable for employment when in fact, the client had not attended the HAZMAT course or any other HAZMAT course, Jones admitted.

Jones was charged in a 13-count indictment on Dec. 12, 2018.  The indictment alleges that he and a co-conspirator purported to offer job placement services to individuals seeking employment in Afghanistan and elsewhere.  In fact, according to the indictment, they created fake training certificates and false resumes to make their clients appear more qualified than they actually were, and used the false documents to apply for jobs on their clients’ behalf.

This case was investigated by SIGAR, the FBI, DCIS and the U.S. Army CID.  The case is being prosecuted by Trial Attorney Michael P. McCarthy of the Criminal Division’s Fraud Section.

Justice Department Authorizes More than $10 Million in Immediate Funding to Support Police in Alaska Native Villages and Additional Resources to Support Child Advocacy Centers in Rural Hubs, Expanding Prosecution Resources and Project Safe Neighborhoods Crime Reduction Measures

Attorney General William P. Barr declared a law enforcement emergency in rural Alaska under the Emergency Federal Law Enforcement Assistance Program today, making $6 million immediately available to the state of Alaska for critical law enforcement needs of Alaska Native villages.  Recognizing that Alaska has the highest per capita crime rate in the country and the unique circumstances of Alaska’s geographical and jurisdictional landscape, the Attorney General authorized additional funding and several long-term measures to support village public safety and victim services.

The $6 million in emergency funding from the Office of Justice Program’s Bureau of Justice Assistance (OJP-BJA) will go toward hiring, equipping, and training Village Public Safety Officers (VPSOs), Village Police Officers (VPOs), and Tribal Police Officers (TPOs) working in rural Alaska, as well as for mobile detention facilities. 

In addition, the Department of Justice Office on Community Oriented Policing Services (COPS) will award $4.5 million in funding for 20 officer positions, along with equipment and training, to Alaska Native grantees by the end of July. 

The Office for Victims of Crime (OVC) and the Office on Juvenile Justice and Delinquency Prevention (OJJDP) will support Children’s Advocacy Centers (CAC) in rural Alaska’s major hubs, which provide wrap-around services, forensic interviews, and medical exams for child victims.  OVC and OJJDP have identified up to $14 million in available funding for CACs in Alaska and the lower 48 states.

“In May, when I visited Alaska, I witnessed firsthand the complex, unique, and dire law enforcement challenges the State of Alaska and its remote Alaska Native communities are facing,” said Attorney General Barr.  “With this emergency declaration, I am directing resources where they are needed most and needed immediately, to support the local law enforcement response in Alaska Native communities, whose people are dealing with extremely high rates of violence. Today, I am also directing each component and law enforcement agency of the Justice Department to submit plans within the next 30 days to further support federal, state, and tribal public safety efforts in rural Alaska.  Lives depend on it, and we are committed to seeing a change in this unacceptable, daily reality for Alaska Native people.”

The Attorney General also announced a Rural Alaska Violent Crime Reduction Working Group, led by U.S. Attorney Bryan Schroder.  The Working Group will look for ways to build the capacity of federal, state, and tribal law enforcement in rural Alaska and its work will have a particular emphasis on crimes of domestic violence and crimes against children.  BJA is also making an additional $162,000 available to the U.S. Attorney’s Office to establish an additional Project Safe Neighborhoods (PSN) target site encompassing rural Alaska.

Alaska is home to some of the most remote communities in all of America.  This geographic isolation contributes to law enforcement problems not seen anywhere else in our Nation.  According to one estimate, one-third of Alaskan villages have no local law enforcement personnel at all.  According to a 2016 study funded by the National Institute of Justice, more than four in five American Indian and Alaska Native adults have experienced some form of violence in their lifetime, and more than half of all American Indian and Alaska Native women have experienced violence from an intimate partner.  The lack of law enforcement resources results in a high violent crime rate, especially in Alaska Native communities.

Additional near-term measures by Department of Justice components include:

• The Office on Violence Against Women (OVW) will issue an award for sexual assault training and technical assistance in Alaska, including training community health aides in Alaska Native villages to perform sexual assault forensic exams and training for victim advocates.  The project will include community sexual assault training, which will address coordinated responses to sexual assault across the community.  This award will also train village-based victim advocates to accompany victims throughout the process, including prosecution, as appropriate.
• OVC is extending their application deadline for the Crime Victim Fund tribal set-aside solicitation (part of the $167 million available to tribes for victim services in FY 2019) to Aug. 16, 2019. This money may be used to fund direct services and advocacy, domestic violence shelters, rape crisis services, children advocacy programs, and elder abuse programs. 
• BJA is extending their application deadline to July 15, 2019, for programs that target mental health/drug addiction, reentry initiatives, and community crime reduction.
• The COPS Office has two grant programs that it will reopen to afford Alaska the opportunity to apply:
  • The Anti-Methamphetamine Program (CAMP) is open to state law enforcement agencies with multijurisdictional reach and interdisciplinary team (e.g., task force) structures, in states with high seizures of precursor chemicals, finished methamphetamine, laboratories, and laboratory dump seizures.
  • The COPS Anti-Heroin Task Force (AHTF) Program is open to state law enforcement agencies with multi-jurisdictional reach and interdisciplinary team (e.g., task force) structures, in states with high per capita rates of primary treatment admissions.

As the Department develops a comprehensive response to public safety issues in Alaska, Attorney General Barr expressed his commitment to working closely with American Indian and Alaska Native leadership as well as Congressional and state representatives to ensure Departmental solutions are practical and effective.   The Attorney General will also travel to an Indian country location in the lower 48 states in the coming months, recognizing the significant public safety challenges that persist for many Native American communities.

“I want to be sure that the support this Department offers to Alaska Native communities will support solutions identified by the communities themselves,” said Attorney General Barr. “The only way for us to provide effective support is to work in partnership with others. This is true in Alaska and throughout Indian country.”

In a memo to all Justice Department component leaders, the Attorney General directed every component and law enforcement agency to submit a plan in the next 30 days to further support these efforts in Alaska, focusing in particular on the following goals:

• Increasing the federal, state, local, and tribal law enforcement presence in Alaska and ways to provide more prosecutorial resources for the criminal cases that will result from increased law enforcement presence;
• Reducing violent crime, especially gun violence;
• Decreasing sexual assaults of women and children;
• Providing better immediate and long-term services to victims of crime;
• Cutting off supplies of methamphetamines, opioids, and other illegal drugs;
• Addressing the problem of alcohol abuse and its role in violent crime and crimes against children;
• Increasing addiction prevention and treatment services to those struggling with addictions to drugs and alcohol;
• Providing adequate detention facilities in remote locations; and,
• Incorporating technology into law enforcement efforts to improve response times and decrease travel costs for victims and witnesses.

A seven-count indictment was returned yesterday charging a former Assistant Inspector General for the U.S. Department of Housing and Urban Development, Office of Inspector General, with engaging in a scheme to conceal material facts, making false statements and falsification of records.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Acting Assistant Director in Charge John P. Selleck of the FBI’s Washington Field Office and Michael K. Atkinson, Inspector General of the Intelligence Community made the announcement.

According to the indictment, between early 2012 and mid-2016, Eghbal “Eddie” Saffarinia engaged in a scheme to conceal material facts, including the nature and extent of Saffarinia’s financial relationship with a personal friend who was the owner and chief executive officer of an information technology company in Virginia.  During a period in which Saffarinia received payments and loans from his friend totaling $80,000, Saffarinia disclosed confidential internal government information to his friend and undertook efforts to steer government contracts and provide competitive advantages and preferential treatment to his friend’s company.  Saffarinia also failed to disclose this financial relationship and another large promissory note on his public financial disclosure forms.

The case is being investigated by the FBI’s Washington Field Office and the Office of the Inspector General of the Intelligence Community.  Trial Attorneys Edward P. Sullivan and Rosaleen T. O’Gara of the Criminal Division’s Public Integrity Section are prosecuting the case. 

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

Larry D. Meyers, the former head of the securities lending desk at Banca IMI Securities Corp., pleaded guilty to a criminal antitrust charge for his involvement in a bid-rigging conspiracy for certain financial instruments, the Department of Justice announced.

Meyers admitted that, from at least as early March 2012 until at least August 2014, he and his counterparts at other broker-dealers conspired to submit rigged bids to borrow pre-release American Depository Receipts (ADRs).  Meyers’ plea is the third in the ongoing investigation; Banca IMI and Industrial and Commercial Bank of China Financial Services LLC previously pleaded guilty on May 10, 2019, and June 14, 2019, respectively.

Worldwide, thousands of publicly traded companies list their shares of common stock only on foreign stock exchanges.  Most U.S. investors are unable to purchase or sell such foreign shares.  The U.S. Securities and Exchange Commission, however, permits four U.S. depository banks to create ADRs, which represent foreign ordinary shares and can be traded in the United States.  Through the purchase and sale of ADRs, U.S. investors are able to gain exposure to — including the ability to receive dividends from — companies whose common stock is listed only on foreign exchanges.

Meyers pleaded guilty to conspiring to borrow pre-release ADRs from U.S. depository banks at artificially suppressed rates.  During the conspiracy, a U.S. depository bank began using an auction-style process for pre-release ADRs and invited Banca IMI and other broker-dealers to submit competitive bids for rates to borrow ADRs.  In response, Meyers and his co-conspirators intensified their coordination in an effort to artificially increase their profits under the auction-style process.  On at least 30 occasions, Banca IMI reached an agreement with one or more co-conspirators as to the bids they would submit to U.S. depository banks.  On many occasions, the conspirators agreed that they all would submit the same bid.  Meyers and his co-conspirators reached these agreements using, among other means, private chat rooms and text messages.

“The guilty plea announced today represents the commitment of the Division and its law enforcement partners to hold accountable for market-corrupting collusion not just the companies that benefit from that unlawful activity, but also the executives who carry it out,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.

“This guilty plea highlights just how thorough FBI investigations truly are,” said Assistant Director Robert Johnson of the FBI’s Criminal Investigative Division.  “Individuals engaged in corrupt activity cannot expect to hide behind their companies.  The FBI is committed to pursuing all those who use criminal means to enrich themselves at the expense of U.S. investors.”

“The FBI is committed to investigating companies and executives when they operate outside the law and attempt to play by different rules in the marketplace,” Charles A. Dayoub, Acting Special Agent in Charge of the Criminal Division at the FBI’s Washington Field Office.  “I would like to thank the dedicated FBI agents and analysts who have worked on this investigation and are committed to holding those accountable who ignore the rule of law in the United States.”

A criminal violation of Section 1 of the Sherman Act carries a maximum term of imprisonment of 10 years and a maximum fine of $1 million for individuals.  The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The Washington Criminal II Section of the Antitrust Division and the FBI’s International Corruption Squad in Washington, D.C., are conducting the investigation into bid rigging in the market for pre-release ADRs.  Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal II Section at 202-598-4000 or visit www.justice.gov/atr/contact/newcase.html.

An indictment of two Norwegian shipping executives was unsealed in the U.S. District Court in Baltimore, the Department of Justice announced today.

Ingar Skiaker and Øyvind Ervik have been charged with participating in a long-running conspiracy to allocate certain customers and routes, rig bids, and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore.  A federal grand jury returned the indictment in February 2018.

Skiaker and Ervik, both Norwegian citizens, are former top executives at Höegh Autoliners AS, which has pleaded guilty and been sentenced to pay a $21 million fine.  Including the charges announced today, 13 executives have been charged in the investigation to date.  Four have pleaded guilty and been sentenced to serve prison terms.  Others remain international fugitives.  Including Höegh, five companies have also pleaded guilty for their roles in this conspiracy, resulting in total collective criminal fines over $255 million.

The indictment alleges that, from at least as early as 2006 and continuing at least until September 2012, Skiaker and Ervik conspired with their competitors to allocate certain customers and routes for the shipment of cars and trucks.  The defendants accomplished their scheme by, among other things, attending meetings during which they agreed not to compete against each other, and by refraining from bidding or by agreeing on the prices they would bid for certain customers and routes.  In addition, Skiaker and Ervik agreed with competitors to fix, stabilize, and maintain rates charged to customers of international ocean shipping services.  The customers affected by the conspiracy included U.S. companies.

“The Division’s investigation revealed that collusion was endemic and rampant in the shipping industry going back years,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “The indictment unsealed today advances the Division’s mission to restore and promote open competition.  Höegh has already pleaded guilty, and now we must ensure that its executives will be held accountable.”

“The schemes that took place in perpetuating this long-running conspiracy show a clear indifference for the free market, and a willful disregard for the law,” said Special Agent in Charge Jennifer C. Boone for the FBI Baltimore Field Office.  “The protection of international commerce and victims affected by such schemes remain a priority for the FBI and we will continue to dedicate resources to these types of investigations in order to protect the United States economy.”

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

Today’s announcement is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit.  Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.

Two executives were sentenced in U.S. District Court in Miami for their role in a conspiracy to fix prices of international freight forwarding services, the Department of Justice announced today.  Roberto Dip and Jason Handal were charged with fixing prices in June 2018, and pleaded guilty in November 2018.  A magistrate judge in Miami ordered Dip detained pending trial; he served over five months in jail before being released on bond.

Dip, the president and CEO of a Louisiana-based freight forwarding company, and Handal, the company’s manager, organized meetings throughout the United States where they reached agreements with their competitors to fix the prices for freight forwarding services provided in the United States and elsewhere from at least as early as September 2010 until at least March 2015.  Dip was sentenced to 18 months’ imprisonment, with credit for time served.  Handal was sentenced to 15 months’ imprisonment.  Each executive was also sentenced to pay a $20,000 criminal fine and to three years of supervised release.

“These defendants’ conduct raised freight-forwarding prices by as much as 20 percent, victimizing vulnerable consumers and individuals sending gifts and household goods to family members and loved ones for holidays,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “Today’s sentences reflect the significant harm that the defendants caused, and should send a message to other would-be price-fixers that this crime will not go unpunished.”

“This investigation is an example of the FBI’s commitment to investigating individuals when they operate outside the law to conspire to fix prices in the consumer marketplace,” stated Eric J. Rommal, FBI New Orleans Special Agent in Charge.  “I would like to thank the investigative team and Department of Justice’s Antitrust Division prosecutors who have worked on this complex investigation and are committed to holding those accountable who disregard the rule of law for their own financial gain.  The FBI will continue to work to protect consumers against all forms of fraud, deceit, and illegal activity.”

The ongoing investigation into price fixing in the international freight forwarding industry is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s New Orleans Division.  Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at 415-553-7400.   

Merrill Lynch Commodities Inc. (MLCI), a global commodities trading business, has agreed to pay $25 million to resolve the government’s investigation into a multi-year scheme by MLCI precious metals traders to mislead the market for precious metals futures contracts traded on the Commodity Exchange Inc. (COMEX), announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.

According to MLCI’s admissions, beginning by at least 2008 and continuing through 2014, precious metals traders employed by MLCI schemed to deceive other market participants by injecting materially false and misleading information into the precious metals futures market.  They did so by placing fraudulent orders for precious metals futures contracts that, at the time the traders placed the orders, they intended to cancel before execution.  In doing so, the traders intended to “spoof” or manipulate the market by creating the false impression of increased supply or demand and, in turn, to fraudulently induce other market participants to buy and to sell futures contracts at quantities, prices and times that they otherwise likely would not have done so.  Over the relevant period, the traders placed thousands of fraudulent orders.

MLCI entered into a non-prosecution agreement (NPA) and agreed to pay a combined $25 million in criminal fines, restitution and forfeiture of trading profits.  Under the terms of the NPA, MLCI and its parent company, Bank of America Corporation (BAC), have agreed to cooperate with the government’s ongoing investigation of individuals and to report to the Department evidence or allegations of violations of the wire fraud statute, securities and commodities fraud statute, and anti-spoofing provision of the Commodity Exchange Act in BAC’s Global Markets’ Commodities Business, whose function is to conduct wholesale, principal trading and sales of commodities.  MLCI and BAC also agreed to enhance their existing compliance program and internal controls, where necessary and appropriate, to ensure they are designed to detect and deter, among other things, manipulative conduct in BAC’s Global Markets Commodities Business.

The Department reached this resolution based on a number of factors, including MLCI’s ongoing cooperation with the United States and MLCI and BAC’s remedial efforts, including conducting training concerning appropriate market conduct and implementing improved transaction monitoring and communication surveillance systems and processes.

The Commodity Futures Trading Commission (CFTC) announced a separate settlement with MLCI today in connection with related, parallel proceedings.  Under the terms of the resolution with the CFTC, MLCI agreed to pay approximately $25 million, which includes a civil monetary penalty of $11.5 million, as well as restitution, and disgorgement, with restitution and disgorgement credited for any such payments made to the Department.  In addition, the CFTC order imposes upon MLCI other remedial and cooperation obligations in connection with any CFTC investigation pertaining to the underlying conduct. 

As part of the investigation, the Department obtained an indictment against Edward Bases and John Pacilio, two former MLCI precious metals traders, in July 2018.  Those charges remain pending in the U.S. District Court for the Northern District of Illinois.  See United States v. Edward Bases and John Pacilio, 18-cr-48 (N.D. Ill.).  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the FBI’s New York Field Office.  Trial Attorneys Ankush Khardori and Avi Perry of the Criminal Division’s Fraud Section prosecuted the case.  The CFTC also provided assistance in this matter.

If you believe you are a victim of this offense, please visit https://www.justice.gov/criminal-vns/case/mlci or call (888) 549-3945.

A federal court in Orlando, Florida, entered a permanent injunction against Lakeesha Tucker, Lakeesha Tucker LLC, and Simplified Financial Services LLC, barring them from preparing federal tax returns for others and owning or operating a tax preparation business, the Justice Department announced today.

The court previously entered a judgment against all three defendants for $1,628,046.50, after an earlier order stated that this amount was a reasonable approximation of defendants’ ill-gotten gains they received for the preparation of tax returns.

In its complaint, the government alleged that the defendants prepared tax returns making false or fraudulent claims for the Earned Income Tax Credit. Among the misconduct alleged, defendants reported phony business-related income and expenses, and job-related expenses, and claimed false education credits and charitable contributions.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. The IRS has information on its website for choosing a return preparer and has launched a free directory of federal tax preparers. 

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.

WASHINGTON – Today, Attorney General William P. Barr announced the recipients for the 33rd Annual Attorney General’s Volunteer Awards Ceremony, awarded to those within the Department of Justice, and members of the general public, who have shown admirable dedication to improving their communities. These awards are separated into two different categories, the Attorney General’s Volunteer Award for Community Service and the Attorney General’s Citizen Volunteer Service Award.

The first award, the Attorney General’s Volunteer Award for Community Service, is awarded to an employee or group of employees from the Department, who have shown exemplary community service efforts. The recipients of this year’s award are:

• Brian K. Caserta, U.S. Marshal Service, for his work with the Sports Training Academics Recreation/Police Athletics League to empower youth and build a safer community through positive encounters with law enforcement in San Diego, California;
• Roland L. Hankey II, FBI, for his service as an Emergency Medical Technician with the Culpeper County (Virginia) Volunteer Rescue Squad;
• Drew Yeates, U.S. Attorney’s Office for the District of Utah, for his sustained pro bona work with the Safe Harbor Crisis Center in Layton, Utah, assisting victims of domestic violence.

The second award, the Attorney General’s Citizen Volunteer Service Award, is awarded to members of the public for their outstanding volunteer contributions towards the Department’s mission. The recipients of this year’s award are:

• Laura D. Martin and Patricia A. Torchia, for their volunteer service providing inmates with re-entry life skills at the Federal Medical Center - Rochester, Minnesota;
• Max Schachter, for his relentless work supporting the creation of national school safety best practices as Founder and CEO of Safe Schools for Alex.

“Today we honor these exceptional men and women for their remarkable contributions to protecting and improving their communities,” said Attorney General William P. Barr. “To take only a few examples, they have strived to keep schoolchildren safe, empowered victims of domestic violence, provided inmates with re-entry life skills, and fostered trust between law enforcement and youth. Our awardees’ communities have been made immeasurably better for their efforts. The Department of Justice and a grateful country thank them for their work.”

The Department of Justice filed a civil antitrust lawsuit today seeking to block Quad/Graphics Inc.’s proposed acquisition of LSC Communications Inc. in order to preserve competition in the markets for magazine, catalog, and book printing services in the United States.

The Antitrust Division’s lawsuit alleges that the transaction would combine the only two significant providers of magazine, catalog, and book printing services, denying publishers and retailers throughout the country the benefits of competition that has spurred lower prices, improved quality, and greater printing output.  The Department filed its lawsuit in the U.S. District Court for the Northern District of Illinois.

“American publishers and retailers rely on Quad and LSC to print and distribute billions of magazines, catalogs, and books each year,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “LSC is Quad’s primary competitor.  If this deal were allowed to proceed, Quad would dominate the markets for magazine, catalog, and book printing services and be able to raise prices and reduce quality at the expense of publishers, retailers, and, ultimately, American consumers.”

The magazine, catalog, and book printing services offered by Quad and LSC include the printing, finishing, and distribution of publications to newsstands, retail facilities, or the postal service for delivery to consumers’ homes.  Quad and LSC are by far the largest printers in the United States and are relied upon by many of the largest publishers and retailers to ensure that high-quality products are printed and distributed on time.

According to the Department’s complaint, Quad and LSC view each other as their “#1 competitor,” and intense head-to-head competition between them has directly benefitted their customers through lower prices and better-quality services.  The complaint quotes internal presentations and emails describing this competition:

• Internal documents outline the “two-horse race between LSC and Quad.”
• A Quad internal presentation explained, “we are the only printer other than LSC that can offer the largest Publishers a complete solution.”
• Executives observed a publisher “exploiting the fact that LSC [and] Quad[’s] CEO’s want to beat each other into oblivion.”
• A senior Quad executive remarked of LSC, “We’ve been in a price war with them for some time. Don’t see that changing.”
• After hearing news of the merger, one Quad executive reflected on a recent battle between it and LSC and remarked, “I admit, in the case of [a large customer] I’m taking significant satisfaction in the news . . . . I’m sure it’s a bitter pill for them to swallow.”

The complaint alleges that Quad’s proposed acquisition of LSC would put an end to the “price war” between the two and allow it to dominate the magazine, catalog, and book printing markets. 

Quad/Graphics Inc. is a Wisconsin corporation headquartered in Sussex, Wisconsin.  It offers a variety of printing services, including magazine, catalog, and book printing services, to publishers across the country.  In 2018, Quad’s revenues were approximately $4.2 billion.

LSC Communications Inc. is a Delaware corporation headquartered in Chicago, Illinois.  In 2016, it was spun off from printing firm R.R. Donnelley.  LSC offers a similar set of magazine, catalog, and book printing services as Quad.  In 2018, LSC’s revenues were approximately $3.8 billion. 

The Department of Justice announced today that St. Bernard Parish, Louisiana, has agreed to pay more than $1 million to settle a lawsuit alleging that the Parish violated the Fair Housing Act when it refused to allow two small group homes for up to five children with disabilities to open in single-family neighborhoods.

“The Fair Housing Act prohibits local governments from applying their zoning laws in a manner that discriminates against persons with disabilities,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “This settlement underscores the Civil Rights Division’s commitment to ensure that children with disabilities have access to housing in all communities.”   

“Access to safe, sanitary, and secure housing is a fundamental civil right for all persons within the Eastern District of Louisiana, and this settlement agreement continues efforts to ensure compliance to The Fair Housing Act,” said U.S. Attorney Peter G. Strasser for the Eastern District of Louisiana. “I commend the cooperative efforts of St. Bernard Parish to reach a resolution that is in the best interests of our community.”

“Persons with disabilities have a right to have access to the type of housing that meets their needs,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “Today’s settlement sends a strong message that HUD and the Justice Department are committed to ensuring that cities and municipalities fully adhere to the requirements of the Fair Housing Act.”

The United States’ suit, filed in U.S. District Court in New Orleans, Louisiana, in December 2018, alleged that St. Bernard Parish violated the Fair Housing Act when it denied requests for reasonable accommodations to its zoning ordinance to allow the two group homes to operate in single-family neighborhoods of the Parish. Shortly after learning that the homes were planning to open, the Parish amended its zoning code to prohibit group homes of any size in single-family neighborhoods. The two group home operators filed complaints with HUD, which in turn referred the complaints to the Department of Justice.  The group home operators filed a lawsuit in 2016, which they have settled with the Parish.

Under the settlement, St. Bernard Parish will pay $975,000 in monetary damages and attorneys’ fees to the two group home operators, and a $60,000 civil penalty to the United States. The Parish amended its zoning ordinance to permit small group homes in single-family residential districts, amended its reasonable accommodation policy, and will take a number of actions to guard against further housing discrimination.  These other actions include training officials and individuals involved in zoning and land use, designating a fair housing compliance officer, and reporting periodically to the Department of Justice during the term of the agreement.     

The federal Fair Housing Act prohibits discrimination in housing based on disability, race, color, religion, national origin, sex and familial status. Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov, or contact the Department of Housing and Urban Development at 1-800-66-9777 or through its website at https://www.hud.gov/program_offices/fair_housing_equal_opp.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.

The Department of Justice announced today that it is requiring Harris Corporation (Harris) and L3 Technologies Inc. (L3) to divest Harris’s night vision business in order to proceed with their merger. 

The Department further said that, without the divestiture, the proposed acquisition would eliminate competition between the only two suppliers of U.S. military-grade image intensifier tubes, which are the key component in night vision devices such as goggles and weapon sights purchased by the Department of Defense (DoD) for the United States military.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed merger.  At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit. 

“The merger, as originally structured, would have given the combined company a monopoly over image intensifier tubes, an essential component in night vision devices used by the United States military,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “Today’s settlement will ensure that our armed forces continue to benefit from competition for a mission critical component that soldiers operating in low-light environments rely on every day.”

According to the Department’s complaint, Harris and L3 are the only suppliers of U.S. military-grade image intensifier tubes for night vision devices such as goggles and weapon sights that are purchased by the DoD.  Image intensifier tubes are the critical component in these devices, which amplify visible light to increase situational awareness, threat detection, and mission performance of American soldiers and aircrews operating in low-light environments.  The Department’s complaint alleges that competition between Harris and L3 has resulted in lower prices, higher quality, and shorter delivery times and has fostered innovation that has led to the development of image intensifier tubes with higher sensitivity and resolution.  According to the complaint, the combination of Harris and L3 would leave the DoD without a competitive alternative for this critical input and likely result in higher prices, less favorable contract terms, and reduced research and development efforts.

Under the terms of the proposed settlement, Harris and L3 must divest Harris’s entire night vision business, including its manufacturing facility in Roanoke, Virginia, to an acquirer approved by the United States.

The Antitrust Division and the DoD cooperated closely throughout the course of their respective investigations of the transaction.

Harris is incorporated in Delaware and has its headquarters in Melbourne, Florida.  Harris provides night vision devices and image intensifier tubes, tactical communications solutions, electronic warfare solutions, and space and intelligence systems.  In 2018, Harris had sales of approximately $6.2 billion.

L3 is incorporated in Delaware and is headquartered in New York, New York.  L3 provides night vision devices and image intensifier tubes; intelligence, surveillance, and reconnaissance systems; aircraft sustainment, simulation, and training; and security and detection systems.  In 2018, L3 had sales of approximately $10.2 billion.

As required by the Tunney Act, the proposed settlement, 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 Maribeth Petrizzi, Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., 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 finding it is in the public interest.

A former attorney recently convicted of securities fraud by a jury in the District of Columbia, pleaded guilty today to failure to file an income tax return and pay taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

Brynee Baylor pleaded guilty today to one count of willfully failing to timely file a 2010 individual income tax return and to pay taxes. She admitted to causing a tax loss of $79,000.

On April 30, 2019, the jury convicted Baylor of one count of conspiracy to commit securities fraud, one count of securities fraud, and five counts of first-degree fraud under District of Columbia law.

According to court documents and the evidence presented at trial, Baylor, a former partner in the D.C. law firm Baylor & Jackson PLLC, conspired with a Pennsylvania man and his company, known as the Milan Group, to recruit investors to a purported trading program. Investors were promised extremely large profits in a short time with little or no risk.

In 2011, the Securities and Exchange Commission (SEC) sued Baylor and others for fraud in connection with the purported trading program.

Sentencing is scheduled for Sept. 12.  Baylor faces a maximum sentence of one year in prison for the failure to file a tax return conviction, five years in prison for the conspiracy count, 20 years in prison for the securities fraud count, and 10 years in prison for each of the first-degree fraud counts. Baylor also faces a term of supervised release and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman thanked the SEC for its invaluable assistance and commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey McLellan and Eric Powers of the Tax Division, who are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Mohammad Sikder, 60, of Washington, D.C., pleaded guilty today to two counts of violating the Toxic Substances Control Act for his role in renovating a Washington, D.C., property without following lead-safe work practices and lead disclosure requirements.

Sikder’s solely held company, District Properties LLC, also pleaded guilty to making false statements in 25 building permit applications to the District of Columbia Department of Consumer and Regulatory Affairs (DCRA). These applications understated the age of the homes being renovated, with the intent to avoid regulatory scrutiny of inadequate lead-based paint safety measures at those properties.

The Honorable Amy Berman Jackson scheduled sentencing for Nov. 22, 2019. The charges against Mr. Sikder carry a statutory maximum of twelve months in prison and potential financial penalties. He and the government will jointly recommend a $50,000 fine in addition to any prison time imposed. The company has agreed to pay a $150,000 criminal fine, and to put another $25,000 towards funding lead-based paint compliance trainings in the District of Columbia, Maryland, and Virginia.

“Lead poisoning is a major environmental health problem, and the deliberate actions taken by the defendant posed an unnecessary risk to his employees and the public at large,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “The Department of Justice will not allow to go unchallenged such flagrant disregard for the rule of law and will continue to work with its partners to protect the health of communities here in Washington, D.C., and beyond.” 

“By using unlicensed and untrained workers to renovate older buildings, the defendant threatened the health of his workers and the general public,” said Jennifer Lynn, Acting Special Agent in Charge for EPA’s Mid-Atlantic criminal enforcement program.   “Today’s guilty pleas demonstrate that EPA and its partner agencies are committed to enforcing laws protecting public health.”

Lead poisoning continues to be a major environmental health problem in the United States, although it is completely preventable. The most common source of childhood lead poisoning is lead-based paint in older homes, and the primary exposure pathway is ingestion of lead-contaminated dust. Lead is a toxic substance that can cause permanent damage, and is regulated under the Toxic Substances Control Act. Under the Renovation, Repair and Painting Rule (RRP Rule), contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and must follow specific work practices to prevent lead contamination.

According to a Statement of Offense filed along with the plea agreements, Sikder and District Properties LLC purchased and renovated a property in Washington, D.C., without following the requirements of the RRP Rule. In 2014, the company submitted a building permit application to DCRA for addition, alteration, and repair of the property. At Sikder’s instruction, the employee submitting the permit application, under the section of the application titled “Lead Abatement,” falsely indicated that the property was built after 1978. During the summer and fall of 2014, a contractor conducted demolition at the property without following RRP Rule safe work practices. The demolition work included removing windows, removing interior and exterior painted surfaces, and removing floor and ceiling joists.

A Sept. 24, 2015, Occupational Safety and Health Administration inspection revealed multiple hazards, including (1) employees performing manual demolition on a wall surface that had paint containing lead; (2) the lack of an employee exposure assessment to determine actual employee exposure; (3) the lack of lead training to employees; and (4) proper sanitation practices not being followed. Sampling analysis showed lead present on the dump truck and employees’ hands. When the property was properly remediated and sold, Sikder and District Properties LLC did not provide the purchasers this information and with a report documenting the prior existence of lead-based paint at the property.

Between 2011 and 2017, District Properties LLC submitted 25 renovation permit applications for properties in Washington, D.C., on which the company falsely represented that the properties had been built after 1978, thereby circumventing additional permitting requirements and avoiding EPA oversight with respect to RRP Rule compliance, which would be triggered by an accurate permit application.

In announcing the plea, Deputy Assistant Attorney General Williams and Acting Special Agent in Charge Lynn expressed appreciation for the work performed by Special Agent Allison Landsman from EPA-Criminal Investigations Division, in partnership with the Metropolitan Police Department Environmental Crimes Unit. The case is being prosecuted by Trial Attorney Cassandra J. Barnum of the Environmental Crimes Section.

On June 19, 2019, the Romanian Presidency of the Council of the European Union hosted the EU-US Ministerial Meeting on Justice and Home Affairs in Bucharest, Romania.  The meeting provided an opportunity for both sides to take stock of their long-standing cooperation in this area and to reaffirm their partnership in addressing common security threats.  U.S. Attorney General William P. Barr and Acting Deputy Secretary for Homeland Security David P. Pekoske represented the United States.

The European Union hosted the meeting and was represented by the Commissioner for Migration, Home Affairs and Citizenship Dimitris Avramopoulos; the Commissioner for Justice, Consumers and Gender Equality Věra Jourová; the Commissioner for the Security Union Julian King; as well as the Romanian Vice Prime Minister ad interim and Minister of Justice Ana Birchall and the Minister of Interior Carmen Daniela Dan, together with the Finnish Minister of the Interior Ms. Maria Ohisalo and the Minister of Justice Ms. Anna-Maja Henriksson, on behalf of the current and incoming Presidencies of the Council of the European Union.

The United States and the European Union reaffirmed that fighting terrorism is among their top priorities and committed to enhance their joint efforts, including by expanding the sharing of information gathered in zones of combat for use in investigations and prosecutions.  Participants welcomed results already achieved in this domain, including in cooperation with Europol and Eurojust, and looked forward to the outcome of the meeting to be held on this subject that will bring together U.S. and EU experts in Brussels on July 10.  With regard to other critical areas of EU-US information sharing, participants of the meeting reiterated the importance of the EU-US Passenger Name Record agreement and committed to begin a joint evaluation to assess its implementation.  The United States and the European Union also discussed current threats to aviation security, including unmanned aircraft systems; combatting the use of the internet for terrorist purposes; and chemical, biological, radiological and nuclear threats.

The United States and the European Union also discussed the priority area of security in cyberspace.  Participants committed to further joint efforts to maintain a safe, open, and secure cyberspace, and exchanged views on how to best address growing cyber threats.  Participants recognized that the deployment of 5G network infrastructure needs to be addressed as a matter of priority, as it might pose significant security risks and impact the ability of law enforcement agencies to take effective action against crime. The United States and the European Union are committed to further pursue their exchanges on assessing and managing 5G and supply chain security risks through existing channels, including the Justice and Home Affairs meetings.  The United States and the European Union also recognized the importance of swift cross-border access to electronic evidence, and discussed the implications of recent legislation enacted in the United States and legislation under examination in the European Union.

Participants acknowledged the recent approval by the Council of the European Union of a mandate authorizing the Commission to negotiate on behalf of the EU an agreement with the United States facilitating access to e-evidence for the purpose of judicial cooperation in criminal matters, as well as the steps being taken by the United States towards opening negotiations of such an agreement, in a manner consistent with their respective legislations.  The United States and the European Union also reviewed the unprecedented challenges faced by electoral systems in democratic states, which call for exchanges of best practices to overcome those challenges.  Participants confirmed their commitment to further discuss an expert level dialogue.

The United States and the European Union briefed each other on recent developments in their migration and border management policies; in particular, the European Union provided information on the reinforced mandate of the European Border and Coast Guard Agency (EBCGA) and on the implementation of the European Travel Information and Authorization System (ETIAS), two instruments which will further strengthen the EU's border management. Both sides concurred on the vital importance of preventing and combatting migrant smuggling and trafficking of human beings and discussed further joint work in these areas.

Finally, the United States and the European Union agreed on the importance of advancing further towards reciprocal visa free travel under their respective legal frameworks and, following the May 2019 meeting on visa reciprocity between the United States, the European Union and the concerned Member States, welcomed the progress of the five concerned Member States towards meeting the requirements of the Visa Waiver Program, in order to be considered for designation in the program.

Reaffirming their commitment to advance together towards common solutions in these areas, the United States and the European Union committed to meet again in the second half of 2019 in Washington, D.C.

The meeting was also attended by the EU Counter-Terrorism Coordinator Gilles de Kerchove, the Executive Director of Europol Catherine De Bolle, the Executive Director of Frontex Fabrice Leggeri and the Vice-President of Eurojust Klaus Meyer-Cabri.

Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice issued the following statement today in connection with the closing of the Division’s investigation into the proposed acquisition of Vantage Holdings, Inc. (Vantage) by Louisiana Health Service & Indemnity Co. d/b/a Blue Cross Blue Shield of Louisiana (Blue Cross):

“After a thorough investigation of the proposed transaction, and after working with the Louisiana Attorney General’s office and the Louisiana Department of Insurance, the Antitrust Division determined that the combination of Blue Cross and Vantage is unlikely to result in harm to American consumers.”

In October 2018, the parties announced that Blue Cross would acquire a majority ownership in Vantage.  The Louisiana Department of Insurance held a public hearing and approved the transaction in December 2018, contingent upon the Antitrust Division’s approval.

The Antitrust Division conducted a comprehensive seven-month investigation, during which it reviewed documents, analyzed data, took testimony, and interviewed industry participants.  In particular, the Division analyzed whether the merger would substantially lessen competition in the sale of health plans sold to individuals on the public exchange established by the Affordable Care Act or health plans sold to individuals off of the public exchange.  Multiple types of evidence indicated that the merger is unlikely to harm consumers in the sale of on-exchange or off-exchange commercial individual health insurance plans.  Vantage’s membership in these products has been rapidly declining in recent years.  Moreover, Vantage has set premiums significantly higher than comparable Blue Cross products, and Vantage therefore does not appear to have a competitive impact on Blue Cross product pricing.  In New Orleans, for example, the price of the lowest-cost Vantage silver plan in 2019 is greater than 60 percent more expensive than the lowest-cost Blue Cross silver plan (i.e., the plan with the most widely selected level of coverage), a price gap that has widened substantially in recent years. 

For these and other reasons, the Division determined that the transaction is unlikely to harm consumers and therefore closed its investigation.

The former CEO of two U.S. government contractors pleaded guilty today to falsifying documents in an effort to increase his companies’ competitiveness, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Inspector General for Afghanistan Reconstruction John F. Sopko.

James O’Brien, 46 of Fredericksburg, Virginia, pleaded guilty to four counts of making false statements before U.S. Magistrate Judge Sean P. Flynn of the Middle District of Florida.  Sentencing has not yet been scheduled.

As part of his guilty plea, O’Brien admitted that from 2013 to 2015 he was CEO of Tamerlane Global Services (Tamerlane) and Artemis Global (Artemis), both of Fairfax County, Virginia.  During this time period, Tamerlane and Artemis worked on a logistics contract issued by the U.S. Transportation Command (TRANSCOM) that supported the U.S. war effort in Afghanistan.  Tamerlane and Artemis employees, including O’Brien, deployed to Afghanistan as part of the contract.

Contractors deployed to Afghanistan must have with them letters of authorization (LOAs) issued by the government agency responsible for the deployment.  The LOAs serve as the contractors’ authorization to be deployed to Afghanistan, and set forth the U.S. government-provided benefits, such as military air travel, that the contractors may utilize at no cost while deployed.  LOAs that authorize U.S. government benefits are known as “provisioned LOAs,” and are factored into the cost of a contract.

O’Brien admittedly altered the un-provisioned LOAs, including his own, that TRANSCOM issued to deploying Tamerlane and Artemis employees to make the LOAs appear as if they were provisioned.  He gave the LOAs that he altered to his deploying employees, who used them to utilize government provided benefits in Afghanistan at no cost, O’Brien admitted.

This case was investigated by the Special Inspector General for Afghanistan Reconstruction.  The case is being prosecuted by Trial Attorney Michael P. McCarthy of the Criminal Division’s Fraud Section.

Today, the Department of Justice’s Environment and Natural Resources Division (ENRD) released its Accomplishments Report for Fiscal Year (FY) 2018. The report, which is published annually by ENRD, highlights the division’s strong enforcement of our nation’s environmental laws, defense of government programs that strengthen the country’s energy independence and national security, and close collaboration with states and tribes.

“I am pleased to share the 2018 accomplishments of the Environment and Natural Resources Division of the United States Department of Justice,” said Assistant Attorney General Jeffery Clark.  “The Division achieved many impressive enforcement successes in fiscal year 2018, and I am immensely proud of the hard work of our extraordinary and dedicated attorneys and staff who made these accomplishments possible. I look forward to continuing the important work of the Division in achieving our mission together in 2019 and beyond.”

This year, ENRD focused on several key objectives: vigorously enforcing the pollution abatement and wildlife protection laws of the United States, particularly in cases involving fraud or abuse; promoting energy independence and economic growth by defending the reduction of regulatory burdens and supporting infrastructure development; strengthening national security and border protection; promoting cooperative federalism; and protecting the public fisc.

In fiscal year 2018, ENRD worked on approximately 3,800 cases and matters, while maintaining a robust docket of over 6,750 cases and matters. The Division obtained over $260 million in civil and criminal fines, penalties, and costs recovered. The estimated value of federal injunctive relief obtained — including cleanup and pollution-prevention actions funded by private parties — exceeded $3.3 billion.

ERND defended legal challenges to the Trump Administration’s energy policies and regulatory reform agenda.  By defending the actions of our client agencies, the Division plays a critical role in paving the way for infrastructure and energy security projects that will strengthen the U.S. economy and facilitate border control and military operations to protect our national security.

In addition, the Division secured 30 CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act) settlements and judgments. The settlements and judgments brought on behalf of the United States Environmental Protection Agency (EPA) obtained clean-up work estimated to cost more than $170 million and over $88 million in costs previously expended by EPA.  For example, the consent decree in United States v. Doe Run Resources Corporation (E.D. Mo.), a settlement signed by the United States, the State of Missouri, and the Doe Run Resources Corporation, requires the company to excavate lead-contaminated soil on approximately 4,100 affected residential properties. 

ENRD continued its successful efforts to ensure the integrity of the renewable fuels program through prosecutions of companies that knowingly cheat the federal treasury and the American public through the sale of fraudulent Renewable Identification Numbers (RINs), credits that reflect a volume of renewable fuel manufactured.  The Division added to its success in 2018 by convicting four defendants who were sentenced to lengthy prison terms (totaling 279 months of imprisonment) and ordered to pay over $65 million in restitution and forfeit $12.5 million for various multistate schemes to defraud RIN buyers and U.S. taxpayers.

“I am committed to continuing the good work of our Division, defending the rule of law, and promoting the President’s agenda of regulatory reform. We will fairly enforce our Nation’s environmental laws, focusing on bad actors who aim to get an advantage over others by cheating the system,” Assistant Attorney General Clark added.

The report also recognizes the important contributions of ENRD’s front office leadership: Principal Deputy Assistant Attorney General Jonathan Brightbill; Deputy Assistant Attorneys General Jean Williams, Bruce Gelber, Eric Grant, and Lawrence VanDyke; and Counsel and Chief of Staff Corinne Snow.

The Department of Justice announced today that it has reached settlements with CBS Corporation (CBS), Cox Enterprises Inc. (Cox), The E.W. Scripps Company (Scripps), Fox Corporation (Fox), and TEGNA Inc. (TEGNA) to resolve a Department lawsuit brought as part of its ongoing investigation into exchanges of competitively sensitive information in the broadcast television industry.

All five companies are alleged to have engaged in unlawful information sharing among their owned broadcast television stations.  Cox also owns Cox Reps, one of two large “Rep Firms” in the industry that assist broadcast stations in sales to national advertisers. The Rep Firms are alleged to have participated in the unlawful information sharing conduct.

“The Antitrust Division’s efforts to protect competition in the television broadcast industry continue with today’s settlements that will stop the unlawful exchange of competitively sensitive information among rival broadcasters and their sales rep firms,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “Vigorous competition among broadcast stations allows American businesses across the country to obtain competitive advertising rates. The unlawful sharing of information reduced that competition and thereby harmed businesses that rely on competitive rates to best serve their customers.”

The Department filed a second amended complaint today in the case United States v. Sinclair Broadcast Group, Inc., et al., adding CBS, Cox, Scripps, Fox, and TEGNA as defendants. At the same time, the Department filed proposed settlements with CBS, Cox, Scripps, Fox, and TEGNA that, if approved by the court, would resolve the competitive harm alleged in the complaint. The Department filed its original complaint in the case on Nov. 13, 2018, along with proposed settlements with six other television broadcasting companies.  On Dec. 13, 2018, the Department filed an amended complaint and a proposed settlement with a seventh television broadcasting company.  The court entered final judgment against all seven of those defendants on May 22, 2019.

According to the amended complaint, CBS, Cox, Scripps, Fox, and TEGNA agreed with other entities in many metropolitan areas across the United States to exchange revenue pacing information, and also engaged in the exchange of other forms of non-public sales information in certain metropolitan areas. The complaint further alleges that Cox Reps also facilitated and participated in this exchange of pacing information by its broadcast-station clients that operated in the same metropolitan areas. Pacing compares a broadcast station’s revenues booked for a certain time period to the revenues booked in the same point in the previous year. Pacing indicates how each station is performing versus the rest of the market and provides insight into each station’s remaining spot advertising for the period.

By exchanging pacing information, the five new defendants and other broadcasters were better able to anticipate whether their competitors were likely to raise, maintain, or lower spot advertising prices, which in turn helped inform their stations’ own pricing strategies and negotiations with advertisers. As a result, the information exchanges harmed the competitive price-setting process in markets for the sale of spot advertisements.

The Department recognizes and commends each of these new defendants for their cooperation with the Antitrust Division in bringing these issues to settlement.  In particular, Fox assisted in the expeditious resolution of the Division’s investigation, even though Fox’s relevant conduct of which the Division is currently aware appears to have occurred before Fox’s spin-off from the recently merged Walt Disney Company and 21st Century Fox.

The proposed settlements with CBS, Cox, Scripps, Fox, and TEGNA prohibit the direct or indirect sharing of such competitively sensitive information. Additionally, the Department’s proposed settlement with Cox requires that Cox Reps implements firewalls in markets where it represents more than one broadcast station. The Department has determined that these provisions would resolve the antitrust concerns raised as a result of the defendants’ alleged conduct. The proposed settlements further require these five defendants to adopt rigorous antitrust compliance and reporting measures to prevent similar anticompetitive conduct in the future. The settlements have a seven-year term, and they will continue to apply to stations currently owned by CBS, Cox, Scripps, Fox, and TEGNA even if those stations are acquired by another company. Finally, the settlements require that the five defendants cooperate in the Department’s ongoing investigation.

CBS is a Delaware corporation with headquarters in New York, New York. It owns or operates 28 television stations across 18 markets and had revenues in excess of $14.5 billion in 2018.

Cox is a Delaware corporation with headquarters in Atlanta, Georgia. It owns or operates 14 television stations across 10 markets, owns Cox Reps, and had an estimated $20 billion in revenues in 2018.

Scripps is an Ohio corporation with headquarters in Cincinnati, Ohio. It owns or operates 60 television stations across 42 markets, and had over $917 million in revenues in 2018.

Fox is a Delaware corporation with headquarters in New York, New York. Fox owns or operates 17 television stations across 17 markets. Fox is a corporate entity that was formed after The Walt Disney Company acquired 21st Century Fox and spun-out certain former 21st Century Fox assets, including its broadcast station assets. The television segment of 21st Century Fox had over $5 billion in revenues in 2017.

TEGNA is a Delaware corporation with headquarters in McLean, Virginia.  It owns or operates 49 television stations in 41 markets, and had $2.2 billion in revenues in 2018.

As required by the Tunney Act, the proposed settlements, along with the Department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlements within 60 days of their publication to Owen Kendler, Chief, Media, Entertainment, and Professional Services Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgments upon a finding that they serve the public interest.