District Not Recorded

Today, SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant MAX MYONG AHN, age 60, from Dededo, Guam, was sentenced in District Court on May 8, 2017, to five years probation to include one year home detention, restitution in the amount of $583.00 to the Department of Public Health – Medicaid Division and a $7,500 fine, for Unlawful Use of the Mail to Facilitate the Distribution of Controlled Substance Analogues. The Court also ordered AHN to pay a mandatory $100 assessment fee.

The Federal Analogue Act, 21 U.S.C. § 813, is a section of the United States Controlled Substances Act passed in 1986. The law allows any chemical "substantially similar" to a controlled substance listed in Schedule I or II to be treated as if it were also listed in those schedules, but only if intended for human consumption. These similar substances are often called designer drugs, spice or bath salts.

On November 3, 2016, AHN entered a guilty plea to an Information charging him with Unlawful Use of the Mail to Facilitate the Distribution of Controlled Substance Analogues, in violation of 18 U.S.C. §§ 2 and 1952(a)(3). Undercover investigations at Gallop USA and Max’s Smoke Shop (Max’s), both owned by AHN, revealed that AHN sold Spice to customers and friends. Agents seized 25 bags of spice and 50 plastic jars containing spice residue from Max’s. Agents also seized 792.8 grams of spice and $129,842 in United States currency from Gallop.

Acting U.S. Attorney Anderson stated, “The Drug Enforcement Administration actively works to properly control new generations of designer drugs. These substances are a significant threat to the health of users both domestically and internationally. The Department of Justice and our local and federal partners remain committed to early and active enforcement of drug laws to protect our communities.”

The investigation was conducted by the U.S. Postal Service and the Drug Enforcement Administration, Guam Customs & Quarantine Agency, Guam Police Department, Alcohol, Tobacco, & Firearms, Superior Court of Guam Probation Office, and the Naval Criminal Investigative Service. The case was prosecuted by Clyde Lemons, Jr., Assistant United States Attorney for the District of Guam.

The Justice Department reached a settlement agreement today with Provisional Staffing Solutions (Provisional), a temporary staffing agency located in Cranston, Rhode Island. 　The agreement resolves the department’s investigation into whether Provisional discriminated against non-U.S. citizens when checking their work authorization documents, in violation of the Immigration and Nationality Act (INA).

The department’s investigation concluded that Provisional routinely requested that non-U.S. citizens present specific identity documents to prove their work authorization, such as a Permanent Resident Card (PRC), while not requesting a specific identity document from U.S. citizens.　 Lawful permanents residents and other work-authorized non-U.S. citizens often have the same identity and work authorization documents available to them as U.S. citizens, and may choose from among the acceptable documents to prove they are authorized to work.　 The antidiscrimination provision of the INA prohibits employers from subjecting employees to unnecessary documentary demands based on the employees’ citizenship or national origin.　

Under the settlement, Provisional must pay a civil penalty of $16,290 to the United States, post notices informing workers about their rights under the INA’s antidiscrimination provision, train their human resources personnel and be subject to departmental monitoring and reporting requirements.

"The Justice Department cautions employers not to erect discriminatory barriers to employment," said Acting Assistant Attorney General Tom Wheeler of the Civil Rights Division. 　"Companies large and small must ensure that their Form I-9 practices comply with federal law.　 We appreciate Provisional’s cooperation with the Department to address this issue."

The division’s Immigrant and Employee Rights Section (IER), formerly known as the Office of Special Counsel for Immigration-Related Unfair Employment Practices, is responsible for enforcing the anti-discrimination provision of the INA.　 The statute prohibits, among other things, citizenship, immigration status, and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation and intimidation.　 　

For more information about protections against employment discrimination under immigration laws, call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar; email IER@usdoj.gov; or visit IER’s English and Spanish websites.

Applicants or employees who believe they were subjected to different documentary requirements based on their citizenship, immigration status, or national origin; or discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral, should contact IER’s worker hotline for assistance.

Provisional Staffing Solutions Settlement Agreement

A former employee of the Securities and Exchange Commission (SEC) pleaded guilty today in federal court in Washington, D.C., to making false statements in government filings in order to conceal his prohibited trading of options and other securities, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Inspector General Carl W. Hoecker of the SEC.

 

David Humphrey, 60, of Vail, Arizona, pleaded guilty before U.S. District Judge Rosemary Collyer of the District of Columbia in connection with multiple false statements he made on annual Office of Government Ethics Confidential Financial Disclosure Reports (Form 450s), as well as on internal SEC certifications of holdings. Sentencing is set for Aug. 8, 2017.

 

According to the plea agreement, Humphrey worked for the SEC in Washington, D.C., for 16 years and was a branch chief in the Division of Corporation Finance from 2004 to 2014. Applicable SEC employee ethics regulations prohibited Humphrey from trading options where the underlying interest was a security or group of securities and from purchasing or holding securities in entities the SEC directly regulates, such as financial institutions. In addition, within his role at the SEC, Humphrey was required to pre-clear securities transactions, make certifications that his holdings were in compliance with these regulations, and annually file Form 450s to disclose assets held for investments with a value greater than $1,000 or that produced more than $200 in income at the end of the reporting period.

 

Humphrey admitted that despite knowing the restrictions on SEC employees’ trading of options, he devised and executed an “options trading strategy” under which he traded options over 100 times from his SEC computer at various times between 2001 and 2014. During this period, in order to conceal his options trading, Humphrey admitted that he signed and submitted multiple Form 450s that failed to disclose reportable assets, including prohibited options. For example, in 2013, Humphrey submitted a false Form 450 that failed to report the sale of reportable options in 2012, and in 2014, he submitted a separate Form 450 that failed to report reportable options sales and investments holdings in 2013. Furthermore, in 2013 and 2014, Humphrey falsely certified that he was in compliance with all applicable SEC regulations relating to prohibited holdings, when in fact Humphrey had traded options in violation of those regulations, he admitted.

 

The SEC Office of Inspector General investigated the case. Trial Attorney Gary A. Winters of the Criminal Division’s Fraud Section is prosecuting the case.

WASHINGTON, D.C. – El Departamento de Justicia llegó a un acuerdo hoy con Provisional Staffing Solutions («Provisional»), una agencia de contratación temporal con sede en Cranston, Rhode Island. El acuerdo resuelve la investigación por parte del Departamento sobre si Provisional discriminó a individuos que no eran ciudadanos de los EE. UU. a la hora de comprobar sus documentos de autorización para trabajar, en contra de la ley de Inmigración y Nacionalidad (INA», por sus siglas en inglés).

 

La investigación del Departamento concluyó que Provisional, de forma rutinaria, solicitó a individuos que no eran ciudadanos de los EE. UU. que presentasen documentos de identidad específicos para demostrar que cuentan con autorización para trabajar, tales como una tarjeta de residencia permanente (PRC, por sus siglas en inglés), mientras que no pidieron documentos de identidad específicos a ciudadanos estadounidenses. En muchos casos, los ciudadanos estadounidenses y los residentes permanentes legales y otros individuos que no son ciudadanos de los EE. UU. pero que sí cuentan con autorización para trabajar disponen de los mismos documentos de identidad y autorización para trabajar y pueden elegir de las Listas de Documentos Aceptables para demostrar que tienen autorización para trabajar. La disposición antidiscriminatoria de la INA prohíbe que los empleadores sometan a sus empleados a requisitos documentales injustas con base en la ciudadanía o nacionalidad de origen de dichos empleados.

 

Conforme el acuerdo, Provisional deberá pagar una multa civil a los Estados Unidos que asciende a $16.290, publicar notificaciones para informar a los trabajadores acerca de sus derechos al amparo de la disposición antidiscriminatoria de la INA, capacitar a su personal de recursos humanos y someterse a los requisitos de declaración y supervisión del Departamento.

 

«El Departamento de Justicia les advierte a los empleadores que no deben crear barreras discriminatorias al empleo», declaró el Fiscal General en funciones, Tom Wheeler, de la División de Derechos Civiles. «Tanto las empresas grandes como las pequeñas deben asegurar que sus prácticas en lo que se refiere al Formulario I-9 cumplan con las leyes federales. Agradecemos la cooperación de Provisional con el Departamento por abordar este asunto».

 

La Sección de Derechos de Inmigrantes y Empleados (IER, por sus siglas en inglés), que anteriormente se conocía como la Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a Inmigración, que pertenece a la División, es responsable de aplicar la disposición antidiscriminatoria de la INA. Entre otras cosas, esta ley prohíbe la discriminación por motivos de estatus migratorio, ciudadanía o nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión; la discriminación en el proceso de verificación de la elegibilidad para trabajar; las represalias y la intimidación.

 

Para más información sobre protecciones contra la discriminación en el empleo en virtud de las leyes migratorias, llame a la línea directa de la IER para trabajadores al 1‑800‑255-7688 (1‑800-237-2515, TTY para personas con discapacidades auditivas); llame a la línea directa de la IER para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidades auditivas); matricúlese para un seminario en línea gratuito; mande un correo electrónico a IER@usdoj.gov o visite la página web de la IER en inglés o español.

 

Aquellos postulantes o empleados que creen haber sido sometidos a otros requisitos documentales por motivos de su estatus migratorio, ciudadanía o nacionalidad de origen, o a la discriminación por motivos de su estatus migratorio, ciudadanía o nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión deben llamar a la línea directa de la IER para trabajadores para pedir ayuda.

 

Settlement Agreement

FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced the investiture of seven new immigration judges. Chief Immigration Judge MaryBeth Keller presided over the investiture during a ceremony held May 5, 2017, at EOIR headquarters in Falls Church, Va.

After a thorough application process, Attorney General Jeff Sessions appointed Nina M. Carbone, Jennifer I. Gaz, Charlotte S. Marquez, Jose L. Peñalosa Jr., Donald W. Thompson, David C. Whipple, and Ryan R. Wood to their new positions.

Biographical information follows.

Nina M. Carbone, Immigration Judge, Aurora Immigration Court

Attorney General Jeff Sessions appointed Nina M. Carbone to begin hearing cases in April 2017. Judge Carbone earned a Bachelor of Arts degree in 2005 from the University of Kansas and a Juris Doctor in 2008 from the John Marshall Law School. From 2015 to 2017, she served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Denver, Colo. From 2012 to 2015, she was an associate general counsel at the Employee Labor Relations Unit, Office of the General Counsel, Executive Office for Immigration Review (EOIR), Department of Justice (DOJ). From 2010 to 2012, she served as an attorney advisor in the Office of the Chief Immigration Judge, EOIR, DOJ. From 2008 to 2010, she served as a judicial law clerk at the Miami Immigration Court, EOIR, DOJ, entering on duty through the Attorney General’s Honors Program. Judge Carbone is a member of the Illinois State Bar.

Jennifer I. Gaz, Immigration Judge, Eloy Immigration Court

Attorney General Jeff Sessions appointed Jennifer I. Gaz to begin hearing cases in April 2017. Judge Gaz earned a Bachelor of Arts degree in 1994 from the University of Illinois at Urbana–Champaign and a Juris Doctor in 1997 from the DePaul University College of Law. From May 2007 through April 2017, she served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Eloy and Phoenix, Ariz. From November 2003 to April 2007, she was an associate attorney with Wolin, Kelter & Rosen Ltd. From October 2000 to October 2003, she served as staff counsel with the Office of the General Counsel, Chicago Housing Authority. From 1999 to 2000, she was an associate attorney with Fraterrigo, Beranek, Feiereisel & Kasbohm in Chicago. From 1997 to 1999, she was an associate attorney with Eannace, Meade & Associates. Judge Gaz is a member of the Illinois State Bar.

Charlotte S. Marquez, Immigration Judge, New Orleans Immigration Court

Attorney General Jeff Sessions appointed Charlotte S. Marquez to begin hearing cases in April 2017. Judge Marquez earned a Bachelor of Science degree in 1995 from Louisiana State University and a Juris Doctor in 1998 from Tulane Law School. From March 2006 to April 2017, she served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in New Orleans, La. From June 2000 through March 2006, she was an associate attorney with Jones Walker LLP. From August 1998 to June 2000 she was an associate attorney with McCalla, Thompson, Pyburn, Hymowitz & Shapiro LLP. Judge Marquez is a member of the Louisiana State Bar.

José Luis Peñalosa Jr., Immigration Judge, Adelanto Immigration Court

Attorney General Jeff Sessions appointed José Luis Peñalosa Jr. to begin hearing cases in April 2017. Judge Peñalosa earned a Bachelor of Arts degree in 1986 from the University of California, Los Angeles, and a Juris Doctor in 1989 from the Arizona State University Sandra Day O’Connor College of Law. From May 1993 to April 2017, he was a solo practitioner at Peñalosa & Associates P.C. From May 1991 to May 1993, he was an attorney with Friendly House Inc. in Phoenix. Judge Peñalosa is a member of the State Bar of Arizona and the Colorado Bar.

Donald W. Thompson, Immigration Judge, New York City Immigration Court

Attorney General Jeff Sessions appointed Donald W. Thompson to begin hearing cases in April 2017. Judge Thompson earned a Bachelor of Arts degree in 2003 from the College of New Jersey and a Juris Doctor in 2006 from the Seton Hall University School of Law. From September 2007 to April 2017, he served as an assistant chief counsel for the Office of Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in San Francisco and New York, N.Y. From 2006 to 2007, he clerked for the Honorable Estela De La Cruz of the New Jersey Superior Court. Judge Thompson is a member of the New York and New Jersey State Bars.

David C. Whipple, Immigration Judge, Cleveland Immigration Court

Attorney General Jeff Sessions appointed David C. Whipple to begin hearing cases in April 2017. Judge Whipple earned a Bachelor of Arts degree in 1991 and a Master of Arts in 1995 from the University of Michigan, and a Juris Doctor in 2007 from the University of Idaho College of Law. From March 2016 to April 2017, he served as a special assistant U.S. attorney in the U.S. Attorney’s Office, District of Arizona, Department of Justice. From October 2009 through April 2017, he served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Eloy and Florence, Ariz. From May 2007 to October 2009, he served as a deputy prosecuting attorney for the Office of the Kootenai County Prosecuting Attorney in Idaho. Judge Whipple is a member of the Idaho State Bar.

Ryan R. Wood, Immigration Judge, Bloomington Immigration Court

Attorney General Jeff Sessions appointed Ryan R. Wood to begin hearing cases in April 2017. Judge Wood earned a Bachelor of Arts degree in 2000 from Hamline University, a Juris Doctor in 2004 from the Hamline University School of Law, and a Master of Business Administration in 2015 from the Hamline University School of Business. From November 2014 to April 2017, he served as a special assistant U.S. attorney in the U.S. Attorney’s Office, District of Minnesota, Department of Justice. From October 2009 through November 2014, he served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Fort Snelling, Minn. From January 2005 to October 2009, he was a judge advocate with the U.S. Army Judge Advocate General Corps, serving in the 4th and 7th Infantry Divisions. Judge Wood is a member of the Minnesota State Bar.

Bumble Bee Foods LLC has agreed to plead guilty for its role in a conspiracy to fix the prices of shelf-stable tuna fish, such as canned and pouch tuna, sold in the United States, the Department of Justice announced.

 

According to a one-count felony charge filed today in the U.S. District Court for the Northern District of California in San Francisco, Bumble Bee and its co-conspirators agreed to fix the prices of shelf-stable tuna fish from as early as the first quarter of 2011 through at least as late as the fourth quarter of 2013. In addition to agreeing to plead guilty, Bumble Bee has agreed to pay a $25 million criminal fine, which will increase to a maximum criminal fine of $81.5 million, payable by a related entity, in the event of a sale of Bumble Bee subject to certain terms and conditions. Bumble Bee has also agreed to cooperate with the Antitrust Division’s ongoing investigation. The plea agreement is subject to court approval.

 

“Today’s charge is the third to be filed – and the first to be filed against a corporate defendant – in the Antitrust Division’s ongoing investigation into price fixing among some of the largest suppliers of packaged seafood,” said Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division. “The division, along with our law enforcement colleagues, will continue to hold these companies and their executives accountable for conduct that targeted a staple in American households.”

 

“We echo the Department of Justice Antitrust Division's sentiment,” said Special Agent in Charge John F. Bennett of the FBI’s San Francisco Division. “Companies small and large hold a great deal of the American peoples’ trust and this type of unfair, greedy behavior will not be tolerated.”

 

Today’s charge is the result of an ongoing federal antitrust investigation into the packaged seafood industry, which is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office. Anyone with information on price fixing, bid rigging or other anticompetitive conduct related to the packaged seafood industry should contact the Antitrust Division’s Citizen Complaint Center at (888) 647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the FBI tip line at (415) 553-7400.

 

Bumble Bee Information

A federal court in Greenbelt, Maryland has found that Marvin L. Binion Sr. violated the Court’s previous permanent injunction barring him from preparing tax returns for others and from operating a tax preparation business, announced Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. The Court ordered Binion Sr. to comply with the previously entered injunction and to pay the United States $29,914.38 for its costs incurred in investigating whether Binion Sr. had complied with the injunction.

 

U.S. District Court Judge Roger W. Titus of the District of Maryland entered the order, with Binion Sr.’s consent, finding that Binion Sr. violated the court’s May 8, 2013 permanent injunction. According to the United States’ supplemental filing in this case, despite the 2013 injunction, Binion, Sr. was preparing tax returns for others and running and/or profiting from a tax return preparation business called Universal Tax Services located at 717 Kennedy Street NW in Washington, DC. The United States also alleged that Binion Sr. had his customers mail in paper returns without identifying him as the paid tax return preparer. Before the government filed suit for an injunction against Binion Sr. in 2013, a federal court in Greenbelt, Maryland sentenced Binion Sr. in 2008, to prison for aiding and assisting in the filing of false income tax returns.

 

In addition to imposing a civil compensatory judgment for the government’s investigation costs, the court also ordered Binion Sr. to produce bank records and customer lists to the United States, and to send a letter to his customers informing them that he is barred from preparing federal tax returns for others.

 

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on their website for choosing a tax 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.

Dismantling transnational criminal organizations is a priority of President Trump’s administration and the Department of Justice is committed to taking down these groups.

“Transnational criminal organizations represent one of the gravest threats to American public safety today,” said Attorney General Jeff Sessions. “The Justice Department has zero tolerance for these vicious organizations and our message to them is: We will find you. We will devastate your networks. We will starve your revenue sources, deplete your ranks and seize your profits. We will not concede a single block or street corner to your vicious tactics.”

As part of the commitment to dismantling these organizations, the president has issued an Executive Order on Enforcing Federal Law with Respect to Transnational Criminal Organizations and Preventing International Trafficking. Pursuant to the Executive Order, the Department of Justice is issuing a report detailing convictions in the United States relating to transnational criminal organizations and their subsidiaries.

The attached report, provided in accordance with Section 3 (g) of the Executive Order, provides information pertaining to the number of convictions in investigations involving transnational criminal organizations as reported by the Organized Crime Drug Enforcement Task Forces (OCDETF), for the period beginning Jan. 1, 2017, and ending March 31, 2017.

The report shows 421 convictions in cases targeting transnational criminal organizations, which is 42 percent of the total number of convictions reported during the quarter for the OCDETF Program.

Convictions of Members of Transnational Criminal Organizations and their Subsidiaries

President Trump’s Executive Order on Public Safety in the Interior of the United States requires the Department of Justice to collect relevant data and provide quarterly reports on data collection efforts. The data in this release shows a significant prison population of incarcerated aliens.

“Illegal aliens who commit additional crimes in the United States are a threat to public safety and a burden on our criminal justice system,” said Attorney General Jeff Sessions. “This is why we must secure our borders through a wall and effective law enforcement, and we must strengthen cooperation between federal, state and local governments as we strive to fulfill our sacred duty of protecting and serving the American people.”

Below is a summary of data collected under Section 16 of the Order, which directs “the Secretary [of Homeland Security] and the Attorney General . . . to collect relevant data and provide quarterly reports” regarding the following subjects: (a) the immigration status of all aliens incarcerated under the supervision of the Bureau of Prisons; (b) the immigration status of all aliens incarcerated as federal pretrial detainees; and (c) the immigration status of all convicted aliens in state prisons and local detention centers throughout the United States.

Information Regarding Immigration Status of Aliens Incarcerated Under the Supervision of the Federal Bureau of Prisons

The Department’s Bureau of Prisons (BOP) has an operational process for maintaining data regarding foreign-born inmates in its custody. On a daily basis, BOP supplies this data to Immigration and Customs Enforcement (ICE). ICE, in turn, analyzes that data to determine the immigration status of each inmate and provides that information back to BOP.

By way of satisfying the department’s first quarterly report of this data, below is information regarding aliens currently incarcerated under the supervision of BOP. This data is current as of March 25, 2017:

There are 45,493 foreign-born inmates currently in BOP custody, of which 3,939 are U.S. citizens (either naturalized or derivative). Of the remaining 41,554 foreign-born inmates (aliens):

          o Approximately 22,541 (54.2 percent) are aliens for which final immigration orders have been issued for their removal;

          o Approximately 13,886 (33.4 percent) are aliens who are under ICE investigation for possible removal;

          o Approximately 5,101 (12.3 percent) are aliens still pending adjudication (in other words, ICE has charged these aliens as removal cases, but a final disposition has not yet been reached); and

          o Approximately 26 (0.1 percent) are aliens who have been granted relief on the basis of asylum claims.

Information Regarding the Immigration Status of Aliens Incarcerated as Federal Pretrial Detainees

The United States Marshals Service (USMS) is the Justice Department’s component charged with housing and care of federal pretrial detainees. USMS recently instituted a program to capture data regarding the immigration status of these detainees. During the prisoner intake process, USMS captures arrestee data such as place of birth, citizenship country and alien number (if available), in a system called the Justice Detainee Information System (JDIS).

At the department’s direction, USMS has begun providing ICE with complete data on all foreign-born detainees on a daily basis. The first of these data transfers to ICE took place on April 5, 2017, with a transfer of data associated with approximately 19,000 foreign-born detainees. ICE anticipates that its analysis of this data will soon be complete, and the department will then provide an updated status report.

Immigration Status of All Convicted Aliens Incarcerated in State Prisons and Local Detention Centers Throughout the United States

The Department of Justice and the Department of Homeland Security (DHS) do not currently have a program that collects data regarding the immigration status of convicted aliens incarcerated in state prisons and local detention centers throughout the United States. Neither the Department of Justice nor DHS can independently collect this data without the assistance of the other. To address this need, the Department of Justice is in the process of establishing such a program through its Office of Justice Programs (OJP), which houses the Bureau of Justice Statistics (BJS). BJS already collects some relevant aggregate data from state and local facilities and the department intends to permanently expand BJS’s data collection efforts in this area.

A former resident of Poplar Grove, Illinois was sentenced today to 87 months in prison for filing tax returns using stolen identities, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

According to documents filed with the court, from 2012 through 2014, Shameka Carr, 30, used stolen IDs to file tax returns seeking fraudulent tax refunds with the Internal Revenue Service (IRS). Carr directed the IRS to send the refunds in the form of prepaid debit cards and refund checks mailed to addresses that she controlled in Rockford, Illinios and its surrounding areas. Carr admitted to an intended tax loss of $1,026,284.

 

In addition to the term of prison imposed, Carr was also ordered to serve three years of supervised release and to pay $365,764 in restitution to the IRS. Carr pleaded guilty on January 24 to mail fraud and aggravated identity theft.

 

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation and the U.S. Postal Inspection Service, and the Boone County Sheriff’s Department, who conducted the investigation, and Trial Attorneys Michael C. Boteler and John T. Mulcahy of the Tax Division, who prosecuted the case.

 

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

 

A federal grand jury sitting in West Palm Beach, Florida returned an indictment on April 25, which was unsealed today, charging a Florida resident with corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, filing false tax returns, theft of government property and money laundering, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

According to the indictment, David R. Andre of Boynton Beach, Florida, filed false income tax returns with the Internal Revenue Service (IRS) from 2010 to 2015 that sought more than $5.6 million in fraudulent tax refunds. The indictment further alleges that the IRS paid out approximately $463,920, which was deposited into Andre’s personal bank account. Andre also allegedly attempted to impede the due administration of the internal revenue laws by making false statements to IRS agents during interviews in 2015. According to the indictment, Andre falsely stated to IRS agents that he purchased his residence with inheritance proceeds, when in fact he purchased it with illegal proceeds from the tax refund fraud.

 

An indictment merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.

 

If convicted, Andre faces a statutory maximum sentence of three years in prison for corruptly endeavoring to impede the due administration of the internal revenue laws, three years in prison for each count of filing a false tax return, 10 years in prison for each count of theft of government property, and 10 years in prison for each money laundering count. Andre also faces a period of supervised release, restitution, forfeiture and monetary penalties.

 

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Daniel McGraw and Charles Edgar Jr. of the Tax Division, who are prosecuting the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Southern District of Florida for its substantial assistance.

 

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

 

          Today, SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant CRAMER CHENNAUX, age 30, was sentenced in District Court to 57 months imprisonment, to be followed by three of supervised release, and 100 hours of community service. The Court also ordered CHENNAUX to pay a mandatory $100 assessment fee. In addition, defendants convicted of a federal drug offense may no longer qualify for certain federal benefits.

          On May 25, 2016, CHENNAUX was charged by Indictment with Possession of Methamphetamine with Intent to Distribute. On July 27, 2016, CHENNAUX entered a guilty plea to an Information charging him with Possession of Methamphetamine with Intent to Distribute, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(C). Law enforcement had received information that CHENNAUX was in possession of a large amount of methamphetamine at a hotel room. They subsequently seized over 122 grams of methamphetamine, with a 99 percent purity level. Officers also discovered $7,200.00 during the search. The money was administratively forfeited.

          The investigation was conducted by DEA, Superior Court of Guam Marshals Division, Guam Superior Court Probation Office, Guam Police Department, and the U.S. Marshals Service. The case was prosecuted by Clyde Lemons, Jr., Assistant U.S. Attorney.

          Today, SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant GEORGINA J. CAMACHO, age 30, was sentenced in District Court to a 12-month term of imprisonment, to be followed by four years of supervised release. She was also ordered to pay a mandatory $200 assessment fee, restitution in the amount of $26,237.43 and 50 hours of community service.

          On June 20, 2016, Defendant CAMACHO waived Indictment and entered a plea of guilty to an Information charging her with two counts of Financial Institution Fraud, in violation of 18 U.S.C. § 1344. The investigation revealed that CAMACHO defrauded Navy Federal Credit Union (NFCU), the Navy Exchange Services Command (NEX), and the Army and Air Force and Exchange Services (AAFES) by writing checks drawn from her NFCU account which had insufficient funds and was closed. From May 27, 2015 to June 6, 2015, CAMACHO wrote 39 checks, made them payable to and negotiated them at the NEX and AAFES, in order to obtain merchandise from them. The NEX and AAFES incurred losses of $16,537.98 and $9,699.45, respectively.

          The case was investigated by agents of the U.S. Naval Criminal Investigative Service, and the 36th Security Forces Squadron, Andersen Air Force Base. The case was prosecuted by Marivic P. David, Assistant United States Attorney for the District of Guam.

The creator and lead administrator of Playpen, a highly sophisticated website dedicated to the sexual abuse of children which operated on the Tor anonymity network, was sentenced today for his role in this global child exploitation enterprise.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina; Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division; Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division; Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division; and Former Special Agent in Charge Paul Wysopal of the FBI’s Tampa, Florida, Division made the announcement.

Steven W. Chase, 58, of Naples, Florida, was sentenced to 30 years in prison, along with a lifetime term of supervised release, and was ordered to forfeit his residence in Naples by U.S. District Judge Richard L. Voorhees of the Western District of North Carolina.  On Sept. 16, 2016, a federal jury found Chase guilty of one count of engaging in a child exploitation enterprise, one count of advertising child pornography, three counts of transportation of child pornography and one count of possession of child pornography.  The jury also returned a special verdict determining that Chase should be ordered to forfeit all property derived from, involved in, or traceable to his criminal activities, to include his Naples residence.  

“Child predators use online forums on anonymous networks to abuse and exploit children, preying on the inexperienced and vulnerable in society.  This pervasive and global problem demands an aggressive, technology-driven response,” said Acting Assistant Attorney General Blanco.  “The sentencing of the creator of the Playpen forum – along with the identification, apprehension and prosecution of forum members around the country – sends a message that online predators will be caught and prosecuted.  While identifying and apprehending these criminals can be challenging, it is not impossible, and together with our domestic and foreign partners we will use every legal authority and technical tool we have to root out these predators and protect children from harm.” 

“Chase was the mastermind and gatekeeper of Playpen, a hidden, members-only Internet platform and a safe-haven for those looking to view and trade child pornography without detection.  The depiction of the horrendous sexual exploitation of innocent and vulnerable children is a crime my office takes very seriously,” said U.S. Attorney Westmoreland Rose. “Today’s sentence delivers a clear message that the dark web is not a safe place for those looking to possess, receive and share child pornography: this type of criminal activity will land you in jail for a long time.” 

“The abuse of an innocent child is among the most unconscionable offenses,” said Assistant Director Richardson.  “When multiple people conspire to develop and promote a malicious website to sexually assault and exploit children, the FBI furthers its resolve to find these perpetrators.  As I have said before and as today’s sentencing proves, the FBI will stop at nothing to deliver justice for these innocent victims.  We owe a debt of gratitude to the men and women of the FBI and our international partners for their dedication and hard work on this case.”

Evidence at trial established that beginning in August 2014, Chase created the Playpen website as a Tor hidden service, which only permitted individuals operating on the Tor anonymity network to access the site.  Evidence at trial further established that Chase served as lead administrator of Playpen, through which he and more than 150,000 other members authored and viewed tens of thousands of postings involving the sexual abuse of children.  Images and videos shared through the website were highly categorized towards victim age and gender, as well as the type of sexual activity, according to trial evidence.  Testimony at trial also established that in addition to use of the Tor anonymity network, website members employed other advanced technological means in order to thwart law enforcement’s efforts, including elaborate file encryption.   

As lead administrator of the website, trial evidence demonstrated that Chase: chose the name of the website; selected and made payments to the website hosting company; regularly updated the website with new features and security fixes; promoted several members of the website to Administrator and Moderator status to assist with the administration of the criminal enterprise; and spent hundreds of hours logged in to the website – personally authoring hundreds of postings.

Chase was arrested following a court-authorized search of his home on Feb. 19, 2015.  Forensic examination of a computer and devices seized pursuant to the search revealed that he was in possession of thousands of images depicting the sexual abuse of children as young as infants and toddlers. 

Chase’s co-defendants Michael Fluckiger, 46, of Portland, Indiana, and David Lynn Browning, 47, of Wooton, Kentucky, the co-administrator and global moderator of the website, respectively, pleaded guilty in December 2015 to engaging in a child exploitation enterprise for their roles in helping Chase run the website.  On Jan. 12, 2017, Fluckiger was sentenced to 240 months in prison for engaging in a child exploitation enterprise, along with lifetime supervised release.  On Feb. 7, 2017, Browning was sentenced to 240 months in prison for engaging in a child exploitation enterprise, along with a lifetime term of supervised release.

Following Chase’s arrest, the FBI obtained approval from a federal court to deploy a Network Investigative Technique (NIT) to pierce through the anonymity provided by the Tor network and obtain IP address and other basic, computer-related information to help locate and identify the users of the website Chase created.  The FBI subsequently issued investigative leads to offices in every U.S. State.  As a result of the ongoing investigation, at least 350 U.S.-based individuals have been arrested, 25 producers of child pornography have been prosecuted, 51 alleged hands-on abusers have been prosecuted and 55 American children who were subjected to sexual abuse have been successfully identified or rescued.  

International lead information was coordinated through EUROPOL’s European Cybercrime Center (EC3), who received and disseminated information through its network of member states, and the FBI Legal Attaché network.  The ongoing international investigation has yielded at least 520 arrests and the successful identification and rescue of at least 186 children who were subjected to sexual abuse.

The FBI’s Violent Crimes Against Children Section, Major Case Coordination Unit and Digital Analysis and Research Center investigated the case with assistance from the FBI’s Charlotte, Tampa and Boston Field Offices.  Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Cortney Randall of the Western District of North Carolina prosecuted 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.

The Department of Justice announced today that Deere & Company and the Monsanto Company terminated Deere’s attempt to purchase Precision Planting LLC from Monsanto. The department filed suit on Aug. 31, 2016, to block the acquisition, alleging that the transaction was a merger-to-monopoly in high-speed precision planting systems, an innovative technology that enables farmers to accurately plant corn, soybeans and other row crops at up to twice the speed of a conventional planter. The case was scheduled for trial in U.S. District Court in Chicago on June 5, 2017.

“The companies’ decision to abandon this transaction is a victory for American farmers and consumers,” said Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division. “Had this acquisition gone forward, significant head-to-head competition between Deere and Monsanto’s Precision Planting – competition that has led to lower prices and more innovative products – would have been lost. Agriculture is one of the most important sectors of our economy and the Antitrust Division will remain vigilant to ensure that competition in agriculture markets is not thwarted through illegal transactions.”

The proposed acquisition would have combined the only two significant U.S. providers of high-speed precision planting systems. Planting at higher speeds can be highly valuable to farmers, many of whom have a limited window each year to plant their crops to achieve the highest crop yields. As a result, high-speed precision planting technology is expected to become the industry standard in the coming years.

Deere & Company, a Delaware corporation headquartered in Moline, Illinois, is the largest manufacturer of planting equipment in the United States, including its ExactEmerge high-speed precision planting system.

Precision Planting LLC is a Delaware limited liability company headquartered in Tremont, Illinois. It is a leading innovator in planting equipment, including its SpeedTube high-speed precision planting system. Precision Planting is a subsidiary of Monsanto Company, a Delaware corporation headquartered in St. Louis, Missouri.

A Queens, New York tax return preparer was sentenced to serve 24 months in prison today for filing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

Williesteina Jacobs was convicted in July 2016 by a federal jury in the U.S. District Court for the Eastern District of New York. According to documents filed with the court and evidence presented at trial, Jacobs operated International Professional Business Services, a tax preparation business located in South Richmond Hill, New York, and Jamaica, New York. From 2007 through 2010, Jacobs filed false individual income tax returns with the Internal Revenue Service (IRS) on behalf of her clients and claimed refunds to which they were not entitled. These tax returns claimed false business losses and reported grossly inflated or fictitious deductions for, among other things, charitable donations.

 

In addition to the term of prison imposed, Jacobs was also ordered to serve one year of supervised release and to pay restitution to the IRS in the amount of $31,188.

 

Acting Deputy Assistant Attorney General Goldberg commended agents of IRS–Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Yael T. Epstein and Andrew J. Kameros, who prosecuted the case.

 

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

          Today, SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant KISANO OPISBO aka ENRICKSON FREDRICK, age 43, a citizen of the Federated States of Micronesia (FSM), was sentenced on April 27, 2017, in District Court, to five months and 18 days imprisonment. The Court also ordered a three-year term of supervised release following OPISBO’S release, in addition to the payment of a mandatory $100 assessment fee.

          On December 13, 2016, OPISBO was charged by Indictment with Illegal Reentry of Removed Alien, in violation of 8 U.S.C. § 1326(a) and (b)(2). On January 27, 2017, OPISBO entered a guilty plea to the charge. OPISBO was previously deported to the FSM in December 2002. His deportation followed a conviction on Guam for Burglary, Fourth Degree Criminal Sexual Conduct, and Indecent Exposure. OPISBO had no permission to return to the United States. He later changed his name and obtained a new passport, which enabled his travel to Hawaii and then South Carolina. On November 11, 2016, while traveling to Pohnpei via Guam, federal immigration authorities arrested OPISBO after determining his true identity through biometric data.

          Acting United States Attorney Anderson stated, “The enforcement of federal immigration laws is a high priority for the Department of Justice. Our office will continue to hold criminal aliens accountable for unlawfully entering the United States.”

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

The U.S. Court of Appeals for the D.C. Circuit today affirmed the decision by the District Court for the District of Columbia blocking health insurer Anthem, Inc.’s acquisition of Cigna Corp., the Justice Department announced.  Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division released the following statement today after the ruling in United States et al. v. Anthem, Inc. and Cigna Corp.:

“We are pleased with the appellate court’s decision. It upholds an injunction against the merger of two of the country’s largest health insurers, which not only would have led to higher prices but also slowed innovation and harmed consumers by weakening value-based offerings aimed at lowering medical costs. The decision confirms the district court’s conclusion that the merger would not have provided real benefits to consumers, but instead would have harmed competition in these important markets.

“I am proud of the outstanding work done by the trial team, who established that this merger would be anticompetitive, and by the lawyers who defended the case on appeal. As this case shows, the Antitrust Division and our state partners will continue to vigorously protect competition and enforce the antitrust laws in this critical industry.”

In July 2016, the Antitrust Division filed a lawsuit in the U.S. District Court for the District of Columbia seeking to block Anthem’s $54 billion acquisition of Cigna, the largest proposed transaction in the history of the healthcare industry. The division’s complaint alleged that the merger would substantially lessen competition in the health insurance industry in dozens of markets throughout the United States. 

The Division tried the case before Judge Amy Berman Jackson over a seven-week period from Nov. 21, 2016, to Jan. 3, 2017. On Feb. 8, 2017, Judge Jackson ruled in favor of the Division and blocked the proposed merger. She found that the merger was likely to substantially lessen competition in the market for the sale of health insurance to national accounts based in fourteen states, and in the sale of health insurance to large employers in Richmond, Virginia. Five days after the court’s decision, Anthem filed a brief appealing the decision and separately requested expedited review from the court of appeals. Oral argument was held six weeks later on March 24, 2017.

The United States was joined in the lawsuit by the District of Columbia and the States of California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New Hampshire, New York, Tennessee and Virginia.

Attorney General Jeff Sessions today announced the appointment of Dana Boente as Acting Assistant Attorney General of the National Security Division. Boente succeeds Acting Assistant Attorney General Mary McCord, who serves as the Principal Deputy Assistant Attorney General and who recently announced that she would be departing in May.

“Dana Boente has been a dedicated public servant for decades and has served in important leadership roles in the Department of Justice,” said Attorney General Sessions. “In recent months, he has provided extraordinary leadership during the transition period. I am pleased that he has agreed to continue his service by leading our efforts to keep America safe. I also thank Mary McCord for her dedicated service to the department.”

Prior to this appointment, Boente had been serving as the Acting Deputy Attorney General since Jan. 30, 2017, and has served and will continue to serve as the U.S. Attorney for the Eastern District of Virginia since his confirmation by the U.S. Senate on Dec. 15, 2015. Boente was appointed by the Attorney General in December 2012 to serve as the U.S. Attorney for the Eastern District of Louisiana, a position he held until September 2013. Boente began his career with the Justice Department in 1984 with the Tax Division, and in January 2001 he became an Assistant U.S. Attorney in the Fraud Unit of the Eastern District of Virginia.

From 2005 to 2007, Boente served as the Principal Deputy Assistant Attorney General of the Tax Division. Following his service with the Tax Division, he returned to the Eastern District of Virginia when he was selected as the First Assistant U.S. Attorney. He served as acting U.S. Attorney for that office from October 2008 through September 2009 and from Sept. 23, 2013 until his Senate confirmation.

          Today, SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant PETER ANTHONY CONCEPCION SANTOS, age 44, was sentenced in District Court to a 63-month term of imprisonment, to be followed by three years of supervised release, and 100 hours of community service. The Court also ordered SANTOS to pay a mandatory $100 assessment fee. In addition, defendants convicted of a federal drug offense may no longer qualify for certain federal benefits.

          November 18, 2015, SANTOS was charged by Superseding Indictment with Conspiracy to Distribute Methamphetamine Hydrochloride and Attempted Possession with Intent to Distribute Methamphetamine Hydrochloride. On February 23, 2016, SANTOS entered a guilty plea to an Information charging him with Attempted Possession with Intent to Distribute Methamphetamine Hydrochloride, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(C) and 18 U.S.C. § 2. The United States also sought forfeiture of related assets under federal law. The investigation revealed that SANTOS, and others, agreed to use the mail system to distribute large quantities of methamphetamine on Guam. Law enforcement seized approximately 4.5 kilo grams of methamphetamine, with a 99 percent purity level. Officers also discovered $2,772 during a search incident to the arrest of SANTOS. SANTOS testified at trial against his co-defendant Justin Cruz. Cruz was sentenced on March 22, 2017, to 35 years imprisonment for Conspiracy to Distribute methamphetamine.

          The investigation was pursued by the Organized Crime Drug Enforcement Task Force (OCDETF), a specialized multi-agency, multi-jurisdictional law enforcement team effort. OCDETF investigates and prosecutes the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies.

          This OCDETF investigation involved federal agents and local law enforcement officers of the U.S. Postal Inspection Service (USPIS), Drug Enforcement Administration (DEA), U.S. Department of Homeland Security Investigations (HSI), Guam Police Department (GPD), Guam Customs and Quarantine Agency (GCQA), Superior Court of Guam Probation Office, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), U.S. National Oceanic Atmosphere Administration (NOAA), and U.S. Coast Guard Criminal Investigative Service (CGIS). The case was prosecuted by Clyde Lemons, Jr., an Assistant United States Attorney for the District of Guam.

          Acting United States Attorney SHAWN N. ANDERSON, for the Districts of Guam and the Northern Mariana Islands (NMI), wants to encourage the public to participate in the Drug Enforcement Administration’s National Prescription Drug Take Back Day on Saturday, April 29, 2017.

          On October 22, 2016, the public turned in 731,269 pounds—almost 366 tons—of medication to DEA and more than 4,000 of its community partners at almost 5,200 collection sites nationwide. Over the life of the program, 7.1 million pounds (more than 3,500 tons) of prescription drugs have been removed from medicine cabinets, kitchen drawers, and nightstands by citizens around the country.

          Unused medicines in the home are a problem because the majority of the 6.4 million Americans who abused CPDs in 2015, including the almost 4 million who abused prescription painkillers, say they obtained those drugs from friends and family, including from a home medicine cabinet, according to the National Survey on Drug Use and Health released last month. Some painkiller abusers move on to heroin: four out of five new heroin users started with painkillers.

          Almost 30,000 people—78 a day—died from overdosing on these painkillers or heroin in 2014, according to the Centers for Disease Control and Prevention.

          This initiative addresses a vital public safety and public health issue. Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. In addition, Americans are now advised that their usual methods for disposing of unused medicines—flushing them down the toilet or throwing them in the trash—both pose potential safety and health hazards.

          Collection sites will be set up throughout communities nationwide. The following sites in Guam and in the NMI are designated to receive unused prescription drugs:

• Naval Base Guam (Navy Exchange Food Court)
• Agana Shopping Center (Across Vitamin World)
• Andersen Air Force Base Exchange (Front Entrance)
• Saipan Commonwealth Health Center (in front of the pharmacy)

For more information on prescription drug abuse, go to: www.dea.gov, www.getsmartaboutdrugs.com, or www.justthinktwice.com.

After being convicted at trial, three Northern California real estate investors were sentenced today for their role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Robert Alhashash Rasheed, John Lee Berry III and Refugio Diaz were charged on Nov. 19, 2014, in an indictment returned by a federal grand jury in the Northern District of California. They were convicted of one count each of conspiring to rig bids on Dec. 15, 2016. Today, Rasheed was sentenced to serve fourteen months in prison and serve 1260 hours of community service in lieu of paying a criminal fine, Berry was sentenced to serve ten months in prison and ordered to serve 974 hours of community service in lieu of paying a criminal fine and Diaz was sentenced to serve eight months in prison and ordered to serve 579 hours of community service in lieu of paying a criminal fine.

Between May 2008 and December 2010, the defendants conspired with others not to bid against one another, instead designating a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County. The members of the conspiracy then held second, private auctions to award the properties to members of the conspiracy and determine payoffs for other conspirators who had agreed not to bid against each other at the public auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. The primary purpose of the conspiracies was to suppress and eliminate competition in order to obtain selected real estate offered at Alameda County public foreclosure auctions at noncompetitive prices. 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, if any, paid to the homeowner.

The sentence announced today is a result of the department’s ongoing investigation into bid rigging at public real estate foreclosure auctions in California’s Alameda, Contra Costa, San Francisco and San Mateo counties. These investigations are 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.

A federal court in Kansas City, Kansas has permanently barred Everett Bias and Integrity Solutions Tax Consultants Inc. (ISTC) from preparing federal tax returns for others, the Justice Department announced today.

 

In its complaint, the government alleged that Bias and ISTC prepared false returns for customers located in both Kansas City, Kansas and Kansas City, Missouri. In addition to barring the defendants from preparing tax returns, the court ordered the defendants to contact all customers for whom they prepared federal tax returns since 2014 to inform them of the permanent injunction and provide the United States with a list of all of these persons.

 

According to the government’s complaint, Bias and ISTC unlawfully prepared federal tax returns that lowered their customers’ federal tax liabilities by using S corporations. This type of corporation passes corporate income, losses, deductions, and credits to its shareholders for federal tax purposes. Shareholders report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. According to the government’s complaint, Bias and ITSC:

 

• Failed to report S corporation pass-through income as taxable income on the customers’ personal income tax returns;

• Falsely lowered the income of customers’ S corporations and then reported that false lowered income amount on the customers’ personal income tax returns;

• Improperly double-deducted customers’ personal expenses, such as mortgage interest and real estate taxes, on customers’ corporate and personal returns; and

• Concocted S corporations in order to improperly deduct customers’ personal expenses as business expenses and lower pass through income or create a phony flow through loss.

 

The government similarly alleged that Bias and ISTC concocted businesses for customers claiming that they were sole proprietors -- which are required to report its profit or loss on a Schedule C (Form 1040, Schedule C, “Profit or Loss from Business”) to the income tax return -- then fabricated the income and expenses of the fictitious business to show a loss, which falsely lowered their customers’ taxable income. Finally, the government alleged that Bias and ISTC fabricated itemized deductions such as unreimbursed employee business expenses and medical/dental expenses on their customers’ personal tax returns.

 

Return preparer fraud was one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on their website for choosing a tax 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.

 

Tonight Attorney General Jeff Sessions issued the following statement:

 

“The American people demand a lawful system of immigration.  Congress has established a lawful system of immigration.  At the heart of this immigration debate is disagreement over whether illegally entering this country is a crime. Our duly enacted laws answer that question.

 

“Nevertheless, actions that have always been understood to be squarely within the powers of the President, regardless of the Administration, have now been enjoined. The Department of Justice cannot accept such a result, and as the President has made clear, we will continue to litigate this case to vindicate the rule of law.

 

“Make no mistake – our national interest also requires criminal aliens to be deported. The Bureau of Justice Statistics just released a report showing that 42 percent of defendants charged in U.S. district court were non-U.S. citizens. And according to the U.S. Sentencing Commission, in 2013, 48 percent of all deported aliens who were convicted for coming back to the United States illegally were also convicted of a non-immigration related crime.

 

“This is the Trump era. Progress is being made daily, and it will continue.  This will be the Administration that fully enforces our nation’s immigration laws.”

Today, Attorney General Sessions issued the following statement following his meeting with representatives from the U.S. Conference of Mayors:

“The Department of Justice will fulfill our responsibility to uphold and enforce our nation’s immigration laws, including 8 U.S.C. 1373.  Under the Obama administration, the Department of Justice required certain grantees to certify compliance with federal law, including 8 U.S.C. 1373, as a condition for receiving grant funding.  Last year, the Department of Justice’s Inspector General reported that 10 jurisdictions were potentially in violation of 8 U.S.C. 1373, including because they had policies that restricted local law enforcement from sharing information about criminal aliens in their custody.
 
“My letter has required those jurisdictions to submit a response by June 30 certifying they are in compliance.  To date, only one has replied and we await the responses of the others.  We will evaluate those responses to ensure the requirements of these grants are met.  I once again urge these cities and jurisdictions to reevaluate their policies, protect their citizens and comply with the law.
 
“We are pleased that the mayors who met with us today assured us they want to be in compliance with the law.  The vast majority of state and local jurisdictions are in compliance and want to work with federal law enforcement to keep their communities safe.  Of course, compliance with 8 U.S.C. 1373 is the minimum the American people should expect.  We want all jurisdictions to enthusiastically support the laws of the United States that require the removal of criminal aliens, as many jurisdictions already do.”

Three Orange County, California residents were sentenced to prison today for willfully failing to report their foreign bank accounts in Switzerland and Israel, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

Dan Farhad Kalili, 55, a resident of Irvine, California, was sentenced to serve 12 months and one day in prison; his brother, David Ramin Kalili, 52, a resident of Newport Coast, was sentenced to serve eight months in prison; and his brother-in-law, David Shahrokh Azarian, 67, also a resident of Newport Coast, was sentenced to serve eight months in prison.

 

According to documents and information provided to the court, Dan Kalili, David Kalili and Azarian willfully failed to file with the Department of Treasury Reports of Foreign Bank and Financial Accounts (FBARs) regarding secret bank accounts in Switzerland and Israel that each maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars.

 

“For more than a decade, Dan Kalili, David Kalili and David Azarian hid millions in secret offshore accounts,” said Acting Deputy Assistant Attorney General Goldberg. “They moved their funds from bank to bank and country to country in an effort to escape scrutiny. Today, each was sentenced to prison. The clear message is: the days when a U.S. citizen can safely stash money in an undeclared foreign account are over.”

 

“Today’s sentencing should reassure every honest, hardworking American taxpayer that schemes designed to conceal income in offshore accounts will not be tolerated,” said Chief Richard Weber of Internal Revenue Service Criminal Investigation (IRS-CI). “IRS-CI will continue to devote resources to investigate individuals who engage in these types of schemes for the purpose of personal gain by defrauding the U.S. Treasury and the American taxpayer.”

 

From May 1996 through at least 2009, Dan Kalili opened and maintained several undeclared offshore bank accounts at Credit Suisse Group (Credit Suisse) in Switzerland. He also opened and maintained several undeclared offshore bank accounts from at least 1998 through 2008 at UBS AG (UBS) in Switzerland. In July 2006, Dan Kalili opened an undeclared account at UBS in the name of the Colsa Foundation, an entity established under the laws of Liechtenstein. At the end of May 2008, the Colsa Foundation account held approximately $4,927,500 in assets. Similarly, David Kalili opened and maintained several undeclared accounts at Credit Suisse in Switzerland, from February 1999 through at least 2009, and at UBS in Switzerland, from October 1993 through at least 2008. Dan and David Kalili also maintained joint undeclared Swiss bank accounts at both UBS and Credit Suisse beginning in 2003 and 2004. Meanwhile, Azarian opened and maintained several of his own undeclared accounts at Credit Suisse in Switzerland from May 1994 through at least 2009, and at UBS in Switzerland from April 1997 through at least 2008.

 

Dan Kalili, David Kalili and Azarian took affirmative steps to prevent their assets in UBS and Credit Suisse from being discovered. Dan Kalili opened an undeclared account at Swiss Bank A in the name of the Colsa Foundation and in May 2008, transferred his assets from the UBS Colsa Foundation account to Swiss Bank A. By this time, Bradley Birkenfeld, an American banker who worked for UBS, had been indicted, Martin Liechti, a UBS executive, had been detained and UBS had announced that the Justice Department and the SEC were investigating whether it helped clients avoid paying taxes between 2000 and 2007. Dan Kalili later made a partial disclosure of the Swiss Bank A Colsa account on his individual income tax returns. In 2009, he opened undeclared accounts at Israeli Bank A and at Bank Leumi, both in Israel. In June 2009, he closed the joint undeclared account at Credit Suisse he held with David Kalili, as well as his own undeclared account, and transferred the funds. Shortly before its closure, the undeclared joint account at Credit Suisse held approximately $2,561,508 in assets. As of December 2009, Dan Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,569,973, and his undeclared account at Bank Leumi held assets valued at approximately $2,497,931.

 

Similarly, in August 2008, David Kalili opened an undeclared account at Israeli Bank A in Israel, into which he transferred funds from his UBS accounts. He later partially declared the Israeli Bank A account on his individual income tax returns. As of August 2009, David Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,369,489.

 

In August 2008, Azarian, also opened an undeclared account at Israeli Bank A in Israel, and in May 2009, he closed his undeclared account held at Credit Suisse and transferred the funds to Israeli Bank A. Azarian later partially declared this Israeli Bank A account on his individual income tax returns. At the time of its closure, Azarian’s undeclared account at Credit Suisse held assets valued at approximately $1,903,214.

 

In addition to the term of prison imposed, Dan Kalili was ordered to serve one year of supervised release and to pay $337,443 in restitution. He also agreed to pay a civil penalty of $2,674,329. David Kalili was ordered to serve one year of supervised release and to pay $243,019 in restitution. He also agreed to pay a civil penalty of $1,325.121. Azarian was ordered to serve one year of supervised release and to pay $197,840 in restitution. He also agreed to pay a civil penalty of $951,607.

 

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Jason M. Scheff of the Tax Division, who prosecuted the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Central District of California for its substantial assistance.

 

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

Lena Cotton of Wellington, Florida, and her business, Professional Accounting Ldc LLC, located at 3676 Collin Drive in West Palm Beach, Florida, prepare false federal income tax returns for their customers, according to a new civil suit filed by the Department of Justice. The complaint, filed in federal court in West Palm Beach asks a federal judge to bar Cotton and her business, from preparing tax returns for others and order the defendants to disgorge the gross receipts they obtained from the preparation of federal tax returns that made improper claims.

 

The complaint alleges that the defendants prepare tax returns for customers that understate liabilities and overstate refunds by falsifying information, fabricating deductions, and claiming bogus credits. The complaint alleges that one of their signature schemes is manufacturing education credits for expenses that customers never incurred. For instance, the complaint alleges that the Internal Revenue Service (IRS) has uncovered at least 31 instances of the defendants claiming, for purposes of education credits, that customers attended Palm Beach State College, previously known as Palm Beach Community College, even though the school has no record of their attendance during the relevant time periods.

 

The complaint further alleges that the defendants frequently selected incorrect filing statuses for their customers, claimed other false tax credits, and misrepresented the extent to which customers used their personal vehicles for work purposes. According to the complaint, a review of 1,034 returns prepared by the defendants for tax years 2012 through 2014 uncovered misstatements on 671 returns (64.9 percent) that cost the United States over $900,000 in tax revenue.

 

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017, and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on its website for choosing a return preparer and has launched a free directory of federal tax preparers.

 

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

 

Michelle Cho, an officer of Far East Construction Corporation (Far East) and other construction companies, was sentenced today to six months in prison and 24 months of supervised release on a federal charge of conspiring to commit wire fraud. Cho was also ordered to pay forfeiture in the amount of $169,166 and pay a criminal fine in the amount of $35,000.

The sentencing was announced by Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division, U.S. Attorney Channing D. Phillips of the U.S. Attorney’s Office for the District of Columbia, Assistant Director in Charge Andrew Vale of the FBI’s Washington Field Office, Acting Inspector General Hannibal “Mike” Ware for the U.S. Small Business Administration (SBA), Inspector General Carol Fortine Ochoa of the U.S. General Services Administration (GSA), Special Agent in Charge Brian J. Reihms of the Central Field Office of the Defense Criminal Investigative Service (DCIS) and Director Frank Robey of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).

According to court documents, Cho was an initiator and mastermind of a scheme lasting more than five years to defraud a disadvantaged persons’ business assistance program of tens of millions of dollars. Cho utilized two straw companies, including Far East, to conspire with MCC Construction Company (MCC) and others to defraud the SBA. Cho’s two companies were eligible to receive federal government contracts that had been set asides for small, disadvantaged businesses under the SBA 8(a) program. Cho and MCC understood that MCC would illegally perform all of the work on these contracts and pay three percent of the proceeds to Cho’s companies rather than have Cho’s companies perform at least 15 percent of the work as required by the SBA 8(a) program. In so doing, MCC was able to win 27 government contracts worth over $70 million from 2008 to 2011. The scope and duration of the scheme resulted in a significant number of opportunities lost to legitimate small, disadvantaged businesses.

The court documents also state that Cho and MCC violated the provisions of the SBA 8(a) program, which is designed to award contracts to businesses that are owned by “one or more socially and economically disadvantaged individuals.” To qualify for the 8(a) program, a business must be at least 51 percent owned and controlled by a U.S. citizen (or citizens) of good character who meets the SBA’s definition of socially and economically disadvantaged. The firm must also be a small business (as defined by the SBA) and show a reasonable potential for success. Participants in the 8(a) program are subject to regulatory and contractual limits. Also, under the program, the disadvantaged business is required to perform a certain percentage of the work. For the types of contracts under investigation here, the SBA 8(a)-certified companies were required to perform 15 percent or more of the work with its own employees.

Cho, 45, of Downers Grove, Illinois, was charged on Oct.12, 2016, in the U.S. District Court for the District of Columbia with one count of conspiring to commit wire fraud. She pleaded guilty on Nov. 15, 2016, and was sentenced today by the Honorable Ketanji Brown Jackson.

MCC pleaded guilty on Feb. 2, 2016, to conspiring to commit fraud on the United States by illegally obtaining government contracts that were intended for small, disadvantaged businesses and agreed to pay $1,769,924 in criminal penalties and forfeiture. Thomas Harper, another former officer and owner of MCC, pleaded guilty on June 22, 2016, to conspiring to obstruct proceedings before a department or agency. He is to be sentenced on May 15, 2017. Walter Crummy, another former officer and owner of MCC, pleaded guilty on Aug. 23, 2016, to conspiring to commit wire fraud and was sentenced earlier this month to a year of probation, two months of which were home confinement, and forfeiture in the amount of $105,618.

The investigation was conducted by the FBI’s Washington Field Office, the Inspector General for the Small Business Administration (SBA), the Inspector General of the U.S. General Services Administration (GSA), the Central Field Office of the Defense Criminal Investigative Service (DCIS) and the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).

The prosecution was handled by Assistant U.S. Attorney John Marston and Trial Attorney Justin P. Murphy of the Antitrust Division.

          Today, SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant MICHAEL V. BAMBA, age 33, from Tamuning, was sentenced in District Court to a 57-month term of imprisonment, to be followed by three years of supervised release, and 100 hours of community service. The Court also ordered BAMBA to pay a mandatory $100 assessment fee. In addition, defendants who are convicted of a federal drug offense may no longer qualify for certain federal benefits.

          On April 29, 2015, BAMBA was charged by Indictment with Conspiracy to Distribute Methamphetamine Hydrochloride and Attempted Possession with Intent to Distribute Methamphetamine Hydrochloride. On August 13, 2015, BAMBA entered a guilty plea to Conspiracy to Distribute Methamphetamine Hydrochloride, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(C). The investigation revealed that BAMBA, and other individuals, agreed to use the mail system to distribute large quantities of methamphetamine on Guam. Law enforcement seized over 137 grams of methamphetamine, with a 90 percent purity level.

          The investigation was conducted by the U.S. Postal Service and the Drug Enforcement Administration, with assistance by the Guam Superior Court Probation Office, Guam Customs and Quarantine Agency, and the Guam Police Department. The case was prosecuted by Clyde Lemons, Jr., Assistant United States Attorney for the District of Guam.

A Hillsboro, Oregon promoter was convicted today following a jury trial of making, passing and submitting fake financial instruments to a financial institution and the U.S. Treasury and failing to file tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

According to the superseding indictment and the evidence presented at trial, from approximately 2008 through 2015, Winston Shrout, 69, formerly of St. George, Utah, created and submitted more than 1000 bogus financial instruments with the intent of defrauding financial institutions and the U.S. Treasury. Shrout held seminars and private meetings to promote and market the use of these fake financial instruments to pay off debts, including federal taxes. Shrout sold recordings of his seminars, templates for fake financial instruments and other materials through his website.

 

The evidence presented at trial also proved that Shrout failed to file his 2009 through 2014 tax returns despite earning $562,224 from presenting at seminars, licensing fees associated with the sale of his products and annual pension payments.

 

Sentencing is scheduled for Aug. 1. Shrout faces a statutory maximum sentence of 25 years in prison for each count of making a fake financial instrument and one year in prison for each count of failing to file a tax return. He also faces a period of supervised release, restitution and monetary penalties.

 

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Stuart Wexler and Lee Langston of the Tax Division, who prosecuted the case.

 

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

 

          SHAWN ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant GUO HUA LU (age 54) was sentenced on Thursday, April 20, 2017, in the U.S. District Court by Chief Judge Ramona V. Manglona, to six months incarceration, a $5,500.00 fine, $750.00 restitution, one year of supervised release after incarceration, and a $100 special assessment fee, for False Statement to a Federal Officer.

          LU was a document preparer who obtained a fraudulent notarial certificate on behalf of a Chinese national seeking a passport for her U.S. citizen infant. When interviewed by an agent from the U.S. Department of State’s Diplomatic Security Service, LU denied his involvement in obtaining the fraudulent document. On October 28, 2016, LU was indicted by a federal grand jury for one count of False Statement to a Federal Officer. LU pled guilty on December 22, 2016.

          This investigation was conducted by the Department of State’s Diplomatic Security Service (DSS) and the case was prosecuted by Assistant U.S. Attorney James J. Benedetto.

Today, the Department of Justice sent the attached letters to nine jurisdictions which were identified in a May 2016 report by the Department of Justice’s Inspector General as having laws that potentially violate 8 U.S.C. § 1373.

Additionally, many of these jurisdictions are also crumbling under the weight of illegal immigration and violent crime. The number of murders in Chicago has skyrocketed, rising more than 50 percent from the 2015 levels. New York City continues to see gang murder after gang murder, the predictable consequence of the city's “soft on crime” stance. And just several weeks ago in California’s Bay Area, after a raid captured 11 MS-13 members on charges including murder, extortion and drug trafficking, city officials seemed more concerned with reassuring illegal immigrants that the raid was unrelated to immigration than with warning other MS-13 members that they were next.

The letters remind the recipient jurisdictions that, as a condition for receiving certain financial year 2016 funding from the Department of Justice, each of these jurisdictions agreed to provide documentation and an opinion from legal counsel validating that they are in compliance with Section 1373. The Department of Justice expects each of these jurisdictions to comply with this grant condition and to submit all documentation to the Office of Justice Programs by June 30, 2017, the deadline imposed by the grant agreement.

Proof of Compliance with 8 U.S.C. § 1373 Letters

The owner of Brooklyn, New York return preparation businesses was indicted on April 14 and arrested today on 18 counts of aiding and assisting in the preparation of false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

According to the indictment unsealed today, Maria Munoz, owned and operated tax preparation businesses in Brooklyn including Munoz Multiservices Corp., Munoz Multiservices Inc. and United Tax Service. The indictment alleges that Munoz prepared fraudulent returns for clients that reported fictitious or inflated deductions for charitable donations, unreimbursed employee expenses, personal property taxes and other expenses. Munoz also fabricated education expenses in order to fraudulently claim education credits for her clients and cause the Internal Revenue Service (IRS) to pay them bogus or inflated refunds.

 

An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.

 

If convicted, Munoz faces a statutory maximum sentence of three years in prison on each count, a period of supervised release, restitution and monetary penalties.

 

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Carl F. Brooker of the Tax Division, who are prosecuting the case.

 

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

On April 19, Chief Judge Beryl A. Howell of the U.S. District Court for the District of Columbia entered an order that revoked the naturalized U.S. citizenship of a confessed al-Qaeda operative, restrained and enjoined him from claiming any rights, privileges, or advantages of U.S. citizenship and ordered him to immediately surrender and deliver his Certificate of Naturalization and any other indicia of U.S. citizenship to federal authorities, the Justice Department announced.

 

“The Justice Department is committed to protecting our nation’s national security and will aggressively pursue denaturalization of known or suspected terrorists,” said Attorney General Jeff Sessions. “This case demonstrates the Department’s commitment to using all tools at its disposal, both criminally and civilly, to strategically enforce our nation’s immigration laws and to disrupt international terrorism. I congratulate the aggressive and effective investigation and prosecution by the Department of Justice team. We will protect our national security and our borders, and when we identify individuals tied to foreign terrorist organizations who procured their U.S. citizenship by fraud, we will initiate denaturalization proceedings - whether you reside here or abroad - and ensure you are denied entry into the United States.”

 

Khaled Abu al-Dahab, 57, an Egyptian-born naturalized U.S. citizen and former Silicon Valley car salesman is a confessed member of the Egyptian Islamic Jihad (EIJ) terrorist organization. Al-Dahab admitted to attending a training camp near Jalalabad, Afghanistan, where he received military-style training and taught foreign fighters to fly hang gliders in preparation for terrorist attacks. Moreover, al-Dahab told the FBI that, during the period in which he was supposed to establish the good moral character to naturalize under the Immigration and Nationality Act, he operated a communications hub for EIJ operatives out of his Santa Clara, California apartment. He facilitated the transfer of fraudulent passports, documents, money and other items by, between and among EIJ members, and researched communications devices and helicopter piloting at the direction of EIJ leadership. Al-Dahab’s communication hub materially assisted in the perpetration of terrorist attacks in Egypt and Pakistan.

 

Additionally, al-Dahab admitted to recruiting Islamic Americans into the al-Qaeda terrorist organization during his 12-year residence in California. Al-Dahab told the investigators that Osama bin Laden was eager to recruit American citizens of Middle Eastern descent because their U.S. passports could be used to facilitate international travel by al Qaeda terrorists, and that bin Laden personally congratulated him for this work. Al-Dahab was naturalized as a U.S. citizen on Feb. 7, 1997. Upon departing the United States sometime in 1998, al-Dahab was arrested by Egyptian authorities. He was tried, convicted and sentenced to 15 years in prison for terrorism related offenses.

 

On April 8, 2015, the United States filed a civil action seeking the revocation of al-Dahab’s naturalized U.S. citizenship on the grounds that he illegally procured his citizenship on account of his false written statements and testimony during his naturalization proceedings regarding his current and past addresses; employment history; travel outside the United States; marital history; prior false testimony; prior claims of U.S. citizenship; commission of crimes for which he had not been arrested; and membership in or association with EIJ, as well as his affiliation with an organization that advocated terrorism. The United States also alleged al-Dahab should also be denaturalized because he procured his citizenship by concealment of a material fact or by willful misrepresentation due his concealment of these matters. The United States obtained the district court’s permission to serve the complaint on al-Dahab in Egypt via Facebook and electronic mail.

 

“The Department’s Office of Immigration Litigation – District Court Section will continue to pursue denaturalization proceedings against known or suspected terrorists who procured their citizenship by fraud,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The U.S. government is dedicated to strengthening the security of our nation and preventing the exploitation of our nation’s immigration system by those who would do harm to our country.”

 

Under the Immigration and Nationality Act, a naturalized U.S. citizen’s citizenship may be revoked, and his certificate of naturalization canceled, if the naturalization was illegally procured or procured by concealment of a material fact or by willful misrepresentation.

 

This case was investigated by the Civil Division’s Office of Immigration Litigation, District Court Section (OIL-DCS) and the FBI. The litigation was handled by Christopher W. Dempsey, Chief of the National Security and Affirmative Litigation Unit within OIL-DCS, with substantial assistance by FBI Special Agent Rami G. Nimri.

          SHAWN ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant ANTONIA BAUTISTA (age 60) was sentenced today in the U.S. District Court by Chief Judge Frances Tydingco-Gatewood to two years probation and a $100 special assessment fee, for Conspiracy to Commit Visa Fraud.

 

          BAUTISTA was part of a conspiracy involving Guam Construction Company (GCC), its president and vice-president, Byong H. Kang and Choon H. Kang, respectively. On April 4, 2014, an Information was filed against BAUTISTA charging Conspiracy to Commit Visa Fraud by intentionally misrepresenting occupations of H-2B workers in an effort to facilitate fraudulently obtaining H-2B visas. After the H-2B workers arrived in Guam, BAUTISTA, GCC’s office manager and corporate secretary, assisted the Kangs and caused GCC to employ the H-2B workers in skilled occupations not authorized on their H-2B visas, as electricians, engineers, heavy equipment operators and others.

BAUTISTA pled guilty on April 4, 2014.

 

          This investigation was a joint effort between both local and federal law enforcement, the Department of Homeland Security (DHS) Homeland Security Investigations, the Internal Revenue Service-Criminal Investigations Section, U.S. Department of Labor, Wage & Hour Division working together with Guam Department of Labor and Guam Customs & Quarantine Agency task force officers. Jointly, they investigated not only visa fraud and a sophisticated money laundering scheme, but those who fraudulently obtain federal contracts, and do not pay fair wages.

 

            This case was prosecuted by Assistant U.S. Attorney Stephen F. Leon Guerrero.

The Attorneys General of Mexico, Dr. Raúl Cervantes Andrade, and of the United States, Jeff Sessions, met on April 18, 2017, to follow up on matters discussed during their previous meeting of March 20, 2017, and to continue strengthening their bilateral law enforcement cooperation.

Both sides discussed recent statements made by U.S. authorities regarding immigration, including the intention of the U.S. to fully enforce its immigration laws, and to continue to respect all of its human rights obligations in this regard.

Attorney General Sessions thanked the Mexican government for its assistance in a number of recent matters, including the prosecution of those responsible for the murder and attempted murder of ICE Special Agents Jaime Zapata and Victor Avila; the extradition of Heraclio Osorio Arellanes, who is charged with participating in the murder of Border Patrol Agent Bryan Terry; and the recovery of the jerseys of New England Patriots player Tom Brady.

Both Attorneys General briefly discussed the arrest of Edgar Veytia Cambero, the former Attorney General of the Mexican State of Nayarit, in the United States , agreeing to mutually coordinate on this matter in both the United States and Mexico, and identify assets in both countries to be seized and forfeited.

The Mexican Prosecutor General’s Office and the U.S. Department of Justice reiterate their commitment to combat corruption and transnational organized crime through law enforcement cooperation in a close and coordinated manner.

A New York City man pleaded guilty today to making illegal political contributions in the names of others to campaign committees for U.S. President and U.S. Senate in 2011, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division.

Adam H. Victor, 64, pleaded guilty to one count of making political contributions in the names of others before U.S. District Judge Ketanji Brown Jackson of the District of Columbia. Sentencing is set for Aug. 22, 2017.

According to admissions made in connection with his guilty plea, during the 2011 calendar year, Victor made $17,500 in aggregated contributions through numerous immediate family members and colleagues to the campaign committee of a candidate for President of the United States and a candidate for a U.S. Senate seat in West Virginia, when, in fact, Victor paid for all of the contributions. According to the plea, Victor did not reveal to either candidate that he was the true source of the contributions.

The FBI investigated the case. Trial Attorneys Todd Gee and Andrew Laing of the Criminal Division’s Public Integrity Section are prosecuting the case.

A federal grand jury sitting in the Eastern District of Michigan returned a superseding indictment today, charging a Grand Blanc, Michigan owner of adult foster care homes with additional tax crimes including obstructing the internal revenue laws and failing to file tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

Jeremiah Cheff was indicted in October 2016 on 60 counts of failing to collect, account for and pay over employment taxes. According to the superseding indictment, Jeremiah Cheff controlled the financial and business operations of 16 foster care homes that cared for individuals with mental illnesses and developmental and physical disabilities, including Hunter’s Home, Nico’s Place, Harmony Manor, Hilltop Estates and Deerwood Manor. It is alleged that from September 2010 through September 2014, Cheff withheld payroll taxes from employees’ paychecks, failed to timely file employment tax returns and failed to pay over the funds withheld to the Internal Revenue Service (IRS).

 

The new charges allege that Cheff corruptly endeavored to obstruct the internal revenue laws and failed to timely file his 2013 through 2015 individual returns. According to the indictment, after the IRS informed Cheff it intended to file a lien to collect unpaid employment taxes, Cheff sent an $80,000 fake financial instrument to the IRS and falsely claimed to a revenue officer that he had paid the taxes due. Cheff also allegedly spent money from his businesses for personal benefit instead of paying it to the IRS, falsely classified his employees as independent contractors, provided false information to his return preparer and filed false 2013 through 2015 partnership returns for Hunter’s Home.

 

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

 

If convicted, Cheff faces a statutory maximum sentence of five years in prison for each of the 60 employment tax counts, three years in prison for obstructing the IRS and one year in prison for each of the failure to file counts. He also faces a period of supervised release, restitution and monetary penalties.

 

Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey McLellan and Carl F. Brooker IV of the Tax Division, who are prosecuting the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Eastern District of Michigan for its substantial assistance.

 

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

 

Today, Attorney General Jeff Sessions and Mexican Attorney General Raúl Cervantes Andrade released the following statement on the arrest of Tomas Yarrington:

“The detention of Mexican ex-Governor Tomas Yarrington Ruvalcaba, on April 9, 2017, in Florence, Italy, was the result of law enforcement cooperation between Mexican, Italian and U.S. authorities.

“Yarrington faces serious charges in both the United States and Mexico, which arise out of criminal acts allegedly committed in both countries during Yarrington’s tenure as Governor of the State of Tamaulipas from 1999-2004.

“After careful analysis of the evidence and potential penalties of both the U.S. and Mexican charges against Yarrington, and in accordance with the priority given to competing extradition requests pursuant to Article 13 of the Extradition Treaty between Italy and Mexico, and Article 15 of the Extradition Treaty between Italy and the United States, the governments of the United States and Mexico have agreed that, in the event of a favorable decision by the Italian judicial authorities regarding both the United States’ and Mexico’s extradition requests, as well as a favorable decision on both requests by the Italian Minister of Justice, the United States and Mexican governments have agreed to request that the Italian Minister of Justice grant precedence to the United States’ request and also to seek the authorization of the Italian Minister of Justice for the re-extradition of Yarrington to Mexico in accordance with Article 16 of the U.S.-Italy Extradition Treaty.

“The United States and Mexico have agreed that upon the conclusion of the U.S. prosecution of Yarrington, and upon a determination of extraditability pursuant to the U.S.-Mexico extradition treaty, he will be temporarily surrendered to Mexico so that he may be brought to justice for the offenses charged against him there.

“Both the United States and Mexico have made a further commitment to exchange information and to collaborate with their respective prosecutions against Yarrington, and to utilize all available legal instruments for that purpose.

“The United States and Mexico extend their thanks to the Government of Italy and its law enforcement authorities for their apprehension of Yarrington. We also extend our gratitude to Interpol, the Mexican Attorney General’s Office (PGR), the U.S. Department of Homeland Security Immigration and Customs Enforcement and the Justice Department’s Office of International Affairs for their diligent work in locating and arresting the fugitive. This arrest is another example of the United States’ and Mexico’s shared commitment to combat corruption and transnational organized crime."

          SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendants FRANCISCO C. ARIAS and EDER J. CORTEZ-ZELAYA, who were convicted at the trial of U.S. v. Francisco Arias, Eder Cortez-Zelaya and Corinna Concepcion, in the District Court of Guam, were sentenced today.

 

          FRANSISCO ARIAS, age 42, an undocumented alien and citizen from Mexico, was sentenced by Chief Judge Frances Tydingco-Gatewood, to life imprisonment for count one, conspiracy to distribute methamphetamine (ice), after taking into consideration his role of threatening one individual; 20 years for count two, conspiracy to commit money laundering; and five years each for counts 4 and 5, unlawful use of the mail to facilitate the conspiracy to distribute methamphetamine. All sentences are to be served concurrently.

 

          EDER J. CORTEZ-ZELAYA, age 34, a naturalized U.S. Citizen originating from El Salvador, was sentenced by Chief Judge Frances Tydingco-Gatewood to 292 months for count one, conspiracy to distribute methamphetamine (ice), 20 years for count two, conspiracy to commit money laundering; and five years each for counts 4 and 5,unlawful use of the mail to facilitate the conspiracy to distribute methamphetamine. All sentences are to be served concurrently.

 

          Both Francisco ARIAS and CORTEZ-ZELAYA were determined to be organized leaders, who conspired with 15 co-defendants, to have packages of methamphetamine (ice) transported from Las Vegas, Nevada and received on Guam.  All of the co-defendants have been sentenced.

 

            This OCDETF case involved federal agents and local law enforcement officers of the U.S. Postal Inspection Service (USPIS), Drug Enforcement Administration (DEA), U.S. Department of Homeland Security Investigations (HSI), Guam Police Department (GPD), Guam Customs and Quarantine Agency (GCQA), Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), U.S. National Oceanic Atmosphere Administration (NOAA), and U.S. Coast Guard Criminal Investigative Service (CGIS).

 

            The case was prosecuted by Assistant U.S. Attorney Clyde Lemons, Jr.

            

A federal judge yesterday found that the Town of Colorado City and the City of Hildale engaged in a decades-long pattern or practice of police misconduct and housing discrimination, and ordered expansive relief to remedy the violations and prevent further violations in the future, announced the Department of Justice. 

U.S. District Judge H. Russell Holland’s order, issued yesterday, adopts findings made by a jury last year that the Colorado City Marshals Office engaged in a long-standing pattern of abuses that included false arrests, unreasonable seizures of property, discriminatory policing on the basis of religion, and violating the Establishment Clause of the First Amendment.  “The constitutional right to free exercise of religion, on the one hand, and the statutory right to housing and constitutional policing, on the other hand, are vitally important to a viable, peaceful community,” U.S. District Judge Holland wrote.

“Religious discrimination threatens the Founders’ vision of a society based firmly on principles of liberty and freedom of conscience,” said Acting Assistant Attorney General Tom Wheeler for the Justice Department’s Civil Rights Division.  “No individual in the United States should be treated differently by a town or its police officers because of his or her religion.  No religious leaders should be permitted to use the power of sworn law enforcement officers to hide their misdeeds and enforce their decrees.

The adjoining towns of Colorado City and Hildale are located on the border of Arizona and Utah and are populated primarily by members of a faction of the Fundamentalist Church of Jesus Christ of Latter Day Saints (FLDS) that remains loyal to its imprisoned prophet, Warren Jeffs.  Jeffs is currently serving a prison term in Texas of life plus 20 years for aggravated sexual assault of a minor. 

The advisory verdict made permanent by U.S. District Judge Holland’s order came after a seven-week trial during which the United States presented evidence from over thirty witnesses that the governments of Colorado City and Hildale are controlled the FLDS Church and Warren Jeffs.  Among other things, Judge Holland concluded that Marshals “officers turned a blind eye to criminal activity involving FLDS Church leaders or members,” including supporting a fugitive and ignoring underage marriages, unauthorized distribution of prescription drugs, and food-stamp fraud. 

In addition to its verdict on the police-misconduct claim, the jury found that the defendants engaged in a pattern or practice of housing discrimination against persons who were not members of Warren Jeffs’ faction of the FLDS.  The jury found that the defendants had used their municipal authority to coerce, intimidate, or interfere with individuals seeking housing, discriminated in the provision of municipal services, and denied housing to non-FLDS members.  The United States settled the damages portion of the case shortly before the verdict for $1.6 million. 

The Court’s findings are accompanied by a comprehensive order designed to remedy the police misconduct and housing discrimination.  Under the terms of the order, which lasts for ten years, the defendants must revise the policies of the Marshal’s Office, adopt new internal affairs and hiring practices, hire two new officers, and hire both a police-practices consultant and a mentor for the Chief of Police.  The defendants must submit to training and revise numerous municipal policies and procedures, including their water policies and water impact fees.  The order also requires the defendants work to subdivide the land in Colorado City, an issue that has long been a point of contention between the defendants and the religiously neutral land trust that took over control of the property in the area from the FLDS Church over a decade ago.  Judge Holland will appoint a monitor to track the defendants’ compliance with the order and report to the Justice Department and the court.           

The opinion marks the end of five years of Justice Department litigation to address widespread discrimination in Colorado City and Hildale. 

The Marshal’s Office currently has seven sworn officers.  Arizona’s Police Officer Standards and Training Board (POST) recently voted to revoke the peace officer certifications of six of those officers, including the certification of the current Chief Marshal Jerry Darger.  POST officials recently refused to approve the certification of the seventh officer on the grounds that he had been engaged in a pattern of criminal activity, including felony conduct.  Since 2003, six other members of the Marshal’s Office have been decertified by Arizona state officials, including three officers who refused to cooperate with state law-enforcement efforts. 

This matter was litigated by attorneys from the Housing and Civil Enforcement Section and the Special Litigation Section of the Department of Justice’s Civil Rights Division.  More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.  If you have any information regarding this matter, please contact the Department at 1-800-896-7743 or e-mail the Justice Department at coloradocitydiscrimination@usdoj.gov.

WASHINGTON – A Louisiana criminal defense attorney was sentenced to 30 months in prison today for tax evasion, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

According to documents filed with the court, Michael Thiel, 66, a resident of Baton Rouge, Louisiana, operated a criminal defense practice in Hammond, Louisiana. Despite earning substantial income through his law practice, Thiel evaded paying approximately $1 million in income and employment taxes, including interest and penalties. From 2003 through 2013, Thiel did not timely file income or employment tax returns and did not make timely payments of the taxes he owed. Though Thiel had the ability to make payments towards his tax obligations, he concealed his income and assets using trusts and nominees. In 2001, he created the Thiel Family Trust, of which he was the beneficiary, fiduciary and trustee. He created two additional trusts in 2008 in the names of family members.

 

Thiel used these three trusts to evade the payment of federal income and employment taxes. In January 2007, Thiel used nominees to purchase his primary residence for $435,000 and entered into a phony lease agreement with the nominees to conceal his ownership of the property and shield it from IRS collection efforts. Between January 2007 and January 2014, Thiel deposited $416,283 into the nominee account that was used to secure and pay the mortgage on the property. These funds came from the nominee trusts and other accounts not held in his name.

 

“As a result of today’s sentence, criminal defense attorney Michael Thiel’s decade-long effort to evade paying his income and employment taxes is over, and he will begin serving time in prison,” said Acting Deputy Assistant Attorney General Goldberg. “Each April, the vast majority of Americans follow the tax law and pay their fair share. They have the right to expect that taxpayers who spurn these obligations will be held fully to account -- no matter their profession, wealth or position in the community.”

 

“Today’s sentencing of Michael Thiel is a strong reminder that payment of individual and business taxes is an obligation, not a choice,” said Chief Richard Weber of Internal Revenue Service Criminal Investigation (IRS-CI). “When Mr. Thiel made the decision to evade paying taxes for himself and his business, he also made the decision to cheat his employees and other honest taxpayers. Investigation of employment tax fraud is a priority for the special agents of IRS-CI as our system of taxation depends on everybody paying their fair share.”

 

In addition to the term of prison imposed, Thiel was ordered to serve two years of supervised release and to pay restitution to the IRS in the amount of $998,352. Thiel pleaded guilty in December 2016 to evading the payment of federal income and employment taxes.

 

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS-CI, who conducted the investigation, and Assistant Chief Todd A. Ellinwood and Trial Attorney Michael Hatzimichalis of the Tax Division, who prosecuted the case.

 

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

A Louisiana criminal defense attorney was sentenced to 30 months in prison today for tax evasion, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

 

According to documents filed with the court, Michael Thiel, 66, a resident of Baton Rouge, Louisiana, operated a criminal defense practice in Hammond, Louisiana. Despite earning substantial income through his law practice, Thiel evaded paying approximately $1 million in income and employment taxes, including interest and penalties. From 2003 through 2013, Thiel did not timely file income or employment tax returns and did not make timely payments of the taxes he owed. Though Thiel had the ability to make payments towards his tax obligations, he concealed his income and assets using trusts and nominees. In 2001, he created the Thiel Family Trust, of which he was the beneficiary, fiduciary and trustee. He created two additional trusts in 2008 in the names of family members.

 

Thiel used these three trusts to evade the payment of federal income and employment taxes. In January 2007, Thiel used nominees to purchase his primary residence for $435,000 and entered into a phony lease agreement with the nominees to conceal his ownership of the property and shield it from IRS collection efforts. Between January 2007 and January 2014, Thiel deposited $416,283 into the nominee account that was used to secure and pay the mortgage on the property. These funds came from the nominee trusts and other accounts not held in his name.

 

“As a result of today’s sentence, criminal defense attorney Michael Thiel’s decade-long effort to evade paying his income and employment taxes is over, and he will begin serving time in prison,” said Acting Deputy Assistant Attorney General Goldberg. “Each April, the vast majority of Americans follow the tax law and pay their fair share. They have the right to expect that taxpayers who spurn these obligations will be held fully to account -- no matter their profession, wealth or position in the community.”

 

“Today’s sentencing of Michael Thiel is a strong reminder that payment of individual and business taxes is an obligation, not a choice,” said Chief Richard Weber of Internal Revenue Service Criminal Investigation (IRS-CI). “When Mr. Thiel made the decision to evade paying taxes for himself and his business, he also made the decision to cheat his employees and other honest taxpayers. Investigation of employment tax fraud is a priority for the special agents of IRS-CI as our system of taxation depends on everybody paying their fair share.”

 

In addition to the term of prison imposed, Thiel was ordered to serve two years of supervised release and to pay restitution to the IRS in the amount of $998,352. Thiel pleaded guilty in December 2016 to evading the payment of federal income and employment taxes.

 

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS-CI, who conducted the investigation, and Assistant Chief Todd A. Ellinwood and Trial Attorney Michael Hatzimichalis of the Tax Division, who prosecuted the case.

 

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

 

A federal jury convicted real estate investor Glenn Guillory for his role in a conspiracy to rig bids at public foreclosure auctions held in Contra Costa County, California, the Department of Justice announced today.

After a week-long trial before the Honorable Chief Judge Phyllis J. Hamilton in Oakland, California, the jury convicted Guillory yesterday of conspiring to rig bids at foreclosure auctions in a conspiracy that operated from as early as June 2008 until about January 2011. Guillory was charged in an indictment returned by a federal grand jury in the Northern District of California on Dec. 3, 2014.

The evidence at trial showed that Guillory and his co-conspirators agreed not to compete for real estate sold at foreclosure auctions in Contra Costa County. The conspirators negotiated payoffs for agreeing not to compete and held second, private auctions known as “rounds” to determine the amounts of the payoffs for the individuals who had participated in the bid suppression.

Including Guillory’s conviction, 65 individuals have either pleaded guilty or been convicted after trial as a result of the department’s ongoing antitrust investigations into bid-rigging at public foreclosure auctions in Northern California (Alameda, Contra Costa, San Francisco and San Mateo counties). Indictments are pending against several other real estate investors who participated in the conspiracy.

The investigation 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 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.

Many Americans associate April with “Tax Day” and the annual deadline for filing individual income tax returns. But the end of April is also the first deadline for employers to file quarterly employment tax returns. Those who do not comply with filing requirements or who fail to pay the taxes withheld from their employees’ wages face civil lawsuits or criminal prosecutions as part of the Department of Justice’s ongoing focus to enforce employment tax laws using all tools available.

 

Employers in the United States are required to collect, account for and pay over to the Internal Revenue Service (IRS) tax withheld from employee wages, including federal income tax and social security and Medicare taxes. Employers also have an independent responsibility to pay their matching share of social security and Medicare taxes.

 

“Employers who willfully fail to comply with their employment tax obligations are cheating the U.S. Treasury at the expense of taxpayers, such as law-abiding employers and employees, who pay their taxes on time and in full,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “The Department is committed to holding employers that willfully fail to pay their employment taxes accountable with, as appropriate, criminal prosecution, bringing these offenders into compliance through civil injunctions, and working with the IRS to collect what is owed.”

 

“Employment taxes are a critical part of the tax system, generating more than $1 trillion a year in payments to the government, and the IRS works closely with employers and the payroll community to help ensure compliance in this area,” said IRS Commissioner John Koskinen. “We want to help employers avoid problems in the employment tax area. When problems do arise, we use civil enforcement tools and, when appropriate, work closely with the Justice Department in the pursuit of criminal cases. The collection of employment taxes is a priority area for the IRS and helps ensure fairness for employers and taxpayers. Employers who fail to pay or withhold these taxes enjoy an unfair economic advantage over those who comply with the tax laws.”

 

Willful Failure to Comply with Federal Employment Tax Laws is a Crime

 

An individual’s willful failure to comply with employment-tax obligations is not simply a civil matter. Employers whose business model is based on a continued failure to pay employment tax, who use withheld employment taxes as a slush fund to pay personal expenses or other creditors, who pay employees in cash to avoid employment tax obligations, or who file false employment tax returns are engaging in criminal conduct and face prosecution, imprisonment, monetary fines and restitution.

 

Recent prosecutions include:

 

Employers who “pyramid” taxes by opening successive businesses

 

In January, Napoleon Robinson of Lauderhill, Florida, was sentenced to serve 18 months in prison for evading more than $500,000 in employment taxes. Robinson owned and operated a series of ship welding and repair businesses in Virginia and New York. Robinson was not paying over employment taxes and would close down one company and open a new one in the name of a nominee owner, while continuing to run the company, making its financial and personnel decisions and controlling the businesses’ bank accounts. He was also ordered to pay restitution to the IRS.

 

In January, two West Virginia business owners, Michael and Jeanette Taylor, were sentenced to serve 21 and 27 months in prison for failing to pay over more than $1.4 million in employment taxes. The Taylors owned a construction business that transported steel and sold gravel and concrete. They changed the name of their business several times, though the operations of the business remained the same. Both were responsible for collecting, accounting for and paying over the employment taxes withheld from their employees’ wages. Instead of paying over the taxes that they collected, the Taylors used the funds to purchase property and finance their horse farm. They were also ordered to pay restitution to the IRS.

 

Employers using withheld employment taxes for personal expenses

 

In January, Paul Harvey Boone of Hillsborough, North Carolina, was sentenced to serve 15 months in prison for failing to pay over employment taxes. Boone owned and operated Boone Audio Inc. From 2008 through 2011, Boone used company funds for personal expenses while failing to pay over the employment taxes withheld from his employees’ wages. He was also ordered to pay restitution to the IRS.

 

In December 2016, Sreedar Potarazu, a Maryland surgeon and entrepreneur, pleaded guilty to failing to account for and pay over $7.5 million in employment taxes and to shareholder fraud. Potarazu founded VitalSpring Technologies Inc., a corporation that provided data analysis and services related to health care expenditures. Potarazu was responsible for collecting, truthfully accounting for and paying over VitalSpring’s employment taxes. Instead of paying over the employment tax, Potarazu spent millions on personal expenses including transferring funds to himself and others, travel, car service and the publication of a book.

 

Employers using employment taxes to pay other creditors

 

In January, Steven Lynch, a tax attorney and owner of the Iceoplex in Pittsburgh, Pennsylvania, was sentenced to serve 48 months in prison, fined $75,000 and ordered to pay restitution to the IRS of more than $793,000, after being convicted of failing to collect, account for and pay over employment taxes. Lynch co-owned and operated the Iceoplex, a recreational sports facility which included a fitness center, ice rink, soccer court, restaurant and bar. He controlled the finances for these businesses and was responsible for collecting, accounting for and paying over tax withheld from employee wages and timely filing employment tax returns. Lynch failed to pay over more than $790,000 in employment taxes withheld.

 

In June 2016, Muzaffar Hussain of Pleasanton, California, pleaded guilty to failing to account for and pay over employment taxes for Crossroads Home Health Care Inc. Hussain was the CFO and was responsible for filing the company’s employment tax returns and paying over the employment taxes. Hussain transferred funds in an amount equal or close to the amount of employment taxes from the business bank account into other accounts and used the money to fund other business and personal expenses.

 

Employers paying employees in cash to avoid employment tax

 

In September 2016, Phillip Hui of Sicklerville, New Jersey, was sentenced to serve 15 months in prison for conspiring to evade payroll taxes on cash wages paid to illegal immigrants employed at his dry cleaning business. Hui hired foreign nationals from Mexico and Guatemala who did not have legal status in the United States and paid them in cash. Their wages were not reported on the quarterly employment tax returns filed with the IRS. He was also ordered to pay restitution to the IRS.

 

Employers filing false employment tax returns

 

In March, Richard Tatum, a Houston, Texas, business owner of an industrial staffing company, pleaded guilty to failing to pay more than $18 million in employment taxes. Tatum filed false employment tax returns that did not report the majority of his employees and did not pay over the taxes he withheld from his employees. stead, he used the money for luxury travel and to make payments on his ranch.

 

In January, Janis Ann Edwards, an Oklahoma City, Oklahoma, business owner, pleaded guilty to evading more than $3.5 million in employment taxes. Edwards was the sole owner of Corporate Resource Management c. and a number of related companies that operated as professional employer organizations. Edwards directed her employees to alter quarterly employment tax returns to reflect less payroll tax liability than was actually owed.

 

Delinquent Employers Also Risk Injunctions and Money Judgments

 

The Tax Division is also aggressively pursuing civil enforcement action against those who fail to meet their employment tax obligations. Since 2003, the Division has permanently enjoined more than one hundred employers and obtained tens of millions of dollars in money judgments. Civil injunctions are court orders requiring the employer and principal officers to timely deposit and pay employment taxes to the U.S. Treasury. These court orders also impose various other requirements and prohibitions, including the obligation to provide notice of each deposit to the IRS, as well as restrictions on opening and operating new businesses and transferring or dissipating assets.

 

In recent years, the Tax Division increased the number of civil actions brought against employers who violate employment tax laws. In 2016, the Tax Division obtained employment tax injunctions against 38 employers—more than double the number of injunctions obtained in 2015. The injunctions obtained in the past year include court orders against employers throughout the United States, such as a St. Louis concrete business, a Florida restaurant, an Iowa lawn care business and a Michigan custom kitchen company.

 

Since Jan. 1, the Tax Division filed 17 suits, collectively seeking more than $10 million in unpaid employment taxes, against tax-delinquent medical-care providers who, despite IRS notices and efforts to collect, have been non-compliant for three or more quarters, despite persistent attempts by the IRS to remind them of their obligations and to collect the unpaid taxes.

 

These 17 suits collectively seek more than $10 million in unpaid employment taxes and are part of an ongoing effort by the Justice Department and the IRS focusing on employment tax compliance. Among these cases is a suit filed in federal court in Minnesota to enjoin Dawda Sowe and Nurse Staffing Solutions Health Care from failing to pay employment taxes and to obtain a $2 million judgment against the business for employment taxes the business allegedly failed to pay over an eight-year period. Also, this month the Tax Division filed suit in federal court in Texas to obtain a court order requiring Jeanna Smith to timely file employment and unemployment tax returns for her business and pay those taxes in full, amongst other requirements. In this suit, the government also seeks a judgment for unpaid employment taxes and alleges that Smith incorporated several home-health care businesses, such as Paris Senior Care Group Inc., which accumulated more than $1.3 million in unpaid employment taxes.

 

Those Who Violate Injunctions are at Risk for Civil and Criminal Contempt

 

Those who violate an injunction can be charged with civil and criminal contempt and face being shut down, paying compensation for the damage the contempt caused and incarceration of the principal officer(s). For example, a federal court in Washington held Dr. James Hood and his wife, Karen Hood, in contempt of court for a consistent pattern of failing to meet their tax obligations. The court later ordered the two to close their dental care businesses, cease operating as employers, and barred them from opening any new businesses where the Hoods would serve as employers by June 8, 2017.

 

Liability Extends to Responsible Individuals

 

Any individual who is responsible for ensuring that employment taxes are collected, truthfully accounted for, and paid over to the IRS, and willfully fails to do so or willfully attempts to evade or defeat paying employment taxes may be subject to a civil penalty equal to the amount of the unpaid withholdings. This civil penalty, referred to as the trust fund recovery penalty, may be imposed even if the individual uses the employment tax to pay other creditors or keep the business afloat. Individuals subject to these penalties include, but are not limited to, corporate officers, treasurers, manager, and, in some circumstances, bookkeepers.

 

Since January 2013, the Tax Division has obtained tens of millions of dollars in money judgments against individuals subject to these penalties. For example, in July 2016, a Florida jury found the CEO and owner of a professional employer organization, David Goldberg of Deerfield Beach, Florida, personally liable for more than $4.2 million due to his failure to pay his company’s employment taxes. In addition, in December 2016, the U.S. Court of Federal Claims found that the CFO of an Internet-marketing platform, Mark V. Noffke, was responsible for his company’s failure to pay its employment taxes and entered a judgment of more than $500,000 against him. And in April, a federal court found the co-manager of an architectural woodwork installation company, Darren Commander of Jackson, New Jersey, personally liable for $1.9 million due to his failure to pay his company’s employment taxes.

 

These cases reflect the ongoing commitment of the Department of Justice and the IRS to pursue companies and individuals who fail to collect, account for, or pay employment taxes to the IRS. For more information about civil and criminal employment tax enforcement efforts, visit the Tax Division’s website.

 

As part of the department’s efforts under the Task Force on Crime Reduction and Public Safety (Task Force), Attorney General Jeff Sessions today announced a series of actions the department will take to support law enforcement and maintain public safety in Indian Country.

“It is paramount that tribal police have the tools they need to fight crime and maintain public safety in their communities,” said Attorney General Sessions. “Law enforcement in Indian Country faces unique practical and jurisdictional challenges and the Department of Justice is committed to working with them to provide greater access to technology, information and necessary enforcement.”

The following three actions were announced today:

1. The department will deploy the Tribal Access Program for National Crime Information (TAP) to 10 tribal sites, beginning today with the Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation in Montana. This expanding program, which was first implemented in 2015 as a successful pilot program with nine tribes, is designed to provide federally-recognized tribes access to national crime information databases for both civil and criminal purposes;

1. In support of the Task Force, the Office of Tribal Justice will coordinate a series of listening sessions with tribal law enforcement officials and tribal leaders to ensure the unique perspective of law enforcement in Indian Country is taken into account; and

1. ​The Office of Tribal Justice has created the Indian Country Federal Law Enforcement Coordination Group, an unprecedented partnership that brings together sworn federal agents and other key law enforcement stakeholders from 12 federal law enforcement components, including: the Department of Justice’s Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration; the Federal Bureau of Investigation Criminal Justice Information Services and Indian Country Crimes Unit, the U.S. Marshals Service and the Office of the Inspector General; The Department of the Interior’s Bureau of Land Management and Bureau of Indian Affairs, Office of Justice Services; the Department of Health and Human Services; the Department of Homeland Security’s Federal Emergency Management Agency, U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement, Homeland Security Investigations. This partnership will increase collaboration and coordination with the goal of enhancing the response to violent crime in Indian country.

The Attorney General will continue to receive and act upon recommendations from the Task Force as they become available and is committed to combatting violent crime and maintaining public safety in tribal lands.

With the annual tax return filing deadline almost upon us, the vast majority of taxpayers are complying with their legal obligation to file accurate returns and pay the taxes that they owe. However, there are taxpayers who attempt to evade paying their fair share of taxes, file false returns, fail to file returns or seek to obstruct the Internal Revenue Service (IRS)’s efforts to assess or collect monies that are due. The Justice Department’s Tax Division warns taxpayers who attempt to violate the federal tax laws that they face prosecution, jail, restitution and significant monetary penalties.

 

“Most Americans follow the tax law and rightfully expect that each of their fellow citizens will do the same,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Yet every year some taxpayers try to take a different path – they hide money offshore, declare only a small portion of their income, make up bogus deductions and lie to the IRS if they are caught. With this year’s filing deadline approaching, these taxpayers should stop, reverse course and simply pay what they owe. As the Justice Department’s recent criminal prosecutions make clear, the consequences for willful violations are severe: jail time and substantial monetary penalties.”

 

“The majority of Americans file their taxes without issue and they would tell you that they want strong enforcement of the tax laws to ensure that we are all paying our fair share,” said Chief Richard Weber of IRS Criminal Investigation. “For those thinking about intentionally evading the tax laws – IRS-CI has the finest financial investigators and are trained to follow the money trail wherever it may lead.”

 

Over the past year, the Tax Division and the U.S. Attorney’s Offices have worked closely with the IRS and other law enforcement partners to enforce the nation’s tax laws fully, fairly and consistently through criminal investigations and prosecutions across the country, as evidenced by the sampling of recent convictions listed below. These enforcement efforts continue year-round.

 

Recent Tax Evasion and Filing False Tax Returns Prosecutions:

• In March, Denver Nichols, a Labadie, Missouri roofing contractor, pleaded guilty to filing false 2007 and 2008 income tax returns. Nichols operated his roofing business under the name Eagle Roofing Co. He late filed false 2007 and 2008 returns that underreported his business’s gross receipts by approximately $959,500 and $794,680.

• In March, Stephen Leib, a Philadelphia, Pennsylvania tech business owner, pleaded guilty to tax evasion. Leib owned New Wave Logistics Inc. He evaded more than $800,000 in taxes by cashing a significant amount of his business’s gross receipts at a check cashing facility, lying to his accountant about the total amount of income he earned and filing false tax returns.

• In March, Jeffrey Nowak, a Las Vegas, Nevada liquor storeowner, was sentenced to serve 41 months in prison for tax evasion and conspiring to defraud the United States. Nowak conspired with Ramzi Suliman, with whom he jointly owned and operated liquor stores in Las Vegas. Nowak and Suliman skimmed cash receipts and provided their accountant with a phony set of books that omitted nearly $4 million in cash receipts.

• In February, Jose Echeverria, a Chelan Falls, Washington businessman, pleaded guilty to filing a false individual income tax return. Echeverria owned and operated a produce sales business. He underreported his income by approximately $564,292.

• In December 2016, James and Mardeen Perin, former owners of Sully’s Pub in West Des Moines, Iowa, pleaded guilty to aiding and assisting in filing a false tax return. The Perins filed a false 2013 tax return that did not report cash that they earned through their business.

Recent Failure to File Tax Returns Prosecutions:

• In March, James Burton and Lucretia Pecantte-Burton, two Louisiana attorneys, pleaded guilty to failing to file individual income tax returns. Burton and Pecantte-Burton were partners of the law firm Pecantte-Burton & Burton (PB&B) and regularly received cash payments. They also had a partnership interest in a tax return preparation business. Burton and Pecantte-Burton did not file 2007 through 2009 income tax returns.

• In February, Samuel Frazier, a Gulfport, Mississippi businessman, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Frazier owned two companies in Gulfport: Frazier Fire Systems LLC and EZ Haul Demolition and Construction LLC. Frazier failed to file a 2009 tax return despite earning more than $618,253 in income.

• In December 2016, John Raschella, a former Parma, Ohio resident, was convicted at trial for failing to pay more than $1 million in income taxes, interest and penalties for 1995, 1996 and 1998 through 2012 on income earned as an insurance salesman. He also failed to timely file income tax returns between 1989 and 2012.

• In June 2016, Carlos Cortes, a San Antonio, Texas artist, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Cortes did not file tax returns for 2006 through 2009, despite earning more than $1.3 million in income during this time.

Recent Prosecutions Involving the Use of Nominee Entities and Offshore Bank Accounts to Hide Assets and Income:

• In March, Casey Padula, a Port Charlotte, Florida owner of Demandblox, a marketing and information technology business, pleaded guilty to conspiracy to commit tax and bank fraud. Padula conspired to move more than $2.5 million to offshore accounts in Belize and disguised them as business expenses in the corporate records. Padula used the funds to pay for personal expenses and purchase significant personal assets.

• In March, Masud Sarshar, a Los Angeles, California businessman, was sentenced to serve 24 months in prison for hiding more than $23.5 million in offshore bank accounts. Sarshar maintained several undeclared bank accounts at Israeli banks, both in his name and in the names of entities that he created. Between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to those undeclared accounts and earned more than $2.5 million in interest income. Sarshar reported none of this income on his individual and corporate tax returns.

• In January, three Orange County, California residents pleaded guilty to hiding millions of dollars in secret foreign bank accounts. Dan Farhad Kalili, David Ramin Kalili and David Shahrokh Azarian, willfully failed to file legally required reports, commonly known as FBARs, disclosing their bank accounts in Switzerland and Israel.

• In January, Peggy and John DeYoung, a Missoula, Montana couple, pleaded guilty to conspiring to defraud the United States. The DeYoungs had not filed an income tax return since 1998. Peggy DeYoung earned income through her ownership interest in two companies that owned Southern California mobile home parks. The DeYoungs also established a number of purported trusts. They owned bank accounts in the names of these trusts using fabricated taxpayer identification numbers and paid personal expenses from the accounts, causing a tax loss of $376,350.

Recent Prosecutions of Attempts to Obstruct IRS Efforts to Assess and Collect Taxes:

• In November 2016, Richard Thomas Grant, a Point Richmond, California man, was sentenced to serve 33 months in prison. Grant stopped filing income tax returns and paying income taxes despite earning significant income as a partner with an engineering company. Grant attempted to frustrate IRS collection and audit efforts by filing lawsuits against the IRS. To conceal his income, Grant used prepaid debit cards and money orders to pay personal expenses.

• In November 2016, Steven Headden Young of St. Petersburg, Florida, was sentenced to serve 21 months in prison. Young evaded a substantial portion of his individual income taxes for 2007 through 2011 and interfered with an IRS audit. He fabricated a letter from the IRS to a bank directing the bank to send subpoenaed records to a bogus address.

• In October 2016, Henti Lucian Baird, a Greensboro, North Carolina resident and former IRS revenue officer, pleaded guilty. Baird filed tax returns each year but has not paid since at least 1998. Baird created nominee bank accounts to hide hundreds of thousands of dollars from the IRS, submitted false information to the investigating IRS officer regarding these accounts and transferred funds from nominee accounts to avoid impending IRS levies.

• In June 2016, Paul Tharp, a North Carolina man, was sentenced to serve 21 months in prison. Tharp failed to file tax returns for 2003 through 2006, and the IRS assessed income tax against him for those years. Tharp attempted to evade payment of his tax debt by filing false disclosures with the IRS, omitting businesses that he owned as well as bank accounts and rental income.

More information about the Tax Division’s criminal and civil enforcement efforts in these and other areas is on the division’s website. The IRS website also has information about how to report tax fraud.

 

 

A DeSoto, Texas resident pleaded guilty today to aiding and assisting in the preparation of a false tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney John R. Parker for the Northern District of Texas.

 

According to documents filed with the court, Vicki Walker, 52, was a tax return preparer operating under the name Vicki Walker Tax Services LLC in Dallas. Walker admitted that she filed a false tax return with the Internal Revenue Service (IRS) for a client that contained false business loss and capital loss deductions. In addition, Walker admitted that she prepared other false returns intending to cause a tax loss of approximately $1,173,757.

 

Walker is scheduled to be sentenced on Aug. 2. She faces a statutory maximum sentence of three years in prison, as well as a term of supervised release, restitution and monetary penalties.

 

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Chris Stokes of the Northern District of Texas, who are prosecuting the case.

 

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

An Alabama real estate investor was sentenced on Monday, April 10, 2017, to serve 12 months and a day in prison for his role in a bid-rigging conspiracy and a fraud scheme related to public real estate foreclosure auctions in Mobile, Alabama, the Department of Justice announced.

Oscar Celso Anez pleaded guilty to bid rigging and conspiracy to commit mail fraud in the Southern District of Alabama on June 14, 2016.　 In addition to a term of imprisonment, Senior U.S. District Court Judge Callie V.S. Granade also ordered Anez to pay $343,561 in restitution.　

Between March 2002 and November 2010, Anez conspired with others not to compete for selected foreclosure properties at public auctions in order to obtain the properties at artificially suppressed auction prices.　 In addition, Anez and his co-conspirators held secret, second auctions for rigged foreclosure properties.　 The winner of the second auction obtained title to the property and made payoffs to co-conspirators.　 The money that the conspirators paid to one another would have gone to mortgage holders, homeowners and others with a legal interest in the property.　

"The Court’s sentence holds Oscar Anez accountable for his major role in carrying out these schemes and will serve as a strong deterrent to others who are considering violating federal laws that prohibit anticompetitive conduct," said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.　 "To date, fifteen defendants have been prosecuted and more than $1 million in restitution has been ordered by the United States District Court for the Southern District of Alabama."

"Fraud and bid-rigging have no place in this community," said Acting U.S. Attorney Steve Butler of the Southern District of Alabama.　 "This sentence should serve as a reminder that violations of federal anti-trust laws will be actively investigated and prosecuted in the Southern District of Alabama."

"The FBI remains dedicated to working with our law enforcement partners to eliminate this type of fraud," said Special Agent in Charge Robert F. Lasky of the FBI’s Mobile Field Office.

The sentencing of Anez is a result of an ongoing investigation that is being conducted by the Washington Criminal II Section of the Antitrust Division and the Mobile Field Office of the FBI, with substantial assistance from the U.S. Attorney’s Office for the Southern District of Alabama.　 Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000.

Jason A. Halek, 43, of Southlake, Texas, pleaded guilty in federal court in Bismarck, North Dakota, to three felony charges stemming from the operation of a saltwater disposal well near Dickinson, in Stark County, North Dakota, the Justice Department announced.  Halek pleaded guilty to three counts of violating the Safe Drinking Water Act.

The well, named the Halek 5-22, received “produced water” constituting “brine and other wastes” commonly and generically referred to as “saltwater.” “Saltwater” in this context covers a wide array of drilling waste fluids, including hydraulic fracturing fluid, which is water combined with chemical additives such as biocides, polymers and “weak acids.”

According to an agreed upon factual statement filed in court, Halek admitted to injecting saltwater into the well without first having the state of North Dakota witness a test of the well’s integrity, which is necessary to protect drinking water. Halek also admitted injecting fluids down the “annulus” or “backside” of the well in violation of the well’s permit which required that fluids be injected through the tubing. Finally, Halek also admitted to failing to provide written notice to the state of the date of first injection into the well.

Previously, on Sept. 26, 2014, Nathan R. Garber pleaded guilty to various charges related to the operation of the well. Sentencing for Halek and Garber is scheduled for July 31, 2017.

The case was investigated by the U.S. Environmental Protection Agency’s Criminal Investigation Division. Significant cooperation was provided by the State of North Dakota and the North Dakota Industrial Commission (NDIC). The case is being prosecuted by the United States Attorney’s Office for the District of North Dakota and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.