District Not Recorded

A Manassas, Virginia man pleaded guilty today to using the Internet to pay women to sexually abuse children as young as six years old in the Philippines while he produced numerous images of the abuse.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Tracy Doherty-McCormick for the Eastern District of Virginia and Special Agent in Charge Patrick J. Lechleitner of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C., made the announcement.

According to court documents, from at least October 2011 until February 2012, Dwayne Stinson, 53, used an electronic payment service to pay women in the Philippines he was chatting with to sexually abuse children while he directed the abuse. He admitted that some of the children were as young as six or seven years old. The defendant contemporaneously produced numerous screenshot images of the abuse and stored them on his computer.

Stinson pleaded guilty to one count of production of child pornography before U.S. District Judge Liam O’Grady. His sentencing is scheduled for Aug. 24, 2018.

The Prince William County Police Department and Northern Virginia/District of Columbia Internet Crimes Against Children Task Force (NOVA/DC ICAC) assisted in the investigation. CEOS Trial Attorney James E. Burke IV and Assistant U.S. Attorney Whitney Russell for the Eastern District of Virginia are prosecuting the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and 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 Tennessee health care executives were charged in an indictment unsealed today for their alleged participation in a $4.6 million Medicare kickback scheme involving durable medical equipment (DME).

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Don Cochran of the Middle District of Tennessee, Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Atlanta region, Special Agent in Charge John F. Khin of the U.S. Department of Defense Criminal Investigative Service’s (DCIS) Southeast Field Office and Director Mark Gwyn of the Tennessee Bureau of Investigation (TBI) Medicaid Fraud Control Unit made the announcement.

John Davis, 40, of Brentwood, Tennessee, and Brenda Montgomery, 69, of Camden, Tennessee, were each charged with one count of conspiracy to defraud the United States and to pay and receive health care kickbacks, and seven counts of paying and receiving health care kickbacks.  Davis is the former CEO of Comprehensive Pain Specialists (CPS), a large, multi-state pain management company.  Montgomery is the owner, founder and CEO of CCC Medical Inc., a DME company with five locations in Tennessee and headquartered in Camden.  Davis and Montgomery were arrested this morning and appeared this afternoon before U.S. Magistrate Judge Alistair E. Newbern of the Middle District of Tennessee. 

“The charges against John Davis and Brenda Montgomery, alleging almost three quarters of a million dollars in illegal health care kickbacks and the submission of over $4.6 million in fraudulent claims to Medicare, demonstrate the Department of Justice’s commitment to protect taxpayer dollars and to hold corporate executives accountable for fraudulent and abusive conduct,” said Acting Assistant Attorney General Cronan.  “Kickbacks such as those alleged in the indictment distort markets and undermine public trust.  The Criminal Division and our law enforcement partners will continue to root out fraud, waste and abuse in our health care programs, no matter how complex the schemes.”

“Our Medicare program is designed to help those who are most vulnerable and in need of medical services and equipment,” said U.S. Attorney Cochran.  "Stealing funds from our health care system places the vulnerable at greater risk and diverts public funds into the pockets of the greedy individuals who exploit those with the greatest need.  We will be un-relenting in our efforts to bring to justice, those individuals and corporations who choose to profit at the expense of the health of those individuals with the greatest need.”

“Kickback schemes like this one do not benefit patients or the Medicare program,” said Special Agent in Charge Jackson.  “These arrangements are simply designed to line the pockets of the defendants at the expense of the taxpayer.”

“In concert with our partner agencies, DCIS aggressively investigates fraud and corruption that undermines the integrity of Department of Defense programs,” said DCIS Special Agent in Charge Khin.  “These defendants selfishly put greed and personal gain before the safety and well-being of our military members, their families, and retirees, who deserve the best medical care available.”

“Having the support and cooperation of our partner local, state and federal agencies is critical in our combined efforts to protect Tennesseans from individuals attempting to derive a personal benefit at the expense of patients and taxpayers,” said TBI Director Gwyn.

The indictment alleges that from at least June 2011 until at least June 2017, Montgomery agreed to pay Davis, the CEO of CPS, illegal kickbacks in exchange for Medicare referrals for DME ordered by CPS employees that Davis referred to CCC Medical.  As alleged in the indictment, Montgomery agreed to pay Davis 60 percent of Medicare proceeds collected on claims billed for DME ordered by CPS providers and referred by Davis.  In addition, the indictment alleges that Davis and Montgomery took a number of steps to conceal their illegal agreement, including making kickback payments through a nominee, creating and filing false tax documents, and, for Davis, intervening as CEO to prevent the owners of CPS from obtaining their own Medicare DME supplier numbers that would have allowed CPS to bill for its own Medicare DME orders.

Beginning in or around May 2015, according to the indictment, Davis and Montgomery renegotiated their illegal agreement to further obscure their personal contract from Medicare and from CPS owners and employees.  The indictment alleges that from approximately May 2015 until approximately November 2015, Montgomery agreed to pay Davis $200,000 for the sham purchase of a shell entity known as ProMed Solutions LLC (ProMed).  Davis and Montgomery renegotiated the sham transaction after Montgomery complained that her referrals from CPS had been lower than expected, and Montgomery ultimately paid $150,000 for the shell, ProMed, according to allegations in the indictment.  The true purpose of this payment was to induce Davis to continue driving CPS referrals to CCC Medical, the indictment alleges.

The indictment alleges that Montgomery, through CCC Medical, submitted over $4.6 million in fraudulent claims to Medicare, and that Medicare paid a total of $2.6 million on those claims.  Further, the indictment alleges that Montgomery paid more than $770,000 in illegal kickbacks to Davis.

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 HHS-OIG, DCIS and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit.  Trial Attorney Anthony Burba of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ryan Raybould of the Middle District of Tennessee and are prosecuting the case. 

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws throughout the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have collectively billed the Medicare program for over $12.5 billion.  

A Newton, Massachusetts man, who was arrested and charged in October 2017 for conducting an extensive cyberstalking campaign against his former housemate, was charged today in federal court in Boston with an additional 24 offenses. 

Ryan S. Lin, 25, was charged with seven counts of cyberstalking, five counts of distribution of child pornography, nine counts of making hoax bomb threats, three counts of computer fraud and abuse and one count of aggravated identity theft.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Andrew E. Lelling for the District of Massachusetts, Special Agent in Charge Harold H. Shaw of the FBI Boston Field Office and Waltham Police Chief Keith MacPherson made the announcement today.

The conduct charged in the October 2017 complaint is incorporated into today’s charges.  Specifically, from about May 2016 through Oct. 5, 2017, Lin engaged in an extensive cyberstalking campaign against a 24-year-old female victim. Lin, the victim’s former housemate, allegedly hacked into the victim’s online accounts and devices and stole the victim’s private photographs, personally identifiable information, and private diary entries, which contained highly sensitive details about her medical, psychological and sexual history, and distributed the victim’s material to hundreds of people associated with her.

Lin also allegedly created and posted fraudulent online profiles in the victim’s name and solicited rape fantasies, including “gang bang” and other sexual activities, which in turn caused men to show up at the victim’s home. Lin engaged in a number of other activities targeting the female victim, including relentless anonymous text messaging and additional hoaxes, from shortly after he met her until October 2017.    

The Information further charges that, in addition to his former housemate, Lin engaged in cyberstalking activity aimed at six additional individuals. Some were associated with the former housemate, and others were entirely unrelated. The additional victims include a female victim that was also Lin’s housemate in Newton at the time of his arrest. It is also alleged that on multiple occasions, Lin sent sexually explicit images of prepubescent children on an unsolicited basis to the victim’s mother, the victim’s co-worker and housemate, a friend of the victim who resided in New Jersey, and two of Lin’s former classmates in New York.

In addition to the cyberstalking activity, it is alleged that Lin falsely and repeatedly reported to law enforcement that there were bombs at the victim’s Waltham, Massachusetts residence. Lin also allegedly created a false social media profile in the name of the victim’s housemate in Waltham and posted that he was going to “shoot up” a school in a nearby town. These threats expanded beyond Waltham and became part of an extensive and prolonged pattern of threats to local schools, private homes, businesses, and other institutions in the broader community. 

The investigation was conducted by the FBI’s Boston Field Office and the Waltham Police Department.  The Middlesex County District Attorney’s Office and Watertown, Newton and Wellesley Police Departments assisted in the investigation. Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Amy Harman Burkart, Chief of Lelling’s Cybercrime Unit are prosecuting the case. 

The details contained in the charging document are allegations.  The defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

Note: To view the information click here. 

Note: To view the indictment click here. 

The Justice Department today announced the seizure of Backpage.com, the Internet’s leading forum for prostitution ads, including ads depicting the prostitution of children.  Additionally, seven individuals have been charged in a 93-count federal indictment with the crimes of conspiracy to facilitate prostitution using a facility in interstate or foreign commerce, facilitating prostitution using a facility in interstate or foreign commerce, conspiracy to commit money laundering, concealment money laundering, international promotional money laundering, and transactional money laundering.|

The seven defendants charged in the indictment are Michael Lacey, 69, of Paradise Valley, Arizona; James Larkin, 68, of Paradise Valley, Arizona; Scott Spear, 67, of Scottsdale, Arizona; John E. “Jed” Brunst, 66, of Phoenix, Arizona; Daniel Hyer, 49, of Dallas, Texas;  Andrew Padilla, 45, of Plano, Texas and Jaala Joye Vaught, 37, of Addison, Texas. 

Attorney General Jeff Sessions, Deputy Attorney General Rod Rosenstein, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Elizabeth A. Strange for the District of Arizona, U.S. Attorney Nicola T. Hanna of the Central District of California, FBI Director Christopher A. Wray,  U.S. Postal Inspection Service Chief Postal Inspector Guy Cottrell and Chief Don Fort of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.

“For far too long, Backpage.com existed as the dominant marketplace for illicit commercial sex, a place where sex traffickers frequently advertised children and adults alike,” said Attorney General Sessions.  “But this illegality stops right now.  Last Friday, the Department of Justice seized Backpage, and it can no longer be used by criminals to promote and facilitate human trafficking. I want to thank everyone who made this important seizure possible: all of our dedicated and committed professionals in the Child Exploitation and Obscenity Section and our U.S. Attorney’s Office in the District of Arizona, the FBI, our partners with the IRS Criminal Investigation, our Postal Inspectors, and the Texas and California Attorney Generals’ offices. With their help, we have put an end to the violence, abuse, and heartache that has been perpetrated using this site, and we have taken a major step toward keeping women and children across America safe.”

“Backpage has earned hundreds of millions of dollars from facilitating prostitution and sex trafficking, placing profits over the well-being and safety of the many thousands of women and children who were victimized by its practices,” said First Assistant U.S. Attorney Elizabeth A. Strange.  “It is appropriate that Backpage is now facing criminal charges in Arizona, where the company was founded, and I applaud the tremendous efforts of the agents who contributed to last Friday’s enforcement action and who assisted in obtaining the indictment in this case.  Some of the internal emails and company documents described in the indictment are shocking in their callousness.”

“This website will no longer serve as a platform for human traffickers to thrive, and those who were complicit in its use to exploit human beings for monetary gain will be held accountable for their heinous actions,” said FBI Director Wray.  “Whether on the street or on the Internet, sex trafficking will not be tolerated. Together with our law enforcement partners, the FBI will continue to vigorously combat this activity and protect those who are victimized.”

“The events of last Friday and today are a big win, not only for the agents who investigated these crimes, but more importantly for the victims, including children, who were harmed as a consequence of the alleged actions of Backpage.com,” said Chief Postal Inspector Cottrell.  “By laundering the illegal gains of an enterprise, Backpage perpetuated the exploitation of victims and continued to finance their business. The U.S. Postal Inspection Service is committed to protecting our customers by stopping the money laundering to ensure the cycle of victimization ends.”

“An indictment of this magnitude is particularly troubling when you look at the various layers of corruption and exploitation that are alleged to have occurred,” said IRS-CI Chief Fort.  “The masterminds behind Backpage are not only alleged to have committed egregious amounts of financial crimes such as money laundering, they did so at the expense of innocent women and children.  While these types of investigations can be made more challenging with the use of virtual currency, offshore banking, and the anonymity of the Internet, it should serve as an example to all criminals that there is not a place they can hide where we will not find them.”

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

The effort to seize Backpage was led by the Justice Department’s Child Exploitation and Obscenity Section and the U.S. Attorney’s Office for the District of Arizona, with significant support from the U.S. Attorney’s Office for the Central District of California, the office of the California Attorney General, and the office of the Texas Attorney General.  The law enforcement agencies conducting the investigation and seizure include the FBI Phoenix Field Office, the U.S. Postal Inspection Service and IRS-CI.  The criminal case is being prosecuted by Assistant U.S. Attorneys Kevin Rapp, Dominic Lanza, and Margaret Perlmeter of the District of Arizona and Senior Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section.  Assistant U.S. Attorney John Kucera of the Central District of California is handling the asset forfeiture aspects of the case.

With the tax season in full swing, the Justice Department warns taxpayers to avoid unscrupulous tax return preparers who seek to harm taxpayers, and also reminds taxpayers that they could still be responsible for any unpaid taxes, penalties, and interest, resulting from errors made on their returns.

In the last year, the Justice Department’s Tax Division, in collaboration with U.S. Attorney’s Offices, filed dozens of civil and criminal 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.  

“The Tax Division will continue to protect the American public by holding fraudulent tax return preparers accountable,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman.  “The Justice Department is committed to working with the IRS to stamp out this fraud.”

In the past decade, the Tax Division has obtained convictions and injunctions against hundreds of unscrupulous return preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns 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.

Examples of some of the criminal convictions obtained by the Tax Division in the last year include:

• In January 2018, a Kansas City, Kansas tax return preparer was sentenced to 96 months in prison for preparing income tax returns for clients that reported false business income and losses, medical and dental expense deductions, job-related expenses, charitable donations, and other fraudulent items. 

• In August 2017, a Gulfport, Mississippi tax return preparer was sentenced to 48 months in prison for obstructing the internal revenue laws and aiding in the preparation of a false tax return.  She ran a home-based tax return preparation business where she instructed several of her clients, who owed income taxes to the IRS, to write payment checks directly to her rather than to the IRS.  She kept these funds for herself and used the money to gamble at local casinos.  Typically, she provided copies of accurate returns to her clients, but then did not file any return with the IRS. 

• In April 2017, a San Diego, California tax return preparer was sentenced to 37 months in prison for preparing fraudulent tax returns.  She prepared fraudulent returns for her clients that reported fake business losses, charitable contributions, and medical, dental, education and unreimbursed employee expenses.  In total, her conduct caused a tax loss of more than $1.2 million. 

Examples of some of the civil injunctions obtained by the Tax Division in the last year include:

• In October 2017, a federal court in Houston, Texas permanently enjoined a woman and a corporation from preparing federal tax returns for others.  According to the government’s complaint, the woman, through her business, routinely prepared federal tax returns for customers that reported false expense deductions, as well as false claims for education tax credits and improper dependents.

• In September 2017, a federal court in Detroit, Michigan permanently barred a tax return preparation company and its owner from operating a tax return preparation business and preparing federal tax returns for others.  The owner prepared tax returns with false income and expenses, bogus dependents, improper filing statuses, and false itemized deductions, all with the purpose of fraudulently maximizing customer refunds and refundable credits, according to the government’s complaint.

• In July 2017, a federal court in New York permanently enjoined the owners and their multiple businesses from preparing federal tax returns for others.  The owners prepared federal tax returns for customers that contained false or erroneous claims for education tax credits, fuel tax credits, and the Earned Income Tax Credit, according to the government’s complaint.

When return preparers violate these civil injunction orders, the Tax Division is committed to holding them responsible:

• In December 2017, a Louisiana woman, who continued to file returns even after a federal judge permanently enjoined her from preparing returns, was sentenced to seven years in prison for filing fraudulent income tax returns.  She filed returns that included fake business losses, deductions, and tax credits in order to fraudulently increase her clients’ refunds.

• In November 2017, a federal court in Florida found a woman in contempt of the court’s injunction barring her from preparing tax returns for others.  The court ordered her to pay the government $11,572.57 as a sanction for costs incurred investigating her contempt.

• In May 2017, a federal court in Maryland found that a man had violated the court’s previous permanent injunction barring him from preparing tax returns for others and from operating a tax preparation business.  The court ordered that he comply with the previously entered injunction and that he pay the United States $29,914.38 for its costs incurred investigating whether he had complied with the injunction.

Tax return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2018 and taxpayers seeking a return preparer should remain vigilant. The IRS has some information on its website about selecting a return preparer and has launched a free directory of federal tax preparers. Also, the IRS has a list of steps on its website that you can take now in anticipation of filing your 2017 federal income tax return and ten tips for choosing a tax preparer.

A former police officer with the Village of Biscayne Park had his initial appearance today on an indictment in Miami for deprivation of civil rights under color of law against two individuals on separate occasions and for falsifying records in a federal investigation. Acting Assistant Attorney General John Gore of the Civil Rights Division, U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida, Katherine Fernandez Rundle, Miami-Dade State Attorney, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Troy Walker, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), made the announcement. 

Guillermo Ravelo, 37, of Miami, Florida, is charged with depriving persons of their civil rights under color of law, in violation of Title 18, United States Code, Section 242 (Counts 1 and 3), and falsifying records in a federal investigation, in violation of Title 18, United States Code, Section 1519 (Counts 2 and 4). If convicted of all charges, Ravelo faces a statutory maximum sentence of 60 years in prison.

According to the allegations contained in the indictment, on April 7, 2013, officer Ravelo responded to a request for assistance from another Biscayne Park police officer who had conducted a traffic stop.  During the arrest of the driver, officer Ravelo struck the driver with his fist. In a separate incident, on June 14, 2013, while still employed as a police officer with the Biscayne Park Police Department, officer Ravelo responded to a call concerning an ongoing vehicle burglary in Biscayne Park and struck the suspect with a blunt object. Both assaults resulted in bodily injury, and on both occasions officer Ravelo falsified the police reports by misstating the circumstances of the arrests and by omitting that he struck both of the victims.

The investigation was led by the FBI, including the FBI Miami Area Corruption Task Force, FDLE, and the Miami-Dade State Attorney’s Office.  This case is being prosecuted by Assistant U.S. Attorney Harry C. Wallace, Jr., Department of Justice Trial Attorney Donald W. Tunnage, and Assistant State Attorney Trent Reichling.

An indictment merely contains accusations.  A defendant is presumed innocent, unless and until proven guilty in a court of law. 

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Health and Human Services Secretary Alex Azar and Attorney General Jeff Sessions today released a fiscal year (FY) 2017 Health Care Fraud and Abuse Control Program report showing that for every dollar the federal government spent on healthcare related fraud and abuse investigations in the last three years, the government recovered $4. Additionally, the report shows that the departments’ FY 2017 Takedown event was the single largest healthcare fraud enforcement operation in history.

In FY 2017, the government’s healthcare fraud prevention and enforcement efforts recovered $2.6 billion in taxpayer dollars from individuals and entities attempting to defraud the federal government and Medicare and Medicaid beneficiaries. Some of these fraudulent practices include:

• Providers operating “pill mills” out of their medical offices.
• Providers submitting false claims to Medicare for ambulance transportation services.
• Clinics submitting false claims to Medicare and Medicaid for physical and occupational therapy.
• Drug companies paying kickbacks to providers to prescribe their drugs, and pharmacies soliciting and receiving kickbacks from pharmaceutical companies for promoting their drugs.
• Companies misrepresenting capabilities of their electronic health record software to customers.

“Taxpayers work hard every day to help fund government programs for our fellow Americans,” Attorney General Sessions said. “But too many trusted medical professionals like doctors, nurses and pharmacists have chosen to violate their oaths and exploit this generosity to line their pockets, sometimes for millions of dollars.  At the Department of Justice, we have taken historic new actions to incarcerate these criminals and recover stolen funds, including executing the largest healthcare fraud enforcement action in American history.  These achievements are important, but the department's work is not finished. We will keep up this pace and continue to prosecute fraudsters so that we can give financial relief to taxpayers.”

“Today’s report highlights the success of HHS and DOJ’s joint fraud-fighting efforts,” said HHS Secretary Azar. “By holding individuals and entities accountable for defrauding our federal health programs, we are protecting the programs’ beneficiaries, safeguarding billions in taxpayer dollars, and, in the case of pill mills, helping stem the tide of our nation’s opioid epidemic.”

The Departments of Justice (DOJ) and Health and Human Services (HHS), through the Health Care Fraud Prevention and Enforcement Action Team (HEAT) effort, use data analytics and surveillance to crack down on, prevent and prosecute healthcare fraud. While the program continues to be very successful, the return on investment fluctuates from year to year, in part because cases resulting in large settlements take multiple years to complete. Additionally, there has been a reduction in large monetary settlements as many of the large pharmaceutical manufacturers have entered into Corporate Integrity Agreements with the HHS Office of the Inspector General to establish protections against fraudulent activities.

With teams comprised of law enforcement agents, prosecutors, attorneys, auditors, evaluators and other staff, last year DOJ opened 967 new criminal healthcare fraud investigations of which federal prosecutors filed criminal charges in 439 cases involving 720 defendants.  A total of 639 defendants were convicted of healthcare fraud related crimes. In FY 2017, the DOJ and HHS joint Medicare Fraud Strike Force filed 253 indictments and charges against 478 defendants who allegedly billed federal healthcare programs more than $2.3 billion. The Strike Force obtained more than 290 guilty pleas, litigated 33 jury trials and won guilty verdicts against 40 defendants. The Fraud Strike Force secured prison sentences for more than 300 defendants, with an average sentence of 50 months. Since its inception in 2007, Strike Force prosecutors filed more than 1,660 cases charging more than 3,490 defendants who collectively billed the Medicare program more than $13 billion.

Beyond criminal prosecution, the HHS Office of Inspector General (OIG) remains vigilant in excluding providers and suppliers who committed fraud or engaged in the abuse or neglect of patients in federal health programs. A total of 3,244 individuals and entities were excluded in FY 2017. Others were excluded as a result of licensure revocations. These exclusions help to safeguard beneficiaries from future harm that could otherwise be inflicted by such convicted individuals or entities. HHS can also suspend Medicare payments to providers during investigations of credible allegations of fraud.  During FY 2017, there were 551 related payment suspensions.  More than 4 million claims are reviewed by Medicare each day; resulting in more than one billion claims processed annually for timely payments to healthcare providers and suppliers. Given the volume of claims processed by Medicare each day and the significant cost associated with conducting medical review of an individual claim, the Centers for Medicare and Medicaid Services uses automated edits to help prevent improper payments without the need for manual intervention.  The National Correct Coding Initiative consists of edits designed to reduce improper payments in Medicare Part B, and this program saved Medicare $186.9 million during the first nine months of FY 2017.

As the opioid epidemic continues to devastate communities and families across the nation, both DOJ and HHS are responding with new approaches. One out of every three beneficiaries received prescription opioids through Medicare Part D in 2016. Additionally, 401 prescribers were found to have questionable prescribing patterns for beneficiaries at serious risk of opioid misuse or overdose, based on an OIG analysis. Last July, DOJ and HHS announced the largest ever healthcare fraud enforcement action, involving 412 charged defendants across 41 federal districts, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in healthcare schemes involving approximately $1.3 billion in false billings. Of those charged, more than 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.

In August, Attorney General Sessions announced the formation of the Opioid Fraud and Abuse Detection Unit, a new DOJ pilot program that will use data to help combat and prosecute individuals and entities involved in illegal activities that fuel the crisis. As part of that task force, the department funded 12 experienced assistant United States attorneys for a three-year term to focus solely on investigating and prosecuting healthcare fraud related to prescription opioids, including pill mill schemes and pharmacies that unlawfully divert or dispense prescription opioids for illegitimate purposes. Those prosecutors have already charged several with unlawful distribution of opioids, and their continued success is crucial in combatting this deadly epidemic.

For more details on the Health Care Fraud and Abuse Control Program and today’s report, visit: https://oig.hhs.gov/publications/docs/hcfac/FY2017-hcfac.pdf

Attorney General Jeff Sessions today named Director of the National Institute of Justice Dr. David Muhlhausen as Executive Director of Federal Interagency Council on Crime Prevention and Improving Reentry (FIRC) and announced that Ja’Ron Smith, Domestic Policy Council Director of Urban Affairs and Revitalization, was also announced as the White House liaison to the FIRC.

"Recidivism rates in this country are unacceptably high," Attorney General Sessions said. "That means more costs for society, more dangerous work for our law enforcement officers, and more crime. That's why, under President Trump's leadership, the Department of Justice is committed to improving outcomes for those reintegrating into society who want to abide by our laws. The FIRC plays a critical role in making that progress possible, and so I want to thank Director Muhlhausen for his willingness to serve and for his hard work on this issue already. I am confident that he will be a success in this new position."

The FIRC was established in response to Executive Order 13826 on March 7, 2018 and is co-chaired by Attorney General Sessions, the Assistant to the President for Domestic Policy Andrew P. Bremberg, and the Senior Advisor to the President in charge of the White House Office of American Innovation Jared Kushner. The FIRC is part of President Trump’s effort to encourage prison reform, reduce recidivism, combat crime, and improve public safety.

Director Muhlhausen joined the National Institute of Justice in 2017. Previously, he served as a research fellow in empirical policy analysis at the Heritage Foundation, where he worked since 1999. Dr. Muhlhausen has testified frequently before Congress on the efficiency and effectiveness of various Federal programs. He has been called by the House and Senate Committees on the Judiciary to discuss how to improve policing strategies, prisoner reentry programs, and other important criminal justice programs. 

The National Institute of Justice is dedicated to improving knowledge and understanding of crime and justice issues. The Institute provides objective and independent research and tools to inform the decision-making of policymakers in order to reduce crime and advance justice, particularly at the state and local levels.

More information about the National Institute of Justice can be found at www.nij.gov. More information about OJP can be found at www.ojp.gov.

Attorney General Jeff Sessions today notified all U.S. Attorney’s Offices along the Southwest Border of a new “zero-tolerance policy” for offenses under 8 U.S.C. § 1325(a), which prohibits both attempted illegal entry and illegal entry into the United States by an alien. The implementation of the Attorney General’s zero-tolerance policy comes as the Department of Homeland Security reported a 203 percent increase in illegal border crossings from March 2017 to March 2018, and a 37 percent increase from February 2018 to March 2018—the largest month-to-month increase since 2011. 

“The situation at our Southwest Border is unacceptable. Congress has failed to pass effective legislation that serves the national interest—that closes dangerous loopholes and fully funds a wall along our southern border. As a result, a crisis has erupted at our Southwest Border that necessitates an escalated effort to prosecute those who choose to illegally cross our border,” said Attorney General Jeff Sessions. “To those who wish to challenge the Trump Administration’s commitment to public safety, national security, and the rule of law, I warn you: illegally entering this country will not be rewarded, but will instead be met with the full prosecutorial powers of the Department of Justice. To the Department’s prosecutors, I urge you: promoting and enforcing the rule of law is vital to protecting a nation, its borders, and its citizens. You play a critical part in fulfilling these goals, and I thank you for your continued efforts in seeing to it that our laws—and as a result, our nation—are respected.”

On April 11, 2017, Attorney General Jeff Sessions announced a renewed commitment to criminal immigration enforcement. As part of that announcement, the Attorney General issued a memorandum to all federal prosecutors and directed them to prioritize the prosecution of certain criminal immigration offenses.

Today’s zero-tolerance policy further directs each U.S. Attorney’s Office along the Southwest Border (i.e., Southern District of California, District of Arizona, District of New Mexico, Western District of Texas, and the Southern District of Texas) to adopt a policy to prosecute all Department of Homeland Security referrals of section 1325(a) violations, to the extent practicable.

The Justice Department today announced that three East Los Angeles men have agreed to plead guilty to federal civil rights and racketeering charges for participating in the 2014 firebombing of African-American residences inside the Ramona Gardens Housing Development.     

On the night of May 11, 2014, eight members of the Big Hazard street gang, which claims Ramona Gardens as its territory, assembled, prepared Molotov cocktails, drove outside of Ramona Gardens, then reentered the housing development on foot to avoid its security cameras. Once the gang members located their pre-selected targets, they smashed the windows of four apartments and threw lit Molotov cocktails into the residences, according to the plea agreements. Three of the four targeted apartments were occupied by African-American families, including women and children, who were sleeping at the time of the unprovoked attack.

In plea agreements filed today in the Central District of California, the three defendants – Jose Saucedo, aka “Lil’ Moe,” 24, Edwin Felix, aka “Boogie,” 26, and Jonathan Portillo, aka “Pelon,” 23, all members of the Big Hazard street gang – admitted that they targeted the apartments because of the occupants’ race and color, and with the intent to force the victims to move away from the federally funded housing complex in the Boyle Heights section of Los Angeles.

“The defendants’ racially motivated and unprovoked attack on families sleeping peacefully in their homes caused fear and destruction,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “The Justice Department will continue to vigorously prosecute violent acts of hate.”

“It was a miracle that no one was injured in these racially motivated attacks,” said United States Attorney Nicola T. Hanna. “These defendants have admitted their goal was to drive African Americans out of this housing facility. This simply will not be tolerated, and we will take any and all steps necessary to protect the civil rights of every person who lives in the United States.”

"The innocent victims of this cold-blooded attack were targeted based on the color of their skin," said Paul D. Delacourt, the Assistant Director in Charge of the FBI's Los Angeles Field Office.  "I'm proud of the agents, detectives and prosecutors who identified the defendants and continue to investigate this very challenging case.  These plea agreements are the first step in delivering justice to the victims, as well as delivering the universal message that there is no place for racially motivated hatred or violence in the United States."

All three defendants have agreed to plead guilty to conspiring to violate the civil rights of the African-American families, specifically the constitutional right to live in a residence free from “injury, intimidation and interference based on race.”

The three defendants have also agreed to plead guilty to using force – a dangerous weapon, namely, explosives, and fire – to injure, intimidate and interfere with the African-American residents because of their race and because they were living in the Ramona Gardens Housing Development. They also agreed to plead guilty to committing a violent crime in aid of racketeering on behalf of the Hazard gang.

In addition, Portillo has agreed to plead guilty to a charge of using fire to commit another federal felony. Saucedo and Felix have agreed to plead guilty to a charge of attempted malicious damage of federal property through the use of fire. Once they enter their guilty pleas, all three defendants will face potential sentences of over 30 years in federal prison.

Three other members of the Big Hazard gang who were charged in this case – Francisco Farias, aka “Bones,” 27, Joel Matthew Monarrez, aka “Gallo,” 23; and Jose Zamora, aka “Fresco,” 28 – previously pleaded guilty to federal hate crimes and related offenses. These defendants are pending sentencing.

The final two defendants charged in this case, Carlos Hernandez, aka “Rider,” 33, and Josue Garibay, aka “Malo,” 24, are scheduled for trial before United States District Judge Christina A. Snyder on July 31.

According to an indictment unsealed in the summer of 2016, Hernandez instructed the other defendants to meet at a location in Hazard gang territory on Mother’s Day in 2014, to prepare for the attack. At the meeting, Hernandez allegedly distributed materials to be used during the firebombing, including disguises, gloves, and other materials. Hernandez explained that the order for the racially motivated attack had come from the Mexican Mafia, a prison gang that controls the majority of Hispanic gangs in Southern California.

Furthermore, according to the indictment, Hernandez instructed the other defendants to break the victims’ windows, allowing the Molotov cocktails to make a clean entry, ignite the firebombs, and throw them into the victims’ residences in order to maximize damage. One of the victims, a mother sleeping on her couch with her infant child in her arms, narrowly missed being struck by one of the defendants’ firebombs.

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

The case is being prosecuted by Assistant United States Attorney Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section, and Justice Department Trial Attorney Julia Gegenheimer of the Civil Rights Division’s Criminal Section.

JOSEPH EDWARD MILLER, 41, of Arapahoe, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on April 4, 2018, for conspiracy to distribute methamphetamine. Miller was arrested in Arapahoe, Wyoming. He received 36 months of probation and was ordered to pay a $100.00 special assessment and a $400.00 fine. This case was investigated by the Fremont County Sheriff’s Office, the Wyoming Division of Criminal Investigation, the Tribal Fish and Game, the Bureau of Indian Affairs, the Federal Bureau of Investigation and the U.S. Drug Enforcement Administration.

WOLF ELKINS DURAN, 25, of Casper, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on April 2, 2018, for possession of child pornography. Duran was arrested in Casper, Wyoming. He received 57 months of imprisonment, to be followed by five years of supervised release, and was ordered to pay $8,500.00 in restitution and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children Task Force and the U.S. Department of Homeland Security.

         CONCORD - Steven Orr, 53, of Grapevine, Texas, pleaded guilty to defrauding victims in New Hampshire and Illinois and unlawfully possessing a firearm, United States Attorney Scott W. Murray announced today.

          According to court documents, in June of 2017, Orr offered to sell four loaders to a company in Windham, New Hampshire for $120,000.  Unaware that Orr did not own or have authority to sell the loaders, the New Hampshire company arranged for a third party to inspect the loaders and had $120,000 electronically transferred from its bank account in New Hampshire to Orr’s personal bank account in Grapevine, Texas.  After the deposit was made, Orr used the money for his personal benefit.

          In August of 2017, Orr agreed to sell 21 cranes owned by a company in Joliet, Illinois to a different company in Lemont, Illinois for $2.2 million.  Orr did not own the cranes or have the authority to sell them.  At Orr’s direction, the company in Lemont wire transferred a $550,000 deposit for the transaction from its bank account in Chicago, Illinois, to Orr’s personal bank account in Texas.  After that deposit was made, Orr used the money for his personal benefit.

          According to other court documents, it was unlawful for Orr to possess a firearm because he was a convicted felon.  Nevertheless, when Special Agents from the FBI arrested Orr in Texas last September, they found a Sig Sauer .40 caliber pistol and a Taurus .380 caliber pistol in a safe that was inside a recreational vehicle that Orr was renting.

          Orr pleaded guilty to two counts of wire fraud and one count of possession of a firearm by a convicted felon.  He is scheduled to be sentenced on July 17, 2018.

          “This prosecution will put an end to this defendant’s fraud schemes,” said U.S. Attorney Murray.  “I commend the FBI for its hard work in tracking down this fraudster and bringing him to justice.  This case also demonstrates our ongoing commitment to prosecuting those who possess firearms unlawfully.”

          “Mr. Orr is finally accepting responsibility for stealing hundreds of thousands of dollars from hard-working businesses that trusted him.  He conned them into purchasing equipment he did not own for his own personal benefit,” said Harold H. Shaw, Special Agent in Charge, FBI Boston Division. “Financial fraud is not a victimless crime, and the FBI will continue to do everything it can to root out individuals like Mr. Orr whose behavior threatens the financial security of others.”

          The cases were investigated by the Federal Bureau of Investigation and are being prosecuted by Assistant United States Attorney Robert M. Kinsella.

# # #

Randall Fox, one-time captain of the fishing vessel Native Sun, was found guilty today in U.S. District Court in Seattle of discharging oily waste directly into the ocean, a felony violation of the Act to Prevent Pollution from Ships. The jury deliberated 5 hours following a three-day trial before U.S. District Judge John C. Coughenour. Randall Fox faces a maximum of six years in prison and a criminal fine of up to $250,000.

“Today’s conviction shows that illegal dumping in our oceans will not be tolerated,” said Acting Assistant Attorney General Jeff Wood of the Justice Department’s Environment and Natural Resources Division (ENRD). “The Department of Justice will continue to work with our partners like the U.S. Coast Guard to aggressively prosecute criminals that pollute the oceans.”

The Act to Prevent Pollution from Ships specifically prohibits the discharge of bilge slops and other oily mixtures, unless they have been properly treated using approved pollution prevention equipment and meet rigorous standards. The act implements America’s obligations under an international treaty to control pollution by ocean-going vessels. 

The government alleged and proved that Randall Fox discharged bilge slops from the Native Sun directly overboard into the ocean using unapproved pumps and hoses. One of these discharges was video-recorded by a crewmember, who reported the crime to authorities.  Other evidence at trial established that the Native Sun had repeatedly pumped its bilges in the same manner depicted in the video.  Bingham Fox, the defendant’s father and the owner of the Native Sun, was convicted at trial of related crimes a year ago. 

This case was investigated by the U.S. Coast Guard. The case is being prosecuted by trial attorneys Todd W. Gleason and Stephen Da Ponte of ENRD’s Environmental Crimes Section. 

The United States, together with the State of Missouri, announced a consent decree today that requires the Doe Run Resources Corporation (Doe Run) to clean up more than 4,000 lead-contaminated residential properties near the Big River Mine Tailings Site in St. Francois County, Missouri. The consent decree is subject to a 30-day public comment period.

According to the settlement terms, Doe Run is required to excavate lead contaminated soil on approximately 4,100 affected residential properties, and to perform additional cleanup at the Hayden Creek mine waste area.

“Under today’s action by DOJ, EPA, and the State of Missouri, Doe Run has agreed to take significant actions to address lead contamination at thousands of residential properties in St. Francois County,” said Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division. “Part of the ‘Old Lead Belt,’ this area is in the midst of one of the largest former lead mining districts in the world. Timely action to clean up these contaminated areas is vital to the surrounding communities.”

“Protecting our communities from the toxic effects of lead is one of Administrator Pruitt’s top priorities,” EPA Region 7 Administrator Jim Gulliford said. “I am pleased that this agreement will result in the cleanup of more than 4,000 residential properties, helping to protect the residents of St. Francois County.” 

Historical mining activities in St. Francois County released hazardous heavy metals, including lead, cadmium, and zinc, onto residential properties. This settlement is a mixed funding arrangement where EPA will contribute up to $31.54 million toward the cleanup, which is estimated to cost a total of $111 million. 

Lead exposure can cause a range of adverse health effects, from behavioral disorders and learning disabilities to seizures and death, putting young children at the greatest risk because their nervous systems are still developing. During the 2013 to 2016 period, there were approximately 200,000 children across the nation ages 1-5 years with elevated blood lead levels above 5 micrograms per deciliter, the reference level that the Centers for Disease Control and Prevention uses to identify children with blood lead levels that are much higher than most children’s levels and who require case management. 

In the three zip codes comprising the majority of the Big River Mine Tailings Site, between 9.3 percent and 16.7 percent of children have an elevated blood lead level above 5 micrograms per deciliter. 

Reducing childhood lead exposure and addressing associated health impacts is a top priority for the Trump Administration and EPA. On February 15, EPA Administrator Scott Pruitt hosted key members of the Trump Administration to collaborate on a federal strategy making childhood lead exposure a priority for their respective departments and agencies.

Through the Superfund Task Force he established in May 2017, Administrator Pruitt is also revitalizing EPA’s Superfund Program to prioritize and take action to expeditiously establish control over any Superfund site where the risk of human exposure is not fully controlled. The cleanup of these residential properties reflects EPA’s commitment to reduce human exposure, especially children’s exposure, to hazardous substances.  

The consent decree was lodged in the U.S. District Court for the Eastern District of Missouri. Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment. The consent decree will available for viewing at www.justice.gov/enrd/Consent_Decrees.html.

Attorney General Jeff Sessions issued the following statement on border security: “Earlier this week, media outlets reported that a so-called ‘migrant caravan’ was making its way through Mexico with the intent of illegally crossing the southern border of the United States. The President was clear that this caravan needed to be stopped before it arrived at our southern border, and his efforts now appear to be successful. But let me be clear as well: we will not accept the lawlessness of these types of efforts and those who choose to violate our laws, and those who conspire to assist others to violate our laws, will face criminal prosecution.

“When I visited Nogales, Arizona, in April 2017, I announced my direction to federal prosecutors to prioritize the prosecution of all illegal entry, illegal reentry, and alien smuggling offenses. We have surged hundreds of immigration judges to our border over the last year. We hired new judges at the fastest pace ever. We added performance metrics to ensure that these cases aren’t languishing in the courts while illegal aliens spend years living in our country without consequences. We will have a more efficient and effective immigration court system that supplies due process. As such, aliens who enter our country illegally should be aware that the government will use any and all lawful tools, including expedited removal and prompt immigration proceedings, to ensure that our immigration courts will not be burdened with cases that lack merit under the law.

“But this will not be enough if Congress does not act to pass clear, fair, and effective legislation that ends the illegality and creates a system that serves the national interest is crucial at this time. It is essential for Congress to act.

“The Department of Justice fully supports the efforts of the Departments of Defense and Homeland Security announced today to secure our border. I will soon be announcing additional Department of Justice initiatives to restore legality to the southern border.”

The Justice Department today announced that former White River Juvenile Detention Center officer Jason Benton, 43, pleaded guilty today in federal court to using pepper spray to assault a fifteen-year-old boy, and for obstructing justice by falsifying an incident report about that assault.

According to the guilty plea, Benton instructed the juvenile, who was locked in his cell, to be quiet. Benton then had the juvenile’s cell door opened and ordered the juvenile to come out of his cell with his mattress.  The juvenile picked up his mattress as instructed. As the juvenile turned to face the cell door, holding the mattress in both arms, Benton pepper sprayed the juvenile in the face from a distance of a few inches. Benton continued spraying the juvenile as he tried to turn his head away from the spray. Benton then took the juvenile to the ground. Benton covered up the assault when he falsified an incident report, saying that the juvenile had attempted to lunge at him with his fists clenched, when in fact the juvenile had posed no physical threat.  

Benton is the third former officer to plead guilty to charges stemming from assaults on juvenile detainees at the White River Juvenile Detention Center. On April 26, 2017, former White River supervisors Captain Peggy Kendrick, 44, and Lieutenant Dennis Fuller, 40, pleaded guilty to conspiring to assault juvenile detainees. Kendrick also pleaded guilty to assaulting a sixteen-year-old girl using pepper spray and for obstructing justice. Kendrick and Fuller await sentencing. Two other former White River Juvenile Detention Center officers, Will Ray, 26, and Thomas Farris, 48, are scheduled to begin trial on Aug. 28, before Senior United States District Judge Billy Roy Wilson in Little Rock on related charges of conspiring to assault and assaulting juveniles.

“Federal law protects all individuals – including those who are incarcerated – from the use of excessive force by those acting under color of law,” said Acting Assistant Attorney General John Gore of the Civil Rights Division.  “We will vigorously investigate and prosecute officers who break the public trust in this way.” 

“When law enforcement officers violate the law and the public trust, they will be prosecuted and held accountable,” said U.S. Attorney for the Eastern District of Arkansas Cody Hiland. “There will be no exception. This officer broke his oath to uphold the Constitution, injured a juvenile in the process, and then tried to cover it up. That is a crime, and those who commit crimes will be punished accordingly.”

Benton faces a statutory maximum sentence of 30 years in prison.

This case is being investigated by the FBI’s Little Rock Division.  It is being prosecuted by Assistant U.S. Attorney Julie Peters of the Eastern District of Arkansas and Trial Attorney Samantha Trepel of the Civil Rights Division.

A resident of West Bloomfield, Michigan, pleaded guilty today to willfully failing to pay over employment taxes to the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to documents and information provided to the court, Dino Rotondo owned and operated four professional employer organizations (PEOs) located in Troy, Michigan, which provided payroll-related services to client companies.  Rotondo processed payroll and agreed to withhold from client employee paychecks, and send to the IRS, the employment taxes that were due.   Despite this obligation, Rotondo did not pay to the IRS employment tax withholdings that his PEOs collected during 2012 and the first quarter of 2013.

Rotondo also admitted that he did not pay to the IRS employment taxes due for an additional business that he owned.  In total, Rotondo did not pay more than $1.5 million in employment taxes owed to the IRS.   

U.S. District Judge Bernard A. Friedman scheduled sentencing for Jan. 18, 2019.  Rotondo faces a statutory maximum sentence of five years in prison.  He also faces a period of supervised release, restitution, and monetary penalties. 

Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Abigail Burger Chingos and Jeffrey Bender, who are prosecuting the case. 

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

The United States filed a civil complaint seeking to permanently bar Michael L. Meyer, of Southwest Ranches, Florida, from providing federal tax advice for compensation because Meyer allegedly promotes, organizes, and executes a national charitable giving tax scheme that has cost the United States Treasury more than $35 million.  The complaint alleges that Meyer executes his scheme through three bogus charities that he controls.  The United States also seeks to disgorge the fees that Meyer received from the scheme.

According to the complaint filed in the United States District Court for the Southern District of Florida, Meyer, an attorney licensed in Kentucky and Indiana, advises scheme participants to claim unwarranted charitable deductions for purported contributions to one of three bogus charities that Meyer controls.  The complaint alleges that the purported donations are made on paper only and the participants never actually surrender dominion or control of the donated property to the charities. Some of the purported contributions allegedly consist solely of backdated promissory notes created by Meyer as well as fabricated intellectual property.  The complaint alleges that Meyer prepares baseless appraisals and false federal tax forms to facilitate the scheme. 

Meyer allegedly markets his charitable giving tax scheme nationwide through financial planners and CPAs, and he executes every material aspect of the scheme.  The complaint alleges that Meyer sells his scheme by making demonstrably false statements about his experience and credentials, including falsely claiming that he is a licensed Certified Public Accountant and Certified Valuation Analyst, and by making false statements about the legality of his tax scheme.

Return preparer fraud, abusive tax shelters, and transactions involving fake charities are three of the IRS’s Dirty Dozen Tax Scams for 2018, and taxpayers seeking a tax return preparer or a tax adviser should remain vigilant.  Information about these cases is available on the Justice Department 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 Department of Justice announced today that it has reached a settlement with Knorr-Bremse AG and Westinghouse Air Brake Technologies Corporation (Wabtec), two of the world’s largest rail equipment suppliers, to resolve a department lawsuit alleging that the companies had for years maintained unlawful agreements not to compete for each other’s employees. The lawsuit further alleges that the companies entered into similar “no-poach” agreements with rail equipment supplier Faiveley Transport S.A. before Faiveley was acquired by Wabtec in November 2016. 

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 Knorr and Wabtec’s no-poach agreements. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department’s competitive concerns and restore competition for employees, to the benefit of U.S. workers.

“The unlawful no-poach agreements challenged today restrained competition for employees and deprived rail industry workers of important opportunities, information, and the ability to obtain better terms of employment,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Today’s settlement will restore competition for employees in the U.S. rail industry.” 

“Today’s complaint is part of a broader investigation by the Antitrust Division into naked agreements not to compete for employees—generally referred to as no-poach agreements. As part of today’s settlement, Knorr and Wabtec are required to cooperate with the Antitrust Division in any investigation into additional no-poach agreements to which they may have been counterparties,” continued Assistant Attorney General Delrahim. The department has also agreed as part of the settlement that it will not bring further civil actions or criminal charges against Knorr or Wabtec in connection with any other potential no-poach agreements that the companies disclosed to the department prior to today’s lawsuit. 

According to the department’s complaint, Knorr and Wabtec compete with each other to attract, hire, and retain various skilled employees, including project managers, engineers, executives, business unit heads, and corporate officers. The department’s complaint alleges that:

• Beginning no later than 2009, Knorr and Wabtec reached agreements not to solicit, recruit, hire without prior approval, or otherwise compete with one another for employees. For example, in a letter dated January 28, 2009, a director of Knorr Brake Company wrote to a senior executive at Wabtec’s headquarters, “[Y]ou and I both agreed that our practice of not targeting each other’s personnel is a prudent cause for both companies. As you so accurately put it, ‘we compete in the market.’”
• Beginning no later than 2011, Knorr Brake Company (a wholly-owned subsidiary of Knorr) and Faiveley Transport North America (the U.S. subsidiary of Faiveley before Faiveley was acquired by Wabtec) agreed to get the other’s permission before pursuing each other’s employees. For example, in October 2011, a senior executive at Knorr Brake Company explained that he had a discussion with an executive at Faiveley’s U.S. subsidiary that “resulted in an agreement between us that we do not poach each other’s employees. We agreed to talk if there was one trying to get a job[.]”
• Beginning no later than 2014, Wabtec Passenger Transit, a U.S. business unit of Wabtec, and Faiveley Transport North America similarly agreed not to hire each other’s employees without prior approval. For example, in an e-mail to his colleagues, a Wabtec Passenger Transit executive explained that a candidate for employment “is a good guy, but I don’t want to violate my own agreement with [Faiveley Transport North America].”

According to the complaint, the no-poach agreements between Knorr, Wabtec, and Faiveley restricted competition for U.S. rail industry workers, which limited their access to better job opportunities, restricted their mobility, and deprived them of competitively significant information that they could have used to negotiate for better terms of employment.

Under the antitrust laws, no-poach agreements that are naked (i.e., not reasonably necessary for a separate, legitimate business transaction or collaboration) eliminate competition in the same irredeemable way as agreements to fix product prices or allocate customers, which have traditionally been criminally investigated and prosecuted as hardcore cartel conduct. Beginning in October 2016, the department has made several announcements that it intends to bring criminal, felony charges against culpable companies and individuals who entered into these types of no-poach agreements. In an exercise of prosecutorial discretion, the department will pursue as civil violations no-poach agreements that were formed and terminated before those announcements were made. Knorr’s and Wabtec’s respective no-poach agreements were discovered by the Division and terminated by the parties before October 2016, prompting the Division to resolve its competition concerns through a civil action. 

Under the terms of the proposed settlement, Wabtec and Knorr are prohibited from entering, maintaining, or enforcing no-poach agreements with any other companies, subject to limited exceptions. The settlement also requires Knorr and Wabtec to implement rigorous notification and compliance measures to preclude their entry into these types of anticompetitive agreements in the future. 

The settlement includes several new provisions that are designed to improve the effectiveness of the decree and the Division’s future ability to enforce it. For example, the parties have agreed that the Division may prove any alleged violations of the decree by a preponderance of the evidence, and that they will reimburse American taxpayers for the costs of investigating and enforcing any violations. 

Knorr-Bremse AG is a privately-owned German company with its headquarters in Munich, Germany. Knorr is a global leader in the development, manufacture, and sale of rail and commercial vehicle equipment. In 2017, Knorr had annual revenues of approximately $7.7 billion. Knorr Brake Company, a Delaware corporation with its headquarters in Westminster, Maryland, and New York Air Brake Corporation, a Delaware corporation with its headquarters in Watertown, New York, are wholly-owned subsidiaries of Knorr.

Westinghouse Air Brake Technologies Corporation (Wabtec), a Delaware corporation based in Wilmerding, Pennsylvania, is a global rail equipment supplier that provides a wide range of equipment used on passenger and freight trains. In 2017, Wabtec’s worldwide revenues were $3.88 billion. Wabtec Passenger Transit is a business unit of Wabtec based in Spartanburg, South Carolina.

Until its acquisition by Wabtec, Faiveley was a French société anonyme based in Gennevilliers, France. Faiveley was the world’s third-largest rail equipment supplier behind Wabtec and Knorr and had revenues of approximately €1.2 billion in 2016. Faiveley Transport North America, a New York corporation headquartered in Greenville, South Carolina, was a wholly-owned subsidiary of Faiveley. 

As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Maribeth Petrizzi, Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

The United States has sued Steven M. Doletzky, Michael A. Garno, Michael A. Bass, and Florida corporations they used to operate Liberty Tax Service stores in the St. Petersburg, Florida area.  The complaint seeks to permanently bar Doletzky, Garno, and Bass from preparing federal tax returns for others.  In addition, the complaint seeks orders from the federal court requiring all defendants to disgorge to the United States any ill-gotten fees Doletzky, Bass, and Garno charged customers for the preparation of false or fraudulent federal tax returns, the Justice Department announced today.

According to the complaint, as part of his tax fraud scheme, Doletzky recruited homeless individuals as customers by offering food, beverages, and false promises of assistance with obtaining welfare benefits on their behalf.  Doletzky allegedly obtained vans to transport homeless individuals to his Liberty Tax Service stores from locations in the St. Petersburg area where homeless people were known to congregate.  Doletzky then directed others to prepare false tax returns on behalf of these homeless individuals that claimed fraudulent tax refunds, the bulk of which Doletzky retained as tax preparation fees, the complaint alleges.   

According to the lawsuit, Doletzky directed the preparation of false or fraudulent tax returns at his Liberty Tax Service stores and provided tax preparation training to Garno and Bass before they became independent Liberty Tax Service franchisees.  The complaint alleges that Doletzky, Garno, and Bass directed their preparers to prepare federal income tax returns that claimed fraudulent claims for tax credits, including for education credits and the Earned Income Tax Credit (EITC).  For example, from 2013 to 2015, Doletzky, Garno, and Bass’ Liberty Tax Service stores allegedly prepared and filed federal income tax returns that claimed over 1,250 separate, false claims for education credits. 

The IRS has a list of steps on their website that you can take now in anticipation of filing your 2017 federal income tax return and ten tips for choosing a tax preparer. Return preparer fraud was one of the IRS’s Dirty Dozen Tax Scams for 2018 and taxpayers seeking a return preparer should remain vigilant. The IRS has some information on their website about selecting a return preparer and has launched a free directory of federal tax preparers.

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

Deputy Attorney General Rod Rosenstein today announced that Edward O’Callaghan will serve as the Acting Principal Associate Deputy Attorney General.  O’Callaghan, who has been serving as the Principal Deputy Assistant Attorney General in the National Security Division, will replace Robert Hur, who is succeeding Rosenstein as the United States Attorney in the District of Maryland.

“Edward O’Callaghan has served the Department of Justice with distinction, excelling as a prosecutor in the Southern District of New York and most recently as the Principal Deputy Assistant Attorney General in the National Security Division. His experiences in a variety of roles throughout the Department will be invaluable as we work to protect our national security, reduce violent crime, and promote the rule of law,” said Deputy Attorney General Rosenstein.  “I also want to thank Robert Hur for serving as the Principal Associate Deputy Attorney General. His counsel was invaluable over the past ten months and I look forward to seeing him thrive as the United States Attorney for the District of Maryland.”

Prior to his appointment as Acting Principal Associate Deputy Attorney General, O’Callaghan most recently served as Principal Deputy Assistant Attorney General for the National Security Division, where he assisted the Assistant Attorney General in the administration of all units and components in the National Security Division, most notably in the Counterterrorism Section, the Counterintelligence and Export Control Section, the Office of Intelligence, the Office of Law & Policy, the Foreign Investment Review Staff, and the Office of Justice for the Victims of Overseas Terrorism. While awaiting the confirmation of Assistant Attorney General John Demers, O’Callaghan served as Acting Assistant Attorney General for the National Security Division.

Before rejoining the Department of Justice in 2017, O’Callaghan was a partner at an international law firm.  O’Callaghan specialized in defending financial institutions, public companies, asset management firms, and individuals in international and domestic regulatory investigations and criminal prosecutions.  These cases involved securities fraud, bank fraud, money laundering, RICO, and corruption, among other things.

O’Callaghan previously served as an Assistant U.S. Attorney for the Southern District of New York from 1999 to 2008.  He was also Co-Chief of the Terrorism & National Security Unit from 2005 to 2008.  As an Assistant U.S. Attorney, O’Callaghan was the lead prosecutor on several important cases, including the Department of Justice’s international fraud investigation and prosecutions in relation to corruption in the United Nations Oil-for-Food Program, RICO prosecutions of crime families, and numerous bank and securities fraud cases.  He received the U.S. Attorney General's Award for Distinguished Service in 2008, and the Director's Award for Superior Performance as an Assistant U.S. Attorney in 2000.

After earning his J.D. from NYU Law School in 1994, O’Callaghan began his career as a clerk to the Honorable Kevin Thomas Duffy of the U.S. District Court for the Southern District of New York. 

Today, the Department of Justice, FBI and U.S. Postal Inspection Service (USPIS) announced the results of a four-day long, nationwide law enforcement operation, called Operation Disarray, which targeted vendors and buyers of opioids and cocaine on the Darknet.  This operation was the first coordinated action by the new Joint Criminal Opioid Darknet Enforcement (J-CODE) Team.

These results were announced by Attorney General Jeff Sessions, FBI Director Christopher A. Wray and U.S. Postal Inspection Service Chief Postal Inspector Guy Cottrell.

“Synthetic opioids are responsible for nearly one-third of the unacceptable 64,000 drug overdoses in America in 2016,” said Attorney General Sessions.  “Some of the deadliest drugs can be purchased with a few clicks of a button and ordered online. That’s why I ordered the creation of J-CODE—the Joint Criminal Opioid Darknet Enforcement team—back in January.  J-CODE coordinates our efforts to stop online opioid sales, and it is already getting results.  Today, we announce the first nationwide J-CODE operation, one that led to the arrest of alleged traffickers across America. I want to thank all of our law enforcement partners at the FBI, DEA, ATF, our Postal Inspectors, IRS-CI, NCIS, FinCEN and ICE-HSI who helped make this possible, and I want to thank President Trump for his strong support of our efforts. J-CODE is helping us keep deadly drugs out of this great country.”

“Our work to combat drug trafficking has taken us from coast to coast and to the darkest corners of the web.  The opioid epidemic is a public health crisis, and those of us in law enforcement must be relentless in our efforts to disrupt this illicit activity,” said FBI Director Christopher Wray.  “We thank our partners in this operation; through J-CODE, we will continue to work together to target the sale of opioids on the Darknet.”

“The Postal Inspection Service is dedicated to protecting the American public,” said Chief Postal Inspector Guy Cottrell.  “One of the ways we fulfill this mission is by working tirelessly with other law enforcement agencies in operations just like this one to keep dangerous drugs out of the communities we serve.”

During the March 27 to 30 operation, FBI, USPIS, and local law enforcement made eight arrests related to Operation Disarray.  Agents conducted more than 160 interviews nationwide of people who have bought or sold opioids and other drugs online.  Leads from the investigation identified 19 overdose deaths of persons of interest.  FBI, USPIS and the Internal Revenue Service Criminal Investigation (IRS-CI) also executed numerous search warrants, which resulted in the seizure of weapons, drugs, counterfeit currency, and computer equipment.  During the operation, law enforcement agents distributed literature regarding the dangers of opioid abuse, as well as, offered support for those affected by the opioid epidemic.  The investigation is ongoing. 

The J-CODE Team is a new FBI initiative announced by Attorney General Sessions in January 2018, and is aimed at targeting drug trafficking, especially fentanyl and other opioids, on the Darknet.  With this team, the FBI is bringing together agents, analysts, and professional staff with expertise in drugs, gangs, health care fraud, and more, and our federal, state, and local law enforcement partners from across the U.S. Government, to focus on disrupting the sale of drugs via the Darknet and dismantling criminal enterprises that facilitate this trafficking.  Operation Disarray is the J-CODE’s first joint, nationwide coordinated operation.

Attorney General Sessions thanked our law enforcement partners on the J-CODE team, to include the FBI, USPIS, Department of Justice Criminal Division’s Computer Crime and Intellectual Property Section and the Organized Crime and Gang Section; Drug Enforcement Agency; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Department of Defense; IRS-CI; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Financial Crimes Enforcement Network (FinCEN) for bringing expertise, professionalism and a shared desire to combat this epidemic.  Through continued collaboration and determination the successes J-CODE will continue to forge a positive difference and outcome. 

The United States, together with the State of Indiana, announced today that U. S. Steel Corporation (U. S. Steel) has agreed to resolve alleged violations of the Clean Water Act and Indiana law by undertaking substantial measures to improve its wastewater processing monitoring system at its steel manufacturing and finishing facility, known as the Midwest Plant, in Portage, Indiana.  

The settlement agreement, which is memorialized in a consent decree lodged today in federal district court in the Northern District of Indiana, requires U. S. Steel to pay more than $600,000 as a civil penalty and to reimburse the U.S. Environmental Protection Agency (EPA) and the National Park Service (NPS) for response costs incurred as a result of an April 2017 spill of wastewater containing hexavalent chromium that entered a waterway that flows into Lake Michigan. U. S. Steel will also pay costs to the National Oceanic and Atmospheric Administration (NOAA) for assessing natural resource damages due to the April 2017 spill.  In addition, U. S. Steel will pay damages to NPS resulting from the closure of several beaches along the Indiana Dunes National Lakeshore due to the spill.  

U. S. Steel will also resolve allegations under the Emergency Planning and Community Right-to-Know Act (EPCRA) by implementing a detailed protocol to notify relevant state and local authorities about any future spills from its Portage facility to the ground or water.  

“Lake Michigan and the surrounding waterways are treasured resources worthy of protection from harmful pollution. Today’s settlement with U. S. Steel appropriately penalizes the company for last year’s wastewater spill, recoups the government’s response costs and other losses, and requires significant actions by the company to prevent toxic spills like this from occurring again,” said Acting Assistant Attorney General Jeffrey H. Wood for the Justice Department’s Environment and Natural Resources Division.  This settlement is a prime example of how federal and state counterparts can work hand-in-hand to enforce environmental laws to protect the health of our citizens and the environment.”

“We are pleased that U. S. Steel has agreed to take the appropriate measures to protect and restore the waterways that were harmed by its spill that occurred in April 2017,” said U.S. Attorney Thomas L. Kirsch II for the Northern District of Indiana. “This settlement is a win for the people of Indiana, and we are happy to have worked with our state and federal partners to achieve this result.”

“EPA is committed to fostering strong partnerships to achieve water quality goals,” said Assistant Administrator Susan Bodine for EPA’s Office of Enforcement and Compliance Assurance. “I am pleased that through the coordinated effort of federal and state agencies, and with the cooperation of U. S. Steel, this settlement will help protect Lake Michigan and Indiana waterways.”

“One of NOAA’s roles is to assess and restore natural resources after oil spills, ship groundings and releases of hazardous chemicals,” said Assistant NOAA Administrator for the W. Russell Callender National Ocean Service. “This settlement allows NOAA and its federal and state partners to protect natural resources and recreational opportunities important to the people and economy of Indiana and the Great Lakes.”

“The Indiana Dunes National Lakeshore is pleased that all of the parties involved in the matter have come to this agreement,” said Superintendent Paul Labovitz for the NPS. “Several of our beaches were closed for nearly a week during the week of Easter last spring. We are thankful that the spill didn’t occur during our busy summer beach season.  It is our hope that our neighbors in industry learned some valuable lessons from the USS chromium spill, and will be more vigilant to prevent such occurrences that negatively impact the quality of life in NW Indiana.”  

“This is a major victory for Hoosiers in Northwest Indiana,” said Indiana Attorney General Curtis Hill. “Through our partnership with the U.S. Department of Justice, we were able not only to collect fines, but, perhaps more importantly, to ensure that U. S. Steel will make improvements and changes in order to prevent future incidents that negatively impact the environment.”

“I am pleased to see this situation resolved,” said Commissioner Bruno Pigott of the Indiana Department of Environmental Management. “Hoosiers can know we take seriously our responsibility to protect the waters of the State and Lake Michigan. This consent decree is a notable example of state and federal partners effectively working together to address, with a future goal to deter, noncompliance and its collective consequence on the environment.”

On April 11, 2017, U. S. Steel experienced a rupture in an expansion joint on one of its process wastewater pipes, discharging untreated wastewater containing hexavalent chromium – a toxic chemical produced as part of its manufacturing process – into the Burns Waterway that flows into Lake Michigan. The quantity of hexavalent chromium discharged from the April 2017 spill significantly exceeded the limits of the facility’s National Pollutant Discharge Elimination System (NPDES) permits.  

Though U. S. Steel provided immediate, oral notice of the April 2017 spill to appropriate state and local emergency personnel, it failed to follow-up with the required written notification under EPCRA, given the quantity of material released.

EPA and NPS conducted response actions in and around the areas of the spill, and NOAA assessed natural resource damages caused by the spill. The spill closed four local beaches along the Indiana Dunes National Lakeshore managed by NPS, as well as the Indiana American Water public drinking water intake, for about a week. Inspections by EPA and Indiana Department of Environmental Management of the facility later that month revealed additional violations of the facility’s NPDES permits.  In October 2017, U. S. Steel experienced another wastewater discharge containing a less toxic form of chromium.

Under the consent decree, U. S. Steel will undertake repairs to its treatment plant pipes and containment trench, whose failures contributed to the April 2017 spill. In a more comprehensive manner, U. S. Steel will develop wastewater operations and maintenance plans and preventive maintenance plans, design and implement new wastewater process monitoring, and sample daily for total and hexavalent chromium. These measures are designed to allow for early detection of conditions that may lead to discharges such as the April 2017 spill and other permit violations, furthering compliance with the Clean Water Act and analogous state laws.  

In addition, the facility will follow protocols attached to the decree for notifying appropriate entities, including the nearest downstream Indiana users as well as local governments, including the city of Chicago, whenever there is a spill or release of hazardous substances to the ground or water.  

As part of the agreement, U. S. Steel will reimburse EPA’s total response costs of $350,000. U. S. Steel will also reimburse NOAA, which shares trusteeship for natural resources in the Great Lakes ecosystem, for its full costs of $27,500 in assessing natural resource damages.  In addition, U. S. Steel will pay NPS’s full response costs of approximately $12,500, and damages incurred by NPS in the amount of $240,500 as a result of the week-long beach closures along the Indiana Dunes National Lakeshore. NPS intends to use those damages, representing lost use/compensatory restoration for the public’s inability to access and enjoy the beaches for the week, to fund future projects at or around the National Lakeshore.

Today’s settlement, lodged with the U.S. District Court for the Northern District of Indiana, is subject to a 30-day public comment period following notification in the Federal Register and final approval by the court. To view the consent decree or to submit a comment, visit the department’s website at: www.justice.gov/enrd/Consent_Decrees.html.

Attorney General Jeff Sessions issued the following statement on the Department of Justice’s new lawsuit against the State of California: “I regret the need to file yet another lawsuit against the state of California today. The Department of Justice is fighting every day to take illegal guns and drugs off our streets, combat the opioid epidemic and secure our borders from drug traffickers and criminal aliens, and protect our national security from radical Islamic extremists and foreign threats to our cyber security. But once again, we see that too many of our resources are being diverted to deal with meritless and unnecessary lawsuits.

“We are forced to spend our resources to bring these lawsuits against states like California that believe they are above the law and are passing facially unconstitutional laws specifically intended to interfere with the federal government’s ability to carry out its legitimate law enforcement duties. And we are forced spend our resources to defend against lawsuits that are patently meritless like one now filed by California claiming that adding back a question on citizenship to the census is unconstitutional after decades of its inclusion. Both of these lawsuits are forcing us to spend precious tax payer dollars and Department resources to litigate issues that most Americans believe are common sense—the executive branch should be able to remove criminal aliens from a jail instead of your neighborhood, the federal government should have an accurate count of who can legally vote in our federal elections, a Department should be able to rescind an unlawful policy intended to usurp Congress’ role in passing immigration laws, or that the President should be able to know who is coming into our country from countries that are terrorist havens.

“The waste is compounded by ideological judging and forum shopping that drags these cases out for months and years. In the meantime, the federal government can be prevented from carrying out its lawful duties by a single district court judge regardless of how many of the other 600 plus district court judges may disagree.  The increasing frequency of limitless injunctions is simply unsustainable, and the ever-more extreme nature of these injunctions is only making it more obvious just how unlawful they are. This is not a political or a partisan issue.  It is a constitutional issue and a rule of law issue and, more frequently now, a question of how we are allocating our tax payer dollars—to protecting Americans from violent crime and a raging drug epidemic or defending frivolous lawsuits from partisan actors.

“Government-by-litigation isn’t what the American people voted for and attempting to thwart an administration’s elected agenda through endless, meritless lawsuits is a dangerous precedent.”

Attorney General Jeff Sessions today announced that the Department of Justice has filed a motion to participate in settlement discussions and as a “friend of the court” in the ongoing Multi-District Litigation against opioid manufacturers and distributors.

“Following the leadership of President Trump, for the past year the Department of Justice has vigorously fought the prescription opioid crisis, deploying new tools and resources to stop the traffickers and corrupt medical professionals who are profiting off of addiction,” said Attorney General Sessions.  “We are determined to continue making progress. Today, we are taking a new step to help those who have suffered the consequences of the opioid epidemic by offering our assistance as friend of the Court in ongoing litigation against opioid manufacturers and distributors. We have already filed a statement of interest in this case, arguing that the taxpayer has paid a heavy price because of dishonest opioid marketing practices, and deserves to be compensated. Now we are formally seeking to provide the federal government’s expertise and legal counsel to the court on a potential settlement. We are determined to see that justice is done in this case and that ultimately we end this nation’s unprecedented drug crisis.”

A “friend of the court” is not a direct party to the case, but provides information and expertise that may help achieve justice in the case.

The Department’s participation, if granted by the court, will ensure that the court will be better able to consider the national consequences of the case, and in particular any legal obligations of settling parties to reimburse the federal treasury.

In addition to this filing, the United States is pursuing its own actions against bad actors at every level of the opioid distribution system through the Prescription Interdiction and Litigation (PIL) Task Force, which Attorney General Sessions created in February.

The Attorney General has directed the PIL Task Force to examine existing state and local government lawsuits against opioid manufacturers to determine what assistance, if any, federal law can provide in those lawsuits.

Today’s filing will build on a number of new initiatives begun by Attorney General Sessions over the past year that will help us end the drug crisis, including the following:

• In July, the Attorney General announced charges against more than 120 defendants, including doctors, for crimes related to prescribing or distributing opioids and other dangerous narcotics.
• One week later, the Attorney General announced the seizure of AlphaBay, the largest criminal marketplace on the Internet.  This site hosted some 220,000 drug listings – including more than 100 vendors advertising fentanyl – and was responsible for countless synthetic opioid overdoses, including the tragic death of a 13-year old in Utah.
• In August, the Attorney General created the Opioid Fraud and Abuse Detection Unit, a new data analytics program to help find evidence of overprescribing and opioid-related health care fraud.
• The Attorney General then assigned 12 experienced Assistant United States Attorneys to opioid “hot-spots” to focus solely on investigating and prosecuting opioid-related health care fraud. By November they had begun issuing indictments.
• In October, the Department announced the first-ever indictments of Chinese nationals and their North American-based traffickers and distributers for separate conspiracies to distribute fentanyl and other opioids in the United States.
• Also in October, the DEA announced the establishment of six new enforcement teams focused on combatting the flow of heroin and illicit fentanyl into the U.S. These enforcement teams are based in communities facing some of the most significant challenges with heroin and fentanyl.
• In 2017, the DEA held two of its National Prescription Drug Takeback Days, when people can dispose of unnecessary and potentially dangerous drugs with no questions asked. In total, DEA took a record 956 tons of drugs out of American communities.
• In January 2018, the Department announced a new resource to target traffickers who sell drugs online called J-CODE: Joint Criminal Opioid Darknet Enforcement team.  The J-CODE team will coordinate efforts across the FBI’s offices all around the world – bringing together DEA, our Safe Streets Task Forces, drug trafficking task forces, Health Care Fraud Special Agents, and other assets – effectively doubling the FBI’s investment into fighting against online drug trafficking.
• Also in January 2018, the DEA announced a 45-day surge of Special Agents, Diversion Investigators, and Intelligence Research Specialists to focus on pharmacies and prescribers who are dispensing unusual or disproportionate amounts of drugs.
• On February 7, 2018, the DEA placed all fentanyl analogues not already regulated by the Controlled Substances Act into Schedule I – the category for substances with no currently accepted medical use – for at least two years.  This makes it harder for people to acquire illicit fentanyl and easier for law enforcement to investigate and prosecute drug traffickers.

Note: To view the Motion to Participate in Settlement Discussion and as Friend of the Court click here.

For 45 days in February and March, the U.S. Drug Enforcement Administration surged its enforcement and administrative resources to identify and investigate prescribers and pharmacies that dispensed disproportionately large amounts of drugs. The ultimate goal of the surge was remediating or removing those whose actions perpetuate the controlled prescription drug crisis in America, particularly opioid drugs.   

During that period, the DEA surged the efforts of special agents, diversion investigators, and intelligence research specialists to analyze 80 million transaction reports from DEA-registered manufacturers and distributors, as well as reports submitted on suspicious orders and drug thefts and information shared by federal partners, such as the Department of Health and Human Services. This resulted in the development of 366 leads to DEA field offices, 188 of which (51 percent) resulted in active investigations by DEA’s 22 field divisions.

“In the midst of the deadliest drug epidemic in American history, we need all hands on deck,” said Attorney General Jeff Sessions. “That’s why the Department of Justice has made enforcing our drug laws a priority. Over the last 45 days, the DEA has surged resources and personnel to prevent the diversion of opioids, arresting dozens of people and taking away drug dispensing authority from nearly 150 medical professionals. And our efforts are just getting started. I recently announced that DEA will surge task force officers and more analysts to places across America where the opioid crisis is at its worst. These new resources will help us catch and convict more of the drug traffickers and corrupt medical professionals who are fueling the opioid crisis.”

“DEA will use every criminal, civil, and regulatory tool possible to target, prosecute and shut down individuals and organizations responsible for the illegal distribution of addictive and potentially deadly pharmaceutical controlled substances,” said Acting DEA Administrator Robert W. Patterson. “We must stop the loss of our loved ones to these drugs.”

The culmination of those investigations was 28 arrests, 54 other enforcement actions including search warrants and administrative inspection warrants, and 283 administrative actions of other types. These additional actions included scheduled inspections, letters of admonition, memoranda of agreement/understanding, surrenders for cause of DEA registrations, orders to show cause, and immediate suspension orders (the immediate revocation of registrations).

DEA works with various federal and state partners on data sharing agreements to enhance its ability to identify individuals and companies who are contributing to the prescription opioid crisis, including a coalition of 41 state attorneys general and the Department of Justice’s Opioid Fraud and Detection Unit, an initiative of Attorney General Sessions. It is also dedicating additional resources to its domestic divisions to carry out investigations.

A Mountain House, California man pleaded guilty today in Sacramento for trafficking in counterfeit sports apparel. 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Special Agent in Charge Sean Ragan of the FBI’s Sacramento Field Office and Sheriff Scott Jones of the Sacramento County Sheriff’s Department made the announcement.

Seyyed Ali Noori, 50, pleaded guilty to two counts of trafficking in counterfeit goods before U.S. District Judge Garland E. Burrell Jr. of the Eastern District of California.  Noori was indicted by a federal grand jury on Jan. 14, 2016, and will be sentenced on June 15.

According to admissions made in connection with his plea, Noori owned and operated Goldstar Wholesale LLC, a regional wholesale distributor based in Tracy, California, and also sold goods at the Galt Flea Market in Galt, California.  In August, October, and November 2013, undercover officers with the Sacramento Intellectual Property Task Force purchased hundreds of dollars of counterfeit hats, shirts, and other accessories from Noori.  These items bore counterfeit trademarks belonging to professional sports franchises in the National Football League, the National Basketball Association, Major League Baseball, and the National Hockey League, as well as apparel brands like Monster Energy, Nike, and New Era.  Purchases were made from Noori at the Galt Flea Market and the Goldstar warehouse. 

Noori admitted that on Nov. 12, 2013, he was served with a notice directing him to cease-and-desist selling goods bearing counterfeit NFL, MLB, NBA, NHL, and Monster Energy trademarks.  Noori signed a declaration that he understood the cease-and-desist notice and would refrain from selling such products in the future. 

Nonetheless, according to Noori’s admissions, he continued to sell the counterfeit goods.  On Dec. 3, 2013, undercover Task Force officers visited Noori’s retail stand at the Galt Flea Market, where Noori indicated that he could no longer display the counterfeit items for sale.  Instead, he directed the officers to his box truck for the counterfeit goods, which they purchased.  On Dec. 19, 2013, a search warrant executed at the Goldstar warehouse recovered thousands of items openly displayed for sale, including pieces of headwear, shirts, and accessories, all bearing counterfeit sports trademarks.

This case was investigated by the Sacramento Intellectual Property Task Force, the FBI’s Sacramento Field Office and the Sacramento County Sheriff’s Office.  Trial Attorneys Aaron R. Cooper and Timothy C. Flowers of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case.

A federal jury in the District of New Jersey found the former chief executive officer and the former vice president of a now-bankrupt public air charter operator guilty yesterday for their roles in a scheme to steal millions of dollars in passenger money for future travel from an escrow account, announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Special Agent in Charge Todd A. Damiani of the U.S. Department of Transportation Office of Inspector General’s New England Field Office.

Judy Tull, 73, and Kay Ellison, 58, both of Edenton, North Carolina, were each convicted of one count of conspiracy to commit wire fraud affecting financial institutions and to commit bank fraud, four substantive counts of wire fraud affecting financial institutions and three substantive counts of bank fraud following a seven-day trial.  Tull is the former CEO of Myrtle Beach Direct Air and Tours (Direct Air), which was headquartered in Myrtle Beach, South Carolina, with operations in Daniels, West Virginia, and Ellison is its former vice president and managing partner.  Sentencing has been scheduled for July 17, 2018 before U.S. District Judge Susan D. Wigenton of the District of New Jersey, who presided over the trial. 

“Judy Tull and Kay Ellison stole passengers’ money to try and prop up their failing company,” said Acting Assistant Attorney General Cronan.  “Their brazen scheme created a multimillion dollar shortfall that left passengers stranded at airports, and banks and credit card companies scrambling to pick up the pieces.  “This important case is just the latest example of the pivotal role the Fraud Section plays in the Department of Justice’s ongoing efforts to combat white collar fraud.”

“This investigation demonstrates the Department of Transportation Office of Inspector General’s (DOT-OIG) commitment to protecting the traveling public from fraudulent schemes involving charter flight operations,” said DOT-OIG Regional Special Agent in Charge Damiani. “We will continue our vigorous efforts in preventing, detecting and prosecuting fraud that erodes the public’s confidence in the integrity of transportation-related goods and services.”

According to evidence presented at trial, from October 2007 through March 2012, Tull and Ellison engaged in a scheme to steal passengers’ money for future travel from an escrow account by artificially inflating the amount of money the defendants claimed they were entitled to receive, and by sending this falsified amount in a letter to the escrow bank telling the escrow bank to release the money.  The evidence further established that to cover up their fraud, the defendants falsified profit and loss statements to make the company look like it was making money rather than losing money, and sent these falsified documents to credit card companies and banks to trick them into continuing to do business with the company.

Testimony at trial established that two financial institutions sustained losses of nearly $30 million for having to refund thousands of passengers their money that should have been held for them in escrow, but was actually stolen by the defendants as part of their fraud.

Robert Keilman, 73, of Marlboro, New Jersey, Direct Air’s former Chief Financial Officer, pleaded guilty to charges stemming from his role in this scheme and is awaiting sentencing. 

This case was investigated by DOT-OIG.  Trial Attorneys Michael T. O’Neill and Cory E. Jacobs of the Criminal Division’s Fraud Section are prosecuting the case.  Former Fraud Section Trial Attorney L. Rush Atkinson also investigated the case.

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

The Justice Department today reached a settlement agreement with the South Carolina Department of Corrections (SCDC), to ensure that inmates with hearing disabilities are provided effective communication and the opportunity to participate equally in SCDC’s services, programs, and activities.

The settlement agreement resolves complaints under the Americans with Disabilities Act (ADA) in which inmates with hearing disabilities alleged that SCDC failed to provide them with sign language interpreters and other auxiliary aids and services, and excluded their participation in vocational and religious programs because they are deaf. SCDC cooperated with the Department throughout the investigation.

Among the terms of the agreement, inmates with hearing disabilities will not be excluded from participating in SCDC’s programs including vocational and religious services.  The agreement also requires SCDC to provide services equal to those provided to inmates who are not deaf including auxiliary aides and services and qualified interpreters, in a timely manner, to ensure effective communication with the SCDC inmates with hearing disabilities. SCDC will also provide telecommunication services so that inmates with hearing disabilities may communicate with their families and attorneys the same as other inmates.

“SCDC cooperated fully with this investigation and has committed to ensuring effective communication and providing equal access to its programs and services for its inmates with hearing disabilities,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “We congratulate SCDC for recognizing its obligations and moving promptly to take this step.”

“Access to services and programming is not only a right under the ADA for the inmates who are deaf and hard of hearing, in this instance, these services will enable the inmates to improve their job skills and better ready themselves for a law-abiding life,” said U.S. Attorney Beth Drake. “That’s good corrections policy that benefits the whole state.”

This agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments.

For more information about the ADA, today’s agreement, individuals may access the ADA Web page at http://www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).

A federal jury found a Houston physician and the owner of a pain management clinic guilty today for their roles in running a “pill mill” that provided tens of thousands of unlawful prescriptions for millions of doses of opioids and other controlled substances.

Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas and Special Agent in Charge Will R. Glaspy of the Drug Enforcement Administration’s (DEA) Houston Division made the announcement.

After a  nine-day trial, Gazelle Craig, D.O., 41, and Shane Faithful, 48, both of Houston, Texas, were convicted of one count of conspiracy to unlawfully distribute controlled substances and three counts of unlawfully distributing and dispensing controlled substances. A sentencing date has not yet been scheduled before U.S. District Judge David Hittner of the Southern District of Texas, who presided over the trial.  Both defendants were remanded into the custody of the U.S. Marshal’s Service. 

“Our great country is currently in the midst of the deadliest drug crisis in our history,” said Attorney General Sessions. “Sadly, even some trusted medical professionals like doctors, nurses and pharmacists have chosen to violate their oaths and exploit this crisis for cash.  The consequences have been devastating. In this case, tens of thousands of pills flooded our streets because of the defendants’ actions. We will never know for certain the scale of the damage done. We do know that justice has been served, and so I want to thank everyone who helped secure this conviction, including the DEA and Department of Justice Trial Attorneys Scott Armstrong and Devon Helfmeyer. This conviction will not only help stop the diversion of prescription drugs, it will send a message to every would-be fraudster in America.”

According to evidence presented at trial, from March 2015 through July 2017, Craig, a licensed doctor, and Faithful, the clinic owner, ran Gulfton Community Health Center (Gulfton), which operated as an illegal pill mill.  The evidence showed that Craig unlawfully wrote approximately 18,252 prescriptions for over 2.1 million dosage units of hydrocodone, a Schedule II controlled substance, and approximately 15,649 prescriptions for over 1.3 million dosage units of carisporodal, a Schedule IV controlled substance.  The combination of hydrocodone and carisoprodol is a dangerous drug cocktail with no known medical benefit, the evidence showed.

The trial evidence showed that Craig issued unlawful prescriptions for controlled substances to as many as 60 patients a day.  “Crew leaders” ferried numerous patients to Gulfton so that Craig could provide them with unlawful prescriptions for controlled substances.  Faithful and Craig charged approximately $300 for each prescription and required payment in cash.  The evidence also revealed that the defendants divided each day’s cash proceeds, often in excess of $15,000, from the sale of the unlawful prescriptions. 

Faithful and Craig made great efforts to prevent law enforcement from investigating Gulfton, the evidence showed.  For example, they banned the use of any electronic devices in the clinic and prevented anyone from bringing bags into Gulfton.  Approximately four armed security guards also patrolled Gulfton daily to control the crowds of people, who ranged from addicts to “crew leaders.” 

This case was investigated by the DEA.  Trial Attorneys Scott Armstrong and Devon Helfmeyer of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations nationwide.  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

On March 26, 2018, Preston Q. Howard, 49, of Wright City, Missouri, entered a guilty plea before Chief United States District Court Judge J. Randal Hall, to three charges of Obstruction of Persons in the Free Exercise of Religious Beliefs, in violation of 18 U.S.C. § 247(a)(2).  He faces up to 20 years in prison without the possibility of parole for each offense, and is subject to a sentencing enhancement because he chose his victims based on their religion, classifying his actions as hate crimes. 

According to information presented at the March 26 hearing, between June 22, 2017 and August 8, 2017, Howard made numerous telephone calls to the Islamic Society of Augusta, during which he threatened to “kill,” “bomb,” “shoot,” “behead,” “slaughter,” “execute,” “light on fire,” and “murder” members of the mosque, to “hunt down” and “zone in” on Muslims, and to “blow up the mosque.” At the hearing, Howard admitted committing these acts and obstructing or attempting to obstruct the mosque members’ free exercise of their religious beliefs.  Howard remains in federal custody pending his sentencing hearing, which has not yet been scheduled.

“All people, regardless of where they worship or which religion they belong to, are entitled to live free from the threat of violence and discrimination,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “Howard’s threatening and hateful calls were criminal and unlawful. The Department of Justice will continue to hold anyone who commits hate crimes accountable under the law.” 

“Those who perpetrate hate crimes by making abhorrent and venomous threats against members of our community in violation of federal law will be held accountable! We continue to work with our law enforcement partners to identify and bring to justice those who terrorize our citizens,” said U.S. Attorney Bobby L. Christine for the Southern District of Georgia

“Not only did this defendant violate the mosque members’ right to exercise their religious beliefs, his threats caused them to live in fear for their safety and lives,” said David J. LeValley, Special Agent in Charge of FBI Atlanta. “At the FBI, we swear an oath to protect our citizens and uphold the Constitution, and violating the right to practice one’s faith, will never be tolerated.”

The FBI Atlanta Field Division investigated the case. Assistant United States Attorney Nancy Greenwood is prosecuting the case on behalf of the United States.  For any questions, please contact the United States Attorney’s Office at (912) 652-4422.

The Justice Department today filed a lawsuit in the Central District of California against California Auto Finance, alleging that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing protected servicemembers’ motor vehicles without obtaining the necessary court orders.

The Justice Department initiated an investigation into the practices of California Auto Finance, which is based in the City of Orange, California, after United States Army Private Andrea Starks submitted a complaint to the Justice Department in November 2016.

In April 2016, Private Starks notified California Auto Finance that she would be entering the military the following month.  Despite this advance notice, California Auto Finance repossessed Private Stark’s vehicle without a court order on May 9, 2016, her first day of active military training.  At the time of repossession, the vehicle was parked at the home of Private Starks’ grandmother in Cedar Rapids, Iowa.  The complaint states that California Auto Finance had no process to determine customers’ military status – such as checking the Department of Defense’s publicly available database – prior to repossessing their cars. 

“The members of our armed forces should be able to devote their full attention to their duties without having to worry about whether their legal rights will be violated by lenders,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “Repossessing vehicles without required court orders is both wrong and illegal.  The Justice Department continues to ensure that we are doing all we can to protect and assist servicemembers, veterans, and their families from unlawful conduct by lenders.”

“We have a solemn duty to protect the rights of the men and women who bravely serve in our nation’s armed forces,” said United States Attorney Nicola T. Hanna of the Central District of California. “By repossessing servicemembers’ automobiles without court orders, California Auto Finance allegedly violated their rights. We respect and honor the sacrifice that servicemembers have made to our country, and we will take whatever action we can to protect their rights.”

In addition to monetary damages for affected servicemembers, the complaint asks for civil monetary penalties and injunctive relief to prevent future repossessions that violate the SCRA. 

California Auto Finance is a privately held indirect auto lending company based in the City of Orange, California, that describes itself as a leading sub-prime lender in California.  The complaint is an allegation of unlawful conduct.  The allegations must still be proven in federal court.

This case is being jointly handled by the Department’s Civil Rights Division and the U.S. Attorney’s Office for the Central District of California.

The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service.  It requires a court to review and approve any vehicle repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments to the servicemember. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. 

The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with United States Attorney’s Offices.  Since 2011, the Department has obtained over $467 million in monetary relief for over 119,000 servicemembers through its enforcement of the SCRA.  The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office.  Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.

The Department of Justice and the City of West Palm Beach announced today that they had reached an agreement regarding Resolution Number 112-17.  The Department had been investigating whether West Palm Beach’s Resolution Number 112-17 and polices related to the resolution comply with 8 U.S.C. § 1373, which protects information sharing between local law enforcement and the Department of Homeland Security (DHS).

Following the City’s agreement to, and subsequent dissemination of, a memorandum from West Palm Beach to its employees stating West Palm Beach’s position that its local laws do not restrict information sharing with DHS, the Department issued a letter to West Palm Beach concluding its section 1373 review.  The letter stated, “[i]n light of our ongoing discussions and your agreement to and sending of a memorandum to all employees stating that they are not restricted from sharing information with DHS, we find no evidence that you are currently out of compliance with section 1373.”

West Palm Beach also agreed to dismiss its lawsuit requesting a declaration that its Resolution complies with federal law and challenging the Department’s authority to impose immigration cooperation-related grant conditions.

Today’s settlement protects public safety by providing assurance that West Palm Beach’s Resolution, as interpreted by West Palm Beach, does not violate section 1373, and permits DHS to receive the information it may need to take custody of aliens who commit crimes. 

The United States sued in federal court in Newnan, Georgia, to permanently bar Lucrezia Finch Henderson from preparing federal income tax returns for others, the Justice Department announced today.  The complaint alleges that Henderson unlawfully reported information on her customers’ returns that resulted in the customers claiming more tax credits and refunds than they were entitled to receive.

As alleged in the complaint, Henderson engaged in abusive tax schemes such as reporting fake businesses on her customers’ returns in order to generate losses to lower their tax liabilities.  Henderson falsely claimed education credits for customers who did not attend college that year, according to the complaint. According to that complaint, Henderson prepares tax returns at Infinity Tax located at 104 Sage Commercial Drive, Suite B, in Lagrange, Georgia.

The IRS has a list of steps on their website that you can take now in anticipation of filing your 2017 federal income tax return and ten tips for choosing a tax preparer. Return preparer fraud was one of the IRS’s Dirty Dozen Tax Scams for 2018 and taxpayers seeking a return preparer should remain vigilant. The IRS has some information on their website about selecting a return preparer and has launched a free directory of federal tax preparers.

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

A mother-daughter tax return preparer team in St. Louis, Missouri, prepares false federal income tax returns for their customers, according to a new lawsuit filed by the Department of Justice today. The suit asks the court to permanently bar Cherlynn Harrington, Linda McClendon, and their business Goodlink, LLC d/b/a Goodlink Tax Services from preparing federal income tax returns for others.  The complaint alleges that defendants unlawfully understate their customers’ income tax liabilities and overstate their customers’ refunds. 

The complaint alleges that Harrington and McClendon fabricate income and/or expenses in order to improperly claim the Earned Income Tax Credit (EITC), sometimes charging their customers more than $1,500 to prepare these false tax returns. In some cases, Harrington made unauthorized withdrawals from debit cards loaded with her customers’ false tax refunds according to the complaint.

The IRS has a list of steps on their website that you can take now in anticipation of filing your 2017 federal income tax return. Return preparer fraud was one of the IRS’s Dirty Dozen Tax Scams for 2018 and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on their 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 Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a settlement with Houston-based XTO Energy Inc., resolving alleged Clean Air Act violations stemming from the company’s oil and gas production operations on the Fort Berthold Indian Reservation in North Dakota. 

The settlement resolves claims that XTO failed to adequately design, operate, and maintain vapor control systems on its storage tanks at oil and natural gas well pads, resulting in emissions of volatile organic compounds (VOCs). VOCs are a key component in the formation of smog or ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma, and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis.

As part of the settlement, XTO will ensure the adequacy of its vapor control systems and improve its operation and maintenance practices, monitoring, and inspections. These improvements to XTO’s operations on the Fort Berthold Indian Reservation will significantly reduce VOC emissions, including through monthly use of infrared cameras during inspections to better detect and respond to air emissions. In addition, EPA estimates that XTO will spend at least $450,000 to fund an environmental mitigation project. XTO will     also pay a $320,000 civil penalty.

EPA estimates that XTO’s system upgrades will annually reduce the emission of at least 2,200 tons of VOCs. Improved operation and maintenance will result in additional emissions reductions. Today’s settlement resolves alleged violations at all 20 of XTO’s well pads on the Fort Berthold Indian Reservation.

“This settlement will reduce harmful air pollutants, benefiting the health of residents of the Fort Berthold Indian Reservation, as well as those living in surrounding communities,” said Acting Assistant Attorney General Jeffrey H. Wood of the Environment and Natural Resources Division of the Department of Justice. “This case further demonstrates the shared commitment of the Justice Department and EPA to enforce the nation’s environmental laws, including in Indian Country.”

“This settlement with XTO Energy will reduce emissions from its production facilities on the Fort Berthold Reservation and will benefit tribal communities and regional air quality,” said EPA Regional Administrator Doug Benevento. “EPA will continue to work with energy producers and our state and tribal partners to ensure that oil and natural gas extraction occurs in accordance with the laws that protect our air and water resources.”

As part of the settlement, XTO has agreed to evaluate the design and capacity of its vapor control systems, modify those vapor control systems as necessary to ensure that that they are adequately designed and sized to collect and convey emissions to a control device, implement an enhanced inspection and maintenance program, and undertake monthly infrared camera inspections to identify any emissions and take prompt corrective action to address those emissions.

XTO will also conduct an environmental mitigation project to install and operate auto-gauging equipment on storage tanks to reduce how often thief hatches are opened. This project is expected to significantly reduce VOC emissions.  

XTO’s oil and natural gas production operations in North Dakota use storage tanks to store produced oil and produced water. The oil and water are stored at separate well pads prior to transport by pipeline or truck. Multiple storage tanks are typically present at a well pad and are frequently controlled by the same vapor control system.

The case arose from EPA’s inspections and information requests in 2015 that found violations related to VOC emissions from produced oil and produced water storage tanks, due to undersized vapor control systems and inadequate operation and maintenance.

This settlement is part of EPA’s national enforcement initiative to reduce public health and environmental impacts from energy extraction activities. For more information about EPA’s enforcement initiative, click here: http://www2.epa.gov/enforcement/national-enforcement-initiative-ensuring-energy-extraction-activities-comply.

The proposed consent decree, lodged in the U.S. District Court for the District of North Dakota, is subject to a 30-day public comment period and approval by the federal court. Information about submitting a public comment is available at:  www.justice.gov/enrd/consent-decrees.

Gregory McLeod, 44, of East Point, Georgia, and a former correctional officer and supervisor at the U.S. Penitentiary in Atlanta (USP Atlanta), was sentenced today in federal court to one year and eight months in prison, followed by three years supervised release, for using excessive force against an inmate in 2016, and for writing two false reports about the incident in an effort to cover up his crime. 

According to information presented in court, McLeod, who achieved the rank of lieutenant, and worked as a supervisor at the prison, strip searched an inmate in his office in front of three other correctional officers.  After the inmate complained that the strip search was taking too long, McLeod repeatedly punched the inmate in his face, injuring him. 

Following the assault, McLeod wrote an incident report and a separate memorandum about the encounter in which he falsely claimed that the inmate swung a closed fist at McLeod and attempted to assault other officers before the officers could apply hand and leg restraints.

“Correctional officers have an important duty to protect inmates from violence or any act of unreasonable force,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “McLeod’s violent actions, and attempt to obstruct justice, blatantly violated the inmate’s civil rights. This Justice Department will not tolerate any abuse of power by a law enforcement officer and will continue to prosecute these cases to the fullest extent of the law.”

“McLeod broke the law and repeatedly lied about his conduct,” said U.S. Attorney Byung J. “BJay” Pak. “The men and women who work in prisons and jails have very stressful jobs, but they must adhere to the laws that each has sworn to uphold.  At the same time, inmates and detainees in our nation’s prisons and jails have the right to be free from the use of excessive force.”

“We certainly understand that detention officers have a difficult job maintaining order and protecting inmates in our nation’s prisons,” said David J. LeValley, Special Agent in Charge of FBI Atlanta. “But inherent in that job is a power that cannot be abused. It is unfortunate that the actions of this one defendant harm the reputation of the vast majority of officers who respect that power.”

“Violence against inmates and false reporting have no place in the federal prison system,” stated Robert A. Bourbon, Special Agent in Charge of the Department of Justice Office of the Inspector General’s (OIG) Miami Field Division. “The DOJ OIG is committed to ensuring that there are serious consequences for any DOJ employee who intentionally violates the rights of inmates and lies about it.”

At his guilty plea on Nov. 22, 2017, McLeod admitted that he used excessive force and that he intentionally violated the inmate’s constitutional rights.  McLeod also admitted that he intentionally impeded and obstructed the investigation of the incident by writing the two false reports. 

McLeod was sentenced by U.S. District Judge Steven C. Jones to one year and eight months in prison, followed by three years supervised release.

This case was investigated by the Atlanta Division of the FBI and the Department of Justice OIG. This case was prosecuted by Assistant U.S. Attorney Brent Alan Gray, and Department of Justice Trial Attorney Mary J. Hahn of the Civil Rights Division.

A federal court entered an order against three Utah-based telemarketing companies and their owner, the Department of Justice announced today. That order permanently enjoins them from engaging in deceptive and abusive telemarketing practices.  The order also imposes a civil monetary penalty.

The Department filed a complaint in May 2011, alleging that the defendants, Feature Films for Families Inc., Corporations for Character L.C., Family Films of Utah Inc., and Forrest S. Baker III, committed widespread violations of the FTC Act and Telemarketing Sales Rule in various telemarketing campaigns to sell DVDs and movie tickets, and in charitable solicitation call campaigns. The complaint alleged that the defendants: (1) made multiple deceptive claims regarding the use of sales proceeds and charitable donations and the sales purpose of calls; (2) placed millions of calls to phone numbers on the National Do Not Call Registry under the guise of survey and informational calls; (3) ignored consumers’ prior do-not-call requests; (4) transmitted inaccurate caller-identification information; (5) failed to make required oral disclosures; and (6) abandoned calls.

“Unwanted telemarketing calls invade the privacy of American consumers,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “The Department of Justice will continue to work with the Federal Trade Commission to ensure telemarketers adhere to laws designed to protect against abusive and deceptive telemarketing practices.”

On May 25, 2016, following eight days of trial, a jury found the defendants committed more than 117 million knowing violations of the Telemarketing Sales Rule, including 99 million calls to phone numbers on the Do Not Call Registry, and more than four million additional calls in which they made misleading statements to induce DVD sales. The verdict was the first-ever in an action to enforce the Telemarketing Sales Rule and Do Not Call Registry rules.

The stipulated final order, entered by the district court, permanently enjoins the defendants from making material misrepresentations or omissions in the course of marketing entertainment products, services, or recordings, and from violating any provision of the Telemarketing Sales Rule.  The stipulated order also imposes a civil penalty judgment of approximately $45.4 million, of which all but $487,735 is conditionally suspended based on the defendants’ inability to pay the entire penalty.

“As this case demonstrates, the FTC is aggressively pursuing law enforcement action against those that violate our nation’s Do Not Call rules, including those that use deception to secure sales or donations,” said Tom Pahl, Acting Director of the FTC’s Bureau of Consumer Protection.

This matter was handled by Trial Attorneys Arturo DeCastro and David A. Frank of the Civil Division’s Consumer Protection Branch, with assistance from Attorney Michael Tankersley of the Federal Trade Commission and the U.S. Attorney’s Office for the District of Utah.

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

WASHINGTON –The Justice Department today announced that on March 21, 2018, a federal district court in Casper, Wyoming, found that the Wyoming Military Department (WMD) discriminated against former employee Amanda Dykes by subjecting her to sexual harassment and constructively discharging her. The verdict was returned after a July 2017 bench trial during which the Justice Department produced evidence that the defendant violated Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, national origin, sex, and religion.

The evidence produced at trial showed that Dykes was subjected to sexual harassment by her direct supervisor, former employee Don Smith, when both worked at WMD’s Wyoming Youth Challenge Program. Smith subjected Dykes to persistent, unwelcomed conduct including poems, songs, and emails professing his affection and love for her as well as constant visits to her office. These intensified to such a degree that Dykes asked her subordinates to help her avoid being left alone with her supervisor.

Dykes reported the supervisor’s conduct to her employer’s human resources department as well as to his direct supervisor, but received no assistance in remedying the harassment. The court found that harassing behavior persisted for over 18 months despite Dykes’ numerous complaints, that no reasonable employee could be expected to remain in her job under these circumstances, and that Dykes had no choice but to resign her position in September 2011 to avoid the continued harassment.

The district court ordered WMD to pay $221,030.62 to Dykes for the salary and benefits she lost as a result of her constructive discharge.

This judgment represents the first successful sexual harassment trial verdict obtained in a Title VII case since the launch of the Civil Rights Division’s Sexual Harassment in the Workplace Initiative (SHWI), which focuses on workplace sexual harassment in the public sector.

As part of the Initiative, the Justice Department will continue to bring sex discrimination claims against state and local government employers with a renewed emphasis on sexual harassment charges. The Department will also work to develop effective remedial measures that can be used to hold public sector employers accountable where Title VII violations have been found, including identifying changes to existing employer practices and policies that will result in safe work environments. More information about the Civil Rights’ Division’s Sexual Harassment in the Workplace Initiative can be found here.

“The Justice Department vigorously enforces Title VII to ensure that people can work free from sexual harassment and retaliation,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “The verdict sends the clear message that this Justice Department will continue to effectively combat sexbased discrimination whenever it occurs in a public sector workplace.”

Dykes originally filed her sexual harassment charge against the WMD with the Denver Field Office of the Equal Employment Opportunity Commission (EEOC), which investigated and determined that there was reasonable cause to believe that discrimination had occurred and referred the matters to the Department of Justice.

More information about Title VII and other federal employment laws is available at the division’s Employment Litigation Section website. The continued enforcement of Title VII is a priority of the Civil Rights Division. Additional information about the Civil Rights Division of the Department of Justice is available on the division website.

EEOC enforces federal laws prohibiting employment discrimination. Further information about EEOC is available on its website. The United States was represented in this case by Robert Galbreath, Torie Atkinson, Brian McEntire, and Patty Stasco.

At its annual conference, the International Competition Network (ICN) adopted guiding principles for procedural fairness in competition agency enforcement; substantially revised merger recommended practices addressing international enforcement cooperation, timing of notification, and review periods; and presented the results of a member survey on vertical merger assessment and related economic issues. The ICN also issued a strategy report on advocacy monitoring and evaluation methods, and interim reports on the treatment of vertical restraints under unilateral conduct laws and key elements of cartel leniency programs, the Department of Justice announced today. 

The ICN held its 17th annual conference, hosted by the Competition Commission of India, on March 21-23, 2018. Nearly 500 delegates from over 70 jurisdictions participated, including competition experts from international organizations and the legal, business, academic, and consumer communities. Deputy Assistant Attorney General Roger Alford led the Department of Justice’s delegation; the Federal Trade Commission’s delegation was led by Acting Chairman Maureen Ohlhausen. Assistant Attorney General Makan Delrahim had planned to attend, but was required to remain in Washington due to the litigation schedule in a Division matter. The conference showcased the achievements of the ICN working groups on competition advocacy, agency effectiveness, cartels, mergers and unilateral conduct, and featured discussion of current competition issues and the future direction of the network.

“The Division looks forward each year to this opportunity to engage face to face with enforcer colleagues from around the world,” said Assistant Attorney General Delrahim. “The relationships that we develop through ICN are key to our enforcement program, and to promoting sound competition policy worldwide. We commend the Competition Commission of India for hosting an excellent conference.” 

Deputy Assistant Attorney General Alford spoke on a panel discussing online markets and vertical restraints. The panel was part of the Unilateral Conduct Working Group’s ongoing work on vertical restraints. The Working Group, co-chaired by the Department of Justice, presented an interim report examining a series of hypothetical vertical restraints and their effect on competition and potential resulting efficiencies.

“The ICN continues to play a critical role in addressing evolving issues and challenges that confront the international competition community,” said FTC Acting Chairman Maureen Ohlhausen. “As exemplified by this year’s work product, led by the FTC, on merger review and procedural due process, there has been substantial progress toward convergence of competition policy around the world.”

Acting Chairman Ohlhausen helped lead the conference’s panel discussion of how competition authorities can communicate the benefits of competition and advocate for pro-competitive policies when the political, social, or economic context is not in their favor. The panel explored how advocacy strategies may differ and recognized that competition advocacy, whatever the context or climate, is a crucial component of a competition agency’s work. Randolph Tritell, Director of the FTC’s Office of International Affairs, led the concluding panel, showcasing the implementation of the ICN’s work across the globe.

The FTC co-chairs the ICN’s Merger Working Group, which promotes convergence toward best practices in merger process and analysis and seeks to reduce the public and private costs of multijurisdictional merger reviews. This year, the Merger Working Group presented revised Recommended Practices on: 1) international enforcement cooperation; 2) timing of notification; and 3) review periods. The working group also presented results of its agency survey on vertical merger analysis and related economic assessment.

The Agency Effectiveness Working Group produced new recommendations on due process in competition law enforcement. The FTC-led project developed Guiding Principles for procedural fairness, recommendations for internal agency practices that support sound decision making, and implementation tips for good agency enforcement process. The group also studied how economic thinking and economic analysis can be incorporated into agencies’ investigations and decision-making processes. The working group introduced new video training modules on merger remedies and enforcement cooperation as part of the ICN’s online interactive educational center for competition authorities from around the world.

The Cartel Working Group addresses the challenges of anti-cartel enforcement, including the prevention, detection, investigation and punishment of cartel conduct. The Cartel Working Group presented an interim report on survey findings regarding major characteristics of leniency regimes, incentives and disincentives for leniency applications and interaction between leniency and other policies.

The Advocacy Working Group provides guidance and facilitates experience-sharing to improve the effectiveness of ICN members’ competition advocacy initiatives. At the conference, the group released its second report as part of the Strategy Project. The report analyzes survey results on how competition agencies assess their advocacy actions and programs, and identifies common practices and trends. This work will inform the development of guidance covering the planning, monitoring, and evaluation of advocacy actions and programs. The working group also expanded the Market Studies Information Store, which now includes over 700 market studies conducted by member agencies, and facilitates knowledge-sharing, collaboration, and best practices in market studies.

Created in October 2001 to increase understanding of competition policy and promote convergence toward sound antitrust enforcement around the world, the ICN, founded by 15 agencies including the Department of Justice’s Antitrust Division and the FTC, has grown to 138 member agencies from 125 jurisdictions, supported by a wide network of non-government advisors from around the world.

The former CEO of the Israel-based company Yukom Communications, a purported sales and marketing company, was charged in an indictment filed on March 22, for her alleged participation in a scheme to defraud investors in the United States and across the world in financial instruments known as “binary options.” 

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Assistant Director in Charge Andrew W. Vale of the FBI’s Washington Field Office made the announcement.

Lee Elbaz, 36, of Israel, was charged in the District of Maryland with one count of conspiracy to commit wire fraud and three counts of wire fraud. 

The indictment alleges that Yukom provided investor “retention” services for two websites, known as BinaryBook and BigOption, that were used to promote and market purported binary options, and that those binary options were fraudulently sold and marketed.  The indictment further alleges that in her role as CEO of Yukom, Elbaz, along with her co-conspirators and subordinates, misled investors using BinaryBook and BigOption by falsely claiming to represent the interests of investors but that, in fact, the owners of BinaryBook and BigOption profited when investors lost money; by misrepresenting the suitability of and expected return on investments through BinaryBook and BigOption; by providing investors with false names and qualifications and falsely claiming to be working from London; and by misrepresenting whether and how investors could withdraw funds from their accounts.  Representatives of BinaryBook and BigOption, working under Elbaz’s supervision, misrepresented the terms of so-called “bonuses,” “risk free trades” and “insured trades,” and deceptively used these supposed benefits in a manner that in fact harmed investors, according to the indictment. 

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 FBI’s Washington Field Office.  Trial Attorneys Ankush Khardori and Tracee Plowell of the Criminal Division’s Fraud Section are prosecuting the case. 

The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.

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

Attorney General Jeff Sessions today announced the Second Annual Attorney General’s Award for Distinguished Service in Policing.

The Attorney General’s Award recognizes individual state, local or tribal sworn, rank- and-file police officers and deputies for exceptional efforts in community policing. The awarded officer(s) or deputy(ies) will have demonstrated active engagement with the community in one of three areas: criminal investigations, field operations or innovations in policing.

“President Trump and I support law enforcement at all levels – and we always will. We know whose side we are on. We are on the side of law-and-order.  This means we are on the side of the approximately 85 percent of all law enforcement officers that serve at the state, local, and tribal level,” said Attorney General Sessions. “These men and women serve and protect us from violent crime, dangerous opioids, and criminal gangs. The Department of Justice is committed to supporting the law enforcement community that keeps this great nation safe and makes it even safer. Today we honor our law enforcement officers by announcing the second annual Attorney General’s Award for Distinguished Service in Policing.”

Within each category, an award will be given to law enforcement agencies serving small, medium, and large jurisdictions:

• Small:              Agencies serving populations of fewer than 50,000
• Medium:          Agencies serving populations 50,000 to 250,000
• Large:              Agencies serving populations of more than 250,000

By distinguishing and rewarding these efforts, the Department strives to promote and sustain its national commitment to policing and to advance proactive policing practices that are fair and effective.

With the Attorney General’s Award for Distinguished Service in Policing, the Office of the Attorney General recognizes that within and across the nation’s more than 18,000 law enforcement agencies, individual officers, and deputies are working hard to keep our communities safe.

The application for nominees can be found at https://www.justice.gov/ag/policing-award.

The chief of staff for a former member of the U.S. House of Representatives has been convicted for obstructing a congressional investigation into the alleged misappropriation of Congressional funds to pay for campaign activity, announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division.

David G. Bowser, 45, of Arlington, Virginia, was convicted of one count of obstruction of proceedings, one count of concealment of material facts and three counts of making false statements.  A sentencing date has not been set.

“David Bowser abused his position as a chief of staff on Capitol Hill to fund political campaigns with taxpayer funds, and then lied to cover up his crimes,” said Acting Assistant Attorney General Cronan.  “The Criminal Division is committed to preserving the public’s confidence in our government by investigating and prosecuting corrupt public officials.  I commend the career prosecutors in the Public Integrity Section, as well as the dedicated agents of the FBI, for their exemplary work on this case.” 

Bowser was indicted in April 2016.  From 2008 until January 2015, Bowser served as the chief of staff for a then-U.S. congressman and worked on behalf of and served as a decision maker for the congressman’s political campaigns.  In or about June 2012, Bowser, on behalf of the congressman’s office, hired Brett O’Donnell, a communications consultant, to assist the congressman with his messaging.  Immediately upon joining the congressman’s office, O’Donnell assisted the congressman with his reelection campaign for the House of Representatives in 2012, at Bowser’s direction.  From January 2013 until his termination from the congressman’s office in March 2014, O’Donnell also provided substantial services to the congressman’s Senate campaign at Bowser’s direction, including preparing for political debates, drafting and practicing campaign speeches and advising on campaign messaging, among other services.  Bowser caused the congressman’s office to pay O’Donnell approximately $43,750 in congressional, taxpayer funds.  Such funds must be used for official, congressional purposes, and cannot be used in furtherance of a congressman’s political campaign or to pay for any campaign-related expenses.

Bowser was convicted for obstructing a congressional ethics investigation into the payments to O’Donnell.  In March 2014, the Office of Congressional Ethics (OCE), a non-partisan office established in the House of Representatives to investigate allegations of misconduct, began to investigate allegations that O’Donnell was being paid with congressional funds for performing campaign-related services.  During the course of OCE’s investigation, Bowser attempted to obstruct the investigation by, among other things, delaying and failing to produce relevant documents; influencing the testimony of witnesses; and falsely stating that O’Donnell was solely hired to provide official services.

On Sept. 3, 2015, O’Donnell pleaded guilty in the Middle District of Georgia to one count of making false statements in connection to this case.  During O’Donnell’s interview with OCE, in which he discussed the work that he performed for Bowser and the congressman, he made several false statements in an effort to minimize and conceal his role with the campaigns.

The FBI is investigating the case.  Trial Attorneys Todd Gee and Sean F. Mulryne of the Criminal Division’s Public Integrity Section are prosecuting the case.

Edward N. Levine, 67, a resident of Novato, California, was sentenced today to 27 months in prison and followed by three years of supervised release for the sale of two black rhinoceros horns in Las Vegas. Levine will also be prohibited from wildlife and antique sales as a result of today’s sentencing. 

A jury convicted Levine on September 14, 2017, of conspiracy to violate the Lacey and Endangered Species Acts and a substantive violation of the Lacey Act for knowingly selling the horns to an undercover agent from the United States Fish and Wildlife Service (USFWS). His co-defendant, Lumsden Quan, had previously pleaded guilty to the indictment and was sentenced in December 2015 to 367 days of imprisonment and a $10,000 fine. 

The sentence was announced by Assistant Attorney General Jeffrey H. Wood for the Environment and Natural Resources Division of the Department of Justice, U.S. Attorney Dayle Elieson for the District of Nevada, and Acting Chief of Law Enforcement Edward Grace for USFWS. 

The Honorable Chief Judge Gloria M. Navarro in U.S. district court in Las Vegas sentenced Levine for his role in the conspiracy, which involved negotiating the sale and transporting the horns from California to Nevada in March 2014. Levine and Quan ultimately sold the horns to an undercover agent posing as a taxidermist for $55,000 in a Las Vegas casino hotel room. Levine had faced a maximum of five years imprisonment for violating the Lacey Act. 

“Complex international investigations such as Operation Crash have demonstrated the link between wildlife trafficking and criminal organizations also involved in other serious transnational organized crimes including trafficking of illegal firearms and drugs,” said Acting Chief of Law Enforcement Edward Grace for the U.S. Fish and Wildlife Service.  “Mr. Levine not only illegally bought and sold horns from critically endangered black rhinos; he was previously convicted and served time for his role in drug trafficking with South American drug cartel.”

Levine was identified as part of “Operation Crash” – a nationwide effort led by the USFWS and the Justice Department to investigate and prosecute those involved in the black market trade of rhinoceros horns. A “crash” is the term for a herd of rhinoceros. Operation Crash is an ongoing effort to detect, deter, and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns. As of October 2017, Operation Crash has resulted in the prosecution and sentencing of nearly 50 subjects and recovery of approximately $7.8 million through fines, forfeiture, and restitution. Levine was the only Operation Crash target to proceed to trial. 

The black rhinoceros is an herbivore species native to Africa of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under U.S. and international laws, including the Endangered Species Act. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 183 countries around the world to protect fish, wildlife, and plants that are or may become imperiled due to the demands of international markets. 

The investigation was handled by the USFWS’s Office of Law Enforcement, the U.S. Attorney’s Office for the District of Nevada, and the Justice Department’s Environmental Crimes Section. The government is represented by Trial Attorney Ryan Connors, Assistant U.S. Attorney Kathryn Newman, and paralegals Christopher Kopf and Amanda Backer.

Today, Attorney General Jeff Sessions announced that the Department of Justice is proposing to amend the regulations of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, clarifying that bump stocks fall within the definition of “machinegun” under federal law, as such devices allow a shooter of a semiautomatic firearm to initiate a continuous firing cycle with a single pull of the trigger.

In making the announcement, Attorney General Sessions made the following statement: “Since the day he took office, President Trump has had no higher priority than the safety of each and every American,” said Attorney General Jeff Sessions. “That is why today the Department of Justice is publishing for public comment a proposed rulemaking that would define ‘machinegun’ to include bump stock-type devices under federal law—effectively banning them.  After the senseless attack in Las Vegas, this proposed rule is a critical step in our effort to reduce the threat of gun violence that is in keeping with the Constitution and the laws passed by Congress.  I look forward to working with the President’s School Safety Commission to identify other ways to keep our country and our children safe, and I thank the President for his courageous leadership on this issue.”

On February 20, 2018, the President issued a memorandum instructing the Attorney General “to dedicate all available resources to… propose for notice and comment a rule banning all devices that turn legal weapons into machineguns.” This NPRM is in response to that direction, and would make clear that the term “machinegun” as used in the National Firearms Act (NFA), as amended, and Gun Control Act (GCA), as amended, includes all bump-stock-type devices that harness recoil energy to facilitate the continuous operation of a semiautomatic long gun after a single pull of the trigger. If the NPRM is made final, bump-stock-type devices would be effectively banned under federal law and current possessors of bump-stock-type devices would be required to surrender, destroy, or otherwise render the devices permanently inoperable. The comment period for the NPRM is 90 days from the date of publication in the Federal Register.   

To view the Notice of Proposed Rulemaking click here.

Please note:  This is the text of the Bump Stock Notice of Proposed Rulemaking (NPRM) as signed by the Attorney General, but the official version of the NPRM will be as it is published in the Federal Register.”

Following a three-day trial, a jury found Mark Porter, 59, of Lake Havasu City, Arizona, guilty yesterday of committing a federal hate crime when he used a stun device during the racially-motivated assault of a neighbor at his apartment complex in Draper, Utah.  Assistant Attorney General for the Civil Rights Division John Gore, U.S. Attorney for the District of Utah John W. Huber, and Special Agent in Charge for the Salt Lake City Field Office of the Federal Bureau of Investigation Eric Barnhart announced that the defendant was found guilty of the only offense charged in the indictment, a violation 42 U.S.C. § 3631 for using force and the threat of force to injure, intimidate, and interfere with an African-American man because of his race and because of his occupancy of a nearby apartment in the complex. The jury further found that the defendant used a dangerous weapon – a stun cane.

Evidence presented at trial showed that the defendant shouted a racial slur at the victim’s 7-year-old son as the boy rode on a scooter in a common area at the apartment complex.  After the defendant told the child to “get out of here,” he used the stun cane to injure the victim, knocking the victim to the ground.  The defendant then used a racial slur to refer to the victim and his son and told them both to “get out of here.” 

Evidence presented at trial also established that, prior to the incident, the defendant had told an employee and maintenance staff at the apartment complex that he did not want to live near any African-Americans.  Immediately prior to the incident with the boy and his father, the defendant told another neighbor that he thought that African-Americans needed to be “exterminated.”

“Porter’s violent conduct, motivated by his intolerance of another race, is an egregious crime that will not be tolerated by this Justice Department,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “We will continue to protect the civil rights of all individuals and vigorously prosecute hate crime cases.”

“There is no place in Utah for race-motivated hatred and violence,” said U.S. Attorney John W. Huber. “All families deserve the opportunity to live peaceably in their homes where they may pursue happiness in safe environments. The jury in this case spoke on behalf of our Utah communities and definitively stated that this criminal conduct will not be tolerated.”

Sentencing is set for May 30 before U.S. District Judge Dee Benson of the District of Utah. The defendant faces a maximum sentence of 10 years and a fine of $250,000.

The case was investigated by the Salt Lake City Field Office of the FBI.  The case is being prosecuted by Assistant U.S. Attorney J. Drew Yeates of the United States Attorney’s Office and Trial Attorney Rose E. Gibson of the Civil Rights Division’s Criminal Section.

An Indianapolis man reported false information on federal income tax returns he prepared for his customers, according to a new lawsuit filed by the U.S. Department of Justice today.  In the lawsuit’s complaint, the government alleges that Antonio Chappell prepared false tax returns at G & A Tax Service LLC (G & A Tax), a tax preparation firm owned by Chappell with locations in Indianapolis at 4857 Oakbrook Drive and 4721 North Franklin Road.  The government’s complaint, filed in federal court in Indianapolis, Indiana, asks the court to entirely bar Chappell and G & A Tax from preparing federal tax returns for others. 

According to the complaint, Chappell prepares fraudulent federal tax returns for his customers by falsely reporting income and expenses to inflate claims for the Earned Income Credit. The complaint also alleges that Chappell knowingly or recklessly misrepresents his customers’ filing statuses and reports non-qualifying dependents on customers’ tax returns in order to maximize the customers’ Earned Income Credit and qualify them for the Additional Child Tax Credit.
 

Further, Chappell and others at G & A Tax falsely submitted income tax returns under another tax preparer’s Preparer Tax Identification Number – including at least 184 returns filed after that tax preparer’s death, according to the complaint.  The complaint also alleges that Chappell attempted to facilitate the sale of dependent information to at least one customer in order to claim false tax credits for the customer, provided a customer a fraudulent document to mislead an IRS examiner during an audit, and instructed at least one customer to falsely represent that the customer provided support to the dependents claimed on his return.

The IRS has a list of steps on their website that you can take now in anticipation of filing your 2017 federal income tax return and ten tips for choosing a tax preparer. Return preparer fraud was one of the IRS’s Dirty Dozen Tax Scams for 2018 and taxpayers seeking a return preparer should remain vigilant. The IRS has some information on their website about selecting a return preparer and has launched a free directory of federal tax preparers.

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

The Justice Department today reached a settlement agreement with Union Parish Detention Center (UPDC), a correctional facility located in Farmerville, Louisiana.

The settlement agreement resolves a complaint under the Americans with Disabilities Act (ADA) that UPDC held a detainee with human immunodeficiency virus (HIV) in isolated, segregated housing for approximately six months because he has HIV. UPDC cooperated with the Department throughout the investigation.

Under the agreement, UPDC will not segregate detainees in the future on the basis of their HIV status. The agreement also requires UPDC to adopt nondiscrimination policies, designate an ADA coordinator, establish an ADA complaint procedure, and train all staff annually on HIV and nondiscrimination obligations.  In addition, UPDC will pay $27,500 in damages to the complainant.

“This agreement ensures that Union Parish Detention Center will respect the right of individuals with HIV to equal treatment under the law,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “Segregation of detainees with HIV in jails or prisons is unlawful, subjects individuals to unwarranted stigma and harm, and will not be tolerated by this Justice Department.”

People interested in finding out more about the ADA or this settlement agreement can call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website at http://www.ada.gov.

A real estate investor was sentenced today for his role in conspiracies to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.  

Michael Marr was charged on Nov. 19, 2014, in an indictment returned by a federal grand jury in the Northern District of California.  He was convicted on June 2, 2017, of conspiring to rig bids at foreclosure auctions in Alameda and Contra Costa County.  Today, Marr was sentenced to serve 30 months in prison and to serve 3 years of supervised release.  In addition to his term of imprisonment, Marr was ordered to pay a criminal fine of $1,397,061.59. 

“Michael Marr was a driving force behind a multi-year conspiracy to corrupt the public foreclosure auction process through a system of illegal payoffs,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “Today’s sentence reflects the seriousness of that crime.” 

The evidence at trial showed that the defendant conspired with others to rig bids to obtain hundreds of properties sold at foreclosure auctions.  The conspirators designated the winning bidders to obtain selected properties at the public auctions, and negotiated payoffs among themselves in return for not competing with one another.  They subsequently conducted private auctions among themselves at or near the courthouse steps where the public auctions were held, awarding the properties to the conspirators who submitted the highest bids in those private auctions.

As the CEO of Community Fund, LLC and Community Realty Property Management Inc., Marr sent multiple employees to the foreclosure auctions to rig bids on his behalf.  As part of the conspiracies, Marr’s agents purchased several hundred properties through the bid-rigging conspiracies and were owed payoffs on hundreds more.

When real estate properties are sold at public auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with the remaining proceeds paid to the homeowner. 

The sentence is a result of an ongoing investigation into bid rigging at public real estate foreclosure auctions in California’s San Francisco, San Mateo, Alameda, and Contra Costa counties, which is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.

The Department of Justice today announced that an Ohio man has been indicted by a federal grand jury in the Southern District of Ohio on a charge of violating the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act. 

According to the indictment, on or about Feb. 4, 2017, outside of a restaurant located in Cincinnati, Ohio, Izmir Koch, 32, willfully caused bodily injury to a person because of that person’s perceived religion. The indictment alleges that Koch hit and kicked an individual (Victim-1), after Victim-1 represented that he was Jewish. Victim-1 is alleged to have suffered bodily injury as a result of the assault, including a fractured orbital floor.  

If convicted, Koch faces a statutory maximum sentence of 10 years in prison, a fine of $250,000, or both. An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty. 

This case is being investigated by the Cincinnati Division of the Federal Bureau of Investigation.  It is being prosecuted by Assistant United States Attorney Megan Gaffney of the Southern District of Ohio and Trial Attorney Gabriel Davis of the Civil Rights Division of the Department of Justice.