District Not Recorded

Representatives from INTERPOL Washington--the U.S. National Central Bureau (USNCB)--attend the opening ceremony for the 85th INTERPOL General Assembly (GA). The GA meets November 7th through 10th in Bali, Indonesia. The GA is composed of delegates appointed by the governments of INTERPOL member countries. As INTERPOL's supreme governing body, it meets once a year and makes all the major decisions affecting general policy, the resources needed for international cooperation, working methods, finances and programs of activities. It also elects the Organization's Executive Committee. Generally speaking, the GA makes decisions by a simple majority in the form of resolutions. Each member country represented has one vote.

As the designated representative to INTERPOL on behalf of the Attorney General, INTERPOL Washington serves as the national point of contact for all INTERPOL matters, coordinating international investigative efforts among member countries and the more than 18,000 local, state, federal, and tribal law enforcement agencies in the United States. A component of the U.S. Department of Justice, INTERPOL Washington is co-managed by the U.S. Department of Homeland Security.

Defendants Shipped More Than $780,000 Drugs into United States 

Two Pakistani nationals, who have been held in continuous custody since their October 2012 arrest in London, have been sentenced by Chief Judge Beryl A. Howell of the U.S. District Court in the District of Columbia, after pleading guilty to charges related to their operation of Internet sites that illegally shipped pharmaceuticals from Pakistan and the United Kingdom to customers in the United States, the Department of Justice announced. 

Sheikh Waseem Ul Haq, 43, and Tahir Saeed, 54, operated Internet sites that, from late 2005 until October 2012, illegally shipped $2 million of pharmaceuticals from Pakistan and the United Kingdom to customers worldwide, including nearly $780,000 in sales to U.S. purchasers.

Ul Haq was sentenced today to time served.  On Sept. 23, Saeed was sentenced to time served.  Both defendants will remain in federal custody pending their removal from the United States to Pakistan. Following both defendants October 2012 arrest at a hotel near Heathrow Airport by the London Metropolitan Police Service Fugitive Squad, they were extradited to the District of Columbia in the spring of 2013, following the return in November 2012 of a 48-count indictment.  In addition to their prison terms, each defendant agreed to forfeit $388,265.11. 

Ul Haq pleaded guilty to all 48 counts of the indictment, which charged him with conspiracy to import Schedule II, III and IV controlled substance pharmaceuticals into the United States; conspiracy to distribute Schedule II, III and IV controlled substance pharmaceuticals; conspiracy to introduce misbranded pharmaceuticals into interstate commerce; importation and distribution of controlled substance pharmaceuticals; introduction into interstate commerce of misbranded drugs and conspiracy to commit international money laundering.  Saeed pleaded guilty to conspiracy to import Schedule II, III and IV controlled substance pharmaceuticals into the United States; conspiracy to introduce misbranded pharmaceuticals into interstate commerce and conspiracy to commit international money laundering.

As part of the guilty pleas, the defendants admitted that they owned and operated two businesses, Waseem Enterprises and Harry’s Enterprises.  Both businesses were used to conduct wholesale pharmaceutical sales, as well as to unlawfully distribute a wide variety of controlled substances and prescription drugs through Internet sites.  The defendants directed U.S. customers to submit payments via Western Union to numerous individuals in Karachi, Pakistan, in order to conceal the fact that the funds were going to Ul Haq and Saeed.  In e-mails, the defendants admitted that they paid bribes to Pakistani customs officials to facilitate shipment of the drugs out of Pakistan.  The defendants packaged the drug shipments in ways that reduced the likelihood of interdiction by customs inspectors.

The drugs the defendants shipped into the United States included methylphenidate (sold as Ritalin); various anabolic steroids; alprazolam (sold as Xanax); diazepam (sold as Valium), lorazepam (sold as Ativan); clonazepam (sold as Klonapin) and other controlled and non-controlled substances.

“This prosecution demonstrates how the use of the Internet to distribute drugs illegally is a major threat to consumers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “These defendants operated their Internet marketing scheme from Pakistan and were able to ship drugs illegally and directly to U.S. citizens.  We will enforce the law to protect consumers from adulterated, contaminated and counterfeit drugs and assure that only medically necessary drugs are dispensed by licensed pharmacists who are filling legitimately issued prescriptions by licensed physicians.” 

“We will continue to work with our partners, nationally and internationally, to protect our country from those who are intent on shipping unregulated and potentially dangerous drugs into the United States,” said U.S. Attorney Channing D. Phillips for the District of Columbia.

The Department of Justice’s Organized Crime Drug Enforcement Task Force sponsored and supported this complex investigation, which was investigated by the FBI’s Washington Field Office, U.S. Postal Inspection Service, the U.S. Food and Drug Administration’s Office of Criminal Investigations and the Drug Enforcement Administration. The Criminal Division’s Office of International Affairs assisted with the extradition and additional assistance was received from the London Metropolitan Police Service, INTERPOL and law enforcement agents in Germany.  The case was prosecuted by Assistant U.S. Attorney John P. Dominguez of the U.S. Attorney’s Office for the District of Columbia and Senior Litigation Counsel Linda I. Marks of the Civil Division’s Consumer Protection Branch.

On November 2, 2016, the Maryland Prince George’s County Police Department’s District 5 Coffee Club met at the Colony South Hotel and Conference Center.  The Club, a non-partisan public forum for the Prince George's County police COPS unit, citizens, business owners, other public offcials and organizations, addresses issues effecting the community. Staff from INTERPOL Washington attended the meeting.

Each week, during the Coffee Club, citizens of District 5 bring their concerns directly to the police officers and firefighters working within their District. Public figures, like the District 5 Police Commander and the County Fire Battalion Chief, are loyal attendees and provide valuable insight to citizens via informational updates that address their concerns.

The community outreach efforts of the Prince George’s County Police Department showcase inventive ways to engage the community. The Coffee Club is one of ten community outreach programs that the District offers. Other programs include:

• Community Advocates for Family and Youth
• Community Emergency Response Team (C.E.R.T. of South County)
• The DISTRICT 5 Citizens Advisory Council (CAC)
• Judicial Watch
• Neighborhood Watch
• Police Athletic League
• Police Explorers
• Triad/SALT
• Volunteers in Police Service (VIPS)

The Prince George's County Police Department supports INTERPOL Washington, the U.S. National Central Bureau (USNCB), by providing a detailee to our State and Local Outreach Office.  The current detailee, Sergeant William Heggs, facilitated the USNCB visit.   Maryland is one of 12 states and the District of Columbia that participates in federation, allowing law enforcement agencies throughout the state full access to INTERPOL’s tools and services.

As the designated representative of the Attorney General, INTERPOL Washington serves as the national point of contact for all INTERPOL matters, coordinating international investigative efforts among member countries and the more than 18,000 local, state, federal, and tribal law enforcement agencies in the United States.

Hid Account Containing $200 Million Also Paying $100 Million Civil FBAR Penalty

A Rochester, New York emeritus professor of business administration pleaded guilty today to conspiring with others to defraud the United States and to submitting a false expatriation statement to the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Dana J. Boente of the Eastern District of Virginia, after the plea was accepted by U.S. District Judge T.S. Ellis III. 

According to documents filed with the court and statements made during the plea hearing, Dan Horsky, 71, is a citizen of the United States, the United Kingdom and Israel and was employed for more than 30 years as a professor of business administration at a university located in New York.  Beginning in approximately 1995, Horsky began investing in numerous start-up businesses through financial accounts at various offshore banks, including one bank in Zurich, Switzerland.  Horsky created “Horsky Holdings,” a nominee entity, to hold some of the investments and he used the Horsky Holdings account, and later, other accounts at the Zurich-based bank, to conceal his financial transactions and financial accounts from the IRS and the U.S. Treasury Department. 

Horsky made investments in Company A through the Horsky Holdings account using his own money, money provided by his father and sister, and margin loans from the Zurich-based bank.  Eventually, Horsky amassed a four percent interest in Company A’s stock.  In 2008, Company A was purchased by Company B for $1.8 billion in an all cash transaction.  Horsky received approximately $80 million in net proceeds from the sale of Company A’s stock, but disclosed to the IRS only approximately $7 million of his gain from that sale and paid taxes on just that fraction of his share of the proceeds.  In 2008, and in subsequent years, Horsky invested in Company B’s stock using funds from his accounts at the Zurich-based bank and by 2013, his investments in Company B, combined with other unreported offshore assets, reached approximately $200 million.

“Despite his extraordinary wealth, Mr. Horsky concealed funds offshore, failed to report substantial income, conspired to submit false expatriation documents to cover up his fraudulent scheme, and evaded paying his fair share of tax,” said Principal Deputy Assistant Attorney General Ciraolo.  “The Department and its partners within the IRS are receiving a tremendous amount of information from a wide variety of sources, and we are using that information to pursue and prosecute individuals like Mr. Horsky, who violate our nation’s tax laws.  Today’s guilty plea proves, once again, that taxpayers will pay a heavy price when they choose to secrete funds in foreign bank accounts and evade tax and reporting obligations.”

“You can’t hide from the IRS,” said U.S. Attorney Boente.  “Horsky went to great lengths to hide assets in secret accounts overseas in order to avoid paying his share of taxes to the IRS.  Today’s plea shows that we will continue to prosecute those who engage in this criminal activity. I want to thank IRS-Criminal Investigation and our prosecutors for their work on this important case.”

Horsky directed the activities in his Horsky Holdings and other accounts maintained at the Zurich-based bank, despite the fact that it was readily apparent, in communications with employees of the bank, that Horsky was a resident of the United States.  Bank representatives routinely sent emails to Horsky recognizing that he was residing in the United States.  Beginning in at least 2011, Horsky caused another individual to have signature authority over his Zurich-based bank accounts, and this individual assumed the responsibility of providing instructions as to the management of the accounts at Horsky’s direction.  This arrangement was intended to conceal Horsky’s interest in and control over these accounts from the IRS. 

In 2013, the individual who had nominal control over Horsky’s accounts at the Zurich-based bank conspired with Horsky to relinquish the individual’s U.S. citizenship, in part to ensure that Horsky’s control of the offshore accounts would not be reported to the IRS.  In 2014, this individual filed with the IRS a false Form 8854 (Initial Annual Expatriation Statement) that failed to disclose his net worth on the date of expatriation, failed to disclose his ownership of foreign assets, and falsely certified under penalties of perjury that he was in compliance with his tax obligations for the five preceding tax years. 

Horsky also willfully filed false 2008 through 2014 individual income tax returns which failed to disclose his income from, and beneficial interest in and control over, his Zurich-based bank accounts.  Horsky agreed that for purposes of sentencing, his criminal conduct resulted in a tax loss of at least $10 million.  In addition, Horsky failed to file Reports of Foreign Bank and Financial Accounts (FBARs) up and through 2011, and also filed false FBARs for 2012 and 2013.

“Federal income tax compliance should be equally shared among all Americans,” said Special Agent-in-Charge Thomas Jankowski of IRS Criminal Investigation (CI), Washington D.C. Field Office.  “Conspiring to defraud the government with an elaborate scheme to underreport taxable income is unlawful.  Mr. Horsky’s plea today serves as an important reminder that IRS-CI is committed to bringing to justice those who shirk their federal income tax responsibilities.”                   

Sentencing is scheduled for Feb. 10, 2017.  Horsky faces a statutory maximum sentence of five years in prison, as well as a period of supervised release and monetary penalties.  As part of his plea agreement, Horsky paid a penalty of $100 million dollars to the U.S. Treasury for failing to file and filing false FBARs, which is separate from any restitution that the court may order.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Boente commended special agents of IRS-CI, who conducted the investigation, and Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Mark Lytle of the Eastern District of Virginia, who are prosecuting this case.

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

WASHINGTON – Deputy Attorney General Sally Q. Yates released the following statement after President Obama granted commutation of sentence to 72 individuals:

"Today, another 72 individuals who were sentenced to unnecessarily long prison terms have received a second chance.  The department is moving full steam ahead as we continue reviewing drug petitions submitted under the clemency initiative, and we look forward to additional commutations in the coming months."

ALEXANDRIA, Va. – Said Imberly Chino Lucero, 28, a permanent resident of the United States residing in San Juan, Mexico, and Carlos Andres Herrera-Fernandez, 35, of Lanham, Maryland, were indicted today by a federal grand jury on charges of conspiracy to import and the importation of cocaine into the United States and possession with intent to distribute cocaine.

According to court records, the defendants were arrested October 5, after Chino Lucero attempted to bring 500 grams or more of cocaine into the U.S. through Dulles International Airport.  The cocaine was allegedly contained in packaging for candy which Chino Lucero smuggled in his luggage onto a commercial flight.  Herrera-Fernandez is identified as a co-conspirator in this scheme.

Herrera-Fernandez and Chino Lucero each face a mandatory minimum sentence of five years in prison and a maximum penalty of 40 years in prison if convicted of each count. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations (HSI) Washington, made the announcement after the grand jury returned the indictment. Special Assistant U.S. Attorney Raizza K. Ty is prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-250.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

The CEO and a senior manager of a Long Island, New York, company that fraudulently sold vending machine business opportunities were sentenced to prison, the Justice Department announced today.  Both defendants worked at Multivend LLC, dba Vendstar, based in Deer Park, New York.  Before closing in July 2010, Vendstar made approximately $10 to $12 million in sales per year.

 The sentences were imposed Thursday by U.S. District Court Judge Joan M. Azrack of the Eastern District of New York.  The two defendants sentenced on Thursday were among six defendants who were found guilty after a six-week jury trial before Judge Azrack last fall.

• Edward Morris “Ned” Weaver, 43, of Perrysburg, Ohio, was sentenced to serve 60 months in prison.  Weaver was the president and chief executive officer of Vendstar from 2004 to 2010.  Weaver was convicted of conspiracy, mail fraud, wire fraud, and making a false statement to a federal law enforcement agent.
• Lawrence A. Kaplan, 58, of Brooklyn, New York, was sentenced to serve 54 months in prison.  Kaplan was Vendstar’s technical support manager, whose primary job was to suppress the large number of complaints Vendstar received.  Kaplan was convicted of conspiracy, mail fraud, wire fraud and making a false statement.

“Ned Weaver, Lawrence Kaplan and their co-conspirators stole millions of dollars from people who had the misfortune to trust them and believe their lies,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “The Department of Justice will continue to prosecute fraud and hold accountable those who scam everyday Americans out of their hard-earned money.”

“The U.S. Postal Inspection Service will continue to work with our partners to ensure that our citizens are protected from these types of predatory schemes,” said Inspector in Charge Antonio J. Gomez of U.S. Postal Inspection Service, Miami Division, which led the investigation.  “It is an essential part of our core mission as Postal Inspectors that the U.S. mail isn’t used in furtherance of these fraudulent schemes that often target hard-working individuals.”

Vendstar sold business opportunities for plastic bulk vending machines that, for 25 cents, dispensed loose candy and nuts.  Vendstar advertised nationwide in newspapers and on the Internet.  Vendstar promised to provide everything its customers would need to be successful, including the machines, candy, assistance in finding profitable locations and ongoing customer support.  Vendstar sales representatives – with Weaver’s and Kaplan’s knowledge and approval – misrepresented the business opportunity’s likely profits, the amount of money that Vendstar’s prior customers were earning, how quickly customers were likely to recover their investment, the quality of locations that were available for the vending machines and the level of location assistance that customers would receive from locating companies recommended by Vendstar.  Vendstar referred customers to locating companies that did not find profitable locations and regularly changed their names to stay ahead of constant complaints.  Vendstar sales representatives also falsely claimed to operate their own profitable vending routes, according to evidence introduced during the trial.

Twenty-two individuals have been charged with fraud in connection with Vendstar, including Vendstar managers, Vendstar sales representatives and the operators of locating companies recommended by Vendstar.  In addition to the two defendants who were sentenced on Thursday, three defendants were sentenced last year and 16 other defendants are awaiting sentencing.

Principal Deputy Assistant Attorney General Mizer commended the U.S. Postal Inspection Service for its thorough investigation.  The case was prosecuted by Senior Litigation Counsel Patrick Jasperse and Alan Phelps of the Civil Division’s Consumer Protection Branch.

The Consumer Protection Branch (CPB) handles criminal as well as civil cases. During the last 10 years, the CPB has convicted approximately 150 individuals of fraudulently selling business opportunities. 

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

Used Stolen Identities to File Returns Fraudulently Claiming More Than $400,000 in Tax Refunds

A Montgomery County, Alabama resident was sentenced to 61 months in prison for his role in a stolen identity refund fraud scheme, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.

According to information provided in court, James Vernon Battle used stolen personal identification information to prepare and file at least 335 false federal income tax returns for tax years 2013 and 2014 that fraudulently claimed more than $400,000 in tax refunds.  Battle obtained stolen personal identification information from Wendy Huff, who worked at two loan companies in Montgomery, Alabama.  Battle directed the Internal Revenue Service (IRS) to issue the requested refunds via prepaid debit cards and U.S. Treasury checks.  The prepaid debit cards and checks were sent to various addresses controlled by Battle, as well as Huff’s personal residence.  Battle brought several checks to Huff’s workplace, where she used her position to cash them.  Huff returned half of the proceeds to Battle and kept the balance for herself.

Battle also attempted to obstruct justice by threatening and intimidating a witness.  Evidence introduced in court showed that right after Battle was released on bond, he stalked the witness and threatened that he had “a bullet for the person that messed up his million dollar plan.”  U.S. District Court Judge William Keith Watkins found that the evidence of obstruction warranted an increased prison sentence.

Battle pleaded guilty in April to wire fraud and aggravated identity theft.  In addition to the prison term imposed, Battle was ordered to serve three years of supervised release and to pay $102,322 in restitution to the IRS.  Huff pleaded guilty in March to conspiracy to commit wire fraud and aggravated identity theft, and was sentenced in July to 48 months in prison.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation and the U.S. Secret Service, who conducted the investigation, and Trial Attorneys Michael C. Boteler and Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who prosecuted this case.

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

Attorney General Loretta E. Lynch today released the following statement regarding this morning’s shooting in Des Moines, Iowa:

“Good morning, everyone.  Before we begin today, I want to take a moment to address the senseless attacks that claimed the lives of two police officers early this morning in Des Moines, Iowa.  A suspect is in custody, and the Department of Justice has offered any and all assistance to our state and local counterparts as they investigate these appalling attacks.  We will continue to monitor the situation, and our U.S. Attorney’s Office in the Southern District of Iowa will remain in regular contact with local authorities.

Violence has no place in the United States of America.  It degrades our communities, and it demeans our values.  And when that violence is coldly and deliberately directed at those who risk their lives to enforce the law and to keep us safe, it is especially intolerable. This tragic incident is yet another reminder of the tremendous dangers that law enforcement officers face each and every day.  The men and women in law enforcement deserve our gratitude and our respect.  And more than that, they deserve our support, which is why the Department of Justice is committed to doing everything we can to give police officers the tools, training, and equipment they need to do their jobs safely and effectively.  And we are determined to hold to account anyone who targets police officers simply because they have the courage and the selflessness to wear the badge each and every day.  

I know that this is a time of particular tension and mistrust between law enforcement and many communities.  I know that while we do not yet know what led the perpetrator to commit these awful crimes, many will be nevertheless be tempted to read a message or motive into this assault.  But let me be clear: there is no message in murder.  Violence creates nothing; it only destroys.  And the path to the more just and peaceful society that we desire for ourselves and for our children is paved not with hatred and malice, but with compassion, and understanding, and the hard work of cooperation.  Let those be our watchwords in the days to come.

I ask that you keep the families and loved ones of the brave officers we lost this morning in your thoughts and prayers.”

Unlawful Information Sharing Contributed to Blackout that Deprived Many Fans of Opportunity to Watch Los Angeles Dodgers on TV for Last 3 Seasons  

The Department of Justice sued DIRECTV and its corporate successor, AT&T Inc., today for acting as the ringleader of a series of unlawful information exchanges between DIRECTV and three of its competitors – Cox Communications Inc., Charter Communications Inc. and AT&T – during the companies’ negotiations to carry SportsNet LA, which holds the exclusive rights to telecast almost all live Dodgers games in the Los Angeles area. 

The lawsuit, filed in the U.S. District Court for the Central District of California, alleges that DIRECTV unlawfully exchanged competitively-sensitive information with Cox, Charter and AT&T during the companies’ negotiations for the right to telecast the Dodgers Channel.  Specifically, the complaint alleges that DIRECTV and each of these competitors agreed to and did exchange non-public information about their companies’ ongoing negotiations to telecast the Dodgers Channel, as well as their companies’ future plans to carry – or not carry – the channel.  The complaint also alleges that the companies engaged in this conduct in order unlawfully to obtain bargaining leverage and to reduce the risk that they would lose subscribers if they decided not to carry the channel but a competitor chose to do so.  The complaint further alleges that the information learned through these unlawful agreements was a material factor in the companies’ decisions not to carry the Dodgers Channel.  The Dodgers Channel is still not carried by DIRECTV, Cox or AT&T. 

“As the complaint explains, Dodgers fans were denied a fair competitive process when DIRECTV orchestrated a series of information exchanges with direct competitors that ultimately made consumers less likely to be able to watch their hometown team,” said Deputy Assistant Attorney General Jonathan Sallet of the Justice Department’s Antitrust Division.  “Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace.”

DIRECTV is a subsidiary of AT&T Inc., a Delaware corporation with headquarters in Dallas.  As of 2014, DIRECTV had approximately 1.25 million video subscribers in the Los Angeles area.  AT&T is a Delaware corporation with headquarters located in Dallas.  As of 2014, AT&T had approximately 400,000 video subscribers in the Los Angeles area.  

The Department of Justice today announced a new program, the Servicemembers Civil Relief Act Enforcement Support Pilot Program, to support enforcement efforts related to protecting the rights of current and former military personnel as part of the department’s Servicemembers and Veterans Initiative.  The Servicemembers Civil Relief Act (SCRA) is a federal law that provides wide-ranging financial and housing protections and benefits for military members as they enter active duty. 

With the support of the Executive Office for United States Attorneys and the Civil Rights Division, the new pilot program funds Assistant U.S. Attorney and trial attorney positions to assist the department’s litigating components with SCRA enforcement, and also designates military judge advocates currently serving as legal assistance attorneys to serve as Special Assistant U.S. Attorneys to support the department’s enforcement efforts related to the SCRA.  U.S. Attorneys throughout the country will also be appointing Initiative Liaisons to work with local military and veteran communities.

“The men and women who bravely defend our country deserve more than just our respect – they deserve our unyielding support,” said Attorney General Loretta E. Lynch.  “The pilot program we are announcing today will enhance our ability to safeguard the economic and legal rights of our servicemembers, our veterans and their families.  In the days ahead, the Department of Justice will continue working tirelessly to ensure that our laws protect those who protect us.”

“Servicemembers sacrifice a lot to protect our freedom and our security, and in turn our laws protect them and their families from unscrupulous financial predators,” said Principal Deputy Associate Attorney General Bill Baer.  “The SCRA Enforcement Support Pilot adds significant legal resources designed to stop these predators.  Whether a servicemember has a financial or housing related issue, the Department of Justice will investigate complaints promptly and vigorously take enforcement action against wrongdoers.”

The pilot provides full-time support for SCRA enforcement efforts through the end of Fiscal Year 2018 and funds Assistant U.S. Attorneys in districts with major military installations and additional trial attorneys in the Civil Rights Division, for a terminal period.  The Assistant U.S. Attorneys will principally be responsible for coordinating with Staff Judge Advocate’s Offices on military installations and bringing claims in coordination with the Civil Rights Division against those who target servicemembers.

The pilot also allows military judge advocates (JAG) who are serving as legal assistance attorneys to be designated as Special Assistant U.S. Attorneys for the purpose of assisting with SCRA litigation.  The Servicemembers and Veterans Initiative will coordinate the assignment of these JAG officers with U.S. Attorney’s Offices throughout the country.  U.S. Attorney’s Offices in the Western District of Washington and the Eastern District of North Carolina are the first districts adding these valuable military legal resources.

In addition to the funding, it was announced that the Servicemembers and Veterans Initiative has become a permanent component within the Office of the Associate Attorney General and will be led by Director Silas V. Darden.  The department created the Servicemembers and Veterans Initiative in December 2014 with a mission to support the department in its efforts to protect those who protect us all.  Please visit www.servicemembers.gov for more information about the initiative.

          ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that NAVIS FRANCES LEFEVER SABLAN, age 30, was sentenced today by Chief Judge Frances Tydingco-Gatewood of the District Court of Guam to serve eight months in federal prison, three years of supervised release, and ordered to pay $25,145.65 in restitution and a $100 special assessment fee.  Defendant SABLAN pled guilty on November 17, 2015, to Bank Fraud in violation of Title 18, United States Code, Section 1344.

          SABLAN admitted that from February 2014 to December 2014, she embezzled over $25,000 from her employer Allied Pacific Environmental Consulting (APEC).  APEC hired her as its bookkeeper and she was responsible for preparing checks drawn on the company’s checking accounts maintained at First Hawaiian Bank.  SABLAN forged the signatures of the company owner and other authorized personnel on 42 company checks that totaled $25,645.65.  She wrote payroll checks for herself and checks ostensibly for petty cash, and used the stolen funds for her personal benefit.            

            Alicia A.G. Limtiaco stated, “The U.S. Attorney’s Office and its law enforcement partners are committed to investigating and prosecuting individuals who victimize and perpetrate fraud against members of our community, including businesses and financial institutions.”

            This case was investigated by the Federal Bureau of Investigation and prosecuted by   Assistant U.S. Attorney Marivic David.

Grand Jury Has Now Indicted Six Individuals in Worldwide Conspiracy

A federal grand jury returned a superseding indictment today charging a total of six executives from four different companies for conspiring to fix prices of electrolytic capacitors sold to customers in the United States and elsewhere, the Department of Justice announced today.  

The indictment, filed in U.S. District Court in San Francisco, charges the following individuals for conspiring to suppress and eliminate competition by fixing the prices of electrolytic capacitors:

• Tomohide Date, an executive of NEC TOKIN, who is charged with conspiring from in or about November 2001 until in or about December 2011;
• Satoru Miyashita, an executive of Company C, who is charged with conspiring from in or about January 2003 until in or about September 2012;
• Yasutoshi Ohno, an executive of Company A, who is charged with conspiring from in or about April 2000 until in or about September 2012;
• Masanobu Shiozaki, an executive of Company B, who is charged with conspiring from in or about November 2001 until in or about December 2011; 
• Kiyoaki Shirotori, also an executive of Company C, who is charged with conspiring from in or about April 2006 until in or about December 2011; and 
• Takuro Isawa, a former employee of Company A, who is charged with conspiring from in or about August 2002 until at least March 18, 2010.  Isawa was previously indicted by a federal grand jury on March 12, 2015. 

“The Antitrust Division will not hesitate to charge foreign nationals who participate in conspiracies that cheat American consumers,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.  “These executives participated in a long-running conspiracy to fix the prices of electrolytic capacitors, which are necessary components in scores of electronic products purchased by American consumers.”

Electrolytic capacitors store and regulate electrical current in a variety of electronic products, including computers, televisions, car engine and airbag systems, home appliances and office equipment. 

The division has charged a total of five companies and six individuals for their participation in the same worldwide conspiracy.  NEC TOKIN Corporation and Hitachi Chemical Co. previously pleaded guilty and paid criminal fines of $13.8 million and $3.8 million, respectively.  On August 22, the division also filed informations charging Rubycon Corporation, Elna Co. Ltd. and Holy Stone Holdings Co. Ltd. with participating in the conspiracy.  All five companies are cooperating with the division’s ongoing investigation.

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

The charges today result from an ongoing federal antitrust investigation being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office into price fixing, bid rigging and other anticompetitive conduct in the capacitor industry.  Anyone with information on price fixing, bid rigging or other anticompetitive conduct related to the capacitors industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the FBI tip line at 415-553-7400.

Superseding Indictment

An attorney who operated a tax preparation business in the Bronx, New York, pleaded guilty today in Manhattan federal court to charges related to his participation in filing fraudulent tax returns and falsely claiming more than $6 million in bogus deductions, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Preet Bharara for the Southern District of New York.

William Doonan, 69, of Bronx, New York, pleaded guilty today before U.S. Magistrate Judge Andrew J. Peck to one count of aiding and assisting in the preparation of a false tax return, and one count of obstructing and impeding the due administration of the internal revenue laws.

“William Doonan used his law practice to prepare thousands of false tax returns each year with phony deductions, costing the U.S. treasury more than $1.5 million,” said Principal Deputy Assistant Attorney General Ciraolo.   “His conviction sends a clear message – we will fully prosecute crooked tax preparers – whether they be lawyers and tax professionals or temporary storefront operators.”

“William Doonan used his law degree and tax preparation business to fleece the IRS of millions of dollars in fraudulent tax deductions,” said U.S. Attorney Bharara.  “As he admitted today, Doonan claimed numerous false deductions for thousands of clients, defrauding the IRS and unlawfully depriving the public of tax revenue.”

According to the allegations contained in the Information filed in the Southern District of New York and statements made during the plea proceeding:

Since at least 2009, Doonan has been in the business of preparing federal tax returns for clients in exchange for fees.  Doonan, a New York licensed attorney since 1982, carried out his tax preparation business in the Bronx using the firm name “William Doonan, Esq.”  Doonan prepared and filed more than 3,000 federal tax returns with the Internal Revenue Service (IRS) each year and regularly prepared and filed client returns that were false and fraudulent.  For example, on some of his clients’ returns, Doonan added false medical and dental expenses, state and local taxes, home mortgage interest, gifts to charity, job expenses and certain miscellaneous deductions.  Doonan also attached Schedules C to his clients’ returns that reported “Consulting” businesses that the relevant clients did not own, operate, and materially participate in, and business losses that the relevant clients did not incur.  Between tax year 2009 through tax year 2012, Doonan included in excess of $6 million in these fabricated and inflated items on his clients’ federal tax returns.

Sentencing is scheduled for Feb. 10, 2017 before U.S. District Judge Vernon S. Broderick.  Doonan faces a statutory maximum sentence of three years in prison on the aiding and assisting in the preparation of a false return count and three years in prison on the obstruction of the internal revenue laws count, as well as a period of supervised release and monetary penalties. 

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Bharara commended agents of IRS-Criminal Investigation, who conducted the investigation. This case is being prosecuted by the U.S. Attorney’s Office for the Southern District of New York ’s Complex Frauds and Cybercrime Unit.  Special Assistant U.S. Attorney Jorge Almonte of the Tax Division is in charge of the prosecution.

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

The Department of Justice’s Antitrust Division and the Federal Trade Commission seek public comment on proposed Antitrust Guidelines for International Enforcement and Cooperation.  The proposed guidelines update the 1995 Antitrust Enforcement Guidelines for International Operations and provide guidance to businesses engaged in international activities on questions that concern the agencies’ international enforcement policy as well as the agencies’ related investigative tools and cooperation with foreign authorities.

The proposed guidelines reflect the growing importance of antitrust enforcement in a globalized economy and the agencies’ commitment to cooperating with foreign authorities on both policy and investigative matters. 

“The Antitrust Enforcement Guidelines for International Operations have long been an important reflection of the department’s application of the antitrust laws to businesses engaged in international operations,” said Acting Assistant Attorney General Renata Hesse, in charge of the Department of Justice’s Antitrust Division.  “Since the Guidelines were last updated in 1995, globalization has increased dramatically, as has international antitrust enforcement and the level of cooperation between the department and international counterparts.  Because of this evolution in practice and developments in the law over the intervening 21 years, this update is long overdue.” 

“With the continued expansion of cross-border commerce around the world, the agencies’ international antitrust enforcement policies and practices are becoming more and more important in protecting U.S. consumers and businesses,” said Chairwoman Edith Ramirez of the Federal Trade Commission.  “The revisions we are proposing are designed to ensure that the guidelines are up-to-date and transparent.”  

The proposed revisions restructure the previous guidelines in order to make the guidelines more useful and accessible by focusing on the questions of greatest significance to users.  The proposed revisions also describe the current practices and methods of analysis the agencies employ when determining whether to initiate and how to conduct investigations of, or enforcement actions against, conduct with an international dimension. 

In particular, the revisions:

•  Add a chapter on international cooperation, which addresses the agencies’ investigative tools, confidentiality safeguards, the legal basis for cooperation, types of information exchanged and waivers of confidentiality, remedies and special considerations in criminal investigations;  
• Update the discussion of the application of U.S. antitrust law to conduct involving foreign commerce, the Foreign Trade Antitrust Improvements Act, foreign sovereign immunity, foreign sovereign compulsion, the act of state doctrine and petitioning of sovereigns, in light of developments in both the law and the agencies’ practice; and
• Provide revised illustrative examples focused on the types of issues most commonly encountered.

The commission vote approving issuance of the proposed updated Antitrust Guidelines for International Enforcement and Cooperation for public comment was 3-0.  

The agencies are interested in receiving comments on the proposed update from interested parties, including attorneys, economists, academics, consumer groups and the business community.  Interested parties may submit public comments electronically to ATR.InternationalGuidelines@usdoj.gov until Thursday, Dec. 1.  Submitted comments will be made publicly available on the agencies’ websites.  

The Justice Department announced that it has reached a settlement agreement with Louisiana Tech University to ensure that black students have access to the high-quality education programs at the A.E. Phillips Laboratory School, a K-8 public school operated by Louisiana Tech on its campus in Lincoln Parish, Louisiana.  The U.S. District Court for the Western District of Louisiana today approved the court-ordered agreement, which will reduce barriers to enrollment for black students and further desegregate A.E. Phillips’ faculty, staff and facilities.

A.E. Phillips, which opened in approximately 1910 as a segregated school serving only white students, was first ordered to desegregate in 1984.  Following an investigation the Justice Department concluded, and Louisiana Tech agreed, that more work is needed to open up A.E. Phillips’ quality educational program to all students of Lincoln Parish.  As a laboratory school, A.E. Phillips is known for its strong academic programs and teaching, and serves as a resource for Louisiana Tech’s College of Education to train future teachers and apply innovative education techniques.

The University of Louisiana System, the Louisiana Board of Regents, the Louisiana Board of Elementary and Secondary Education and the Louisiana State Superintendent of Education are also parties to the settlement agreement.  Under the consent order, Louisiana Tech and A.E. Phillips will:

• increase the percentage of black student enrollment so that the percentage of black students enrolled at A.E. Phillips reflects the percentage of black students in grades K-8 enrolled in Lincoln Parish School Board’s schools by the 2020 through 2021 school year;
• take steps to expand A.E. Phillips’ existing facilities to two classrooms per grade level to accommodate additional black student enrollment;
• develop a comprehensive plan to recruit black students for incoming kindergarten classes and for available vacancies in other grade levels;
• offer full and partial tuition scholarships to admitted black students who are eligible for free and reduced price student meals under the federal guidelines;
• offer free and reduced price meals to admitted black students who meet the federal requirements for assistance; and
• take affirmative measures to recruit black candidates for administrator, teacher, certified staff and other staff vacancies at the school.

“We commend the Louisiana Tech community for its firm commitment to make the promise of equal access to education a reality for all children, regardless of the color of their skin,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “Our consent order establishes long overdue protections critical to increasing the enrollment of – and support for – black students at A.E. Phillips.” 
                           
“All students should have a quality education and should not be barred from any school that provides them that education,” said U.S. Attorney Stephanie A. Finley of the Western District of Louisiana.  “This consent order will have an important and lasting impact for all the students in the Lincoln Parish community.  The children of Louisiana should always be the focus.  We look forward to continuing to work with Louisiana Tech, A.E. Phillips and the state education agencies to ensure that the order is successfully implemented.”

The order dismisses the court’s supervision of the desegregation of A.E. Phillips in the areas of transportation and extracurricular activities.  Upon full implementation of the consent order, Louisiana Tech and the state education agencies may seek the court’s approval to dismiss the desegregation case against A.E. Phillips. 

Promoting school desegregation and enforcing Title IV of the Civil Rights Act of 1964 is a top priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt. 

The Justice Department announced today that it has opened an investigation into the conditions at the Boyd County Detention Center in Catlettsburg, Kentucky.  The investigation will focus on whether prisoners are adequately protected from the use of excessive force, whether prisoners are subject to an invasion of their bodily privacy and whether the jail indiscriminately uses restrictive housing without due process.

“Our Constitution protects prisoners against excessive force, violations of their bodily privacy and improper use of restrictive housing,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “We will conduct a thorough, comprehensive investigation guided by the facts and the law.”

The department has not reached any conclusions regarding the allegations in this matter.  The investigation will be conducted under the Civil Rights of Institutionalized Persons Act (CRIPA).  Under CRIPA, the department has the authority to investigate violations of prisoners’ constitutional rights that result from a “pattern or practice of resistance to the full enjoyment of such rights.”  The department has conducted CRIPA investigations of many correctional systems, and where violations have been found, the resulting settlement agreements have led to important reforms.

The Civil Rights Division’s Special Litigation Section is conducting this investigation.  Individuals with relevant information are encouraged to contact the department via phone at 844-491-4947 (starting on Nov. 9, 2016) or by email at Community.BoydCountyJail@usdoj.gov.

A former business manager of Local 657 of the Laborers International Union of North America (LIUNA) pleaded guilty today to stealing $1.7 million from Local 657 and related offenses. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington, D.C., Field Office, Special Agent in Charge Robin Blake of the Department of Labor Office of Inspector General Washington, D.C., Regional Office and District Director Mark Wheeler of the Department of Labor’s Office of Labor-Management Standards Washington, D.C., District Office made the announcement.  

Anthony Wendel Frederick Sr., 50, of Upper Marlboro, Maryland, was charged with one count of conspiracy to commit theft from a labor organization, one count of conspiracy to receive unlawful labor payments, one count of conspiracy to commit wire fraud and one count of money laundering, as part of a 45-count indictment against Frederick and two co-defendants.  Frederick pleaded guilty before U.S. District Judge Amit P. Mehta of the District of Columbia.

LIUNA’s Local 657 is a labor organization that represents construction laborers in Washington, D.C., and five adjacent counties.  Frederick served as the business manager for Local 657 for approximately 10 years until June 2014.

In pleading guilty, Frederick admitted that from May 2013 to June 2014, he directed more than $1.7 million in Local 657 funds to STS Contracting of Greenbelt, Maryland, without the knowledge or authorization of the Local 657 Executive Board or LIUNA International officials.  Frederick also admitted that officials in STS General Contracting made a number of financial payments to Frederick with the funds stolen from Local 657, including a down payment of $225,000 on a home that Frederick purchased and construction of a three-car garage on the property, and directed more than $600,000 to a corporation owned in part by Frederick’s wife.

The FBI and the Department of Labor investigated the case.  Trial Attorneys Vincent Falvo and David Karpel of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case.

A federal jury sitting in Oakland, California convicted a resident of Richmond, California yesterday for his role in a conspiracy to steal identities and cash fraudulently obtained and stolen U.S. Treasury checks, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division; U.S. Attorney Brian J. Stretch of the Northern District of California; and Special Agent in Charge Michael T. Batdorf of Internal Revenue Service-Criminal Investigation (IRS-CI).

Hugh Robinson was convicted on all charges of conspiracy to commit theft of public money, theft of public money, and aggravated identity theft following a five-day trial before U.S. District Court Judge Jeffery S. White in the Northern District of California. In November 2015, Robinson was charged, along with 10 co-defendants.  According to the indictment and evidence presented at trial, from at least August 2013 through April 2015, Robinson conspired with his co-defendants to obtain the names of deceased individuals by searching California death records, and electronically file false income tax returns in the names of those deceased individuals claiming refunds.  Robinson and his co-defendants listed addresses on these tax returns to which they had access to enable them to retrieve the refund checks.

According to the indictment and the evidence presented at trial, Janel McDonald, a charged co-conspirator, provided false and fraudulent California identification documents to other co-conspirators who used the false identifications to negotiate the refund checks. Robinson and other co-defendants cashed checks at various Walmart stores, including a store in Richmond, California where Robinson worked with co-conspirators to negotiate the fraudulently obtained checks.  According to the criminal complaint, a search of Robinson’s residence yielded U.S. Treasury checks totaling more than $237,000.

Sentencing is scheduled for Feb. 7, 2017.  Robinson faces a statutory maximum sentence of five years in prison for conspiracy to commit theft of public money, 10 years in prison for each count of theft of public money, and a mandatory sentence of two years in prison for each count of aggravated identity theft.  Robinson also faces a period of supervised release and monetary penalties.

Principal Deputy Assistant Attorney General Ciraolo, U.S. Attorney Stretch, and Special Agent in Charge Batdorf commended agents of IRS-CI, who conducted the investigation, and Assistant U.S. Attorneys Thomas Newman and Jose A. Olivera, and Trial Attorney Gregory Bernstein of the Justice Department’s Tax Division, who prosecuted the case.

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

A 21-count indictment was unsealed in the U.S. District Court for the Southern District of New York charging seven defendants with sex trafficking, conspiracy and related offenses.  The indictment, which was returned under seal on Sept. 15, 2016, alleges that the defendants are members of an international sex trafficking organization which operated in Mexico and the United States between 2000 and 2016.  Fourteen victims of the charged sex trafficking organization are identified in the indictment.

Six of the defendants charged were taken into custody on Oct. 26 and 27, 2016.  As part of a coordinated bilateral law enforcement action, Raul Romero-Granados, aka Chicarcas and El Negro, 32, and Isaac Lomeli-Rivera, aka Giro, 34, were arrested in the United States.  Efrain Granados-Corona, aka Chavito and Cepillo, 41; Alan Romero-Granados, aka El Flaco, 24; Pedro Rojas-Romero, 37, and Emilio Rojas-Romero, 34, were arrested in Mexico.  Juan Romero-Granados, aka Chegoya and El Guero, remains a fugitive.  The defendants arrested in Mexico were taken into custody by Mexican authorities pursuant to provisional arrest warrants submitted by the United States in August 2016.  The defendants arrested in the United States were presented on Oct. 27, 2016, before U.S. Magistrate Judge Kevin Nathaniel Fox of the Southern District of New York, and appeared today before U.S. District Judge Andrew L. Carter Jr. of the Southern District of New York.

The charges were announced today by Attorney General Loretta E. Lynch, U.S. Attorney Preet Bharara of the Southern District of New York, Director Sarah R. Saldaña of U.S. Immigration and Customs Enforcement (ICE), Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, and Special Agent in Charge Angel M. Melendez of ICE’s Homeland Security Investigations (HSI) in New York.

“Human trafficking is a corrosive and degrading practice that goes against both the rule of law and the most basic standards of human dignity,” said Attorney General Lynch.  “This indictment is yet another sign of the Justice Department’s steadfast determination to hold traffickers accountable for their heinous crimes, and of our unshakeable commitment to helping survivors reclaim their futures and restart their lives.  I want to commend our partners in Mexican law enforcement for their commitment to combating human trafficking.  We thank them for their cooperation in this important action, and for their ongoing collaboration in our shared efforts to end human trafficking in our nations.”

“The indictment outlines alleged conduct of these defendants that is brutal and predatory,” said U.S. Attorney Bharara.  “The defendants allegedly raped, beat, tortured, and enslaved their victims, often minors who were coercively separated from their families.  The combined efforts of American and Mexican law enforcement that made these charges possible reflect our joint commitment to protect victims of these most predatory crimes that treat human beings as chattel.”

“The sexual exploitation of human beings is one of the vilest crimes committed against humanity,” said Director Saldaña.  “This operation reflects our commitment to bring to justice traffickers who have no regard for human life.  Each arrest is a testament to the outstanding bilateral relationship between Mexico and the United States.  We are sending a clear message to human traffickers that law enforcement agencies on both sides of the border have them in their sights.”

“Through vigorous enforcement efforts and collaborative international partnerships, the Justice Department works tirelessly to bring traffickers to justice and protect victims held in modern-day slavery,” said Principal Deputy Assistant Attorney General Gupta.  “Human traffickers degrade the humanity of the vulnerable victims they target.  I commend our Mexican counterparts for their dedication to fighting the heinous crime of human trafficking, their sustained collaboration in advancing bilateral enforcement efforts and their critical role in this case.”

“Human trafficking is nothing less than a modern form of slavery and no one should be forced to live in a world of fear and involuntary servitude,” said Special Agent in Charge Melendez.  “HSI will remain steadfast in its commitment to working with its law enforcement partners to dismantle the international criminal organizations involved in human trafficking.”

As alleged in the superseding indictment unsealed on October 27, 2016 in federal court in Manhattan:  

Efrain Granados-Corona, Raul Romero-Granados, Isaac Lomeli-Rivera, Juan Romero-Granados, Alan Romero-Granados, Pedro Rojas-Romero and Emilio Rojas-Romero are members of an international sex trafficking organization known as the STO.  Many of the members of the STO are relatives.  Efrain Granados-Corona is the uncle of Raul Romero-Granados, Isaac Lomeli-Rivera (through his relationship with Granados-Corona’s niece), Juan Romero-Granados and Alan Romero-Granados.  Pedro and Emilio Rojas-Romero are brothers, as are Juan and Alan Romero-Granados.  Isaac Lomeli-Rivera is Raul Romero-Granados’s brother-in-law.

Between at least 2000 and the present, members of the STO used romantic promises, physical and sexual violence, threats, lies and coercion to force and coerce adult and minor women to work in prostitution in both Mexico and the United States.

The trafficking organization used a similar approach in many cases.  Often, a member of the STO would become romantically involved with a victim – frequently a minor – in Mexico.  The trafficker would then uses multiple means to isolate the victim from her family.  In some cases, the trafficker would use romantic promises to induce the victim to leave her family and live with him.  In other cases, the trafficker would rape the victim, making it difficult for her to return to her family due to the associated stigma of the rape.  Once a victim was separated from her family, the trafficker would frequently monitor her communications, keep her locked in an apartment, leave her without food and physically or sexually abuse the victim.  The traffickers often told victims that the traffickers owed a significant debt and that the victim needs to work in prostitution to assist in repaying the debt.  The traffickers typically begin forcing the victims to work in prostitution in Mexico, frequently in a neighborhood of Mexico City known as “La Merced.”  Victims would often be required to see at least 20 to 40 customers per day.  Traffickers would monitor the number of clients a victim sees by surveilling her, communicating with brothel workers and by counting the number of condoms provided to a victim.  Traffickers typically would require the victims to turn over all of the prostitution proceeds. 

After a victim worked in prostitution in Mexico for some time, the traffickers typically would arrange for the victim to be smuggled into the United States.  Members of the STO often assisted one another in making smuggling arrangements.  In many cases, multiple traffickers and multiple victims would be smuggled into the United States together.  In other cases, one trafficker may remain in Mexico while arranging for a victim to be smuggled together with another trafficker and other victims.

Once in the United States, the members of the STO generally maintained their victims at one of several shared apartments in New York City.  Victims living in the same apartment would frequently be forbidden to communicate with one another.  Once in the United States, traffickers would continue to use physical and sexual violence, threats of the same, lies and coercion to force the victims to work in prostitution. 

In most cases, the trafficker or another member of the STO would provide a victim with contact information with which to find work.  The victims typically work weeklong shifts either in a brothel or in a “delivery service.”  In a delivery service, the victim would be delivered to a customer’s home by a “driver.”  These brothels and delivery services are located both within New York, and in surrounding states, including, but not limited to Connecticut, Maryland, Virginia, New Jersey and Delaware.

Generally, each customer paid $30 to $35 for 15 minutes of sex.  Of that, half of the money typically went to the driver (in the case of a delivery service) or to the brothel.  The other $15 went to the victim, who was then typically forced to give all of the proceeds to the trafficker or to another member of the STO.

The traffickers then frequently sent, or had their victims send, some of the prostitution proceeds to traffickers’ family members and associates in Mexico by wire transfer.  Such transfers provide financial assistance to the traffickers’ families and financial support to the traffickers themselves if they return to Mexico. 

Since 2009, the Department of Justice, through the Civil Rights Division’s Human Trafficking Prosecution Unit and the Department of Homeland Security through HSI have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative aimed at strengthening high-impact prosecutions under both U.S. and Mexican law.  The initiative is aimed at dismantling human trafficking networks operating across the U.S.-Mexico border, bringing human traffickers to justice, reuniting victims with their children and restoring the rights and dignity of human trafficking victims held under the trafficking networks’ control.  These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of over 50 defendants in multiple cases in New York, Georgia, Florida and Texas since 2009, and numerous Mexican federal and state prosecutions of associated sex traffickers. 

On June 23, 2016, Attorney General Lynch announced the extradition to the United States of five defendants apprehended in Mexico through a prior bilateral human trafficking enforcement action that resulted in the arrests of eight defendants charged in a 27-count indictment in the Eastern District of New York with operating an international sex trafficking enterprise.  In announcing the charges unsealed on October 27, 2016, the Attorney General commended U.S. and Mexican law enforcement partners for their shared commitment to sustaining the momentum of these coordinated bilateral anti-trafficking efforts.

The charges in the indictment are merely allegations and the defendants are presumed innocent unless and until proven guilty. 

All seven defendants were charged with conspiracy to commit sex trafficking, which has a maximum sentence of life in prison.   Raul Romero-Granados and Efrain Granados-Corona were each charged with two counts of sex trafficking of a minor by force, fraud or coercion, which also carries a maximum sentence of life in prison.  Emilio Rojas-Romero, Pedro Rojas-Romero and Isaac Lomeli-Rivera were charged with two counts of sex trafficking by force, fraud or coercion, and Efrain Granados-Corona, Raul Romero-Granados, Juan and Alan Romero-Granados were charged with one count of sex trafficking by force, fraud or coercion, which also carries a maximum sentence of life in prison.  Raul Romero-Granados was charged with two counts of transportation of a minor for purposes of prostitution and Efrain Granados-Corona was charged with one count of transportation of a minor for purposes of prostitution, which also carries a maximum sentence of life in prison.  Isaac Lomeli-Rivera was charged with two counts of transportation for the purposes of prostitution and Efrain Granados-Corona, Juan Romero-Granados, Alan Romero-Granados, Pedro Rojas-Romero and Emilio Rojas-Romero were charged with one count of transportation for purposes of prostitution.  That charge carries a maximum sentence of 10 years in prison.

In announcing the indictment, Attorney General Lynch, U.S. Attorney Bharara, Director Saldaña and Principal Deputy Assistant Attorney General Gupta commended the HSI’s New York Office, the HSI Mexico Attaché Office, the State Department and the New York City Police Department for their assistance, and praised the government of Mexico for its role in this bilateral enforcement action.  The Justice Department also acknowledged the non-governmental victim service providers and advocates for their dedicated efforts to restore and improve the lives of survivors of trafficking and their families in connection with this case and others.

The case is being prosecuted by Assistant U.S. Attorneys Kristy J. Greenberg, Jane Kim and Rebecca G. Mermelstein of the Southern District of New York with the support of the Civil Rights Division’s Human Trafficking Prosecution Unit and the Criminal Division’s Office of International Affairs.

A federal grand jury sitting in Alexandria, Virginia returned an indictment on Oct. 26 that was unsealed today, charging a Haymarket, Virginia woman with wire fraud, aggravated identity theft, and filing false tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Dana J. Boente for the Eastern District of Virginia.

According to charging documents, Karen Holtz worked for JMS Ventures, Inc (JMS), d/b/a the Kenyan Collection, a small business that imported and distributed handmade Kenyan goods, including dog collars. Between 2008 and 2013, Holtz fraudulently diverted funds from JMS, by writing herself unauthorized checks from the JMS bank account and using PayPal to transfer customer payments directly to her personal bank account.  The indictment further alleges that Holtz defrauded JMS’s customers by using their personal identifying information, including names and credit card numbers, to make fraudulent charges to their credit cards.  Holtz is alleged to have obtained at least $350,000 from the fraud scheme.  The indictment further alleges that Holtz filed false federal individual income tax returns for tax years 2010 through 2013, which failed to report all the income that she received in those years.  In an attempt to conceal the fraud, Holtz also allegedly altered and destroyed records, including evidence of the fraud.

Holtz was arrested this morning and had her initial appearance this afternoon at the U.S. District Court in the Eastern District of Virginia in Alexandria in front of Magistrate Judge John F. Anderson.

If convicted, Holtz faces a statutory maximum sentence of 20 years in prison for each count of wire fraud, three years in prison for each count of filing false returns and a mandatory sentence of two years in prison for each count of aggravated identity theft.  In addition, Holtz faces a term of supervised release, restitution and monetary penalties.

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

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Boente thanked the Loudoun County Sheriff’s Office, U.S. Secret Service, and special agents of the Internal Revenue Service-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Katherine L. Wong of the Eastern District of Virginia and Trial Attorney Kimberly G. Ang 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. 

Failed to Report More Than $1.4 Million in Embezzled Funds on Tax Returns

A North Carolina businessman, who provided financial services to professional athletes, pleaded guilty today to wire fraud and filing a false 2011 income tax return, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Ripley Rand for the Middle District of North Carolina. 

Michael Rowan, 46, a resident of High Point, North Carolina, operated Capital Management Wealth Advisors Inc. (CMG) and APS Management LLC (APS), along with his business partner.  Through CMG and APS, Rowan provided financial and investment services to professional athletes, including players in the National Football League (NFL).  From May 2008 through August 2014, Rowan converted and misappropriated approximately $2.9 million from his clients’ bank accounts.  For 2009 through 2013, Rowan failed to report the misappropriated funds on his federal income tax returns.

According to documents filed with the court, Rowan, through CMG and APS, contacted prospective NFL Players in college to offer them financial and wealth management services, including bill payment, investment services and financial guidance.  Once a player was drafted by the NFL, Rowan would enter into a verbal agreement with the player to provide financial services for an annual fee of between $15,000 and $50,000.  Rowan directed his clients to execute an agency agreement that allowed Rowan access to the clients’ bank accounts.  Rowan represented to his clients that he would only make transactions that were authorized by the clients and for the clients’ benefit.  However, Rowan used his access to his clients’ bank accounts to transfer over $2.9 million for his own personal benefit and without his clients’ authorization or knowledge.

Sentencing is scheduled for Jan. 31, 2017. Rowan faces a statutory maximum sentence of 20 years in prison for the wire fraud count and three years in prison for the false tax return count, as well as a period of supervised release and monetary penalties.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of Internal Revenue Service-Criminal Investigation and U.S. Postal Inspection Service, who conducted the investigation, and Assistant U.S. Attorney Frank Chut and Trial Attorney Mara Strier of the Tax Division, who are prosecuting this case.

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

WASHINGTON, DC – The Department of Justice’s (DOJ’s) National Institute of Justice (NIJ) awarded nearly $800,000 to the Urban Institute and the University of Southern California to develop and test prevention programs addressing elder abuse, neglect and financial exploitation. The awards, which were also supported by DOJ’s Elder Justice Initiative, underscore NIJ’s work to identify evidence-based solutions to elder mistreatment and evaluate their effectiveness in prevention, detection and intervention. The awards establish an initial planning phase for an Elder Abuse Prevention Demonstration Project. Following the planning phase, NIJ will fund multi-year demonstration evaluations.

“There is no age limit on victimization,” said NIJ Director Nancy Rodriguez. “These awards are another step toward enabling evidence-based approaches to protect our elderly from abuse and neglect, while also holding accountable those who exploit and victimize our seniors.”

The Urban Institute was awarded $399,970 to design and implement an elder abuse prevention pilot project with at-risk adults 60 and older in Maricopa County, Ariz. This 18-month study will result in a published manual, including information for implementing and replicating the program in other locations. Following completion, the institute will perform a multi-year demonstration of the program.

The University of Southern California was awarded $400,000 to develop an innovative elder mistreatment intervention based upon lessons learned from preventing other forms of family violence, such as child maltreatment and intimate partner violence. The award will support the first phase of a three-part project led by the university in partnership with health professionals and stakeholders. Adults 65 and older will have the opportunity to take part in the first phase. Following completion, the university will perform a multi-year demonstration of the program.

More information on NIJ’s elder abuse projects is located here: http://nij.gov/topics/crime/elder-abuse/Pages/welcome.aspx

More information on DOJ’s Elder Justice Initiative can be found at www.elderjustice.gov. 

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

This October marks the 20th year for the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), which is responsible for implementing the Justice Department’s national strategies in combating computer and intellectual property crimes worldwide.

“CCIPS is the cornerstone of the department’s anti-cybercrime efforts, and has been involved in one capacity or another in practically every significant cybercrime and intellectual property case that has been in the public eye,” said Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.  “And CCIPS has been performing that role for 20 years, long before terms like ‘data breach’ or the ‘darknet’ became common references.”

CCIPS was established on Oct. 13, 1996, from an earlier five-attorney “Computer Crime Unit” formed in 1991 within the division’s General Litigation and Legal Advice Section.  In 20 years, CCIPS’s membership has grown to more than 40 attorneys, in addition to nine digital investigative analysts who comprise the CCIPS Cybercrime Lab.  Section attorneys regularly run complex investigations; resolve unique legal and investigative issues raised by emerging computer and telecommunications technologies; litigate cases; provide litigation support to other prosecutors; train federal, state and local law enforcement personnel; comment on and propose legislation; promote cybersecurity; and initiate and participate in international efforts to combat computer and intellectual property crime.

Since 1996, the section has prosecuted cases involving hundreds of millions of pieces of stolen information, including credit card and debit card numbers, email addresses, social security numbers and other personally identifying information; hundreds of millions of dollars of trade secrets, including highly sensitive technologies and agricultural products; tens of millions of counterfeit products and copyrighted works, ranging from pharmaceutical products and military supplies to digital media; and millions of compromised computers victimized by botnets and ransomware.

CCIPS’s litigation accomplishments, in partnership with prosecutors in U.S. Attorneys’ Offices across the country, include prosecutions of sophisticated hackers, such as the conviction of hacker Albert Gonzalez who, along with co-conspirators, infiltrated the computer networks of major retailers around the country and stole in excess of 40 million credit/debit card numbers; the disruption of the Gameover Zeus botnet and Cryptolocker ransomware scheme in connection with the indictment of Russian alleged cybercriminal Evgeniy Bogachev; and the takedown of Megaupload.com and indictment of its operator, Kim Dotcom, for allegedly running the largest worldwide online digital piracy conspiracy in history.  In cooperation with U.S. Attorneys’ Offices and international partners, the section has played a central role in cutting-edge international operations against “dark market” websites hosted on the Tor network. 

CCIPS has also worked to protect the privacy of Americans by prosecuting privacy invasions by criminals such as hackers, cyberstalkers, sextortionists and purveyors of mobile spyware.  In addition, CCIPS works diligently to assure the fair and appropriate use of law enforcement investigative authorities.  CCIPS has regularly updated its search and seizure manual to educate investigators and prosecutors about the legal issues surrounding search and seizure of computers and gathering of electronic evidence.  Over the years, CCIPS has contributed to Department of Justice policies promoting the effective and responsible use of evolving technologies, such as cell site simulators and drones.

Over its 20 years, CCIPS has played a transformative role in addressing the increasingly international nature of computer crime and digital evidence.  In 1997, the section helped form the G8 24/7 High Tech Crime Network, which created formal points of contact in participating countries for urgent assistance with international investigations involving electronic evidence.  CCIPS has served as the 24/7 Network point of contact for the United States since that time, assisting in emergency responses to criminal and terrorist incidents abroad.  From 1999 to 2001, CCIPS was part of the team that negotiated the Convention on Cybercrime, also known as the Budapest Convention, the world’s first international treaty governing cross-border cybercrime and electronic evidence, which now boasts 50 member countries. 

CCIPS also acts as a focal point for national and global networks of trained computer and intellectual property crime prosecutors.  The section coordinates the nationwide Computer Hacking and Intellectual Property prosecutor network, which is made up of dedicated computer and IP crime prosecutors in every U.S Attorney’s Office.  In cooperation with the Office of Overseas Prosecutorial Development and Training, CCIPS also manages regional Intellectual Property Law Enforcement Coordinator placements around the world. 

New initiatives like the Cybersecurity Unit represent CCIPS’s continued dedication to its role as a central hub for expert advice and legal guidance in a variety of areas, including best practices for victim response and reporting of cyber incidents, analysis of the implications of emerging technological changes like the Internet of Things, and white papers on topics such as information sharing and reports on active defense. 

“The section has shown a truly remarkable ability to respond to emerging threats and rapid technological change,” said Assistant Attorney General Caldwell.  “In the next 20 years, I expect that CCIPS will continue to be a leader for the department.” 

An Austin, Texas businessman was sentenced today to 72 months in prison following his conviction on filing false tax returns and corruptly endeavoring to impede the due administration of the internal revenue laws, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.

Victor Antolik, 57, owned and operated a commercial janitorial business with locations in Austin, San Antonio and Houston, Texas, under a variety of business names, including Diversified Building Services Inc., DBS Services Inc., Partners in Cleaning, PIC Building Services and BSI Industries.  Antolik also earned income as a real estate agent, real estate broker and property manager.  Antolik earned a portion of his real estate income through his companies SGN Realty Inc. and Signature Realty Services.  Antolik submitted to the Internal Revenue Service (IRS) false individual income tax returns on which he underreported his income for tax years 2004, 2007 and 2008.  In addition, between 1998 and 2014, Antolik attempted to obstruct the due administration of the internal revenue laws by, among other things, attaching altered Forms W-2 and 1099 to his tax returns, providing false information to his accountants that was used to prepare corporate and individual income tax returns on his behalf, and using nominees to conceal income and assets.

In addition to the prison term imposed, Antolik was also ordered to serve one year of supervised release and to pay restitution to the IRS in the amount of $916,358. 

Principal Deputy Assistant Attorney General Ciraolo thanked agents of IRS-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Robert A. Kemins and David Zisserson, who prosecuted the case.  Principal Deputy Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the Western District of Texas for their substantial assistance.   

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

The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit yesterday in U.S. District Court in Washington, D.C., against Fayez Sarofim for violating the premerger notification and waiting period requirements of the Hart-Scott-Rodino (HSR) Act of 1976 when he acquired voting securities of Kinder Morgan Inc., in 2001, 2006 and 2012, and Kemper Corporation in 2007.  At the same time, the department filed a proposed settlement, subject to approval by the court, under which Sarofim has agreed to pay a $720,000 civil penalty to resolve the lawsuit.

The HSR Act imposes notification and waiting period requirements for transactions meeting certain size thresholds so that they can undergo premerger antitrust review.  Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the department.  The maximum civil penalty for an HSR violation increased from $16,000 per day to $40,000 per day effective Aug. 1.

Further details about this matter are described in the FTC’s press release issued today, and in the attached complaint and competitive impact statement.

Consistent with the requirements of the Tunney Act, the proposed settlement, along with the competitive impact statement, will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Daniel P. Ducore, Special Attorney, United States, c/o Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580.  At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.

Sarofim CIS

Sarofim Complaint

Sarofim Explanation

Sarofim PFJ

Sarofim Stipulation

An American tuna fishing company that regularly unloaded its catch in American Samoa, was convicted and sentenced today for discharging oil into the South Pacific and for maintaining false records, announced Assistant Attorney General John C. Cruden of the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Channing D. Phillips for the District of Columbia.  The company, Pacific Breeze Fisheries LLC, owned the Fishing Vessel F/V Pacific Breeze, a tuna purse seiner that was responsible for the pollution.

Pacific Breeze Fisheries admitted that its engineers failed to document the illegal dumping of oily bilge water into the waters off American Samoa without the use of required pollution prevention equipment.  These discharges occurred on at least two occasions, in 2014 and 2015, before the vessel brought fish to a cannery in the port of Pago Pago, American Samoa.

The company further admitted that between October 2013 and July 2015, senior engineers regularly failed to accurately record the transfer and disposal of oil waste in the vessel’s Oil Record Book.  The U.S. Coast Guard relies on such records to determine whether vessels are illegally dumping oil at sea.  As a result, tons of oil sludge, waste oil and oily bilge water that were produced by the vessel remain unaccounted for.

The company pleaded guilty before U.S. District Court Judge Tanya S. Chutkan for the District of Columbia to four felony violations of the Act to Prevent Pollution from Ships, for failing to accurately maintain an Oil Record Book and for illegally discharging oily bilge water into the South Pacific.  Under the terms of the plea agreement, the company will pay a $1.6 million fine, in addition to a community service payment of $400,000 for use in the National Marine Sanctuary of American Samoa.  Though Pacific Breeze Fisheries does not currently manage any active fishing vessels, the company also agreed to implement an extensive environmental compliance plan in the event it resumes operations.

On Oct. 25, Jeon Seon Han, the former Chief Engineer of the F/V Pacific Breeze, pleaded guilty in the District of Hawaii for his role in obstructing the U.S. Coast Guard inspection of the vessel in American Samoa in 2015.  Han admitted to lying to U.S. Coast Guard inspectors about the disposal of sludge and to ordering the disassembly of an illegal discharge system before the inspection.  Sentencing for Han is scheduled for February 2017.

The case against Pacific Breeze Fisheries was investigated by U.S. Coast Guard personnel in American Samoa, Honolulu, Hawaii, and the District of Columbia.  The case was prosecuted by Senior Trial Attorney Kenneth E. Nelson and Trial Attorney Brendan Selby of the Environmental Crimes Section and Assistant U.S. Attorney Frederick W. Yette of the U.S. Attorney’s Office for the District of Columbia.

Today, the President granted commutation of sentence to the following 98 individuals:

·         David Alan Aldridge – Odessa, TX
Offense: Conspiracy to manufacture 50 grams or more of actual methamphetamine and possession of pseudoephedrine with intent to manufacture methamphetamine; possession with intent to distribute a quantity of methamphetamine; possession of equipment, chemicals, products and materials to manufacture methamphetamine; possession of a detectable amount of methamphetamine; purchasing more than nine (9) grams of ephedrine or pseudoephedrine during a 30 day period (six counts); Western District of Texas
Sentence: Life imprisonment; 10 years’ supervised release; $35,000 fine (August 13, 2009)

Commutation Grant: Prison sentence commuted to a term of 151 months’ imprisonment, and unpaid balance of the $35,000 fine remitted, conditioned upon enrollment in residential drug treatment.

·         Marvin D. Anthony, Sr.  – Camden, AR
Offense: Conspiracy to distribute 50 grams or more of cocaine base; distribution of cocaine base; Western District of Missouri
Sentence: Life imprisonment; six years’ supervised release (November 19, 2007)

Commutation Grant: Prison sentence commuted to a term of 262 months’ imprisonment.

·         Darnell C. Billings – Dolton, IL
Offense: Distribution of 50 or more grams of cocaine base; Central District of Illinois
Sentence: Life imprisonment (May 25, 2007)

Commutation Grant: Prison sentence commuted to a term of 188 months’ imprisonment.

·         Kevin Bivins – Niagara Falls, NY
Offense: Conspiracy to possess with intent to distribute and distribution of five kilograms or more of cocaine; conspiracy to possess with intent to distribute and distribution of 50 grams or more of cocaine base; possession with intent to distribute and distribution of cocaine base; use of a communication facility to commit a drug trafficking offense (eight counts); Western District of New York
Sentence: 168 months’ imprisonment; 10 years’ supervised release (January 11, 2002); amended to 240 months’ imprisonment (on remand) (July 18, 2003)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.

·         Edward Lionel Blake – Houston, TX
Offense: Conspiracy to possess with intent to distribute cocaine base; possession with intent to distribute cocaine base, aiding and abetting; Southern District of Texas
Sentence: 360 months’ imprisonment; five years’ supervised release; $1,000 fine (November 24, 1998)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Wallace Bourgeois, Jr.  – LaPlace, LA
Offense:         1. Conspiracy to distribute and to possess with the intent to distribute 50

                        grams or more of cocaine base ("crack"); Eastern District of Louisiana

2. Wire fraud; Eastern District of Louisiana
Sentence:        1. 240 months’ imprisonment; 10 years’ supervised release (January 7,

2010)

2. 12 months’ imprisonment (concurrent); three years’ supervised release (concurrent) (April 28, 2010)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Damon Brightman – Goose Creek, SC
Offense: Conspiracy to possess with intent to distribute and distribution of five kilograms or more of cocaine and 50 grams or more of cocaine base; District of South Carolina
Sentence: Life imprisonment; 10 years’ supervised release (March 22, 2006)

Commutation Grant: Prison sentence commuted to a term of 210 months’ imprisonment.

·         Shane Derek Brown – Key West, FL
Offense: Possession with intent to distribute 50 grams or more of crack cocaine; Southern District of Florida
Sentence: 262 months’ imprisonment; five years’ supervised release (January 28, 2002)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         James Holman Browning, Jr.  – Mebane, NC
Offense: Conspiracy: Distributed cocaine base ("crack"); distributed crack (two counts); Middle District of North Carolina
Sentence: Life imprisonment; 10 years’ supervised release (December 19, 2003)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Mark Lamont Byrd – St. Louis, MO
Offense: Possession with intent to distribute in excess of five grams of cocaine base; possession of a firearm during and in relation to a drug trafficking crime; possession with intent to distribute in excess of 50 grams of cocaine base; Eastern District of Missouri
Sentence: 180 months’ imprisonment; five years’ supervised release (May 19, 2006)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         David Carroll – Arlington, VA
Offense: Distribution of crack cocaine (seven counts); distribution of cocaine (two counts); possess with intent to distribute crack cocaine; Eastern District of Virginia
Sentence: Life imprisonment; 10 years’ supervised release  (June 9, 1995)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Derrick Dante Clark – Cocoa, FL
Offense: Conspiracy to possess with intent to distribute and distribution of cocaine base; possession with intent to distribute and distribution of cocaine base; Middle District of Florida
Sentence: 240 months’ imprisonment; 10 years’ supervised release (June 25, 2007)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Kevin Wayne Daniels – Austin, TX
Offense: Possession with intent to distribute 50 grams or more of methamphetamine; felon in possession of a firearm; Western District of Texas
Sentence: 240 months’ imprisonment; 10 years’ supervised release (January 23, 2009)

Commutation Grant: Prison sentence commuted to 175 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Israel John Patrick Davis – Oklahoma City, OK
Offense: Conspiracy to possess with intent to distribute and distribute a controlled substance; District of North Dakota
Sentence: 204 months’ imprisonment; five years’ supervised release (January 22, 2009); amended to 163 months’ imprisonment (January 25, 2016)

Commutation Grant: Prison sentence commuted to expire on October 27, 2017.

·         Anthony D. Dorsey – Kansas City, MO
Offense: Possession with intent to distribute a mixture or substance containing cocaine base in an amount of 50 grams or more; Western District of Missouri
Sentence: 240 months’ imprisonment; 10 years’ supervised release (August 23, 2007)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.

·         Juan Antonio Duenas – San Antonio, TX
Offense: Possess with intent to distribute, more than 50 grams of methamphetamine; Southern District of Texas
Sentence: 240 months’ imprisonment; 10 years’ supervised release (September 24, 2003)

Commutation Grant: Prison sentence commuted to October 27, 2018, conditioned upon enrollment in residential drug treatment.

·         Charlton Oriaso Esekhigbe – Missouri City, TX
Offense: Possession with intent to distribute 50 grams or more of cocaine base; felon in possession of a firearm; Southern District of Texas
Sentence: 240 months’ imprisonment; 10 years’ supervised release (February 17, 2006)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         John Aundo Gamble – Myrtle Beach, SC
Offense: Possession with intent to distribute five grams or more of cocaine base and a quantity of cocaine; felon in possession of a firearm and ammunition; using, carrying and possessing a firearm during and in furtherance of a drug trafficking crime; District of South Carolina
Sentence: 240 months’ imprisonment; five years’ supervised release (August 31, 2004)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Miguel Garcia – Perley, MN
Offense: Conspiracy to possess with intent to distribute and distribute controlled substances; possession with intent to distribute a controlled substance; District of North Dakota
Sentence: Life imprisonment; 10 years’ supervised release (September 28, 2006)

Commutation Grant: Prison sentence commuted to a term of 360 months’ imprisonment.

·         Ignatizo Giuliano – Fort Lauderdale, FL
Offense: Knowingly conspiring with other persons to distribute and to possess with intent to distribute five kilograms or more of cocaine; Middle District of Florida
Sentence: Life imprisonment; 10 years’ supervised release (November 4, 1991)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Stephen Runea Glenn – Houston, TX
Offense: Possession with intent to distribute 50 grams or more of cocaine base, aiding and abetting; possession of a firearm in furtherance of a drug trafficking crime; Southern District of Texas
Sentence: 180 months’ imprisonment; five years’ supervised release (May 14, 2009)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Arandal Derrick Goodley – Midland, TX
Offense: Conspiracy to distribute cocaine base "crack"; possession with intent to distribute a quantity of cocaine base "crack"; laundering of monetary instruments (15 counts); aiding and abetting laundering of monetary instruments (four counts); Western District of Texas
Sentence: Life imprisonment; 10 years’ supervised release (October 22, 1998)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Stephen Joseph Graham – Cumming, GA
Offense: Conspiracy to possess with intent to distribute methamphetamine; possession with intent to distribute methamphetamine; Northern District of Georgia
Sentence: Life imprisonment; 10 years’ supervised release  (September 17, 2002)

Commutation Grant: Prison sentence commuted to a term of 360 months’ imprisonment.

·         Wayne Gross – St. Louis, MO
Offense: Unlawful user of controlled substances while in possession of firearms; possession with the intent to distribute cocaine base (crack); carrying a firearm during and in relation to a drug trafficking crime; Eastern District of Missouri
Sentence: 248 months’ imprisonment; four years’ supervised release (April 2, 2004)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Robert Sedillo Gutierrez – Roswell, NM
Offense:         1. Possession with intent to distribute 500 grams and more of a mixture

and substance containing a detectable amount of methamphetamine, its salts, isomers, and salts of its isomers; District of New Mexico

2. Supervised release violation (attempt to possess with intent to distribute more than 500 grams of cocaine); District of New Mexico
Sentence:        1. 360 months’ imprisonment; 10 years’ supervised release (August 7,

                        2006)

2. 18 months’ imprisonment; two years’ supervised release (concurrent) August 7, 2006)

Commutation Grant: Prison sentence commuted to a term of 210 months’ imprisonment.

·         Ishon D. Hardin – Knoxville, TN
Offense: Conspiracy to distribute and possession with intent to distribute five kilograms or more of a substance containing cocaine hydrochloride and cocaine base; possession with intent to distribute cocaine; Eastern District of Tennessee
Sentence: 292 months’ imprisonment; 10 years’ supervised release (September 24, 2001); amended to 240 months’ imprisonment (August 16, 2010)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Robert A. Hearn – Springfield, IL
Offense: Possession with intent to distribute five or more grams of a mixture or substance containing cocaine base (crack); Central District of Illinois
Sentence: 360 months’ imprisonment; eight years’ supervised release (March 16, 2007)

Commutation Grant: Prison sentence commuted to a term of 240 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Jamar Henry – Springfield, IL
Offense: Possession of five or more grams of cocaine base "crack" with the intent to distribute; Central District of Illinois
Sentence: 262 months’ imprisonment; eight years’ supervised release (September 2, 2003)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Ferlandis Urben Herod – Memphis, TN
Offense: 1. Conspiracy to possess with intent to distribute five kilograms or more of cocaine; possession with intent to distribute five kilograms or more of cocaine; 2. Supervised release violation (conspiracy to possess with intent to distribute cocaine); 1. Middle District of Tennessee; 2. Western District of Tennessee
Sentence: 1. Life imprisonment; 2. 24 months’ imprisonment (consecutive); 10 years’ supervised release (1. July 14, 2005; 2. December 19, 2005)

Commutation Grant: Prison sentence commuted to a term of 264 months’ imprisonment.

·         Olynthia Louise Hinton – Chester, SC
Offense: Possession with intent to distribute a quantity of cocaine and 50 grams or more of cocaine base; District of South Carolina
Sentence: 240 months’ imprisonment; 10 years’ supervised release (February 15, 2006)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         James Holmes – Nashville, TN
Offense: Conspiracy to possess with intent to distribute 50 grams or more of a mixture and substance containing a detectable amount of cocaine base; maintaining a place for the purpose of manufacturing and distributing a mixture and substance containing a detectable amount of cocaine base; Northern District of Alabama
Sentence: 240 months’ imprisonment; 10 years’ supervised release (February 16, 2005)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Antonio Hood – Lancaster, SC
Offense: Conspiracy to possess with intent to distribute and distribution of five kilograms or more of cocaine and 50 grams or more of cocaine base; District of South Carolina
Sentence: Life imprisonment; 10 years’ supervised release (February 2, 2005)

Commutation Grant: Prison sentence commuted to a term of 240 months’ imprisonment.

·         William D. Hoopingarner – Marshall, IL
Offense: Conspiracy to distribute in excess of 500 grams of methamphetamine (mixture); Southern District of Indiana
Sentence: 168 months’ imprisonment; five years’ supervised release (April 25, 2008); amended to 135 months’ imprisonment (January 12, 2016)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Donnie Keith Howell – Goldsboro, NC
Offense: Conspiracy to possess and distribute cocaine base; distribution of cocaine base; Eastern District of North Carolina
Sentence: Life imprisonment; five years’ supervised release (March 13, 1995)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Andre M. Huggins – Bear, DE
Offense: Distribution of cocaine (two counts); conspiracy to distribute more than five kilograms of cocaine; maintaining a dwelling to distribute cocaine; money laundering (two counts); District of Delaware
Sentence: 240 months’ imprisonment; 10 years’ supervised release (August 21, 2006)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Tony Orlando Hughes – Newport News, VA
Offense: Conspiracy to possess with intent to distribute and distribute cocaine and cocaine base; distribute cocaine base (22 counts); distribute cocaine (two counts); possession of firearm during and in relation to a drug trafficking crime (eight counts); possess with intent to distribute cocaine (three counts); Eastern District of Virginia
Sentence: 2,616 months’ imprisonment; 10 years’ supervised release  (November 29, 2004)

Commutation Grant: Prison sentence commuted to a term of 360 months’ imprisonment.

·         Virgilio Jimenez – Manhattan, NY
Offense: Possession with intent to distribute five grams or more of cocaine base ; District of Rhode Island
Sentence: 292 months’ imprisonment; eight years’ supervised release (March 23, 2006)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Alphonso Johnson – Orlando, FL
Offense: Conspiracy to possess with intent to distribute cocaine base; possession with intent to distribute cocaine base; Middle District of Florida
Sentence: 360 months’ imprisonment; five years’ supervised release (July 2, 1999)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Gerald Jerome Johnson – Jamestown, ND
Offense: Possession with intent to distribute a controlled substance; possession of a firearm in furtherance of a drug trafficking crime; possession of a firearm by a convicted felon; District of North Dakota
Sentence: Life plus 25 years’ imprisonment (October 10, 2006)

Commutation Grant: Prison sentence commuted to a term of 300 months’ imprisonment.

·         Tony O’Neal Johnson – Mexia, TX
Offense: Possession with intent to distribute at least five grams of cocaine base (three counts); Western District of Texas
Sentence: 292 months’ imprisonment; eight years’ supervised release, $3,000 fine (June 22, 2005); amended to 210 months’ imprisonment (May 16, 2007)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, and unpaid balance of $3,000 fine remitted, conditioned upon enrollment in residential drug treatment.  

·         Charles Jermaine Keitt – Orangeburg, SC
Offense: Possession with intent to distribute 5 grams or more of cocaine base and a quantity of cocaine, and a quantity of marijuana; District of South Carolina
Sentence: 262 months’ imprisonment; eight years’ supervised release (September 23, 2008)

Commutation Grant: Prison sentence commuted to a term of 151 months’ imprisonment.

·         Jaleel Abdul Lafi, III – Hopkins Park, IL
Offense: Distribution of five or more grams of cocaine base ("crack") (three counts); distribution of 50 or more grams of cocaine base ("crack"); possession of a firearm in relation to drug trafficking crime; Central District of Illinois
Sentence: 180 months’ imprisonment; five years’ supervised release (February 17, 2009)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Bobby Earl Lee – St. Petersburg, FL
Offense: Possession with the intent to distribute 50 grams or more of cocaine base; possession with the intent to distribute five grams or more of cocaine base; possession of a firearm in relation to a drug trafficking crime; Middle District of Florida
Sentence: Life plus 60 months’ imprisonment (September 16, 1994)

Commutation Grant: Prison sentence commuted to a term of 360 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Edward Monroe Little  – Maiden, NC
Offense: Conspiracy to possess with intent to distribute quantities of cocaine and cocaine base; possessing with intent to distribute, a quantity of cocaine base, and aiding and abetting; Western District of North Carolina
Sentence: Life imprisonment; 10 years’ supervised release (January 10, 2005)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.

·         John Lockett – Houston, TX
Offense: Conspiracy to possess with intent to distribute crack cocaine; possession with intent to distribute crack cocaine (two counts); Southern District of Texas
Sentence: Life imprisonment; 10 years’ supervised release; $5,000 fine (September 26, 1997)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017 and unpaid balance of the $5,000 fine remitted.

·         Alberto Lopez – Gardner, MA
Offense: Conspiracy to possess heroin and cocaine base with intent to distribute; possession of heroin with intent to distribute and distribution of heroin; possession of cocaine base with intent to distribute and distribution, aiding and abetting (three counts); District of Massachusetts
Sentence: Life imprisonment; six years’ supervised release (June 4, 1996)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Rico Mayo – Benicia, CA
Offense: Possession of five or more grams of cocaine base; use of a firearm during and in relation to a drug trafficking crime; possession with intent to distribute cocaine base; Eastern District of California
Sentence: 420 months’ imprisonment; five years’ supervised release (February 9, 1998)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         James A. McKines – Las Vegas, NV
Offense: Conspiracy to possess with intent to distribute phencyclidine (PCP); possession with intent to distribute PCP; interstate travel in aid of racketeering; Western District of Missouri
Sentence: Life imprisonment; 10 years’ supervised release; $40,000 fine (November 2, 1989)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Otis McRay – Satsuma, FL
Offense: Conspiracy to distribute 5 kilograms or more of cocaine and 50 grams or more of cocaine base; distribution of 5 grams or more of cocaine base (two counts); Middle District of Florida
Sentence: Life imprisonment; eight years’ supervised release (November 26, 2001)

Commutation Grant: Prison sentence commuted to a term of 240 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Terrance Ramon Merritt – Fort Walton Beach, FL
Offense: Conspiracy to possess with intent to distribute 5 kilograms or more of a mixture and substance containing a detectable amount of cocaine, 50 grams or more of a mixture and substance containing cocaine base; 3,4 methylenedioxymethamphetamine (MDMA) and marijuana; possession with intent to distribute 500 grams or more of a mixture and substance containing a detectable amount of cocaine, a detectable amount of MDMA and a detectable amount of marijuana; possession of a firearm by a convicted felon; Northern District of Florida
Sentence: Life imprisonment; 10 years’ supervised release (March 15, 2007)

Commutation Grant: Prison sentence commuted to a term of 262 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Thomas Lee Miller – Emmons, MN
Offense: Manufacturing or attempt to manufacture five grams or more of actual (pure) methamphetamine within 1,000 feet of a protected location after having a prior felony drug conviction; Northern District of Iowa
Sentence: 360 months’ imprisonment; 16 years’ supervised release (December 18, 2003)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Jose Flores Molina – Nampa, ID
Offense: Possession with intent to distribute heroin; possession with intent to distribute methamphetamine; District of Idaho
Sentence: 360 months’ imprisonment; eight years’ supervised release, $3,000 fine (January 30, 2003)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Ernest Moore, Jr. – Tuskegee, AL
Offense: Distribution of cocaine base (two counts); possession with intent to distribute cocaine base (two counts); carrying a firearm in connection with a drug trafficking offense; Middle District of Alabama
Sentence: 180 months’ imprisonment; five years’ supervised release (February 17, 2005)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Michael Howard Motes – Wilmington, NC
Offense: Conspiracy to distribute and possess with intent to distribute methamphetamine and amphetamine; possession with intent to distribute methamphetamine and amphetamine; Northern District of Georgia
Sentence: Life imprisonment; 10 years’ supervised release; $10,000 fine (June 30, 1999)

Commutation Grant: Prison sentence commuted to a term of 360 months’ imprisonment and unpaid balance of the $10,000 fine remitted.

·         Randall C. Moyer – Salt Lake City, UT
Offense: Attempted manufacture of 50 grams or more of actual methamphetamine; District of Utah
Sentence: 240 months’ imprisonment; five years’ supervised release; $2,729.97 restitution (July 25, 2006)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, and unpaid balance of $2,729.97 restitution obligation remitted, conditioned upon enrollment in residential drug treatment.  

·         Francisco Navarro – San Diego, CA
Offense: Importation of heroin; possession of heroin with intent to distribute; Southern District of California
Sentence: 240 months’ imprisonment; 10 years’ supervised release (August 11, 2008)

Commutation Grant: Prison sentence commuted to a term of 168 months’ imprisonment.

·         David Neighbors – Evansville, IN
Offense: Conspiracy to distribute 50 grams or more of cocaine base and less than 500 grams of cocaine hydrochloride; distribution of five grams or more of cocaine base (two counts); possession with intent to distribute more than 50 grams of cocaine base; Southern District of Indiana
Sentence: Life imprisonment; 10 years’ supervised release (December 17, 2008)

Commutation Grant: Prison sentence commuted to a term of 360 months’ imprisonment.

·         Larry Anthony Nesby – Cairo, IL
Offense: Conspiracy to distribute 50 grams or more of cocaine base (two counts); Southern District of Illinois
Sentence: Life imprisonment; $400 fine (October 3, 2002)

Commutation Grant: Prison sentence commuted to a term of 360 months’ imprisonment.

·         Rasheed Jamal Olds – Kansas City, KS
Offense: Conspiracy to distribute cocaine and crack cocaine; conspiracy to launder money; District of Kansas
Sentence: Life imprisonment; five years’ supervised release (May 7, 1997); amended to 360 months’ imprisonment (October 18, 2011)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Robert O’Neal  – Fort Lauderdale, FL
Offense: Conspiracy to possess with intent to distribute crack cocaine; possess with intent to distribute crack cocaine (two counts); Southern District of Florida
Sentence: 240 months’ imprisonment; 10 years’ supervised release (January 24, 2003)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Antonio D. Patrick – Halls, TN
Offense: Possession with intent to distribute and distribution of cocaine base; possession with intent to distribute and distribution of cocaine; Western District of Tennessee
Sentence: 262 months’ imprisonment; five years’ supervised release  (October 11, 2002)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Harold Eugene Patton – Morganton, NC
Offense: Conspiracy to possess with intent to distribute cocaine base; Western District of North Carolina
Sentence: Life imprisonment; 10 years’ supervised release  (November 19, 2008)

Commutation Grant: Prison sentence commuted to a term of 235 months’ imprisonment.

·         George Pearson, Jr.  – Clearwater, FL
Offense: Conspiracy to possess with intent to distribute 50 grams or more of cocaine base; possession with intent to distribute cocaine base; Middle District of Florida
Sentence: 240 months’ imprisonment; 10 years’ supervised release (July 2, 2004)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Anthony Pender – Laurel, MD
Offense: Possession of a firearm by convicted felon; possession with intent to distribute 50 grams or more of cocaine base; District of Maryland
Sentence: Life imprisonment; 10 years’ supervised release (December 4, 2006)

Commutation Grant: Prison sentence commuted to a term of 188 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Bobby Clarence Perry – Commerce, GA
Offense: Conspiracy to distribute methamphetamine; conspiracy to distribute cocaine and marijuana; Northern District of Georgia
Sentence: Life imprisonment; 10 years’ supervised release; $5,000 fine (September 13, 1999)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Reisa Lynn Pettiette – Athens, TX
Offense: Conspiracy to manufacture, distribute and possess with intent to manufacture and distribute methamphetamine; conspiracy to possess a listed chemical knowing it will be used to manufacture a controlled substance; possession of a listed chemical with intent to manufacture a controlled substance; possession and distribution of a listed chemical with intent to manufacture a controlled substance; possession of an unregistered firearm; use, carrying, and possession of a firearm in furtherance of a drug trafficking crime; Eastern District of Texas
Sentence: 240 months’ imprisonment; five years’ supervised release (October 16, 2003)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Brett Rolland Poore – Austin, TX
Offense: Conspiracy to possess with intent to distribute more than 50 grams of methamphetamine; possession with intent to distribute more than 50 grams of methamphetamine, aiding and abetting; Western District of Texas
Sentence: 262 months’ imprisonment; five years’ supervised release (September 23, 2005)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Lesean Roberts – Euclid, OH
Offense: Possession with intent to distribute cocaine base, and aiding and abetting; possession with intent to distribute cocaine hydrochloride; Northern District of Ohio
Sentence: Life imprisonment; 10 years’ supervised release (May 22, 2007)

Commutation Grant: Prison sentence commuted to a term of 240 months’ imprisonment.

·         Darrell E. Robinson – Sacramento, CA
Offense: Conspiracy to distribute at least 50 grams of cocaine base; Eastern District of California
Sentence: 262 months’ imprisonment; five years’ supervised release (August 4, 2006)

Commutation Grant: Prison sentence commuted to a term of 188 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Charles McKinley Russell, Jr.  – Brentwood, MD
Offense: Possession with intent to distribute crack cocaine; District of Maryland
Sentence: 292 months’ imprisonment; 10 years’ supervised release; $1 fine (May 18, 1999)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Ronnie Dean Shelton – Floyd, VA
Offense: Possession of more than five grams of methamphetamine with intent to distribute; Western District of Virginia
Sentence: 188 months’ imprisonment; five years’ supervised release (November 19, 2008)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Alicia Siller – Coleman, TX
Offense: Conspiracy to distribute and possess with intent to distribute more than 500 grams of methamphetamine and aiding and abetting; possession with intent to distribute more than 50 grams or methamphetamine and aiding and abetting; use of a person under 18 years of age in drug operations and aiding and abetting; Northern District of Texas
Sentence: 262 months’ imprisonment; six years’ supervised release (October 24, 2003)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Leon Smallwood – Alton, IL
Offense: Conspiracy to distribute cocaine base; distribution of cocaine base (three counts); felon in possession of a firearm; Southern District of Illinois
Sentence: Life imprisonment; eight years’ supervised release; $2,500 fine (October 2, 1998)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Michael Anthony Smith – Charlottesville, VA
Offense: Possession with intent to distribute cocaine base; Western District of Virginia
Sentence: 360 months’ imprisonment; five years’ supervised release; $500 fine (October 23, 1997)

Commutation Grant: Prison sentence commuted to expire on November 26, 2016.

·         Oscar A. Smith, Jr.  – North Charleston, SC
Offense: Conspiracy to possess with intent to distribute five kilograms or more of cocaine and 50 grams or more of cocaine base ("crack"); District of South Carolina
Sentence: 240 months’ imprisonment; 10 years’ supervised release (July 18, 2005)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Terrence Tyron Smith – Richmond, KY
Offense: Distribution of five grams or more of cocaine base (crack cocaine); possession with the intent to distribute five grams or more of cocaine base (crack cocaine); Eastern District of Kentucky
Sentence: 240 months’ imprisonment; eight years’ supervised release (March 7, 2007)

Commutation Grant: Prison sentence commuted to a term of 172 months’ imprisonment.

·         Tyrone Lamont Smith – New York, NY
Offense: Conspiracy to distribute cocaine base; Western District of Virginia
Sentence: 360 months’ imprisonment; 10 years’ supervised release (June 12, 1995)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Mervin Spencer – Hahnville, LA
Offense: Possession with intent to distribute cocaine base; distribution of cocaine base (two counts); Eastern District of Louisiana
Sentence: Life imprisonment; 10 years’ supervised release (September 13, 2006)

Commutation Grant: Prison sentence commuted to a term of 300 months’ imprisonment.

·         Gary Don Starnes – Warsaw, MO
Offense: Possession with intent to distribute 50 grams or more of methamphetamine; Eastern District of Missouri
Sentence: 240 months’ imprisonment; 10 years’ supervised release (January 6, 2010)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.

·         Damian Roman Steplight – Dale City, VA
Offense: Conspiracy to distribute 50 grams or more of crack cocaine; Eastern District of Virginia
Sentence: Life imprisonment; 10 years’ supervised release (January 25, 2002)

Commutation Grant: Prison sentence commuted to a term of 240 months’ imprisonment.

·         Brandon Terrell Stevenson – Gainesville, FL
Offense: Conspiracy to distribute and to possess with intent to distribute more than five kilograms of a mixture and substance containing cocaine and more than 50 grams of a mixture and substance containing cocaine base; Northern District of Florida
Sentence: Life imprisonment; 10 years’ supervised release (October 30, 2009)

Commutation Grant: Prison sentence commuted to a term of 210 months’ imprisonment, conditioned upon enrollment in residential drug treatment.  

·         Edwin Reginald Straughter – Hobe Sound, FL
Offense: Conspiracy to distribute cocaine base; distribution of cocaine base (two counts); possession with intent to distribute cocaine base; Southern District of Florida
Sentence: Life imprisonment; 10 years’ supervised release (February 20, 1996)

Commutation Grant: Prison sentence commuted to a term of 360 months’ imprisonment.

·         Carlos Stuckey  – Apopka, FL
Offense: Conspiracy to distribute and possess with intent to distribute more than 50 grams of cocaine base; Northern District of Florida
Sentence: Life imprisonment; 10 years’ supervised release (February 10, 2009)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Michael Dewayne Tensley – Marianna, FL
Offense: Distribution of more than 50 grams of cocaine base; Northern District of Florida
Sentence: Life imprisonment; 10 years’ supervised release (September 27, 2006)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Jeffery James Terrell – Jasper, AL
Offense: Possession with intent to distribute 50 grams or more of a mixture and substance containing cocaine base; Northern District of Alabama
Sentence: Life imprisonment; 10 years’ supervised release (March 15, 2007)

Commutation Grant: Prison sentence commuted to expire on February 24, 2017.

·         Lenthius D. Thomas – Ocala, FL
Offense: Conspiracy to distribute and possession with intent to distribute cocaine and cocaine base; Middle District of Florida
Sentence: Life imprisonment; 10 years’ supervised release (June 24, 1998)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Stanley D. Thomasson – Poplar Bluff, MO
Offense: Used/carried firearms during drug trafficking crime (two counts); possession of Schedule II narcotic controlled substance (three counts); Eastern District of Missouri
Sentence: 421 months’ imprisonment; four years’ supervised release (April 5, 1994); amended to 397 months’ imprisonment  (June 9, 2015)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Danny Demar Turner – Madison, WI
Offense: Distribution of a mixture or substance containing cocaine base (crack cocaine) (three counts); Western District of Wisconsin
Sentence: 210 months’ imprisonment; three years’ supervised release (August 12, 2008)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Hayzen Turner, Jr. – Adamsville, AL
Offense: Distribution of a mixture and substance containing cocaine base (three counts); distribution of 50 grams or more of a mixture and substance containing cocaine base (two counts); possession with intent to distribute a quantity of a mixture and substance containing cocaine base, cocaine hydrochloride and marijuana; carrying a firearm during and in relation to a drug trafficking offense; felon in possession of a firearm (three counts); Northern District of Alabama
Sentence: Life imprisonment; 10 years’ supervised release (December 18, 2007)

Commutation Grant: Prison sentence commuted to a term of 180 months’ imprisonment.

·         Mark Walker – Jasper, MO
Offense: Conspiracy to distribute in excess of 500 grams of methamphetamine; Western District of Missouri
Sentence: 235 months’ imprisonment; five years’ supervised release (August 15, 2005)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.  

·         Kevin Washington – Owensboro, KY
Offense: Conspiracy to possess with intent to distribute and distribute 50 grams or more of cocaine base and 500 grams or more of cocaine; aiding and abetting knowingly and intentionally possess with intent to distribute and distribute 50 grams or more of cocaine base  (three counts); Western District of Kentucky
Sentence: 240 months’ imprisonment; 10 years’ supervised release (June 18, 2004)

Commutation Grant: Prison sentence commuted to expire on May 1, 2017.

·         Kevin Washington – Oxford, NC
Offense: Possession with intent to distribute more than 50 grams of cocaine base (crack); Eastern District of North Carolina
Sentence: Life imprisonment; 10 years’ supervised release (October 11, 2006)

Commutation Grant: Prison sentence commuted to a term of 262 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Robert Wettstain – Beaver Dam, KY
Offense: Conspiracy to knowingly and intentionally possess with intent to distribute methamphetamine; aiding and abetting knowingly and intentionally possessing with intent to distribute methamphetamine (two counts); Western District of Kentucky
Sentence: Life imprisonment; 10 years’ supervised release (May 15, 2008)

Commutation Grant: Prison sentence commuted to a term of 240 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Daryl Wilkes – Virginia Beach, VA
Offense: Conspiracy to possess with intent to distribute and to distribute cocaine base and cocaine; knowingly and intentionally distribute cocaine base (20 counts); knowingly possess a firearm in furtherance of a drug trafficking crime (two counts); knowingly and intentionally distribute cocaine (eight counts); knowingly and intentionally possess with intent to distribute cocaine base; knowingly and intentionally possess with intent to distribute cocaine (two counts); Eastern District of Virginia
Sentence: 952 months’ imprisonment; five years’ supervised release (June 16, 2004); amended to 780 months’ imprisonment (October 4, 2006); amended to 480 months’ imprisonment (May 2, 2008)

Commutation Grant: Prison sentence commuted to a term of 300 months’ imprisonment.

·         Anthony K. Williams – Indianapolis, IN
Offense: Possession with intent to distribute 50 grams or more of cocaine base (mixture); possession of cocaine; Southern District of Indiana
Sentence: 240 months’ imprisonment; 10 years’ supervised release; $500 fine (April 4, 2008)

Commutation Grant: Prison sentence commuted to expire on October 27, 2018, conditioned upon enrollment in residential drug treatment.

·         Donald Jamal Wilson – Huntington, WV
Offense: Conspiracy to distribute 50 grams or more of cocaine base and quantities of cocaine and heroin; intentionally make available for use, with or without compensation, an apartment for the purpose of storing cocaine base and heroin (two counts) ; Southern District of West Virginia
Sentence: Life imprisonment (March 24, 2008)

Commutation Grant: Prison sentence commuted to a term of 188 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         Bradley Lee Winters – Mason City, IA
Offense: Conspiracy to distribute 50 grams or more of actual methamphetamine; possession with intent to distribute 50 grams or more of actual methamphetamine; Southern District of Iowa
Sentence: 360 months’ imprisonment; 10 years’ supervised release (March 18, 2009)

Commutation Grant: Prison sentence commuted to a term of 240 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

·         William Abel Yates – Durham, NC
Offense: Possess with intent to distribute cocaine base (crack); Middle District of North Carolina
Sentence: Life imprisonment; 10 years’ supervised release (August 24, 1998)

Commutation Grant: Prison sentence commuted to a term of 300 months’ imprisonment, conditioned upon enrollment in residential drug treatment.

The owner of two Arkansas mental health companies that provide inpatient and outpatient mental health services to juveniles was sentenced to serve 84 months in prison today for engaging in a scheme to bribe a former deputy director of the Arkansas Department of Human Services (ADHS), announced Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division.

Theodore E. Suhl, 50, of Warm Springs, Arkansas, was previously convicted of two counts of honest services fraud, one count of federal funds bribery and one count of interstate travel in aid of bribery.   In addition to his prison sentence, Suhl was ordered to pay a $200,000 fine.

The evidence presented at trial showed that Suhl bribed former deputy director of ADHS, Steven B. Jones, using intermediaries Phillip W. Carter and a local pastor.  Beginning in approximately April 2007, Suhl, Jones and Carter periodically met at restaurants in Memphis, Tennessee, or in rural Arkansas in order for Suhl to request assistance for his companies from Jones in his capacity as deputy director of ADHS.  Jones agreed to perform official acts that benefitted Suhl and Suhl’s businesses and provided internal ADHS information to Suhl.  In exchange for Jones’s agreement to perform official acts, Suhl paid Jones by funneling cash payments through the pastor’s church and providing the bribe payments to Jones in cash so that the transactions would not be easily traceable.  Putting Jones on Suhl’s illicit payroll paved the way for more than $1.5 million in profits for Suhl’s juvenile mental health counseling business. 

Jones pleaded guilty to federal funds bribery and conspiracy for his involvement in the scheme and was sentenced to 30 months in prison.  Carter pleaded guilty to conspiracy to commit federal funds bribery and honest services wire fraud and was sentenced to 24 months in prison.

The FBI’s Little Rock Field Office investigated the case.  Trial Attorneys John D. Keller, Lauren Bell and Amanda R. Vaughn of the Criminal Division’s Public Integrity Section prosecuted the case.

A Marietta, Georgia resident was sentenced today to 45 months in prison for using stolen identities to fraudulently obtain income tax refunds, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney John A. Horn for the Northern District of Georgia. 

Peter Isika, 46, pleaded guilty on June 30 to theft of public money and aggravated identity theft.  During 2013 and 2014, Isika filed at least 50 false income tax returns with the Internal Revenue Service (IRS) using stolen identities that he purchased over the Internet. Isika directed the fraudulently obtained tax refunds to prepaid debit cards and bank accounts that he controlled. 

In addition to the term of prison imposed, Isika was ordered to serve three years of supervised release and to pay restitution to the IRS in the amount of $419,810.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Horn commended special agents of IRS-Criminal Investigation and U.S. Treasury Inspector General for Tax Administration, who conducted the investigation, and Trial Attorneys Jason Poole and Mara Strier of the Tax Division and Assistant U.S. Attorney Kamal Ghali, who are prosecuting the case.

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

A Boca Raton, Florida, man pleaded guilty in a New Jersey federal court for his role in a computer hacking and identity theft scheme that hijacked customer email accounts to send bulk unsolicited or “spam” emails, and generated more than $1.3 million in illegal profits.  

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division andU.S. Attorney Paul J. Fishman of the District of New Jersey  made the announcement.

Timothy Livingston, 31, pleaded guilty before U.S. District Judge William J. Martini of the District of New Jersey.  Sentencing is scheduled for Jan. 27, 2017.

According to admissions made in connection with his plea agreement, beginning as early as 2011, Livingston operated A Whole Lot of Nothing LLC — a business that specialized in sending unsolicited or spam emails on behalf of its clients.  Livingston admitted that his clients included legitimate businesses, such as insurance companies that wished to send bulk emails for advertising purposes, as well as illegal entities, such as online pharmacies that sold narcotics without prescriptions.

Livingston admitted that beginning in January 2012, he solicited Tomasz Chmielarz to write computer programs that would send spam in a manner that concealed the true origin of the email and bypass spam filters.   Livingston admitted that he then used these programs to transmit spam, and used proxy servers and botnets to remain anonymous, hide the true origin of the spam and evade anti-spam filters and other spam blocking techniques.

According to the plea agreement, Livingston hacked into individual email accounts and utilized corporate mail servers to further his spam campaigns, which enabled him to send out massive amounts of spam without identifying himself as the sender. 

In connection with his plea agreement, Livingston consented to the entry of a forfeiture money judgment in the amount of $1,346,442, as well as the forfeiture of property obtained using illegal proceeds from the scheme, including a 2009 Cadillac Escalade and a 2006 Ferrari F430 Spider.                

Chmielarz, 33, of Rutherford, New Jersey, pleaded guilty for his role in the conspiracy before Judge Martini on June 2.

The FBI’s Cyber Division investigated the case.  Senior Trial Attorney William A. Hall Jr. of the Criminal Division’s Computer Crime and Intellectual Property Section, Assistant U.S. Attorney Daniel Shapiro of the District of New Jersey’s Computer Hacking and Intellectual Property Section of the Economic Crimes Unit and Assistant U.S. Attorneys Peter Gaeta and Sarah Devlin of the District of New Jersey’s Asset Forfeiture-Money Laundering Unit prosecuted the case.

A federal court in Columbia, South Carolina, has permanently barred a Liberty Tax Service franchise owner from preparing federal tax returns for others, the Justice Department announced today.  The civil injunction order prohibits Christopher Paul Haynes from acting as a federal tax return preparer and from supervising, managing or employing federal tax return preparers.  In addition, Haynes must provide the government with a list of all customers for whom Haynes or his business prepared a tax return for any tax year from 2010 to present.  Haynes agreed to the civil injunction order entered against him.

On Feb. 8, the government filed suit against Haynes and alleged that he and his employees prepared false federal income tax returns in order to increase customers’ refunds at Haynes’s three Columbia-area Liberty Tax Service franchises.  According to the government's complaint, Haynes and his employees prepared tax returns that included false or inflated income and expenses on Schedule C (Profit or Loss From Business), bogus dependents, false filing statuses and improper unreimbursed employee business expenses. 

Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016.  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.          

Deputy Attorney General Sally Q. Yates released the following statement after President Obama granted commutation of sentence to 98 individuals:

“Today’s clemency grants to another 98 federal inmates who were sentenced under outdated drug laws are part of our ongoing commitment to bring fairness to our criminal justice system.  These grants reflect the Department’s accelerated progress in prioritizing and reviewing petitions that fit the President’s Clemency Initiative.  As we’ve said before, the Department of Justice remains committed to reviewing and providing a recommendation on every petition submitted by August 31 of this year that involves a drug crime.  And we will continue to prioritize the review any drug related petitions that have been submitted since that time.”

Attorney General Loretta E. Lynch and Turkish Minister of Justice Bekir Bozdağ met today to discuss law enforcement and counterterrorism cooperation between the United States and Turkey, including cooperation on extradition.  In particular, the Attorney General and the Minister of Justice discussed that, pursuant to the U.S./Turkey Extradition Treaty, in both countries extraditions are subject to the judicial process, and accordingly must meet the evidentiary standards of the requested country.  The Attorney General and the Minister of Justice both pledged that their departments will continue their ongoing close and full cooperation.  

            United States Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands (NMI) announced today that Assistant United States Attorney (AUSA) Marivic David will lead the efforts of her office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016 general elections.  AUSA David has been appointed to serve as the District Election Officer (DEO) for the District of Guam and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.  

            United States Attorney Limtiaco said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud.  The Department of Justice will act promptly and aggressively to protect the integrity of the election process.” 

            The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.

            Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.

            The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice.  In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Limtiaco stated that AUSA/DEO Marivic David will be on duty while the polls are open.  She can be reached by the public at the following telephone number:  671-479-4120. 

            In addition, the FBI will have Special Agents available in each Field Office and Resident Agency throughout the country to receive allegations of election fraud and other election abuses on election day.  The FBI can be reached by the public by calling 671-688-0373.

            Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to voting.section@usdoj.gov or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

            United States Attorney Limtiaco said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”

A federal grand jury returned an indictment on Oct. 19 and unsealed today, charging the owners of adult foster care homes located throughout Michigan with 60 counts of failing to account for and pay over employment taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.                                                                                  

According to the indictment, Jeremiah and Nicolette Cheff of Grand Blanc, Michigan, controlled the financial and business operations of 16 foster care homes, including Hunter’s Home, Nico’s Place, Harmony Manor, Hilltop Estates and Deerwood Manor, which cared for individuals with mental illnesses and developmental and physical disabilities.  It is alleged that from September 2010 through September 2014, the Cheffs withheld payroll taxes from their employees’ paychecks, failed to timely file employment tax returns, and failed to pay over the funds they withheld to the Internal Revenue Service (IRS).

If convicted, the Cheffs face a statutory maximum penalty of five years in prison for each count charged in the indictment, as well as a period of supervised release and monetary penalties.

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

Principal Deputy Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Jeffrey A. McLellan and Carl F. Brooker, IV of the Tax Division, who are prosecuting the case.  Principal Deputy Assistant Attorney General Ciraolo 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.

The Justice Department filed a proposed consent decree with the city of Florence, Kentucky, to resolve a pregnancy and disability discrimination lawsuit brought by the department under Title VII of the Civil Rights Act of 1964 and Title I of the Americans with Disabilities Act (ADA).

According to the department’s complaint, Florence discriminated against two pregnant police officers by denying both officers’ requests for light duty.  The department alleges that Florence previously assigned light duty positions to employees who were temporarily unable to perform their regular job duties, regardless of why the employee needed light duty.  In April 2013, within months of a police officer’s pregnancy-related light duty request, Florence limited light duty to employees with on-the-job injuries.  Florence also required that employees with non-work-related illnesses, injuries or conditions demonstrate that they had “no restrictions” before they could return to work.

In 2014, according to the department’s complaint, Police Officers Lyndi Trischler and Samantha Riley requested light duty when they were unable to perform their duties as patrol officers due to their pregnancies.  Officer Trischler, who was diagnosed with a high-risk pregnancy and suffered complications, also requested light duty as a reasonable accommodation for her pregnancy-related disability.  Florence denied the requests and required each to take leave.  After placing Officers Trischler and Riley on leave, Florence continued to grant light duty to other employees who were similar in their ability or inability to work.

This is the department’s first lawsuit challenging a discriminatory light duty policy since the U.S. Supreme Court’s ruling regarding light duty policies and pregnant employees in Young v. United Parcel Service.  It is also the department’s first lawsuit challenging disability-related “no restrictions” policies in the workplace.

“No woman should ever have to choose between having a family and earning a salary,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “Equally important, individuals with disabilities who need reasonable accommodations deserve an opportunity to keep their jobs.  The Justice Department will continue working tirelessly to protect pregnant women against unlawful discrimination in the workplace.”

Under the consent decree, which still must be approved by the U.S. District Court for the Eastern District of Kentucky, Florence will adopt new policies that allow accommodations, including light duty, for pregnant employees and employees with disabilities; establish an effective process for receiving and responding to employees’ accommodation requests and discrimination complaints; and ensure the proper maintenance of employee medical records.  In addition, Florence will train all supervisors, administrators, officers and employees who participate in making personnel decisions related to light duty and other accommodation requests made pursuant to Title VII and the ADA.  Florence has also agreed to pay $135,000 in compensatory damages and attorney’s fees as well as restore the paid leave that Officers Trischler and Riley were forced to use.

“Providing pregnant employees with light duty when appropriate can be a critical reasonable accommodation,” said Chair Jenny R. Yang of the Equal Employment Opportunity Commission (EEOC).  “In 2015, the EEOC issued updated pregnancy discrimination guidance explaining that light duty policies that accommodate some workers but refuse to accommodate pregnant women may run afoul of the law.  The comprehensive guidance provides information to assist employers in developing, disseminating and enforcing strong policies consistent with the requirements of Title VII and the ADA.”

“We are working closely with our colleagues at the DOJ’s Civil Rights Division and this consent decree is an excellent result of the partnership between the EEOC and the DOJ,” said Director Michelle Eisele of the EEOC’s Indianapolis District Office.  “We look forward to future successful collaborations.”

Officers Trischler and Riley are represented by the non-profit advocacy organization, A Better Balance, and the law firm Outten & Golden LLP.  They originally filed charges of discrimination with the Equal Employment Opportunity Commission.  The EEOC’s Cincinnati Office investigated the charges, determined that there was reasonable cause to believe that discrimination had occurred and referred the charges to the department.

The case is being handled by Trial Attorneys Catherine Sellers of the Civil Rights Division’s Employment Litigation Section and Elaine Grant of the Civil Rights Division’s Disability Rights Section.

The continued enforcement of Title VII and the ADA is a priority of the Civil Rights Division.  More information about Title VII, the ADA and other federal employment laws is available at www.justice.gov/crt.  Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov. 

Divestiture Will Preserve Competition for Railcar Freight Brake Systems and Components in the United States

The Department of Justice announced today that it will require Westinghouse Air Brake Technologies Corporation (Wabtec) to divest Faiveley Transport North America’s (Faiveley) entire U.S. freight car brakes business in order for Wabtec to proceed with its proposed approximately $1.8 billion acquisition of Faiveley Transport S.A. and Faiveley Transport North America. 

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

“The safe and efficient passage of goods throughout the United States freight rail network is crucial to the American economy and depends on sufficient competition for freight car brake systems and components,” said Acting Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division.  “The acquisition as originally proposed would have eliminated Faiveley as one of only three major companies that supplies freight car brake components in the U.S. and eliminated Faiveley as a pipeline competitor in the development, manufacture and sale of freight car control valves – essentially freezing a century-old duopoly in that market.”

The proposed settlement includes a divestiture of Faiveley’s entire U.S. freight car brakes business which develops, manufactures and sells freight car brake systems and components including: air brake control valves, hand brakes, slack adjusters, truck-mounted brake assemblies, empty load devices and brake cylinders.  The divestiture also includes Faiveley’s FTEN control valve, a freight car brake control valve under development that will be available for full commercialization after approval from the Association of American Railroads.  

The department believes the proposed divestiture addresses the competitive concerns raised by this transaction as originally proposed.  Under the terms of the proposed consent decree, Wabtec must divest Faiveley’s entire U.S. freight brakes business to a single independent buyer approved by the United States.  Wabtec has proposed that the divestiture be sold to Amsted Rail Company Inc. (Amsted Rail).  Amsted Rail is a unit of Amsted Industries, a privately held company, based in Chicago.  It is a leader in manufacturing railroad freight car undercarriage components and end-of-car systems for the freight rail industry.  Amsted Rail’s revenues in 2015 totaled approximately $2 billion.  

Wabtec, based in Pennsylvania, is a global rail equipment supplier.  Wabtec provides a wide range of equipment used on freight railcars, including components of freight car brake systems used in the U.S. freight rail network, and is a dominant supplier of complete freight brake systems in the United States.  In 2015, Wabtec’s worldwide revenues were $3.3 billion, of which revenues from its freight business were approximately $2 billion.
  
Faiveley Transport North America, headquartered in Greenville, South Carolina, is a wholly-owned subsidiary of Faiveley Transport S.A., a French corporation.  Faiveley Transport S.A. makes and sells rail equipment, including braking equipment, for a variety of train applications to customers in 24 countries, including the United States.  During the fiscal year ending March 31, 2016, Faiveley had global sales of approximately €1.1 billion with approximately $174 million in revenue in the United States. 

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

Wabtec-Faiveley CIS

Wabtec-Faiveley Complaint

Wabtec-Faiveley Hold Separate

Wabtec-Faiveley PFJ

Geoffrey S. Shank, Director of the U.S. National Central Bureau of INTERPOL (INTERPOL Washington), will retire from federal government service effective October 31, 2016.  Current Deputy Director Wayne H. Salzgaber will be acting director until further notice.  The International Criminal Police Organization (INTERPOL), the largest international police organization in the world, comprises 190 member countries.  INTERPOL Washington is a component of the U.S. Department of Justice, and is co-managed by the U.S. Department of Homeland Security.

Maintained Double Set of Books to Conceal $1.5 Million and Evade $650,000 in Taxes

Three family members who operated Portland, Oregon area strip clubs were sentenced to prison today for conspiring to defraud the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Billy J. Williams for the District of Oregon.  

David Kiraz, 34, of Happy Valley, Oregon, was sentenced to serve 36 months in prison, George Kiraz, 56, of Portland, was sentenced to serve 36 months in prison and Daniel Kiraz, 32, of Portland, was sentenced to serve 12 months and one day in prison, for hiding $1.5 million in income from the IRS and evading more than $650,000 in income taxes. 

“Skimming cash and keeping two sets of books cheats not only the United States, but also honest taxpayers that play by the rules and pay their fair share of taxes,” said Principal Deputy Assistant Attorney General Ciraolo.  “The department and the IRS will continue to make the investigation and prosecution of tax evaders like David, George and Daniel Kiraz, a top priority.”

“These sentences are significant sanctions for serious crimes,” said U.S. Attorney Williams.  “Business owners who deal extensively in cash have the same legal obligation to pay their fair share of taxes as does everyone else.  The U.S. Attorney’s Office and IRS will continue to work together to identify and prosecute those who cheat the tax system.”

“Our nation’s tax system funds many government services to include our military, infrastructure and other vital services, so essentially, the Kiraz’s weren’t just cheating the IRS, they were cheating the men and women of our armed forces, anyone who drives our highways and those who rely on any number of social services for their well-being,” said Special Agent in Charge Darrell Waldon of IRS Criminal Investigation.  “Moreover, besides depriving the U.S. Treasury, tax scoffs shift their tax burden to every taxpayer who pays an honest tax, essentially robbing each and every one of us.”

In May, David Kiraz, his father George D. Kiraz and David’s brother Daniel Kiraz were convicted of conspiracy to defraud the IRS and charges related to filing false tax returns.  The Kirazes operated two strip clubs in the Portland area, Cabaret Lounge I and Cabaret Lounge II.  From 2007 through 2010, the Kirazes’ strip clubs collected more than $1.5 million in cash door charges and dancer stage fees.  The Kirazes maintained a double set of books, tracking these charges and fees in one set of books that was stored at David Kiraz’s residence, and omitting the receipts in a second set of books that the Kirazes provided to their return preparers, intentionally causing them to prepare and file false income tax returns for David Kiraz that failed to report between $330,000 and $460,000 in door and stage fees each year.  The defendants evaded more than $650,000 in federal and state income taxes for tax years 2007 through 2010.

In addition to the prison terms imposed, George and David Kiraz were also ordered to serve three years of supervised release and to pay more than $650,000 in restitution to the IRS and the Oregon Department of Revenue.  Daniel Kiraz was ordered to pay more than $125,000 in restitution.

Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Leslie A. Goemaat of the Justice Department’s Tax Division and Assistant U.S. Attorneys Seth D. Uram and Quinn P. Harrington, who prosecuted the case.

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

An owner of several Reno, Nevada landscaping and rock hauling businesses was sentenced yesterday to 10 months in prison for failure to pay over employment taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Daniel G. Bogden of the District of Nevada.  The bookkeeper for the business was sentenced to five years’ probation with three months home confinement for willful failure to file an employment tax return. 

“The willful failure to comply with employment tax obligations is a crime – plain and simple,” said Principal Deputy Assistant Attorney General Ciraolo.  “Stealing employee withholdings and failing to pay them over to the U.S. Treasury, gives dishonest employers an unfair advantage over their law-abiding competitors.  The department will continue to work with the Internal Revenue Service (IRS) to prosecute these offenders and level the playing field.”

"Defendants’ illegal conduct injured not only the United States, but their former employees,” said U.S. Attorney Bogden.  “While the United States of America will foot the bill for the employment and social security taxes that were withheld from the employees’ paychecks, the employees themselves will have any retirement diminished due to the non-reporting of cash wages.”

“Employers have a responsibility to their employees to withhold the proper amount of taxes and pay those taxes over to the IRS,” said Special Agent in Charge Tara Sullivan of IRS Criminal Investigation, Las Vegas Field Office.  “When employers fail to do so, it affects revenue to the U.S. government, but more importantly, it affects their employees Medicare and social security benefits.”

According to documents filed with the court, Kyle Archie of Reno, was the part owner of Reno Rock Inc., GKPA Inc. and D Rockeries Inc.  Kyle Archie admitted that he was responsible for the day-to-day operations of the businesses and that from 2003 through 2009;  he had a legal duty to collect, truthfully account for, and pay over employment taxes to the IRS.  He further admitted that although he collected these taxes from his employees’ wages and held them in trust, he failed to pay them over to the IRS for the third quarter of 2008.      

Linda Archie of Reno, who is Kyle Archie’s mother, worked as the bookkeeper for Reno Rock Inc., GKPA Inc. and D. Rockeries Inc. and was responsible for maintaining the books and records of the companies and filing documents with various government agencies.  She admitted that between 2003 and 2009, she failed to file employment tax returns on behalf of these businesses to account for the taxes that were withheld from the employees’ wages.  

In addition to the prison term imposed, Kyle Archie was also ordered to serve ¬three years of supervised release, and both Kyle and Linda Archie were ordered to pay restitution to the IRS in the amount of $1,235,528.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Bogden commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Carla B. Higginbotham of the District of Nevada and Trial Attorney Kathleen M. Barry of the Tax Division, who prosecuted the case.

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

In anticipation of the upcoming general elections, the Justice Department today provided information about its efforts, through the Civil Rights Division and Criminal Division, to ensure that all qualified voters have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation or fraud in the election process.

Civil Rights Division:

The Civil Rights Division is responsible for ensuring compliance with the civil provisions of federal statutes that protect the right to vote and the criminal provisions of federal statutes that prohibit discriminatory interference with that right.

The Civil Rights Division’s Voting Section enforces the civil provisions of a wide range of federal statutes that protect the right to vote including: the Voting Rights Act, the National Voter Registration Act, the Uniformed and Overseas Citizens Absentee Voting Act, the Help America Vote Act and the Civil Rights Acts.  Among other things, collectively, these laws:

• prohibit election practices that have either a discriminatory purpose, based on race or membership in a minority language group, or a discriminatory result, with members of racial or language minority groups having less opportunity than other citizens to participate in the political process;
• prohibit voter intimidation;
• provide that individuals who need assistance in voting because of disability or illiteracy can obtain assistance from a person of their choice;
• provide for accessible election machines for voters with disabilities;
• require provisional ballots for voters who assert they are eligible but whose names do not appear on poll books;
• provide for absentee ballots for service members, their family members and U.S. citizens living abroad;
• require states to ensure that citizens can register through drivers’ license offices, public assistance and disability services offices, other state agencies and through the mail; and
• include requirements regarding maintaining voter registration lists.

The Civil Rights Division’s Criminal Section enforces federal criminal statutes that prohibit voter intimidation and voter suppression based on race, color, national origin or religion.

On Election Day, Nov. 8, 2016, the Civil Rights Division will implement a comprehensive program to help protect the right to vote, including:

• The Civil Rights Division will conduct monitoring in the field at polling places around the country (locations for monitoring will be announced closer to Election Day).
• Civil Rights Division attorneys in both the Voting and Criminal Sections in Washington, D.C., will be ready to receive election-related complaints of potential violations relating to any of the statutes the Civil Rights Division enforces.  Attorneys in the division will take appropriate action and will consult and coordinate with local U.S. Attorneys’ Offices and with other entities within the Justice Department concerning these complaints before, during and after Election Day.
• Civil Rights Division staff will be available by phone to receive complaints related to voting rights (1-800-253-3931 toll free or 202-307-2767) or by TTY (202-305-0082).  In addition, individuals may also report complaints, problems or concerns related to voting by fax 202-307-3961, by mail to voting.section@usdoj.gov and by complaint forms that may be submitted through a link on the department’s website: https://www.justice.gov/crt/voting-section.
• Complaints related to violence, threats of violence or intimidation at a polling place      should always be reported immediately to local authorities by calling 911.  They should also be reported to the department after local authorities are contacted.

Criminal Division and the Department’s 94 U.S. Attorneys’ Offices:

The Department’s Criminal Division oversees the enforcement of federal laws that criminalize certain forms of election fraud and vindicate the integrity of the federal election process.

The Criminal Division’s Public Integrity Section and the department’s 94 U.S. Attorneys’ Offices are responsible for enforcing the federal criminal laws that prohibit various forms of election fraud, such as vote buying, multiple voting, submission of fraudulent ballots or registrations, alteration of votes and malfeasance by election officials.  The Criminal Division is also responsible for enforcing federal criminal law prohibiting voter intimidation for reasons other than race, color, national origin or religion (as noted above, voter intimidation that has a basis in race, color, national origin or religion is addressed by the Civil Rights Division).

The U.S. Attorney’s Offices around the country designate Assistant U.S. Attorneys who serve as district election officers (DEOs) in the respective districts.  DEOs are responsible for overseeing potential election-crime matters in their districts and coordinating with the department’s election-crime experts in Washington, D.C.

On Nov. 8, 2016, the U.S. Attorneys’ Offices will work with specially trained FBI personnel in each district to ensure that complaints from the public involving possible voter fraud are handled appropriately.  Specifically:

• In consultation with federal prosecutors in the Public Integrity Section in Washington, D.C., the DEOs in U.S. Attorneys’ Offices, FBI officials at Headquarters in Washington, D.C., and FBI special agents serving as Election Crime Coordinators in the FBI’s 56 field offices will be on duty while polls are open to receive complaints from the public.
• Election-crime complaints should be directed to the local U.S. Attorney’s Offices or the local FBI office.  A list of U.S. Attorneys’ Offices and their telephone numbers can be found at https://www.justice.gov/usao/find-your-united-states-attorney.  A list of FBI offices and accompanying telephone numbers can be found at https://www.fbi.gov/contact-us.
• Public Integrity Section prosecutors are available to consult and coordinate with the U.S. Attorneys’ Offices and the FBI regarding the handling of election-crime allegations.
• Again, complaints related to violence, threats of violence or intimidation at a polling place should be reported first to local police authorities by calling 911.

Both protecting the right to vote and combating election fraud are essential to maintaining the confidence of all Americans in our democratic system of government.  The department encourages anyone who has information suggesting voting discrimination or ballot fraud to contact the appropriate authorities.

Two German shipping companies that owned and operated the Motor Vessel (M/V) Nils B, pleaded guilty today to an environmental crime in federal court in San Diego before the Honorable Jan M. Adler, announced Assistant Attorney General John C. Cruden and United States Attorney Laura E. Duffy.

W. Bockstiegel Reederei GmbH  & Co. KG (which operated the vessel) and W. Bockstiegel GmbH & Co. Reederei KG MS “NILS B” (which owned the vessel), pleaded guilty to one felony violation of the Act to Prevent Pollution from Ships for failing to accurately maintain an oil record book for the M/V Nils B.  In doing so, the firms failed to disclose that oil contaminated water had been discharged into the ocean from the vessel without the use of pollution prevention equipment.

According to the plea agreement, on August 5, 2014, personnel from the United States Coast Guard boarded the vessel after its entry into the Port of San Diego, California.  Once onboard, the Coast Guard discovered that the crew had failed to keep an oil record book for a significant period of time, modifications had been made to piping coming from the oil water separator and oil was discovered in discharge piping that should not have been present.  

The defendants acknowledged that Coast Guard examiners took oil samples from the oil water separator’s overboard discharge valve and from the vessel’s sludge tank and the samples from the two locations matched.  Under U.S. and international law, sludge is never to be discharged through an oil water separator.  The Coast Guard also discovered a black hose near the oil water separator that contained oil slightly weathered light fuel oil mixed with lubricating oil.  In the industry, such a hose is known as a “magic hose.”  The defendants, in pleading guilty, admitted that the oil record book on board the vessel did not disclose any discharges of sludge between the time that the overboard discharge valve had been cleaned while the vessel was in dry dock in June of 2014 and its entry into the Port of San Diego in August.

Sentencing for this case has been set for Nov. 3.  According to the plea documents, the company and the United States agree to recommend that the court impose a total criminal penalty of $750,000.00, of which $250,000.00 will be a community service payment for the benefit of the Tijuana River National Estuarine Research Reserve to further research related to the effects of pollution on the marine estuarine environment. 

This case was investigated by U.S. Coast Guard Investigative Service and U.S. Environmental Protection Agency, Criminal Investigation Division personnel in San Diego, California.  The case was prosecuted by Senior Trial Attorney Kenneth E. Nelson of the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice and Assistant U.S. Attorney Melanie Pierson of the U.S. Attorney's Office for the Southern District of California.

A former senior employee of the Interior Department’s Fish and Wildlife Service (FWS) pleaded guilty to making false statements in several disclosure forms to conceal approximately $300,000 of income that he received from an association that received grants and cooperative agreements from the FWS.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S Department of the Interior Deputy Inspector General Mary L. Kendall made the announcement.

Stephen M. Barton, 67, of Boise, Idaho, pleaded guilty yesterday before U.S. Magistrate Judge Ronald E. Bush of the District of Idaho.  He is scheduled to be sentenced on Jan. 24, 2017.

According to his plea agreement, Barton worked as the chief of administration and information management for FWS beginning in 2007.  Throughout his entire time at FWS, Barton also worked as treasurer for an association that received grants and cooperative agreements from FWS.

According to admissions made in connection with his plea agreement, Barton willfully and knowingly submitted false disclosure forms to FWS, including a request for ethics approval to engage in outside work or activity, a confidential financial disclosure report (OGE Form 450), and several confidential certificate of no new interests forms (OGE Form 450-A), in which he concealed approximately $300,000 of income that he received from the association between Jan. 1, 2010, and Dec. 31, 2014.

The Interior Department’s Office of Inspector General’s Eastern Division investigated the case.  Trial Attorney Victor R. Salgado of the Criminal Division’s Public Integrity Section is prosecuting the case.

Best Choice Home Health Care Agency Inc. (Best Choice) and its owner, Reginald King, have agreed to pay $1.8 million to resolve allegations that Best Choice and King violated the False Claims Act by paying kickbacks for the referral of Medicaid-covered patients for home and community-based healthcare services from Best Choice.  Best Choice is a home healthcare services provider based in Kansas City, Kansas.  King is the owner and operator of Best Choice. 

“The department will continue to hold accountable entities and individuals that engage in illegal kickback schemes for the referral of patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “It is critically important that we protect the integrity of government health care programs by ensuring that services are provided based on clinical considerations rather than the financial interests of those who refer patients for care.”

This settlement resolves allegations that from July 1, 2010, through Dec. 31, 2014, Best Choice submitted claims for home and community-based healthcare services to Medicaid that resulted from a kickback arrangement between King, on behalf of Best Choice and Christopher Thomas, who transported patients from their homes to healthcare facilities in Kansas City.  Specifically, under this alleged arrangement, King paid Thomas $58,000 in kickbacks for new patients referred to Best Choice based on a formula which accounted for each hour of service that Best Choice billed to Medicaid. 

“Fraud and abuse in Medicaid add costs without adding any value,” said Acting U.S. Attorney Tom Beall for the District of Kansas.  “We fight fraud to help make health care more available and more affordable.”

The Medicaid Program is a jointly-funded federal and state program.  Of the $1.8 million that King and Best Choice will pay under the settlement, the United States will receive $1,011,780 and the state of Kansas will receive $788,220.

The settlement resolves allegations originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Thomas, the recipient of the alleged kickbacks.  The act permits private parties to sue on behalf of the United States for false claims for government funds and to receive a share of any recovery.  The whistleblower reward in this case will be $43,178 which represents 10 percent of the federal share of the settlement, minus the amount that the relator received in kickbacks during the duration of the scheme.

The settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $31.6 billion through False Claims Act cases, with more than $19.2 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Kansas, the Department of Health and Human Services Office of Inspector General and the Kansas Medicaid Fraud Control Unit.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The qui tam case is docketed as United States ex rel. Thomas v. Best Choice Home Health Care Agency, Inc., and Reginald King, No. 1:13-cv-2209 (D. Kan.).

Life Care Centers of America Inc. (Life Care) and its owner, Forrest L. Preston, have agreed to pay $145 million to resolve a government lawsuit alleging that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled, the Department of Justice announced today.  Life Care, based in Cleveland, Tennessee, owns and operates more than 220 skilled nursing facilities across the country.

“This resolution is the largest settlement with a skilled nursing facility chain in the department’s history,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “It is critically important that we protect the integrity of government health care programs by ensuring that services are provided based on clinical rather than financial considerations.”

This settlement resolves allegations that between Jan. 1, 2006 and Feb. 28, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings.  Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of their qualifying patients.  The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement.  The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, speech), one of which has to be provided five days a week.    

The United States alleged in its complaint that Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level irrespective of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy to many beneficiaries.  Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued.  Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period.  The settlement also resolves allegations brought in a separate lawsuit by the United States that Forrest L. Preston, as the sole shareholder of Life Care, was unjustly enriched by Life Care’s fraudulent scheme.

“Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” said U.S. Attorney Nancy Stallard Harr for the Eastern District of Tennessee. “We are committed to working with our federal partners to protect both.”

“The resolution announced today demonstrates the commitment of the U.S. Attorney’s Office to aggressively pursue providers who utilize fraudulent practices to knowingly put their own financial self-interest over a duty to patients,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.  “It is imperative that providers make healthcare decisions based upon a patient’s need for services rather than a self-serving desire to maximize financial profit.  Our office will continue to investigate fraud allegations, in order to ensure that providers do not compromise the integrity of our public health care programs.”

As part of this settlement, Life Care has also entered into a five-year chain-wide Corporate Integrity Agreement with the  Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.  

“Therapy provided in skilled nursing facilities must be medically reasonable and necessary, and we will continue to vigorously investigate companies that subject their residents to needless and unreasonable therapy,” said HHS Inspector General Daniel R. Levinson.  “The corporate integrity agreement with Life Care is designed to ensure that it only provides therapy based on the individual needs of each resident.”

The settlement, which was based on the company’s ability to pay, resolves allegations originally brought in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act by Tammie Taylor and Glenda Martin, former Life Care employees.  The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.  The government may intervene and file its own complaint in such a lawsuit, as it has done in this case.  The whistleblower reward in this case will be $29 million.

The settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $31.6 billion through False Claims Act cases, with more than $19.2 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorneys’ Offices for the Eastern District of Tennessee and the Southern District of Florida, and the HHS-OIG, with assistance from the U.S. Attorneys’ Offices for the District of Colorado, the Middle District of Florida, the Northern District of Georgia, the District of Massachusetts and the District of South Carolina and NCI/AdvanceMed, a Medicare Zone Program Integrity Contractor.

The two qui tam cases are docketed as United States ex rel. Taylor v. Life Care Centers of America, Inc., No. 1:12-cv-64 (E.D. Tenn) and United States ex rel. Martin v. Life Care Centers of America, Inc., No. 1:08-cv-251 (E.D. Tenn).  The case against Forrest L. Preston is captioned United States v. Preston, No. 1:16-cv-113 (E.D. Tenn).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

Parallel Resolutions with the Securities and Exchange Commission and Brazilian Authorities Equaling $97 Million in Disgorgement Also Announced Today

Brazilian aircraft manufacturer Embraer S.A. (Embraer) entered into a resolution to resolve criminal charges and agreed to pay a penalty of more than $107 million in connection with schemes involving the bribery of government officials in the Dominican Republic, Saudi Arabia and Mozambique, and to pay millions more in falsely recorded payments in India via a sham agency agreement.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Special Agent in Charge William J. Maddalena of the FBI’s Miami Field Office made the announcement.

“Embraer paid millions of dollars in bribes to win government aircraft contracts in three different continents,” said Assistant Attorney General Caldwell.  “But this prosecution shows that the Criminal Division will hold accountable those who treat corruption as a mere cost of doing business.  Between U.S., Brazilian and Saudi authorities, bribe payers and bribe takers alike have been brought to justice for their wrongdoing.”

“Embraer tried to bribe their way into several profitable aircraft contracts around the world,” said Assistant Special Agent in Charge Maddalena.  “Instead of reaping a nice profit, their criminal conduct earned the Brazilian aircraft manufacturer a substantial penalty that more than wiped out their gains from these contracts.  Crime does not pay!”

According to the company’s admissions, Embraer executives and employees paid bribes to government officials and falsified books and records in connection with aircraft sales to foreign governments and state-owned entities in multiple countries.  In 2008, Embraer paid $3.52 million to an influential government official in the Dominican Republic via a false agency agreement to secure a contract to sell the Dominican Air Force eight military aircraft for approximately $92 million.  In 2010, Embraer paid $1.65 million to an official at a Saudi Arabian state-owned and -controlled company via a false agency agreement to secure that instrumentality’s agreement to purchase three aircraft from Embraer for approximately $93 million.  In 2008, Embraer paid $800,000 via a false agency agreement with an intermediary designated by a high-level official at Mozambique’s state-owned commercial airline, Linhas Aéreas de Moçambique S.A. (LAM), to secure LAM’s agreement to purchase two aircraft from Embraer for approximately $65 million.  In 2009, Embraer paid an agent $5.76 million pursuant to a false agency agreement with a shell company in connection with a contract it secured to sell the Indian Air Force three aircraft for approximately $208 million. 

In total, Embraer earned profits of nearly $84 million on the foregoing aircraft sales. 

Embraer entered into a three-year deferred prosecution agreement (DPA) to resolve the case.  As part of the DPA, Embraer admitted to its involvement in a conspiracy to violate the FCPA’s anti-bribery and books and records provisions and to its willful failure to implement an adequate system of internal accounting controls.  Embraer agreed to pay a criminal penalty of $107,285,090; continue to cooperate with the department’s investigation; enhance its compliance program; implement a more adequate system of internal accounting controls; and retain an independent corporate compliance monitor for a term of three years. 

The Criminal Division’s Fraud Section reached this resolution based on a number of factors, including the fact that Embraer did not voluntarily disclose the FCPA violations, but did cooperate with the department’s investigation after the Securities and Exchange Commission (SEC) served it with a subpoena.  After Embraer began cooperating, it did so fully and disclosed all relevant, non-privileged facts known to it, including about individuals involved in the misconduct.  Embraer did not, however, engage in full remediation.  It disciplined a number of company employees and executives engaged in the misconduct, but did not discipline a senior executive who was aware of bribery discussions in emails in 2004 and had oversight responsibility for the employees engaged in those discussions.  As a result, the criminal penalty in this case is 20 percent below the bottom of the applicable range under the U.S. Sentencing Guidelines, a discount that reflects Embraer’s full cooperation but incomplete remediation.

In related matters, Embraer reached settlements with both the SEC and Brazilian authorities.  Embraer reached a settlement with the SEC, under which it agreed to pay $83.8 million in disgorgement and $14.4 million in prejudgment interest.  The SEC has agreed to credit the disgorgement that Embraer pays to Brazilian authorities.  Embraer also reached a settlement with Brazilian authorities under which it agreed to pay $20 million in disgorgement.  With the cooperation of U.S. authorities, Brazilian authorities have charged 11 individuals for their alleged involvement in Embraer’s misconduct in the Dominican Republic.  Saudi Arabian authorities have charged two individuals for their alleged involvement in Embraer’s misconduct in Saudi Arabia. 

The FBI’s Miami Field Office investigated the case.  Senior Trial Attorney Jason Linder and Trial Attorney John-Alex Romano of the Criminal Division’s Fraud Section prosecuted the case. 

The Fraud Section appreciates the cooperation and assistance provided by the SEC in this matter.  Authorities in Brazil, the Dominican Republic and South Africa also provided assistance and cooperation.  The Criminal Division’s Office of International Affairs also provided assistance during the investigation.

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

Department of Justice Tribal Access Program Will Continue to Improve the Exchange of Critical Data

The Department of Justice is expanding the Tribal Access Program (TAP) for National Crime Information which provides federally-recognized tribes access to national crime information databases for both civil and criminal purposes.  Tribes interested in participating in TAP must submit a letter or resolution from the tribe’s governing body by Dec. 2.  TAP allows tribes to more effectively serve and protect their communities by ensuring the exchange of critical data.

In the fall of 2015, the Department of Justice selected tribes to participate in the initial User Feedback Phase of TAP.  This partnership focused on testing the department’s technology solution and training support; it also enabled tribes to identify and share best practices regarding the use of national crime information databases to strengthen public safety.

During 2016, participating tribes received a kiosk workstation that provided access to national systems as well as training to support whole-of-government needs.  User Feedback Phase tribes have elected to implement TAP in a variety of criminal and civil agencies.  Those tribal criminal agencies included law enforcement agencies, prosecutors, criminal courts, jails and probation departments.  The tribal civil agencies and programs that were eligible to use TAP included agencies whose staff and volunteers have contact with or control over Indian children; public housing agencies; child support enforcement agencies; head start programs; civil agencies that investigate allegations of abuse, neglect and exploitation of children; civil courts that issue orders of protection, restraining orders, or other keep away orders; and sex offender registration programs.

“Sharing crime information helps police solve crimes and fosters better cooperation between tribal, federal, state and local law enforcement,” said Director Tracy Toulou for the department’s Office of Tribal Justice.  “This expansion is another step forward in the Justice Department’s ongoing efforts to strengthen the ability of tribal institutions to keep communities safe.  For example, tribal court orders of protection entered into this system will be accessible to law enforcement nationwide and help safeguard victims of domestic violence.”  

“TAP showcases how a blend of Indian Country policy experts, technology specialists, and law enforcement experts working in partnership with native communities can have a direct and positive impact on the daily lives of people in Indian Country,” said Deputy Assistant Attorney General and Chief Information Officer Joseph Klimavicz for the department’s Justice Management Division.  “It is my hope that the development of a comprehensive solution to the issue of tribes’ long-standing inability to access national crime information databases breaks an impasse that was putting communities at risk.”

The department’s Office of Community Oriented Policing Services (COPS) and the

Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART) are each providing $1 million in funding for the expansion, which will be used for approximately 10 kiosks.

“Access to data is an integral part of building trust between tribal law enforcement agencies, the federal government, and tribal communities,” said Director Ronald Davis of the  COPS Office. “The COPS Office is proud to continue its support of the Tribal Access Program, which provides public safety agencies serving tribal populations the access to critical information databases that can help keep their communities safe.”

“The SMART Office is proud to contribute a million dollars to this effort, for the second straight year,” said Director Luis C. deBaca for the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking.  “Access to federal justice information systems is critical to public safety in tribal communities, as they work to combat sexual violence and build registration and notification programs.” 

TAP enhances tribal efforts to register sex offenders pursuant to the Sex Offender Registration and Notification Act (SORNA); have orders of protection enforced off-reservation; protect children; keep firearms away from persons who are disqualified from receiving them; improve the safety of public housing, and allow tribes to enter their arrests and convictions into national databases.

TAP supports tribes in analyzing their needs for national crime information and includes appropriate solutions, including a-state-of-the-art biometric/biographic kiosk workstation with capabilities to process finger and palm prints, take mugshots and submit records to national databases, as well as the ability to access Criminal Justice Information Services (CJIS) systems for criminal and civil purposes through the Department of Justice’s Criminal Justice Information Network.  TAP, which is managed by the department’s Chief Information Officer, provides specialized training and assistance for participating tribes, including computer-based training and on-site instruction, as well as a 24/7 Help Desk.

Eligibility Criteria For Interested Tribes

Because of the success of the User Feedback Phase, the department is expanding TAP.  Tribes who have either an Adam Walsh Act Sex Offender Registry, or a tribal law enforcement agency which is not a federal Bureau of Indian Affairs police department, are eligible to participate in TAP.  The pertinent dates for the next phase of TAP:

• Expression of Interest Submission: Oct. 24 - Dec. 2
• Notification of Selection: Dec. 16
• Onboarding and Vetting: Jan. 9, 2017 - May 31, 2017
• Deployment: May 9 - Sept. 29, 2017

Federally recognized tribes interested in participating in TAP must submit a letter or resolution from the tribe’s governing body.  That document should include:

• Name and contact information of a senior tribal executive who will act as the primary TAP point of contact.  This individual must have authority to ensure coordination of TAP across various tribal agencies, departments and offices.  An alternate point of contact must also be named.
• A statement acknowledging that misuse or non-use may result in TAP access being discontinued.
• Language affirming the tribe’s agreement to:
• Make whole-of-government legislative and policy determinations which provide guidance to tribal agencies about how national crime information databases are used, including what tribal data is entered into those systems.
• Use TAP to close gaps related to access to national crime information databases if that was an impediment to the implementation of SORNA.  This must be accomplished within one year of deployment.
• Execute a Memorandum of Agreement with FBI CJIS and pay the standard national user fees associated with fingerprint-based for noncriminal justice (civil) purposes.
• Provide necessary documentation and establish appropriate policies during the onboarding and vetting time period.
• Ensure users of TAP establish appropriate accounts, take required training, background checks, and obtain necessary certification during the onboarding and vetting time period.
• Ensure users of TAP participate in deployment day training during the deployment time period. 
• Comply with and adhere to auditing and policy requirements as well as all personnel, physical, and technical security requirements.
• Provide high-speed Internet access to the kiosk.

The letter or resolution from the tribe’s governing body must be sent to TAP.App@usdoj.gov no later than midnight eastern time, Dec. 2.

For more information about the Justice Department’s work on tribal justice and public safety issues, visit: www.justice.gov/tribal.

For specific information on TAP, visit www.justice.gov/tribal/tribal-access-program-tap.

Guidance Helps Protect Workers Against Anticompetitive Conduct and Puts Firms on Notice that DOJ Will Proceed Criminally Against Naked Wage Fixing and No-Poaching Agreements

Today, the Justice Department’s Antitrust Division and the Federal Trade Commission issued guidance for human resource (HR) professionals and others who are involved in hiring and compensation decisions.  HR professionals are often in the best position to ensure their companies’ hiring practices comply with the law and this guidance will help educate and inform them about how the antitrust laws apply to the employment arena.

Workers are entitled to the benefits of a competitive market for their services.  They are harmed if companies that would ordinarily compete against each other to recruit and retain employees agree to fix wages or other terms of employment or enter into so-called "no-poaching" agreements by agreeing not to recruit each other’s employees.

Going forward, the Justice Department intends to criminally investigate naked no-poaching or wage-fixing agreements that are unrelated or unnecessary to a larger legitimate collaboration between the employers.  These types of agreements eliminate competition in the same irredeemable way as agreements to fix the prices of goods or allocate customers, which have traditionally been criminally investigated and prosecuted as hardcore cartel conduct.  Agreements that do not constitute criminal violations may still lead to civil liability under statutes enforced by both agencies.

"Antitrust violations in the employment arena can greatly harm employees and impact earnings over the course of their entire careers," said Acting Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division.  "HR professionals need to understand that these violations can lead to severe consequences, including criminal prosecution.  The newly released joint guidance provides HR professionals with information to prevent violations and report potentially unlawful activity, furthering the Justice Department’s commitment to protect workers from harmful conduct that stifles competition."

"Competition is essential to well-functioning markets, and job markets are no exception," said Chairwoman Edith Ramirez of the Federal Trade Commission.  "These guidelines will help ensure that employers understand how to comply with the antitrust laws and will help employees reap the benefits of a competitive market for their services."

The guidance also discusses how the antitrust laws apply to firms’ decisions to share sensitive information, such as compensation information, with competing employers, either directly or through third party entities.  Information sharing may violate antitrust law unless the information exchange is carefully designed to prevent harm to competition.

The agencies’ joint guidance includes a Q&A section that explains how antitrust law applies to various scenarios that HR professionals might encounter in their daily work lives.  The agencies also urge HR professionals and others who have information about possible antitrust violations to contact the Justice Department Antitrust Division’s Citizen Complaint Center or the Federal Trade Commission’s Bureau of Competition.

The agencies have also issued a quick reference card that encapsulates some of this information in a convenient, index-card-sized format.  The card provides a list of antitrust red flags that HR professionals should look out for during their day-to-day work.  The listed situations are not exhaustive, and the existence of a red flag does not necessarily imply an antitrust violation.  Still, HR professionals should proceed with particular caution if they are confronted with any of the scenarios listed on the card.  By doing so, HR professionals can play an important role in protecting employees and consumers and ensuring the competitiveness of the employment marketplace.

The United States has sued an Oregon City, Oregon woman to bar her from promoting an alleged tax fraud scheme, the Justice Department announced today.  The government’s complaint alleges that Priscilla E. Schrock promotes the formation and use of “Religious Non-Profit Corporations” (RNPCs), which Schrock falsely informs her customers are exempt from tax laws.  According to the complaint, Schrock claims that by assigning income to the RNPC, the customer can avoid paying federal income tax on their income.  Schrock also tells her customers that transferring assets to an RNPC protects the assets from the Internal Revenue Service (IRS) collection action, the complaint alleges.  The suit asks the court to bar Schrock from promoting and selling the scheme and to order her to provide a list of her customers’ names, addresses, telephone numbers and email addresses to the Justice Department.

According to the complaint, Schrock promotes the scheme through an Oregon City based entity called South Beach Missions.  The complaint also alleges that the U.S.  District Court for the District of Oregon previously enjoined a similar scheme that John D. Fitzgerald promoted.  According to the complaint, Fitzgerald and Schrock are friends and some of Fitzgerald’s former customers are now Schrock’s customers. 

According to the complaint, Schrock and South Beach Missions know or have reason to know the statements they make about RNPCs, aka corporations sole, are false sham non-profit corporations.  The IRS has issued guidance regarding sham non-profits and advised the public to be aware of tax evasion schemes that misuse corporation sole laws.  The IRS has specifically advised that “[a] taxpayer cannot use a corporation sole created to avoid or evade income taxes as a means to exclude the taxpayer’s personal income from tax.” 

Abusive tax schemes and return preparer fraud are on the IRS’s Dirty Dozen Tax Scams for 2016.  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.