District Not Recorded

Two individuals were charged in an indictment filed today for their alleged roles in a multimillion-dollar scheme involving purported investments in a start-up financial technology company.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Halsey B. Frank of the District of Maine, Special Agent in Charge Joseph Bonavolonta of the FBI’s Boston Field Office and Special Agent in Charge Kristina O’Connell of the IRS Criminal Investigation (IRS-CI) in Boston made the announcement.

Michael A. Liberty, 58, of Windermere, Florida, and Paul E. Hess, 63, of Braintree, Massachusetts, were each charged in an indictment filed in the District of Maine with one count of conspiracy to commit wire fraud, four counts of wire fraud and one count of securities fraud.  In addition, Liberty was charged with one count of conspiracy to commit money laundering and three counts of money laundering.

The indictment alleges that, beginning in 2010, Liberty and Hess solicited investments in Mozido, a privately held financial technology start-up company that offered users an ability to make payments using their mobile phones.  Liberty and Hess allegedly raised millions of dollars from investors telling them, among other things, that their money would be used to fund Mozido’s business operations and that Hess was not being paid to raise the money.  The indictment alleges that a substantial amount of the money did not go to Mozido, that a portion of the money was diverted to pay Liberty’s personal expenses, and that Hess received commissions and other payments in return for the money he raised from investors.

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.      

The FBI’s Portland, Maine Resident Agency and IRS-CI are investigating the case.  Trial Attorneys Michelle Pascucci and Matthew Sullivan of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Donald Clark of the District of Maine are prosecuting the case. 

Individuals who believe they may be a victim in this case should contact the Victim Witness Services Unit of the U.S. Attorney’s Office for the District of Maine at (207) 780-3257 for more information.

The U.S. Department of Justice repatriated stolen assets to the Government of the Kyrgyz Republic arising from the corruption and theft of government funds by the prior regime of Kurmanbek Bakiyev and his son Maxim Bakiyev.  The return of the funds was celebrated yesterday in a ceremony in Bishkek, Kyrgyz Republic attended by Ambassador Alice G. Wells, the head of the Bureau of South and Central Asian Affairs for the Department of State and U.S. Ambassador to the Kyrgyz Republic, Donald Lu.     

These funds were identified in the United States in the criminal prosecution of Eugene Gourevitch for insider trading in the U.S. District Court for the Eastern District of New York and a $6 million forfeiture order was subsequently entered by the Court.  Following the conviction in the prosecution led by the U.S. Attorney’s Office for the Eastern District of New York, the Kyrgyz Government filed a Petition for Remission with the U.S. Department of Justice, Money Laundering and Asset Recovery Section, claiming that the funds subject to the forfeiture order traced back to monies stolen by Maxim Bakiyev from Kyrgyz state authorities and other banking institutions.  On Oct. 4, 2018, the Department of Justice granted the Remission Petition.

So far, approximately $4.5 million of the funds have been collected and are approved for repatriation of the $6 million ordered to be forfeited will be repatriated.  These funds will be deposited  in the account of  the Government of the Kyrgyz Republic (“current account of the Central Treasury of the Ministry of Finance of the Kyrgyz Republic in the National Bank of the Kyrgyz Republic”).  MLARS attorneys working in the Kleptocracy Asset Recovery Initiative assisted in the investigation linking these funds to the corruption offenses in Kyrgyztan.  Additional efforts will be made by the U.S. Government and the Government of the Kyrgyz Republic to try to locate and return the remainder of the stolen assets in the forfeiture order.

In a joint statement by the Kyrgyz Republic and the U.S. State Department issued today, the Government of the Kyrgyz Republic confirms that the repatriated assets will be used for the benefit of the Kyrgyz people, with a focus on social projects and anti-corruption and transparency.  These include:

• Improving public access of the rural population to the healthcare system by buying and installing medical equipment (X-ray, diagnostics equipment, etc.) for regional hospitals to deliver better medical services to the rural area population;
   
• Construction of water supply facilities in order to expand  access  to clean drinking water for the rural population through upgrades of drinking water systems and expansion of the scope of ongoing construction of large-scale water supply facilities (water pipes, water pumps, water purification facilities) currently under way with financial support of the World Bank and other International Financial Institutions; and
   
• Strengthening Kyrgyz institutions responsible for anti-corruption programs and promoting the transparency of court proceedings and financial integrity of state organs, including the purchase and installation of audio and video equipment for projects in district courthouses to increase transparency and public control in the justice sector. 

Minister of Finance for the Kyrgyz Republic Baktygul Jeenbaeva who assisted in the investigation of the source of the funds will be the point of contact for questions about the use of these funds.  During the repatriation ceremony, Minister Jaanbaeva said, “We are grateful for the United States of America’s support for the Kyrgyz leadership’s efforts to fight corruption.  I would like to emphasize the fact that these funds were stolen from the people, and now with the help of our American colleagues, we are returning them through a legal process.  We appreciate the joint efforts together with Government of the United States of America and their assistance on this issue and express our hope for further cooperation with the U.S. government.”

U.S. Ambassador Alice G. Wells remarks are posted at: https://kg.usembassy.gov/senior-bureau-official-alice-g-wells-remarks-on-repatriation-of-stolen-assets-to-the-kyrgyz-republic/.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.  In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption.  Individuals with information about possible proceeds of foreign corruption located in or laundered through the U.S. should contact federal law enforcement or send an email to kleptocracy@usdoj.gov (link sends e-mail) or https://tips.fbi.gov/.

 

The Justice Department today reached an agreement with the city of Concord, New Hampshire, to resolve a complaint alleging that the city violated Title II of the Americans with Disabilities Act (ADA) by failing to provide an accessible ballot to a voter who is blind.

Under the agreement, the city of Concord will provide voting machines that are accessible to voters who are blind or visually impaired.  The city will have the accessible machines at its polling places starting in the November 2019 city election.  In addition, the city will provide training to poll workers on the use of the accessible voting machines and will develop educational materials regarding the availability of the machines in city elections.

“Through this settlement, the city of Concord will ensure that voting in city elections is accessible to voters who are blind or visually impaired,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “We commend the city’s commitment to guaranteeing that voters with disabilities have equal access to voting.”

This settlement is part of the Department of Justice’s ADA Voting Initiative, which protects the voting rights of individuals with disabilities. A hallmark of the ADA Voting Initiative is its collaboration with jurisdictions to ensure accessibility to both polling places and the ballot. 

Those interested in finding out more about this settlement or the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed online at http://www.ada.gov/complaint/.

Amer Sinan Alhaggagi was sentenced today to 188 months for attempting to provide material support to a designated foreign terrorist organization and identity theft charges.  Assistant Attorney General John C. Demers of the National Security Division, United States Attorney David L. Anderson for the Northern District of California and FBI Special Agent in Charge John F. Bennett of the San Francisco Field Office made the announcement.  The sentence was handed down by the Honorable Charles R. Breyer, Senior U.S. District Judge. 

“Alhaggagi wanted to carry out deadly terrorist attacks in the United States in the name of ISIS,” said Assistant Attorney General Demers.  “Today’s sentencing shows the dedication of the National Security Division and our partners to hold accountable those who seek to provide material support to foreign terrorist organizations and to conduct violence on their behalf.  I commend the work of the agents, analysts, and prosecutors who are responsible for this case.” 

“The highest priority of our counter-terrorism efforts is to prevent acts of violence before they occur,” said U.S. Attorney Anderson.  “Amer Alhaggagi hoped and intended to carry out acts of great cruelty in order to sow terror in our community.  Through the combined efforts of local and federal law enforcement, Alhaggagi was identified, apprehended, and prosecuted before he was able to commit the violence he schemed to commit.  This prosecution stands as an example of how homegrown extremists who seek to sow fear and panic into our communities can be stopped when law enforcement agencies work together.”

“Today is a tragedy for the Alhaggagi family and our community as we have lost yet another young person to the allure of extremist ideology focused on hatred and violence,” said John F. Bennett, Special Agent in Charge of the FBI’s San Francisco Field Office.  “This sentence serves as a reminder of how persistent and pervasive online radicalization has become and this should be a precautionary example for individuals who may be tempted by terrorist propaganda.  The FBI, through our Joint Terrorism Task Forces, remains dedicated to protecting the United States against any form of terrorism and ensuring the safety of our community.”

Alhaggagi, 23, of Oakland, Calif., pleaded guilty to the charges on July 18, 2018.  In pleading guilty, Alhaggagi admitted he knowingly attempted to provide services and personnel to the Islamic State of Iraq and Syria (ISIS) in violation of 18 U.S.C. § 2339B.  ISIS was designated a foreign terrorist organization by the United States Secretary of State in 2014.

Federal prosecutors filed sentencing memoranda disclosing additional details of Alhaggagi’s conduct prior to and after his arrest.  For example, beginning in July of 2016, Alhaggagi boasted online about a series of terrorist attacks he wanted to commit on behalf ISIS.  His aim was to “redefine terror,” and he promised that if he succeeded, the “whole Bay Area [was] gonna be in flames.”   Among his more vicious attacks, he planned to explode a car bomb outside a gay nightclub in San Francisco, and plant backpack bombs on routes known to be used by emergency vehicles, in an effort to kill first responders seeking to aid casualties.  In addition, even after his arrest, Alhaggagi hatched a new plot for a bomb attack and shared the plan with prison inmates.  At one point, Alhaggagi was driving through Berkeley towards the Oakland Hills with an undercover agent when he pointed out several bars and clubs “where all the students are.”  The defendant commented, “it’s a nice area to attack… it’s like, everybody’s in their own world, just doing their thing.”  He told the undercover agent that there were even more crowded areas in San Francisco that could make for good targets and said, “it’s not hard to target places, because there’s people everywhere.  But I was trying to target, you know, like clubs, you know, like dance clubs, bars… stuff like that . . ..”

In pleading guilty, Alhaggagi admitted to the following: 

• Alhaggagi admitted that in October and November of 2016, he created Twitter accounts and Facebook accounts along with the Gmail accounts that were necessary to authenticate them for individuals he believed were ISIS supporters. 
• Alhaggagi admitted that in the Fall of 2016 he communicated with two individuals who asked him to set up social media accounts.  Alhaggagi communicated with the individuals from his computer while he was in Oakland, Calif., and admitted opening several Twitter, Facebook, and Gmail accounts at their request.  Alhaggagi also admitted knowing that both of the individuals were ISIS sympathizers and that by opening the social media accounts he was providing a service to ISIS.  The investigation demonstrated at least one of the individuals Alhaggagi opened accounts for was an actual member of ISIS.
• Alhaggagi admitted that on Nov. 29, 2016, the day of his arrest, he possessed a device used to make counterfeit credit cards and that between July and August 2016, he used a credit card with someone else’s name to buy more than $1,000 worth of clothes for himself online.

A federal grand jury indicted Alhaggagi on July 21, 2017, with one count of knowingly attempting to provide services and personnel to the Islamic State of Iraq and Syria, or ISIS, in violation of 18 U.S.C. § 2339B; one count of possessing an identity theft device, in violation of 18 U.S.C. § 1029(a)(4); one count of unauthorized identity theft, in violation of 18 U.S.C. § 1029(a)(2); and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A.  Alhaggagi pleaded guilty to all the charges without a written agreement.

In addition to the prison term, Judge Breyer ordered the defendant to serve 10 years supervised release.   

The prosecution is the result of an investigation by the Federal Bureau of Investigation, the Special Prosecutions and National Security Unit of the United States Attorney’s Office for the Northern District of California, the United States Department of Justice National Security Division, the Berkeley Police Department, and members of the Joint Terrorism Task Force including, the Oakland Police Department.

Further Information: Case #: 17-387 CRB

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges' calendars with schedules for upcoming court hearings can be viewed on the court's website at www.cand.uscourts.gov. 

A health care products business owner, who attempted to evade the payment of more than $450,000 in income taxes, was sentenced in federal court in Denver, Colorado, today by U.S. District Court Judge Raymond Moore to 36 months in prison, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. 

According to court documents, in April 2010, Craig Walcott was notified by the Internal Revenue Service (IRS) that he owed taxes and penalties for the years 2005, 2006 and 2007, totaling $458,569.  After receiving this notice, Walcott took a series of steps to prevent the IRS from collecting those taxes.  He recorded fictitious deeds of trust against four properties he owned, so that they would be unattractive targets for IRS tax liens, and transferred other properties he owned to nominee entities to make it appear to the IRS that he no longer had an ownership interest in the properties. Walcott also filed false tax returns for the tax years 2005- 2007 that underreported his income for those years.

Walcott pleaded guilty on Nov. 27, 2018, to one count of attempting to evade the payment of his federal income taxes. 

In addition to prison, Walcott was ordered to pay restitution to the IRS in the amount of $628,733 and to serve three years of supervised release after the completion of his sentence. Walcott was remanded into custody today.

The case was investigated by special agents of the IRS-Criminal Investigation. Tax Division Assistant Chief Andrew Kameros and Trial Attorney Lee Langston prosecuted the case.

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

The Justice Department today announced that it has reached a settlement agreement with CFA Institute (CFAI), an international association of investment professionals, headquartered in Charlottesville, Virginia. CFAI offers a global certification for Chartered Financial Analysts who pass an exam that CFAI administers annually. The settlement resolves the Department’s investigation into whether CFAI violated the anti-discrimination provision of the Immigration and Nationality Act (INA) by preferring to hire H-1B visa holders over U.S. workers when it selected CFAI exam graders from its members. This is the fifth settlement under the Civil Rights Division’s Protecting U.S. Workers Initiative, which is aimed at targeting, investigating, and taking enforcement actions against companies that discriminate against U.S. workers in favor of temporary visa workers. It is the first of those settlements to involve the H-1B visa program.   

The Department’s independent investigation concluded that from at least November 2016 through January 2018, CFAI set aside annual exam-grading positions for its members who required or had H-1B visas or other high-skill temporary visas, based on their citizenship status. The Department also concluded that, in doing so, CFAI failed to consider equally qualified U.S. workers for such positions. The INA prohibits employers from discriminating in the hiring process based on a worker’s citizenship status or national origin. Refusing to hire U.S. citizens, or setting aside positions for visa holders, because of their citizenship status violates the INA.    

“The Civil Rights Division works diligently to stop employers from unlawfully denying employment opportunities to qualified and available U.S. workers,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “We appreciate CFAI’s cooperation and look forward to working with the organization to ensure that it does not disqualify exam graders based on their citizenship status.”

Under the settlement, CFAI will pay $321,000 in civil penalties to the United States, train employees on the requirements of the INA’s anti-discrimination provision, and be subject to departmental monitoring and reporting requirements. 

Under the Protecting U.S. Workers Initiative, the Civil Rights Division has opened dozens of investigations, filed one lawsuit, and reached settlement agreements with five employers. Since the Initiative’s inception, employers have agreed to pay or have distributed over $320,000 in back pay to affected U.S. workers. The Division has also increased its collaboration with other federal agencies to combat discrimination and abuse by employers using temporary visa workers. 

The 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 citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation. 

More information on how employers can avoid unlawful citizenship status discrimination is available here.  For more information about protections against employment discrimination under immigration laws, 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; or 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.

A federal court in Orlando, Florida, entered a permanent injunction against Yves Demesmin, Unik Tax Refund LLC, and YvesDemesmin LLC, barring them from preparing federal tax returns for others and owning or operating a tax preparation business, the Justice Department today announced.

The court had earlier ordered that the defendants disgorge $1,251,456.54, representing the ill-gotten gains that they received for the preparation of tax returns. Both orders were signed by Judge Gregory A. Presnell of the U.S. District Court for the Middle District of Florida. 

The government alleged that the defendants prepared tax returns making false or fraudulent claims for the Earned Income Tax Credit and fuel tax credit, and reporting false business-related income and expenses, farming-related income and expenses, and phony job-related expenses.

Previously, on April 30, 2018, the court barred co-defendants Joseph Demesmin, UJM Tax Services LLC, Elie Dorceus, Loyal Experience Dependable Tax Service LLC, LED Financial Service LLC, Mario Cooper, Dia Fleming, and Dia I. Fleming LLC from preparing federal tax returns for others and owning or operating a tax preparation business. The court also ordered that these defendants disgorge a combined total of $1,137,873.59 of ill-gotten gains that they received for the preparation of tax returns.

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.

The Justice Department announced today the filing of civil forfeiture complaints seeking the forfeiture and recovery of approximately $38 million in assets allegedly associated with an international conspiracy to launder funds misappropriated from 1Malaysia Development Berhad (1MDB), a Malaysian sovereign wealth fund.  Combined with civil forfeiture complaints filed in July 2016 seeking more than $1 billion in assets, and civil forfeiture complaints filed in June 2017 seeking approximately $540 million in assets, this case represents the largest action brought under the Department’s Kleptocracy Asset Recovery Initiative.  Assets now subject to forfeiture in this case total approximately $1.7 billion.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Nicola T. Hanna of the Central District of California, Assistant Director Robert Johnson of the FBI’s Criminal Investigative Division and Chief Don Fort of the IRS Criminal Investigation (IRS-CI) made the announcement.

According to the complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates.  1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people. 

“The complaints filed today demonstrate the Department of Justice’s steadfast commitment to recovering assets traceable to the alleged multi-billion dollar looting of Malaysia’s sovereign wealth fund,” said Assistant Attorney General Benczkowski.  “The Criminal Division and our law enforcement partners are committed to protecting the U.S. financial system and ensuring that the proceeds of overseas corruption and other criminal conduct find no safe haven here.”

“These new lawsuits target assets collected by corrupt officials and their associates through a massive scheme that stole billions of dollars from the people of Malaysia and laundered the proceeds across the world,” said U.S. Attorney Nick Hanna.  “Through a series of cases filed over the past three years, we have pursued a wide variety of assets purchased with stolen 1MDB funds, and so far we have successfully forfeited hundreds of millions of dollars. Collectively, these cases send a strong message that the United States cannot be used as a safe haven or a conduit for money pilfered by corrupt officials.”

“Today’s announcement is a testament to the FBI’s relentless effort to investigate kleptocracy and hold corrupt foreign officials accountable,” said FBI Assistant Director Johnson.  “At the onset of this investigation, we promised to work with our foreign and domestic partners to identify and return stolen assets to the Malaysian people.  This filing demonstrates our unwavering commitment to keep that promise.  We want to thank our partners, both domestic and foreign, for their hard work in helping to bring justice for the Malaysian people.  The recovery of these assets is another step in that direction.”

“The investigation into the misappropriation of the 1MDB funds represents a model for international cooperation in significant cross-border money laundering matters, and sends a message that criminals cannot evade law enforcement authorities simply by laundering money through multiple jurisdictions and through a web of shell corporations,” said IRS-CI Chief Fort.  “We are proud of the investigative work on this case and the work of our fellow law enforcement agencies in this and other complex financial investigations.”

As alleged in the complaints, the members of the conspiracy – which included officials at 1MDB, their relatives and other associates – diverted more than $4.5 billion in 1MDB funds.  Using fraudulent documents and representations, the co-conspirators allegedly laundered the funds through a series of complex transactions and shell companies with bank accounts located in the U.S. and abroad.  These transactions allegedly served to conceal the origin, source and ownership of the funds, and ultimately passed through U.S. financial institutions to then be used to acquire and invest in assets located in the U.S. and overseas.

As alleged in the earlier complaints, in 2009, 1MDB officials and their associates embezzled approximately $1 billion that was supposed to be invested to exploit energy concessions purportedly owned by a foreign partner.  Instead, the funds were allegedly transferred through shell companies and were used to acquire a number of assets, as set forth in the complaints.  The complaints also allege that the co-conspirators misappropriated close to $1.4 billion in funds raised through bond offerings in 2012, and more than $1.2 billion following another bond offering in 2013.  The complaints also allege that in 2014, the co-conspirators misappropriated approximately $850 million in 1MDB funds under the guise of repurchasing certain options that had been given in connection with a guarantee of the 2012 bonds.

The complaints filed today in the Central District of California identify additional assets traceable to the 2012 and 2013 bond offerings.  These assets include luxury real estate in London, proceeds from the sale of luxury real estate in New York City, and converted equity in a facilities management company headquartered in Kentucky.    

The FBI’s International Corruption Squads in New York City and Los Angeles and the IRS-CI are investigating the case.  Deputy Chief Woo S. Lee and Trial Attorneys Kyle R. Freeny, Jonathan Baum, Barbara Levy and Joshua L. Sohn of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys John Kucera and Michael R. Sew Hoy of the Central District of California are prosecuting the case.  The Criminal Division’s Office of International Affairs is providing substantial assistance.

The Department also appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg, and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.  In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption.  Individuals with information about possible proceeds of foreign corruption located in or laundered through the U.S. should contact federal law enforcement or send an email to kleptocracy@usdoj.gov (link sends e-mail) or https://tips.fbi.gov/.

A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime.  These allegations are not proven until a court awards judgment in favor of the United States.

In an opinion issued yesterday, the United States District Court for the District of Utah granted the United States’ Motion to Reconsider and found the per se rule applies to the horizontal customer agreement alleged in the indictment of heir location service providers Kemp & Associates and its Chief Operating Officer, Daniel J. Mannix. 

“The Department is pleased that the Court granted our motion today and we look forward to trying this case to protect consumers who are harmed by the conduct alleged in the indictment,” said Assistant Attorney General Makan Delrahim.

In granting the United States’ Motion, the Court found the “the agreement in the present case is a horizontal customer allocation agreement, and therefore subject to the Per Se approach.” 

Heir location firms identify people who may be entitled to an inheritance from the estate of someone who died without a will.  The heir location firms then enter into contracts with those people to help secure their inheritances in exchange for a fee.

The indictment alleges that the conspirators agreed to suppress and eliminate competition between them on estates they both pursued.  Specifically, the indictment alleges that they agreed that the second company to solicit an heir on an estate would allocate that heir and the business of certain remaining heirs to the first company.  In exchange for backing off, the first company would then pay the second company a portion of the contingency fees ultimately collected from the allocated heirs.  The conspirators memorialized, monitored, enforced, and profited from this agreement from as early as September 1999 until as late as January 2014.

A naturalized U.S. citizen residing in Alexandria, Virginia pleaded guilty today to a felony charge of having fraudulently obtained U.S. citizenship.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger of the Eastern District of Virginia and Special Agent in Charge Patrick J. Lechleitner of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C made the announcement.

Mergia Negussie Habteyes, 58, pleaded guilty to one count of unlawfully procuring naturalization contrary to law before U.S. District Judge T. S. Ellis III of the Eastern District of Virginia.  A sentencing hearing before Judge Ellis is scheduled for May 17, 2019.  Negussie was charged in an indictment returned by a federal grand jury in the Eastern District of Virginia on Aug. 14, 2018. 

By his own admission, Negussie participated in the persecution of detainees in Ethiopia from roughly 1977 to 1978 during the “Red Terror,” a  campaign of brual violence during which Ethiopia’s ruling military council, the Derg, and its affiliates arrested, extra-judicially detained, interrogated and tortured tens of thousands of members, perceived members and supporters of political opposition groups.  Negussie injured and abused detainees on account of their political opinion by beating them with weapons including belts, rods, and other objects, causing in many instances permanent scarring and injury.  During these beatings, Negussie questioned the detainees about their affiliation with the Ethiopian People’s Revolutionary Party (EPRP) and opposition activities of the EPRP, which was the Derg’s primary political opponent at the time. 

Negussie came to the United States in 1999 after telling a series of lies to U.S. immigration officials in the course of obtaining authority to enter the United States as a refugee.  He ultimately became a naturalized U.S. citizen in 2008.  At his plea hearing, Negussie specifically admitted that, during his sworn naturalization interview, he falsely stated that he had never persecuted persons because of their political opinion, and he failed to disclose that he had committed a crime or offense for which he was not arrested.  Additionally, Negussie admitted that he falsely stated that he had never given false or misleading information to any U.S. government official while applying for any immigration benefit and that he had never lied to U.S. immigration officials  to gain entry or admission into the United States.

Negussie’s materially false representations in sworn statements to U.S. immigration officials resulted in his procurement of naturalization contrary to law. 

“Individuals who participate in the kind of brutal human rights violations perpetrated by this defendant should not be able to find safe haven in the United States by misrepresenting themselves and their past,” said Assistant Attorney General Benczkowski.  “The Justice Department and its partners will continue to pursue those, like Negussie, who seek to subvert the U.S. immigration and naturalization system this way.” 

“Negussie sought to outrun his past by employing deception to fraudulently obtain United States citizenship,” said U.S. Attorney Terwilliger. “We remain committed to investigating and prosecuting criminal immigration cases, including those involving human rights violators.”

“The conscious choice to become a citizen is a great pillar and a richly beautiful tradition of the United States,” said HSI SAC Lechleitner.  “It is the highest and most egregious offense to this special fabric of our country to commit fraud in order to obtain that citizenship, but it is immeasurably deplorable for Negussie to have willfully concealed his participation in raw inhumanity.” 

Conviction will result in automatic revocation of Negussie’s U.S. citizenship.

The case was investigated by HSI Washington, D.C. with the support of the Human Rights Violators and War Crimes Center (HRVWCC).  Established in 2009, the HRVWCC furthers the government’s efforts to identify, locate and prosecute human rights abusers in the United States, including those who are known or suspected to have participated in persecution, war crimes, genocide, torture, extrajudicial killings, female genital mutilation or the use or recruitment of child soldiers. The HRVWCC leverages the expertise of a select group of agents, lawyers, intelligence and research specialists, historians and analysts who direct the government’s broader enforcement efforts against these offenders. The HRVWCC comprises ICE HSI’s Human Rights Violators and War Crimes Unit, ICE’s Human Rights Law Section, FBI’s International Human Rights Unit and the Justice Department’s Human Rights and Special Prosecutions Section (HRSP).  

The case was jointly prosecuted by Trial Attorney Jamie Perry of the Criminal Division’s HRSP and Assistant U.S. Attorney Alexander Blanchard of the Eastern District of Virginia with assistance from HRSP Historian Dr. Christopher Hayden and HRSP paralegal specialist Claire Garvin and EDVA paralegal specialist Angela Lawrence.

Members of the public who have information about former human rights violators in the United States are urged to contact U.S. law enforcement  through the HSI tip line at 1-866-DHS-2-ICE or its online tip form at www.ice.gov/exec/forms/hsi-tips/tips.asp.

An indictment against Joaquin Guzman Lopez and Ovidio Guzman Lopez, charging them with a conspiracy to distribute cocaine, methamphetamine, and marijuana for importation into the United States was unsealed last week. The Guzman Lopez brothers, believed to currently reside in Mexico, are the sons of Joaquin Guzman Loera, aka “El Chapo,” who was convicted by a jury in the Eastern District of New York for his role as the leader of the Sinaloa Cartel.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Scott Brown of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Arizona Field Office made the announcement.

Joaquin Guzman Lopez, 34, and Ovidio Guzman Lopez, 28, are charged in a one-count indictment alleging that from in or around April 2008, through April 2018, they conspired to distribute cocaine, methamphetamine, and marijuana from Mexico and elsewhere for importation into the United States.  This case is assigned to U.S. District Judge Rudolph Contreras.

The case was investigated by HSI.  This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state, and local enforcement agencies.  The principal mission of the OCDETF program is to identify, disrupt, dismantle, and prosecute high-level members of drug trafficking, weapons trafficking, and money laundering organizations and enterprises.

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

Trial Attorneys Anthony Aminoff and Anthony Nardozzi of the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) are prosecuting the case.

A Miami, Florida-area medical clinic owner pleaded guilty today for her role in a scheme to defraud Medicare by submitting fraudulent billings from the clinic and by supplying patients to three home health agencies that submitted fraudulent bills for home health services.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) and Special Agent in Charge Brian Swain of the U.S. Secret Service’s (USSS) Miami Field Office made the announcement.  

Juliette Anais Tamayo, 53, of Miami, pleaded guilty to count two of a superseding indictment charging her with conspiracy to commit health care fraud and wire fraud.  Tamayo previously pleaded guilty to count one of the superseding indictment, charging a conspiracy to pay and receive kickbacks and to defraud the United States.  Her sentencing has been scheduled for April 30, 2019 by U.S. District Judge Cecelia Altonaga of the Southern District of Florida, who accepted both pleas.

Tamayo owned Sunshine Medical Care Group Inc. (Sunshine), a medical clinic in Miami.  According to admissions made as part of her separate pleas to the health care fraud and kickback conspiracies, Tamayo solicited and accepted kickbacks from patient recruiters and from the owners of several Miami-area home health agencies in exchange for providing prescriptions for home health services to patients at Sunshine.  The prescriptions, in turn, were used by the home health agencies to bill Medicare for home health services purportedly provided to Medicare  beneficiaries.  Tamayo paid a portion of the kickbacks she received from the home health agencies to physicians who worked at Sunshine to induce them to write the fraudulent prescriptions, she admitted. 

The superseding indictment alleged that the losses to Medicare as a result of the scheme were approximately $3.7 million.

The principals of the home health agencies and one of the Sunshine physicians who wrote fraudulent prescriptions previously pleaded guilty to conspiracy to commit health care fraud in separate matters.

The case was investigated by the FBI, HHS-OIG and the U.S. Secret Service. Trial Attorneys Adam G. Yoffie and Gary A. Winters of the Criminal Division’s Fraud Section are prosecuting the case.

The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.

The Department of Justice’s U.S. Trustee Program (USTP) has entered into a multi-district settlement agreement with global consulting firm McKinsey & Company, Inc. (McKinsey), resolving disputes over the adequacy of McKinsey’s disclosures of connections in Chapter 11 bankruptcy cases.  Under the Bankruptcy Code and Rules, the retention and payment of a professional firm by a debtor company in bankruptcy is contingent upon approval by the bankruptcy court after the firm discloses all of its connections to the debtor, creditors, and other parties.  These strict disclosure requirements allow the court, USTP, and parties involved in the case to identify any conflicts of interest that may taint the professional’s advice and favor one interested party over another.

The USTP alleged that McKinsey made insufficient disclosures about its clients and investments in certain entities that were connected with the debtors that employed McKinsey to provide financial advice on their respective bankruptcy reorganizations.  Specifically, the USTP alleged in court filings that McKinsey failed to identify clients who were connected with the debtors it represented and lacked candor regarding its investments in entities that could create a conflict of interest.

“This settlement ensures that McKinsey is held accountable for its conduct,” said USTP Director Cliff White.  “Transparency is the linchpin of the bankruptcy system and professionals employed in bankruptcy cases must be free of conflicts of interest..  McKinsey failed to satisfy its obligations under bankruptcy law and demonstrated a lack of candor with the court and USTP.  This settlement ensures that McKinsey is held to the same standards applicable to all professionals who participate in bankruptcy cases.  If this conduct is repeated in future cases, we will seek even more far-reaching remedies.”

Settlement Terms

Under the terms of the settlement, McKinsey agrees to pay $15 million in three bankruptcy cases to remedy inadequate disclosures of connections and to make additional disclosures.  The payment will be distributed to the creditors and other parties in accordance with the reorganization plans approved by the courts or other applicable law.  This is one of the highest repayments made by a bankruptcy professional for alleged non-compliance with disclosure rules.

The USTP has agreed not to bring additional actions in these and other cases based on McKinsey’s past disclosures.  If facts later show that those disclosures contained material misrepresentations or omissions that would have rendered McKinsey not disinterested or otherwise disqualified from retention, then the USTP is free to seek disqualification from employment, disgorgement of fees, and other remedies in the settled cases.  While the agreement resolves disputes with the USTP, it does not impact the rights of any parties or government agencies not participating in the settlement.  A term sheet for the proposed settlement has been filed in three U.S. Bankruptcy Courts, where the settlement will be subject to the courts’ approval.  The cases are captioned Alpha Natural Resources, Case No. 15-33896 (Bankr. E.D. Va.), Westmoreland Coal, Case No. 18-35672 (Bankr. S.D. Tex.), and SunEdison, Case No. 16-10992 (Bankr. S.D.N.Y). 

The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.  The Program has 21 regions and 90 field office locations.  Learn more information on the Program at: https://www.justice.gov/ust.

 

Attorney General William P. Barr issued the following statement:

"Jeffrey Rosen is a distinguished lawyer who has served at the highest levels of government and the private sector," said Attorney General William P. Barr. "As an attorney, he has more than 35 years’ experience litigating complex matters in state and federal courts across the country, including as a partner at Kirkland & Ellis. He supervised more than 400 attorneys while serving as General Counsel at the Department of Transportation and also served as General Counsel and Senior Policy Advisor at the White House Office of Management and Budget. He currently serves as Deputy Secretary of Transportation, where he leads 50,000 employees.  His years of outstanding legal and management experience make him an excellent choice to succeed Deputy Attorney General Rod Rosenstein, who has served the Department of Justice over many years with dedication and distinction.”

A federal grand jury returned an indictment yesterday against the former president and the former chief legal officer of Cognizant Technology Solutions Corporation, a publicly traded Fortune 200 technology services company based in Teaneck, New Jersey, in connection with an alleged foreign bribery scheme.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Craig Carpenito of the District of New Jersey and Special Agent in Charge Gregory W. Ehrie of the FBI Newark Field Office made the announcement.

Gordon Coburn, 55, of Beaver Creek, Colorado, and Steven Schwartz, 51, of Greenwich, Connecticut, were charged in a 12-count indictment with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), three counts of violating the FCPA, seven counts of falsifying books and records, and one count of circumventing and failing to implement internal accounting controls.  The charges stem from an alleged scheme to bribe one or more government officials in India to ensure the issuance of a construction permit necessary to complete the development of an office campus that would support thousands of employees and become one of Cognizant’s largest facilities in India.

The case is assigned to U.S. District Judge Kevin McNulty of the District of New Jersey.  The defendants are scheduled to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.

“The allegations in the indictment filed yesterday describe a sophisticated international bribery scheme authorized and concealed by C-suite executives of a publicly-traded multinational company,” said Assistant Attorney General Benczkowski.  “The indictment of Gordon Coburn and Steven Schwartz demonstrates the Department’s commitment to relentlessly pursuing corporate fraud and corruption wherever it is found.”

According to the indictment, in or about April 2014, Coburn and Schwartz allegedly authorized an unlawful payment of approximately $2 million to one or more foreign government officials in India to secure and obtain a necessary permit to open a new office campus.  To conceal Cognizant’s involvement in the scheme, Coburn, Schwartz and others allegedly agreed that a third-party construction company would obtain the permit by making the illegal bribe payment and that Cognizant would reimburse the construction company through phony construction invoices at the end of the project.  The indictment further alleges that in or about late June 2014, after the co-conspirators had agreed that the construction company would make the bribe payment on behalf of Cognizant, the construction company secured the necessary government order for Cognizant to obtain the permit, allowing Cognizant to complete the development of the office campus and avoid millions of dollars in costs.  Months later, the co-conspirators are alleged to have knowingly caused Cognizant to funnel over $2 million to the construction company disguised as payment for cost overruns on the office campus when they knew that the actual purpose of the payment was to reimburse the construction company for the bribe payment.  According to the indictment, as Coburn, Schwartz and others had previously agreed, they hid the bribe reimbursement payment within a series of line items in a construction change order request to be paid to the construction company, thereby concealing the true nature and purpose of the reimbursement, falsifying Cognizant’s books and records, and circumventing and failing to implement its internal controls.

The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Department of Justice and the U.S. Attorney’s Office for the District of New Jersey also announced today that they have declined prosecution of Cognizant after considering the factors set forth in the Department of Justice’s Principles of Prosecution of Business Organizations and the Corporate Enforcement Policy, including Cognizant’s prompt voluntary self-disclosure, cooperation and remediation, as well as Cognizant’s disgorgement to the Department and the U.S. Securities and Exchange Commission (SEC) of the cost savings that resulted from the bribery scheme. 

In the related case with the SEC, Cognizant entered into a cease and desist order and agreed to pay the SEC a civil penalty, disgorgement and prejudgment interest totaling approximately $25 million.  The Company will pay $16,394,351 in disgorgement of profits within the time limits prescribed by 28 U.S.C. § 2462 to the SEC, and the remaining $2,976,210 to the U.S. Treasury.

The Department appreciates the significant cooperation provided by the SEC in this case.

The case is being investigated by the FBI’s Newark Field Office.  Assistant Chief David A. Last of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Courtney A. Howard and Nicholas P. Grippo of the District of New Jersey are prosecuting the case.

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

Official White House Photo by Tia Dufour President Donald J. Trump participates in swearing-in of William P. Barr administered by U.S. Supreme Court Chief Justice John Roberts on February 14, 2019.  Attorney General Barr's wife, Christine, holds the Bible.

Today, William P. Barr was confirmed by the U.S. Senate to be the 85th Attorney General of the United States. Following the vote, President Donald J. Trump participated in the swearing-in of Mr. Barr during a ceremony in the Oval Office of the White House, where U.S. Supreme Court Chief Justice John Roberts administered the oath of office. Mr. Barr’s wife, his three daughters and their spouses, and his grandchildren attended the ceremony. Mr. Barr joins John Crittenden (1841 and 1850-1853) as one of only two people in U.S. history to serve twice as Attorney General.

Mr. Barr is rejoining the Department of Justice where he previously served as the 77th Attorney General of the United States from 1991 to 1993 under President George H.W. Bush. Mr. Barr also served as the Deputy Attorney General from 1990 to 1991 and as the Assistant Attorney General of the Office of Legal Counsel from 1989 to 1990. While serving at the Department, Mr. Barr helped create programs and strategies to reduce violent crime and was responsible for establishing new enforcement policies in a number of areas including financial institutions, civil rights, and antitrust merger guidelines. Mr. Barr also led the Department’s response to the Savings & Loan crisis; oversaw the investigation of the Pan Am 103 bombing; directed the successful response to the Talladega prison uprising and hostage taking; and coordinated counter-terrorism activities during the First Gulf War.

Most recently, Mr. Barr served as Of Counsel at Kirkland & Ellis. Before his work at Kirkland & Ellis, he served as Executive Vice President and General Counsel for GTE Corporation from 1994 until 2000 and as Executive Vice President and General Counsel of Verizon from 2000 to 2008.

Mr. Barr served as a law clerk under Judge Malcolm Wilkey of the U.S. Court of Appeals for the District of Columbia Circuit, and from 1982 to 1983, served on the White House Domestic Policy Staff under President Ronald Reagan. He received his A.B. in government in 1971 and his M.A. in government and Chinese studies in 1973, both from Columbia University. From 1973 to 1977, Mr. Barr served in the Central Intelligence Agency before receiving his J.D. with highest honors from George Washington University Law School in 1977.

The Department of Justice welcomes back Attorney General Barr and looks forward to his leadership in upholding the rule of law and protecting the rights of all Americans.

A Colorado paving company owner was sentenced to prison yesterday for failure to pay income taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

Douglas A. Wieland was sentenced to 12 months and one day in prison by U.S. District Judge R. Brooke Jackson in Denver, Colorado. In September 2018, Wieland pleaded guilty to two counts of failure to pay income taxes, in violation of 26 U.S.C. §  7203.

According to court documents, Wieland owned and operated Performance Paving, a company that performed asphalt and concrete work. Wieland admitted that, from April 1999 through December 2017, he did not make any payments toward his income taxes. He also admitted that he took steps to conceal his income and assets to prevent the IRS from seizing his assets. Wieland deposited over $1.8 million into a “warehouse bank” account and then used that account to pay for his personal expenses. The purpose of a “warehouse bank” is to maintain the financial privacy of all “account holders” by commingling the funds of numerous account holders in a single bank account, usually at a domestic bank in the United States. Wieland also cashed checks his customers gave him for his services, and admitted at a court proceeding held in Adams County, Colorado, that he “cashed a check somewhere outside the box so the IRS doesn’t steal it from my bank.”

In addition to the term of imprisonment imposed, Wieland was ordered to pay restitution in the amount of $166,658.

Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Lori A. Hendrickson and Sarah A. Kiewlicz, who prosecuted the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website at www.justice.gov/tax.

The Department of Justice announced today that it had reached a settlement with Learfield IMG College to resolve a Department lawsuit alleging that it engaged in unlawful agreements not to compete for multimedia rights contracts for universities’ athletic programs.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to challenge unlawful agreements not to compete.  At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the lawsuit’s alleged competitive harm.

“The illegal agreements not to compete allowed Learfield IMG College to benefit at the expense of the nation’s universities, students, and fans,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “Public and private universities rely on competition among multimedia rights providers to provide critical resources to athletic programs, but these agreements lessened that competition and thereby harmed the universities and, ultimately, American students and taxpayers.”

The proposed settlement prohibits agreements not to bid, or to submit joint bids, between Learfield IMG College and any of its competitors in multimedia rights management.  The Department has determined that prohibiting this conduct would resolve the competition concerns raised as a result of Learfield IMG College’s actions.  The proposed settlement further requires Learfield IMG College to adopt rigorous antitrust compliance and reporting measures to prevent similar anticompetitive conduct in the future.  Learfield IMG College has cooperated with the Department’s investigation and will continue to do so as it adopts these measures.

Learfield IMG College, a subsidiary of A-L Tier I LLC, is headquartered in Plano, Texas.  Learfield IMG College provides a variety of services to universities, including multimedia rights management, trademark licensing, and ticketing.  

          SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant Gregorio Blas Cruz, Jr., age 50, originally from Mongmong, Guam, was sentenced on February 13, 2019, in two cases involving Possession with Intent to Distribute Methamphetamine Hydrochloride, in violation of 21 U.S.C. § 841(a)(1).  The District Court sentenced Cruz to concurrent 70-month terms of imprisonment, to be followed by three years of supervised release.  The Court also ordered Cruz to pay a mandatory $200 assessment fee.  In addition, defendants who are convicted of a federal drug offense may no longer qualify for certain federal benefits.

          On July 8, 2015, Cruz pled guilty to possessing methamphetamine with intent to distribute, in a case involving approximately 33 grams of ice and the seizure of $3,390 in U.S. currency.   On April 21, 2016, while on pretrial release for that case, Cruz was arrested again for a similar offense.  His second case involved 292 grams of methamphetamine and the seizure of over $1,000 in U.S. currency.  Cruz had prior convictions in the Superior Court of Guam for family violence, theft and drugs.

          The government requested a significant downward departure in Cruz’s sentence due to his providing law enforcement with information that resulted in the seizure of approximately ten pounds of methamphetamine.  A DEA Task Force Officer from the Judiciary of Guam, Probation Office, testified at sentencing that the street value of the ten pounds of methamphetamine was over two million dollars.  Due to Cruz’s 25-year drug addiction, the Court recommended his enrollment in a Bureau of Prisons drug treatment program while incarcerated. 

          The Drug Enforcement Administration conducted the investigation, in conjunction with Judiciary of Guam, Probation Office and Guam Police Department.  The case was prosecuted by Belinda Alcantara, an Assistant U.S. Attorney in the District of Guam.     

A Baton Rouge, Louisiana-based doctor pleaded guilty yesterday and his medical billing supervisor pleaded guilty today for their roles in a scheme to defraud Medicare and other health care insurers.  

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Brandon J. Fremin of the Middle District of Louisiana, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Field Office, and Special Agent in Charge Eric J. Rommal of the FBI’s New Orleans Field Office made the announcement. 

John Eastham Clark M.D., 66, of Baton Rouge, pleaded guilty on Feb. 13 to count one of an indictment charging him with conspiracy to commit health care fraud.  His sentencing has not been scheduled yet by U.S. District Judge Shelly D. Dick of the Middle District of Louisiana, who accepted his plea.  Charlene Anita Severio 56, of Walker, Louisiana, pleaded guilty today to one count of an indictment charging her with conspiracy to commit health care fraud and wire fraud and two counts of the indictment charging health care fraud.  Her sentencing has not been scheduled yet by Judge Dick, who accepted her plea.

“For nearly a decade, John Eastham Clark and Charlene Anita Severio submitted fraudulent claims to Medicare and other health insurers for payments they were not entitled to receive,” said Assistant Attorney General Benczkowski.  “These guilty pleas should serve as a warning to unscrupulous doctors and other medical professionals: the Criminal Division’s Medicare Fraud Strike Force and our law enforcement partners will aggressively investigate and prosecute illegal billing practices and other fraudulent schemes that steal taxpayer dollars and increase healthcare program costs for all Americans.” 

“In defrauding the Medicare system, Dr. Clark violated a sacred oath taken by physicians but above all he violated the law,” said U.S. Attorney Fremin.  “Ms. Severio, an employee of Dr. Clark, submitted fraudulent claims to both Medicare and other health care insurers as part of the scheme.  We will continue to hold medical professionals accountable for abusing positions of trust in the community and for harming the financial integrity of our health care system.  I want to thank the Department of Justice’s Criminal Division, Fraud Section, the FBI, Health and Human Services - Office of Inspector General and the dedicated attorneys and staff from our office for their outstanding efforts in this case.”

“Today’s guilty pleas clearly illustrate that, along with our law enforcement partners, we will aggressively pursue criminal charges against bad actors in the Medicare program,” said HHS-OIG Special Agent in Charge Porter.  “Those intent on robbing patients with legitimate medical needs of access to taxpayer funds earmarked for their health care, will ultimately pay a heavy price.”      

“Agents of the Federal Bureau of Investigation remain dedicated to combating health care fraud and to doing our part in reducing the impact that opioids have on our nation,” said FBI Special Agent in Charge Porter.  “This was a case that spanned multiple years and has resulted in numerous convictions.  It highlights the cooperation between the FBI and the Health and Human Services - Office of the Inspector General.”

Clark was a co-owner and the medical director of Louisiana Spine & Sports LLC, a pain management clinic located in Baton Rouge.  According to plea documents, the charge stems from Clark’s role in a scheme to submit fraudulent claims to Medicare and other health care insurers.  Specifically, as part of his guilty plea, Clark admitted that from approximately June 2005 through March 2015, he, along with his billing supervisor Severio, and others, conspired to submit fraudulent claims indicating that minor surgical procedures occurred on days subsequent to office visits, when in fact the office visits and procedures took place on the same day.  Clark admitted that this practice, commonly referred to as “unbundling,” was done to defraud health care insurers for non-reimbursable office visits.  Clark further admitted to falsifying, and directing Severio and others to falsify, records substantiating the fraudulent claims.

Severio was a billing supervisor at Louisiana Spine & Sports, and worked for Clark.  According to admissions made as part of her guilty plea, from approximately June 2005 through March 2015, Severio conspired with Clark to submit fraudulent claims to Medicare and other health care insurers.  Specifically, Severio admitted that she knowingly and willfully submitted fraudulent claims indicating that minor surgical procedures performed by Clark occurred on days subsequent to office visits, when in fact the office visits and procedures took place on the same day.  Severio admitted that this practice was done to defraud health care insurers.

 In another case involving Louisiana Spine & Sports, on Nov. 20, 2018, Gray Wesley Barrow M.D., a co-owner of Louisiana Spine & Sports, pleaded guilty to a scheme to receive approximately $336,000 in illegal health care kickback payments.  Barrow is scheduled to be sentenced on March 1.  In addition, Christopher William Armstrong, a former physician’s assistant at Louisiana Spine & Sports, pleaded guilty on Nov. 27, 2018 for his role in a scheme to unlawfully distribute thousands of oxycodone pills.  Armstrong is scheduled to be sentenced on April 16.   

The case was investigated by HHS-OIG and the FBI.  Assistant Chief Dustin M. Davis and Trial Attorney Justin M. Woodard of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Elizabeth E. White of the Middle District of Louisiana are prosecuting the case.  

The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. 

          SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant Sasha Sun, age 48, from Tumon, Guam, was sentenced in the District Court of Guam to 12 months imprisonment for Harboring Illegal Aliens. The Court also ordered Sun to be placed on three years of supervised release following Sun’s release from custody and to pay a mandatory $100.00 special assessment fee.  Additionally, the Court ordered the forfeiture of Sun’s San Vitores Village condominium and $74,794.00 in U.S. currency.

          Homeland Security Investigations’ undercover operation revealed that Sun, the owner of the Joy Luck Club in Tumon, illegally employed three female aliens from Taiwan. The aliens entered Guam as tourists under the Visa Waiver Program, a program that grants entry of certain aliens into Guam for 45 days. Those entering under the program are prohibited from working while on island. However, Sun employed the female aliens as hostesses, selling $20 drinks to men who patronized the business. Sun paid the aliens $10.00 for every drink they sold.

          U.S. Attorney Anderson stated, “Those who recruit and harbor aliens for unlawful employment on Guam will face criminal prosecution and the potential forfeiture of assets related to their crimes. In this case, Sun also used her condominium to house the aliens who were illegally working.  In addition, the money found in her condominium was illegal proceeds from the unlawful harboring of those aliens. The U.S. Attorney’s Office is committed to aggressively prosecuting these offenses and eliminating any financial incentive to engage in such conduct.”

          The investigation was conducted by the U.S. Department of Homeland Security, Homeland Security Investigations and the Guam Police Department. This case was prosecuted by Rosetta San Nicolas, an Assistant United States Attorney for the District of Guam.

Monica Elfriede Witt, 39, a former U.S. service member and counterintelligence agent, has been indicted by a federal grand jury in the District of Columbia for conspiracy to deliver and delivering national defense information to representatives of the Iranian government.  Witt, who defected to Iran in 2013, is alleged to have assisted Iranian intelligence services in targeting her former fellow agents in the U.S. Intelligence Community (USIC).  Witt is also alleged to have disclosed the code name and classified mission of a U.S. Department of Defense Special Access Program. An arrest warrant has been issued for Witt, who remains at large.

The same indictment charges four Iranian nationals, Mojtaba Masoumpour, Behzad Mesri, Hossein Parvar and Mohamad Paryar (the “Cyber Conspirators”), with conspiracy, attempts to commit computer intrusion and aggravated identity theft, for conduct in 2014 and 2015 targeting former co-workers and colleagues of Witt in the U.S. Intelligence Community.  The Cyber Conspirators, using fictional and imposter social media accounts and working on behalf of the Iranian Revolutionary Guard Corps (IRGC), sought to deploy malware that would provide them covert access to the targets’ computers and networks.  Arrest warrants have been issued for the Cyber Conspirators, who also remain at large.

The announcement was made by Assistant Attorney General for National Security John Demers, U.S. Attorney Jessie K. Liu for the District of Columbia, Executive Assistant Director for National Security Jay Tabb of the FBI, U.S. Treasury Secretary Steven Mnuchin, Special Agent Terry Phillips of the Air Force Office of Special Investigations, and Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office.

“Monica Witt is charged with revealing to the Iranian regime a highly classified intelligence program and the identity of a U.S. Intelligence Officer, all in violation of the law, her solemn oath to protect and defend our country, and the bounds of human decency,” said Assistant Attorney General Demers.  “Four Iranian cyber hackers are also charged with various computer crimes targeting members of the U.S. intelligence community who were Ms. Witt’s former colleagues. This case underscores the dangers to our intelligence professionals and the lengths our adversaries will go to identify them, expose them, target them, and, in a few rare cases, ultimately turn them against the nation they swore to protect.  When our intelligence professionals are targeted or betrayed, the National Security Division will relentlessly pursue justice against the wrong-doers.” 

“This case reflects our firm resolve to hold accountable any individual who betrays the public trust by compromising our national security,” said U.S. Attorney Liu.  “Today’s announcement also highlights our commitment to vigorously pursue those who threaten U.S. security through state-sponsored hacking campaigns.”

“The charges unsealed today are the result of years of investigative work by the FBI to uncover Monica Witt’s betrayal of the oath she swore to safeguard America’s intelligence and defense secrets” said Executive Assistant Director for National Security Tabb.  “This case also highlights the FBI’s commitment to disrupting those who engage in malicious cyber activity to undermine our country’s national security. The FBI is grateful to the Department of Treasury and the United States Air Force for their continued partnership and assistance in this case.”

“Treasury is taking action against malicious Iranian cyber actors and covert operations that have targeted Americans at home and overseas as part of our ongoing efforts to counter the Iranian regime’s cyber-attacks,” said Treasury Secretary Steven Mnuchin.  “Treasury is sanctioning New Horizon Organization for its support to the IRGC-QF.  New Horizon hosts international conferences that have provided Iranian intelligence officers a platform to recruit and collect damaging information from attendees, while propagating anti-Semitism and Holocaust denial.  We are also sanctioning an Iran-based company that has attempted to install malware to compromise the computers of U.S. personnel.”

“The alleged actions of Monica Witt in assisting a hostile nation are a betrayal of our nation’s security, our military, and the American people,” said Special Agent Phillips. “While violations like this are extremely rare, her actions as alleged are an affront to all who have served our great nation.”  

“This investigation exemplifies the tireless work the agents and analysts of the FBI do each and every day to bring a complex case like this to fruition,’ said Assistant Director in Charge McNamara.  “Witt's betrayal of her country and the actions of the cyber criminals - at the behest of the IRGC - could have brought serious damage to the United States, and we will not stand by and allow that to happen.  The efforts by the Iranian government to target and harm the U.S. will not be taken lightly, and the FBI will continue our work to hold those individuals or groups accountable for their actions.”

According to the allegations contained in the indictment unsealed today:

Monica Witt’s Espionage

Monica Witt, a U.S. citizen, was an active duty U.S. Air Force Intelligence Specialist and Special Agent of the Air Force Office of Special Investigations, who entered on duty in 1997 and left the U.S. government in 2008.  Monica Witt separated from the Air Force in 2008 and ended work with DOD as a contractor in 2010.  During her tenure with the U.S. government, Witt was granted high-level security clearances and was deployed overseas to conduct classified counterintelligence missions.

In Feb. 2012, Witt traveled to Iran to attend the Iranian New Horizon Organization’s “Hollywoodism” conference, an IRGC-sponsored event aimed at, among other things, condemning American moral standards and promoting anti-U.S. propaganda.  Through subsequent interactions and communications with a dual United States-Iranian citizen referred to in the indictment as Individual A, Witt successfully arranged to re-enter Iran in Aug. 2013.  Thereafter, Iranian government officials provided Witt with a housing and computer equipment.  She went on to disclose U.S. classified information to the Iranian government official.  As part of her work on behalf of the Iranian government, she conducted research about USIC personnel that she had known and worked with, and used that information to draft “target packages” against these U.S. agents.   

Iranian Hacking Efforts Targeting Witt’s Former Colleagues

Beginning in late 2014, the Cyber Conspirators began a malicious campaign targeting Witt’s former co-workers and colleagues.  Specifically, Mesri registered and helped manage an Iranian company, the identity of which is known to the United States, which conducted computer intrusions against targets inside and outside the United States on behalf of the IRGC.  Using computer and online infrastructure, in some cases procured by Mesri, the conspiracy tested its malware and gathered information from target computers or networks, and sent spearphishing messages to its targets.  Specifically, between Jan. and May 2015, the Cyber Conspirators, using fictitious and imposter accounts, attempted to trick their targets into clicking links or opening files that would allow the conspirators to deploy malware on the target’s computer.  In one such instance, the Cyber Conspirators created a Facebook account that purported to belong to a USIC employee and former colleague of Witt, and which utilized legitimate information and photos from the USIC employee’s actual Facebook account. This particular fake account caused several of Witt’s former colleagues to accept “friend” requests.

*          *          *

The case is being investigated by the FBI’s Washington Field Office with assistance from the Air Force Office of Special Investigations.  The prosecution is being handled by Assistant U.S. Attorneys Deborah Curtis, Jocelyn Ballantine and Luke Jones of the U.S. Attorney’s Office for the District of Columbia with assistance from Trial Attorney Evan N. Turgeon of the National Security Division’s Counterintelligence and Export Control Section.

Christopher Bantli pleaded guilty today in U.S. District Court for the District of Columbia to a conspiracy to import fentanyl into the United States, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration’s (DEA) Miami Field Division.

Bantli, 39, pleaded guilty before U.S. District Judge Amy Berman Jackson for the District of Columbia.  Bantli had been extradited to the United States from Canada following his indictment in the District of Columbia.  According to court records, beginning in or around Nov. 2015 and continuing through Sept. 8, 2016, Bantli advertised, distributed, and imported controlled substances, including powerful fentanyl analogues and synthetic opiates, through the encrypted website AlphaBay.  Bantli accepted virtual currency such as Bitcoin as payment for the illegal substances, and used Canadian and U.S. mail to distribute the illicit substances to consumers.  To assist with his distribution enterprise, Bantli used his apartment in Calgary, Canada, as a drug laboratory and de facto fulfillment center for the orders placed on his AlphaBay profile.  Bantli’s apartment contained a pill press, packaging, cutting agents, as well as the controlled substances themselves.

Bantli will be sentenced on May 29 before Judge Berman Jackson.

The case was investigated by the DEA, in cooperation with Canadian law enforcement authorities.  The U.S. Marshals Service provided critical assistance in Bantli’s extradition.  The U.S. Department of Justice thanks the Government of Canada for its assistance in this case, in particular the Calgary Police Service Cybercrime Support Team.  This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state, and local enforcement agencies.  The principal mission of the OCDETF program is to identify, disrupt, dismantle, and prosecute high-level members of drug trafficking, weapons trafficking, and money laundering organizations and enterprises.

Trial Attorneys Anthony Aminoff and Kaitlin Sahni of the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) are prosecuting the case. Trial Attorney Brian Nicholson of the Department of Justice’s Office of International Affairs provided significant assistance in bringing Bantli to the United States and procuring foreign evidence during the investigation. 

 

El Departamento de Justicia anunció hoy que el acusado Benjamín Jaramillo Hernández, de 69 años, se declaró culpable hoy de un delito de odio federal y un cargo de posesión ilícita de munición que se basan en una serie de acciones cada vez más amenazantes y violentas con la iglesia católica St. Mary Catholic Church en Eugene como objetivo en septiembre del 2018. Lo anunciaron Eric Dreiband, el Fiscal General Auxiliar de la División de Derechos Civiles, y Billy J. Williams, el Fiscal Federal para el Distrito de Oregón.

«La División de Derechos Civiles se mantiene firme en su creencia que todas las personas deben vivir libres de amenazas de violencia», declaró el Fiscal General Auxiliar, Eric Dreiband. «El Departamento de Justicia seguirá defendiendo los derechos de individuos que se convierten en víctimas por ejercer sus creencias religiosas y enjuiciaremos a cualquiera que vulnere esos derechos».

«Las leyes contra los delitos de odio protegen valores estadounidenses fundamentales, como la libertad del culto. La declaración de culpabilidad de hoy reafirma el principio básico de que nadie debe vivir con miedo por motivos de su religión», dijo el Fiscal Federal Williamson. «Nuestra oficina continuará investigando activamente y enjuiciando los delitos de odio y buscando la justicia para todas las víctimas».

 «Amenazas de acciones violentas atacan el derecho fundamental como estadounidense a vivir, trabajar y rezar sin miedo. Trabajando con la comunidad y nuestras agencias asociadas del orden público, nos fortalecemos gracias a nuestros valores comunes de mantener a salvo a todos independientemente de su raza, religión o creencias políticas», afirmó el Agente Especial Encargado Renn Cannon.

Según los documentos judiciales, el 9 de septiembre del 2018, Hernández fue escoltado fuera de la propiedad de St. Mary tras un ataque de ira durante el sacramento de la comunión. Cinco días más tarde, el 14 de septiembre, un empleado de la iglesia informó a la Policía de Eugene que alguien había dispensado aerosol de pimienta en los mangos de las puertas exteriores y en la ranura para el correo de la puerta principal de la oficina de St. Mary. Los empleados declararon sentir una sensación de ardor en sus dedos y dificultades para respirar. Un policía de Eugene y un agente del FBI identificaron a Hernández en unas videosecuencias de vigilancia de la iglesia como la persona responsable de los dos incidentes.

El 16 de septiembre del 2018, a Hernández lo vieron nuevamente cerca de St. Mary. Un testigo vio a Hernández al otro lado de la calle de la iglesia cuando este paró cerca de la Biblioteca Municipal de Eugene y gritó al testigo, «Aquí tengo algo para ti», mientras señalaba a una bolsa que llevaba encima.

Varios días más tarde, el 20 de septiembre, los empleados de St. Mary avisaron que habían encontrado una nota amenazante y siete balas explosivas de una Sig de 10mm en la oficina. La nota amenazaba a la iglesia con «2 MP5 con 50 cartuchos cada uno», un tipo de metralleta. La nota concluyó así: «A Eugene lo van a poner en el [palabrota] mapa».

Un policía de Eugene revisó nuevamente las videosecuencias de vigilancia de la iglesia e identificó a Hernández como el individuo que había dejado la nota y las balas. El 21 de septiembre del 2018, Hernández fue detenido por la Policía de Eugene en la Biblioteca Municipal de Eugene y acusado de intimidación en segundo grado, vandalismo en segundo grado y dos cargos de entrada no autorizada en segundo grado. Durante un registro de Hernández, los agentes hallaron una lata parcialmente vacía de aerosol de pimienta, tres cartuchos de escopeta .410 y 13 balas explosivas de una Sig de 10mm.

Hernández fue acusado en la lectura penal de cargos de un cargo de obstrucción al libre ejercicio de creencias religiosas y otro de delincuente en posesión de municiones.

Hernández se enfrenta a una pena máxima de 20 años de cárcel y una multa penal de hasta 250.000 $ por el delito de odio, y una pena máxima de 10 años de cárcel por la posesión ilícita de municiones. Hernández será condenado el 22 de mayo del 2019 ante la Juez del Tribunal de Distrito Federal Ann Aiken.

Este caso lo están enjuiciando Gavin Bruce, un Fiscal Federal Auxiliar de la Fiscalía Federal de Oregón, y Cameron Bell, un Abogado de Litigios de la División de Derechos Civiles del Departamento de Justicia de los EE. UU. El caso fue investigado por la División del FBI en Eugene y la Policía de Eugene.

Para más información sobre el trabajo del Departamento de Justicia para combatir y prevenir los delitos de odio, vaya a www.justice.gov/hatecrimes: es un único portal con enlaces a recursos del Departamento de Justicia relacionados con delitos de odio para la policía, los medios de comunicación, investigadores, víctimas, grupos de apoyo y otras organizaciones y personas.

Two owners and an employee of for-profit, non-accredited schools were sentenced during the last two days for bribing a public official at the U.S. Department of Veterans Affairs (VA) in exchange for the public official’s facilitation of over $2 million in payments that were supposed to be dedicated to providing vocational training for military veterans with service-connected disabilities. 

Albert Poawui, 41, of Laurel, Maryland, was the owner of Atius Technology Institute (“Atius”), a school purporting to specialize in information technology courses.  Sombo Kanneh, 29, of McLean, Virginia, was Poawui’s employee at Atius.  Michelle Stevens, 57, of Waldorf, Maryland, was the owner of Eelon Training Academy, a school purporting to specialize in digital media courses.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jessie K. Liu for the District of Columbia, Assistant Director in Charge Nancy McNamara of FBI’s Washington Field Office and Special Agent in Charge Kim Lampkins of U.S. Department of Veterans Affairs Office of Inspector General (OIG) Mid-Atlantic Field Office made the announcement.

All three defendants were sentenced by U.S. District Judge John D. Bates of the District of  Columbia.  Poawui was sentenced to serve 70 months in prison followed by three years of supervised release and ordered to pay $1.5 million in restitution to the VA.  Kanneh was sentenced to serve 20 months in prison followed by three years of supervised release and was ordered to pay $113,227.30 in restitution to the VA and to forfeit $1.5 million.  Stevens was sentenced to serve 30 months in prison followed by three years of supervised release and ordered to pay $83,000 in restitution to the VA and to forfeit $83,000.

James King, the VA official who all three defendants bribed, has pleaded guilty to bribery, wire fraud, and falsification of documents, and will be sentenced on Friday, Feb. 15. 

The Vocational Rehabilitation and Employment (VR&E) program is a VA program that provides disabled U.S. military veterans with education and employment-related services.  VR&E program counselors advise veterans under their supervision which schools to attend and facilitate payments to those schools for veterans’ tuition and necessary supplies.

According to admissions made in connection with Poawui and Kanneh’s pleas, in or about August 2015, Poawui and King agreed that Poawui would pay King a seven percent cash kickback of all payments made by the VA to Atius.  In exchange, King steered VR&E program veterans to Atius regardless of the veterans’ educational needs or interests and notwithstanding their repeated complaints about the poor quality of education at Atius.

Between Aug. 2015 and Dec. 2017, Poawui, King, and the scheme’s other participants caused the VA to pay Atius approximately $2,217,259.44.  Poawui paid King over $155,000 as part of the illicit bribery scheme.  These bribery payments were hand-delivered by Poawui or Kanneh to King or King’s assistant, who was a veteran enrolled in the VR&E program.  Kanneh admitted that she routinely moved money between Atius’s bank accounts to facilitate bribe payments to King.

Poawui also admitted that he made numerous false representations to the VA to enhance the scheme’s profits.  For example, Poawui certified to the VA that veterans attending Atius were enrolled in up to 32 hours of class per week, when in fact he knew that Atius offered a maximum of six weekly class hours.  After the VA initiated an administrative audit of Atius, Poawui and King took steps to conceal the truth about earlier misrepresentations they had made to the VA.

According to admissions made in connection with Stevens’ plea, she created Eelon Training Academy after learning about the VR&E program from King.  In or about Sept. 2016, King facilitated the first tuition payment from the VA to Eelon.  Shortly after receiving this payment, King told Stevens that she should give him seven percent of the monies paid by the VA to Eelon.  King proceeded to steer veterans under his supervision to Eelon regardless of their resistance to attending Stevens’ school.

Stevens admitted to later making two cash payments of $1,500 to King in furtherance of her scheme to bribe King in exchange for King sending veterans under his supervision to Eelon and facilitating the VA’s payments to Stevens.  In total, Stevens received approximately $83,000 from the VA for education that she purported to provide to veteran students.  Stevens submitted invoices to the VA amounting to no less than $300,000 for the tuition and equipment of seven students, but was not paid the balance of the invoice amount due to the VA’s ongoing investigation into Eelon following complaints by students about the poor quality of education. 

In an effort to procure the outstanding payments from the VA, Stevens made numerous fraudulent misrepresentations to the VA, and maintained fraudulent student files in the event of an audit by the VA.  For example, Stevens emailed to the VA an “attendance” sheet for eight students.  The attendance sheet was created by Stevens and included handwritten check marks purporting to represent the dates that the students attended class.  In fact, as Stevens well knew, the students had not attended class on many of those dates nor was class even held on many of those dates. 

Poawui, Kanneh and Stevens’ sentences are the result of an ongoing investigation by the FBI’s Washington Field Office and the Department of Veterans Affairs Office of Inspector General.  Trial Attorney Simon J. Cataldo of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney David Misler of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case. 

Charges were unsealed yesterday against a Micronesian government official for his alleged participation in a money laundering scheme involving bribes made to corruptly secure engineering and project management contracts from the government of the Federated States of Micronesia (FSM).  In a related matter, on Jan. 22, a U.S. executive pleaded guilty for his role in a scheme to, among other things, bribe the Micronesian official in violation of the Foreign Corrupt Practices Act (FCPA).  

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Sean Kaul of the FBI’s Honolulu Field Office made the announcement.

Master Halbert, 44, a Micronesian citizen, was charged in a criminal complaint filed in the District of Hawaii with one count of conspiracy to commit money laundering.  Halbert was arrested yesterday in Honolulu, Hawaii, and had his initial court appearance before U.S. Magistrate Judge Richard L. Puglisi of the District of Hawaii.  Halbert is scheduled to have a pretrial detention hearing on Feb. 13 and a preliminary hearing on Feb. 22.

According to the criminal complaint, Halbert was a government official in the FSM Department of Transportation, Communications and Infrastructure who administered FSM’s aviation programs, including the management of its airports.  The complaint alleges that between 2006 and 2016, a Hawaii-based engineering and consulting company owned by Frank James Lyon paid bribes to FSM officials, including Halbert, to obtain and retain contracts with the FSM government valued at nearly $8 million.  According to the complaint, Lyon entered into an agreement with Halbert to bribe Halbert in exchange for Halbert’s assistance in securing contracts for Lyon and his company.  Lyon and Halbert allegedly agreed that these bribes would be transported from the United States to FSM.

The charges contained in the complaint are merely allegations and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

In the related matter, Lyon, 53, of Honolulu, Hawaii, pleaded guilty on Jan. 22 to a one-count information filed in the District of Hawaii charging him with conspiracy to violate the anti-bribery provisions of the FCPA and to commit federal program fraud.  Lyon is scheduled to be sentenced on May 13.

Trial Attorney Katherine Raut of the Criminal Division’s Fraud Section is prosecuting the case.  The Criminal Division’s Office of International Affairs also provided assistance. 

The Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

The Department of Justice, the United States Environmental Protection Agency (EPA), and the West Virginia Department of Environmental Protection (WVDEP) announced that they have reached a settlement with Antero Resources Corporation resolving alleged violations of Section 404 of the Clean Water Act (CWA) at 32 sites in Harrison, Doddridge, and Tyler Counties in West Virginia.

The settlement filed in U.S. District Court for the Northern District of West Virginia requires Antero to pay a civil penalty of $3.15 million and to conduct restoration, stabilization, and mitigation work at impacted sites. Antero will also provide mitigation for aquatic resource impacts.

“The Department of Justice is pleased to join with the EPA and the West Virginia Department of Environmental Protection in reaching this settlement and will continue to work with its law enforcement partners to hold corporations accountable for violating the nation’s environmental laws,” said Assistant Attorney General Jeffrey Bossert Clark of the Environment and Natural Resources Division.

“This settlement seeks to rectify harm done to U.S. waters from unauthorized activities undertaken by Antero, and demonstrates that federal and state regulators are committed to pursuing violations that threaten human health and the environment,” said EPA Regional Administrator Cosmo Servidio.

Impacts to aquatic resources will be partially offset at a 51.5-acre permittee-responsible mitigation site that will restore, enhance, create, and preserve over 11,500 linear feet of streams and more than 3 acres of wetlands. The EPA-estimated value of the proposed mitigation and restoration is $8 million.

The violations involved the unauthorized disposal of dredged and fill materials into waters of the United States at or near sites where Antero had constructed well pads, compressor stations, impoundments, pipeline crossings, access roads, and other structures associated with Marcellus Shale natural gas extraction by means of hydraulic fracturing, also known as fracking.

While each of the 32 sites varied regarding the extent of the impact to wetlands and streams, the unauthorized activities impacted more than 19,000 linear feet of streams and over four acres of wetlands and included:

• Stream impoundments;
• Filling wetlands and streams for compressor station pads;
• Realigning and culverting stream segments; and
• Failing to fully restore “temporary” impacts.

Approximately half of the sites were identified by Antero through a self-audit. Several of the sites were associated with construction failures or “slips” from access roads and pads.

The proposed settlement which is subject to a 30-day public comment period is available at: https://www.justice.gov/enrd/consent-decrees.

For more information about Clean Water Act Section 404 protection of wetlands and waterways, visit https://www.epa.gov/cwa-404.

A Texas man was charged today with conspiring to provide material support to a foreign terrorist organization. Assistant Attorney General John C. Demers of the National Security Division, U.S. Attorney Erin Nealy Cox for the Northern District of Texas, and Special Agent in Charge Eric Jackson of the FBI’s Dallas Division made the announcement.

Michael Kyle Sewell, 18, of Arlington, Texas, was charged today by criminal complaint in Fort Worth, Texas, with conspiring to provide material support and resources to Lashkar-e-Taiba (LeT), a Pakistani-based foreign terrorist organization.  Sewell has been detained pending further court proceedings.

“Sewell allegedly used social media to recruit and encourage an individual to travel overseas to join a foreign terrorist organization and conspired with that person to provide material support to that organization,” said Assistant Attorney General Demers.  “The National Security Division is committed to hold accountable those who engage in this behavior.”

“We stay on constant alert for radicals plotting attacks targeting citizens of the United States, here or abroad,” said U.S. Attorney Nealy Cox.  “Countering terrorist threats is our highest priority, and we will continue to work to stem the flow of foreign fighters abroad and bring justice to those who attempt to provide material support to foreign terror organizations.  I would like to thank the FBI and our Joint Terrorism Task Force partners for all that they do to keep our communities safe.”

“The men and women of FBI Dallas along with our local, state, and federal partners will continue to work diligently against homegrown violent extremists who provide support to any foreign terrorist organization,” said FBI Special Agent in Charge Jackson.  “As threats are uncovered to the community we serve, the FBI and its partners must continue to ensure we are vigilant and determined to prevent any harm to this great nation.”

As set forth in the complaint, Sewell recruited an individual, identified in the complaint as coconspirator 1, to join LeT, a designated foreign terrorist organization.  Sewell met the coconspirator online and encouraged him to join LeT. 

Sewell provided the coconspirator with contact information for an individual who he believed could facilitate the coconspirator’s travel to join the organization.  Unbeknownst to Sewell and the coconspirator, the facilitator was an undercover FBI agent.

Sewell coached the coconspirator about what to say to convince the facilitator that he was sincere in his desire to fight for LeT.  Sewell also contacted the facilitator to vouch for the coconspirator’s authenticity.  Sewell told both the coconspirator and the facilitator that he would kill the coconspirator if he turned out to be a spy. 

The coconspirator made contact with the facilitator and made arrangements with the facilitator to travel to Pakistan to join LeT.           

The FBI and its Joint Terrorism Task Force members; including the Arlington Police Department, the Fort Worth Police Department, the Tarrant County Sheriff’s Office, the Naval Criminal Investigation Service, the Department of Homeland Security, and the Texas Department of Public Safety; investigated the case.

A New York man was charged today with attempting and conspiring to provide material support to Lashkar e-Tayyiba (“LeT”), a Pakistan-based designated foreign terrorist organization responsible for multiple high-profile attacks, including the infamous Mumbai attacks in Nov. 2008.  Assistant Attorney General for the National Security Division John C. Demers, U.S. Attorney Geoffrey S. Berman for the Southern District of New York, the Assistant Director-in-Charge William F. Sweeney of the FBI New York Field Office and Commissioner James P. O’Neill of the Police Department for the City of New York (NYPD) made the announcement.

Jesus Wilfredo Encarnacion, a.k.a. “Jihadistsoldgier,” “Jihadinhear,” “Jihadinheart,” “Lionofthegood,” was arrested last night at John F. Kennedy International Airport (JFK Airport) in Queens, New York.  Encarnacion is expected to be presented later today before Magistrate Judge Henry B. Pitman in Manhattan federal court.

“Encarnacion allegedly attempted to travel to Pakistan to join a foreign terrorist organization and conspired with another individual to provide that organization with material support,” said Assistant Attorney General Demers.  “The National Security Division is committed to identifying and holding accountable those who seek to join and support designated foreign terrorist organizations.”

“As alleged, Jesus Encarnacion, a Manhattan man, plotted to travel to Pakistan to join and train with the terrorist organization Lashkar e-Tayyiba, which is infamous around the world for perpetrating the lethal 2008 Mumbai terror attacks and other atrocities,” said U.S. Attorney Berman.  “The excellent work of the FBI and NYPD stopped Encarnacion’s alleged plan to support this deadly terrorist organization before he took flight, and now he will face federal terrorism charges.”

“As alleged, not only did Mr. Encarnacion express a desire to execute and behead people, he scheduled travel and almost boarded a plane so he could go learn how to become a terrorist,” FBI Assistant Director-in-Charge Sweeney Jr.  “These organizations are using the internet and social media to appeal to the most barbaric impulses in people, and train them to kill.  The FBI New York Joint Terrorism Task Force will continue to do all it can to stop these alleged criminals before innocent people are killed.”

“As alleged, Jesus Encarnacion had expressed his desire to commit a terrorist attack while living in New York City and never abandoned those plans,” said NYPD Police Commissioner O’Neill.  “Allegedly, one of his stated motives for traveling overseas was to get the training and experience he believed he needed to someday return to the United States and carry out attacks.  I want to commend the FBI Agents, NYPD Detectives and representatives of 54 other agencies that make up the Joint Terrorism Task Force for the investigation that led to this arrest.”

As alleged in the criminal Complaint,[1] filed today in Manhattan federal court:

In Nov. 2018, Encarnacion expressed his desire to join a terrorist group in an online group chat, where he met another individual (CC-1).  CC-1 introduced Encarnacion to an individual who, unbeknownst to CC-1 or Encarnacion, was in fact an undercover FBI employee (UC-1).  Encarnacion repeatedly expressed, in the course of recorded communications through a social media service with CC-1 and through an encrypted messaging service with UC-1, his allegiance to and support for LeT, which, since approximately 2001, has been designated as a Foreign Terrorist Organization by the United States Secretary of State. 

Over the past several months, Encarnacion has discussed his desire and plans to join LeT overseas so that he could receive training and participate in violent acts of terrorism.  For example, Encarnacion told UC-1 that he was “ready to kill and die in the name of Allah” and sought UC-1’s assistance to help Encarnacion travel to abroad to serve as an “executioner” for LeT, stating, “I want to execute.  I want to behead.  Shoot.”  Encarnacion further stated that he aspired to commit terrorist attacks (“a bombing and shooting”) in the United States, but lacked “guidance” and “guns” to do so.

During the months that followed, Encarnacion and UC-1 agreed on a plan that Encarnacion believed would allow him to join LeT in Pakistan.  Encarnacion told UC-1 that he had made arrangements to travel to a particular city in Europe (the “European City”), as the first step of traveling to Pakistan to join LeT.  Encarnacion purchased an airline ticket for a flight scheduled to depart on Feb. 7, 2019, from JFK Airport, to the European City.  On Feb. 7, Encarnacion traveled to JFK Airport, where he was arrested by the FBI after he attempted to board that flight.

*                      *                      *

Encarnacion, 29, of Manhattan, is charged with one count of attempting to provide material support to a designated foreign terrorist organization and one count of conspiring to provide material support to a designated foreign terrorist organization, each of which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Demers and Mr. Berman praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which consists of agents from the FBI, detectives from the NYPD, and officers from numerous other agencies, including U.S. Customs and Border Protection, which assisted significantly in this case. 

This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys David W. Denton Jr. and Kimberly J. Ravener are prosecuting with the assistance of Bridget Behling and Alexandra Hughes of the National Security Division.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.                    

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below are only allegations, and every fact described should be treated as an allegation.

A Woodbridge, Virginia man was sentenced today to 210 months in prison followed by 10 years of supervised release for producing child pornography.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger of the Eastern District of Virginia, Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office and Chief Michael L. Brown of the Alexandria Police Department made the announcement. 

David Edward De Vere, 53, a former Equal Employment Specialist at the U.S. Patent and Trademark Office, pleaded guilty on Sept. 27, 2018 before U.S. District Judge Liam O’Grady of the Eastern District of Virginia to production of child pornography. 

According to admissions made in connection with his guilty plea, De Vere met and began exchanging sexually explicit messages online with a 16-year-old minor living in Colorado in March 2017.  During the course of these communications, De Vere induced the minor to take and send him multiple images of the minor engaging in sexually explicit conduct.  De Vere also encouraged another adult with access to the minor in Colorado to sexually abuse the minor, and then traveled to Colorado in April 2017 in an unsuccessful attempt to sexually abuse the minor himself.

The case is being investigated by the FBI Washington Field Office’s Child Exploitation and Human Trafficking Task Force, which is comprised of agents of the FBI, U.S. Marshals Service, and detectives from the Prince William County Police, Fairfax County Police, Loudoun County Sheriff’s Office, Metropolitan Police, Alexandria City Police, Arlington County Police, Leesburg Police, Virginia State Police and the Offices of Inspector General of several federal agencies.  Trial Attorney William G. Clayman of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Kellen S. Dwyer are prosecuting the case. 

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

Two federal courts handed down decisions this week protecting religious liberty and agreeing with the positions of the Department of Justice in those cases. In the first case, the United States Court of Appeals for the Fourth Circuit ruled that a federal trial court had improperly dismissed a suit by a small African Christian congregation under the Religious Land Use and Institutionalized Persons Act (RLUIPA).  The congregation alleges that Baltimore County, Maryland, improperly denied the congregation zoning approval for a new church.  In the second case, the United States District Court for the District of Iowa ruled that the University of Iowa violated the First Amendment rights of a student group when the University de-registered the group for requiring its student leaders to adhere to the group’s religious beliefs, while not applying that same requirement to other student groups.

 “The Department of Justice is committed to protecting the religious, associational, and expressive freedoms enshrined in federal law,” said Principal Deputy Associate Attorney General Jesse Panuccio. “We are pleased the courts agreed with the Department in these two cases, and we will continue to work to protect the rights of people of all faiths.”

In Jesus Christ is the Answer Ministries v. Baltimore County, Maryland, the appeals court ruled that a small congregation, many of whose members are African immigrants, could proceed with its claim that the county improperly denied approval to build a small church on a 1.2-acre lot. The congregation sued under RLUIPA, which protects places of worship from discriminatory or unjustifiably burdensome application of zoning regulations. The suit alleged that neighbors opposing the plan had made racially and ethnically charged statements about the worship style of the congregation including references to “dancing and hollering” as if they were “home back in Africa.” The suit also alleged that the church had made reasonable proposals and modifications to its plan and that their religious exercise was “substantially burdened” in violation of RLUIPA by the denial.  The court of appeals agreed with the brief of the United States that both of these claims should be permitted to proceed.  

In Business Leaders in Christ (BLinC) v. University of Iowa, the court agreed with the Statement of Interest filed by the United States, and ruled that the University of Iowa violated students’ rights of expressive association and free exercise of religion by de-registering a Christian student group.  The university had de-registered the group because BLinC limits its leadership to persons who agree with its religious beliefs.  The court found that the University applied the de-registration policy in a discriminatory manner by allowing other student groups to similarly limit their membership or leadership if the University felt the groups supported the University’s “education or social purposes.”

The Department of Justice announced the Religious Liberty Task Force in July, 2018. The Task Force helps the Department fully implement the religious liberty guidance by ensuring that all Justice Department components are upholding that guidance in the cases they bring and defend, the arguments they make in court, the policies and regulations they adopt, and how we conduct our operations.

More information about RLUIPA is available on the Place to Worship Initiative homepage, www.justice.gov/crt/placetoworship.

The Justice Department today announced that the Office of Justice Programs’ (OJP) Office for Victims of Crime (OVC) awarded more than $8.3 million in Antiterrorism and Emergency Assistance Program (AEAP) funding to aid Californians who are survivors of the Oct. 1, 2017, mass shooting in Las Vegas, Nevada. Deputy Attorney General Rod J. Rosenstein made the announcement in a speech today to law enforcement at the Los Angeles Crimefighters Leadership Conference.

Fifty-eight people were killed and more than 600 physically injured when a man opened fire on the Route 91 Harvest Festival, an open-air music venue, from a hotel room on the 32nd floor of the Mandalay Bay hotel and casino on the Las Vegas strip. When officers located the gunman and entered the room, he was found dead with self-inflicted wounds.

This new grant is being awarded to the California Victim Compensation and Government Claims Board, as 35 of the 58 murder victims and approximately 200 of those physically injured were from California. By some estimates, half of the concert attendees that evening were from the state of California. This incident of mass violence significantly impacted the state resources available to victims.

"The Las Vegas mass shooting was the deadliest in American history, and it inflicted unfathomable damage to hundreds of people, many of whom were visiting from California,” Deputy Attorney General Rod J. Rosenstein said. "While we cannot undo the evil that was done that day, the Department of Justice is doing its part to support first responders and survivors. We have already provided more than $19 million in funds for law enforcement and victims' services. Today we provide an additional $8.3 million to services for victims from California. We support them and all crime victims --and we will continue to do our part to help them heal."

The $8,353,884 in funding will provide supplemental crisis response and consequence management support services to help victims as they continue to heal and cope with probable re-traumatization. These services include supplemental crime victim compensation expenses; victim assistance, such as mental health and peer support groups; outreach to identify and contact victims, including a virtual victim resiliency center; and related expenses for support staff to provide these activities. The peer support groups will occur in multiple locations to provide easier access for victims.

In addition to this grant, in November 2018, the Justice Department awarded  $16,735,720 to the state of Nevada, primarily for those not residing in California, to assist victims of this terrorist attack, including ticket holders, concert staff, vendors, witnesses, law enforcement personnel, and other first responders. The grant helped to support close family members, medical personnel, coroner’s staff, taxi drivers, and others who helped the concert attendees. In addition, it defrayed the costs of counseling and therapy, vocational rehabilitation, and trauma recovery for victims and emergency responders. Funds also assisted with legal aid and supplemented the massive outlays incurred by the Nevada victim compensation program.

In June 2018, the Department awarded over $2 million to support first responders in the aftermath of the shooting. In addition, in November 2018, the Justice Department announced a new $8.7 million grant to provide multi-disciplinary, scenario-based active shooter training to first responders across the country.

“The scale of loss and suffering endured by these victims and survivors is enormous, and the trauma will follow them the rest of their lives,” said Principal Deputy Assistant Attorney General Matt M. Dummermuth. “We hope that these resources will help sustain them as they walk the path from pain and grief to healing.” 

AEAP is a non-competitive solicitation specifically created to provide supplemental emergency and longer-term victim support to jurisdictions where a criminal mass violence or domestic terrorism incident occurred. OVC awards funding once local and state authorities have determined the costs associated with responding and have submitted a request for assistance.

For more information about AEAP, please visit: https://www.ovc.gov/AEAP/

The Office of Justice Programs, led by Principal Deputy Assistant Attorney General Matt M. Dummermuth, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP and its components can be found at: www.ojp.gov.

February 6 marks the International Day of Zero Tolerance for Female Genital Mutilation. The FBI, the Human Rights and Special Prosecutions Section (HRSP) of the Justice Department’s Criminal Division and U.S. Immigration and Customs Enforcement (ICE), all members of the Human Rights Violators and War Crimes Center (HRVWCC), join U.S. and foreign government partners, non-governmental organizations and local communities to call for the eradication of the practice.

Female genital mutilation/cutting (FGM/C) is a federal crime, and any involvement in committing this crime is a serious human rights violation, which may result in imprisonment and potential removal from the United States.  Individuals suspected of FGM/C, including sending girls overseas to be cut, may be investigated by the HRVWCC and prosecuted accordingly.

The elimination of FGM/C has broad implications for the health and human rights of women and girls, as well as societies at large.  This day serves as an opportunity to reflect on victims who have suffered from female genital mutilation/cutting, including many women and girls who have died or suffered lifelong health complications from the practice.  The day also renews a global commitment to the health and well-being of all women, girls and communities by eliminating the practice.

In 2018, ICE expanded Operation Limelight USA, an outreach operation designed to educate travelers on the dangers and consequences of FGM/C, from one international airport to seven.  U.S. officials with Operation Limelight USA spoke to 1300 travelers on 80 different flights from May 22 to July 2 at seven airports across the United States, while UK partners spoke to travelers at Heathrow Airport and train stations throughout the UK.  In Aug. 2018, U.S. officials, including representatives from the FBI and ICE, were again joined by their partners in the United Kingdom to sign a proclamation signaling the nations’ commitment to preventing the practice.

“The FBI is committed to investigating human rights violations, including female genital mutilation/cutting (FGM),” said Unit Chief Maureen Schutz of the FBI’s Criminal Division.  “We continue to work with our partners at U.S. Immigration and Customs Enforcement to protect the rights of young women and children and to bring justice to those who have violated them.”

“Female genital mutilation is a global issue and we rely on our domestic and international partners as we work to eliminate this practice.  We continue to partner with the FBI, non-governmental organizations, and other government agencies to identify potential victims and find those who conduct female genital mutilation,” explained Unit Chief Mark Shaffer of ICE’s Homeland Security Investigations Human Rights Violators and War Crimes Center.

FGM/C prevalence is primarily concentrated in 30 countries in Africa, the Middle East, and Asia, but also occurs in parts of Western Europe, North America, Australia and New Zealand.  It is global in scope and found in multiple geographies, religions, and socioeconomic classes.

Anyone who has information about an individual who is suspected of assisting in this crime is urged to call the toll-free ICE tip line at (866) 347-2423 or complete the ICE online tip form or the FBI online tip form.  All are staffed around the clock, and tips may be provided anonymously.

• ICE Human Rights Violators and War Crimes Unit
• FBI International Human Rights Unit

For more information about the practice of female genital mutilation/cutting, view this Fact Sheet on FGM/C from the U.S. Department of State or visit the United Nations’ Zero Tolerance Day website.

ALBUQUERQUE –Josephine Gervais, 39, of Albuquerque, N.M., appeared in federal court today on a charge of malicious damage by fire to federal property. 

            According to court documents, Gervais committed the offense on January 31, 2019, by setting fire to a sign and vegetation outside the FBI office in Albuquerque.  Albuquerque Fire and Rescue responded to the scene and put out the fire.  Gervais fled the scene.  Agents arrested her at her home later the same day.

            Gervais faces from 5 to 20 years in prison if convicted.   Allegations in indictments are only accusations. A criminal defendant is presumed innocent unless proven guilty beyond a reasonable doubt.

            The Albuquerque office of the FBI investigated the case with assistance from Albuquerque Fire and Rescue.  Assistant U.S. Attorney Howard R. Thomas is prosecuting the case.

A Key Biscayne, Florida resident was found guilty yesterday by a federal jury for his role in a $100 million scheme to defraud Westernbank of Puerto Rico (Westernbank); the losses triggered a series of events leading to Westernbank’s insolvency and ultimate collapse.  The defendant was also convicted of a $3 million scheme to defraud Mellon United National Bank of Miami (Mellon Bank). 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Special Agent in Charge Michael De Palma of IRS Criminal Investigation (IRS-CI) for Miami and Puerto Rico, Special Agent in Charge Iván J. Arvelo of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in San Juan and Special Agent in Charge Douglas A. Leff of the FBI’s San Juan, Puerto Rico Field Office made the announcement. 

Jack Kachkar, 55, was convicted of eight counts of wire fraud affecting a financial institution after a three-week trial before U.S. District Judge Donald L. Graham of the Southern District of Florida.  Kachkar is scheduled to be sentenced by Judge Graham on April 30, 2019.  

“Jack Kachkar engineered a massive fraud scheme that led directly to the failure of a major Puerto Rican bank with more than 1,500 employees,” said Assistant Attorney General Benczkowski.  “I want to commend the prosecutors and our law enforcement partners for their tireless work investigating this complex case and holding the defendant to account for these crimes.”

“Jack Kachkar’s fraud caused substantial harm to the 1,500 employees of Westernbank and the people of Puerto Rico,” said U.S. Attorney Fajardo Orshan. “The U.S. Attorney’s Office remains committed to the prosecution of those individuals and corporations that use Miami and other South Florida communities as their base to operate multinational fraud schemes.”

“Today’s verdict holds the defendant accountable for orchestrating fraudulent schemes that resulted in more than $100 million in losses to insured institutions and the FDIC as receiver,” said Inspector General Lerner.  “The FDIC Office of Inspector General remains committed to investigate cases of deception and swindles that undermine the integrity of financial institutions, and we will continue to work with our law enforcement partners to bring to justice those who commit such offenses.”

“IRS Criminal Investigation will always pursue investigations like this where Mr. Kachkar, for his own personal benefit, orchestrated such a large scheme at the expense of one of Puerto Rico’s largest banks and its 1,500 employees,” said IRS-CI Special Agent in Charge Palma.  “This investigation shows that the appearance of success can be a mask for a tangled financial web of lies, and we are proud to be part of the prosecution team that is bringing Mr. Kachkar to justice.”

“HSI San Juan will continue working with our local, state and federal partners to investigate and prosecute these types of cases as well as those involving violations to the more than 400 federal statutes that we investigate, “ said HSI Special Agent in Charge Arvelo.  “This man was responsible for one of the largest fraud schemes ever recorded in the banking business in Puerto Rico and he will pay the consequences.”

“This defendant’s greed was powerful enough to destroy a bank, taking with it the jobs of approximately 1,500 hard working citizens of Puerto Rico,” said FBI Special Agent in Charge Leff.  “The FBI thanks the US Attorney’s Office for sending an equally strong message that most fraud schemes will eventually lead to a prison cell.”

According to evidence presented at trial, from 2005 to 2007, Kachkar served as chairman and CEO of Inyx Inc., a publicly traded multinational pharmaceutical manufacturing company.  Beginning in early 2005, Kachkar caused Westernbank to enter into a series of loan agreements in exchange for a security interest in the assets of Inyx and its subsidiaries.  Under the loan agreements, Westernbank agreed to advance money based on Inyx’s customer invoices from “actual and bona fide” sales to Inyx customers, the evidence showed. 

The trial evidence showed that Kachkar orchestrated a scheme to defraud Westernbank by causing numerous Inyx employees to make tens of millions of dollars worth of fake customer invoices purportedly payable by customers in the United Kingdom, Sweden and elsewhere.  Kachkar caused these invoices to be presented to Westernbank as valid invoices.   Kachkar made false and fraudulent representations to Westernbank executives about purported and imminent repayments from lenders in the United Kingdom, Norway, Libya and elsewhere in order to lull Westernbank into continuing to lend money to Inyx, the evidence showed.  In fact, these lenders had not agreed to repay Westernbank’s loan.  Kachkar made false and fraudulent representations to Westernbank executives that he had additional collateral, including purported mines in Mexico and Canada worth hundreds of millions of dollars, to induce Westernbank to lend additional funds, the evidence showed.  In fact, this additional collateral was worth barely a fraction of that represented by Kachkar.

During the course of the scheme, Kachkar caused Westernbank to lend approximately $142 million, primarily based on false and fraudulent customer invoices.  The evidence showed that the defendant diverted tens of millions of dollars for his own personal benefit, including for the purchase of, among other things, a private jet, luxury homes in Key Biscayne and Brickell, Miami, luxury cars, luxury hotel stays, and extravagant jewelry and clothing expenditures. 

In or around June 2007, Westernbank declared the loan in default and ultimately suffered losses exceeding $100 million on the Inyx loans.  According to trial evidence, these losses later triggered a series of events leading to Westernbank’s insolvency and ultimate collapse.  At the time of its collapse, Westernbank had approximately 1,500 employees and was one of the largest banks in Puerto Rico.

In addition, the evidence showed, Kachkar knowingly deposited a $3 million check at Mellon Bank from the purported sale of his private jet.  At the time of its deposit, based on the evidence presented, Kachkar knew that the check was worthless.  In fact, the defendant agreed to sell his plane to a different buyer.   After receiving a provisional credit for the check from Mellon Bank, the defendant wired out all of the provisional credit, including a $1 million wire to Kachkar’s personal account in Canada.  Upon Mellon Bank’s request to reverse this $1 million wire, Kachkar refused to do so, resulting in at least a $1 million loss to Mellon Bank, the evidence showed. 

This matter was investigated by the FDIC-OIG, IRS-CI, HSI and FBI.  The Department of Justice’s Office of International Affairs provided significant support in the investigation.  The case is being prosecuted by Trial Attorney Michael O’Neill of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michael N. Berger of the Southern District of Florida.

ALBUQUERQUE – Ryan Thompson, 32, of Tohatchi, N.M., pleaded guilty today in federal court to charges of kidnapping and aggravated sexual abuse in Indian Country. 

 

            According to court documents, Thompson, an enrolled member of the Navajo Nation, kidnapped a woman and child from a gas station in Gallup on November 15, 2017.  He drove them to another location and forced the woman to drink alcohol. When Thompson briefly left the area, the woman tried to escape by driving way.  Thompson stopped her, pulled her out of the car, and beat her. 

            Thompson sexually abused the woman in front of the child.  He also threatened to kill the woman and child.  Thompson held them in his car overnight before taking them to a home where they stayed another night.  On November 17, 2017, Thompson stole property from another residence.  At that time, the woman drove away in her car with the child.  She encountered police a short time later.  Emergency responders took her to the hospital for treatment of her injuries, including a broken nose.

            At sentencing, Thompson faces from 15 to 20 years in prison.  The Gallup Resident Agency of the FBI investigated this case with assistance from the Navajo Nation Police Department.  Assistant U.S. Attorney Joseph Spindle is prosecuting the case.         

As tax filing season begins, the Department of Justice warns taxpayers to beware of unscrupulous tax return preparers. The Department of Justice applies both civil and criminal tools at its disposal to shut down illegal tax return preparation activity. Taxpayers should always remain wary of tax return preparers who claim they can obtain larger refunds than others or engage in other unscrupulous practices.

While most tax return preparers are professional and honest, some prepare returns with false information in order to improperly boost a taxpayer’s refund or reduce their liability or to increase business and preparation fees. But, under the law, taxpayers are responsible for what is reported on their returns. When the IRS uncovers the falsehoods, the taxpayer can face penalties and interest and, if circumstances warrant, criminal prosecution.

“Fraudulent tax return preparers harm taxpayers, legitimate businesses, and the American public,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman.  “The Justice Department is committed to working with our partners at the Internal Revenue Service to protect the law-abiding American public and the treasury by stopping this fraud.”

Every year, the Justice Department’s Tax Division, in collaboration with U.S. Attorney’s Offices, files dozens of civil actions throughout the United States seeking court orders to shut down tax return preparers who allegedly prepared false tax returns, and to punish dishonest tax return preparers for their fraudulent activities. When the evidence supports criminal enforcement action, the Department of Justice and U.S. Attorney’s offices pursue criminal prosecutions of tax return preparers.

In 2019, the Justice Department has already obtained several injunctions barring individuals from filing returns for others, and filed actions against numerous others:

• On Jan. 4, 2019, a federal court in Indianapolis, Indiana, permanently enjoined Antonio Chappell and G & A Tax Service LLC, from preparing federal tax returns for others. The court noted that the defendants had prepared tax returns with a wide range of scams, including falsifying reported income or losses to wrongfully increase or claim the Earned Income Tax Credit, fabricating education expenses to obtain the American Opportunity Credit for certain educational expenses; misrepresenting a taxpayer’s filing status; and reporting non-qualifying dependents to take advantage of the Additional Child Tax Credit.
• On Jan. 7, 2019, a federal court in Orlando, Florida, entered a preliminary injunction barring Erotida Harden, Michael Harden, Aida Cortes, Yahaira Claudio, Tamika Robenson, Natasha Williams, and Certified Taxes LLC, from acting as tax return preparers and directing them to immediately close all tax return preparation stores that they currently own directly or through any entity and not to reopen them without a court order.
• On Jan. 16, 2019, a federal court in Orlando, Florida, entered a preliminary injunction barring Marcgenson Marc, Tiana Character, LeNorris LaMoute, Dosuld Pierre, Shirleen Thales, Advanced Tax Services Inc., Genson Financial Group LLC, and Character Financial Solutions LLC from acting as tax return preparers and directing them to immediately close all tax return preparation stores that they currently own directly or through any entity and not to reopen them without a court order.

Examples of some recent criminal convictions obtained by the Tax Division include:

• On Jan. 28, 2019, a Minneapolis-based tax return preparer was sentenced to serve 121 months in prison for managing and directing a fraudulent return-preparation business, which prepared returns that reported false dependents, fake business income and losses, inflated deductions, inflated credits, and false filing statuses, in order to get customers inflated refunds.
• On Nov. 14, 2018, a Las Vegas, Nevada, tax return preparer was sentenced to 37 months in prison for aiding and assisting in the filing of false tax returns that included multiple false items, including charitable contributions, capital loss deductions, energy tax credits, and unreimbursed employee expenses—such as business meals and transportation expenses.
• On Sept. 13, 2018, a resident of Winton-Salem, North Carolina, who was licensed as an attorney in Georgia, was sentenced to 13 months in prison for aiding and assisting in the preparation of fraudulent tax returns.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. 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 here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

In addition, when selecting a tax return preparer:

• Be wary of tax return preparers who claim they can obtain larger refunds than others can.
• Avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of your refund into their financial accounts.
• Ensure you use a preparer with a preparer tax identification number (PTIN). Paid tax return preparers must have a PTIN to prepare all or substantially all of a tax return.
• Use a reputable tax professional, who enters their PTIN on your tax return, signs the tax return, and provides you a copy of the return (as required).
• Consider whether the individual or firm will be around for months or years after filing the return to answer questions about the preparation of the tax return.
• Never sign a blank tax form.
• Check the person’s credentials. Only attorneys, CPAs, and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collections, and appeals.

The IRS has some information on its website about selecting a return preparer and has launched a free directory of federal tax preparers and a list of tips for choosing a tax preparer.

Acting Attorney General Matthew G. Whitaker and Secretary of Homeland Security Kirstjen M. Nielsen yesterday submitted a joint report to President Donald J. Trump evaluating the impact of any foreign interference on election infrastructure or the infrastructure of political organizations, including campaigns and candidates in the 2018-midterm elections. 

The classified report was prepared pursuant to section 1(b) of Executive Order 13848, Imposing Certain Sanctions in the Event of Foreign Influence in a United States Election, which the President issued on Sept. 12, 2018. 

Throughout the 2018 midterm election cycle, the Departments of Justice and Homeland Security worked closely with federal, state, local, and private sector partners, including all 50 states and more than 1400 local jurisdictions, to support efforts to secure election infrastructure and limit risk posed by foreign interference.  Efforts to safeguard the 2020 elections are already underway. 

Although the specific conclusions within the joint report must remain classified, the Departments have concluded there is no evidence to date that any identified activities of a foreign government or foreign agent had a material impact on the integrity or security of election infrastructure or political/campaign infrastructure used in the 2018 midterm elections for the United States Congress. This finding was informed by a report prepared by the Office of the Director of National Intelligence (ODNI) pursuant to the same Executive Order and is consistent with what was indicated by the U.S. government after the 2018 elections.   

While the report remains classified, its findings will help drive future efforts to protect election and political/campaign infrastructure from foreign interference. 

Acting Attorney General Matthew G. Whitaker issued the following statement in response to President Trump’s second State of the Union Address:

“President Trump’s speech presented a hopeful, optimistic vision for this country. An America with a secure southern border would be an America with less crime, less addiction, and better wages for working families. The Department of Justice is working every day to bring us closer to that kind of future by prosecuting criminals, interdicting drugs, and defending the rights of the American people in court. As we continue these efforts, I am hopeful that our elected leaders in Congress will come together on a bipartisan basis to support this law-and-order agenda for the good of the country.”

Erick Jamal Hendricks, 38, of Charlotte, North Carolina, was sentenced to 15 years in prison for attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS).

A jury in Akron, Ohio, convicted Hendricks last year of attempting and conspiring to provide material support to a designated foreign terrorist organization.

The sentence was announced by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Justin E. Herdman of the Northern District of Ohio and Special Agent in Charge Eric Smith of the FBI’s Cleveland Office.

According to court documents and trial testimony, Hendricks tried to recruit people to train together and conduct terrorist attacks in the United States on behalf of ISIS.

“Hendricks used social media to recruit others to plan and carry out attacks on our homeland in the name of ISIS, with the goal of creating a sleeper cell on our soil,” said Assistant Attorney General Demers.  “Thanks to the collaborative efforts of law enforcement, Hendricks’ plan was thwarted, and with today’s sentence, he is being held accountable for his terrorist activities.”

“This defendant sought to create a cell of ISIS supporters, train those people and then launch attacks from inside the United States,” U.S. Attorney Herdman said.  “This defendant posed a very real threat to the safety of our community and nation.”

“Erick Jamal Hendricks represents the significant online ISIS threat that we face daily – a US citizen that became radicalized online and attempted to recruit and train individuals to commit jihad, all while living in the United States,” said Special Agent in Charge Smith.  “The FBI urges the public to report information regarding individuals pledging their allegiance to ISIS or other identified terrorist groups.  The FBI is pleased that Hendricks was stopped before he was successful and now will spend a significant amount of time behind bars.”

According to court documents and trial testimony, Hendricks tried to recruit people to train together and conduct terrorist attacks in the United States on behalf of ISIS.

Amir Al-Ghazi was arrested in the Northern District of Ohio in June 2015 after attempting to purchase an AK-47 assault rifle and ammunition from an undercover law enforcement officer.  Al-Ghazi had pledged allegiance to ISIS in social media and made statements expressing interest in conducting attacks in the U.S.

Hendricks had contacted Al-Ghazi over social media to recruit him in the spring of 2015. Hendricks allegedly told Al-Ghazi that he “needed people” and wanted to meet in person; that there were several “brothers” located in Texas and Mexico; that he was attempting to “get brothers to meet face to face;” and that he wanted “to get brothers to train together,” according to court documents and trial testimony

Al-Ghazi said Hendricks tested his religious knowledge and commitment, inquiring about his willingness to commit “jihad,” to die as a “martyr” and his desire to enter “jannah” (paradise).  Al-Ghazi understood these statements to mean that Hendricks was recruiting people to train together for the purpose of conducting a terrorist attack in the U.S. and to see if Al-Ghazi was suitable for recruitment, according to the allegations.  Al-Ghazi believed that Hendricks and the “brothers in Texas and Mexico” may have been responsible for a thwarted terrorist attack in Garland, Texas, on May 3, 2015, and therefore he decided to stay away from social media for a period following the attack to minimize detection by law enforcement.

Hendricks also communicated over social media with several other people, including an undercover FBI employee (UCE-1).  Hendricks on April 16, 2015 instructed UCE-1 to download the document “GPS for the Ghuraba in the U.S.”, which included a section entitled “Final Advice” which advocated that “brothers and sisters” should not allow themselves to go to jail.  This section also allegedly encouraged Muslims to die as a “Shaheed” (martyr), to “Boobie trap your homes,” to “lay in wait for them” and to “never leave your home without your AK-47 or M16.”  Hendricks also directed UCE-1 to communicate online with other people and stated “It’s hard to sift through brothers;” “Allah chooses only the few;” and “Everyday I do this day in and day out,” according to court documents and trial testimony.

Hendricks told another person that his goal was to create a sleeper cell to be trained and housed at a secure compound that would conduct attacks in the U.S.  He mentioned that potential targets included military members whose information had been released by ISIS and the woman who organized the “Draw Prophet Mohammad contest,” and he claimed to have 10 members signed up for his group, according court documents and trial testimony.

On April 23, 2015, Hendricks used social media to contact Elton Simpson, who, along with Nadir Hamid Soofi, was inspired by ISIS and launched the attack on the “First Annual Muhammad Art Exhibit and Contest” in Garland.  Simpson and Soofi opened fire, wounding a security guard, before Garland police returned fire and killed both Simpson and Soofi.  Hendricks also connected UCE-1 with Simpson via social media, communicated with UCE-1 about the contest in Garland, and directed UCE-1 to go to the contest.  Hendricks said: “If you see that pig (meaning the organizer of the contest) make your ‘voice’ heard against her.”  He also asked UCE-1 a series of questions related to security at the event, including: “How big is the gathering?” “How many ppl?” “How many police/agents?” “Do you see feds there?’ “Do you see snipers?” and “How many media?”  Shortly thereafter, Simpson and Soofi committed the attack on the cartoon drawing contest.

Al-Ghazi is serving a 16-year prison sentence after pleading guilty to attempting to provide material support to a designated terrorist organization and being a felon in possession of firearms.

This case was investigated by the FBI’s offices in Cleveland; Columbia, South Carolina; Baltimore; and Charlotte, with assistance from the U.S. Attorney’s Offices in the District of Maryland, District of South Carolina and the Western District of North Carolina.

This case was prosecuted by Assistant U.S. Attorneys Matthew W. Shepherd and Mark S. Bennett and Trial Attorney Rebecca Magnone of the National Security Division’s Counterterrorism Section.

The former treasurer of Jackson County, Kentucky, pleaded guilty today to devising a scheme to defraud the Jackson County Fiscal Court of over $160,000 and to misusing the identity of a Jackson County employee to facilitate her theft. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Robert M. Duncan for the Eastern District of Kentucky, and Special Agent in Charge James (Robert) Brown Jr. of the FBI’s Louisville, Kentucky Field Division and Commissioner Richard Sanders of the Kentucky State Police, made the announcement.  

Beth N. Sallee, 38, of McKee, Kentucky, pleaded guilty to one count of aggravated identity theft and to one count of wire fraud.  Sallee will be sentenced on June 18, 2019 before U.S. District Court Judge Claria Horn Boom for the Eastern District of Kentucky.

According to admissions made in connection with her guilty plea, Sallee admitted that beginning in 2013, she misused her position to write a number of checks, totaling approximately $161,808.23, payable to herself without the approval of the Jackson County Fiscal Court.  Sallee deposited these checks into her own personal checking account or for cash.  The unauthorized checks drew on various Jackson County Fiscal Court accounts, including the Department of Emergency Services grant, payroll, and general fund accounts.  To enable her scheme, Sallee forged the signature of other Jackson County employees on unauthorized checks without their knowledge or permission.  She later attempted to conceal her scheme by removing pages of Jackson County financial documents, obscuring page numbers with white-out, and requesting the removal of check images from bank statements that were to be given to an auditor. 

The investigation was conducted by the FBI and the Kentucky State Police.  The case is being prosecuted by Trial Attorney Jessica C. Harvey of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Andrew T. Boone of the Eastern District of Kentucky.

The Department of Justice filed an amicus brief today with the Court of Appeals for the Sixth Circuit opposing a class action settlement that would provide consumers coupons worth only part of the price of a new pressure cooker, while awarding class counsel millions of dollars in attorney’s fees and costs. 

Plaintiffs in the case, Chapman et al. v. Tristar Products, Inc., alleged that a pressure cooker sold by Tristar Products contained a defect that could cause hot liquid to “erupt” out of the appliance. A settlement reached between the parties would provide class members with a limited warranty extension and a non-transferrable $72.50 credit toward the purchase of certain Tristar products, to be ordered directly from the company. At current prices, the credit would pay for less than half the cost of a new pressure cooker from Tristar. Under the settlement, class members would release all claims relating to alleged defects in the pressure cookers, including claims for personal injury or property damage. Out of the estimated 3.2 million consumers who purchased the pressure cooker at issue, only about 13,300 claimed the coupons. The settlement, as approved by the district court, would award plaintiff’s counsel more than $2 million in attorney’s fees and costs.

The Class Action Fairness Act of 2005 provides the Attorney General and state officials an opportunity to review federal class action settlements before district courts grant final approval. The United States filed a statement of interest in 2018 opposing the Chapman settlement in district court for the Northern District of Ohio. A coalition of 18 state attorneys general also filed a brief arguing that the settlement was unfair to consumers. The district court approved the settlement, which is now on appeal with the Sixth Circuit.

“Under the Class Action Fairness Act, the Department of Justice plays an important role in reviewing the reasonableness and adequacy of proposed class action settlements,” said Principal Deputy Associate Attorney General Jesse Panuccio.  “Settlements such as this one raise serious fairness concerns by awarding class members only illusory relief while the lawyers bringing the lawsuit are awarded substantial fees.  We will continue to scrutinize such proposed settlements to ensure they comport with the law and are fair, reasonable, and adequate.”

“Class action settlements that provide nothing of real value to consumers but award significant attorney’s fees to class counsel are precisely what Congress meant to curtail with the Class Action Fairness Act,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “We will continue to advocate on behalf of consumers when we see inappropriate class action settlements of this kind.”

Trial Attorney Kendrack Lewis of the Civil Division’s Consumer Protection Branch represents the United States in the matter. Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. 

From January 30 to February 1, 2019 in Bogotá, Colombia, Acting Attorney General Matthew Whitaker, along with Justice Department staff and U.S. Ambassador Kevin Whitaker, met with President Iván Duque Márquez, Colombian Attorney General Néstor Humberto Martínez Neira, Cabinet members, the Congressional Secretary General, and Colombian police officials to reaffirm the long-standing law enforcement relationship between the United States and Colombia and to strengthen judicial cooperation and goals for addressing transnational crime and supporting the return of democracy in Venezuela. 

In separate meetings, Acting Attorney General Whitaker met with U.S. Department of Justice components stationed at the U.S. Embassy, to include the FBI, U.S. Drug Enforcement Administration (DEA) and the Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT) and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  They provided briefings on the U.S. government’s law enforcement partnership with Colombia in dismantling and disrupting transnational criminal organizations including combatting Clan del Golfo, which was designated by the Department of Justice on Oct. 19, 2018 as one of the top transnational organized crime threats.

On February 1, Acting Attorney General Whitaker visited the General Santander National Police Academy and gave brief remarks at a wreath laying ceremony in honor of the brave young men and women who lost their lives or were wounded in the line of duty during the Jan. 17 suicide car bomb attack at the officer cadet school by the narco-terrorist group ELN. To approximately 100 Colombian National police officers, AG Whitaker said he was directing all U.S. Department of Justice components stationed at the U.S. Embassy, to include DEA, FBI, the U.S. Marshal’s Service and our DOJ Attaches, to make cases against ELN a top priority for the U.S. Department of Justice. 

Acting AG Whitaker pledged that the Department of Justice, together with the Colombian National Police and Attorney General’s Office, "will pursue these cases with the same investigative skill and prosecutorial resources, with which we’ve successfully pursued the Clan del Golfo.”

Acting AG Whitaker was also provided a Congressional briefing at the Colombian Congress.

During the visit, American and Colombian officials discussed their shared mission of combatting narco-trafficking and narco-terrorism as well as illicit finances, foreign corruption, human trafficking, child sexual exploitation and arms trafficking.  Both sides look forward to continuing to work together to achieve their shared objectives, as well as continued progress on these issues.

A New Jersey man was sentenced to 18 months in prison followed by three years of supervised release today for tax evasion in connection with over $1.2 million in income related to the proceeds from the sale of a purportedly original Caravaggio painting.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Acting Special Agent in Charge Matthew D. Line of IRS Criminal Investigation’s (IRS-CI) Nashville Field Office and Special Agent in Charge Troy Sowers of the FBI’s Knoxville Field Office made the announcement. 

Brian Gimelson, 48, of Lawrenceville, New Jersey, was sentenced by U.S. District Judge Tanya Walton Pratt of the Southern District of Indiana.  Judge Pratt also ordered Gimelson to pay $432,456 in restitution.  Gimelson pleaded guilty on Sept. 12, 2018 to two counts of attempting to evade or defeat a tax. 

According to admissions made in connection with his guilty plea, Gimelson earned a substantial income for his role in a transaction involving the sale of a purportedly original painting by the Italian painter Michelangelo Merisi, commonly known as Caravaggio, titled, “David With the Head of Goliath” (the Caravaggio Painting).  Despite earning over $1.2 million in income on this transaction, Gimelson admittedly did not timely file income tax returns and he did not timely pay tax due and owing to the United States. 

In order to conceal his income and evade the payment of his tax liabilities, Gimelson admittedly created a company, had his wife serve as managing member of the company, and used this company to facilitate the Caravaggio Painting transaction.  Despite creating this company in his wife’s name, Gimelson admitted that he controlled the company and its bank accounts, including the fees Gimelson received for his role in the Caravaggio Painting transaction.  Gimelson further admitted that he directed his wife to make frequent and substantial cash withdrawals on his behalf from company accounts, and Gimelson used company funds to purchase collectibles and precious metals, among other things. 

At sentencing, the Court concluded that Gimelson’s tax evasion caused losses of $432,456 to the IRS. 

The case was investigated by IRS-CI’s Nashville Field Office and the FBI’s Knoxville Field Office.  The case is being prosecuted by Trial Attorneys Danny Nguyen and Caitlin Cottingham of the Criminal Division’s Fraud Section.

The Justice Department today reached a settlement agreement with Honda Aircraft Company LLC (Honda Aircraft), a wholly owned subsidiary of American Honda Motor Co. Inc., and subsidiary of Honda Motor Co. Ltd., that manufactures and sells business jet aircrafts. The settlement resolves a claim that Honda Aircraft, headquartered in Greensboro, North Carolina, refused to consider or hire certain work-authorized non-U.S. citizens because of their citizenship status, in violation of the Immigration and Nationality Act’s (INA) anti-discrimination provision.

The Department’s independent investigation determined that between August 2015 and December 2016, Honda Aircraft published at least 25 job postings that unlawfully required applicants to have a specific citizenship status to be considered for the vacancies. The Department concluded that the company’s unlawful practice of restricting job vacancies to U.S. citizens and in some cases, to U.S. citizens and lawful permanent residents (LPR), was based on a misunderstanding of the requirements under the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). The discriminatory job postings were published on Honda Aircraft’s website and several third-party websites.

“The Department of Justice is committed to ensuring that employers do not unlawfully exclude non-U.S. citizens because of their citizenship status,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “Employers who are subject to the ITAR or the EAR should carefully review their responsibilities under anti-discrimination statutes.”

The ITAR regulates specific exports of defense articles and services, and – absent State Department authorization – limits access to certain sensitive information to “U.S. persons,” which are defined as U.S. citizens, U.S. nationals, lawful permanent residents, asylees, and refugees. The EAR similarly regulates commercial goods and technology that could have military applications. The EAR limits access to export-controlled technology and information to “U.S. persons” absent authorization from the Department of Commerce.  Neither the ITAR nor the EAR requires or authorizes employers to hire only U.S. citizens and LPRs. Employers that limit their hiring to U.S. citizens and/or LPRs without legal justification may violate the INA’s anti-discrimination provision.

Under the settlement agreement, Honda Aircraft will pay a civil penalty of $44,626, and remove all specific citizenship requirements from current and future job postings unless they are authorized by law. The agreement also requires certain employees to attend training on the INA’s anti-discrimination provision and ensure that trained personnel review future job advertisements.   

The INA’s anti-discrimination provision prohibits employers from discriminating in hiring or recruiting or referring for a fee based on a person’s citizenship, immigration status, or national origin.  In the absence of a legal basis (such as a law, regulation, or government contract that requires U.S. citizenship restrictions), employers, recruiters and referrers for a fee may not limit job opportunities or otherwise impose barriers to employment based on an individual’s citizenship or immigration status. By requiring a specific citizenship status as a condition of employment, Honda Aircraft’s job postings created discriminatory barriers for work-authorized individuals and unlawfully excluded U.S. nationals, asylees, refugees, and, in some cases, LPRs. 

The 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 citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation. 

More information on how employers can avoid unlawful citizenship status discrimination is available here.  For more information about protections against employment discrimination under immigration laws, 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; or 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.

A federal jury found Logan Roy McCauley, 25, of Hamilton, Virginia, guilty today of producing child pornography.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney G. Zachary Terwilliger for the Eastern District of Virginia made the announcement after the verdict was accepted by Senior U.S. District Judge T.S. Ellis III.

According to court records and evidence presented at trial, in November 2017, McCauley drove to West Virginia, picked up a minor he had met online, and drove the minor to his residence in Hamilton.  Within hours of arriving, McCauley engaged in sexual intercourse with the minor for purposes of using a smartphone to record a portion of the sexual encounter.  Soon after creating the video, McCauley sent an online message to another person admitting he had made the video that morning.  The day after McCauley created the video, law enforcement arrived at McCauley’s residence.  At this time, McCauley told law enforcement about the video, which was still on McCauley’s smart phone.

McCauley faces a maximum sentence of 30 years in prison and is subject to a 15-year mandatory minimum sentence.  He will be sentenced on April 26, 2019 before Senior U.S. District Court Judge Ellis.

The case was investigated by the FBI and the Loudoun County Sheriff’s Office.  It was prosecuted by Trial Attorney Gwendelynn Bills of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorneys Alexander Berrang and Jay Prabhu of the Eastern District of Virginia.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

ALBUQUERQUE – Federal law enforcement officials have announced charges against five men and two businesses for conspiracy, smuggling goods into the United States, and misrepresentation of Indian produced goods and products.  The charges, which are contained in a five-count indictment, arise from a multi-year scheme to import Native American-style jewelry, arts, and crafts into the United States from the Philippines and sell these goods to customers based on false representations that the merchandise was made by Native Americans.

 

            According to the indictment, which was returned on December 19, 2018, Sterling Islands Inc., located in Albuquerque, N.M., imported Native American-style goods from a factory in the Philippines.  These goods were not indelibly marked with the country of origin as required by customs law.  The indictment alleges that Jawad Khalaf, 70, of Albuquerque, N.M., is the owner and president of Sterling Islands Inc.  Nader Khalaf, 41, of Albuquerque, N.M., is a manager. 

            As alleged, Al-Zuni Global Jewelers, Inc., a wholesale business in Gallup, N.M., received these illegally imported goods and distributed them to customers.  Nashat Khalaf, 71, of Gallup, N.M., is the owner and president of Al-Zuni Global Jewelers, Inc.  Zaher Mostafa, 51, of Gallup, N.M., is a manager. 

            The indictment further charges that on or about August 3, 2012, Nader Khalaf sent an email message to the Philippines ordering Native American-style canteens.  This email included a note from Mostafa requesting production.  On or about November 24, 2014, Mostafa sold canteens to a customer that he represented as made by Navajo when the canteens were actually made in the Philippines.

            As alleged, on or about July 23, 2013, Nader Khalaf processed an order from Taha Shawar, 47, of Breckenridge, Colo., for jewelry stamped “E.Y.”  On August 5, 2014, Shawar sold a necklace stamped “E.Y.” to customers, claiming the necklace was made by an actual Navajo artist with those initials.

                “Native Americans make tremendous contributions to the cultural and artistic heritage of our nation,” said New Mexico U.S. Attorney John C. Anderson.  “This case demonstrates the Justice Department’s commitment to preserving and protecting the rich culture and heritage of New Mexico’s Pueblos and Tribes while promoting confidence in New Mexico’s native art market.”

                The U.S. Fish and Wildlife Service is committed to safeguarding the rich culture, art and heritage of Native Americans," said Edward Grace, Acting Assistant Director of the Office of Law Enforcement for the U.S Fish and Wildlife Service. "We will continue to hold to account those who would attempt to sell fraudulent Indian art and craftwork in order to further their business dealings. We thank the U.S. Attorney's Office, Federal Bureau of Investigation, Homeland Security Investigations, U.S. Marshals Service, Drug Enforcement Administration, New Mexico Department of Game and Fish, and Indian Arts and Crafts Board for their assistance with this case."   

                “People from all over the country come to New Mexico to buy Native American jewelry, and they expect the real thing,” said Special Agent in Charge James C. Langenberg of the FBI Albuquerque Division.  “When it's not, not only are they cheated, but so are the Native American artists who work hard to preserve their heritage.  The FBI and our partners are committed to vigorously investigating and prosecuting the counterfeiters who would threaten one of our country's most precious cultural resources.”

                “HSI special agents will continue to use their full authority to pursue the criminal organizations responsible for exploiting our tribal lands and cultural patrimony,” said Jack P. Staton, Special Agent in Charge of HSI El Paso.  “HSI’s unique cross-border authority is vital to the success of these investigations and we will continue to work with our federal, tribal, state, and local law enforcement partners to protect the Native American heritage of the pueblos and tribes in New Mexico.” 

                “The Indian Arts and Crafts Board is charged by statute to protect federally recognized American Indian and Alaska Native artists and their creative work through the Indian Arts and Crafts Act, thereby promoting tribal economies and preserving American Indian and Alaska Native cultural traditions,” said Indian Arts and Crafts Board Director Meridith Stanton.  “The Indian Arts and Crafts Board commends the Office of the U.S. Attorney in the District of New Mexico and the U.S. Fish and Wildlife Service Office of Law Enforcement for their outstanding work on the Al Zuni Indian Arts and Crafts Act investigation to protect the integrity and vitality of authentic Indian art.  This is particularly important in New Mexico, which relies on the creation and sale of authentic Indian art and craftwork as an important tourist draw and economic engine.” 

                The defendants face a maximum of 20 years in prison if convicted of the conspiracy and smuggling offenses.  They face up to 5 years in prison if convicted of misrepresentation of Indian produced goods and products. 

                Allegations in indictments are only accusations. Criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.

            This investigation was led by the Office of Law Enforcement for the Southwest Region of the U.S. Fish and Wildlife Service with assistance from the Albuquerque Division of the FBI, Homeland Security Investigations, the Indian Arts and Crafts Board, the Drug Enforcement Administration, the U.S. Marshals Service, and the New Mexico Department of Game and Fish.  Assistant U.S. Attorneys Sean J. Sullivan, Kristopher N. Houghton, and Brandon L. Fyffe are prosecuted the case. 

Marlene Seo was sentenced today in Denver to one year and one day in prison for making and subscribing a false corporate income tax return, announced Principal Deputy Assistant Attorney Richard E. Zuckerman, head of the Justice Department’s Tax Division.

According to court documents, Seo owned and operated the National Martial Arts Academy (NMAA).  From 2011 through 2013, she directed that income due to NMAA to be deposited into certain bank accounts, which she did not disclose to her bookkeeper and accountants.  As a result, Seo caused the 2011, 2012 and 2013 federal corporate income tax returns for NMAA to underreport the business’s gross receipts by approximately $650,000. 

Seo pleaded guilty on October 29, 2018, to signing and filing NMAA’s false 2012 income tax return.  In addition to the prison term, Seo was ordered to serve one year of supervised release and to pay restitution to the Internal Revenue Service (IRS) in the amount of $238,350.70 and a special assessment of $100.

Principal Assistant Attorney General Zuckerman commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Anahi Cortada and Lisa L. Bellamy of the Tax Division, who prosecuted the case.

A federal jury in Charlotte, North Carolina found two men guilty yesterday for their roles in a five-year multi-million dollar high-yield investment fraud, the Justice Department announced today.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina and Inspector in Charge David McGinnis of the U.S. Postal Inspection Service’s Charlotte Division, made the announcement.

Robert Leslie Stencil, 61, of Charlotte, North Carolina, and Michael Allen Duke, 50, of Richardson, Texas, were each convicted of one count of conspiracy to commit mail and wire fraud, following a three-week trial.  In addition, Stencil was convicted of 13 counts of mail fraud, 13 counts of wire fraud and four counts of money laundering.  Duke was also convicted of three counts of mail fraud, one count of wire fraud and one count of money laundering.  Sentencing before U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina, who presided over the trial, has not yet been scheduled.

“Robert Stencil and Michael Duke shamelessly stole millions of dollars from unwitting investors, including the elderly, to line their own pockets,” said Assistant Attorney General Benczkowski.  “These convictions hopefully provide some consolation to the many innocent victims of this criminal scheme.”

According to the evidence presented at trial, from 2012 through 2016, Stencil, Duke and their co-conspirators sold millions of dollars of worthless stock in a sham company named Niyato Industries Inc. (“Niyato”).  Stencil played the role of Niyato’s Chief Executive Officer.  Duke was Stencil’s top salesperson.  Together with their co-conspirators, Stencil and Duke portrayed Niyato as a leader in its field, manufacturing electric vehicles and converting gasoline vehicles to run on compressed natural gas.  Stencil, Duke and their co-conspirators told victims that Niyato was run by a team of high-profile executives, and that Niyato had patented technology, state-of-the-art facilities, and valuable contracts.  Further, they told victims that Niyato would use 97 percent of the money it raised selling stock to grow its business and expand operations.  Stencil, Duke and their co-conspirators used high-pressure tactics when pitching Niyato stock to victims.  Among other things, they sold victims on the opportunity to get in on the ground floor, offering them a portion of a supposedly limited supply of pre-IPO stock at $.50 per share and promising them a 10- to 16-fold return when Niyato went public.  From 2012 to 2016, Stencil, Duke and their co-conspirators repeatedly told victims that an IPO was imminent.

In reality, the evidence showed that Niyato had no patents, facilities, products, or plans to commence an IPO.  Niyato’s true business was the sale of worthless stock.  Stencil, Duke and their co-conspirators used nearly all of the money raised by selling Niyato stock for their own personal benefit, with Stencil paying salespeople – like Duke – half or nearly half of the money they solicited from each investor on behalf of Niyato.  Moreover, Stencil used Niyato’s bank account as his own personal piggybank.  The evidence further established that Stencil, Duke and their co-conspirators sold approximately $2.8 million in stock to around 140 victims, many of whom were elderly.  Duke was Stencil’s top salesperson, selling over $1.4 million of worthless Niyato stock to around 70 victims.  For his role in the fraudulent scheme, Duke received over $700,000.    

Four other defendants pleaded guilty and are awaiting sentencing, including Nicholas Fleming, 63, of Northridge, California; Martin Delaine Lewis, 52, of Frisco, Texas; Paula Saccomanno, 61, of Boca Raton, Florida; and Dennis Swerdlen, 64, of Boca Raton, Florida.  Kristian F. Sierp, 47, of Costa Rica, pleaded guilty on Feb. 2, 2017 and received a sentence of 102 months in prison in connection with his role in this case and in an unrelated Costa Rican sweepstakes fraud.  Daniel Thomas Broyles, Sr., 61, of Beverly Hills, California, was also charged and remains a fugitive.  An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.   

This case was investigated by the U.S. Postal Inspection Service.  Fraud Section Trial Attorneys William Bowne and Christopher Fenton are prosecuting the case. 

A federal grand jury in the District of Oregon has returned a five-count superseding indictment charging six members and associates of the Gypsy Joker Outlaw Motorcycle Club (GJOMC) for racketeering conspiracy, kidnapping and murder.

The superseding indictment was announced by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Billy J. Williams for the District of Oregon, Special Agent in Charge Darek Pleasants of the Bureau of Alcohol, Tobacco, Firearms, and Explosive’s (ATF) Seattle Field Division and Chief of Police Danielle Outlaw of the Portland Police Bureau (PPB).

“According to the indictment, since at least 2003, the Gypsy Jokers have engaged in a wide range of crimes, including kidnapping, murder, drug dealing, robbery, extortion, and witness tampering,” said Assistant Attorney General Benczkowski.  “Thanks to the efforts of ATF, the Portland Police Department, and federal prosecutors, we will work hard to hold accountable the leaders and members of this brutal and highly organized gang for their alleged crimes.”

“Kenneth Hause is the leader of a criminal organization that, through its many chapters and support clubs, has sowed violence and intimidation throughout the Pacific Northwest,” said U.S. Attorney Williams.  “This is an organization whose members and associates pride themselves on living outside the law and use kidnapping, assault, murder and other forms of violence to extend and maintain their power. Kenneth Hause and his co-defendants will soon have their day in court and will face the consequences of their crimes.”

“This is a continuation of ATF’s operations against the Gypsy Joker Outlaw Motorcycle Club for racketeering, kidnapping and murder,” said ATF Special Agent in Charge Pleasants. “As president of a criminal organization, Mr. Hause put the community at risk and showed contempt for law and order. It is among ATF’s core commitments to protect the public from violent criminals such as these Gypsy Jokers.”

“The Portland Police Bureau is proud to be a part of this cooperative effort,” said Chief Outlaw. “Violent crime deeply affects our community. By working with our partners, we can utilize a collective group of strategies and tactics to investigate and apprehend those responsible for committing violent acts or profiting from people’s fear through extortion and intimidation.”

GJOMC National President Kenneth Earl Hause, 61, of Aumsville, Oregon; Mark Leroy Dencklau, 58, of Woodburn, Oregon; Earl Deverle Fisher, 48, of Gresham, Oregon; Ryan Anthony Negrinelli, 36, of Gresham; Joseph Duane Folkerts, 61, of Battleground, Washington; and a sixth unnamed defendant are charged, as members and associates of the GJOMC, with conspiring to conduct and participate in the activities of a racketeering enterprise.

Additionally, Dencklau, Fisher, Negrinelli, Folkerts and the unnamed defendant are charged with murder in aid of racketeering; kidnapping in aid of racketeering, resulting in death; kidnapping resulting in death; and conspiracy to commit kidnapping, resulting in death for the June 30 to July 1, 2015 kidnapping and murder of Robert Huggins, a former GJOMC member and resident of southeast Portland, for the purpose of maintaining and increasing their positions in the GJOMC criminal enterprise.

According to the superseding indictment, the GJOMC preserves, promotes and protects its power, territory and profits through violence and intimidation and enriches its members through extortion, robbery and the distribution of narcotics. The organization is known for using fear through its members and associates as a tactic for establishing and maintaining its power.  The GJOMC oversees several “support clubs” in Oregon and Washington, including the Road Brothers Northwest Motorcycle Club, Solutions Motorcycle Club, Northwest Veterans Motorcycle Club, High-Side Riders, and the Freedom Fellowship Motorcycle Club.

Dencklau, Fisher and Tiler Evan Pribbernow, 37, of Portland were first charged in a four-count indictment unsealed in July 2018.  Pribbernow pleaded guilty to a single count of conspiring to conduct and participate in the activities of a racketeering enterprise on Nov. 7, 2018. Dencklau and Fisher are detained pending trial.

In addition to the criminal charges brought against the named defendants, the government is seeking forfeiture of a property located in Salem, Oregon used as a GJOMC clubhouse.           

An indictment is only an accusation of a crime, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the PPB and ATF, with assistance from the U.S. Marshals Service; IRS Criminal Investigation; Clark County, Washington Sheriff’s Office; Oregon State Police, and the Oregon and Washington State Crime Labs. Trial Attorney Rebecca A. Staton of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Leah K. Bolstad and Steven T. Mygrant for the District of Oregon are prosecuting the case.

This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.